OPEN MARKET STOCK REPURCHASES AT SÃO PAULO STOCK EXCHANGE – BOVESPA

Abstract

This paper examines stock prices reaction to open market repurchases announcements at the São Paulo Stock Exchange between May 30, 1997 and October 31, 1998. This institutional scenario is a good testing ground for some theoretical hypotheses about stock repurchases announcements, because during this period there were taxes on capital gains but not on dividends. Using an event study methodology, we examined 110 episodes and found very small abnormal returns. Those results can not be explained by two main competing theoretical explanations. The Cumulative Abnormal Returns pattern found clearly suggests that repurchase announcements affected the behavior of stock prices in ways not described in previous studies.

Citation

Laser Procianoy, J. and Fernando Moreira, L. (2005), "OPEN MARKET STOCK REPURCHASES AT SÃO PAULO STOCK EXCHANGE – BOVESPA", Arbelaez, H. and Click, R.W. (Ed.) Latin American Financial Markets: Developments in Financial Innovations (International Finance Review, Vol. 5), Emerald Group Publishing Limited, Leeds, pp. 345-363. https://doi.org/10.1016/S1569-3767(05)05016-8