The Empirical Study On The Market Notice Of The Stock Repurchase Applied To The Share Reform In China

Listed companies in China conduct stock repurchase especially following the threshold of the share reform in a convergent way, which can be attributed that the share repurchase plays a remarkable role in solving the problems such as resistance of major shareholders to promote the progress of share reform smoothly. Therefore, share repurchase and stock reform have been applied by many companies at the same time in which background this paper attempts to do relevant empirical research.Based on both separate and comparative analysis, the thesis concludes that the stock repurchase and share reform pass on positive message to the market and investors respond actively to various degrees. Under the condition that the repurchase occurrs along with the share reform, it would produce a mixed announcement effect which not only maintains positive incentives from each single means to share price but also receives a significant interactive influence. Linear regression is applied to give explanation from the quantitative point of view. According to the empirical analysis, the accumulative excess income rate of the stock repurchase sample is significantly and positively related to the repurchase rate especially in the [-1, 1] time-window; the accumulative excess income rate of the share reform sample is significantly and positively related to share proportion ratio-change of the first major shareholding, dummy variables of repurchase and the constant but not to the consideration of the gift shares. Finally, the paper selects data of four listed companies from each sample group to do a case study, which validates the empirical results.Policy recommendations could be given based on the research results, which conclude to enhance the application of share repurchases, to improve the regulatory system of local security market and to diversify the compensation methods of share reform. The study can be regarded as a summary of the successful share reform process and provides the referential for the systemic reformation of capital market.