XXV Edition

1-2 December 2016"

Timing the Market with Own Stock. Evidence from a Bailout Country

Santos Dinis, University of Coimbra
Gama Paulo, University of Coimbra

Can firms time the market? This paper uses hand collected data on 38114 own stock transactions from 2005 to 2015 of Euronext Lisbon listed companies to detect market timing capabilities within different settings. Grounding on Dittmar and Field (2015) the paper uses relative transaction prices to ascertain market timing. Own stock buying and selling are examined separately and dissection is made studying open market and over the counter transactions, frequency characterization and the presence of a bailout context. Multivariate regression results show that the bailout had a negative impact on the firms market timing capabilities, frequent repurchasers (frequent resellers) can indeed time the market, at all frequencies and both with lead or lag benchmarks, and within the repurchase environment, transactions made OTC positively influence the market timing capabilities of firms. Univariate results support.

Area: Other

Keywords: Repurchases, Own Stock, Opportunistic Behavior, Market Timing, OTC transactions

Paper file

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