scholarly journals Do Share Repurchases Distort Stock Prices? Evidence from the United States and Malaysia

2021 ◽  
pp. 232102222110243
Author(s):  
Chong-Meng Chee ◽  
Nazrul Hisyam bin Ab Razak ◽  
Bany Ariffin bin Amin Noordin
Keyword(s):  
Stock Prices ◽  
The United States ◽  
Jel Classification ◽  
Share Repurchases ◽  
Alternative Measure ◽  
Share Repurchase ◽  
Price Support ◽  
Global Finance ◽  
The Usa ◽  
Sample Support

Heavy share buyback years after the global finance crisis 2008–2009 drew criticism from scholars and financial press that share repurchases were being used by firms to manipulate their stock prices. This paper examines whether a greater firm’s repurchase intensity distorts stock prices reflecting to information. We analyse 2 sets of unbalanced panel data that contain a sample of 337 US and another sample of 167 Malaysian repurchasing firms between 2012 and 2016. Contrary to the criticism, we find that a greater firms’ share buyback intensity in the USA stimulates faster incorporation of information in price and results in more efficient stock prices. The main findings hold true and are robust when an alternative measure of share repurchase intensity was used. The findings of US sample support the notion that share repurchase serves as a signalling tool and price support to promote more efficient stock prices. We also find no strong evidence supporting the notion that shares repurchased by Malaysian firms distort stock prices. JEL Classification: G10, G14, G35

Do Share Repurchases Promote Efficient Stock Price?

2021 ◽  
Vol 12 (3) ◽  
pp. 2537-2546
Author(s):  
Chong-Meng Chee Et.al
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Fixed Effects ◽  
Practical Implication ◽  
Informed Trading ◽  
Share Repurchases ◽  
Share Repurchase ◽  
Price Support ◽  
Share Prices ◽  
Unbalanced Panel Data

Purpose: This paper examines whether a greater firm’s repurchase intensity translates into more efficient stock price. Design/ Methodology/ Approach: An unbalanced panel data, that consists of a sample of 337 US repurchasing firms between 2012 and 2016, was analyzed. Based on the result of the Hausman test, fixed effects estimator was employed to estimate the coefficients. To address heterogeneity across time and firms, time effect and standard error clustered by firms were applied. Findings:Agreater firms’ share buyback intensity stimulates faster incorporation of information in price and results more efficient stock prices. The main findings were further confirmed with robustness test and supports the notion that share repurchase serves as signalling tool and price support to promote more efficient stock price. Practical implication: The finding has implication on how share repurchase can be used in three ways: to ease panic selling and deep selling pressure during the downtime; enhance informed trading in which is a result of information signalled by managerial share repurchases; and attract investors’ attention on neglected and undervalued stock. Originality/value: This research provides new insight and empirical evidenceto reject public cynicism about share repurchases used by firms to manipulate their share prices.

scholarly journals Share Repurchases: A Literature Review

2016 ◽  
Vol 8 (2) ◽  
pp. 1
Author(s):  
Sarthak Kumar Jena ◽  
Chandra Sekhar Mishra ◽  
Prabina Rajib
Keyword(s):  
Literature Review ◽  
Corporate Finance ◽  
Regulatory Framework ◽  
Earning Management ◽  
Share Repurchases ◽  
Share Repurchase ◽  
Dividend Payment ◽  
Significant Growth ◽  
Alternative Method ◽  
The Usa

<p>Share repurchases evolved as an alternative method of payout and a corporate finance tool in 1950 in the USA. From 1980 to 2000 it has achieved a significant growth as compared to dividend payment by companies. Then, share repurchase is gradually spread to other countries like UK, Canada, etc.  Pertinent to its growing importance, over the years an enormous literature has emerged that deals with many facets of share repurchase. This article classifies and organizes literature in relations to the established hypotheses, determinants affecting share repurchase decisions, the effect of share repurchase on liquidity and earning management around share repurchase. In additions to the above, this article also analyses the regulatory framework of Indian buyback starting from 1998. It gives a brief view of sections of old Companies Act (1956) and new Companies Act (2013) dealing with buyback. This article also provides a snapshot of SEBI buyback regulations, 1998 and also accommodates all the amendments.</p>

scholarly journals Pan(dem)ic Reactions in Turkish Stock Market: Evidence from share repurchases

2020 ◽  
Author(s):  
Burak Pirgaip
Keyword(s):  
Stock Returns ◽  
Stock Prices ◽  
Emerging Market ◽  
Policy Implications ◽  
Global Markets ◽  
Share Repurchases ◽  
Share Repurchase ◽  
Short Term ◽  
Financial Uncertainty ◽  
The Impact

Abstract Share repurchases have been widely used in global markets for years for various purposes such as to pay out cash, to stabilize stock prices, and so on. However, their use has recently been challenged due to the economic and financial uncertainty imposed by the COVID-19 outbreak. Not only governments have put bans or restrictions on the repurchasing transactions but also some major companies themselves have suspended their buyback programmes to preserve cash. On the other hand, repurchase activity has manifested itself in Turkish capital markets somewhat unexpectedly under uncertain market conditions. This study is one of the first attempts to explore the impact of share repurchase transactions on stock returns in an emerging market severely hit by COVID-19. Event study analyses reveal that market reaction to repurchase activity in the aftermath of the pandemic declaration of March 11, 2020 was significantly positive. Moreover, short-term stock performance of repurchasing firms was far greater than that of their non-repurchasing peers. These results have important policy implications in terms of corporate payout decisions which have recently been challenged by the new coronavirus.

Does founding family involvement affect share repurchase activity? Evidence from US firms from 2006 through 2015

2019 ◽  
Vol 45 (8) ◽  
pp. 1146-1163
Author(s):  
Shane Anthony Van Dalsem
Keyword(s):  
Family Involvement ◽  
Family Firms ◽  
Selection Process ◽  
Family Influence ◽  
Share Repurchases ◽  
Share Repurchase ◽  
Managerial Control ◽  
Content Type ◽  
Founding Family ◽  
The Usa

Purpose The purpose of this paper is to investigate whether family firms (FFs) differ from non-family firms (NFFs) in their propensity and likelihood of repurchasing shares. It focuses on the effects of voting control and managerial control of family members and economic conditions on repurchasing activity. Design/methodology/approach This paper employs pooled Tobit and probit models for a sample of 982 US firms for the period 2006 through 2015 and separates the roles of voting control and managerial control on influencing share repurchase decisions. Findings This paper provides evidence that FFs have a decreased propensity to repurchase shares relative to NFFs over the sample period. In general, the decreased propensity to repurchase shares is driven by the decision whether to repurchase shares and not the percentage of outstanding market value of equity repurchased. Practical implications For critics of share repurchases, this paper provides support for existing literature that FFs provide good long-term stewardship to their firms. In general, it demonstrates that FFs are less likely to repurchase shares than NFFs. Investors that have a preference for or against repurchases can use this information to improve their security selection process. Originality/value To date, the effects of family voting and managerial control on share repurchases in the USA has not been considered in the finance literature. This paper adds to the literature by providing evidence that family influence generally results in a lower propensity to repurchase shares.

scholarly journals Testing the Information-Based Trading Hypothesis in the Option Market: Evidence from Share Repurchases

2019 ◽  
Vol 12 (4) ◽  
pp. 179 ◽  
Author(s):  
Badshah ◽  
Koerniadi ◽  
Kolari
Keyword(s):  
Stock Returns ◽  
Market Share ◽  
Private Information ◽  
Stock Prices ◽  
Implied Volatility ◽  
Share Repurchases ◽  
Share Repurchase ◽  
Open Market ◽  
Option Prices ◽  
Abnormal Stock Returns

The informed options trading hypothesis posits that option prices lead stock prices. In this paper, we extended the research on this hypothesis to open-market share repurchases. Empirical tests showed that the implied volatility spread was not significantly related to buy-and-hold abnormal stock returns. However, further evidence reveal a significant relationship between implied volatility spread and subsequent stock return volatility around open-market share repurchase events. We concluded that option traders have private information on the volatility of stock returns and superior information processing ability that accounts for prescient pricing behavior in options relative to stocks.

scholarly journals Nonlinear Short-Run Adjustments between REITs and Stock Markets in the USA and Australia

2022 ◽  
pp. 47-68
Author(s):  
Cheng-Wen Lee ◽  
Wei-Jui Chen
Keyword(s):  
Stock Returns ◽  
Stock Markets ◽  
Structural Breaks ◽  
The United States ◽  
Jel Classification ◽  
Smooth Transition ◽  
Vector Error Correction ◽  
The Us ◽  
The Usa ◽  
Short Run

Abstract This study examines whether nonlinear co-integration exists between real estate investment trusts (REITs) and corresponding stock markets in the United States and Australia. Moreover, we employ the smooth-transition, vector-error correction model (STVECM) including the generalized autoregressive conditional heteroskedasticity (GARCH) model to separately explore the adjustment efficiencies of the short-run REITs and corresponding stock returns in dynamics. The empirical results demonstrate that there is a nonlinear co-integration with structural breaks between the equity and mortgage REITs and stock markets in the US as well as between the REITs and stock markets in Australia. When large positive and negative deviations of STVECM exist, the speed of equilibrium adjustment of the S&P 500 index is greater than that of the Mortgage REITs index. Additionally, the higher the equilibrium adjustment of Australian/US REITs index, the greater the reversion of Australian/US REITs index. Meanwhile, this study is also interested in finding out whether the REIT indices in the US or Australia would serve as a leading indicator for price movements. The result findings may provide a good reference for the investors’ investment engaged in the areas of these two countries. JEL Classification: C22, D53, G14, L85. Keywords: REITs, STVECM, Nonlinear Granger causality, GARCH.

Emigrant Psychoanalysts in the USA and the FBI Archives

2004 ◽  
Vol 6 (1) ◽  
pp. 75-92 ◽  
Author(s):  
James E. Goggin
Keyword(s):  
United States ◽  
Civil Rights ◽  
National Socialism ◽  
Cultural Context ◽  
Due Process ◽  
The United States ◽  
External Threats ◽  
The Usa ◽  
The Rich ◽  
New Nation

Interest in the fate of the German psychoanalysts who had to flee Hitler's Germany and find refuge in a new nation, such as the United States, has increased. The ‘émigré research’ shows that several themes recur: (1) the theme of ‘loss’ of one's culture, homeland, language, and family; and (2) the ambiva-lent welcome these émigrés received in their new country. We describe the political-social-cultural context that existed in the United States during the 1930s, 1940s and 1950s. Documentary evidence found in the FBI files of three émigré psychoanalysts, Clara Happel, Martin Grotjahn, and Otto Fenichel, are then presented in combination with other source material. This provides a provisional impression of how each of these three individuals experienced their emigration. As such, it gives us elements of a history. The FBI documents suggest that the American atmosphere of political insecurity and fear-based ethnocentric nationalism may have reinforced their old fears of National Socialism, and contributed to their inclination to inhibit or seal off parts of them-selves and their personal histories in order to adapt to their new home and become Americanized. They abandoned the rich social, cultural, political tradition that was part of European psychoanalysis. Finally, we look at these elements of a history in order to ask a larger question about the appropriate balance between a liberal democratic government's right to protect itself from internal and external threats on the one hand, or crossover into the blatant invasion of civil rights and due process on the other.

Sandra Ramos Revisited

2020 ◽  
Vol 2 (4) ◽  
pp. 32-54
Author(s):  
Silvia Spitta
Keyword(s):  
United States ◽  
The United States ◽  
Ancient Greek ◽  
Graphic Arts ◽  
Left Behind ◽  
The World ◽  
The Usa ◽  
Political Choices ◽  
The Rich

Sandra Ramos (b. 1969) is one of the few artists to reflect critically on both sides of the Cuban di-lemma, fully embodying the etymological origins of the word in ancient Greek: di-, meaning twice, and lemma, denoting a form of argument involving a choice between equally unfavorable alternatives. Throughout her works she shines a light on the dilemmas faced by Cubans whether in Cuba or the United States, underlining the bad personal and political choices people face in both countries. During the hard 1990s, while still in Havana, the artist focused on the traumatic one-way journey into exile by thousands, as well as the experience of profound abandonment experienced by those who were left behind on the island. Today she lives in Miami and operates a studio there as well as one in Havana. Her initial disorientation in the USA has morphed into an acerbic representation and critique of the current administration and a deep concern with the environmental collapse we face. A buffoonlike Trumpito has joined el Bobo de Abela and Liborio in her gallery of comic characters derived from the rich Cuban graphic arts tradition where she was formed. While Cuba is now represented as a rotten cake with menacing flies hovering over it ready to pounce, a bombastic Trumpito marches across the world stage, trampling everything underfoot, a dollar sign for a face.

Russian Federation and the United States of America: geostrategic directions to manage the Ukrainian crisis

2019 ◽  
pp. 123
Author(s):  
Attarid Awadh Abdulhameed
Keyword(s):  
United States ◽  
European Union ◽  
National Security ◽  
Russian Federation ◽  
United States Of America ◽  
The United States ◽  
The European Union ◽  
The Usa ◽  
Ukrainian Crisis ◽  
Zero Sum

Ukrainia Remains of huge importance to Russian Strategy because of its Strategic importance. For being a privileged Postion in new Eurasia, without its existence there would be no logical resons for eastward Expansion by European Powers.  As well as in Connection with the progress of Ukrainian is no less important for the USA (VSD, NDI, CIA, or pentagon) and the European Union with all organs, and this is announced by John Kerry. There has always ben Russian Fear and Fear of any move by NATO or USA in the area that it poses a threat to  Russians national Security and its independent role and in funence  on its forces especially the Navy Forces. There for, the Crisis manyement was not Zero sum game, there are gains and offset losses, but Russia does not accept this and want a Zero Sun game because the USA. And European exteance is a Foot hold in Regin Which Russian sees as a threat to its national security and want to monopolize control in the strategic Qirim.

The United States as the Trade Partner of Poland in te Context of the Transatlantic Trade and Investment Partnership (TTIP)

2014 ◽  
Vol 9 (3) ◽  
pp. 201-213
Author(s):  
Renata Marks-Bielska ◽  
Wiesława Lizińska ◽  
Izabela Serocka
Keyword(s):  
Growth Rate ◽  
Foreign Trade ◽  
The United States ◽  
Average Growth ◽  
Transatlantic Trade ◽  
Central Statistical ◽  
The Usa ◽  
Central Statistical Office ◽  
Trade Partner ◽  
Structure Of Trade

Evaluation of the importance of the USA as the trade partner of Poland is the main objective of the paper, based on the changes in the value of trade during the years 2000-2012 and changes in the structure of trade during the years 2008-2012. The data from the Statistical Yearbooks of Foreign Trade published by the Central Statistical Office was used. The potential for foreign trade growth was illustrated using the simplified analysis based on the gravity model of foreign trade concept. Gradually increasing value of Polish trade with the USA (the average growth rate 9.8%, EU-15 countries 13.1%). Polish exports are characterised by a higher than imports growth rate (USA - exports growth by 12.5%, imports 9.2%, EU-15 - exports 15.1%, imports 11.6%). Trade is strongly dominated by position of one group of products (over 30% share in both exports and imports). The potential of trade is poorly exploited currently. Trade was focused mainly on the countries situated in the close neighbourhood (mainly the EU countries with the domination of Germany).

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