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Does price react to fixed price tender offer share buyback announcement?


Kadir @ Shahar, Hanita and Abdullah, Nur Adiana Hiau (2007) Does price react to fixed price tender offer share buyback announcement? International Journal of Management Studies (IJMS), 14 (1). pp. 39-59. ISSN 0127-8983

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Official URL: http://ijms.uum.edu.my

Abstract

This paper investigates stock market reactions to share buyback announcements, specifically with the fixed price tender offer mechanism. An event study methodology was used to examine stock price reaction of 30 observations involving 21 listed companies surrounding the announcement dates. Two models, namely market adjusted return (MAR) and the single index market models (SIMM) were utilised to compute abnormal returns.Eventhough most literature in the western market found positive abnormal returns, this study reveals that investors gain zero abnormal returns out of these announcements. The post announcement result shows a zero abnormal return which implies that the Malaysian stock market is semi-strongly efficient due to this announcement. Finally, evidence also shows that none of the implications forwarded in the theories could be supported in this study.

Item Type: Article
Uncontrolled Keywords: tender offers, securities
Subjects: H Social Sciences > HG Finance
Divisions: College of Business
Depositing User: Prof. Dr. Nur Adiana Hiau Abdullah
Date Deposited: 23 Jun 2010 16:45
Last Modified: 28 Jun 2010 09:51
URI: http://repo.uum.edu.my/id/eprint/16

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