A Study Of Factors Influcing Short-term Market Effect Of Lised Companies’ Sotck Repurchase In China

For inciting equity and improving share price purposes,listed companies reduce the number of shares in circulation according utilizing the funds of the company’s business activities or financing funds to recover the company’s stock.This behavior is called stock repurchase.After the stock repurchase,the company’s stock capital structure and ownership structure will be affected.Stock repurchase has been regarded as a kind of common tool of capital allocation for a long time in the western developed capitalist countries.Stock repurchase,originated in the United States,has become an important way of capital operation and profit distribution in the capital market.With the increasingly development of Chinese capital market,stock repurchase as an important financial instrument will be paid more and more attention and be widely used by the listed companies in China.Especially with the completion of the reform of equity division by the end of 2006,China’s capital market has entered the era of full circulation.China Banking Regulatory Commission issued Supplementary Provisions on the Share Repurchase by Listed Companies by Means of Centralized Bidding in 2008,this measure has promoted the use and development of stock repurchase in China.The business guidelines of Share repurchase through bidding at stock exchanges of listed companies(revised in 2013)issued by Shanghai Stock Exchange.The guidelines Pull up the market economy and enhance the vitality of the entire market economy.Therefore,this paper summarize all the sample data that from the completion of the non-tradable shares reform in 2007 to now.This paper researches and analyzes the market effect of stock repurchase of listed companies from the perspective of circulation stock.It has great theoretical and practical significance for the future development of our country and bridging the gap between developed countries.Based on the above considerations,this paper first elaborates the concept of stock repurchase.Secondly,this paper analyzes and summarizes the domestic and foreign research achievements and development status from the perspective of the factors that influencing the market effect of stock repurchase.Based on this,this paper uses the data that from the completion of the non-tradable shares reform to now as sample,uses the event study method to test the short-term market effects of stock repurchase in China and analyzes the influencing factors of short-term market effect.This paper mainly draws the following conclusions:Short term memory of stock repurchase in China has a strong positive market effect,and there is a phenomenon of early disclosure;The higher the Rate of Return on Common Stockholders’ Equity(ROE),the more positive the market reaction of stock repurchase;The debt to assets ratio,the cash flow of the company’s operating activities are negatively correlated with the market effect;The Intensive Degree of Share Ownership,the size of the listed company have a reverse relationship with the stock repurchase.