Informed Trading in Option Markets around Accelerated Share Repurchase Announcements

2017 ◽  
Author(s):  
Ladshiya Atisoothanan ◽  
Balasingham Balachandran ◽  
Huu Nhan Duong ◽  
Michael F. Theobald
Keyword(s):  
Informed Trading ◽  
Share Repurchase ◽  
Option Markets ◽  
Repurchase Announcements

The Effects of Share Repurchase Announcements on Returns in the Malaysia Stock Market

2018 ◽  
Vol 1 (1) ◽  
pp. 1 ◽  
Author(s):  
Tze San Ong ◽  
Pei San Ng
Keyword(s):  
Stock Market ◽  
Abnormal Return ◽  
Small Firms ◽  
Abnormal Returns ◽  
Share Repurchase ◽  
Before And After ◽  
Positive Abnormal Return ◽  
Repurchase Announcements ◽  
Signaling Hypothesis ◽  
Firm Characteristic

This paper examines the market response surrounding the share repurchase announcements of Malaysia Listed Companies from years 2012 to 2016. One sample T-test was carried out to identify the abnormal return in the range before and after 20 days from share repurchase announcements. The result shows a significant positive abnormal return in the day of repurchase announcements and continuously until day 1 after the announcements. Multiple regression analysis was performed in order to identify the firm characteristic of share repurchase. The finding is supported with information asymmetric, which shows that stock market reacts more favorably through the repurchase announcements by small firms than large firms. This study is consistent with the signaling hypothesis that shows share repurchase announcement can be an effective tool in stabilizing the stock market in Malaysia. The finding of this study acts as a useful tool for managers and investors to improve their decisions on share repurchase announcements in Malaysia. Company’s managers can conduct share repurchase announcements that are able to make the stock market react positively in order to generate positive abnormal returns.

The Announcement Effects of Restricted Open Market Share Repurchases: Experience from Taiwan

2004 ◽  
Vol 07 (03) ◽  
pp. 335-354 ◽  
Author(s):  
Miawjane Chen ◽  
Chao-Liang Chen ◽  
Wan-Hsiu Cheng
Keyword(s):  
Abnormal Returns ◽  
Free Cash Flow ◽  
Share Repurchase ◽  
Open Market ◽  
Announcement Effects ◽  
Significant Difference ◽  
Repurchase Announcements ◽  
Free Cash Flow Hypothesis ◽  
Managerial Choice ◽  
Signaling Hypothesis

In this paper we empirically examine the effects of 451 restricted share repurchase announcements in Taiwan. Their 3-day cumulative abnormal returns are all significantly positive for different purposes and Tobin's qs. However, there is no significant difference in abnormal returns for different repurchasing purposes. This indicates that mandating a purpose is not really an effective tool for limiting managerial choice. Moreover, when the related variables are controlled, the other empirical results we conducted indicate that, at least in Taiwan, the traditional signaling hypothesis and the free cash flow hypothesis can function simultaneously to explain the effects of the restricted repurchase announcements.

scholarly journals Share buy-backs for a selection of JSE listed companies: An exploratory study

2010 ◽  
Vol 41 (4) ◽  
pp. 47-58 ◽  
Author(s):  
P. G. Bester ◽  
N. Wesson ◽  
W. D. Hamman
Keyword(s):  
South African ◽  
Listed Companies ◽  
Small Sample ◽  
Share Repurchases ◽  
Share Repurchase ◽  
News Service ◽  
Conducting Research ◽  
Repurchase Announcements ◽  
Buy Back ◽  
Selection Of

This study undertook to derive share repurchase trends from a small sample of JSE-listed companies over the nine years, 1999 – 2008. The study also draws attention to the particular obstacles to be overcome when conducting research into the unique South African share repurchases environment.The study finds that 33 companies made 71 repurchase announcements (47 general and 24 specific) via the Securities Exchange News Service (SENS) over the period July 1999 until financial year-end in 2008. On average, 59,0% of the total number of shares (and 49,3% of the total value) repurchased under a general authority is not included in the 3% SENS announcements. General share repurchases represent 47,9% of total repurchases in volume (and 60,5% in terms of value). The total number of shares repurchased (excluding share trust purchases) by the 33 companies shows that 56,8% were repurchased by subsidiaries and 17,1% were subsequent repurchases by companies from subsidiaries. (In value, these repurchases represent 53,7% and 17,2%, respectively.)This study therefore concludes that research based on only the 3% SENS announcements of general share buy-backs results in significant understating of actual total share buy-back activities, and that the South African share repurchase environment presents unique challenges. The main obstacle for future South African research in this field however is the lack of comprehensive and accurate share repurchase data as supplied by South African financial data sources.This material is based upon work supported financially by the National Research Foundation. Any opinion, findings and conclusions or recommendations expressed in this material are those of the authors and therefore the NRF does not accept any liability in regard thereto.

Does Share Repurchase Announcement Lead to Rise in Share Price? Evidence from India

2019 ◽  
Vol 20 (2) ◽  
pp. 420-433
Author(s):  
Paramita Mukherjee ◽  
Chanchal Chatterjee
Keyword(s):  
Stock Returns ◽  
Market Share ◽  
Share Price ◽  
Share Repurchase ◽  
Open Market ◽  
Individual Basis ◽  
Increasing Trend ◽  
Excess Stock Returns ◽  
Repurchase Announcements

In recent years, there is an increasing trend of share repurchase announcement by Indian firms. This article attempts to examine whether open market share repurchase announcements in India lead to excess stock returns and to identify the factors responsible for additional stock returns. Apart from a standard market method, the price behaviour is examined on an individual basis. The results show that the firms, on an average, do not experience price improvement after share repurchase. While 24 per cent of the firms lose and 10 per cent gain, the rest experience no change. In normal times, investors prefer small-cap companies, but post-announcement, promoters’ share and premium play an important role.

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