Market Reaction around the Buyback Announcements: An Empirical Analysis of Informational Efficiency of Indian Stock Market
Journal Title: International Journal of Management, IT and Engineering - Year 2012, Vol 2, Issue 7
Abstract
In this paper an important financial event buyback of shares has been analyzed with an aim to evaluate the impact of its announcement on stocks listed on National Stock Exchange S&P CNX 500 (index). We have used the event study methodology to see the impact of the announcement. The present study could not find evidence of abnormal returns associated with the announcement of buy-back of shares in the Indian capital market. In this paper impact of mode of buy-back has also been analyzed. No significant impact of mode of buy-back has been seen from analysis. Market reacted positively but insignificantly in case of buy-back through open offer. Overall findings support the stock market efficiency in semi-strong form. The stock market efficiency is not only concerned with the direction of change in the stock prices rather it is concerned with magnitude of change.
Authors and Affiliations
Dr. Harsh Purohit, Dr. Vibha Dua Satija and Haritika Sabharwal Chhatwal
Keywords
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