Wits Business School (ETDs)

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Examining equity market’s response to inflation and unemployment news in South Africa
(University of the Witwatersrand, Johannesburg, 2024) Name, Tendai Innocent; Alovokpinhou, Sedjro
This study investigates the response of equity prices to inflation and unemployment news in South Africa by providing evidence at both aggregate and industry levels. The findings indicate that inflation news has a negative impact on the equity returns of the JSE All Share Index, Basic Materials, Consumer Goods, Financials, and Technology during economic contractions. Inflation news also has a negative impact on equity returns of Consumer Goods during economic expansions. Furthermore, the study reveals that unemployment negatively impacts the stock returns of the JSE All Share Index, Financials, Industrials, Consumer Services and Consumer Goods during economic expansions. The equity returns of Basic Materials are negatively affected by unemployment news during contractions and expansions. Health Care equity returns are also negatively impacted by unemployment news during economic contractions. The study finds that unemployment news has a greater impact on Financials, whereas inflation news has a greater impact on Technology. Policymakers are advised to promote economic diversification, particularly in industries that exhibit significant negative impacts during economic contractions, such as Basic Materials, Financials, Consumer Goods, and Technology. Moreover, implementing risk- mitigation strategies and developing hedging mechanisms can safeguard against inflation-related challenges. Employment support programs are crucial to counter the negative impact of unemployment news on various assets, including the JSE All Share Index, Consumer Goods, Basic Materials, Financials, Industrials, and Consumer Services, particularly during expansions. Furthermore, industry-specific policies tailored to vulnerable industries may include targeted or regulatory incentives. Continuous market monitoring and ensuring timely access to accurate information is crucial.
Exploring Challenges Faced by Women in Executive Leadership in the Non-Profit Sector in South Africa
(niversity of the Witwatersrand, Johannesburg, 2023) Nsibande, Nondumiso; Alovokpinhou, Sedjro
Women continue to face challenges in executive leadership positions within non-profit organisations in South Africa which negatively affects their performance. Limited progress has been made on women’s representation in decision-making in the last few years, however, those who make it to these positions tend to vacate them because of obstacles that exist while holding these positions. This study used a phenomenological qualitative research design to explore the experiences of women in senior management positions in the non-profit sector. The study used in-depth interviews to collect qualitative data from 20 participants: 16 women leaders, and four men leaders in the non-profit sector. Feminist theory was used to understand the different challenges and discriminations faced by women in senior management based on race, gender, and other forms of stereotype. The study found that the main challenges faced by participants which affected their ability to thrive in their role as leaders in the organisations was the reinforcement of patriarchal ideologies, including gender norms in the workplace, lack of resources, lack of mentorship and investment in leadership training, gender wage inequality, discrimination based on the intersections between race and gender, and a lack of a family work-life balance. Participants also identified factors that could contribute to sustaining women in leadership positions such as positive organisational culture, and being intentional in challenging toxic gender norms and overall gender inequality; promoting work-life balance policies; investing in mentorship and networking opportunities, networking and leadership training
The Impact of Commodity Price Fluctuations on Investment Styles
(University of the Witwatersrand, Johannesburg, 2024) Maluleke, Vutomi; Alovokpinhou, Sedjro
This thesis aims to investigate the impact of fluctuations in commodity prices on the returns of various investment styles and identify the specific commodity classes that exhibit strong predictive power. The study focuses on three commodity classes, food, energy, and precious metals, applied to the value, growth, and momentum investment styles, which exhibit dominance and consistency across all the countries examined. Through empirical analysis, the study seeks to contribute to the existing literature by estimating the predictive power of commodity prices on investment style returns. A deeper understanding of the relationship between investment styles and commodity prices may provide investors with more effective strategies for achieving their investment objectives and navigating the challenges posed by volatility in commodity markets. Drawing upon the research conducted by Dladla and Malikane (2019), our study builds upon the foundational framework of the linear asset pricing model. We extend the stock returns model with commodity prices. We use the real domestic and decomposed prices of commodities, reflecting the real exchange rate and the US dollar denominated international price. In addition to commodity prices, we introduce three macroeconomic variables: interest rates, the output gap, and the real exchange rate. We estimate the baseline models for six countries: the United States, the United Kingdom, Australia, Canada, South Africa, and Brazil. The findings of this investigation indicate that fluctuations in commodity prices, interest rates, and the output gap play an important role in explaining the returns on investment styles. We find that food and energy prices, real interest rates, and the output gap significantly explain returns on investment styles. Real interest rates exert a positive impact on returns on investment styles. This effect has been statistically significant in all the countries. The output gap displays a negative impact on returns on investment styles. Furthermore, we find that commodities have a negative effect on returns on investment styles. Food prices negatively impact returns on investment styles across all the countries. This effect holds statistical significance in the United States, United Kingdom, Australia, and South Africa. We further note that energy prices exert a similar impact as food prices. The effect of energy prices is statistically significant in the United States, United Kingdom, Australia, Canada, and Brazil. Notably, the impact of energy prices on returns appears consistent across the three investment styles. However, we note that the impact of precious metals is not statistically significant in any of the countries, except in Canada, where we note a positive effect on returns on momentum styles. The effect of food and energy prices on returns on investment styles is in line with Gorton and Rouwenhorst (2006), who argue that this is primarily due to the distinct behavior exhibited by commodities across different phases of the business cycle. They suggest that commodities typically demonstrate a positive association with inflation and are influenced by a combination of demand-side fundamentals and supply-side dynamics. This divergence in the behavior of commodities implies that their relationships with equity markets vary inherently. On the other hand, precious metals exhibit a different pattern compared to food and energy prices, as they are often perceived as safe-haven assets