M.Com. (Economic Development and Policy Issues) / There is an observable correlation, over time, between domestic savings rates and GDP growth rates: countries with relatively high savings rates over time also enjoying comparably high GDP growth rates. Aggregate saving in South Africa has been in decline and, currently, is at a historic low. Unflattering comparisons between South Africa and faster-growing emerging market economies have led to suggestions that South Africa's low domestic savings rate poses a constraint on the country's ability to grow faster. While the literature, both international and domestic, is relatively rich in studies on the determinants of foreign direct investment as well as the determinants of savings, none of the work done on South Africa has made use of disaggregated savings data to understand whether there is an observable difference in the marginal propensity to save of these economic sectors. In order to successfully raise the level of saving, much more focus needs to be applied to whether there is a difference in the relationship between growth and the components of aggregate saving i.e. which „source‟ of saving if any would yield the greatest impact on GDP and therefore should be encouraged from a policy point of view. The results of the econometric analysis demonstrate that the greatest responsiveness of savings to GDP growth occurs amongst corporates. Since corporates have a choice between retaining earnings and distributing earning as dividends (thus increasing household income) it is clear that tax-rates are an important lever through which government can encourage savings. In essence, a greater level of savings may be achievable if corporates are encouraged to retain earnings, rather than distribute these as dividends to the household sector which has exhibited a relatively weak propensity to save.

This thesis describes the Community Investment Programme (CIP) and investigates its practicability in three pilot projects in South Africa where it was implemented. CIP is a community development programme that was conceptualised by Dr Norman Reynolds, a development economist. From 1994 onwards, he became disillusioned with the fact that the new democratic government did not address the structural problems in the South African economy, which left the majority of the poor trapped in the so-called second economy of South Africa. He conceptualised a programme, CIP, which aims to develop this second economy so as to ensure that all South Africans may participate meaningfully in the economy. CIP is advocating a people-centred development approach, where communities themselves take the lead in their development. Communities make their own decisions and decide how to use community development budgets, called ‘rights programmes’ in CIP, which are spent to stimulate the emergence of working local economies. The implementation of CIP should be a learning process, where the community gets the space to learn, make mistakes and rectify them. In addition, CIP aims to address all aspects of human development, not only economic development. Hence, if CIP is implemented by communities, it will contribute to the self-esteem and dignity of individuals and communities. The three pilot projects encountered a number of issues in the implementation of CIP, as described in theory by Reynolds. After analysing those, this research reaches a number of conclusions that should be taken into account when implementing CIP in a community. CIP is seriously needed in South Africa and if the recommendations of this research are taken into account, it could be very powerful in addressing the underdevelopment characterising so many areas in South Africa. / Development Studies / D. Litt. et Phil. (Development Studies)

Thesis (M.Com. (Business Finance))--University of the Witwatersrand, Faculty of Commerce, Law and Management, School of Economic and Business Sciences, 2017 / The writer studies the short-run determinants of bond yield volatility in South Africa (SA) by analyzing the impact that global factors –representing global funding conditions – have on the changes to the rand denominated generic 10-year government bond yield (SAGB). This is followed by a one-period forward forecast of this volatility. The explanatory variables tested in this study are as follows: net bond purchases by foreign investors, Chicago Board Options Volatility Index (VIX), JP Morgan Emerging Market Bond Index (JP EMBI) spread, the US dollar to SA rand (USDZAR) exchange rate, the SA 5 year credit default swap (CDS) rate, the 12 month interest rate expectation/9x12 forward rate agreement (FRA), dollar spot price of gold and dollar spot price of oil. The study period ranges from January 2000 to December 2015. The GARCH modelling technique is used due to its ability to capture the volatility clustering effects observed in time series return data. The writer used the Gaussian distribution as the default model, however in order to control for the skewness and fat-tails in financial market return data, the Student-T and Generalised Error distributions are also tested to see if the non-normally distributed bond returns could be better captured by alternative parametric assumptions. The results show that all the explanatory variables, with the exception of the FRA, are statistically significant in explaining volatility in the local generic 10-year government bond. / GR2018

A research report submitted to the Faculty of Science, in partial fulfilment of the requirements for the degree of Master of Science, University of the Witwatersrand, Johannesburg, 2016. / This report examines the potential for private in commercial land-use activities to yield a positive return to capital as well as ecosystem infrastructure in South Africa. Intact ecosystem infrastructure in South Africa is concentrated in the Eastern Cape, Kwa-Zulu Natal and Mpumalanga, all of which have a high prevalence of communal land-ownership and small-scale farmers. These areas are under threat of rapid degradation from poor land-use practices including over-grazing, over-harvesting of forestry products, alien encroachment and over-frequent burning resulting in soil erosion and degradation, decreased water retention and quality as well as denudation and biodiversity loss. As such developing effective strategies to respond to the drivers of land degradation is a critical task for ecosystem goods and services preservation. While the majority of existing state led strategies around sustainable land-use, land-reform and rural development in these areas have proven ineffective there are notable exceptions emanating from the state, NGOs and the private sector. This report analyses these examples in case study format, pointing out the key features of each case with regards to the enabling environment and primary outcomes from both a financial and ecosystem infrastructure returns perspective. Specific attention is also given to the development of effective social processes that have a proven track-record improving the social base that underlies effective socio-ecological systems. The end goal of the report is to provide a theoretical model designed for real-world application / LG2017

A research report submitted to the Wits Business School, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management in Finance and Investment, 2016 / This research investigated the application of capital budgeting and risk analysis techniques and their effect on company performance in the South African mining industry. Studies internationally and locally have reported an improved application of capital budgeting techniques— away from the naïve, non-discounted cash flow techniques of the Payback Period (PBP) to the more appropriate discounted cash flow methods of Net Present Value (NPV) and Internal Rate of Return (IRR). In a survey distributed to the Finance Managers, Officers and Directors of mining companies in South Africa, we confirmed the increased sophistication in capital budgeting— the results suggest that 83.3% prefer NPV, 61.5% always use IRR and only 58.3% use PBP. On the other hand, and in contrast to capital budgeting, risk analysis is still comparatively naïve; with sensitivity analysis being the dominant technique used in the mining industry. The sophisticated methods of scenario testing and real option analysis (ROV) are rarely employed. An empirical analysis on the effects of capital budgeting and risk analysis on company performance has yielded results in contradiction with the theory of capital budgeting. The finding of the study is a negative and/or insignificant relation of capital budgeting and risk analysis sophistication to company performance as measured by return of assets (ROA). Although this finding is counterintuitive and contradicts theory, it is, however, consistent with international studies of this nature. / XL2018

A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Management (in the field Finance and Investment Management) , 2016 / Style investing is a well-documented global phenomenon that refers to the manner in which investors formulate their capital allocation decisions. The two broad styles of investing to be discussed in this report are the ‘value style’ and the ‘growth style’ investing. Recent empirical research suggests that value style of investing outperforms growth style investing over the long term. Rational theories suggest that a value premium exist because value counters have higher unsystematic risk. However, theories such as behavioural finance attribute the value premium to more psychological social factors such as emotional and heuristic biases. The aim of this study was to determine whether value style investing outperforms growth style investing in South Africa. For the purposes of this study, we evaluated the performance of various portfolios for the period of December 2000 to December 2015. In addition, the study determined the relative risk of the two styles, by testing whether value outperforms growth during periods of financial crisis, and during a period of slow economic growth. In defining the parameters of our study, we divided the constituents of Financial Times and London Stock Exchange/Johannesburg Stock Exchange (FTSE /JSE) index into growth and value based on their relative Price to book (P/B) going back to December 2000. This created four portfolios; namely, Deep value, Relative value, Relative growth and Super growth. Portfolio Analytics were employed to determine which style outperforms over the period. Regression analyses was used to ascertain which portfolio generated abnormal risk adjusted returns over the period. Relative risk is also analysed. The results of this research indicate that there is limited evidence of value premium in South Africa over the period of the study, albeit there are some periods where one style is dominant over the other. Regressions suggest that none of the portfolios constructed using market capital weighted generate abnormal returns. However, deep value, relative value and relative growth portfolios generate abnormal returns when constructed on equalweighted basis. On a relative risk basis, deep value outperforms during the financial crisis, whereas relative value outperforms during economic slowdowns. / GR2018

Thesis submitted in fulfilment of the requirements for the degree of Master of Management in Finance & Investment in the Faculty of Commerce Law and Management Wits Business School at the University of the Witwatersrand / The objective of this paper is to study the exit behaviour of private equity investments held by independent private equity firms in South Africa. As this is an exploratory study we examine empirical hypotheses previously tested by other authors. Firstly, we test whether portfolio companies within high technology sectors are more likely to achieve an initial public offering (IPO) exit relative to other exits. Secondly, we test the effect of the lending rate on the likelihood of a secondary sale. Lastly, we consider the relative preference of IPO compared to acquisition (M&A) and other exit modes. As South Africa is considered to be a bank-centered financial system (Levine, 2002), private equity investments within the market would be expected to experience poor IPO activity as suggested by the literature (Black and Gilson, 1998).The research is quantitative in nature and involves the use of statistical modelling, multinomial logistic regression was applied, using panel data, which assumes that the effect of explanatory variables on the choice of exit varies across observations (private equity firms) and over time. From the multinomial logit model it was found that; 1) High technology firms were more likely to be exited by means of M&A rather than IPO; 2) An increase in the lending rate was found to increase the likelihood of a Secondary sale which is contrary to previous research (Sousa, 2010); and 3) M&A was found to be the most likely mode of exit assuming all explanatory variables were at their mean, while IPO was the least likely mode of exit. / MT2017

The research centred around the fact that the existing methods of distributing life and investment products was inefficient and it was decided to research the issue to determine whether a more suitable cost effective method could be developed. Currently the distribution of life and investment products is very expensive and therefore an alternate method of distribution was being explored. This was also endorsed in a survey conducted by the Financial Services Board were it was found that in order for financial services company to survive and compete new models need to be developed to compete in this increasingly globalised industry. Life assurance and investment products in South Africa and elsewhere in the world is sold by agents who are employed by the life assurance and investment companies. More recently other distribution channels have emerged and these include the internet, direct mail and call centres. The share of business that is obtained through these means is also an interesting feature to explore when investigating the methods used by new entrants to this multi billion rand industry. The situation prevailing in the local industry is that independent brokers secures a contract with the life company's and this places the broker in a position to market the company's products through the use of business consultants. There are significant costs associated with the current model of distributing the companies' products. These are broker consultant salaries, car allowances and traveling expenses, entertainment expenses, overriding commission on the business sold by the broker they servIce, management and support staff expenses and related expenses. The proposed model will have following characteristics. • Have distribution contracts with all independent brokers. • Using the franchise methods of training and recruiting business consultants. • Variable costing methods in determining payments for service delivered. • This method would also significantly reduce the cost of distribution by the new entrants into this multi billion rand industry. In the final analysis it was shown that the third party distributor would make a difference to the manner in which life and investments products is distributed in this dynamically changing industry. / Theses (MBA)-University of KwaZulu-Natal, 2006.

The major concern of investment decision-makers is to find the appropriate capital budgeting techniques to apply. Many factors cause change within an organisation. Strategic investment management takes a close look at these changing factors. To this end, a literature study of popular capital budgeting procedures, investment strategic theory, and a selected method for linking the two was undertaken. A sample of manufacturers in the Gauteng region of South Africa was chosen to indicate whether there is a correlation between financial theory and practice. The results of this survey indicated that financial evaluation was widely practised. Whereas, strategic analysis was used less often. The need for an in-depth study of other economic sectors and the financial theory and practice used by the investment decision-makers in those sectors is identified as a possible future study. The value inherent in the evaluation of relative performances of manufacturing firms, which have applied similar strategies, is also identified. / Business Management / M. Comm. (Business Management)

M.Com. (Financial Management) / This paper studies the effects of bull and bear market states on the profitability of a momentum investment strategy. That is, a strategy that buys past winners and sells past losers is simulated over the period 3 July 2002 to 8 August 2012 and its profitability is reviewed in light of bull and bear sub-periods. Such an investment strategy has been shown to yield abnormal returns in several markets around the world, including the South African stock market. By doing so, these studies challenge the efficient market hypothesis, a central and widely accepted hypothesis within traditional portfolio theory. There are many theories that have been used to explain why abnormal profits are achievable using a momentum investment strategy. By determining the effects of bull and bear market states on the profitability of a momentum investment strategy, this paper provides some insight into which theories, if any, are most relevant to the South African stock market context. It is found that on average, a momentum portfolio yields abnormal returns over the full sample period, with the chief driver of these returns being the winner component of the portfolio. When broken into bull and bear sub-periods, it was found that a momentum investment strategy only yields abnormal returns during a bull period, whilst these abnormal returns became negative during a bear period. These results are consistent with one efficient market hypothesis explanation and two behavioral models presented in past studies. The results indicate that the market may be efficient and that changes in macroeconomic risk are the cause of momentum profits. However, insofar as the macroeconomic risk explanation is inaccurate, these results support the behavioural models of Daniel, Hirshleifer, and Subrahmanyam (1998); and Hong and Stein (1999). Both these models predict that momentum returns will be strongest during bull periods.