Faculty of Commerce, Law and Management (ETDs)

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    Does capital market development influence capital structure choices of firms?
    (2021) Selatitsana, Phatsisi
    This study investigated on the influence of capital market development on capital structure choices of selected non-financial firms in emerging as well as in frontier markets from period 2010 to 2017. To measure capital market development, stock market turnover ratio and ratio of domestic credit to private sector by commercial banks to GDP were used. The study finds that beside firm specific factors and other country-level factors which are used to explain financing choices of firms, capital market development as well affects the financing decisions of listed firms. This study generally, discovers that the development of equity and debt markets are both significant in increasing access to funding by firms and therefore, inform the choice of debt ratios employed by firms both in emerging and frontier markets. The findings of this thesis found that emerging markets enterprises use equity markets as a substitute for debt funding, but the preferable source of finance for firms is long-term debt with the highest positive coefficient. Conversely, in frontier markets, firms are using stock market as a complementary to debt financing, but the most preferred source of financing is short-term debt having highest coefficient
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    Capital market reaction to changes in the Minister of Finance in South Africa
    (2020) Tshikovhela, Azwianzi
    The efficient market hypothesis (EMH) has been a key topic of Finance in developing and developed countries. This study will focus on the application of the EMH on a particular political event in South Africa as developing country. The study investigates the reaction of the Johannesburg Stock Exchange (JSE) equity market returns and JSE government bonds’ yield returns due to changes in the National Minister of Finance in South Africa. Several theories were applied to provide perspective on the issue of information flow and market returns volatility. The study adopted the event study methodology to analyse the effect on changes in the Minister of Finance on the JSE capital market and abnormal returns were calculated using the market model approach, with an event window period of 21 trading days and an estimation period of 252 trading days. The study was focused on a period of 10 years, from 2009 until 2018, which is a period after the apartheid era. The research analysed a sample of the Top 100 JSE listed firms in 2018 and all the government bonds listed on the JSE that were trading during the period of this study. The overall results show that JSE equity market returns and JSE government bonds’ yield returns react insignificantly negatively or positively depending on the timing and circumstances surrounding the change in the National Minister of Finance. These findings have important implications for the optimal strategies of risk-averse capital market investors
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    International stock market linkages: the case of Zimbabwe and South Africa
    (University of the Witwatersrand, Johannesburg, 2017) Manungo, Rusununguko Conwell; Kodongo, Odongo
    The aim of this paper is twofold. First, it aims to investigate whether or not there are both short run and long run bilateral linkages between the Zimbabwe Stock Exchange (ZSE) and the Johannesburg Stock Exchange (JSE) markets. Secondly, it aims to find out whether or not the extent of linkages between the two markets has been changing over time. The results of the study can be stated simply: - correlation coefficients calculated for the two sub-periods 1980(1)–1990(12) (apartheid in South Africa and independence in Zimbabwe, but still some controls on the economy) and 1991(1)–1999(12) (death of apartheid in South Africa and financial liberalization in Zimbabwe) show that they were not constant overtime. The extent of the linkage has been increasing overtime. Bivariate co-integration tests indicate that there is a common trend linking the Zimbabwe Stock Exchange and the Johannesburg Stock Exchange stock price indices in the period 1991–1999, but none was found for the period 1980-1990. The results suggest that the interrelations between the two markets have increased overtime. They are in line with macroeconomic trends that have taken place since 1991, which were sufficient to strengthen the linkages between the markets, including capital market liberalization, securitization of national markets and a significant increase in cross - listing of stocks of multinational and national companies.This paper thus provides new empirical evidence on international stock market linkages between the Zimbabwe Stock Exchange and the Johannesburg Stock Exchange