The information content of open-market repurchase announcements in Taiwan

Cheng, Su-Yin; Hou, Han

doi:10.1016/j.intfin.2013.07.010

Cited by 9 publications

(8 citation statements)

References 29 publications

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“…The Open-Market Repurchases (OMR) program is one of the hot topics studies in the current capital market, especially the main purpose of the implementation is to protect the interests of shareholders. Aimed at the fact whether OMR has the positive effect on CAR of share repurchase in the event period, there are some differences in the previous research results and these results are in contradiction with the argument of signaling undervaluation (Su & Lin, 2012;Huang, Liano, Manakyan, & Pan, 2013;Cheng & Hou, 2013); at the same time, the previous researches seldom analyze the effect of OMR in the event period on investor sentiment on the trading market from the perspective of behavioral finance, or only from the effect of market situations to analyze (Chen & Liu, 2018), not from the repurchase program in the stock price of risk, and emphasize the importance of systematic risk before the OMR.…”

Section: Introductionmentioning

confidence: 67%

Effects of the Pre-Repurchase Systematic Risk on the Relationship Between Investor Behavior, Market Factors and the Stock Price Responses

Liu

2018

Journal of Business Economics and Management

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This study explores the pre-repurchase systematic risk will affect the abnormal returns in the open-market repurchase event period and also change the relationship between the investor sentiment, trading activity, market factors and stock price response during the event on Taiwan stock market. Based on threshold regression models, it is found that the pre-repurchase systematic risk will significantly change the relationship between investor behavior, market factors and stock price responses and the asymmetry of the relationship exists when pre-repurchase systematic risk is lower than a repartition, which supports that institutional investors and credit trading investors differ in these existing relationships. When the pre-repurchase beta is below repartition, it will be detrimental to the returns in event period. But on the contrary, the returns in the short-term shock of news exposure period present the favorable results, which may be related to the fact that there exists sentiment premium in short-term when credit trading investors’ repurchase news exposure occurs. Finally, the study is to confirm the effect of systematic risk for returns and investor sentiment, these results have not been further explored in the past, and can be used as the firm’s evalu-ation reference to the repurchase program in the future.

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Section: Introductionmentioning

confidence: 67%

Effects of the Pre-Repurchase Systematic Risk on the Relationship Between Investor Behavior, Market Factors and the Stock Price Responses

Liu

2018

Journal of Business Economics and Management

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“…The research made Peyer and Vermaelen (2009) which captures the last two decades of previous century stills confirms an existence of abnormal returns followed the stock repurchases. The effects of share repurchases announcement were scrutinized on markets in: Canada (Ikenberry, Lakonishok, and Vermaelen, 2000), the United Kingdom (Lasfer, 2002), Taiwan (Cheng and Hou, 2013) and Hong Kong (Zhang, 2005). We find a gap in financial literature concerning the size and persistence of share repurchase anomaly on European emerging markets.…”

Section: Introductionmentioning

confidence: 86%

Closing the value gap by the means of stock repurchase announcement – the case of Warsaw Stock Exchange

Słoński¹,

Zawadzki²

2013

BEH

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This article shows that announcement of share repurchase programs on Polish market is used as a price catalyst when the spread between intrinsic and market value is large. The article presents determinants, conditions and results of 77 open market share repurchase programs conducted on Warsaw Stock Exchange (WSE) between 2005 and 2010. We find the behaviour of management boards of companies listed on WSE consistent with the market timing theory assumptions, as in most cases managers passed the information to the market without any additional economic costs. Investors who adopted the strategy to invest in undervalued stocks and hold the securities for 6 months realized a total return of 61.15% in the analyzed period.

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“…Previous research has primarily concentrated on dividend policies and open market repurchases from various angles (Cheng, 2005;Cheng & Hou, 2013, 2017Hou, 2024;Jin, 2004;Liao & Chen, 2008), with fewer studies delving into the CRCR system. With the exception of Taiwan, where legislation permits companies to carry out CRCR, this practice has not been embraced by other countries.…”

Section: Introductionmentioning

confidence: 99%

Exploring cash refund capital reduction in Taiwan: Empirical insights from bull and bear markets

Wei,

Yu,

Hou

2024

J Corp Accounting Finance

Self Cite

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The paper explores the concept of cash refund capital reductions (CRCR) in the context of firms listed on the Taiwan Stock Exchange Corporation (TSEC) and GreTai Securities Market (GTSM). CRCR is a distinct and increasingly vital financial tool used by these firms. Taiwan stands alone in adopting CRCR, making it a challenge to establish both a theoretical framework and gather empirical evidence on this subject. In this study, we examined 205 CRCR announcements made between 2002 and 2022, delving into their impact on both bull and bear markets. Our investigation reveals that the market responses to CRCR announcements were more significant during bull markets compared to bear markets. Additionally, we delve into the crucial factors influencing market responses in these varying market conditions. The findings underscore the importance for firms announcing CRCR to carefully consider the prevailing market conditions.

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The information content of open-market repurchase announcements in Taiwan

Cited by 9 publications

References 29 publications

Effects of the Pre-Repurchase Systematic Risk on the Relationship Between Investor Behavior, Market Factors and the Stock Price Responses

Effects of the Pre-Repurchase Systematic Risk on the Relationship Between Investor Behavior, Market Factors and the Stock Price Responses

Closing the value gap by the means of stock repurchase announcement – the case of Warsaw Stock Exchange

Exploring cash refund capital reduction in Taiwan: Empirical insights from bull and bear markets

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