Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence From the Malaysian Market

Albaity, M. and Said, D.S. (2016) Impact of Open-Market Share Repurchases on Long-Term Stock Returns: Evidence From the Malaysian Market. SAGE Open, 6 (4). pp. 1-12. ISSN 2158-2440

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Official URL: https://doi.org/10.1177/2158244016670199

Abstract

After the Asian financial crisis in 1997, firms listed on Bursa Malaysia were allowed to repurchase their shares on the open market. The number of companies engaged in share buyback is increasing and has become a tool to stabilize price by signaling undervaluation of the share. However, studies on share buyback in Malaysia are limited to the price performance surrounding the buyback events. This study aims to fill this gap by examining long-run price performance after the actual share buyback event over a sampling period of 2 years from 2009 to 2010 for Malaysian firms listed on FTSE Bursa Malaysia. There is no evidence to conclude that there exist long-term abnormal returns using the calendar-time portfolio approach that support the inefficient market hypothesis. On the contrary, buy-and-hold method was found to be significant supporting that the Malaysian stock market is semi-strong efficient.

Item Type: Article
Uncontrolled Keywords: Buy-and-hold abnormal returns; Fama–French three-factor model; Long-term performance; Share repurchases; Bursa Malaysia
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Business and Accountancy
Depositing User: Ms. Juhaida Abd Rahim
Date Deposited: 10 Nov 2017 02:02
Last Modified: 10 Nov 2017 02:02
URI: http://eprints.um.edu.my/id/eprint/18205

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