International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Common Stock Repurchases: Case of Stock Exchange of Thailand
Wiyada Nittayagasetwat, Aekkachai Nittayagasetwat

In Thailand, common stock repurchase has been allowed since 2001. Eighty-six repurchase announcements from 69 companies listed on Stock Exchange of Thailand (SET) have been made during December 14, 2001- May 22, 2012 (two companies were delisted). This paper is to investigate whether repurchase announcement has any effect on the abnormal return of the listed firms or not. Event study methodology is employed. Sample covers 78 announcements excluding six illiquid stocks and two recent announcements. The announcement date is set as the same date of the board of director meeting because the company must disclose the resolution to SET within the date of resolution or within 9:00 a.m. of the next business day. The result shows the positive abnormal return of 2.23%, on average, at 1% significance level. Graph of cumulative abnormal return reports very clearly that the significant abnormal return starts 2 days before the announcement date. This is consistent with the arguments that repurchase is done when stock is underpriced and management knows about this information.

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