scholarly journals Investigating board diversity in South Africa

2015 ◽  
Vol 8 (2) ◽  
pp. 392-414 ◽  
Author(s):  
Nadia Mans-Kemp ◽  
Suzette Viviers
Keyword(s):  
South African ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Business Case ◽  
Board Diversity ◽  
Johannesburg Stock Exchange ◽  
Earnings Per Share ◽  
Significant Negative Relationship ◽  
The Relationship ◽  
Research Period

The issue of board diversity has been widely debated. Given the lack of conclusive empirical evidence, this study investigated the relationship between gender and race board diversity and the financial performance of South African companies. The sample covered 1 542 annual observations over the period 2002 to 2012. The percentage of female and black directors of companies listed on the Johannesburg Stock Exchange increased significantly over the research period. Board diversity differed considerably across industries. A statistically significant positive relationship existed between the percentage of both female and black directors and earnings per share. In contrast, a statistically significant negative relationship was found between the percentage of both female and black directors and total shareholder return. Given the lack of a clear business case, the question arises as to how board diversity on the JSE can be encouraged. The researchers recommend that more attention should be given to the development and mentoring of diverse board candidates.

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

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

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

scholarly journals Community structure and centrality effects in the South African company network

2013 ◽  
Vol 44 (2) ◽  
pp. 35-43 ◽  
Author(s):  
I. Durbach ◽  
D Katshunga ◽  
H. Parker
Keyword(s):  
Community Structure ◽  
Social Network ◽  
South African ◽  
Stock Exchange ◽  
The South ◽  
Market Capitalization ◽  
Johannesburg Stock Exchange ◽  
The Relationship

This paper conducts a search for community structure in the South African company network, a social network whose elements are South African companies listed on the Johannesburg Stock Exchange. Companies are connected in this network if they share one or more directors on their respective boards. Discovered clusters, called communities, can be considered to be compartments of the network working relatively independently of one another, making their distribution and composition of some interest. We test whether the discovered communities of companies are (a) statistically significant, and (b) related to other attributes such as sector membership or market capitalization. We also investigate the relationship between the centrality of a company’s position in the network and its market capitalization.

scholarly journals The effect of industry nuances on the relationship between corporate governance and financial performance: Evidence from South African listed companies

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Jonty Tshipa ◽  
Leon M. Brummer ◽  
Hendrik Wolmarans ◽  
Elda Du Toit
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
South African ◽  
Resource Dependence ◽  
Stock Exchange ◽  
Listed Companies ◽  
Company Performance ◽  
Johannesburg Stock Exchange ◽  
Good Corporate Governance ◽  
The Relationship

Background: Premised on agency, resource dependence and stewardship theories, the study investigates empirically the existence of industry nuances in the relationship between corporate governance and financial performance of companies listed in the Johannesburg Stock Exchange. Aims: The main objective of the study is to understand the relationship between internal corporate governance and company performance from the perspective of three distinct economic periods, as well as industry nuances, cognisant of endogeneity issues. Setting: South Africa, as an emerging African market, offers an interesting research context in which the corporate governance and financial performance nexus can be examined empirically. Method: A sample of 90 companies from the five largest South African industries, covering a 13-year period from 2002 to 2014 (1170 firm-year observations) was examined with three estimation approaches. Results: Two key trends emerged from this study. First, the relationship between corporate governance and company performance differed from industry to industry. Second, the association between corporate governance and company performance also changes during steady and non-steady periods, which is an indication that the nexus is driven by the state of the global economy and the type of the industry. Conclusion: Evidence from the study suggests that companies should be allowed to optimise rather than maximise their corporate governance options. This finding questioned the approach of the recently published King IV Code of Good Corporate Governance, which requires Johannesburg Stock Exchange-listed companies to ‘apply and explain’ as opposed to ‘apply or explain’ as pronounced by King III Code of Good Corporate Governance.

scholarly journals Environmental consciousness as a factor which promotes firm green investment practices in Johannesburg stock exchange (JSE) listed firms

2015 ◽  
Vol 12 (4) ◽  
pp. 440-450
Author(s):  
Fortune Ganda ◽  
Collins C Ngwakwe ◽  
Cosmas M Ambe
Keyword(s):  
South African ◽  
Stock Exchange ◽  
Environmental Issues ◽  
Environmental Consciousness ◽  
Chi Square ◽  
Listed Firms ◽  
Johannesburg Stock Exchange ◽  
Green Investment ◽  
Positive Direct ◽  
The Relationship

Heightening consciousness concerning natural environmental issues has also resulted in high pressure on firms to introduce green friendly programs. This study explored the relationship between environmental consciousness and green investment practices in 100 South African CDP firms on the JSE over a period of 5 years (that is, 2010 to 2014). The paper analysed the data using Chi-square tests and the results demonstrates that environmental consciousness influences green investment activities in JSE listed companies. Furthermore, a positive direct relationship involving environmental consciousness and green investment activities was ascertained. The paper also produced common and major indicators of environmental consciousness for the firms under study. A brief discussion on corporate views from selected JSE listed firms in relation with environmental consciousness was also implemented.

scholarly journals Determinants of Capital Structure: Evidence from Jordan

2019 ◽  
Vol 8 (4) ◽  
pp. 186
Author(s):  
Sufian Radwan Almanaseer
Keyword(s):  
Capital Structure ◽  
Fixed Effects ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Firm Characteristics ◽  
Financial Leverage ◽  
Significant Negative Relationship ◽  
Amman Stock Exchange ◽  
Fixed Effects Regression ◽  
The Relationship

This study aimed to explore the determinants of the capital structure of the banks listed in the Amman Stock Exchange. A sample of 13 Jordanian commercial banks of 16 banks listed on the Amman Stock Exchange selected for the period 2008-2017. The current study applied a fixed-effects regression model by using e-views to analyze the relationship between financial leverage and firm characteristics such as Risk, Size, profitability, Growth, liquidity, Tax, Age, tangibility, and macroeconomic variables such as Gross Domestic Product, Inflation. The study finds a significant positive relationship between financial leverage, age, growth, risk, size, and tax. Also, the study finds a significant negative relationship between financial leverage with GDP, inflation, liquidity, profitability, and tangibility.

scholarly journals BOARD DIVERSITY NETWORKS AND EARNINGS QUALITY IN MALAYSIA

2021 ◽  
Vol 4 (13) ◽  
pp. 53-77
Author(s):  
Mohd Faizal Jamaludin ◽  
Fathyah Hashim
Keyword(s):  
Network Effects ◽  
Earnings Quality ◽  
Negative Relationship ◽  
Centrality Measures ◽  
Women Directors ◽  
Board Diversity ◽  
Significant Negative Relationship ◽  
Gender Based ◽  
Network Pattern ◽  
The Relationship

This study examines the relationship between board diversity networks and earnings quality using different direct and indirect network centrality measures established by social network analysis. This study establishes the network pattern of 4416 directors consists of 4609 men and 407 women directors from a sample of 745 listed companies on Bursa Malaysia in 2011. Overall, the results show that there is a significant negative relationship between director networks and earnings quality. Additionally, the analysis on gender-based networks suggests that while the effect of men directors’ networks is consistent with the main network model, the women directors create a network which capable of enhancing the company’s earnings quality. The negative network effects on earnings quality most likely due to the reputation of social status, which eventually detriment the companies’ value.

scholarly journals A Review Of The Determinants Of Long Run Share Price And Operating Performance Of Initial Public Offerings On The Johannesburg Stock Exchange

2014 ◽  
Vol 13 (5) ◽  
pp. 1161 ◽  
Author(s):  
Chimwemwe Chipeta ◽  
Adrian Jardine
Keyword(s):  
South African ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Operating Performance ◽  
Negative Relationship ◽  
International Investment ◽  
Share Price ◽  
Public Offerings ◽  
Johannesburg Stock Exchange ◽  
Long Run

This paper provides some new evidence on the determinants of long run operating and share price performance of Initial Public Offerings (IPO) on the Johannesburg Stock Exchange (JSE). It has been hypothesised that the information contained in the pre listing documents could shed some light on the aftermarket performance of South African IPO shares. In line with previous literature, South African IPO shares significantly underperformed the market on average. Additionally, there is a statistically significant negative relationship between IPO Volume and long run performance, suggesting that the South African IPO market may be subject to the fads and over optimism theory of Ritter (1991). The overoptimism hypothesis is further cemented by a negative correlation between pre IPO revenue forecast and aftermarket operating performance. Listing expenses play a moderate role in the reduction of the aftermarket performance of IPOs on the JSE. However, it appears that international investment banks have a positive influence on the aftermarket performance of IPOs on the JSE. Likewise, firms audited by the BIG 4 audit firms tend to perform well in terms of aftermarket buy and hold returns. Large firms at the time of listing tend to perform well and firms with high growth prospects at the time of listing generate a negative and significant return on their investment in total assets. Although the contingent liabilities disclosed in the prelisting reports negatively influence most of the measurers of aftermarket performance, the relationship is, by and large, insignificant.

scholarly journals Are South African equity investors rewarded for taking on more risk?

2019 ◽  
Vol 12 (1) ◽  
Author(s):  
Johannes P. Steyn ◽  
Lomari Theart
Keyword(s):  
South African ◽  
Stock Exchange ◽  
Negative Relationship ◽  
Time Frame ◽  
Sampling Procedure ◽  
Low Risk ◽  
Fund Managers ◽  
Johannesburg Stock Exchange ◽  
Increased Risk ◽  
Managerial Implications

Orientation: It is rational for investors to expect additional compensation for an increased risk exposure. This positive risk–return relationship is in line with traditional financial theory; however, this relationship does not always hold in empirical research.Research purpose: The aim of this article was to investigate the prevalence of the low-risk anomaly in the South African equity market.Motivation for the study: If there is evidence of a low-risk anomaly, where low-risk shares outperform high-risk shares, then the additional return expectation of investors may be misplaced.Research design/approach and method: A unique sampling procedure and an extended time frame were employed in a quintile portfolio analysis methodology.Main findings: The article presents evidence that South African listed shares with low historical volatility earned higher risk-adjusted returns over the period July 2004 to September 2018. Low-volatility shares delivered a Sharpe ratio of 1.10 compared to 0.65 produced by the Financial Times Stock Exchange / Johannesburg Stock Exchange Shareholder Weighted Index over the same period.Practical/managerial implications: The assumption that return in an investment portfolio could be enhanced by taking on more risk could be wrong. It seems that fund managers could potentially enhance returns and decrease risk in their portfolios by focussing on shares with low historical volatility.Contribution/value-add: The negative relationship observed between volatility and return is inconsistent with theoretical expectations. Therefore, the results of this article suggest that investors are not rewarded for assuming higher levels of risk.

scholarly journals IMPLIKASI MARKET VALUE, VARIAN RETURN, LABA PER SAHAM DAN DEVIDEN TERHADAP BID-ASK SPREAD SAHAM SYARIAH

IQTISHODUNA ◽  
2012 ◽  
Author(s):  
Fitriyah Fitriyah
Keyword(s):  
Stock Exchange ◽  
Negative Relationship ◽  
Market Value ◽  
Sampling Technique ◽  
Bid Ask Spread ◽  
Dividend Payments ◽  
Earnings Per Share ◽  
Significant Negative Relationship ◽  
Holding Cost ◽  
Inventory Holding

This research was aimed to determine whether the variables variance return, market value, dividend and earning per share influence the bid-ask spread partially and simultaneously of shares of sharia in Indonesia Stock Exchange. The population in this research are the companies listed in the Jakarta Islamic Index over the period 2007 to 2010. Sampling using a purposive sampling technique and number of sample are 10 companies. The result shows, the variance return, market value, dividend and earning per share simultaneously influence the bid-ask spread. While partially, there ar three variables that significantly influence the bid-ask spread that is variance return with significant positif, dividend, and erningper share with a significant negative relationship. Variable market value does not affect the bid ask spread. Increase in variance return would cause the dealer / broker to cover the high spread. The existence of dividend payments and earnings per share would have an impact on high stock trading so dealers will not take long to save the stock This results in reduced inventory holding cost and ultimately lower the bid ask spread.

scholarly journals The relationship between remuneration and financial performance for companies listed on the Johannesburg Stock Exchange

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Elize Kirsten ◽  
Elda Du Toit
Keyword(s):  
Financial Performance ◽  
South African ◽  
Executive Director ◽  
Stock Exchange ◽  
Share Price ◽  
Executive Directors ◽  
Best Interest ◽  
Goods And Services ◽  
Johannesburg Stock Exchange ◽  
The Relationship

Background: The executive directors of a company are the agents of the shareholders and should manage the company in the best interest of the shareholders, not only for personal gain. It is therefore important for companies to ensure that they implement remuneration policies which will result in motivated employees who will execute decisions and actions which are in the best interest of the shareholders. However, it is widely acknowledged that the relationship between company performance and executive remuneration is weak. This implies that executives are still rewarded excessive remuneration regardless of the performance of their companies. Aim: The purpose of this study was to determine whether a relationship exists between the performance-based remuneration of executive directors and the financial performance of South African companies. Setting: The study was conducted in South Africa, specifically on companies listed on the Johannesburg Stock Exchange. Methods: The study design was quantitative and made use of a Pearson correlation and generalised least squares regression with bootstrapping at a 95% confidence interval to analyse the relationship between executive director remuneration and the financial performance of 42 companies in the consumer goods and services industry of the Johannesburg Stock Exchange (JSE) from 2006 to 2015. Results: The study established that the remuneration policies in place for South African executive directors within the consumer goods and services industry seem to be affected by the share price of the company. Conclusion: In the South African environment, executive director remuneration is thus not directly related to profitability or company size, as was the case in some earlier studies. The link between executive director remuneration and share performance may be an indication that remuneration policies are based on the share price and are thus directly connected to the principle of shareholder wealth maximisation.

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