Motivations for Share Repurchase Programs and the Effect of Share Prices on Managerial Decisions to End Share Repurchase Programs in Thailand
Naratip Tabtieng

Abstract
This study examined the motivations that influenced managerial decisions to repurchase shares of listed companies in Thailand from July 2001 to December 2009. A survey of 64 companies found that the most often cited reasons were that the firms’ share prices were undervalued, priced below their fundamental basis, and the desire to improve earnings per share. This research also studies the effects of managerial decisions to end share repurchase programs at 27 companies. The results show that the share prices of 12 companies increased after the end of share repurchase programs. However, there were only 4 companies that decided to resell their treasury shares at a gain; the other 8 companies decided to end their share repurchase programs by decreasing their share capital. Conceptually, those 8 companies should have ended their programs by reselling at a gain. However this study found that there were other reasons that were more important than the effect of gains on financial statements, such as the desire to maintain the stock price at a present high level to avoid a takeover from other investors. When the share prices of the 15 other companies decreased after the end of share repurchase programs, there were 4 companies that decided to resell their treasury shares at a gain, which seems an appropriate decision since after that period their respective share prices went down. However, the other 11 companies decided to end their share repurchase programs by either reselling treasury shares at a loss (3 companies) or decreasing their share capital (8 companies), considering mainly the effects on financial statements as of the dates of decreasing their share capital.

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