| Summary: | 碩士 === 國立臺灣大學 === 財務金融學研究所 === 97 === The new reigning party took over the power in May 2008, the decadent stock market finally turned into crash caused by the political instability. The consensus reached by the Treasury Department and Legislative Yuan on June 30 was the enactment of treasury stock to stabilize the continuous slide of stock market. This research is to find out the variation of stock prices before and after the application of treasury stock measures on eiher bearish market or bullish market respectively. The purpose of this paper includes as follows: (1) to verify if there are different stock price effects on the enactment of the law, (2) purposes of buyback on eiher bearish market or bullish market, (3) over various industries, (4) to examine if there are different stock price effects on the amount of purchase. I expect this research will shed some light to further understand the effect of stock buy-back program and hopefully provides some help to the future development of our stock market system.
The purposes of treasury stock system are as follows: to transfer the buy-back stock to employees to promote their loyalty and keep talents, to provide a convenient channel for fund infusion , The underlying legal stipulation of the treasury stock system is the Securities and Exchange Law §28-II., to protect corporate credit from degrading and maintain shareholder’s equity, to avoid unreasonable plummeting of company stock price caused by unaccountable factors, also to provide tax saving, earning increase, improvement of corporate capital structure, and maintain consistent dividend policy.
The materials of this paper are chosen from exchange-listed companies who had
practiced the treasury stock buyback at least once before December 31, 2008, seventy two companies are selected altogether. The statistical methodologies applied including analysis of variance (ANOVA), t-test,and simple linear regression in SAS .The empirical are as follows:
1. The study discovers the price performance of one-month-after is better than that of one-month-before And the company’s stock price performs better than the weighted market index..
2. It can’t be sure if there are different stock price after announcement and after announcement to the end of day performed on either bearish marktor bullish market respectively.
3. Both one-month-before and one-month-after situation Among various industries, non-electronic company performs far better than high-tech electronic company in.
4. With positive return in share price buybacks more than those with negative return in terms of percentage of share buyback vs. average daily volume in both one-month-before and one-month-after case.
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