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Share Repurchases Announcement Effect On Earnings: Evidence From South Africa

Author

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  • L.W. Makasi
  • J. W. Kruger

Abstract

This study investigates the effect share repurchases announcements have on earnings of companies listed on the Johannesburg Stock Exchange over a period of 8 years from 2001 to 2008. The study investigates 27 companies listed in the middle capitalization and large capitalization stocks of the Johannesburg Stock Exchange. The study measured earnings by 1) earnings per share percentage change, 2) dividend per share percentage change and 3) cash flow per share percentage change. These variables were investigated over a period of 6 years, 3 years pre- and 3 years post-announcement of share repurchase. The data was analyzed and tested using the T-test and the Wilcoxon parametric paired test.

Suggested Citation

  • L.W. Makasi & J. W. Kruger, 2013. "Share Repurchases Announcement Effect On Earnings: Evidence From South Africa," Accounting & Taxation, The Institute for Business and Finance Research, vol. 5(1), pages 41-46.
    • Handle: RePEc:ibf:acttax:v:5:y:2013:i:1:p:41-46
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    References listed on IDEAS

    as
    1. Li-Hua, Lin & Szu-Hsien Lin & Ya-Chiu Angela Liu, 2011. "Stock Repurchase Announcements And Stock Prices Evidence From Taiwan," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 5(1), pages 1-12.
    2. Barth, Mary E. & Kasznik, Ron, 1999. "Share repurchases and intangible assets," Journal of Accounting and Economics, Elsevier, vol. 28(2), pages 211-241, December.
    3. Dittmar, Amy K, 2000. "Why Do Firms Repurchase Stock?," The Journal of Business, University of Chicago Press, vol. 73(3), pages 331-355, July.
    4. Bens, Daniel A. & Nagar, Venky & Skinner, Douglas J. & Wong, M. H. Franco, 2003. "Employee stock options, EPS dilution, and stock repurchases," Journal of Accounting and Economics, Elsevier, vol. 36(1-3), pages 51-90, December.
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    Cited by:

    1. Alquhaif, Abdulsalam & Al-Gamrh, Bakr & Abdul Latif, Rohaida, 2020. "An overview of share buybacks: A descriptive case from Malaysia," Journal of Behavioral and Experimental Finance, Elsevier, vol. 28(C).

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    More about this item

    Keywords

    Stock buy-back; share repurchases; repurchase announcement; earnings;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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