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A critical analysis of the socioeconomic impact assessments of the Addo Elephant National Park

  • Authors: Rose, Matthew Calvin
  • Date: 2011
  • Subjects: Addo Elephant National Park (South Africa) South African National Parks Economic impact analysis -- South Africa -- Addo Elephant National Park Environmental impact analysis -- South Africa -- Addo Elephant National Park
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:964 , http://hdl.handle.net/10962/d1002698
  • Description: Impact assessment is a requirement for development in many countries across the globe, seeking to inform the decision-maker as to the environmental, social and economic impact of an ongoing or proposed project. Socioeconomic impact assessment (SEIA) is a means of informing decision-makers as to the socioeconomic effects a project could have, or is having, thus contributing to informing adaptive management practices. However, the tendency of socioeconomic impact assessment to highly quantitative economic methods of analysis raises the question of whether the desired results are achieved by the process. The purpose of the research was to determine whether highly quantitative forms of economic analysis are suitable for measurement of impacts in a social context where distributive as well as net impact is important; to critically analyze the method utilized in achieving highly quantitative economic impact assessment results; and lastly to draw conclusions and make recommendations regarding the efficacy of monitoring processes used to inform adaptive management practices. The research was conducted by means of a case study focusing on three SEIAs carried out on the same entity, namely the Addo Elephant National Park. Managed by South African National Parks (SANP), it began expanding its borders in the early 2000s. Funded by the World Bank, SANP was required to carry out a comprehensive Strategic Environmental Assessment (SEA) in 2003 to ensure the expansion did not have negative environmental, social and economic repercussions, and where such consequences were unavoidable, to ensure that mitigation and management thereof was informed by useful monitoring exercises. Given the need for resettlement and issues of economic distributive concern raised in the 2003 SEA, the three socioeconomic impact assessments conducted from 2005 – 2010 as part of the ongoing monitoring exercises formed an ideal framework for answering the primary research questions. The findings indicate that despite consistent terms of reference, different assessors interpret mandates from the commissioning body in different ways, leading to varied applications of the same theory, some methodologically better than others. Economic multiplier analysis was found to be inadequate as a measure of the distributive effects of economic impact. Moreover, a lack of consistency, accountability and transparency in the monitoring process led to three sets of results that were incomparable over time and thus inadequate as a means to inform adaptive management practices. Asymmetries of and between power and expertise in the commissioning body and the assessors led to breakdowns of the assessment process in terms of accountability and integrity and resulted in a failure to properly define the scope of the study and measure the relevant indicators. The following recommendations were made: that the economic multiplier method be complemented by additional methods of analysis when utilized in disparate social contexts where distribution of economic benefit is important; that monitoring practices be systematized at an early stage of the process to ensure comparable results useful in informing ongoing management practices; and that what an assessment measures and how it measures it be clarified with reference to an objective source. Finally, the number of factors for consideration in any impact assessment means that measurement of the full picture suffers resource constraints, emphasizing the need for impact assessment oversight to recognize the deficiencies of the process whilst still acknowledging that ‘some number is better than no number’.
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  • Date Issued: 2011

A regulationist approach to South Africa and a critique of inflation targeting

  • Authors: Bax, Ryan Michael Jonathan
  • Date: 2011
  • Subjects: Inflation (Finance) -- South Africa International finance Economic development -- South Africa Sustainable development -- South Africa Inflation targeting -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1036 , http://hdl.handle.net/10962/d1004533
  • Description: Since the 1970s, the international economic system has become prone to the volatility and undue effects associated with booms and busts. This forty year period spanning the present has exhibited restrained growth and repressive economic development. Critical changes to the system are presented by the transition from "Fordism" to the post 1970s neoliberal regime and the globalization of world markets. Underpinning this transformation is an ideological shift towards free market capitalism and the adoption of "reduced form" market models. These "reduced form" models appear to hinder economic sustainability as their grounding in economics fails to account for real economic activity. This thesis aims to provide a more holistic perception of sustainability, one that provides a sound basis on which to develop sustainable economic policy. The Regulationist Approach presents the requisite understanding of economic sustainability required within this research. The inclusion of economic, historical and socio-political fields of research proposes a wider understanding of the political economy and sustainability. The application of the Regulation Approach to the South African economy illustrates many problem areas that require attention. The examination found that firstly, aggregate demand in the South African economy was unsustainable due to the debt driven nature of demand under the asset price bubble of the mid to late 2000s. Secondly, aggregate supply also proved unsustainable as government is failing to provide any substantive growth within important sectors of the economy such as education and the provision of general services. Furthermore, the adoption of inflation targeting in South Africa poses a barrier to sustained economic growth as it focuses singularly on price inflation. The "reduced form" model of inflation targeting fails to account for market failures and a number of vital indicators of sustainability most notably, debt levels and asset prices. The inclusion of these indicators, and financial stability more generally, are found to provide a more holistic and sustainable approach to macroeconomic policymaking.
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  • Date Issued: 2011

Adjustment of commercial banks' interest rates and the effectiveness of monetary policy: evidence from Anglophone West Africa

  • Authors: Bangura, Lamin
  • Date: 2011
  • Subjects: Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:951 , http://hdl.handle.net/10962/d1002685 , Monetary policy -- Africa, West , Banks and banking -- Africa, West , Interest rates -- Africa, West
  • Description: Most central banks use short-term interest rates as their main instrument of monetary policy. It is assumed that a change in policy rate will influence interest rates set by commercial banks, but this is not usually the case. Commercial banks adjust their interest rates in response to changes in policy rate with lags, which make their interest rates sticky. Stickiness in commercial banks interest rates have been seen as an obstacle to the smooth transmission of monetary policy decisions. Despite the importance of the transmission process, little attention has been given to a systematic measurement of the degree of response of commercial banks‟ interest rates to changes in monetary policy stance in the Anglophone West African countries, specifically within the West African Monetary Zone (WAMZ) economies. Against this backdrop, this study explores the interest rate adjustment dynamics using monthly interest rate series on discount rate, treasury bill rate, commercial banks‟ deposit and lending rates from 1989 to 2009 (for Gambia, Nigeria and Sierra Leone) and from 2000 to 2009 (for Ghana). Specifically, the study set out to examine how lending and deposit rates respond to changes in the official rates and to see whether there is a convergence among the rates over time. Also, to examine the relative adjustment of commercial bank lending rates to changes in the official rate when there is disequilibrium. The analyses were twofold: a full sample period and a rolling window analysis. Following Cottarelli and Kourelis (1994), the study employed cointegration technique and an asymmetric error correction model to obtain the short-run and long-run parameters from which the error correction coefficients, mean adjustment lags and asymmetric mean adjustment lags were estimated. The results for the entire sample period revealed that the long-run pass-through in Nigeria was 81% and 67% for lending rates and deposit rates respectively. In Ghana, it was 66% and 69% for lending and deposit rates respectively. While in Sierra Leone, long-run pass-through was 62% and 72% for lending and deposit rates respectively. In Gambia, it was 50% and 40% for lending and deposit rates respectively. On the other hand, the short-run pass-through was found to be lower compared to the long-run pass-through: in Nigeria it was 66% and 47%; in Gambia, 26% and 29%; in Sierra Leone, 30% and 13%; and in Ghana, -6% and 35% for lending and deposit rates respectively in each country. The pass-through estimates for the rolling windows were mixed for short-run and long-run pass-through. The mean adjustment lags suggest that the speed of adjustment of Lending rates for full sample period were two, two, seven and twelve months in Nigeria, Ghana, Sierra Leone and Gambia respectively. While for deposit rates they were five, six, seven and eighteen for Ghana, Nigeria, Gambia and Sierra Leone respectively. The average speeds of adjustment for the rolling windows were four and five months for lending and deposit rates respectively. Weak evidence of convergence was found in lending and deposit rates in the short-run and long-run pass-through among the countries. However, the results suggest that the magnitude and speed of the pass-through amongst the countries on average were high compared to emerging Asian countries. Significant asymmetric adjustments were found in the lending rates for Gambia and Sierra Leone, while in Gambia and Nigeria there were asymmetries in deposit rates. Based on the evidence provided, interest rate pass-through is high in Nigeria and Ghana compared to Gambia and Sierra Leone and this calls for the harmonization of financial policies on the part of the financial authorities in the WAMZ. Viewed solely from an interest rate pass-through, the lack of convergence among the countries suggests that WAMZ is far from ready for a monetary union. The relatively low pass-through in some of the countries suggests rigidity in the banking system which may be due to underdevelopment of the system. Thus efforts geared toward strengthening the banking system and the financial system as whole would further enhance the prospect of a monetary union among them.
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  • Date Issued: 2011

An analysis of the influence of domestic macroeconomic variables on the performance of the South African stock market sectoral indices

  • Authors: Hancocks, Ryan Lee
  • Date: 2011
  • Subjects: Johannesburg Stock Exchange , Stock price indexes -- South Africa , Interest rates -- South Africa , Macroeconomics -- Econometric models
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: vital:954
  • Description: An econometric study was undertaken to determine the extent to which selected macroeconomic variables influenced stock market prices on the All-Share, Financial, Mining and Retail Indices of the Johannesburg Stock Exchange in South Africa from 1996:7 to 2008:12. The Johansen cointegration method was used to determine whether cointegrating relationships existed between the macroeconomic variables and the stock market indices. A Vector Error Correction model was estimated and found significant results that money supply, inflation, long and short- run interest rates, and the exchange rate all had an influence on stock market prices. Further, the VECM results for each sector indicated that certain macroeconomic variables had differing influences on each sector of the stock market. Impulse Response tests indicated that the selected macroeconomic variables caused shock to the sectoral indices in the short-run but that the effect was lagged. The Variance Decomposition tests conducted supported earlier evidence that the macroeconomic variables had a strong level of sectoral index determinacy in the long run. The results found that the All-Share and Financial Indices were negatively influenced by inflation and short term interest rates in the long run, while the Financial Index also had a negative relationship with long-run interest rates. Money supply was found to have a positive effect on all the indices. A weakening of the exchange rate was found to have a positive influence on both the Retail and Mining Indices, while it negatively affected the All-Share and Financial Indices. The long-run interest rate had a positive influence on both the Retail and Mining Indices. Overall the study finds that macroeconomic variables are important determinants of stock market prices in South Africa and that it is important to examine each sector of the stock market separately to capture what are different effects. The limitations of the study are that a different measure for exchange rates from the nominal rand/dollar exchange rate used here may yield more decisive results and provide insight into the link between exchange rate behaviour and performance of especially the retail sector.
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  • Date Issued: 2011

An analysis of the long run comovements between financial system development and mining production in South Africa

  • Authors: Ajagbe, Stephen Mayowa
  • Date: 2011
  • Subjects: Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:955 , http://hdl.handle.net/10962/d1002689 , Economic development -- South Africa , Econometric models , Mineral industries -- Economic aspects -- South Africa , South Africa -- Economic conditions , South Africa -- Economic policy , Principal components analysis , Cointegration , Stock exchanges -- South Africa , Banks and banking -- South Africa , Foreign exchange rates
  • Description: This study examines the nature of the relationship which exists between mining sector production and development of the financial systems in South Africa. This is particularly important in that the mining sector is considered to be one of the major contributors to the country’s overall economic growth. South Africa is also considered to have a very well developed financial system, to the point where the dominance of one over the other is difficult to identify. Therefore offering insight into the nature of this relationship will assist policy makers in identifying the most effective policies in order to ensure that the developments within the financial systems impact appropriately on the mining sector, and ultimately on the economy. In addition to using the conventional proxies of financial system development, this study utilises the principal component analysis (PCA) to construct an index for the entire financial system. The multivariate cointegration approach as proposed by Johansen (1988) and Johansen and Juselius (1990) was then used to estimate the relationship between the development of the financial systems and the mining sector production for the period 1988-2008. The study reveals mixed results for different measures of financial system development. Those involving the banking system show that a negative relationship exists between total mining production and total credit extended to the private sector, while liquid liabilities has a positive relationship. Similarly, with the stock market system, mixed results are also obtained which reveal a negative relationship between total mining production and stock market capitalisation, while a positive relationship is found with secondary market turnover. Of all the financial system variables, only that of stock market capitalisation was found to be significant. The result with the financial development index reveals that a significant negative relationship exists between financial system development and total mining sector production. Results on the other variables controlled in the estimation show that positive and significant relationships exist between total mining production and both nominal exchange rate and political stability respectively. Increased mining production therefore takes place in periods of appreciating exchange rates, and similarly in the post-apartheid era. On the other hand, negative relationships were found for both trade openness and inflation control variables. The impulse response and variance decomposition analyses showed that total mining production explains the largest amount of shocks within itself. Overall, the study reveals that the mining sector might not have benefited much from the development in the South African financial system.
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  • Date Issued: 2011

An investigation into international transfer pricing guidelines and the anomalies arising from business restructurings by multi-national enterprises

  • Authors: Stelloh, Marcus Matthias
  • Date: 2011
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: vital:879 , http://hdl.handle.net/10962/d1001633
  • Description: The number of multinational enterprises has increased substantially. In part due to the integration of national economies (the European Union), improvements in communication and technology and the opportunity to reduce costs as a result of globalisation. Transfer pricing and especially business restructuring within multinationals is a fairly new concept.Professional legal and audit firms have different views on how to approach business restructurings. This research analyses important transfer pricing aspects and the anomalies that arise through business restructurings. The research method used in this research paper is primarily qualitative, comprising the analysis of various documentary sources of data. Relevant South African and international case law, tax legislation, the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, the Transfer Pricing Aspects of Business Restructurings Discussion Draft and other reports were consulted and analysed. Further the views of recognised legal and tax experts that have been published in technical journals and text books were also considered and examined. A hypothetical example of a business restructuring transaction was constructed in order to illustrate practical issues and different approaches to solving them. The research has argued that the arm’s length principle, which forms the bases of transfer pricing regulation, is not an exact science but theoretically it is the most suitable measure.It may not be able to incorporate all variables, such as the cost savings through synergies of multinational enterprises, but it promotes international trade and investment by ensuring that transactions are based on fair prices. Business restructurings create anomalies in applying the arm’s length principle but these anomalies can be dealt with within the regulatory structure. The business restructuring approach recommended is realistic and pragmatic, but more clarity may be needed in certain circumstances. The research has also discussed the avoidance of transfer pricing audits, including having appropriate transfer pricing policies and documentation.
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  • Date Issued: 2011

Analysis of volatility spillover effects between the South African, regional and world equity markets

  • Authors: Mumba, Mabvuto
  • Date: 2011
  • Subjects: Financial crises International finance Stocks -- Prices -- Africa Stocks -- Prices -- South Africa Capital market -- Africa Capital market -- South Africa Foreign exchange rates Africa -- Economic conditions South Africa -- Economic conditions
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:957 , http://hdl.handle.net/10962/d1002691
  • Description: The current study examines the extent and magnitude by which global and regional shocks are transmitted to the volatility of returns in the stock markets of South Africa, Egypt, Nigeria, Botswana, Mauritius and Egypt. This is done so as to make inferences on the level of the domestic market‟s integration into the regional and world capital markets. By applying multivariate and univariate GARCH models, using weekly data from June 1995 to May 2010, the main empirical findings are threefold. Firstly, the volatility analytical framework finds statistically significant and time-varying volatility spillover effects from the regional and global markets to the South African market. Global shocks are generally stronger and account for up to 23.9 percent of the volatility of South Africa‟s equity market compared to weaker regional factors which account for less than 1 percent of domestic variance. Only in countries with strong bilateral trade and economic links with South Africa, such as Botswana and Namibia, is it found that regional factors are more dominant than global factors for domestic volatility. Compared to the other African markets, the joint influence of foreign shocks on domestic volatility is highest in South Africa and Egypt, two of Africa‟s largest and most developed markets. The results further demonstrate that for all the African markets the explanatory power of both regional and global factors for domestic volatility is not constant over time and tends to increase during turbulent market periods. Secondly, the analysis of the determinants of South frica‟s second moment linkages with the global market suggests that the volatility of the exchange rate plays a cardinal role in influencing the magnitude by which global shocks affect domestic volatility. The increased global integration in the second moments cannot be attributed to either increased trade integration, convergence in inflation rates or to convergence in interest rates between South Africa and the global markets. Lastly, tests were conducted to examine whether there have been contagion effects from the regional and global markets to South Africa from the 1997 Asian crisis and the 2007/8 global financial crisis. The results show no evidence of contagion during either the East Asian currency crisis or the recent global financial crisis to South Africa, while some African markets, such as Egypt, Mauritius and Botswana, exhibit contagion effects from either crisis. Overall, the empirical findings generally support the view that African markets are segmented both at the regional and global levels as domestic volatility is more influenced by local idiosyncratic shocks (the proportion not attributable to either global and regional factors). However, the volatility of South Africa, and to a lesser extent Egypt, remains relatively more open to global influence. This implies that the potential for gains from international portfolio diversification and the scope for success of policies aimed at the stabilisation of equity markets in these markets exist.
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  • Date Issued: 2011

Angel networks as a business start-up financing option in South Africa

  • Authors: Sibanda, Zenzo
  • Date: 2011
  • Subjects: Angels (Investors) -- South Africa Small business -- Finance -- South Africa New business enterprises -- Finance -- South Africa Venture capital -- South Africa Microfinance -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1164 , http://hdl.handle.net/10962/d1002780
  • Description: The following study is about business angels financing small business start-ups. It explores the aspect of starting up an entrepreneurial venture in which the entrepreneur seeks to secure start-up finance from lenders, raising the various issues that are known to characterise this engagement between the entrepreneur and the lender. Using the phenomenological paradigm, the study seeks to determine the awareness of small scale financing by entrepreneurs in South Africa, to determine the most commonly used source of start-up business funding in South Africa, to assess the extent to which business angel financing could be used to finance businesses in South Africa and to determine the factors impacting the use of business angel financing in South Africa. From these objectives, the study will also seek to determine the extent to which business angel networks could facilitate the financing of business start-ups. Small businesses invariably come up in different policy spheres as the main avenues to social and economic construction across national and regional lines. The importance of a successful business start up to a growing economy should not be underestimated. In line with this is the particular factor of gaining access to start up capital, which continues to emerge as a leading contributor to the success or failure of business start ups. Studies continue to verify that the most common challenge faced by most emerging entrepreneurs is start-up capital, either in the lack of this capital, the unfavourable conditions surrounding its availability, the lack of assets to serve as collateral for its use or the ambiguous flow of crucial information between lenders and providers of finance in the funding relationship (Abor and Biekpe, 2006: 69;Hernandez-Trillo, Pagan and Paxton, 2005: 435, ISPESE, 2005: 7, CDE, 2004: 5; Musengi 2003: 11). Roger Sorheim (2005: 179) refers to business angels as private individuals who offer risk capital to unlisted companies that are struggling to obtain start up capital to finance their business ideas. Business angels are further defined as high net-worth bearers of substantial private capital who predominantly invest in the early stage of high risk high potential return business ventures with a positive further growth potential. Business angel finance is typically a ‘once-off’ early stage form of small firm financing compared to the more frequent later stage venture capitalist funding. Studies show that business angels represent an underutilised wealth creation mechanism when it comes to small firm start-ups as most business angels contribute expertise in addition to finance to the start-ups they get involved in. This brings valuable business insight to the commercialisation of a good business idea. The business angel network exposes a range of potentially viable business prospects to willing investors by facilitating the flow of information about entrepreneurs and their businesses, thereby eliminating ambiguity, information asymmetry and transaction costs (Aernoudt and Erikson, 2002: 178; Van Osnabrugge and Robinson, 2000:374; Macht, 2006:1; Ehlrich, De Noble, Moore and Weaver, 1994:70; Sorheim, 2005:179). To achieve a holistic approach to a phenomenon which appears to be relatively new in South African business circles, the study will follow a qualitative approach in which two categories of populations will be used, one of small business operators and the other of business angels in South Africa. In the study, 20 small business operators and five business angels in Grahamstown will be approached using the convenience and snowballing sampling methods respectively. Face-to-face semi-structured interviews will be used as a data collection method and content analysis will be used as a data analysis tool (Collis and Hussey, 2003:156, Driver, Wood, Segal and Herrington, 2001:32, National Small Business Act ). There has been very limited research on business angels in the South African context, therefore the study would significantly contribute in entrepreneurship, government and small business development circles as it brings about attention to what the researcher predicts is an underutilised business start-up financing option.
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  • Date Issued: 2011

Bayesian logistic regression models for credit scoring

  • Authors: Webster, Gregg
  • Date: 2011
  • Subjects: Bayesian statistical decision theory Credit scoring systems Regression analysis Logistic regression analysis Monte Carlo method Markov processes Financial institutions
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:5574 , http://hdl.handle.net/10962/d1005538
  • Description: The Bayesian approach to logistic regression modelling for credit scoring is useful when there are data quantity issues. Data quantity issues might occur when a bank is opening in a new location or there is change in the scoring procedure. Making use of prior information (available from the coefficients estimated on other data sets, or expert knowledge about the coefficients) a Bayesian approach is proposed to improve the credit scoring models. To achieve this, a data set is split into two sets, “old” data and “new” data. Priors are obtained from a model fitted on the “old” data. This model is assumed to be a scoring model used by a financial institution in the current location. The financial institution is then assumed to expand into a new economic location where there is limited data. The priors from the model on the “old” data are then combined in a Bayesian model with the “new” data to obtain a model which represents all the available information. The predictive performance of this Bayesian model is compared to a model which does not make use of any prior information. It is found that the use of relevant prior information improves the predictive performance when the size of the “new” data is small. As the size of the “new” data increases, the importance of including prior information decreases
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  • Date Issued: 2011

Cointegration in equity markets: a comparison between South African and major developed and emerging markets

  • Authors: Petrov, Pavel
  • Date: 2011
  • Subjects: Cointegration Stock exchanges -- South Africa Stock exchanges -- Developing countries Stock exchanges -- Developed countries South Africa -- Economic conditions Portfolio management -- South Africa Econometrics Autoregression (Statistics)
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:5575 , http://hdl.handle.net/10962/d1005539
  • Description: Cointegration has important implications for portfolio diversification. One of these is that in order to spread risk it is advisable to invest in markets that are not cointegrated. Over the last several decades communication technology has made the world a smaller place and hence cointegration in equity markets has become more prevalent. The bulk of research into cointegration focuses on developed and Asian markets, with little research been done on African markets. This study compares the Engle-Granger and Johansen tests for cointegration and uses them to calculate the level of cointegration between South African and other global equity markets. Each market is compared pair-wise with South Africa and the results have been that in general South Africa is cointegrated with other emerging markets but not really with African nor developed markets. Short-run analysis with the error correction was carried out and showed that in general markets respond slowly to any disequilibrium. Innovation accounting methods showed that the country placed first in Cholesky ordering dominates the other one. Multivariate cointegration was carried out using three selections of 4, 6 and 8 market portfolios. One of the markets was SA and the others were all chosen based on the criteria that they are not pair-wise cointegrated with SA. The level of cointegration varied depending on the portfolios, as did the error correction rates, impulse responses and variance decomposition. The one constant was that the USA dominated any portfolio where it was introduced. Recommendations were finally made about which market portfolio an investor should consider as most favourable.
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  • Date Issued: 2011

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

Consumer perceptions of private label brands: an Eastern Cape university-aged analysis

  • Authors: Mpofu, Bukhosi Dumoluhle
  • Date: 2011
  • Subjects: House brands -- South Africa -- Eastern Cape Young consumers -- South Africa -- Eastern Cape Consumer behavior -- South Africa -- Eastern Cape
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1167 , http://hdl.handle.net/10962/d1002783
  • Description: This research investigates the consumer perceptions of private label brands amongst the university aged consumers from selected Eastern Cape universities. The research also aimed to ascertain whether or not generation Y consumers are aware of the existence of private labels, whether price, quality, advertising, packaging, reference groups and demographic variables influenced generation Y purchasing behavior of private label brands. To achieve these objectives, the research made use of the simple random technique to gather the primary data via the use of an online structured questionnaire. The sample population selected where the students in the Eastern Cape Province Universities (Rhodes and Nelson Mandela Metropolitan Universities) who reside off-campus. The assumption was that students who reside off-campus are more aware of private labels as they carry out shopping more than those that reside on campus and generally would have more disposable income and the reason that two different universities have been chosen is to provide a broad base of student opinions, covering varying cultural and income backgrounds, thus allowing for unbiased, valuable research. After pre-tests were conducted the questionnaire was made available online to easy the distribution of the questionnaire and allow for a greater response rate. Descriptive and inferential statistics where used to analyze the results of the questionnaire. The results showed that consumers are generally aware of private label brands and have at least seen them being advertised. Furthermore, the results showed that consumers purchase groceries based on price, quality and convenience of location of the grocery stores .The results indicate that Generation Y consumers are indeed a significant part of the consumer population and that they represent a confident, self reliant, optimistic and positive generation and are verbally and visually more sophisticated, creating a whole new language through digital media and that Generation Y consumers are generally aware of the existence of private labels. The results also indicate that Generation Y consumers strongly agreed that they purchase groceries based on price and quality, meaning price and quality are very influential when purchasing groceries and that the packaging of, generally, all private label brands was not attractive hence a conclusion was made that packaging of private labeled products does not influence Generation Y’s purchasing behaviour of private labels.
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  • Date Issued: 2011

Exchange rate behavior in the cases of the Zambian Kwacha and Malawian Kwacha : is there misalignment?

  • Authors: Magwizi, Brenda Thandekha , Rhodes University
  • Date: 2011
  • Subjects: Foreign exchange rates -- Zambia Foreign exchange rates -- Malawi International relations -- Case studies -- Zambia International relations -- Case studies -- Malawi
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:974 , http://hdl.handle.net/10962/d1002708
  • Description: The exchange rate is the price of one currency against another currency or currencies of a group of countries. Real exchange rates are important because they show the external competitiveness of a country‟s economy. Thus, when the exchange rate of a country is misaligned, this will affect its trade, production and the welfare of people. This study analysed macroeconomic determinants of the real exchange rate and dynamic adjustment of the real exchange rate as a result of shocks to these determinants. The study also determined the extent of misalignment of the real exchange rate in Malawi and Zambia and identified variables that contributed to it. Such information is important to policy makers. Quarterly data were used for both countries from 1980:1-2008:4. The literature review identified those variables that determine the exchange rate and these include government consumption, foreign aid, net foreign assets, commodity prices, terms of trade, domestic credit, openness and the Balassa Samuelson effect (technological progress). To determine the long-run relationship between the exchange rate and its determinants, we employed the Johansen approach and the Vector Error Correction Model (VECM). For robustness check on the long-run and shortrun effects of determinants on the exchange rate, variance decomposition and impulse response analyses were used. Results in the study show that in Malawi for both models, an increase in LAID, LGCON and LTOT resulted in real exchange rate depreciation and increases in LDC, NFA and LNEER resulted in an appreciation. In Zambia, increases in LAID, LGCON, LOPEN and LTOT caused the real exchange rate to depreciate while increases in LDC, NFA and LCOPPER led to an appreciation. Lagged LREER and LNEER were found to have short run effects on the equilibrium exchange rate for Malawi and lagged LCOPPER and LDC for Zambia. Periods of exchange rate misalignment were found in both countries. It was also found that the coefficient of speed of adjustment in Malawi in models 1 and 2 indicate that 11% and 27% of the variation in the real exchange rate from its equilibrium adjust each quarter respectively. The speed of adjustment for Zambia in both models was 45% and 47% respectively, higher than that of Malawi. Foreign aid has proven to be important in exchange rate misalignment in both countries, though this was not really expected in the case of Zambia. Given these results, it may be of interest to policy makers to understand which variables impact most on the exchange rate and how misalignment due to these determinants can be minimised.
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  • Date Issued: 2011

Exchange rate pass-through to domestic prices in Kenya

  • Authors: Mnjama, Gladys Susan
  • Date: 2011
  • Subjects: Kenya -- Economic conditions , Kenya -- Economic conditions -- Econometric models , Foreign exchange rates -- Kenya , Stocks -- Prices -- Kenya , Banks and banking -- Kenya , Cointegration , Econometrics , Inflation (Finance) -- Kenya
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:975 , http://hdl.handle.net/10962/d1002709 , Kenya -- Economic conditions , Kenya -- Economic conditions -- Econometric models , Foreign exchange rates -- Kenya , Stocks -- Prices -- Kenya , Banks and banking -- Kenya , Cointegration , Econometrics , Inflation (Finance) -- Kenya
  • Description: In 1993, Kenya liberalised its trade policy and allowed the Kenyan Shillings to freely float. This openness has left Kenya's domestic prices vulnerable to the effects of exchange rate fluctuations. One of the objectives of the Central Bank of Kenya is to maintain inflation levels at sustainable levels. Thus it has become necessary to determine the influence that exchange rate changes have on domestic prices given that one of the major determinants of inflation is exchange rate movements. For this reason, this thesis examines the magnitude and speed of exchange rate pass-through (ERPT) to domestic prices in Kenya. In addition, it takes into account the direction and size of changes in the exchange rates to determine whether the exchange rate fluctuations are symmetric or asymmetric. The thesis uses quarterly data ranging from 1993:Ql - 2008:Q4 as it takes into account the period when the process of liberalization occurred. The empirical estimation was done in two stages. The first stage was estimated using the Johansen (1991) and (1995) co integration techniques and a vector error correction model (VECM). The second stage entailed estimating the impulse response and variance decomposition functions as well as conducting block exogeneity Wald tests. In determining the asymmetric aspect of the analysis, the study followed Pollard and Coughlin (2004) and Webber (2000) frameworks in analysing asymmetry with respect to appreciation and depreciation and large and small changes in the exchange rate to import prices. The results obtained showed that ERPT to Kenya is incomplete but relatively low at about 36 percent in the long run. In terms of asymmetry, the results showed that ERPT is found to be higher in periods of appreciation than depreciation. This is in support of market share and binding quantity constraints theory. In relation to size changes, the results show that size changes have no significant impact on ERPT in Kenya.
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  • Date Issued: 2011

Exchange rates behaviour in Ghana and Nigeria: is there a misalignment?

  • Authors: Mapenda, Rufaro
  • Date: 2011 , 2011-11-09
  • Subjects: Foreign exchange rates -- Ghana , Foreign exchange rates -- Nigeria , Economic development -- Ghana , Economic development -- Nigeria , Foreign exchange administration -- Ghana , Foreign exchange administration -- Nigeria , International relations
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:976 , http://hdl.handle.net/10962/d1002710 , Foreign exchange rates -- Ghana , Foreign exchange rates -- Nigeria , Economic development -- Ghana , Economic development -- Nigeria , Foreign exchange administration -- Ghana , Foreign exchange administration -- Nigeria , International relations
  • Description: Exchange rates are believed to be one of the major driving forces behind sustainable macroeconomic growth and it is therefore important to ensure that they are at an appropriate level. Exchange rate misalignment is a situation where the actual exchange rate differs significantly from its equilibrium value, resulting in either an overvalued or an undervalued currency. The problem with an undervalued currency is that it will increase the domestic price of tradable goods whereas an overvalued currency will cause a fall in the domestic prices of the tradable goods. Persistent exchange rate misalignment is thus expected to result in severe macroeconomic instability. The aim of this study is to estimate the equilibrium real exchange rate for both Ghana and Nigeria. After so doing, the equilibrium real exchange rate is compared to the actual real exchange rate, in order to assess the extent of real exchange rate misalignment in both countries, if any such exists. In order test the applicability of the equilibrium exchange rate models, the study draws from the simple monetary model as well as the Edwards (1989) and Montiel (1999) models. These models postulate that the variables which determine the real exchange rate are the terms of trade, trade restrictions, domestic interest rates, foreign aid inflow, income, money supply, world inflation, government consumption expenditure, world interest rates, capital controls and technological progress. Due to data limitations in Ghana and in Nigeria, not all the variables are utilised in the study. The study uses the Johansen (1995) model as well as the Vector Error Correction Model (VECM) to estimate the long- and the short-run relationships between the above-mentioned determinants and the real exchange rate. Thereafter the study employs the Hodrick-Prescott filter to estimate the permanent equilibrium exchange rate. The study estimates a real exchange rate model each for Ghana and Nigeria. Both the exchange rate models for Ghana and Nigeria provide evidence of exchange rate misalignment. The model for Ghana shows that from the first quarter of 1980 to the last quarter of 1983 the real exchange rate was overvalued; thereafter the exchange rate moved close to its equilibrium value and was generally undervalued with few and short-lived episodes of overvaluation. In regard to real exchange rate misalignment in Nigeria prior to the Structural Adjustment Program in 1986 there were episodes of undervaluation from the first quarter of 1980 to the first quarter of 1984 and overvaluation from the second quarter of 1984 to the third quarter of 1986; thereafter the exchange rate was generally and marginally undervalued.
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  • Date Issued: 2011

Extending legal professional privilege to non-legal tax practitioners in South Africa: a comparative and constitutional perspective

  • Authors: Jani, Pride
  • Date: 2011
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: vital:882 , http://hdl.handle.net/10962/d1001636
  • Description: This study explains the differing rights of taxpayers, based on the nature of the profession of the tax adviser they consult. Those who utilize the services of tax attorneys can rely on the protection afforded by legal professional privilege whereas those who obtain their advice from non-legal advisers, such as accountants and other tax advisers, cannot claim the same protection. Legal professional privilege is a substantive right which should be extended to cover clients of non-legal tax advisers. The continued denial of the privilege to clients of nonlegal tax practitioners while it is availed to those who approach legal practitioners infringes the rights to privacy and equality contained in the South African Constitution. The object of this research is to show that the common law concept of legal professional privilege is amenable to extension so as to cover the clients of non-legal tax advisers. A qualitative approach was adopted which involved an in-depth analysis of the origins, rationale as well as the requirements for the operation of the doctrine. This also involved a constitutional as well as a comparative dimension. The constitutional dimension sought to show that the current distinction is untenable under the South African Constitution by virtue of the infringement of the rights to privacy and equality. The comparative dimension presented an analysis of the various jurisdictions that have extended the doctrine as well as those that are still to do so or have adamantly rejected the idea. The differential treatment of taxpayers based on the professional they engage contravenes the privacy and equality provisions and is thus unconstitutional. The study demonstrates that legal professional privilege is amenable to extension and there is need for legislative intervention as the courts are limited in the extent to which they may intervene in light of the separation of powers and judicial deference. Legal professional privilege should therefore be extended to protect the clients of non-legal tax advisers as opposed to partial protection which subsists at the moment.
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  • Date Issued: 2011

Financial integration in East Africa: evidence from interest rate pass-through analysis

  • Authors: Bholla, Zohaib Salim
  • Date: 2011
  • Subjects: East African Community -- Economic integration East African Community -- Economic conditions -- 21st century Interest rates -- Africa, East Interest rates -- Econometric models -- Africa, East Interest rates -- Effect of inflation on -- Africa, East Banks and banking -- Africa, East
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1044 , http://hdl.handle.net/10962/d1006131
  • Description: The successful launch of the European Monetary Union (EMU) raised an already ever growing interest in the economics of monetary integration and the formation of monetary unions around the world. Following the EMU experience, countries have considered forming a monetary union amongst themselves. The East African Community (EAC), comprising the three original member countries Kenya, Tanzania and Uganda and now including Burundi and Rwanda, is an example of such a group of countries that seek to form a monetary union. This study aims to identify the current level of financial integration amongst the East African countries. In order to do so the study examines whether the pass-through of monetary policy in the five countries has become similar over time. This is to provide an indication of the extent to which the nominal convergence criteria amongst the member countries have been met. The results of the study provide an indication of whether the formation of a monetary union in East Africa is possible. The empirical analysis used in this study included stationarity tests, four tests of co integration and an asymmetric error correction model to investigate whether the pass-through of monetary policy transmission in the five countries has become more similar over the ten year sample period from 1999 to 2008. The analysis uses three interest rates and 6-year rolling windows to identify the extent of macroeconomic convergence that prevails within the EAC, and consequently whether the formation of a monetary union is possible. The results suggest that the magnitude of the convergence amongst the countries remain low and there are significant rigidities in the deposit and lending rates over time, however the passthrough has improved with respect to the lending rate but not the deposit rate. The overall conclusion of the study suggests that an EAC wide monetary union is currently not possible based on the evidence provided from the pass-through analysis.
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  • Date Issued: 2011

Financial system development and economic growth in selected African countries: evidence from a panel cointegration analysis

  • Authors: Starkey, Randall Ashley
  • Date: 2011
  • Subjects: Economic development -- Africa Economic development -- Developing countries Banks and banking -- Africa Banks and banking -- Developing countries Stock exchanges -- Africa Stock exchanges -- Developing countries Econometric models Economic policy -- Africa Economic policy -- Developing countries
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:979 , http://hdl.handle.net/10962/d1002713
  • Description: Financial systems (i.e. banking systems and stock markets) can influence economic growth by performing the five key financial functions, namely: mobilising savings, allocating capital, easing of exchange, monitoring and exerting corporate governance, as well as ameliorating risk. The level of development of the financial system is a key determinant of how effectively and efficiently these functions are performed. This study examines the short-run and long-run relationships between financial system development and economic growth for a panel of seven African countries (namely: Egypt, Ivory Coast, Kenya, Morocco, Nigeria, South Africa and Tunisia) covering the period 1988 to 2008. While numerous empirical studies have researched this topic, none of the previous African empirical literature have investigated thjs by using three groups of financial development measures (i.e. overall financial development, banking system development and stock market development measures) as well as employing panel cointegration analyses. The investigation of the long-run finance-growth relationship is conducted using two methods; the Pedroni panel cointegration approach and the Kao panel cointegration technique. The Pedroni panel cointegracion approach is more often applied in empirical research as it has less restrictive deterministic trend assumptions, while the Kao panel cointegration technique is employed in this study for comparison purposes. Furthermore, the short-run linkages bet\veen financial development and economic growth are analysed using the Holtz-Eakin d of (1989) panel Granger causality test. The results of the Pedroni cointegration tests show that there are long-run relationships between overall financial development (measured by LOFD and OFD2) and economic growth, banking system development (measured by LPSC) and economic growth, as well as stock marker development (measured by LMCP and LVLT) and economic growth. In contrast, the Kao test fails to find any cointegration between finance and growth. However, on the balance, findings largely support a conclusion of cointegration between financial development and economic growth since the Pedroni approach is more appropriate for examining cointegration in heterogeneous panels. Estimates of these long-run cointegrating relationships show that all five financial development measures have the expected positive linkages with growth. However, only four of the five financial development measures were found to have significant long-run linkages with growth, as the relationship between LOFD and growth was not found to be significant in the long-run. The panel Granger causality results show that economic growth Granger causes banking system development in the short-run (i.e. there is demand-following finance), irrespective of the measure of banking development used. While there is bi-directional, reciprocal causality between economic growth and both of the measures of overall financial development and one measure of srock market development (i.e. LVLT). Thus, pulicy makers should focus on formulating policy which promotes faster paced economic growth so as to stimulate financial development, while at the same time encourage policy that promotes the balanced expansion of the banking systems and srock markets in ordet to augment economic growth.
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  • Date Issued: 2011

How integrated are the African stock exchanges?: evidence from long term comovement, returns and volatility spillovers

  • Authors: Kambadza, Tinashe Harry Dumile
  • Date: 2011
  • Subjects: Stock exchanges -- Africa Money market -- Africa Globalization -- Economic aspects -- Africa International economic relations
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:1017 , http://hdl.handle.net/10962/d1002752
  • Description: Stock market linkages have implications for portfolio diversification, asset pricing, monetary and regulatory policy as well as financial stability. This study examines the extent to which African stock markets are linked using daily data for the period 2000-2010. The study is divided into three main parts each focussing on the ways in which integration of the stock markets can be viewed. Firstly, we analyse the long run co-movement of the stock markets using both bivariate and multivariate Johansen (1988) and Johansen and Juselius (1990) cointegration approaches. Secondly, we analyse returns linkages using Factor analysis and the Vector Autoregressive (VAR) models. In the Factor Analysis model, we used two extraction methods, namely Principal Component Analysis and the Maximurn Likelihood technique. The VAR model was extended with impulse response, variance decomposition and block exogeniety. Thirdly, we analyse the behaviour of volatility and the volatility linkages among the stock markets. We initially analysed and modelled volatility in each stock market using the GARCH, EGARCH and GJR GARCH and then examined the long-term trend of the volatility. Conditional volatility series for each country were then estimated using the most appropriate model and were analysed using VAR, block exogeniety, impulse response and variance decomposition to determine the extent of their linkages. The findings of the study are as follows: Both the bivariate and multivariate models found slim evidence of cointegration amongst the stock markets, suggesting that there were opportunities for portfolio diversification for investors. In general, the financial crisis had very little impact on the long-run relationships of the stock markets. Results for the returns linkages showed that there were limited retums linkages with the exceptions of South African-Namibia and Egypt-Morocco to a lesser extent. South Africa was found to be the most endogenous, whilst Ghana and Nigeria were the most exogenous on the continent. We regards to volatility, we found that it was asymmetric and persistent across all the stock markets with long term trend of volatility showing that it significantly increased for most of the markets. Finally, there were limited volatility linkages, only between South Africa, Egypt and Namibia, implying that African stock markets are still largely segmented from each other. However, the linkages between South Africa and Egypt could have negative effects as they could lead to the spread of contagion effects during times of crises. Therefore, policymakers should consider revising and improving policies to enhance economic integration on the continent.
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  • Date Issued: 2011

Identifying the interdependence between South Africa's monetary policy and the stock market

  • Authors: Muroyiwa, Brian
  • Date: 2011
  • Subjects: Monetary policy -- South Africa , Stock exchanges -- Law and legislation -- South Africa , Interest rates -- South Africa , Securities -- Prices -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:982 , http://hdl.handle.net/10962/d1002716 , Monetary policy -- South Africa , Stock exchanges -- Law and legislation -- South Africa , Interest rates -- South Africa , Securities -- Prices -- South Africa
  • Description: This study estimates the interdependence between South Africa‟s monetary policy and stock market performance, utilising structural vector autoregression (SVAR) methodology. The study finds that a stock price shock which decrease stock prices by 100 basis points leads to 5 basis points decrease in interbank rate. A monetary policy shock that increases the interbank rate by l percent leads to decrease in real stock prices by 1 percent. This result for South Africa is similar to the result by Bjornland and Leteimo (2009) which earlier concluded that there was a high interdependence between interest rate setting and stock prices. However the magnitude of the relationship is relatively lower for South Africa compared to that of the United States of America (USA). The result of the current study is also very much consistent with the argument that the South African stock market is resource-based and so is influenced by external shocks, meaning monetary policy shock does not have as much impact on stock market in South Africa as in the USA. However the SARB may have to consider watching movements in stock prices so that booms in stock markets do not defeat central bank monetary policy thrusts. The stock price market is an essential source of information for monetary policy in South Africa.
  • Full Text:
  • Date Issued: 2011
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