Research Articles (Business and Finance)

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Comparison of multifactor asset pricing models in the South African stock market [2000–2016]
(MDPI, 2023) Mukoyi, Lenia; Ogujiuba, Kanayo K.
The quest for parsimonious models has been a key objective in asset pricing. However, there appears to be no consensus on the most successful asset pricing strategy in the literature, especially for the South African Market. Using financial statements from January 2000 to December 2015, this article explores how market anomalies affect the performance of securities in the Johannesburg Stock Exchange’s (JSE’s) resources, industrial, and finance sectors. We investigated the efficacy of several asset pricing models and their capacity to account for market anomalies in the JSE’s resources, industrial, and financial sectors, as well as the applicability of the Fama and French five-factor model. The study used multiple regression techniques and applied stationarity and cointegration methods to ensure robust results. Results also suggest that when the FF5FM is implemented, there is statistical significance at the 10% level for the CMA in the resources sector as the value factor disappears. The FF5FM results in the industrial sector show a significance level of 5% in the SMB. The financial sector seems to have the majority of the style-based risk factors as the SMB is positively significant at a 5% level, the HML is significant at a 1% level, and the CMA is negatively significant at a 10% level of significance. The results suggest that the Carhart Four Factor model is the best to use in all market conditions.
Contagion risk in equity markets during financial crises and Covid-19: A comparison of developed and emerging markets
(Alexandru Ioan Cuza University Press, 2022) Muzindutsi, Paul-Francois; Sheodin, Akita; Dube, Fikile
This study compared the impact of the Global Financial Crisis (GFC) and the COVID-19 pandemic on financial market contagion between developed and emerging markets. A DCC-GARCH model was employed to test the contagion effects of developed and emerging markets using weekly returns for the S&P 500 (US), FTSE-100 (UK), ASX 200 (AUS), IBOVESPA (BRA), BSE SENSEX (IND) and BVM IPC (MEX). The results show that there was a persuasive case made for the integration of markets for efficient financial systems. A crisis occurring in one market holds significant repercussions for any of the connected markets. The findings show that the COVID-19 pandemic affected all the markets more severely than the GFC and contagion effects were more pronounced in emerging markets than in developed markets during the GFC and the pandemic. Consequently, policymakers in emerging markets should implement policies that reduce external vulnerabilities and improve their markets’ stability to reduce the impact of contagion risk.
Managerial competencies of hospital managers in South Africa: a survey of managers in the public and private sectors
(BMC, 2008) Pillay, Rubin
South Africa has large public and private sectors and there is a common perception that public sector hospitals are inefficient and ineffective while the privately owned and managed hospitals provide superior care and are more sustainable. The underlying assumption is that there is a potential gap in management capacity between the two sectors. This study aims to ascertain the skills and competency levels of hospital managers in South Africa and to determine whether there are any significant differences in competency levels between managers in the different sectors. A survey using a self administered questionnaire was conducted among hospital managers in South Africa. Respondents were asked to rate their proficiency with seven key functions that they perform. These included delivery of health care, planning, organizing, leading, controlling, legal and ethical, and self-management. Ratings were based on a five point Likert scale ranging from very low skill level to very high skill level.
Investment Management and Financial Innovations
(LLC CPC Business Perspectives, 2016) Punwasi, Kiran; Brijlal, Pradeep
This study examines the market reactions to share repurchase announcements made by companies listed on the Johannesburg Stock Exchange from the years 2003 to 2012. The authors use an event study methodology and the Capital Asset Pricing Model to determine if there was an announcement effect when a share repurchase announcement is made. The analyses reveal that consistent with signalling theory and the announcement effect, share repurchase announcements are associated with positive abnormal returns. The average abnormal return and cumulative average abnormal return noted was 0.46% and 3.81%, respectively, for the event period (t-20, t+20). There was an observable trend of declining share prices before the share repurchase announcement. The authors also found no significant evidence that repurchasing firms have market timing ability when executing a share repurchase announcement. From a value investor's perspective, a share repurchase program conveys a very strong signal of a healthy company.
Performance evaluation of actively managed mutual funds
(LLC CPC Business Perspectives, 2016) malefo, Boikanyo Kenneth; Hsieh, Heng-Hsing; Hodnett, Kathleen
Motivated by the growing attraction of the mutual fund industry worldwide, this research seeks to explore the economic benefits contributed by the South African equity unit trust managers over the period from 6 January 2002 to 2 September 2012. The performance statistics of selected equity unit trusts are examined for the overall examination period and two sub-periods: 6 January 2002 to 6 May 2007 and 7 May 2007 to 2 September 2012. The first sub-period captures the bullish performance of the unit trusts before the 2008 global financial crisis. The second sub-period captures the global financial crisis and the European debt crisis before the European Central Bank (ECB) subsequently implemented the outright monetary transactions (OMT) to curb the yields in Eurozone. The risk-adjusted performance measures employed by this study include the Sharpe ratio, M-squared, Treynor measure and Jensen's alpha. Regardless of the different applications of risk-return parameters employed to evaluate fund performance, the results reveal that, on average, most of the equity unit trust managers in South Africa do not outperform the market proxy on a consistent basis. The majority of the unit trust managers show good performance before the crisis, with subsequent inferiority in performance in turbulent times.
Covid-19: An alternative approach to postgraduate supervision in the digital age
(Stellenbosch University, 2022) Hendrickse, Rozenda
Universities globally are facing enormous governmental pressure to increase postgraduate output, and in turn, contribute to the knowledge economy. This pressure is transferred to research supervisors, who have to navigate the complexities of research supervision to not only meet postgraduate output targets set by the university in particular, but postgraduate output targets set by government in general. Before the COVID-19 pandemic, research supervision mostly followed the traditional apprenticeship or group model approach to supervision, where engagement took the form of face-to-face interactions. With the COVID-19 pandemic came social distancing, which forced research supervision to move to online platforms. The core objective of this article was to peruse selected research supervision models or approaches to determine which model or approach would be most suited to an online supervision context, if any. This article advances a re-imagined view of research supervision in higher education.
Dirty money as legal fees in Namibia and Zimbabwe: are lawyers laundering proceeds of crime?
(Emerald group holding, 2022) Duri, Jorum
Purpose: The purpose of this paper is to explore the contentious issue whether lawyers become launderers when they accept dirty money as legal fees. Lawyers represent criminal defendants who may wish to pay for their legal fees with proceeds of their criminal activities. The paper analyses the legal position of Namibia and Zimbabwe on such tainted fees and proceeds to compare with the different position taken by the United States. Design/methodology/approach: The paper adopts a desk research methodology with reliance on various sources such as statutory laws, case laws, books, journal articles and the internet. Its scope is limited to issue and content analysis relating to the use of dirty money as legal fees. Findings: The paper shows that lawyers become launderers when they accept dirty money as legal fees with knowledge or suspicion of its origins. It concludes that the prohibition of dirty money as legal fees is important in the fight against economic crime in Namibia and Zimbabwe. Even though it is decriminalised in the USA, the continuous prosecution of lawyers for tainted fees shows that state authorities are aware of the dangers of tainted legal fees. Originality/value: This paper adds to the few available literature on dirty money and legal fees. It provides sound reasons why prohibition of tainted attorneys’ fees adds muscle to the fight against economic crime. No prior literature is available on tainted legal fees in Namibia and Zimbabwe specifically.
Entrepreneurship gaps framework model: An early-stage business diagnostic tool
(AOSIS OpenJournals Publishing, 2020) Nheta, Daniel S; Shambare, Richard; Sigauke, Caston
Background: In South Africa, entrepreneurship literature demonstrates that three out of four businesses collapse within 3 years of their inception. A plethora of research effort identifies factors such as the lack of finance and access to markets as the leading causes for the high attrition rates amongst emerging businesses. This study finds the narrative to be limiting and inadequate as it does not address the possible gap between entrepreneurs’ expectations and their realities of managing their businesses. Aim: To present the entrepreneurship gaps framework (EGF), an early-stage business diagnostic tool that seeks to assess entrepreneurs’ preparedness. Setting: This study focused on emerging entrepreneurs operating within the limits of developing economies. The framework can be used by emerging entrepreneurs, capacity development institutions and lenders. Methods: A descriptive research design supported by a mixed-method research approach was employed. This was coupled by a two-phase data collection procedure which took place within Limpopo province with 215 participants. Explorative data analysis based on discrete choice models was further implemented. Results: Findings on the EGF illustrated the ability of the framework to act as a more comprehensive diagnostic mechanism that improves early-stage entrepreneurship survival. Conclusion: Entrepreneurship gaps framework is a decision-making tool that can be used by lenders and capacity development institutions to evaluate the emerging entrepreneur with respect to specific areas of business. This results in the necessary support for improving entrepreneur preparedness being provided to entrepreneurs. Secondly, entrepreneurs are likely to benefit from the EGF, if used as a self-diagnostic tool to measure their business preparedness and experience.
Comparison of multifactor asset pricing models in the South African stock market [2000–2016]
(MDPI, 2023) Mukoyi, Lenia; Ogujiuba, Kanayo K.
first_pagesettingsOrder Article Reprints Open AccessFeature PaperArticle Comparison of Multifactor Asset Pricing Models in the South African Stock Market [2000–2016] by Lenia Mukoyi 1 andKanayo K. Ogujiuba 2,*ORCID 1 School of Business and Finance, University of the Western Cape, Belville, Cape Town 7535, Western Cape, South Africa 2 School of Development Studies, University of Mpumalanga, Nelspruit 1200, Mpumalanga, South Africa * Author to whom correspondence should be addressed. J. Risk Financial Manag. 2023, 16(1), 4; https://doi.org/10.3390/jrfm16010004 Received: 2 October 2022 / Revised: 23 November 2022 / Accepted: 25 November 2022 / Published: 22 December 2022 Download Versions Notes Abstract The quest for parsimonious models has been a key objective in asset pricing. However, there appears to be no consensus on the most successful asset pricing strategy in the literature, especially for the South African Market. Using financial statements from January 2000 to December 2015, this article explores how market anomalies affect the performance of securities in the Johannesburg Stock Exchange’s (JSE’s) resources, industrial, and finance sectors. We investigated the efficacy of several asset pricing models and their capacity to account for market anomalies in the JSE’s resources, industrial, and financial sectors, as well as the applicability of the Fama and French five-factor model. The study used multiple regression techniques and applied stationarity and cointegration methods to ensure robust results. Results also suggest that when the FF5FM is implemented, there is statistical significance at the 10% level for the CMA in the resources sector as the value factor disappears. The FF5FM results in the industrial sector show a significance level of 5% in the SMB. The financial sector seems to have the majority of the style-based risk factors as the SMB is positively significant at a 5% level, the HML is significant at a 1% level, and the CMA is negatively significant at a 10% level of significance.
Unclean Energy Source Dependence and Sustainability in Nigeria: Consumption Dynamics and Impact of Contextual Factors
(Econjournals, 2022) Kanayo, Ogujiuba; Naseer, Muazu
Fuelwood is the primary energy source for throughout the developing world. This, indiscriminate use of fuelwood as energy jeopardizes the environment, and well-being of the people. Despite Nigeria being the energy giant in Africa, most of her people still depend on unclean energy [fuelwood] for cooking, heating, and boiling. This article underlines the dynamics and essential impacts of social cum economic and demographic indexes on household unclean energy dependence. We interviewed 994 household fuelwood consumers, using a two-stage stratified random sampling technique. We used the delineated Enumeration Areas for Katsina State, Nigeria for socioeconomic data. The test re-test reliability method (trustworthiness assessment of the questionnaire) and Cronbach Alpha test (internal constancy) resulted in a value of 0.70 and 0.875 respectively. Using descriptive statistics and logit regression, findings indicate a high level of fuelwood energy dependence among households. Findings show that education level, employment status, and household structure have an opposite and highly statistically substantial relationship with the likelihood of household dependence on fuelwood, while age and household size move in the same trajectory and highly statistically substantial association with the likelihood of family dependence on fuelwood. Thus, the most difficult challenge facing Nigeria as per household dependence on unclean energy (fuelwood) is that the use of fuelwood increase economic, environmental, and health dangers. dangers and It has therefore become imperative for a paradigm shift in policies to change the current narrative toward clean energy
Comparison of multifactor asset pricing models in the South African stock market [2000–2016]
(MDPI, 2023) Mukoyi, Lenia; Ogujiuba, Kanayo K
The quest for parsimonious models has been a key objective in asset pricing. However, there appears to be no consensus on the most successful asset pricing strategy in the literature, especially for the South African Market. Using financial statements from January 2000 to December 2015, this article explores how market anomalies affect the performance of securities in the Johannesburg Stock Exchange’s (JSE’s) resources, industrial, and finance sectors. We investigated the efficacy of several asset pricing models and their capacity to account for market anomalies in the JSE’s resources, industrial, and financial sectors, as well as the applicability of the Fama and French five-factor model. The study used multiple regression techniques and applied stationarity and cointegration methods to ensure robust results. Results also suggest that when the FF5FM is implemented, there is statistical significance at the 10% level for the CMA in the resources sector as the value factor disappears. The FF5FM results in the industrial sector show a significance level of 5% in the SMB. The financial sector seems to have the majority of the style-based risk factors as the SMB is positively significant at a 5% level, the HML is significant at a 1% level, and the CMA is negatively significant at a 10% level of significance. The results suggest that the Carhart Four Factor model is the best to use in all market conditions. Results also show that value becomes redundant in a bullish market, but the opposite holds in a bearish market for a model with operating profitably and investing factors. These findings highlight the necessity for investors to determine which investment risk elements produce abnormal returns in both bearish and bullish market circumstances before investing.
Micro-perspective lens on entrepreneurs in the early stage of business: Expectations vis-à-vis realities
(Taylor and Francis Group, 2022) Nheta, Daniel Silent; Shambare, Richard; Sigauke, Caston
In the early stage of business, which is where most new ventures fail, many entrepreneurs experience discrepancies between their entrepreneurial expectations and business realities. These discrepancies referred to by this paper as an entrepreneurial gap (EG) are, therefore, among other factors, professed to be responsible for the high attrition rate of emerging ventures in South Africa. An oversight in this area of EG, despite the provision of most required resources, may still lead to business failure. This paper argues that there is more yet to be comprehended regarding early-stage business success, concerning the entrepreneur component. The purpose of this paper was to recognize and classify factors responsible for establishing entrepreneurial gaps with the intent to improve the level of preparedness among emerging entrepreneurs. A qualitative approach with in-depth interviews was employed in the data collection. ATLAS ti 8 was used to unpack factors that instigate entrepreneurial gaps while posing challenges to emerging entrepreneurs in the early stage of business. The groups identified were: entrepreneur management, familism and personal management. The findings provide information that is credible to improving the level of preparedness among emerging entrepreneurs, and could be used by mentors, coaches and relevant support structures.
Perceptions of trust in the context of social cohesion in selected rural communities of South Africa
(MDPI, 2022) Khaile, Fundiswa T.; Roman, Nicolette V.; October, Kezia R.
Although nuances around the definitions and contextualization of social cohesion subsist, this paper views social cohesion through the lens of social cooperation and togetherness within a collective in geopolitical terms, expressed in the attitudes and behaviours of its members. In many countries, including South Africa, social cohesion remains an ideal to strive for and achieve. Extant studies suggest that trust is one of the key factors in building social cohesion. As such, this paper aims to explore trust in the context of social cohesion. This study attempts to address the knowledge gaps regarding the views, feelings, and experiences around trust and also make a contribution to the qualitative inquiry of trust in the context of social cohesion in rural communities of South Africa.
Chartered accountancy and resistance in South Africa
(Stellenbosch University, 2021) Terblanche, Judith; Waghid, Yusef
In recent times, the chartered accountant profession was regularly in the news for reasons pertaining to the unethical and unprofessional behaviour of members. The profession has an important role to play in the South African economy, as members will often fulfil important decisionmaking roles in business. In a response to the dilemmas the profession is facing, we analysed the implications for the profession and society due to a resistance to include research as a pedagogical activity in the chartered accountancy educational landscape. Through deliberative research activities, students have the opportunity to engage with community members and with societal challenges that could foster reflexivity and humaneness in students. In addition, critical and problem-solving skills are cultivated. These are skills that are difficult to assess in the form of an examination, and the absence of research as pedagogical activity in this particular educational landscape, impacts the cultivation of these skills in future chartered accountants.
A Foucauldian analysis of the ca profession in South Africa: Implications for society
(Stellenbosch University, 2020) Terblanche, Judith; Waghid, Yusef
Chartered accountants are often business leaders who frequently need to make decisions. Consequently, it is of importance for the fractured democratic South Africa that citizens (especially business leaders, such as chartered accountants) develop a socially just consciousness. In this article, we provide the results of an analysis of one of Michel Foucault’s genealogical works, and introduce some of Foucault’s views pertaining to knowledge and power. Foucault (1995) identified three disciplinary power mechanisms, namely hierarchical observation, normalising judgement, and the examination. Consequently, we used this particular Foucauldian lens to analyse the disciplinary power mechanisms evident in the CA educational landscape. Lastly, we identified the consequences for education (and therefore ultimately society) as a result of the particular power relations in the chartered accountant educational landscape and profession.
Effect of mind-power ability among achieving entrepreneurs in south Africa: Identifying accustomed internal drivers
(Emerald, 2020) van Rensburg, Nico; Ogujiuba, Kanayo
This paper aims to identify how mind-power ability and its underlying elements, acting as drivers, impact managerial, and individual performance levels among achieving entrepreneurs in South Africa.– The study adopted a qualitative approach and included 15 male entrepreneurs who were purposively selected based on the study’s requirements. The primary data was collected through semi-structured one-on-one interviews, and interpretative phenomenological analysis served as the primary method of data analysis.Findings from this study suggest that mind-power ability as an accustomed performance factor does indeed exist – and consists of a unique group of accustomed underlying elements – that significantly affects and contributes to both the managerial and individual performance levels of achieving entrepreneurs in South Africa.
The value chain and activities of polyethylene terephthalate plastics in the South African waste economy
(SAGE, 2020) Hoffman, Marlin; Schenck, Catherina
Value chains in their entirety, within the South African context, have not been the focus of much research thus far. A plethora of research has been done on the various actors within the value chain, but the rest of the value chain has not been identified and depicted. Failing to understand and describe the entire value chain of polyethylene terephthalate plastics has led to many unanswered questions and misunderstood impacts on the plastics waste economy. The purpose of the study was to document and depict the value chain and its activities within the polyethylene terephthalate waste economy in South Africa, which, according to the available literature, has not been done before. The documentation of the value chain and its activities will assist in identifying the possibilities of job creation within the waste economy, which could impact the diversion of waste from the landfill.
Sports effects on ethical judgement skills of successful entrepreneurs: Adaptation of interpretative phenomenological analysis
(Emerald, 2021) van Rensburg, Nico; Kanayo, Ogujiuba
This paper aims to identify how entrepreneurs’ active involvement in sports/athletic training affects and adds to their overall ethical judgement skills within and outside the workplace.This study adopted a qualitative approach and included a combination of 12 male and female entrepreneurs who were purposively selected based on the study’s requirements. The primary data was collected through semi-structured one-on-one interviews, and interpretative phenomenological analysis served as the primary method of data analysis.Findings from this study suggest that entrepreneurs’ active involvement in sports/athletic training does indeed influence their ethical judgement skills all-round. Arising from a combination of sports involvement factors, a unique group of underlying elements surfaced that proves valuable accustomed relationships concerning the significant impact sports/athletic training have on successful entrepreneurs’ ethical judgement skills.
Entrepreneurship and management of small enterprises: An overview of agricultural activities in the Mopani district municipality
(University of Western Cape, 2021) Ramodumo, Aaron; Chigada, Joel
This study analysed entrepreneurial dynamics, activities and challenges confronting small agricultural businesses in the Mopani District Municipality in Limpopo, South Africa. Mopani is a rural district municipality and home to 1,2 million people of whom 77% live below the poverty line. Agriculture is a major income-generating sector for many disadvantaged communities in rural areas of South Africa, and it plays a significant role in the economy. The objectives of the study were to investigate the operational practices that contribute to the success/failure of emerging agricultural small enterprise owners in their agricultural activities within Mopani District – a district with large numbers of highly competitive and commercial farmers. In addition, the study suggested interventions that could help smallholder farmers to sustain their income-generating businesses.
Lived experiences of women entrepreneurs in Masvingo city: Successes, failures and survival strategies
(University of Western Cape, 2021) Nyanga, Takupiwa
There has been a significant increase in the number of women entrepreneurs in various sectors of the economy throughout the world. Some women entrepreneurs registered some success stories, while others dismally failed and ended up poorer than they were before they started their businesses. The main purpose of this study was to establish the successes, failures and survival strategies of women entrepreneurs in Masvingo city, Zimbabwe. A qualitative research methodology was employed to carry out the study. Face-to-face semi-structured interviews were conducted on 40 (forty) participants who were selected by using the snowball sampling technique. Thematic data analysis approach was utilized to analyse the collected data. It was found that despite some registered failures and challenges like failing to retain staff, failing to raise adequate capital, and failing to access advanced technology, a significant number of women entrepreneurs were generally successful in launching, maintaining and growing their businesses.

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