scholarly journals The Impact Of Industry Classification On The Valuation Accuracy Of Multiples In The South African Capital Market

2012 ◽  
Vol 12 (1) ◽  
pp. 79 ◽  
Author(s):  
WS Nel ◽  
BW Bruwer ◽  
NJ Le Roux
Keyword(s):  
Emerging Markets ◽  
South African ◽  
Capital Market ◽  
Group Selection ◽  
Stock Exchange ◽  
Peer Group ◽  
Average Increase ◽  
Johannesburg Stock Exchange ◽  
Industry Classification ◽  
The Impact

Although multiples are used extensively in practice, empirical guidance in emerging markets is limited in this regard. In terms of valuation accuracy, the impact of peer group selection by way of industry classification in emerging markets has not yet been substantiated by research. This paper investigates the valuation performance of multiples over various industry classifications when valuing the equity of South African companies listed on the Johannesburg Stock Exchange for the period 2001 to 2010. The empirical results revealed that peer group selection based on a narrower industry classification could, on average, increase valuation accuracy by as much as 19.60%.

scholarly journals The impact of operating leverage on the capital structure of Johannesburg Stock Exchange-listed firms before and after the 2008 global financial crisis

2018 ◽  
Vol 11 (1) ◽  
Author(s):  
Matabane T. Mohohlo ◽  
Johan H. Hall
Keyword(s):  
Financial Crisis ◽  
Capital Structure ◽  
South African ◽  
Global Financial Crisis ◽  
Stock Exchange ◽  
Johannesburg Stock Exchange ◽  
The Global Financial Crisis ◽  
Operating Leverage ◽  
The Impact ◽  
The Capital Structure

The financial leverage-operating leverage trade-off hypothesis states that as financial leverage increases, management of firms will seek to reduce the exposure to operating leverage in an attempt to balance the overall risk profile of a firm. It is the objective of this study to test this hypothesis and ascertain whether operating leverage can indeed be added to the list of factors that determine the capital structure of South African firms. Forty-six firms listed on the Johannesburg Stock Exchange between 1994 and 2015 are analysed and the impact of operating leverage is determined. The results are split into two periods, that is, the period before the global financial crisis (1994–2007) and after the global financial crisis (2008–2015). The impact of operating leverage during these two periods is then compared to determine whether a change in the impact of operating leverage on the capital structure can be observed especially following the crisis. The results show that the conservative nature of South African firms leading up to 2008 persisted even after the global financial crisis. At an industry level, the results reveal that operating leverage does not have a noticeable impact on capital structure with the exception of firms in the industrials sector of the South African economy.

The Stock Market Reaction to Board Changes: The South African Experience

2016 ◽  
Vol 15 (3) ◽  
pp. 269-294
Author(s):  
Narendra Bhana
Keyword(s):  
South African ◽  
Executive Director ◽  
Stock Exchange ◽  
Jel Classification ◽  
Share Prices ◽  
Market Participants ◽  
Johannesburg Stock Exchange ◽  
Stock Market Reaction ◽  
African Experience ◽  
The Impact

This article investigates the impact of board changes on the share prices of the companies listed on the Johannesburg stock exchange (JSE) during the period 2004–2008. Four types of board changes are investigated: new appointments, resignation, retirement and joint appointments. Market participants consider a change in the composition of a company’s board as having information content and produce statistically significant change in the share prices of the company concerned. In particular, the informational effects of new appointments are perceived differently by the market from resignations from the company board. The results also provide evidence that market reacts more favourably to the appointment of an executive director in comparison to that of a non-executive director board appointment. JEL classification: C58, D22, E44, G10, L22

scholarly journals An assessment of the impact of climate change on the financial performance of South African companies

2015 ◽  
Vol 4 (2) ◽  
pp. 49-62 ◽  
Author(s):  
Mandla Moyo ◽  
Hermina Christina Wingard
Keyword(s):  
Climate Change ◽  
Financial Performance ◽  
South African ◽  
Stock Exchange ◽  
Secondary Analysis ◽  
Climate Change Impacts ◽  
Financial Sustainability ◽  
Johannesburg Stock Exchange ◽  
Historic Data ◽  
The Impact

South African companies face uncertainty about whether they should commit resources to mitigate vulnerabilities and exploit opportunities arising from climate change. There is ambiguity over whether responding to climate change materially affects the financial sustainability of South African companies. The study sought to establish the extent to which responding to climate change impacts financial performance. Secondary analysis of historic data was used to compare the climate-change performance of 70 Johannesburg Stock Exchange listed companies to indicators of their financial performance. The research concluded that there is a positive and statistically significant correlation between climate-change performance and financial performance

scholarly journals Investigate the level of disclosure of emissions of the top ten manufacturing companies in South Africa

2016 ◽  
Vol 7 (1) ◽  
pp. 76-86
Author(s):  
Anet M. Smit ◽  
Johanna Magdalena van Zyl
Keyword(s):  
Greenhouse Gas ◽  
South African ◽  
Carbon Tax ◽  
Stock Exchange ◽  
Manufacturing Companies ◽  
Johannesburg Stock Exchange ◽  
Climatic System ◽  
Quantitative Performance ◽  
Dangerous Anthropogenic Interference ◽  
The Impact

Throughout the world, countries and companies are directing their attention towards actions to protect the planet. An important focus area during various initiatives is the aim to stabilize greenhouse gas concentrations at a level that would prevent dangerous anthropogenic interference with the climatic system. Various targets are set by governments to reduce greenhouse gas emissions and the South African Government is, among others, investigating a carbon tax policy to facilitate their transition to a greener economy. This paper analyzes the sustainability reports of the top ten manufacturing companies listed on the Johannesburg Stock Exchange (JSE) and the disclosures of emissions were evaluated against a checklist that was developed through a literature review comprising various sources. From the results of the research, it is evident that all the companies reviewed are aware of the importance of emissions disclosure and the impact that emissions have on climate change. Companies, in general, adhere more to the qualitative, narrative type of requirements than to the more quantitative, performance-related reporting of emissions. In this study the reporting of the companies specifically on Scope 3 emissions were inadequate. More attention should be given to measure performance and to improve their systems to quantify data

scholarly journals Divestitures and shareholder wealth in the long-run – the South African case

2014 ◽  
Vol 11 (4) ◽  
pp. 569-578 ◽  
Author(s):  
Emily Nichols ◽  
Andrew Rosenberg ◽  
Akios Majoni ◽  
Samson Mukanjari
Keyword(s):  
South Africa ◽  
South African ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Shareholder Wealth ◽  
Johannesburg Stock Exchange ◽  
Cumulative Abnormal Returns ◽  
Announcement Date ◽  
Long Run ◽  
The Impact

This study examines the impact of divestitures (spin offs and sell offs) on shareholder wealth for the parent firms listed on the Johannesburg Stock Exchange over the period 1995-2011. The study also makes a comparison of the wealth created by spin offs versus sells offs. We found significantly negative cumulative abnormal returns over the 250 and 500 days respectively, post-announcement date. This result persisted for the whole sample and for the two subsamples of spin offs and sell offs even after running the test excluding the data during and after the financial crisis of 2008. The results suggest that, in general, divestitures in South Africa destroy shareholder value in the long run and sell offs are a better choice of divestitures compared to spin offsю

scholarly journals Seisoenale patrone in die Suid-Afrikaanse kapitaalmark

1993 ◽  
Vol 24 (4) ◽  
pp. 142-146
Author(s):  
F. S. Hattingh ◽  
E. V.D.M. Smit
Keyword(s):  
South African ◽  
Capital Market ◽  
Stock Exchange ◽  
Seasonal Patterns ◽  
Post Office ◽  
The South ◽  
Johannesburg Stock Exchange ◽  
Price Movements ◽  
Equity Indices

Seasonal patterns in the South African capital market In this article the seasonal patterns in daily price movements of the Post Office, Eskom 168 and the RSA bonds are examined and these are compared with three equity indices namely the Gold Index, Industrial Index and Overall Index of the Johannesburg Stock Exchange. Both the South African bond and share markets display significant seasonal patterns. In contrast with international findings, it is shown that seasonal similarities exist between the bond and share markets.

ADOLESCENTS' PERCEPTIONS OF STRESSORS CONTRIBUTING TO SUICIDAL BEHAVIOUR

2017 ◽  
Vol 26 (2) ◽  
pp. 192-213
Author(s):  
Henriëtte Van den Berg ◽  
Hester Tancred ◽  
Dap Louw
Keyword(s):  
South African ◽  
Family Environment ◽  
Family Relationships ◽  
Suicidal Behaviour ◽  
Stressful Life Events ◽  
Qualitative Content Analysis ◽  
Peer Group ◽  
Conservation Of Resources ◽  
Western Cape ◽  
The Impact

South African adolescents show increased levels of suicidal behaviour. This article explores the perceptions of adolescents at risk of suicide regarding the psychosocial stressors they believe contribute to suicidal behaviour among South African adolescents. This study was conducted on 214 adolescents from the Western Cape Province with a high suicide risk. The group was selected on the basis of their high scores on the Suicidal Ideation Questionnaire. A qualitative content analysis was performed with their responses on a question about the reasons for adolescent suicide. The analysis highlighted risk factors relating to substance abuse, negative emotional experiences, lack of self-esteem, problem-solving ability and hope for the future; negative family environment and conflict in family relationships; peer group and romantic relationships; stressful life events; and socioeconomic factors. Guided by the Conservation of Resources (COR) theory suggestions were made for adolescent resource development to counter-act the impact of the various stressors they experience.

The Nexus Between Johannesburg Stock Exchange and the United States Unemployment Rate Announcement: An Impulse Response Analysis

2018 ◽  
Vol 10 (3(J)) ◽  
pp. 160-168
Author(s):  
Misheck Mutize ◽  
Victor Virimai Mugobo
Keyword(s):  
United States ◽  
South African ◽  
Impulse Response ◽  
Unemployment Rate ◽  
Stock Prices ◽  
Stock Exchange ◽  
The United States ◽  
Response Analysis ◽  
Johannesburg Stock Exchange ◽  
The Us

The study explores the relationship between the unemployment rate in the United States and South Africa’s stock prices from the beginning of 2013 to the last day 2017. The objective of this paper is to examine the impact of the US unemployment rate announcement on the South African financial market. Results of Impulse Response analysis show that there is a very minimal impact from the US unemployment announcement to South Africa’s stock prices which disappears within two days of the announcement. In addition, the Johannesburg stock exchange index marginally responds to own shocks, which marginally fades away within two days. These findings imply that the changes in the US employment policies have a direct ripple effect on the South African macroeconomic environment, its investing public sentiments and corporate confidence on the future prospects of businesses.

scholarly journals Determinants of dividend pay-out policy: a case of the South African gold mining industry

2014 ◽  
Vol 11 (3) ◽  
pp. 83-94
Author(s):  
Busisiwe Carol Ringane ◽  
Patricia Lindelwa Makoni
Keyword(s):  
South African ◽  
Gold Mining ◽  
Dividend Policy ◽  
Stock Exchange ◽  
Mining Industry ◽  
Foreign Ownership ◽  
Study Data ◽  
Managerial Ownership ◽  
Johannesburg Stock Exchange ◽  
Shed Light

This paper sought to shed light on dividend policy within the gold mining industry in South Africa. Several cause-and-effect variables of dividend policy are discussed, in order to lay down the theoretical framework for the research. These are size, managerial ownership and foreign ownership. To meet the objectives of the study, data from seven mining companies listed on the Johannesburg Stock Exchange (JSE) was analysed for a 5 year (2008-2012) period. As found in earlier studies, there is a positive correlation (r = 0.59) between the dividend policy and the size of the organisation. This was expected as no cashflow is available for distribution during the early stages of exploration, hence no dividends are paid. As the organisation grows and profit increases, there is free cashflow which can be distributed to shareholders. Managerial ownership negatively correlates with dividend pay-out (r = -0.53). Contrary, a weak correlation was observed between foreign ownership and dividend pay-out.

scholarly journals Fundamental factors influencing returns of shares listed on the Johannesburg Stock Exchange in South Africa

2017 ◽  
Vol 9 (2) ◽  
pp. 426-435
Author(s):  
Marise Vermeulen
Keyword(s):  
Stock Exchange ◽  
Dividend Payout ◽  
Return On Equity ◽  
Explanatory Variables ◽  
Johannesburg Stock Exchange ◽  
Earnings Per Share ◽  
Asset Growth ◽  
Book To Market Ratio ◽  
The Impact ◽  
The Relationship

This study investigated the relationship between share returns and nine variables that had been proven to influence returns in previous research, using a multiple regression analysis. These variables are size, leverage, book-to-market ratio, earnings yield, dividend payout, earnings growth, return on equity, earnings per share and asset growth. The impact of some of the variables on share returns proved to be insignificant, and some collinearity was identified between some of the variables. However, three significant variables were identified and the final regression model included the book-to-market ratio, dividend payout and leverage as the explanatory variables.

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