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Återköp av Aktier: En jämförande studie mellan Sverige och Kina
Södertörn University, School of Business Studies.
Södertörn University, School of Business Studies.
2011 (Swedish)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesisAlternative title
Share Repurchases : A comparative study between Sweden and China (English)
Abstract [en]

Share repurchases in Sweden has since legalization in 2000 gained momentum. Similar to other corporate events, there are studies that examine whether this affects the share price performance. With studies in the U.S. that measured excess returns of approximately 3,5 percent on the announcement day; Swedish buybacks, holding a tighter regulation is of interest to study. The Stockholm Stock Exchange regulation regarding reporting is also similar to the Stock Exchange in Hong Kong. Unlike most previous research using only the announcement of a buyback, where an actual repurchase cannot be assured, the stock exchanges in this study requires disclosure on a daily basis, which means that the announcement can be linked to an actual share repurchase.

The study aims to examine how the stock markets in Stockholm and Hong Kong react to share repurchases. Thereby judge whether the notice gives a negative or positive effect. The problem formulation takes the following approach: Is there abnormal returns at the announcement of share repurchases in the Stockholm stock exchange and the Hong Kong stock exchange. 

The following sub questions will further be explored:

  • Are there differences between the size of the abnormal return and industry?
  • Is there a correlation between the abnormal returns and corporate market-to-book value?

The survey is conducted through an event study, measuring abnormal return during a window of ten days prior to the announcement day and ten days after. Repurchases are studied during the period 2000-03-10 until 2011-04-10 in order to cover the entire period since legalization in Sweden. The sectors used are: industrials, financials, consumer discretionaries and information technology. Furthermore a regression analysis consisting of the variables market-to-book, divided into low and high values, and abnormal return is constructed.

Through a theoretical synthesis, consisting of previous research, signaling hypotheses, the efficient market hypothesis and agency theory, the empirical data is analyzed. The conducted study shows low positive abnormal returns (AAR) for both Stockholm and Hong Kong at 0,37 percent and 0,38 percent for the announcement day respectively with a certain significance days before the announcement. Small differences exist between sectors, with financials showing highest abnormal return and consumer discretionaries the lowest in the two markets. There is furthermore a significant value between high market-to-book values and negative abnormal returns.

Place, publisher, year, edition, pages
2011. , p. 58
Keyword [en]
Share buyback, share repurchase, eventstudy, signaling hypothesis, market-to-book
Keyword [sv]
Återköp, eventstudie, signalhypotesen, market-to-book
National Category
Business Administration
Identifiers
URN: urn:nbn:se:sh:diva-14855OAI: oai:DiVA.org:sh-14855DiVA: diva2:481347
Subject / course
Business Studies
Presentation
(Swedish)
Uppsok
Social and Behavioural Science, Law
Supervisors
Examiners
Available from: 2012-01-23 Created: 2012-01-20 Last updated: 2012-01-23Bibliographically approved

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