The impact of domestic investment on economic growth in South Africa: a Sectoral Approach (1993 to 2020)
- Authors: Hobongwana, Khungile Goodwell https://orcid.org/0000-0003-0223-7370
- Date: 2023-01
- Subjects: Economic development -- South Africa , Investments -- South Africa , Gross domestic product
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10353/26753 , vital:65982
- Description: This study examined the impact of domestic investment on economic growth in South Africa: a sectoral approach from 1993 to 2020. The overall results as discussed by panel data ARDL revealed that domestic investment has an impact on at least one sectoral economic growth in South Africa in the long run. The panel data ARDL test reveals that domestic investment, employment, imports and exports have a significant correlation to influence GDP in the long run in at least one of the sectors. A pairwise Dumitrescu Hurlin panel causality tests determine that domestic investment (DI) does not homogeneously cause gross domestic product (GDP). This is because in South Africa the sectoral or structural change development relies much on foreign direct investment (FDI) rather than domestic investment, hence the negative homogeneous results. Therefore, we need to attract DI as the result shows, because a positive relationship can be expected between domestic investment and economic growth in line with the Keynesian theory where investment is expected to promote economic growth. The new-endogenous growth theory of investment that can be applied in detecting the effect of aggregate and disaggregate domestic investment on sectoral economic growth and aggregate economic growth. , Thesis (MCom) -- Faculty of Management and Commerce, 2023
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- Date Issued: 2023-01
Sectoral co-integration and portfolio diversification benefits: a business cycle examination of South African equity sectors
- Authors: Hofisi, Tinashe S
- Date: 2020
- Subjects: Portfolio management -- South Africa , Investments -- South Africa , Investments, South African , Stocks -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/146379 , vital:38521
- Description: The onset of globalisation and simultaneous changes in financial technology and financial reforms dissipated hurdles once faced in financial transactions among stock markets. Hence, stock markets around the world became increasingly integrated because there was a free flow of cross border investments. Consequently, international diversification diminished thereby undermining the ability of investors to diversify investments across borders. For that reason, recent literature on portfolio diversification is urging investors to shift their focus to domestic portfolio diversification as an alternative. On that account, this study aims to examine the co-integration and dynamic causalities between South African equity market sectors in order to ascertain the sectoral diversification opportunities available to domestic investors over time. The study was examined over the different phases of the business cycle as well as the full sample, i.e. 2004 – 2018, with a view to shedding light on the inter-sectoral diversification opportunities of domestic investors over the South African business cycle. The phases of the business cycle applied are a| expansion and boom; b| recession and recovery phase and c| stagnation phase. The Johansen co-integration and Granger-causality tests were employed. The hypothesis of the study is that, if sectors are not cointegrated, then diversification benefits can be reaped by constructing a portfolio that combines stocks from the respective sectors. On the whole, the findings of this study show that there are both long-run and short-run diversification opportunities across the different phases of the South African business cycle as well as the full sample. However, there are lesser diversification opportunities in the recession and recovery phase over both the long-run and short-run. These results indicate that domestic sectoral portfolio diversification is least effective when it is needed the most (i.e. in a period of heightened volatility such as recession and recovery phase). This study will contribute to the existing literature in two ways; firstly, to investors who intend to diversify their portfolios domestically rather than internationally and, secondly, after reasonably thorough research it was evident that there is scant literature on domestic sectoral diversification in South Africa. As a result, the study attempts to address this gap. Additionally, the essence of the business cycle in this study is to make investors aware of potential diversification opportunities when positioning their portfolios for the next shift in the business cycle.
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- Date Issued: 2020
The impact of unanticipated news announcements by the US Federal Reserve On South African stock returns
- Authors: Sibanda, Lorna
- Date: 2019
- Subjects: Monetary policy -- United States , International finance , South Africa -- Foreign economic relations -- United States , United States -- Foreign economic relations -- South Africa , Banks of issue -- United States , Investments -- South Africa , Stocks -- Prices -- South Africa , Stocks -- Rate of return , Rate of return -- South Africa
- Language: English
- Type: text , Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/94703 , vital:31070
- Description: This thesis analyses whether monetary policy announcement shocks are transmitted across countries, with special emphasis on the impact of US Federal Reserve announcements on the South African stock market. Monetary policy is an important source of economic news and affects the risk perceptions of market participants. This study will improve the understanding of stock price determinants and possibly influence SA monetary policy in guarding against possible shocks originating from abroad. Using Federal Reserve Open Market Committee (FOMC) announcements over the period 2008 – 2014, the research studied changes in volatility of the South African FTSE/JSE All Share Index returns over this period. An event study and GARCH model approach was adopted to reach the goals of the analysis. The findings were a statistically insignificant connection between SA stock returns and both anticipated and unanticipated US Federal Reserve announcements. Over the sample period, each shock to SA stock returns persisted for approximately 4-5 months. Although SA stock return volatility demonstrated clustering behaviour (indicating sensitivity to economic shocks), the research could not find an obvious relationship between these spikes in volatility and US Federal Reserve announcements. It is concluded that South African stock returns do not change in response to unexpected US monetary policy announcements.
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- Date Issued: 2019
Beneficiary perceptions regarding farm worker equity share schemes in South Africa
- Authors: Xolo, Siyavuya Nicholas
- Date: 2018
- Subjects: Investments -- South Africa , Investment analysis Land reform -- South Africa Agricultural laborers -- South Africa
- Language: English
- Type: Thesis , Doctoral , DPhil
- Identifier: http://hdl.handle.net/10948/36323 , vital:33920
- Description: The study aimed to assess beneficiary perceptions regarding farm worker equity share schemes in South Africa. Farm worker equity share schemes started in the early 1990s with the aim of having a special arrangement pertaining to the ownership and operation of a farm between the farmer and the farm workers. This was intended to assist farm workers in not only remaining as farm workers but also to gain ownership of the farm. This could lead to the empowerment of farm workers, better working conditions, improved living standards and their rights to land ownership. Farm worker equity share schemes have been widely reported as having failed to meet their intended objectives, thus, in 2009, the Department of Rural Development and Land Reform initiated a study to assess the implementation of equity share schemes. Although the report was not made public, it reports that out of the 88 equity share schemes at the time, only nine managed to pay dividends ranging from R200 to R2000 per year. As a result, the Department of Rural Development and Land Reform put a moratorium on equity share schemes; this was however removed in 2011. It is against this background that this study was undertaken to assess beneficiaries’ perceptions regarding farm worker equity share schemes in South Africa. A positivistic research paradigm was employed in this study, by means of quantitative research. Secondary data in the form of textbooks, journal articles and Internet sources provided the theoretical framework for this study. Primary data was obtained using the survey method, by means of self-administered structured questionnaires. Convenience and purposive sampling were applied in order to select 20 farms that use equity share schemes. The farms selected for this study were located in the Eastern Cape, Gauteng, Mpumalanga and the Western Cape provinces, covering a variety of farming activities such as citrus fruits, crops, vegetables and wineries. Ideally, a total of 15 farm workers per farm were targeted. However, due to a variation in these farm worker equity share schemes, on some farms less than 15 workers and in others more than 15 workers were selected for the study; this resulted in a total sample size of 341 farm workers. Ten null-hypotheses and a hypothetical model of beneficiary perceptions regarding farm worker equity share schemes were tested. The influence of seven independent variables were tested, these are: stakeholder trust, operational risks, government interventions, two-way communication, farm worker empowerment, training and skills development, and access to resources on farm worker equity share schemes. In addition, the influence of farm worker equity share schemes on three dependent variables, namely, farming performance, sustainability and employee expectations were tested. The Statistica (version 13.2) computer programme was used to analyse the results by means of advanced statistical techniques (such as exploratory factor analysis, regression and correlation analyses) as well as descriptive analysis and frequency distributions. After various statistical procedures, the model was re-specified; some of the variables were then renamed and the hypotheses were adjusted accordingly. The empirical results showed that three key variables to the success of farm worker equity share schemes are stakeholder trust, government interventions and farm owner support. It was determined that these key variables could lead to increased farming performance, farming sustainability and meeting employee expectations. This study provided useful and practical guidelines to farm owners and administrators of equity share schemes, so as to ensure effective strategising that could enhance their competitiveness and long term survival. The findings of this study could inform strategy policy formulation and implementation in the agricultural sector, as pertaining to farm worker equity share schemes. The study used a sound and well-developed research design and methodology, which has been justified and successfully applied to this research; this method can be utilised by other similar studies to conduct empirical research in the field of farm worker equity share schemes. It is envisaged that the results and recommendations of this study could be used to implement effective strategies that could ensure the effective functioning of farm worker equity share schemes in South Africa.
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- Date Issued: 2018
Cointegration, causality and international portfolio diversification : investigating potential benefits to a South African investor
- Authors: Msimanga, Nkululeko Lwazi
- Date: 2011
- Subjects: Cointegration , Econometrics , International finance , Stock exchanges -- South Africa , Stock exchanges -- Developing countries , Stock exchanges -- Developed countries , Investments -- South Africa , Portfolio management -- South Africa , Investment analysis , Autoregression (Statistics)
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:962 , http://hdl.handle.net/10962/d1002696 , Cointegration , Econometrics , International finance , Stock exchanges -- South Africa , Stock exchanges -- Developing countries , Stock exchanges -- Developed countries , Investments -- South Africa , Portfolio management -- South Africa , Investment analysis , Autoregression (Statistics)
- Description: Research studies on portfolio diversification have tended to focus on developed markets and paid less attention to emerging markets. Traditionally, correlation analysis has been used to determine potential benefits from diversification but current studies have shifted focus from correlation analysis to exploring cointegration analysis and other forms of tests such as the Vector Error Correction Methodology. The research seeks to find if it is beneficial for a South African investor to diversify their portfolio of emerging market equities over a long-term period. Daily weighted share indices for the period of January 1996 to November 2008 were collected and analysed through the application of the Johansen cointegration technique and Vector Error Correction Methodology. Granger Causality tests were also performed to established whether one variable can be useful in forecasting another variable. The study found that there was at least one statistically significant long-run relationship between the emerging markets. After testing for unit roots for all the share indices and their first difference using the Augmented Dickey-Fuller test (ADF), Philips-Perron and Kwiatkowski, Phillips, Schmidt, and Shin (KPSS) unit root tests, similar conclusions were m~de. All the unit root tests and their levels could not be rejected for all the series. However, unit root tests on the first differences were rejected, meaning that all series are of order 1(1) - evidence of cointegration. Simply put, emerging markets tend not to drift apart over time. This suggests that emerging markets offer limited benefits to investors who are looking to add some risk to their portfolios. In addition, the study also found evidence of both unidirectional and bidirectional causality (Granger-Cause tests) between markets. This implies that the conditions for a particular market are exogenous of the other market. The study concludes that emerging markets are gradually adopting the same profile as developed markets.
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- Date Issued: 2011
Trade union investment schemes: a blemish on the social movement unionism outlook of South African unions?
- Authors: Rubushe, Melikaya
- Date: 2010
- Subjects: Labor unions -- South Africa , Labor unions and communism , Cosatu , Economic development -- South Africa , National Union of Mineworkers (South Africa) , Labor unions -- Finance , Business enterprises, Black -- South Africa , Investments -- South Africa
- Language: English
- Type: Thesis , Masters , MSocSc
- Identifier: vital:3331 , http://hdl.handle.net/10962/d1003119 , Labor unions -- South Africa , Labor unions and communism , Cosatu , Economic development -- South Africa , National Union of Mineworkers (South Africa) , Labor unions -- Finance , Business enterprises, Black -- South Africa , Investments -- South Africa
- Description: South African trade unions affiliated to Congress of South African Trade Unions (COSATU) have taken advantage of the arrival of democracy and newly found opportunities available through Black Economic Empowerment to venture into the world of business by setting up their own investment companies. The declared desire behind these ventures was to break the stranglehold of white capital on the economy and to extend participation in the economic activities of the country to previously disadvantaged communities. Using the National Union of Mineworkers and the Mineworkers’ Investment Company as case studies, this dissertation seeks to determine whether unions affiliated to the Congress of South African Trade Unions (COSATU) are advancing the struggle for socialism through their investment schemes. Secondly, the dissertation determines whether, in the activities of the schemes, internal democracy is preserved and strengthened. The theoretical framework of this dissertation emerges from arguments advanced by Lenin and Gramsci on the limitations of trade unions in terms of their role in the struggle against capitalism. In addition, the argument draws on the assertions by Michels regarding the proneness of trade union leadership to adopt oligarchic tendencies in their approach to leadership. Of interest is how, according to Gramsci, trade unions are prone to accepting concessions from the capitalist system that renders them ameliorative rather than transformative. Drawing from Michels’ ‘iron law of oligarchy’, the thesis examines whether there is space for ordinary members of the unions to express views on the working of the union investment companies. By looking at the extent to which the investment initiatives of the companies mirror the preferences of the ordinary members of the unions, one can determine the level of disjuncture between the two. The study relies on data collected through interviews and documentary material. Interviews provide first-hand knowledge of how respondents experience the impact of the investment schemes. This provides a balanced analysis given that documents reflect policy stances whereas interviews provide data on whether these have the stated impact. What the study shows is a clear absence of space for ordinary members to directly influence the workings of union investment companies. It is also established that, in their current form, the schemes operate more as a perpetuation of the capitalist logic than offering an alternative system.
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- Date Issued: 2010
Integration between the South African and international bond markets : implications for portfolio diversification
- Authors: Rabana, Phomolo
- Date: 2009
- Subjects: Bond market , Bond market -- South Africa , Principal components analysis , International finance , Foreign exchange rates -- South Africa , Investments -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:947 , http://hdl.handle.net/10962/d1002681 , Bond market , Bond market -- South Africa , Principal components analysis , International finance , Foreign exchange rates -- South Africa , Investments -- South Africa
- Description: International bond market linkages are examined using monthly bond yield data and total return indices on government bonds with ten years to maturity. The bond yield data covers a nineteen-year period from January 1990 to July 2008, while the bond total return index data covers a nine-year period from August 2000 to July 2008. The international bond markets included in the study are Australia, Canada, Germany, Japan, the United Kingdom, and the United States. The examination of international bond market linkages across these markets has important implications for the formulation of effective portfolio diversification strategies. The empirical analysis is carried out in three phases: the preliminary analysis, the principal component analysis (PCA), and the cointegration analysis. For each analysis and for each set of data the full sample period is first analysed and subsequently a five-year rolling window approach is implemented. Accordingly, this makes it possible to capture the time-varying nature of international bond market linkages. The preliminary analysis examines the bond market trends over the sample period, provides descriptive statistics, and reports the correlation coefficients between the selected bond markets. The PCA investigates the interrelationships among the bond markets according to their common sources of movement and identifies which markets tend to move together. The cointegration analysis is carried out using the Johansen cointegration procedure and investigates whether there is long-run comovement between South Africa and the selected bond markets. Where cointegration is found, Vector Error-Correction Models (VECMs) are estimated in order to examine the long-run equilibrium relationships in addition to their short-run adjustments over time. The empirical analysis results were robust, and overall integration between SA and the selected major bond markets remained weak and sporadic. In addition, the results showed that even after accounting for exchange rate differentials, international bond market diversification remained beneficial for a South African investor; and since international bond market linkages remained weak with no observable trend, international bond market diversification will remain beneficial for some time to come for a South African investor.
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- Date Issued: 2009
The covariation of South African and foreign equity returns during bull and bear runs : implications for portfolio diversification
- Authors: Mhlanga, Godfrey
- Date: 2009
- Subjects: Stock exchanges -- South Africa , Portfolio management -- South Africa , Investments -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:944 , http://hdl.handle.net/10962/d1002678
- Description: This study examines the pattern of covariation of the industrial index returns of South Africa and foreign industrial sectors. This follows recent increase in national equity correlations and increases in the influence of industry effects in portfolio diversification. The covariation pattern in returns across industries and countries during both bull and bear runs is examined using correlation analysis to determine if there is a difference between the two epochs. The study presents preliminary evidence of the covariation between sectors during a bear and a bull run. Return covariation among sectors is impelled to a greater extent by country-specific factors than by industry-specific factors, implying the segmentation of industrial sectors. Thus, South African investors can in general gain more if a portfolio comprising shares across industries and countries is held, even if these investors buy shares from similar industries.
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- Date Issued: 2009
The current role of modern portfolio theory in asset management practice in South Africa
- Authors: Garaba, Masimba
- Date: 2005
- Subjects: Portfolio management -- South Africa , Investments -- South Africa , Bank investments -- Mathematical models , Capital assets pricing model , Asset -- Liability management , Money market -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:965 , http://hdl.handle.net/10962/d1002699 , Portfolio management -- South Africa , Investments -- South Africa , Bank investments -- Mathematical models , Capital assets pricing model , Asset -- Liability management , Money market -- South Africa
- Description: This research examines the role that modern portfolio theory (MPT) plays in current South Africa asset management practice in comparison to other portfolio management techniques and security evaluation methods. The purpose of asset management is to pool complementary financial market expertise, in order to generate returns in excess of the market return on the investments of the owners of financial resources that are entrusted to the firm, since the owners of financial resources might not be able to make superior investment decisions on their own. The research presents and discusses the literature pertaining to modern portfolio theory, traditional portfolio theory (fundamental and technical analyses), and behavioural finance theory. The implication of the efficient market hypothesis in relation to all the portfolio management theories is also presented and discussed. In line with a positivist paradigm, the survey research methodology, which combines both qualitative and quantitative aspects, was adopted. The instrument used for data collection was a questionnaire, which was found to be reliable and valid for this research. The questionnaire encompassed the Lickert scale to measure the data. The results of the analysis were interpreted using descriptive statistics. The results of this research suggest that modern portfolio theory does not play a significant role in the management of portfolios and security evaluation in South Africa. South African asset managers regard fundamental analysis as the most significant method of security evaluation in the management of portfolios. Technical analysis and econometric models are regarded as playing a moderate role and complement fundamental analysis whilst behavioural finance models play the least role. This research recommends an integrated portfolio management strategy that incorporates MPT, traditional portfolio theory and behavioural finance models to enhance investor value and protection.
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- Date Issued: 2005