M.Com. (Financial Economics) / The main concern of this study was to evaluate whether an announcement to host major international sporting tournaments in South Africa is perceived by stock market investors to be associated with net economic benefits for the domestic stock market. If the economic activities associated with a tournament are perceived to be beneficial stock prices should react positively and if such activities are perceived to be bad then prices should react negatively; else there should be no reaction if such announcement conveys no relevant investment information for the stock market. The study applied an event study methodology to analyse the daily historical log returns of the Johannesburg Securities Exchange (JSE) All Share Index (ALSI). It uses bidwinning announcements that South Africa would host three major international sporting tournaments, namely, the 1995 Rugby World Cup, 2003 Cricket World Cup, and 2010 Soccer World Cup. Event windows of 41 days, inclusive of announcement dates, are used to observe price reactions. The estimation samples consisted of 250 daily returns in the pre-event window period. Overall, the results showed that in South Africa all announcements led to a positive price reaction. Thus, the announcements for South Africa to be hosting these tournaments conveyed useful positive information to investors in the JSE.

This study examines the pattern of covariation of the industrial index returns of South Africa and foreign industrial sectors. This follows recent increase in national equity correlations and increases in the influence of industry effects in portfolio diversification. The covariation pattern in returns across industries and countries during both bull and bear runs is examined using correlation analysis to determine if there is a difference between the two epochs. The study presents preliminary evidence of the covariation between sectors during a bear and a bull run. Return covariation among sectors is impelled to a greater extent by country-specific factors than by industry-specific factors, implying the segmentation of industrial sectors. Thus, South African investors can in general gain more if a portfolio comprising shares across industries and countries is held, even if these investors buy shares from similar industries.

This dissertation is based on the hypothesis that a third dimension, namely investment time horizon, can add value to the more conventional two-dimensional methodology of assessing the relative risk and return attributes of various assets and portfolios in order to enhance investment decisions. This study shows that time horizons should be considered in the investment decision making process and provides concrete evidence that a methodology that is not cognizant of investment time horizon is prone to extensive long-term opportunity cost risk. In addition to providing evidence of investment time horizon relevance, the study makes suggestions as to how time horizons could be incorporated into the risk return assessments of various asset classes and also presents a framework for the more holistic assessment of asset class properties while incorporating time horizons. / Business Management / Thesis (M. Com. (Business Management))

This dissertation is based on the hypothesis that a third dimension, namely investment time horizon, can add value to the more conventional two-dimensional methodology of assessing the relative risk and return attributes of various assets and portfolios in order to enhance investment decisions. This study shows that time horizons should be considered in the investment decision making process and provides concrete evidence that a methodology that is not cognizant of investment time horizon is prone to extensive long-term opportunity cost risk. In addition to providing evidence of investment time horizon relevance, the study makes suggestions as to how time horizons could be incorporated into the risk return assessments of various asset classes and also presents a framework for the more holistic assessment of asset class properties while incorporating time horizons. / Business Management / Thesis (M. Com. (Business Management))

Mini-study project (MBA)--University of Stellenbosch, 2003. / ENGLISH ABSTRACT: The purpose of this dissertation is to analyse the strategic errors and successes made in order to understand the reasons for Steinhoff International's investment in South African companies and the purpose of listing on the Johannesburg Securities Exchange (JSE). The South African furniture manufacturing industry currently has only one listed company on the JSE and the comparison with competitors from a Steinhoff perspective has been difficult due to the lack of available information and the presence of retailers listed under the furniture sector on the JSE. The study begins with the background of the furniture manufacturing industry and the broad product categories referred to in the industry. Thereafter the history of Steinhoff International follows with their introduction to furniture manufacturing and the entry into South Africa. The study then evaluates the market with relevant analysis to discuss strategic decisions made and evaluates Steinhoff International's strategy. The focus on Steinhoff is specifically from 1995 to 1999 since their investment in South Africa until the merger with the Cornick Group that led to the current structure of Steinhoff International. It is the purpose of the writer to evaluate the company from a strategic point of view for the compilation and use of a case study by fellow students in this field. / AFRIKAANSE OPSOMMING: Die doel van die proefskrif is om te poog om die strategiese foute en suksesse te evalueer en uit te lig ten einde te verstaan hoe Steinhoff Internasionaal tot die slotsom gekom het om in Suid Afrika te investeer en wat die doelwitte en redes vir die notering op die Johannesburgse Effekte Beurs was. Die meubelvervaardigingsindustrie het tans slegs een genoteerde maatskappy in die Suid Afrikaanse mark en die vergelyking met mededingers is dus aansienlik bemoeilik aangesien die meubelsektor op die JSE uit kleinhandelaars bestaan wat die eindverbruiker bedien. Die studie begin met die agtergrond tot die meubelvervaardigingsindustrie en 'n uiteensetting van die produkkategoriëe. Daarna volg die geskiedenis van Steinhoff Internasionaal en hoe hulle by vervaardiging betrokke geraak het en tot Suid Afrika toegetree het as beleggers. Die studie behandel dan die mark met die gepaste ontledings om strategiese besluite te bespreek, waarna Steinhoff Internasionaal in terme van hulle strategie ontleed word. Die fokus op die maatskappy is veral sedert 1995 tot 1999, vanaf die aanvanklike belegging in Suid Afrika tot die uiteindelike oorname en assimilering van die Cornick Groep wat gelei het tot die huidige formaat van Steinhoff Internasionaal. Dit is die doel van die skrywer om die maatskappy vanuit In strategiese oogpunt te evalueer vir die samestelling van In bruikbare gevallestudie vir mede studente in hierdie veld.

Thesis (MBA (Business Management))--Stellenbosch University, 2008. / ENGLISH ABSTRACT: Private Equity is rapidly growing as an alternative asset class for investors in South Africa. Local and international literature presents overwhelming evidence to suggest that Private Equity offers superior risk-adjusted returns and portfolio diversification benefits. Private Equity managers charge quite substantial fees and investors might be concerned about the sustainability of the returns achieved by these firms. This research report addresses the question of how exactly Private Equity managers are able to achieve their superior returns. Although literature is limited and differing in opinion, several methods were identified as being used by managers to increase returns. A sample of 46 individual investments made by two Private Equity firms representing large buy-outs in South Africa was selected and analysed to quantitatively investigate the relationship between some of the identified sources of return and the Internal Rate of Return achieved on each investment. Surprisingly the relationships were not found to be as strong as expected and in many cases were not supportive of the findings in the literature. Only earnings growth and an increase in the earnings multiple had a significant impact on the IRR achieved according to the sample analysed. The author concludes that investing in Private Equity is too interdisciplinary to distil the sources of return into a few concise elements. Proprietary knowledge, expertise, superior management skills, relationships and experience all seem to play a role in providing Private Equity managers with a competitive edge over their public market counterparts. The sources identified in this report are very relevant. However, to empirically prove the individual relationship between each of those sources and the superior returns achieved by Private Equity managers remains a challenge, as their success is vested in their ability to artfully combine these methods in perpetually different combinations according to the merits of each situation. / AFRIKAANSE OPSOMMING: Private Ekwiteit is besig om vinnig te groei as alternatiewe bateklas vir beleggers in Suid-Afrika. Plaaslike en internasionale literatuur bied oorweldigende bewyse wat dui daarop dat Private Ekwiteit bogemiddelde risiko-aangepaste opbrengste sowel as portefeuljediversifikasie-voordele inhou. Private Ekwiteitbestuurders hef redelike hoë fooie en beleggers mag dalk bekommerd wees oor die vermoë van hierdie maatskappye om hul bogemiddelde opbrengste vol te hou. Hierdie navorsingsverslag adresseer die vraag oor hoe presies Private Ekwiteit- bestuurders dit regkry om bogemiddelde opbrengste te realiseer. Alhoewel die beskikbare literatuur beperk is en opinies daarin vervat verskil, is daar verskeie metodes geïdentifiseer wat bestuurders gebruik om opbrengste te verhoog. `n Steekproef is gekies wat bestaan uit 46 individuele beleggings verteenwoordigend van groot uitkoop-transaksies in Suid Afrika. `n Analise is gedoen om die verhouding tussen geïdentifiseerde bronne van opbrengs en die gerealiseerde Interne Opbrengskoers op `n kwantitatiewe wyse te ondersoek. Die bevindinge was verrassend in die sin dat die verhoudings nie so sterk was soos wat verwag was nie en in baie gevalle was dit glad nie ondersteunend van die bevindinge in die literatuur nie. Slegs verdienstegroei en toename in waardasie-veelvoude het `n beduidende impak gehad op die Interne Opbrengskoers wat behaal is volgens die steekproef wat ontleed is. Die skrywer kom tot die gevolgtrekking dat 'n belegging in Private Ekwiteit te interdissiplinêr is om die bronne van opbrengs te distilleer tot `n paar spesifieke elemente. Inligting, spesialiteits-kennis, fantastiese bestuursvaardighede, persoonlike verhoudings en ervaring is alles elemente wat aan Private Ekwiteit-bestuurders `n mededingende voordeel bied. Die bronne van opbrengs wat in hierdie navorsingsverslag hanteer word, is baie relevant. Dit bly egter `n uitdaging om empiries die individuele verhoudings tussen hierdie bronne en die bogemiddelde opbrengste wat behaal word te bewys, aangesien Private Ekwiteit-bestuurders se sukses juis lê in hul vermoë om kunstig hierdie verskeie metodes te kombineer in ewig veranderende kombinasies na aanleiding van die meriete van elke geval.

Thesis (MBA)--Stellenbosch University, 2007. / AFRIKAANSE OPSOMMING: In Februarie 2000 het die Minister van Finansies aangekondig dat die regering besluit het om 'n inflasie teiken van 3 tot 6 persent vir 2002 daar te stel en het dus 'n beleid om 'n bepaalde inflasiekoers na te streef, aangeneem. 'n Eksplisiete lae inflasiekoersteiken is gestel as deel van die regering se ekonomiese beleid. Dit is 'n aanvaarde aanname dat hierdie teikenkoers vir die afsienbare toekoms sal geld. Veranderinge in die inflasiekoers, ongeag of dit na hoer of laer vlakke beweeg, het 'n invloed op hoe bateklasse reageer. Dit is dus belangrik dat beleggers die dinamika van inflasie verstaan en hoe dit beleggingsopbrengste bernvloed. Dit sal hulle help om deurdagte beleggingsbesluite te neem en om realistiese verwagtinge van be leggings - en polisopbrengste te he. Vir verskaffers van beleggingsprodukte in Suid-Afrika, veral die lewensversekeringsindustrie, is daar twee beduidende uitdagings in die huidige omgewing van lae rentekoerse en lae inflasie: om 'n winsgewende kontantvloei te genereer en om aan kliente se verwagtinge te valdoen. Volgens kliente is daar in die onlangse verlede nie aan hul verwagtinge valdoen nie, aangesien il1lustratiewe uitkeerwaardes wat gekwoteer is toe die polis uitgeneem is, nie geldig is in die huidige lae-inflasie omgewing nie. Kliente is ook teleurgesteld met huidige nomina Ie opbrengste wat laer is wat voorheen bereik is. Alhoewe[ dit algemeen aanvaar word dat 'n lae en stabiele inflasiekoers 'n voorvereiste is vir volhoubare ekonomiese groei en vooruitgang. verander dit die beleggingsomgewing vir private beleggers, verskaffers van beleggingsprodukte en beheerliggame. Hierdie verslag ondersoek die impak van lae inflasie op beleggingsopbrengste asook die implikasie daarvan vir beleggers, beleggingsproduk-verskaffers en beheerliggame in die finansiele dienstesektor in Suid-Afrika.

Thesis (MBA)--Stellenbosch University, 2004. / ENGLISH ABSTRACT: The two investment strategies, active and passive (index) investing, were evaluated by comparing the average performance of actively managed funds in the general equity category of the South African unit trust sector with its benchmark, the ALSI index. Various comparative methodologies were followed in the analysis and covered the period 1988-2003. When the upfront costs applicable to the active funds were excluded it was found that active funds on average outperformed the index benchmark. However, when including these costs the index outperformed the average of active fund returns. Similarly, on a risk-adjusted basis the index benchmark fared better than the average of actively managed funds. Index investing, despite its superior performance on average, would not have been a low risk strategy and investors would have experienced volatile returns. Over time index investing and active management repeatedly replaced one another as the dominant investment strategy. A fundamentalist approach about any one of the strategies is not prudent and it is argued that an integration approach of both strategies would have yielded the highest reward per unit risk, based on past experience. When following a strategy of combining both strategies in various combinations over different investment periods, it was found that the highest reward to risk ratio was attained by increasing index investing relative to active investing with an increase in the investment horizon. Simply put, the longer one’s investment term, the more index investing should be followed. Hereby it can be argued that over the long run it is difficult for active management to consistently beat the market. Therefore, investment strategies should be aligned with one’s faith in the efficiencies of markets over time and not be overly influenced by short-term performance records of active managers. / AFRIKAANSE OPSOMMING: Die twee verskillende beleggingsbenaderings, naamlik aktiewe en passiewe (indeks) beleggingsbestuur, is beoordeel deur die gemiddelde opbrengste van die aktief-bestuurde fondse in die algemene aandeelkategorie van die Suid-Afrikaanse effektetrustbedryf met hul beleggingsmaatstaf, die ALSI indeks, te vergelyk. Verskillende vergelykende metodes is in die ontleding gebruik wat die oorsigtydperk 1988-2003 gedek het. Indien aanvangskoste by die aktief-bestuurde fondse buite rekening gelaat word, het hul gemiddelde opbrengs oor die algemeen die opbrengste van die indeks oorskry. Wanneer dié koste wel in ag geneem word, het die indeks egter die gemiddeld van die aktief-bestuurde fondse geklop. Soortgelyk, het die indeks beter as die gemiddelde van die risiko-aangepaste opbrengste van die aktief-bestuurde fondse vertoon. ‘n Indeksbenadering sou ten spyte van sy beter opbrengste oor die algemeen nie ‘n lae risiko strategie verteenwoordig nie en beleggers sou wisselvallige opbrengste ondervind het. ‘n Indeksbenadering en aktiewe bestuur het mekaar oor die verloop van tyd herhaaldelik afgewissel as die dominante beleggingstrategie. ‘n Eensydige benadering ten opsigte van enige van die strategieё sal nie deug nie en dit word eerder voorgehou dat ‘n integrasie van beide strategieё in die verlede die hoogste opbrengs per risiko-eenheid sou opgelewer het. Deur verskillende kombinasie-moontlikhede oor verskillende beleggingsperiodes te toets, is bevind dat die hoogste opbrengs per risikovlak verkry word deur die indeksbenadering te verhoog met ‘n toename in die beleggingshorison. Eenvoudig gestel, hoe langer die beleggingstermyn, hoe meer passiewe bestuur moet in die beleggingsportefeulje gevolg word. Hierdeur kan aangevoer word dat aktiewe bestuur oor die langer termyn moeilik die mark gaan uitpresteer. Indien ‘n belegger in die langtermyn doeltreffendheid van die mark glo, behoort die beleggingstrategie dienooreenkomstig daarby aangepas te word en nie volgens die korttermyn prestasies van aktiewe bestuurders nie.

Thesis (MBA)--Stellenbosch University, 2002. / ENGLISH ABSTRACT: Increased uncertainty in global markets has compelled modern investment and portfolio management to tailor specific financial outcomes. Investors can incorporate derivative instruments into their portfolios to hedge their positions against uncertainty, obtain exposure to virtually any risk or obtain current exposure for future income. Warrants are such instruments; it tracks its underlying asset as options and are tailored for smaller and private investors. It could, however, also be dangerous to one's financial health if the finer intricacies are not understood. Warrants take the investment industry to a new level, because it is essentially a retail product. Warrant issuers hedge a position in assets or on derivative exchanges at a 'wholesale' price and then short the position in small contracts on the stock exchange at a 'retail' price. The price difference presents itself in the volatility parameter used to calculate the issuing price of the warrant. Once issued, the issuer maintains influence on the price by exerting either supply or demand through maintaining a bid and offer in the market. Often, issuers use this 'market-making' to steer the instrument price towards a lower volatility parameter at the expiry of the warrant when it is neutralised, thus securing profit to the issuer. Traditionally financial institutions would market their services in managing assets. They now flex muscles in marketing a retail product through issuing warrants as well. Fierce competition exists among issuers with low cost and differentiated strategies identifiable. These strategies could persuade an investor towards a particular warrant, which might not necessarily be the best investment from the investor's viewpoint. This erodes the efficiency of the market. / AFRIKAANSE OPSOMMING: Toenemende onsekerheid op wêreldmarkte noodsaak hedendaagse beleggingsbestuur om spesifieke finansiele resultate te verseker. Beleggers kan afgeleide instrumente in portefeuljes gebruik om teen onsekerheid te verskans of blootstelling te verkry. Sekuriteitsregte is 'n populêre instrument vir private beleggers. Dit word uitgereik deur finansiele instellings en volg die pad van 'n onderliggende bate, soos 'n opsie. Vanweë die intrede van 'n middelman, hou hierdie instrumente egter addisionele risiko in. Sekuriteitsregte kan beskryf word as 'n kleinhandelsproduk. Kontrakskrywers neem lang posisies in bates of op die afgeleide beurs in, teen groothandel pryse en verkans kort posisies in klein kontrakte op die sekuriteitsbeurs om sodoende 'n neutrale posisie te handhaaf. Die prysverskil manifisteer as 'n volatiliteits maatstaf van die onderliggende bate. Na uitreiking beïnvloed die onderskrywers die prys deur die vraag en aanbod op die mark te manipileer. Hierdie invloed kan gebruik word om die kontrakprys na 'n laer volatiliteitsvlak te stuur voor die kontrak verstryk, sodat addisionele wins gewin kan word. Finansiële instellings bemark hul dienste tradisioneel as batebestuurders. Hul besigheid word egter nou uitgebrei deur handelsprodukte ook te bemark. Sterk kompetisie bestaan tussen onderskrywers met lae koste of gedifferensieerde strategieë identifiseerbaar. Beleggers se keuses word dikwels deur hierdie strategiese bemarking beïnvloed, eerder as om op finansiele toepaslikheid te fokus. Dit lei tot die gevolgtrekking dat die mark nie volkome voltreffend is nie.

Thesis (MBA)--Stellenbosch University, 2003. / Some digitised pages may appear illegible due to the condition of the original hard copy / ENGLISH ABSTRACT: Investors often question the extent to which the state of the market affects returns in investment finance, and seek answers as to whether the market response to bad and good news is dependent on the level of the market. If this is true, investors who have the ability to identify events can make substantial amounts of money by identifying the state of the market before investing. This would then be in violation of the efficient market hypothesis. This study used the Conrad, Cornell and Landsman (2002) model to investigate whether the share price's response to bad news in South Africa changes with the relative level of the market. Conrad, et al. (2002) found enough evidence that the market's response to bad news increases with the increase in relative level of the market. Bhana (1996) supported this notion when he reported that investors overreacted to companies that announced negative earnings. A sample analysis of this study produced regression equations with insignificant unexpected earnings coefficients. One of the notable factors was that, for some observations, the retained earnings moved in the opposite direction with the unexpected earnings shocks. Malan (1998) found similar market reaction when he investigated the overreaction theory using three indices from Johannesburg Stock Exchange and he reported that the market could not distinguish between bad and good news as the results for both bad and good news yield either positive or negative abnormal returns. After introducing additional variables to allow for these opposite movements, CHANGE, the regression equation produced significant regression coefficients. The results of the study were directly opposite to the findings of Conrad, et al. (2002) and those in other existing literature. These indicated that the market responds strongly to good news in both good and bad market states. The study concludes by suggesting further areas for future research. / AFRIKAANSE OPSOMMING: Beleggers bevraagteken dikwels die mate waarin die opbrengste in beleggingsfinansies deur marktoestande beïnvloed word, en wil weet of die markreaksie op slegte of goeie nuus van markvlakke afhang. Indien dit waar is, kan beleggers wat die vermoë het om vooraf gebeure te identifiseer, aansienlike hoeveelhede geld maak deur die toestand van die mark te bepaal voor hulle geld belê. Dit sal dan teenstrydig wees met die Doeltreffende markhipotese. Hierdie studie gebruik die Conrad, Cornell en Landsman-model (2002) om uit te vind of die aandeleprys se reaksie op slegte nuus in Suid-Afrika saam met die relatiewe vlak van die mark verander. Conrad, et al. (2002) het voldoende bewyse gevind dat die mark se reaksie op slegte nuus toeneem soos die relatiewe vlak van die mark toeneem. Bhana (1996) het hierdie gedagte ondersteun toe hy berig het dat beleggers oorreageer wanneer maatskappye negatiewe verdienste aankondig. 'n Steekproefontleding in hierdie studie het regressievergelykings met onbeduidende onverwagte verdienste-koëffisiënte gelewer. Een van die belangrikste faktore was dat die teruggehoue verdienste by sommige waarnemings in die teenoorgestelde rigting beweeg het met onverwagte verdienste-skokke. Malan (1998) het 'n soortgelyke markreaksie gevind toe hy die oorreaksie-teorie ondersoek het deur drie indekse van die Johannesburgse aandelebeurs te gebruik. Hy het berig dat die mark nie tussen slegte en goeie nuus kon onderskei nie omdat die resultate vir slegte sowel as goeie nuus positiewe of negatiewe abnormale opbrengste lewer. Nadat bykomende veranderlikes ingebring is om voorsiening vir hierdie teenoorgestelde bewegings te maak, het die regressievergelyking beduidende regressiekoëffisiënte opgelewer. Die resultate van hierdie studie staan lynreg teenoor die bevindinge van Conrad, et al. (2002) en dié van ander bestaande literatuur. Dit dui daarop dat die mark sterk reageer op goeie nuus in goeie sowel as swak marktoestande. Die studie word afgesluit met voorstelle vir verdere navorsing op hierdie gebied.