scholarly journals An exploration of the online investor relations (IR) practices of companies listed on the Johannesburg Stock Exchange (JSE)

2016 ◽  
Vol 19 (2) ◽  
pp. 215-231 ◽  
Author(s):  
Leana Esterhuyse ◽  
Christa Wingard
Keyword(s):  
South Africa ◽  
Best Practice ◽  
Developing Economies ◽  
Stock Exchange ◽  
Listed Companies ◽  
Chief Financial Officers ◽  
Investor Relations ◽  
Analyst Following ◽  
Share Prices ◽  
Video And Audio

Prior research has found that having better investor relations (IR) practices contributes towards improved share prices, liquidity of shares and analyst following. The main aim of this study was to determine the extent to which JSE-listed companies comply with international best practice guidelines for IR practices via the company’s website. A secondary objective was to arrive at an opinion regarding the stage of internet adoption for IR practices in which JSE-listed companies find themselves, based on Hedlin’s (1999) three-stage model. A checklist of 201 items was used to assess the websites of 205 JSE-listed companies from the beginning of July to mid-September 2012. The average online IR score for all 205 companies was found to be disappointing, although the top 100 companies in South Africa performed better than companies in other emerging and developing economies, but worse than companies in advanced economies, where size is probably the main differentiator. Bandwidth is also a constraining factor for online IR quality in South Africa. We conclude that instead of moving towards stage III (HTML, video and audio) of Hedlin’s model (1999), JSE listed companies still seem to find themselves in stage II (paper-equivalent PDF’s). This should concern Chief Financial Officers (CFOs), as effective and efficient communication with investors could contribute towards attaining optimal share prices and improved liquidity and analyst following.

scholarly journals Use of the Internet for investor relations by public listed companies

2016 ◽  
Vol 13 (4) ◽  
pp. 81-88
Author(s):  
Marcus Craig Rodrigs
Keyword(s):  
Developing Economies ◽  
Stock Exchange ◽  
Listed Companies ◽  
Relationship Building ◽  
The Internet ◽  
Investor Relations ◽  
Developed Economies ◽  
Related Information ◽  
Regulatory Bodies ◽  
Use Of The Internet

With the increasing emphasis on developing economies and the use of the internet for corporate relationship building, this study aims to investigate the usage of internet by listed companies in the ready-made garment industry in Bangladesh. The study will also include comparison of the contents of investor relationships with empirical evidence from around the world. The sample size contains 105 firms listed on the Dhaka Stock Exchange. Employing statistical analysis for measuring investor relations based on available contents disclosed in firms’ website for investor information, this study found that the 105 firms disclose contents related to investors on their websites but fall short of the standard of other countries with only the company profile as the most prominent disclosure. Study result reports that companies in Bangladesh are still behind compared to developed economies in terms of using internet for investor relations. The study also recommends the Dhaka Stock Exchange, Bangladesh Garments Manufacturing and Export Association (BGMEA) and other indigenous regulatory bodies encourage firms to disclose more investor related information

Investigating the low-risk anomaly in South Africa

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yudhvir Seetharam
Keyword(s):  
South Africa ◽  
Kalman Filter ◽  
Stock Exchange ◽  
Low Risk ◽  
Momentum Effect ◽  
Content Type ◽  
Share Prices ◽  
Johannesburg Stock Exchange ◽  
High Volatility ◽  
Finance Theory

PurposeRecent studies have shown that low-volatility shares outperform high-volatility shares. Given the conventional finance theory that risk drives return, this study aims to investigate and attempt to explain the presence of the low-risk anomaly (LRA) in South Africa.Design/methodology/approachUsing share prices from 1990 to 2016, various buy-and-hold strategies are constructed to determine the return to an investor attempting to capitalise on such an anomaly. These strategies involve combinations relating to a price filter, the calculation of risk and volatility, value-weighting or equal-weighting of portfolios and the window period to construct said portfolios.FindingsIt was found that the LRA exists on the Johannesburg Stock Exchange (JSE_=) when using univariate sorts, without controlling for the size or value effect. When using multivariate portfolio sorts (size and volatility or value and volatility), it was found that the LRA does not exist on the JSE under the majority of risk proxies, but particularly prevalent when downside risk is used. This loosely points towards a potential “inverse momentum” effect where low-return portfolios outperform their counterparts.Originality/valueIn general, it is established that the risk–return relationship is non-linear and deterministic under traditional proxies, but improves to being somewhat, but not completely, linear under a Kalman filter. The Kalman filter, which can be considered a proxy for learning, does not remove the anomaly in its entirety, indicating that behavioural approaches are needed to explain such phenomena.

scholarly journals An exploratory study of the effect of country-by-country reporting ambiguities on Johannesburg Stock Exchange-listed companies

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Cara Thiart ◽  
George F. Nel
Keyword(s):  
South Africa ◽  
Financial Reporting ◽  
Multinational Enterprises ◽  
Stock Exchange ◽  
Listed Companies ◽  
Annual Reports ◽  
Reporting Standards ◽  
Financial Reporting Standards ◽  
Johannesburg Stock Exchange ◽  
Group Structures

Background: South Africa issued regulations implementing country-by-country (CbC) reporting standards for multinational enterprises (MNEs) on 23 December 2016. Country-by-country reporting will be applicable to all MNEs with a group revenue in excess of R10 billion. Aim: The aim of the study was twofold: to identify ambiguities that might influence the filing obligation and subsequent scope of CbC reporting in South Africa and to quantitatively measure the potential impact of any identified ambiguities. Setting: This study used data from Johannesburg Stock Exchange-listed companies. Methods: The study commences with a review of the relevant regulations and other applicable literature and continues with a quantitative analysis exploring alternative interpretations deduced from this review. Results: The review identified conflicting interpretations of how companies can be categorised as an MNE Group or not, as well as in measuring the revenue threshold. An analysis of the group structures and annual reports of a selected sample of 78 companies showed that the scope of CbC reporting will depend on the definitions applied to an MNE Group and revenue. Conclusion: Further guidance is needed to determine whether non-controlling entities must be considered as Constituent Entities, as well as how to measure revenue (i.e. whether only the International Financial Reporting Standards [IFRS] 15 revenue line item should be used or whether other income should also be included).

The effect of mandatory XBRL and IFRS adoption on audit fees

2016 ◽  
Vol 12 (2) ◽  
pp. 109-135 ◽  
Author(s):  
Yuan George Shan ◽  
Indrit Troshani
Keyword(s):  
Financial Reporting ◽  
Developing Economies ◽  
Stock Exchange ◽  
Audit Fees ◽  
Listed Companies ◽  
Emerging Economy ◽  
Economic Consequences ◽  
Content Type ◽  
Ifrs Adoption ◽  
The Impact

Purpose – The purpose of this paper is to evaluate the impact of the International Financial Reporting Standards (IFRS) and eXtensible Business Reporting Language (XBRL) on audit fees based on evidence from listed companies operating in an emerging economy. Whilst IFRS constitute high-quality accounting standards, XBRL represents a technology standard that can enhance the usability of IFRS and overall financial reporting transparency. Design/methodology/approach – Multivariate analyses are used on a sample of 1,798 firm-year observations between 2000 and 2011 from companies listed in the Shanghai Stock Exchange that were subject to XBRL and IFRS adoption mandates. Findings – The main results suggest that XBRL has a main negative effect on audit fees which is weaker for larger firms. Additionally, the authors find that IFRS increases audit fees for all companies. Whilst this effect is positive for firms of different sizes, it is weaker for larger firms. Research limitations/implications – Whilst the findings are applicable to the selected sample and may or may not be generaliseable to other economies, they can provide important implications for both regulators and companies that are undertaking IFRS convergence and XBRL implementation projects in developing economies around the world. Originality/value – This study offers a timely assessment of the economic consequences of IFRS and XBRL on listed companies operating in an emerging economy, in addition to providing an important basis upon which further research can be designed in order to extend the analysis.

How do CFOs make capital structure decisions? A survey of Greek listed companies

2014 ◽  
Vol 31 (1) ◽  
pp. 72-87 ◽  
Author(s):  
Athanasios G. Noulas ◽  
Georgios Genimakis
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Listed Companies ◽  
Chief Financial Officers ◽  
External Financing ◽  
Corporate Financing ◽  
Content Type ◽  
Distributed Information ◽  
Optimal Capital Structure ◽  
Athens Stock Exchange

Purpose – The aim of this study is to investigate the corporate financing behaviour of nonfinancial Greek listed companies, focusing on how managers determine optimal capital structure. Design/methodology/approach – The study analyses the results derived from questionnaires submitted to the companies' chief financial officers (CFOs), using both descriptive and nonparametric statistics. Findings – The results broadly support the pecking order hypothesis over static trade-off theory. Firms listed on the Athens Stock Exchange prefer to use internal rather than external financing. A deeper examination of the systematic relationship between a number of variables and the financing decision provides tentative support for the existence of asymmetrically distributed information in the market and demonstrates a series of significant correlations among the determinative factors of a new long-term investment. Originality/value – This paper fills the existing gap between prominent theories of corporate leverage and empirical evidence. The questionnaire collects primary research data that are not available from public sources and reports CFOs' opinions and practices in the field.

Sources of accountability inside the boardroom

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Julia Goodman ◽  
Hayley Pearson ◽  
Morris Mthombeni
Keyword(s):  
South Africa ◽  
Stock Exchange ◽  
Listed Companies ◽  
Board Members ◽  
Exploratory Research ◽  
Executive Board ◽  
Content Type ◽  
Johannesburg Stock Exchange ◽  
Governance Effectiveness ◽  
Felt Accountability

Purpose Despite indications of scholarly interest, there are still gaps in the research of the concept of felt accountability, especially the felt accountability of board members. This paper aims to clarify the sources of accountability experienced by board members. Especially those in a non-executive capacity. How these sources can be accessed to enhance felt accountability and thereby governance effectiveness is explored. Design/methodology/approach Qualitative, exploratory research methods were used. In total, 15 semi-structured, in-depth interviews were completed with non-executive board members of Johannesburg Stock Exchange listed companies in South Africa. Thematic content analysis was used to analyse data. Findings The findings clarified the formal and informal sources of accountability experienced by non-executive board members. This included relational and structural mechanisms that can be used within corporate governance to enhance both types of accountability. Accessing the identified sources of accountability through appropriate mechanisms could increase the levels of felt accountability experienced by the individual non-executive board member, thereby strengthening accountability inside the boardroom and improving overall board effectiveness. The study also revealed a layer of implicit and explicit accountability. Research limitations/implications The study was conducted solely in South Africa, with non-executive board members of Johannesburg Stock Exchange listed companies. Originality/value There is limited research that clarifies the sources of accountability experienced by non-executive board members. This study aims to address this gap in the literature by providing techniques on how to enable the clarified sources of accountability to improve governance effectiveness.

scholarly journals An analysis of audit committee effectiveness at the largest listed companies in South Africa from a CFO and audit committee perspective

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Ben Marx
Keyword(s):  
South Africa ◽  
Financial Reporting ◽  
Internal Control ◽  
Financial Literacy ◽  
Audit Committee ◽  
Listed Companies ◽  
Audit Committees ◽  
Chief Financial Officers ◽  
Subject Field ◽  
Effective Functioning

Purpose: The purpose of the study is to investigate and analyse the effective functioning of audit committees at the largest listed companies in South Africa.Problem investigated: The modern audit committee is often seen as the panacea of the corporate world and as such is looked upon to cure all the financial reporting and control-related problems of entities. Audit committees are, however, not always as effective as they are held to be, as is evidenced by the many well-known corporate scandals and business failures that occurred where audit committees existed and fraudulent financial reporting, audit failures, internal control breakdowns and other irregularities prevailed. The modern audit committee will be of value only if it is properly constituted, is functioning effectively and if its role is clearly understood by all the parties concerned. The research problem investigated stems precisely from this issue, and the paper therefore aims to analyse the effective functioning of the audit committees at the largest listed companies in South Africa. Methodology: The study empirically tested the audit committee practices at the largest listed companies in South Africa. This was done through questionnaires addressed to the CFOs and audit committee chairs. Findings: The study found that audit committees at the largest listed companies in South Africa are well established, properly constituted, have the authority and resources to effectively discharge their responsibilities and consist of members who act independently and who have the right mix of appropriate experience, financial literacy and financial expertise amongst their members. The audit committee's role was found to be generally well understood and supported by the board and the Chief Financial Officers. It was further found that the audit committees are effective in discharging their oversight responsibilities on the board's behalf, with the only real exception being their effectiveness regarding IT-related aspects. Value of research: The study provides valuable information on audit committee practices and the effectiveness of audit committees at the largest listed companies in South Africa. These findings can therefore serve as guidelines for best practice standards for audit committees at other companies and institutions. Conclusion: Audit committees at the largest listed companies in South Africa were found to be well established and according to the views of the CFOs and audit committee chairs to be functioning effectively. Further research regarding the subject field of audit committees should focus on the status and effective functioning thereof at smaller companies, unlisted entities, higher education institutions and public sector entities.

scholarly journals The Role of Investor Relations and Good Corporate Governance on Firm Performance in the Case of the Companies Listed on the Bucharest Stock Exchange

2021 ◽  
Vol 14 (12) ◽  
pp. 569
Author(s):  
Bogdan Aurelian Mihail ◽  
Dalina Dumitrescu ◽  
Daniela Serban ◽  
Carmen Daniela Micu ◽  
Adriana Lobda
Keyword(s):  
Firm Performance ◽  
Information Disclosure ◽  
Stock Exchange ◽  
Relevant Literature ◽  
Investor Relations ◽  
Analyst Following ◽  
Business Valuation ◽  
Good Corporate Governance ◽  
Strong Positive Relationship

The objective of this paper is to investigate the role of Investor Relations (IR) in the performance of companies listed on the Bucharest Stock Exchange. The study is motivated by the findings in the literature that investor relations may boost information disclosure, analyst following, institutional investor share, liquidity, and business valuation. The current article contributes to the relevant literature by making use of the recently released unique database of VEKTOR scores on company investor relations for 2019 and 2020. The main finding based on regression methodology shows that IR scores have a strong positive relationship with firm performance. Specifically, a one standard deviation rise in the IR score corresponds to a 2.6% rise in company ROA. Companies may be advised to strengthen their investor relations based on these findings about the beneficial role of investor relations.

scholarly journals A comparative analysis of strengths and weaknesses of corporate governance practices between two jurisdictions; UK and South Africa

2021 ◽  
Author(s):  
King Costa ◽  
Thelela Ngcetane-Vika
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
United Kingdom ◽  
Best Practice ◽  
Stock Exchange ◽  
The Other ◽  
The United Kingdom ◽  
Other Hand ◽  
Business Entities ◽  
The Uk

This paper is an exploration of theoretical aspects underpinning the practice of Corporate Governance (CG) in the United Kingdom and South Africa. Because of several corporate scandals and failures in the twenty and twenty first siècles, Corporate Governance has been a significant and crucial subject and field of study in business schools in recent years. Leadership and Management of business entities and alignment to prescripts that are statutory formulated for prevention of corporate decline and enhancement of sound business principles continue to be highly contentious issues. A theoretical and exploratory narrative synthesis was conducted to unearth the strengths and weaknesses of contextual explication, practice and legal application of Corporate Governance in both the United Kingdom and South Africa. In terms of the UK, the study found out that the CG is designed and benchmarked on international best practice, seamlessly fitting within all the Codes on Key Aspects of Corporate Governance. Secondly, another major element of strengths determination were found to be inherent in the practice of voluntary compliance. However, the greatest criticisms of Corporate Governance theories in the UK was the fact that their focus is largely on public corporations, especially those listed in London stock exchange and thus, leave behind small and medium enterprises. The cultural diversity is also found to be a cause for concern in terms of practice and legal application. On the other hand, in South Africa, the study found out that consideration for diversity is one of the greatest strengths in CG practice and legal application, which is likely to contribute effectively to good and sound decision-making, reflective of all people. Weaknesses continue to be the delay in realisation of board equity in terms of gender while on the other hand, corruption and lack of adherence to retributive prescripts remain problematic.

scholarly journals The value relevance of goodwill and goodwill amortization in a Danish setting

2006 ◽  
Vol 4 (1) ◽  
pp. 227-241
Author(s):  
Christian V. Petersen
Keyword(s):  
Financial Reporting ◽  
Value Relevance ◽  
Stock Exchange ◽  
Life Time ◽  
Listed Companies ◽  
Economic Life ◽  
Business Combinations ◽  
Share Prices ◽  
Financial Reporting Standards ◽  
Purchased Goodwill

Based on data from the Danish Stock Exchange, this paper examines the value relevance of purchased goodwill and explores how goodwill should be measured subsequent to initial recognition. Danish accounting legislation requires capitalization and amortization of purchased goodwill. As of 2005 Danish listed companies must comply with international financial reporting standards (IFRS) issued by the International Accounting Standards Boards (IASB). An exposure draft (ED 3: Business Combinations) is presently under consideration by the IASB. If this exposure draft is implemented, Danish listed companies must carry out impairment tests on goodwill. The value relevance is tested by examining the association between goodwill and goodwill amortization and share prices, incremental to other accounting variables.The overall findings suggest that investors perceive goodwill as an asset with a long economic life time. The results support the Danish Financial Statements Act that requires capitalization of all purchased goodwill. The findings brings into question if goodwill amortization provides useful information to investors. This suggests that impairment testing might be an alternative way to measure acquired goodwill assets in subsequent years

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