Wits Business School (ETDs)

Permanent URI for this communityhttps://hdl.handle.net/10539/37941

Browse

Filter results by typing the first few letters
Now showing 1 - 2 of 2
  • Thumbnail Image
    Item
    The effect of investments in digital assets on the performance of the company
    (2021) Mofokeng, Senzekile
    The fourth industrial revolution (4IR) has been topical for South Africa as one of the strategies to gain a competitive advantage as a country. 4IR comprises artificial intelligence (AI), the internet of things (IoT), virtual and augmented reality, 3D manufacturing, and blockchain. Due to an increase in data volumes, the need for storage capacity and computational power, business intelligence, and cloud computing are also regarded as foundational technologies influencing trends. This study focuses on three categories of 4IR technologies namely, artificial intelligence, business intelligence (BI) & data sciences, nd cloud computing to investigate the share price performance of companies listed on the Johannesburg Stock Exchange (JSE). Using a quantitative design, an events study methodology is used based on the efficient market hypothesis. This determines whether public announcements made through the stock exchange news service (SENS) result in an increase in the share price and correspondingly market value measured through abnormal returns. The news tested was for a JSE listed company purchase of a target company to acquire digital fourth industrial revolution assets. Four hypotheses were tested, whether share price showed any response to 4IR technology investments. Second, whether share price increase within three days after an announcement. Third, increase in abnormal returns on the day of the news release, and fourth, enquiry into increased abnormal returns three days after the announcement date. Empirical evidence failed to support hypotheses 1, 2,and 4, whereas hypothesis 3 was supported. Significantly, BI data science related announcements could predict an increase in abnormal returns on the day of the announcement as well as the debt ratio. Whilst the adoption of 4IR technologies in South African corporates have increased, from the study one can infer that investors do not perceive a positive effect on wealth and value increase from these investments with the exception of business intelligence and data science investments
  • Thumbnail Image
    Item
    Market reaction to rights offer: A case of Johannesburg Stock Exchange
    (University of the Witwatersrand, Johannesburg, 2020) Lebepe, Busisiwe A.; MOKOALELI-MOKOTELI, THABANG
    Firms have at their disposal various sources to meet the capital requirements to fund their growth aspirations to generate sustainable shareholder wealth. Rights issues are key among this compendium of capital sources. This study investigated the short and medium-term market reaction of firms’ rights offer announcement event on the share price of Johannesburg Stock Exchange (JSE)-listed firms using an event study methodology to operationalise the research. A univariate t-test analysis determined the significance of the market price reaction post-announcement of a rights offer for JSE-listed shares. The cumulative abnormal returns (CAR) were calculated using the market model formula. The significance testing was conducted on the null hypotheses at a 5% significance level. Empirical evidence frequently indicates a significant price drop post-announcement of a rights offer. Studies indicate a general negative price reaction to announcing the rights issue on the JSE due to a dilution in earnings per share, regulation, and effects of floatation costs. This study’s results provide a contrarian view with empirical evidence indicating a significantly positive price movement of 2.30%, 2.94%, and 2.56%, respectively, from day three to five post-announcement of a rights offer. However, statistically insignificant negative price movement results were observed in the medium-term (30–252 days). The review period is from January 2006 to January 2020, covering periods from different economic cycles and the most recent data on rights offers. This study contributes to the ongoing assessment on price reaction post announcing a rights offer in the South African market