The Analysis Of Share Repurchase Motive And Market Effect In Chinese Listed Companies

Shares repurchased means that in listed companies, in order to adjustthe capital structure and enhance corporate value and other purposes,repurchasing outstanding shares. China’s current share repurchaseshowing a trend of diversification. With the development of capitalmarkets, a growing number of listed companies leaders recognize thebenefits of share repurchase for the company, and began to try to developa share buyback program. Therefore, in-depth study and discussion of thetheoretical share repurchase share repurchase practical problems,promoting the development of China’s capital market has a positivepractical significance.Firstly, using standard research methods, expounded motivation ofrepurchasing shares in China’s listed companies, then using empiricalresearch to analyze the effect of share repurchase market, and on thisbasis, exploring the market effects of different issues under repurchasemotives. In this paper, the conclusion as follows：(1)The repurchase of shares of our listed companies and foreignrepurchase motivation theories have in common, and has its owncharacteristics, most of our share repurchase event signaling hypothesiscan be used to interpret, free cash flow hypothesis and stock optionshypothesis, also have the appropriate explanatory.(2)Share repurchase announcement will have a positive market reaction. It will be positive for the day showed abnormal return incidents,but we also found that there are positive excess return before the incidentoccurred, which means the information may be leaked in advance.(3)In the sub-sector testing repo market reaction to theannouncement, we found that the market share repurchase effectsindustry differences exist in China’s capital market, the market sharerepurchases for manufacturing enterprises more recognition, followed byintegrated enterprises, the bio-pharmaceutical enterprises has not beenrecognized by the market.(4) Abnormal return differences between different motives arisingfrom share repurchases significantly. Funds used to solve the greatestvolatility, and in the day of the announcement has the highest averageexcess return, while passing undervalued, enhance the minimum stockprice volatility, the average excess return, followed by the average excessreturn to support the implementation of equity incentive motivated thelowest rate, or even a negative.