Does Price React to Fixed Price Tender Offer Share Buyback Announcement?

Authors

  • Hanita Kadir Shahar Faculty of Finance and Banking Universiti Utara Malaysia, Malaysia
  • Nur Adiana Hiau Abdullah Faculty of Finance and Banking Universiti Utara Malaysia, Malaysia

DOI:

https://doi.org/10.32890/ijms2006.13.1.4

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.

 

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References

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Published

01-06-2006

Issue

Vol. 13 No. 1 (2006): International Journal of Management Studies (IJMS) Vol. 13, No. 1 June 2006

Section

Articles

Research impact

Harvested 2026-09-08
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Identifiers DOI 10.32890/ijms2006.13.1.4 OpenAlex W7009430784

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