Browsing by Author "Gstraunthaler, Thomas"
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- ItemOpen AccessDoes doing good, do good : an investigation into SRI fund performance in South Africa(2011) Fredericks, Llewellyn; Gstraunthaler, ThomasIn this paper the literature is reviewed to determine what exactly SRI is, and whether there has been evidence of the financial benefits of SRI compared to conventional portfolios internationally. It has been found that among the different opinions of SRI, four goals of SRI are central to understanding the concept. These goals are essentially to democratize the economy (by encouraging the employment and empowerment of the previously disadvantaged), to humanize the work environment (ensuring the safety and training of staff), rethinking profit distribution (dividends versus charitable giving and environmental campaigns) and convincing the business world that a corporate conscience can pay. With regards to gaining evidence of the financial benefits of SRI compared to conventional portfolios, no greater clarity was obtained, since there was diverging results of the studies undertaken. These results ranged from views that there is no trade-off between the two different stock performances, while others show that SRI stocks outperform non-SRI stocks and also that 'sin' stocks outperform SRI stocks.
- ItemOpen AccessAn empirical investigation of the relationship between the exchange rate and interest yields : a case study of South Africa(2011) Sikwanda, Andrew; Gstraunthaler, ThomasThis study analyses the relationship between the Dollar/Rand exchange rate and the interest yields rates in South Africa. It makes use of data available from 1998 through to 2010. Using statistical analysis of regression analysis and co integration, the study found that a positive correlation exists between the dollar/rand exchange rate and interest rate yields.
- ItemOpen AccessIs the price-to book/return on equity ratio constant across sectors?(2011) Coultas, Andrew; Gstraunthaler, ThomasThis research paper investigates whether or not the Price-to-Book/ Return on Equity ratio is constant across the banking, retail, pharmaceutical and manufacturing sectors. The study makes use of statistical tests to determine if the ratio is constant. In addition, the research paper investigates the explicatory powers of the DuPont model, the Federal interest rate, and Consumer price inflation of the Price-to-Book/ Return on Equity ratio. This research documents evidence that the Price-to-Book/Return on Equity ratio is not constant across sectors and that the explicatory powers of the DuPont model differ from sector to sector. The implications of these findings are that investors cannot apply the same Price-to-Book/ Return on Equity ratio across sectors when evaluating stocks relative to each other.
- ItemOpen AccessPredicting the Bull Run: scientific evidence for turning points of markets(2013) Davies, Jerome Edward; Gstraunthaler, Thomas; Kruger, RyanThis study investigates predictability in financial markets, specifically the South African financial market, proxied by the Johannesburg Stock Exchange (JSE) All Share Index (ALSI). It provides scientific evidence of past research of turning points in markets, focusing on bull markets as evidence suggests that predictability of bull markets leads to superior returns for an asset manager. In addition, this study provides an analysis of macroeconomic variables that can be used for predictability in the South Africa financial market. We found that certain macroeconomic variables do contain an element of predictability with the yield spread and short term interest rates being the best indicators. In addition we found that predicting the Bull Run in its earliest phase provides superior returns to an asset manager.
- ItemOpen AccessThe price differential between identical assets trading in different markets : a case study of Mondi Holdings(2010) Majoni, Akios; Gstraunthaler, ThomasThis study investigates the possible explanatory factors behind the mispricing in dual traded assets, using Mondi Holdings (the PLC listed on the London Stock Exchange and the LTD listed on the Johannesburg Stock Exchange) as a case study. The study documents the existence of substantial mispricing between the Mondi twins, with the LTD trading at an average premium of 9% over the sample period. However, the reclassification of the PLC shares on the JSE resulted in a significant and sharp decline in the LTD premium to an average of 3%, an indication that regulatory controls were significant in sustaining a larger part of the price deviations.
- ItemOpen AccessQuality of earnings as an investment indicator : a literature review.(2012) Binneman, Jason; Gstraunthaler, ThomasThis paper examines the characteristics of earnings quality, reviews the literature that assesses whether earnings quality does in fact affect market valuations and evaluates whether trading strategies based on this knowledge yield abnormal positive returns. This paper looks at why earnings quality should be an important consideration in evaluation [of] a firm, then investigates research on the accounting effect on valuations, covering the accrual effect, the general growth effect and the value-glamour effect. Thereafter, other factors that can influence earnings quality are documented, from earnings manipulation to the effects of external factors on quality of earnings. The concept and measurement of economic profits are also examined. Lastly, trading strategies based on earnings quality are investigated to see if abnormal profits can be earned from such strategies.
- ItemOpen AccessStrategic issues facing the development of clean development mechanism projects in South Africa(2012) Varughese, Arun; Gstraunthaler, Thomas; Holman, GlenThe Kyoto Protocol was signed into existence in 1999 in an effort to lower carbon emissions emitted around the globe. Under the protocol, a mechanism called the CDM was created in order to help developing nations, such as South Africa, lower their carbon emissions. This paper looks at the development of the carbon credits market in South Africa which was created by CDM. Since the ratification of the agreement thousands of projects have been registered by emerging countries such as India, China and Brazil, yet South Africa has only seventeen registered projects. As the largest economy in Africa, which accounts for the majority of the continent's emissions, the slow uptake of CDM projects is glaring. This research paper examines the strategic issues facing CDM projects in South Africa. The lack of skills in SA; the effect of Eskom's monopoly; the financing of the projects and the effect of government policies were posed in detail interview questions to key participants in the CDM market.
- ItemOpen AccessA study of criteria and success factors in the private equity and venture capital investment process and a comparison to the South African PE/VC Market(2010) Maelane, Lekale Given; Holman, Glen; Gstraunthaler, ThomasThis study endeavors to shed more light on venture capital investment decision making process and the criteria and factors that are used to evaluate new ventures. The study will look at the investment process carried out by a typical venture capital firm, and the primary focus will be on the initial deal screening and the due diligence processes and the factors and criteria the venture capital and private equity practitioners employ in an effort to evaluate new ventures, such that potentially successful ventures are selected and are ultimately funded.
- ItemOpen AccessUsing Altman's Z-Score to assess the appropiateness of management's use of the going assumption in the preparation of financial statements(2010) Mazaba, Mwendamo Isaac; Gstraunthaler, ThomasAuditors are responsible for assessing management’s use of the going concern assumption in the financial statements. According to research done in other countries, the Z-Score is a statistical tool that has been proven to aid auditors' going concern decisions. The objective of this paper is to ascertain whether Altman’s Z-Score can aid South African auditors to more accurately assess the appropriateness of management’s use of the going concern assumption in the preparation of financial statements, by applying two corporate failure prediction models developed by Altman to South Africa listed companies. The study compares the predictive accuracy of the two models against each other and against auditors’ actual going concern decisions. The results indicate that the Z-Score is quite accurate in predicting failure for companies that eventually fail.
- ItemOpen AccessZimbabwe's economic crisis & hyperinflation, 1997-2009(2010) Coomber, Jayson; Gstraunthaler, ThomasThe focus of this paper will be on Zimbabwe’s particular hyperinflationary episode. The crisis has its roots in Zimbabwe's struggle for independence, which took place in the 1970s. This struggle, known as the Second Chimurengo, culminated in Zimbabwe’s declaration of Independence on April 18, 1980. The incumbent President Mugabe has repeatedly referred to the current period of Zimbabwe’s history as the Third Chimurenga: the final stage in Zimbabwe's battle against those he terms the "neo-colonialists" (Raftopoulos, 2009). Given all the hyperinflations of the past, the question to be asked is whether the Zimbabwean experience is an isolated economic novelty; or, rather, is it simply a repetition of the economic and political follies that have plagued some of the fiat governments of the modern world? The purpose of this research, then, is to provide a detailed historical account of the economic side of the crisis, documenting the observable causes and phenomena that accompanied it. This account will then form the basis of a historical analysis of the key features that the Zimbabwean episode shares with other past hyperinflations, in an attempt to draw universal conclusions about the emergence and development of such episodes.