A STUDY USING MULTIVARIATE REGRESSION COMPANIES IN MALAYSIA AND REPURCHASE ACTIVITY IN MALAYSIAN MARKET

Abstract

This research thesis will study the relationship between share repurchases and stock price of listed companies on Bursa Malaysia in specific, economic stability conditions both in Malaysia and around the world from 2017 to 2021. Although this technique has been around as early as the 1980s in the USA as it was prevalent in Western markets, it did not catch on in Malaysia in the 1990s. Yet, the research on share repurchase is still relatively early within Malaysia. Relative to other countries where firms repurchase in order to do so for a multitude of reasons such as signaling undervaluation, rewarding shareholders, acting as a defence against takeovers or as a means of financial resource use if at all needed and other interests of scholars. Unlike earlier works that only consider announcement dates, acknowledging that the announcement does not automatically mean transaction execution, this study seeks to inform the market with a focus on real-world effective repurchase days performed by established companies. This strategy is crucial for determining outcomes as the results demonstrate positive abnormal mean returns for most companies investigated. This can be addressed more fully using the event study methodology, which is a more solid empirical research approach compared to prior literature for abnormal returns. The analysis covers 120 days before and after announcements, and examining return behaviors under estimation windows, event windows (repurchase day), and post-event intervals helps to interpret price movements at Bursa Malaysia Kuala Lumpur (BSKL).