Lee , Siew Peng and Isa, Mansor
(2015)
Management Perceptions Of Share
Repurchases In Emerging Markets: The Case
For Malaysia.
Asian Academy of Management Journal of Accounting and Finance, 11 (1).
pp. 1-25.
ISSN 1823-4992
Abstract
The purpose of this paper is to study the perceptions of Malaysian chief finance officers
(CFO) concerning their reasons for repurchasing shares. We sent a survey questionnaire
to the chief finance officers of all the companies listed on the Malaysian Stock Exchange
that made repurchase announcements over the period 1 September 1997 until 31
December 2011. The results indicate that the main reason for Malaysian companies to
engage in share repurchases is to protect their share prices from market
undervaluation. This reason supports the signalling hypothesis, which is found in most of
the empirical studies on market reaction to share repurchase announcements. Other
repurchase motives, such as to increase EPS, to adjust capital structure, and to use as a
substitute for cash dividend received less support from our respondents. These findings
are useful, especially to investors for understanding the intention of companies to
repurchase shares.
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