RESULTS
·
The
buyback news in the market creates abnormality in the return and volume of the
script, so that investor should not treat that markets are always efficient.
·
Investors
should behave rationally while taking their decision regarding investment in
any script. They should wait for the abnormality in the script to be removed
before investing in it.
·
Investors
should consider the fundamentals of the company before investing in it and
should consider the actual performance of the company over the period of time.
·
Buyback
as a corporate event affects the share prices of the firm for a specific time
period only. As buyback event gets over the abnormality in the script is
removed and the stock prices start reflecting its actual value. So investors
should not get lured by the buybacks.
·
A
huge positive abnormal return before the buyback indicates the sins of leakage
of any insider information. So the investor must check room for such insider
information before investing in that company. This will help them to protect
themselves from future losses.
CONCLUSION
·
This study examines the relation between buyback decision and its impact on the
market price of the stock.
·
The
information about the corporate buyback policies brings abnormality in the market
and market does perform efficiently.
·
The
movements in stock prices and trading volume are influenced by the flow of new
information into the market.
·
The
buyback effect are reflected into the market price of the company within the
time period of few days before the announce date to few days after the buyback
date.
·
Insider
information plays vital role in the fluctuations of stock price and trading
volume of and company which has declared buyback.
· It
can be concluded from this study that there is linear relationship between
buyback decision and market price of the company for a limited duration.
Thereafter the markets start behaving efficiently and absorb all the available
information in the market.
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