Information signalling of common stock repurchase announcements: Australian evidence

Stock repurchases (or share buy-backs) have become increasingly popular among Australian companies. One of the main aims of announcing a stock repurchase by a listed company is signalling the market that its shares are currently underpriced. When market reacts to the signal, price of the shares is expected to increase immediately after the announcement. While there are several ways of repurchasing shares, 'on-market buy-backs' is the most popular method of stock repurchases in Australia. Australian listed companies have announced more than two hundred on-market share buy-backs over the past three years. The aim of this paper is to examine the information signalling effects of these on-market buy-back announcements. If the signal is considered positively (negatively) by the market, the price of the repurchasing company's shares should increase (decrease) immediately after the announcement. If there is no information content in the announcement, the price will remain the same. In this study, signalling effect of share buy-back announcements was examined using most recent Australian data. The total population of on-market buy-back announcements during the period from January 1, 2000 to March 10, 2003 was included. The abnormal market return over the short-run (announcement day and 9 trading days centred on the announcement date) was computed using the All Ordinaries Accumulation Index as the reference portfolio. The daily Abnormal Returns (AR) and Cumulative Abnormal Returns (CAR) during the event period were computed. The results strongly support the information-signalling hypothesis of share buy..backs. Australian market generally considers announcement of on~market share repurchases as signalling of insider information that shares are currently underpriced.

The effect of water deprivation on signalling molecules that utilise cGMP in the Spinifex Hopping Mouse Notomys alexis

In mammals the natriuretic and guanylin peptides influence renal and intestinal fluid content and electrolyte transport by binding to and activating guanylyl cyclase (GC) receptors that in turn stimulate production of the intracellular second messenger guanosine 3':5'-cyclic monophospate
(cGMP). However, the role of natriuretic and guanylin peptides in desert mammals is not understood. The spinifex hopping-mouse (Notomys alexis), has a suite of behavioural and physiological mechanisms that permits survival for extended periods without access to free water. Because signalling molecules that generate cGMP are known to promote water excretion, it was predicted that natriuretic and guanylin peptide synthesis would be down regulated in water-deprived N. alexis, and thus reduce the amount of water lost in the urine and faeces. However, in the kidney ANP and GC-A mRNA levels were increased in water-deprived mice, but CNP and GC-B mRNA levels were decreased. Water deprivation increased guanylin and uroguanylin mRNA expression in the distal colon, but it remained unchanged in the kidney and proximal colon. The expression of GC-C mRNA increased in the proximal colon but not in the distal colon. This study shows that water deprivation differentially affects the expression of regulatory molecules that stimulate cGMP producti

A dynamic ratio-based model for signalling corporate collapse

The recognition of behavioural elements in finance has caused major shifts in the analytic framework pertaining to ratio-based modeling of corporate collapse. The modeling approach so far has been based on the classical rational theory in behavioural economics, which assumes that the financial ratios (i.e., the predictors of collapse) are static over time. The paper argues that, in the absence of rational economic theory, a static model is flawed, and that a suitable model instead is one that reflects the heuristic behavioural framework, which is what characterises behavioural attributes of company directors and in turn influences the accounting numbers used in calculating the financial ratios. This calls for a dynamic model: dynamic in the sense that it does not rely on a coherent assortment of financial ratios for signaling corporate collapse over multiple time periods. This paper provides empirical evidence, using a data set of Australian publicly listed companies, to demonstrate that a dynamic model consistently outperforms its static counterpart in signaling the event of collapse. On average, the overall predictive power of the dynamic model is 86.83% compared to an average overall predictive power of 69.35% for the static model.

Store names information signalling : a credibility perspective

This study is about store names as brand signals. Using the framework of Erdem and Swait (1998), hypotheses are developed regarding the effects of store names on consumers' expected product utility. It is relevant to study store names as brand signals because store names can act as additional signals in the consumer purchase decision process. The study focuses in particular on the effects of store name credibility on perceived risk, information costs and perceived product quality. The hypotheses will be tested on data that are currently being collected in a survey among two hundred students.

Improved glusoce homeostasis and enhanced insulin signalling in Grb 14-deficient mice

Gene targeting was used to characterize the physiological role of growth factor receptor-bound (Grb)14, an adapter-type signalling protein that associates with the insulin receptor (IR). Adult male Grb14^-/- mice displayed improved glucose tolerance, lower circulating insulin levels, and increased incorporation of glucose into glycogen in the liver and skeletal muscle. In ex vivo studies, insulin-induced 2-deoxyglucose uptake was enhanced in soleus muscle, but not in epididymal adipose tissue. These metabolic effects correlated with tissue-specific alterations in insulin signalling. In the liver, despite lower IR autophosphorylation, enhanced insulin-induced tyrosine phosphorylation of insulin receptor substrate (IRS)-1 and activation of protein kinase B (PKB) was observed. In skeletal muscle, IR tyrosine phosphorylation was normal, but signalling via IRS-1 and PKB was increased. Finally, no effect of Grb14 ablation was observed on insulin signalling in white adipose tissue. These findings demonstrate that Grb14 functions in vivo as a tissue-specific modulator of insulin action, most likely via repression of IR-mediated IRS-1 tyrosine phosphorylation, and highlight this protein as a potential target for therapeutic intervention.

Natriuretic peptide signalling in the gills of freshwater and seawater fishes

The gills are considered major targets for cardiac natriuretic peptides with studies confirming natriuretic peptide receptor presence on vascular and sometimes epithelial tissues. Natriuretic peptide intracellular signalling is via guanylyl cyclase receptors and the cGMP pathway, and via inhibitory G-proteins linked to cyclic AMP pathways. Natriuretic peptides in the gills alter branchial blood flow and may also alter ion transport in various salinities. We present an overview of natriuretic peptide cGMP and cAMP signalling in fishes and consider the implications of the recent discovery of several CNPs and BNP in bony fishes on natriuretic peptide receptor studies.

Elucidation of defence responses and signalling pathways induced in Arabidopsis thaliana following challenge with Phytophthora cinnamomi

Arabidopsis thaliana (Arabidopsis) Col-0 was inoculated with Phytophthora cinnamomi to assess the interaction and defence responses involved. Pathogen ingress and asexual reproduction occurred on root tissue but not leaf tissue. The colonisation of root tissue did not cause disease symptoms or plant death, indicating that Arabidopsis Col-0 was tolerant of the infection. The induction of several plant defence responses including the expression of defence-related genes were found, with differences displayed between inoculated root and leaf tissue. Arabidopsis defence-related gene mutant/over-expressing lines were also inoculated with P. cinnamomi but none of the lines tested exhibited a marked increase in susceptibility to the pathogen.

Structural equation modelling of complex sample survey : an application to brand signalling data

The purpose of this paper is to present an empirical analysis of complex sample data with regard to the biasing effect of nonindependence of observations on standard error parameter estimates. In a two-factor confirmatory factor analysis model, using real data, we show how the bias in standard errors can be derived when the nonindependence is ignored. We demonstrate that the standard error bias produced by the nonindependence of observations can be considerable and we briefly discuss solutions to overcome the problem.

The effect of estrogen on Akt signalling and protein synthesis in C2C12 mouse skeletal myotubes

The maintenance of skeletal muscle mass is a critical component of health in both chronic wasting diseases and aging. A considerable amount of progress has been made in the understanding of the signalling pathways that mediate skeletal muscle hypertrophy and atrophy. Akt is seen as a key molecular protein involved in the maintenance of skeletal muscle mass as it has the dual ability to positively influence protein syntheses and negatively regulate protein degradation in its active state (Glass, 2003). Potential mechanisms which may assist with maintaining skeletal muscle mass are the estrogen hormones. Estrogens increase the proliferation of mouse and rat myoblasts and can also attenuate immobilization-induced skeletal muscle atrophy in rats in vivo (Kahlert et al., 1997). No studies have investigated the effect of estrogens on the activation of skeletal muscle hypertrophy and atrophy signalling pathways. Estrogens may contribute to maintaining skeletal muscle mass via their activation of the Akt signalling pathways. Therefore, the aims of the present study were to determine if treatment of C2C12 myotubes with either 17β-estrodiol or estrone increases the activity of Akt and its downstream anabolic signalling proteins, GSK, p70s6k and 4E-BP1 and decreases its catabolic stimulating targets, FOXO, atrogin-1 and MuRF-1. A secondary aim was to determine if this was associated with an increased rate of protein synthesis.

C2C12 myotubes were incubated at 37°C in serum free DMEM without phenol red containing 10 000 units/ml penicillin, 10 000 μg/ml streptomycin, and 250μg/ml amphotericin B for 24h. Myotubes were then stimulated with 17-β estradiol (10nM) for 24h. Phosphorylated and total proteins for Akt, p70S6k, GSK3β, 4E-BP1, FOXO and atrogin-1 were measured using western blotting techniques. Atrogin-1 and MuRF1 mRNA levels were measured using real time-PCR. Protein synthesis rates were measured by incorporation of [3H]-tyrosine into the myotubes during the last hour of treatment.

Compared to control myotubes, treatment with 17β-estradiol increased the ratio of phosphorylated to total protein contents for Akt, GSK-3β and P70s6k by, 1.62, 1.53 and 2.2 fold, respectively (n=6 per group; p < 0.05). There was, however, no difference in the ratios of phosphorylated to total 4E-BP1 or Foxo3a or Atrogin-1 and MuRF1 mRNA. Protein synthesis rates remained unchanged.

This study demonstrates that in C2C12 mouse myotubes, 17β-estradiol treatment increases the phosphorylation of the hypertrophy signalling protein, Akt, and its downstream hypertrophy signalling targets, GSK-3β and P70s6k; no associated changes in protein synthesis were observed. Future studies should investigate the ability of 17β-estradiol to activate these proteins in a model of myotube catabolism and to determine if protein degradation is attenuated.