The wealth effects of share repurchases in Malaysia
This study aims to assess whether buyback activities in Malaysia are able to provide any economic benefits to shareholders both in the short-term and in the long-run. Specifically this study investigates the price effects on: (a) the announcement surrounding the repurchase intentions and implementat...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
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Universiti Utara Malaysia
2014
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| Online Access: | https://repo.uum.edu.my/id/eprint/12459/1/5%281%29.pdf |
| _version_ | 1825803011572629504 |
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| author | Abdul Latif, Rohaida Taufil Mohd, Kamarun Nisham Wan Hussin, Wan Nordin Ku Ismail, Ku Nor Izah |
| author_facet | Abdul Latif, Rohaida Taufil Mohd, Kamarun Nisham Wan Hussin, Wan Nordin Ku Ismail, Ku Nor Izah |
| author_sort | Abdul Latif, Rohaida |
| collection | UUM |
| description | This study aims to assess whether buyback activities in Malaysia are able to provide any economic benefits to shareholders both in the short-term and in the long-run. Specifically this study investigates the price effects on: (a) the announcement surrounding the repurchase intentions and implementation dates, (b) factors affecting the price effects on implementation dates and (c) long-run price effects subsequent to repurchase implementation.Using event study methodologies, this study finds no significant immediate price reactions surrounding repurchase intention dates. However, there is significant evidence of positive abnormal returns in days –5 to +5 surrounding the announcement of repurchase implementation.As for the factors affecting abnormal returns, this study finds that abnormal return responds positively to better prior price performance, dividend yield, directors’ holdings, and fraction of shares repurchased.However, abnormal return responds negatively to the previous amount of cash held, reported earnings per share, and market-to-book value.Using a three year period as a measure of long-run, this study finds that there is no evidence that repurchasing firms experience superior or inferior price performance.This is one of the first studies in Malaysia to examine the long-run wealth effects of share repurchase. |
| first_indexed | 2024-07-04T05:49:57Z |
| format | Article |
| id | uum-12459 |
| institution | Universiti Utara Malaysia |
| language | English |
| last_indexed | 2024-07-04T05:49:57Z |
| publishDate | 2014 |
| publisher | Universiti Utara Malaysia |
| record_format | eprints |
| spelling | uum-124592016-04-12T05:53:59Z https://repo.uum.edu.my/id/eprint/12459/ The wealth effects of share repurchases in Malaysia Abdul Latif, Rohaida Taufil Mohd, Kamarun Nisham Wan Hussin, Wan Nordin Ku Ismail, Ku Nor Izah HC Economic History and Conditions This study aims to assess whether buyback activities in Malaysia are able to provide any economic benefits to shareholders both in the short-term and in the long-run. Specifically this study investigates the price effects on: (a) the announcement surrounding the repurchase intentions and implementation dates, (b) factors affecting the price effects on implementation dates and (c) long-run price effects subsequent to repurchase implementation.Using event study methodologies, this study finds no significant immediate price reactions surrounding repurchase intention dates. However, there is significant evidence of positive abnormal returns in days –5 to +5 surrounding the announcement of repurchase implementation.As for the factors affecting abnormal returns, this study finds that abnormal return responds positively to better prior price performance, dividend yield, directors’ holdings, and fraction of shares repurchased.However, abnormal return responds negatively to the previous amount of cash held, reported earnings per share, and market-to-book value.Using a three year period as a measure of long-run, this study finds that there is no evidence that repurchasing firms experience superior or inferior price performance.This is one of the first studies in Malaysia to examine the long-run wealth effects of share repurchase. Universiti Utara Malaysia 2014-12 Article PeerReviewed application/pdf en https://repo.uum.edu.my/id/eprint/12459/1/5%281%29.pdf Abdul Latif, Rohaida and Taufil Mohd, Kamarun Nisham and Wan Hussin, Wan Nordin and Ku Ismail, Ku Nor Izah (2014) The wealth effects of share repurchases in Malaysia. International Journal of Management Studies (IJMS), 20 (2). pp. 105-127. ISSN 2180-2467 http://www.ijms.uum.edu.my/ |
| spellingShingle | HC Economic History and Conditions Abdul Latif, Rohaida Taufil Mohd, Kamarun Nisham Wan Hussin, Wan Nordin Ku Ismail, Ku Nor Izah The wealth effects of share repurchases in Malaysia |
| title | The wealth effects of share repurchases in Malaysia |
| title_full | The wealth effects of share repurchases in Malaysia |
| title_fullStr | The wealth effects of share repurchases in Malaysia |
| title_full_unstemmed | The wealth effects of share repurchases in Malaysia |
| title_short | The wealth effects of share repurchases in Malaysia |
| title_sort | wealth effects of share repurchases in malaysia |
| topic | HC Economic History and Conditions |
| url | https://repo.uum.edu.my/id/eprint/12459/1/5%281%29.pdf |
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