Dissertations / Theses on the topic 'On-market share repurchases'

This study examines the market reactions to share repurchase announcements made by companies listed on the Johannesburg Stock Exchange from 2003 to 2012. We use an event study methodology and the Capital Asset Pricing Model to determine if there is an announcement effect when a share repurchase announcement is made. Our analysis show that consistent with signalling theory and the announcement effect, share repurchase announcements are associated with positive abnormal returns. The average abnormal return and cumulative average abnormal return noted was 0.46% and 3.81% respectively for the event period (t -20, t +20). There was an observable trend of declining share prices before the share repurchase announcement however the decline in the shares prices was not significant. We found some evidence of market timing ability in 2005 and 2010 however as a collective, we found no significant difference in timing a share repurchase announcement.
Dissertation (MBA)--University of Pretoria, 2012.
Gordon Institute of Business Science (GIBS)
unrestricted

博士
國立中央大學
財務金融研究所
99
Share repurchases have been an intensely studied topic in finance literature. When a firm announces its buyback plan, it will change the firm’s information environment. Informed and uninformed investors are likely to adjust their investment decision. The risk of information trading around share repurchases may be different. Moreover, the information effect of share repurchase is not only on the repurchasing firm but also likely to spill over other firms along supply chain. Thus, this dissertation investigates the two issues and contributes to deeper understand the implication of open market share repurchases. In the first essay, we examine the information trading around open market share repurchases. Our results show that the risk of information trading significantly increases during the repurchase execution period and reverts back in the post-expiration period. It is likely that some uninformed traders leave the market in the execution period, in anticipation of higher information uncertainties. Therefore, the remaining uninformed traders collectively face higher possibility of trading with informed traders. In the second essay, we investigate the wealth effect of open market share repurchases on suppliers. The results show that suppliers have significantly negative short-run abnormal return. It is likely that, when suppliers perceive repurchasing firms’ profitability decline, they adjust their investment to avoid disadvantage. It is more consistent with free cash flow hypothesis. Moreover, we find that the relationship between repurchasing firms and their suppliers have impact on suppliers.

by Ng Kwok-Kwai.
Thesis (M.B.A.)--Chinese University of Hong Kong, 1998.
Includes bibliographical references (leaves 100-101).
ABSTRACT --- p.ii
TABLE OF CONTENTS --- p.iii
LIST OF ILLUSTRATIONS --- p.v
LIST OF TABLES --- p.vi
PREFACE --- p.vii
ACKNOWLEDGEMENTS --- p.ix
Chapter
Chapter I. --- INTRODUCTION --- p.1
Share Repurchase Activities in Hong Kong - Historical Statistics --- p.1
Types of Share Repurchase --- p.7
Chapter II. --- LITERATURE REVIEW --- p.9
Empirical Study on Abnormal Return --- p.9
Motivation for Open Market Share Repurchase --- p.10
Signalling Hypothesis --- p.10
Dividend Taxation Hypothesis --- p.10
Leverage Hypothesis --- p.10
Bondholder Expropriation Hypothesis --- p.10
Scope of this Study --- p.12
Chapter III. --- DATA --- p.13
Sources --- p.13
Sampling Period --- p.13
Screening/Sample Size --- p.14
Chapter IV. --- METHODOLOGY --- p.15
Announcement Day --- p.15
Time Horizons --- p.16
Price Performance --- p.17
Abnormal Return --- p.17
Cumulative Abnormal Return --- p.18
Definition of Variables and Formulae --- p.19
Variables --- p.19
Formulae --- p.20
Computation Process --- p.20
Stage I - Evaluation of Cumulative Abnormal Return(CAR) --- p.20
Abnormal return - beta adjustment --- p.20
Cumulative abnormal return --- p.21
Stage II - CAR verse other Variables --- p.21
Other variables --- p.21
Sub-sample classification --- p.22
Stage III - Regression of CAR with other Variables --- p.23
Chapter V. --- RESULTS AND IMPLICATIONS --- p.24
Cumulative Abnormal Return --- p.24
Short Term Performance --- p.24
Long Term Performance --- p.24
"Cumulative Abnormal Return verse Market-to-Book Ratio, Market Value and Monthly Frequency" --- p.28
Short Term Performance --- p.28
Market-to-book ratio --- p.28
Market value --- p.34
Monthly frequency --- p.39
Long Term Performance --- p.44
Market-to-book ratio --- p.44
Market value --- p.50
Monthly frequency --- p.55
"Regression of CAR verse Market-to-Book Ratio, Market Value and Monthly Frequency" --- p.61
Short Term --- p.61
Long Term --- p.62
Chapter VI. --- CONCLUSION --- p.63
Summary --- p.63
Recommendation --- p.64
APPENDIX I --- p.66
APPENDIX II --- p.70
APPENDIX III --- p.72
APPENDIX IV --- p.96
BIBLIOGRAPHY --- p.100

A 50% dissertation presented in partial fulfilment of the requirements for the degree of Master of Commerce at the University of Witwatersrand.
Information asymmetry creates a gap between management’s perception of the firm’s value and the market value of the firm. It is thought that management engage in information signalling activities in order to close the gap created by information asymmetry. There is a need to understand why management engage in their chosen transactions as this will provide investors with insight into market activities, as well as allow for more accurate investment strategies. While research is available on the market’s reactions to signalling events, the problem is whether management’s intentions have been correctly interpreted by the market. The starting point to gaining this understanding is to ask the question: What signals do management send when they issue and repurchase shares? This study attempts to answer this question by investigating whether companies listed on the Johannesburg Stock Exchange (JSE) issue shares because management perceive their market values to be overvalued and repurchase shares because their market values are undervalued. For the period 1 January 2003 to 31 December 2012, a total of 295 share issue announcements are considered for 102 companies; and a total of 183 share repurchase announcements are considered for 83 companies. The results of this study reveal that managerial equity market timing may exist in the presence of excess returns, where management are better able to predict returns in advance than the market. However, there is also evidence suggesting share repurchases are made to return excess cash to shareholders and issues and repurchases decisions are linked to capital structure planning. The fact that there are other potential reasons for share issues and repurchases, means that the market must be able to determine what the real intentions of management are when shares are issued and repurchased; and hence determine whether their intentions suggest equity market mispricing.

碩士
國立中正大學
財務金融所
98
The goal of this study is to explore the influence of overconfident CEOs on share repurchases from behavioral finance perspectives. We test CEOs overconfidence in three ways：late option exercise, investment in their company and press portrayal. The findings of this study showed that the relationship between overconfident CEOs and the frequency of share repurchases’ announcements was significant positive. This means that there was higher frequency of share repurchases’ announcements when the CEOs were more overconfident. Further, in cash-rich firm, CEOs overconfidence was an important factor of the frequency of share repurchases’ announcements. Finally, abnormal returns of share repurchases’ announcements made by overconfident CEOs was significant lower than those made by rational CEOs. In short , this study found that if the CEOs had shown their overconfidence in the media report, the completion rate of repurchase program was higher.

This dissertation investigates on-market repurchase programs conducted in Australia and explores whether conditions of transparency in the Australian environment are conducive to firms wishing to signal undervaluation of their shares. A sample consisting of 789 programs that are announced over the period 2000 – 2010 are identified and information contained in relevant repurchase disclosures to the market, including program announcements, completion notices and daily trading notices are hand collected for investigation. In this study I examine the share price reaction around the period of a program announcement and the subsequent completion of a program as well as the number of shares repurchased. Share returns are examined by employing an event study methodology and the determinants of the share reaction is established using multiple regression analysis. Tobit regression analysis is employed to investigate the determinants of program completion rates. Results demonstrate that program announcements are accompanied by positive abnormal returns and announcement returns are greater for ‘initial’ programs than for ‘repeat’ programs. Of interest, firms which indicate an unlimited duration earn a greater market response to announcements than firms indicating a fixed period duration. Examination of program completions reveal that completion notices are not accompanied by returns significantly different from zero, a result that is consistent with the notion that they do not impart new information to the market. Examination of announcements demonstrate that the fraction of shares sought or repurchased in a program is not a determinant of announcement returns and firms do not earn a repurchase reputation from prior programs. This finding undermines the importance of program size as a potential cost of false signalling in the Australian environment. Instead, I find evidence that program duration is used by the market as a signal of firm quality. Results demonstrate a negative association between announcement returns and intended program length, consistent with the notion that the shorter the period of time a firm intends to execute a program the more credible a signal to the market that its shares are undervalued. Investigation of completion rates demonstrate that firms are more likely to achieve their repurchase targets if a shorter program length is indicated in an announcement and also the sooner a program is terminated ahead of time. Evidence shows that completion rates are increasing with the range in price a firm pays for its shares and is consistent with the notion that firms repurchase shares out of management’s disagreement with the market over the valuation of its shares rather than to arrest falling share prices. A concern that is often raised in connection with on-market repurchases is that stocks with volatile share prices are particularly suited to firms wishing to acquire shares at ‘cheap’ prices to the benefit of non-selling shareholders, however I find that the transparency of on-market repurchase programs conducted in Australia are effective in deterring firms from engaging in opportunistic behaviour.
Thesis (Ph.D.) -- University of Adelaide, Business School, 2015.

碩士
淡江大學
經濟學系碩士班
96
An open-market share repurchase system has been in operation in Taiwan since August of 2000. In this study, the effect on stock returns of 1185 share repurchase announcements in Taiwan was empirically examined. The results indicate that the free cash-flow hypothesis is able to explain those effects, particularly for low-growth companies. Moreover, companies with a higher buy-back ratio, higher free cash-flow, or lower market-to-book ratio, exhibit greater cumulative abnormal returns from repurchase announcements.

碩士
朝陽科技大學
財務金融系碩士班
90
Abstract Recently, companies listed on Taiwan Stock Exchange are allowed to repurchase their own shares from the open market as a means to maintain the so-called “reasonable” share price. The present study is motivated to reexamine both the more often mentioned “announcement effect” and the less often mentioned “execution effect”. Following the standard event-study methodology, the major empirical findings can be summarized as follows: 1.The cumulative abnormal return in stock price following the announcement date until 2 days after announcement is 2.97%. As for the cumulative abnormal return in stock price covering a 50 days period after announcement date is 10.19%. Based on the above reported findings, the notion that an announcement to repurchase own shares can exert favorable influences on share price has gained empirical support. 2.When sample firms are divided into “higher announced repurchase ratio” and “lower announced repurchase ratio” groups, it is found that the former group as expected has registered a higher cumulative abnormal return in share price when compared with the latter group. 3.When sample firms are divided into two mutually exclusive groups, namely, “first-time” vs. “non-first-time” repurchasing firms, it is found that the positive cumulative abnormal return in share price, of the former group as expected are relatively larger when compared with the latter group. 4.Contrary to expectation, the sample firms with relatively higher execution ratio (defined as the actual repurchase share over the announced repurchase shares) do not register higher cumulative abnormal return when compared with the sample firm with relatively lower execution ratio. 5.Upon the expiry day of the execution period, the following empirical patterns emerge: for the sample firms which did not execute the stock repurchase program at all, the shares declines continuously on and after the day of expiry; in contrast, the sample firms which execute fully the stock repurchase program, the share price decline temporarily following the expiry day then register a continuous up-moving trend. In other words, as expected, firms keep their promise and buy-out the announced repurchase shares has attracted a much more favorable market response. All considered, empirical findings on the large fall conformity with expectations.

碩士
元智大學
會計學系
96
This study examines firms’ financial condition when they announce repurchase their share outstanding by fundamental analysis. I try to find an indicator that can distinguish accounting equality of firms and measure the reliability of information conveyed by repurchase programs. When announcing repurchase, manager frequently indicates that they are doing so in response to mispricing, or their stock price is on undervaluation. Several theoretical papers have investigated the notion that repurchases are a potential signaling to the market. However, this study finds that the announcement return of repurchase firms with poor fundamentals is higher than that of repurchase firms with good fundamental. To be explained by this point, repurchase firms with poor fundamentals are more likely to be undervalued. Accordingly, investors who have difficulty to distinguish the quality of the firm could value the stock by using the signaling of the repurchase program. In addition, my result might be influenced by firm size. Smaller firms communicate to investors for information that could be regarded as a factor of information asymmetry, and smaller firms might have poor fundamental. These results will be consistent with the signaling hypothesis in explaining the motive of the share repurchase.

This study examined the impact of open-market stock repurchases by Real Estate Investment Trusts (REITs) on the share price of the featured company. Two aspects of investment finance are rational behaviour and efficient markets. Both of these concepts were explored to understand why a share repurchase would have an impact on a company share price.Causal research was conducted to analyse the correlation between a share repurchase event and the share price of the featured company. The share buyback announcements were collected from the Bloomberg database. The holding period returns were calculated and compared to zero to analyse whether there was any momentum or contrarian signals. The holding period returns were also adjusted for the average of the all REIT index to ascertain whether the returns were abnormal or not.The results have shown share repurchase transactions to be contrarian indicators of share price performance. Even when the results were adjusted for the REIT index, the negative returns continued.
Dissertation (MBA)--University of Pretoria, 2012.
Gordon Institute of Business Science (GIBS)
unrestricted

碩士
國立東華大學
會計與財務碩士學位學程
100
This paper is aimed at examining the impact of financial crisis on the market reaction to share repurchase announcements and how the impact varies by industries. This paper divides the research period into two sub-periods, non-financial crisis and financial crisis, and the results indicate that the market reaction to the repurchase during the financial crisis period is greater than the non-financial crisis period. The results also indicate that the market reaction to the announcement in the non-financial industry and the financial industry during the financial crisis period have no significant differences.

碩士
國立臺北大學
企業管理學系
97
The main prediction of this research is that intangible assets and information asymmetry are positive relation. For this reason, the primary objective of this study is to investigate the relation between share repurchase and intangible assets. We select the rate of research and development expense, the rate of advertisement expense and the operating profit per employee for intangible assets proxy and also include idle cash proxy and general information asymmetry proxy as control proxy. We build logistic regression model to study the relation between repurchase likehood and intangible assets, and we find that firms with more research and development expense and higher operating profit per employee are more likely to repurchase share, as predicted. Contrary to prediction, the relation of repurchase likehood and advertisement expense is negative. We use event study to estimate abnormal return for announce repurchase share and find abnormal return are negative for 12 days before announcement and positive for 11 days after announcement. The result means repurchase announce has power to stop falling and raise stock price. Besides we classify sample to electric industry, traditional industry and others, and find that electric industry are undervalued most before announcement and other industry’s stock price raise most after announcement.

碩士
國立臺灣大學
會計學研究所
94
This paper examines the short-run market reaction to the U.S. bank holding company share repurchase announcements by using a standard event study methodology and conducts further regression analysis to generalize the motives affecting short-run abnormal return from previous literatures. It is found that the announcement period returns are strongly and negatively related to the prior period returns, size, market-to-book ratio, and beta value, but are positively related to first tier capital ratio, the degree of securitization activities and the potential threat of a takeover. Taken together, though the empirical result supports many prior hypotheses, it strongly favors the undervaluation signaling effect. However, it does not seem to support the free cash flow hypothesis. Our sample includes repurchase announcements between 1995 and 2005.

碩士
開南大學
財務金融學系
97
Share repurchase was legalized for the firms listed on the Taiwan Stock Exchange in 2000. Recently, it has been emerged as one of the primary payout devices, but the motivation of share repurchase is still ambiguous. One of the motivations which are widely suggested in literatures is “substituting dividends”. Prior literatures also suggest that firms may pay dividends to signal their superior operating performance or reduce excess capital. This research argues that if share repurchases are found to signal operating performance or reduce excess capital, it should be regarded as a substitute for dividends. This evidence shows that both the signalling hypothesis and the excess capital hypothesis, particularly the latter, predict share repurchases well. Both repurchasing firms and dividend-paying firms appear to have higher operating profits than the firms that do not pay, indicating that share repurchases is likely a substitute for dividends on signalling.

Thesis (M.Com. (Finance))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic and Business Sciences, 2015.
Given the increased use of share repurchases to pay out excess cash to shareholders, this study aims to examine the short-term market reaction to share repurchase announcements on the Johannesburg Stock Exchange (JSE). In particular, the study examines the link between repurchase motives and the short-term reaction of the market, as well as other characteristics which may have an effect on the market reaction. Using event study methodology, the study covers 146 general share repurchases on the JSE from 2004 to 2014. The findings suggest that the market reacts positively to repurchase announcements, although the market does tend to underreact at the time of the announcement, consistent with past literature. The study provides support for the information signalling, market timing and free cash flow hypotheses. Furthermore, the reaction of the market is seen to not be affected by capital gains tax changes, ownership concentration and shareholder protection, considerations.

碩士
國立嘉義大學
管理研究所
97
In view of the importance of information transparency and the prevalence of share repurchase, the purpose of this research is to examine how information transparency affects the decision of corporate share repurchase and its market reaction. The sample of this study comprises the listed companies with information disclosure evaluation system results over 2-year period, from 2006 to 2007. According to the empirical results, my major findings are as follows: (1) The degree of corporate information transparency is positively associated with the possibility of corporate share repurchase. This result suggests that, in contrast with low transparency firms, high transparency firms need additional alternative payout policies (share repurchase) to convey private information given that they have highly used financial reports to signal information to the market. As for low transparency firms, they can signal through further improving the disclosure quality of financial reports. (2) The degree of corporate information transparency is negatively associated with the market reaction to corporate share repurchases. This is consistent with the argument that market investors react more positively to the repurchase announcements for low transparency firms relative to high transparency firms due to the greater level of under-pricing caused by more information asymmetry. (3) Information transparency does not have significant effects on the long term stock price performance subsequent to the repurchase announcements. This may due to the fact that the degree of mispricing for low transparency firms have been substantially corrected in the short term and the stock price of high transparency firms are usually less undervalued.