Analysis Of Stock Repurchase By Listed Companies In China

Stock repurchase is a mature method of capital operation in developed capital markets and is frequently used since 1980s. In China, it's still under trial stage. We are familiar with capital-widening operations such as acquisition, merger and issuing new shares, but not with stock repurchase. It has important functions of capital structure optimization, State-owned stock lessening and modern incentive system promotion. By analyzing the stock repurchase cases in China, the paper probes into the improvement of regulations in China.First, the paper gives a general introduction of stock repurchase, including the main types, motives and popular theories of stock repurchase in the West. The relative laws of Western countries and development trend are also briefly presented. Secondly, the essay states the significance of stock repurchase to listed companies, shareholders and securities market. Also the comparison between the stock repurchase in China and in foreign countries is made. Thirdly, analysis on capital structure, financial statistics, CAR of repurchase announcement, market reaction and business performance of repurchase cases in China is made to test consistency of Western theories in China and to show the features of our country's repurchase. Finally, suggestion on laws and regulations of stock repurchase is put.