This study aims to answer the empirical question of whether South African and US macroeconomic variables are predictors of returns on the South African stock market. The results add to a body of literature, assessing the period from 1996 to 2016, which includes comparative analysis of data pre-and post the 2008 financial crisis. Furthermore, both local and US macro-economic variables are assessed. Variables selected include 1) GDP (SA and US), 2) Interest Rates (SA and US), 3) Inflation (SA and US), 4) South African Money Supply, 5) Rand/Dollar Exchange Rate, and 6) FTSE Index. These variables are assessed on a monthly and quarterly basis, to provide further information on whether the relationships between the selected variables and the stock market are affected by the timing of the data or the level of noise within the data set. The variables are tested using time series Ordinary Least Squares (OLS) regression analysis. This analysis is used to assess predictive relationships. The results show that South African Interest rates and the RandDollar exchange rate have a statistically significant negative relationship with the South African stock market. Additionally, the South African interest rate appeared to hold a more statistically significant relationship with the stock market when the change in the rate was high. Furthermore, the FTSE Index shows a consistent statistically significant positive relationship. These findings provide valuable information to investors who, with further testing to determine exact time lags, can consider these predictive variables when making investment decisions, assuming weak form efficiency exists within the market.

Individual investors can invest in equity either through trading accounts provided by financial institutions or in equity funds with a fund manager. Fund managers will make different investing decisions that either negatively or positively influence the performance of the funds that an investor chooses to invest in. One such decision is the concentration of the fund in different companies, countries and industries. This research aims to determine how industry concentration influences the performance of South African general equity funds. Concentration is calculated using the industry concentration index formula. Over the period from 2006 to 2017, a mixed model regression, which accounts for both fixed and random effects, is used to determine the impact of concentration on fund performance. A random effect model was used as it models the variability between funds. The fixed effects that were controlled for in the model are concentration, the fund size, the gender and number of managers and the current market cycle which indicates whether the market was experiencing a financial crisis or not. The regression model is run over two models, each with two stages. Model 1 and Model 2 differ in that Model 1 includes year and quarter data as one fixed effect for time. In Model 2, the year and the quarter are included as two separate fixed effects. Stage 1 and Stage 2 differ in that Stage 1 does not consider management team variables while Stage 2 considers all variables. This research differs from prior research by considering the impact of concentration in specific industries as well as accounting for whether the market was experiencing a financial crisis or not. This research concludes that industry concentration can economically impact the performance of South African general equity funds and that, whether this impact is positive or negative depends on the industry in which the fund is concentrated.

This study examines the perspectives of experienced audit committee members on mandatory audit firm rotation (MAFR) in a South African context. This follows the recent initiatives by the Independent Regulatory Board of Auditors (IRBA) to make audit firm rotation compulsory in South Africa. Semi-structured, in-person interviews were conducted with audit committee members in South Africa to explore and contribute to the existing literature on audit committee member positions on MAFR. Twenty-two audit committee members were interviewed. Key discussion areas revolved around the regulator’s intended impact of MAFR in South Africa, including the promotion of auditor independence, the lowering of audit firm market concentration and acceleration of the rate of transformation in the South African audit industry. The findings show a general consensus among the audit committee members interviewed that MAFR will not achieve any of the objectives of the IRBA and that the members are predominantly in opposition of MAFR. Furthermore, the members proposed various arguments against MAFR, illustrating how the policy has limited benefits, if any, and will introduce many monetary and non-monetary costs into the audit industry, which could negatively impact the appeal of the audit industry. The vast majority of members held the view that the primary purpose of MAFR in South Africa is not to promote auditor independence, but is rather intended to address market concentration and transformation. However, the findings indicate that MAFR is believed to not be the best solution for these issues and, as such, further research and alternative measures should be sought by the regulator.

This study investigates whether or not non-IFRS earnings measures can predict future operating cash flows. Many companies consistently present non-IFRS earnings measures, being voluntarily disclosed earnings measures lacking in formal definition, in order to communicate a companies’ core or sustainable earnings. Prior research into the usefulness of non-IFRS earnings measures has shown mixed results around the measures’ ability to predict a company’s future stock returns. Furthermore, there is some evidence that non-IFRS earnings measures have been used opportunistically to report a more favourable financial performance compared to IFRS earnings, questioning the usefulness and relevance of non-IFRS earnings measures. A linear mixed model was used to investigate the ability of non-IFRS earnings measures’ to predict future operating cash flows [CF(T+1)] using the top 40 Johannesburg Stock Exchange (JSE) companies over the sample period from 2012 to 2016. The results of the statistical analysis showed that the non-IFRS earnings measure within the final model showed a positive and significant relationship with CF(T+1), which aligns with findings of a similar Australian study. Further to this, the inclusion of an indicator variable for mining companies was found to improve the model’s ability to predict future operating cash flows using non-IFRS earnings measures. The results of this study add to the growing area of research surrounding non-IFRS measures by uniquely focusing on South African companies, with similar results to prior studies. These findings may be of assistance to analysts and investors for valuation purposes and to standard-setting bodies for consideration as part of their current research project on performance reporting. Finally, the results provide justification for non-IFRS earnings measures as valid and useful metrics for analysis of company performance.

Includes abstract. / Includes bibliographical references (leaves 141-148). / Given the considerable increase in international trade over the past 40 years, particularly between Africa and the rest of the world, there is a risk that the developing African countries are being exploited by the developed countries. The key to this exploitation is the fact that Africa possesses untouched natural resources (embedded with significant profits), which the developed countries, specifically profit seeking companies from these countries ('the non-resident entity'), seek to extract and exploit.

Over the last 30 years organisations have increased their sustainability disclosures in response to an increased focus on corporate sustainability, which considers the economic, environmental, and social aspects of an organisation. With the introduction of integrated reporting, organisations are encouraged to use integrated thinking to create value for their organisation in the short and long term, using all of the capitals or resources available to them. The new emphasis on reporting on maximising the organisation’s human, social and relationship capital, along with its natural capital echoes the focus of sustainability reporting. However, the objectives of integrated and sustainability reporting differ in their focus, between a focus on shareholders and value creation, compared to a focus on the organisation’s impact on the environment, society, and the economy. This exploratory study examines trends in sustainability disclosure in the integrated reports of South African listed companies. It explores the trends in companies’ sustainability information in their integrated reports from 2011, when integrated reporting became mandatory in South Africa, following the implementation of the King Code of Governance Principles (King III) of 2009. It covers reporting up to 2015, when the 2013 International Integrated Reporting Framework (the Framework) of the International Integrated Reporting Council was adopted in South Africa. It also takes into account the 2013 G4 Guidelines of the Global Reporting Initiative. Interpretive content analysis is used, which involved creating a disclosure checklist based on the disclosure categories outlined in the G4 requirements. Issues relating to Broad-based Black Economic Empowerment ('BBBEE’) which are specific to South Africa were included in the disclosure checklist. This study does not seek to measure compliance with the requirements of the GRI, or the quality of the sustainability disclosures, but rather uses the requirements as a guide for sustainability disclosures that could be included in the integrated reports of South African companies. Statistical techniques were then used to determine if significant trends in disclosure were observable in the integrated reports from 2011 to 2015. The results show that there was a notable change in how sustainability disclosures are presented in the integrated reports, although there is no meaningful change in the number and type of sustainability disclosures. Industry classification, and the age and size of companies were also found to be significant in the quantity and quality of sustainability disclosures observed. This study provides insight into the integrated and sustainability disclosure practices of South African listed companies. It also examines their compliance with the guidance provided in the Framework relating to the preparation of fully integrated reports.

This study explores how the redaction of proprietary information from public filings is related to analyst following and properties of analysts’ earnings forecasts. The paper uses hand-collected data on firms’ confidential treatment orders from the SEC EDGAR database to identify firms that withhold information (redacting firms), which are benchmarked to a matched set of firms that do not (non-redacting firms). Relative to non-redacting firms, the paper predicts and documents that redacting firms have (i) higher analyst following; (ii) more dispersed and less accurate analysts’ earnings forecasts; and (iii) lower precision of both public and private information contained in analysts’ earnings forecasts. Additional analyses reveal that analysts covering redacting firms trade off accuracy for timeliness when issuing earnings forecasts, that the market reaction to analyst reports is higher for redacting firms, and that for redacting firms investors place higher weight on information from analysts relative to that from the firm itself. Overall, the findings suggest that firms engaging in redacted disclosure exhibit greater investor demand for analyst outputs, a deterioration in the analysts’ information environment, but also greater investor reliance on analyst outputs.

Although women represent more than half of the U.S. population, in 2015 women held less than 25% of senior-level positions, and less than 5% of executive positions in corporate America. The underrepresentation of women in leadership position is partially attributable to a lack of role models, mentoring, and networking programs needed to develop women executives and senior-managers. The purpose of this quantitative, comparative, field survey study was to examine the differences in the availability of mentoring, networking, and role modeling opportunities between men and women in management positions, and to explore causes of such differences. The attribution theory was used as a framework to gain a better understanding of what men and women perceive to be the underlying success factors leading to their roles as managers. The Career Competencies Indicator survey instrument was adapted and used to collect data from a random sample of 175 participants (85 men, 90 women) in managerial positions in corporate America. Correlation analysis and independent samples t tests were used to test 3 hypotheses. The results indicated significant gender differences in the availability of professional mentoring and role-modeling opportunties for career success in management positions in corporate America, but no significant gender differences in the availability of networking opportunities. Positive social change implicatons include opportunities for corporations and organizations to create mentoring and role modeling opportunties for women who aspire to excel to senior management and executive positions in for-profit companies.

A liquidity shortfall in the United States triggered the bankruptcy of several large commercial banks, and bank failures continue to occur, with 50 banks failing between 2013 and 2015. Therefore, it is critical banking regulators understand the correlates of financial performance measures and the potential for banks to fail. In this study, binary logistic regression was employed to assess the theoretical proposition that banks with higher nonperforming loans, lower Tier 1 leverage capital, and higher noncore funding dependence are more likely to fail. Archival data ranging from 2012-2015 were collected from 250 commercial banks listed on the Federal Deposit Insurance Corporation's website. The results of the logistic regression analyses indicated the model was able to predict bank failure, X2(3, N = 250) = 218.86, p < .001. Nonperforming loans, Tier 1 leverage capital, and noncore funding were all statistically significant, with Tier 1 leverage capital (β = -1.485), p < .001) accounting for a higher contribution to the model than nonperforming loans (β = .354, p < .001) and noncore funding dependence (β = -.057, p = .015). The implication for positive social change of this study includes the potential for bank regulators to enhance job security, wealth creation, and lending within the community by working with bank managers to develop more timely corrective action plans to alleviate the risk of bank failure.

Some business executives are reluctant to engage in social responsibility and sustainability practices because of the assumption that these projects are costly and impair profitability. The purpose of this correlation study was to examine the relationship between corporate social responsibility, sustainability (as proxied by the 2016 Best Corporate Citizens index), and corporate financial performance (as measured by ROA and Tobin's Q). Stakeholder theory was the theoretical framework for the study. The results of linear regression analyses indicated an insignificant positive relationship between corporate social responsibility, sustainability, and financial performance. The yield of the linear regression analyses was as follows: F(1, 12) = .023, p = .881, R2 = .002 for ROA and F(1, 12) = .060, p = .811, R2 = .006 for Tobin's Q. The findings from the study revealed that the relationship between social and sustainable activities and financial performance is indifferent regardless of whether financial performance is assessed using accounting or market measures. The presence of a direct, though insignificant, association calls for business managers' attention. The reason is that with the positive association, it is arguably useful to suggest that the more social and sustainable projects are embarked on by firms, the greater the probability of an increased financial outcome.