This study investigated the demand patterns of poor households during a period of rising prices. Focus was on three main constructs namely the poor, rising prices and the demand patterns. The study was on Bophelong, a township in South Africa. This study was conducted from an empirical, quantitative approach which was preceded by a literature review. The main objective of conducting the literature review was to provide a theoretical framework for questionnaire design and empirical work. Cross sectional data was collected at Bophelong households. On completion of the survey, the poor were selected from the non-poor by means of a poverty line. The poor were further divided into two categories, namely moderately poor and the very poor. Moderately poor households were categorised by an income ranging 50% to 99% inclusively of their household poverty line. The very poor households were categorised by an income in the range of 0 to 49% inclusively of their poverty line. Using the above division, the total poverty rate was 56% of the total sample, 26% being moderately poor and 30% very poor. The poverty gap ratio for all the poor in the sample was 0.48, meaning that on average, the poor needed 48% of their current income to reach their poverty line. This ratio was 0.29 for the moderately poor households and 0.69 for the very poor households. A logistic regression done on the determinants of poverty in Bophelong showed that household size, age of the household head, monthly household income and the employment status of the household head were significant in determining poverty. The monthly average household income in Bophelong was R2 910. For the moderately poor households it was R1 641 for the and R932 for the very poor households. Household size was 3.96 for the whole sample size, 2.97 for the non-poor households, 4.2 for the moderately poor households and 4.7 for the very poor households. The study revealed that demand patterns of the poor differ from those of the non-poor. In addition the moderately poor households‟ demand patterns differ from the very poor An analysis of the poor‟s demand patterns during rising prices: the case of Bophelong household. The greatest part of income of the poor is spent on basic food stuffs. The very poor spent more than half of their income (53%) on food. The study indicated that bread is a giffen good only to the very poor households where quantity demanded moves in the same direction with price. In the non-poor households, bread is regarded inferior. A commodity can be overly a necessity, but the degree of necessity differs with a households‟ economic status. In some cases, a commodity was a necessity in the very poor households but a luxury in the non-poor. The way households substitute one good for another depends on their income levels. In conclusion, the study recommends that for poverty alleviation policies to effectively target the very poor in reducing malnutrition and hunger, these very poor should be studied separetely from the poor households. This is because households of different poverty levels face different challenges. A more detailed and deeper study relating to the demand structure of the poor is recommended. There is also a need to explore the survival means of the poor as to direct policy actions aimed at alleviating poverty among the poor in general. / Thesis (PhD (Economics))--North-West University, Vaal Triangle Campus, 2013

The objective of this study is to evaluate the value drivers that drive the value of companies, as reflected in the share-prices. Through this study, the aim is to draw conclusions on the aspects that drive the share-price of companies. A detailed literature study was performed on the value-creation process that takes place in a company. The literature study has a significant focus on Value-Based Management and the elements that should be considered when evaluating the manner in which companies create shareholder value through the operational activities that are performed. Through applying the principles of value-based management, the management of companies should maximise the value-created for shareholders by utilising company resources in the most effective and efficient way possible. Valuebased management should not be seen as a once-of initiative, but should be ingrained in the day-to-day operating and management activities of companies. The objective of applying value based management principles in a company should be to enhance the value of financial assets through the optimisation of the real assets of the company. Value is created in a company when the company can maintain a return on capital that is greater than the cost of capital. Through the literature study several value-drivers were identified that influence the shareholder value-creation process and that should be managed optimally. These value-drivers have been identified to be (1) sales growth, (2) cash profit margin - earnings before interest, tax, depreciation and amortisation (EBITDA), (3) cash tax rate, (4) working capital, (5) capital expenditure, (6) WACC- the risk and inflation adjusted weighted average cost of capital, and (7) the competitive advantage period. The competitive advantage period is defined as the time during which a company has a positive net present value when discounted at the WACC. Any actions that the management of a company can take to optimise these value-drivers will have a positive effect on the value created for shareholders. The link between shareholder value-creation and share-price was investigated in the literature study. It was found that different factors influence share prices and that some have nothing to do with the company itself, but more with investor sentiment about the economy as a whole and other socio-political factors. The empirical study was based on analysing key value-drivers and financial ratios that were identified during the literature study, in order to establish the relationship between company value-creation and the share-price. The data sample that was used in the empirical study consisted of 55 publicly listed companies that had a net asset value of one billion rand (R1, 000,000,000) or more in 1998. This data sample parameter was chosen in order to consider companies in the empirical study that have significant market presence in the respective industries, sectors and sub-sectors. The time horizon of the empirical study was over a 1 0-year period, from 1998 to 2007. The relationship that exists between the dependent variables of (1) Average Share Price (ASP) and (2) Year-End Share Price (YESP) and the independent variables of (1) net assets, (2) turnover, (3) trading profit, (4) operating profit, (5) profit before interest and tax, (6) Net Operating Profit After Tax (NOPAT), (7) retained profits, (8) free cash flow, (9) Economic Value-Added (EVA), (1 0) Earnings Per Share (EPS), (11) Cash Flow Per Share (CFPS), (12) the price earnings ratio, (13) operating assets, (14) Return On Assets (ROA), and (15) Return On Equity (ROE) were analysed during the empirical study. These dependent and independent variables were chosen based on the insights gained through the literature study and was identified as appropriate to formulate conclusions on the relationship that exists between shareholder value-creation and share-price. The distributions of the above-mentioned variables are discussed in detail and distribution figures are provided to contextualise the spread of the variables and provide background on the data that was used in the empirical study. Although the study of the variables was conducted over a 1 0-year period, from 1998 to 2007, distribution figures for the years 1998 and 2007, are depicted and discussed in order to provide a comparison of the changes that took place over the 1 0-year period. Due to the nature of the variables analysed during the empirical study, the Spearman Rank Correlation Coefficient is used to measure the relationship that exists between the dependent and independent variables. The Spearman Rank Coefficient is a factor model that explains complex phenomena through a small number of basic causes or factors. Given the relative large number of shares available on the share market, the estimation of dependent, share-price variables cannot be performed without simplification to dimensionality, therefore the use of the Spearman Rank Coefficient. The coefficient of correlation between the dependent and independent variables was calculated for the each of the years over the 1 0-year period and the applicability to explain the relationship between shareholder value-creation and share-price was analysed. Through the statistical analyses and the interpretation of the results, it was concluded that earnings per share and cash flow per share are the most appropriate indicators for estimating the relationship that exists between shareholder value-creation and the share-price as reflected on the share market. / Thesis (M.B.A.)--North-West University, Vaal Triangle Campus, 2010.

The objective of this study is to evaluate the value drivers that drive the value of companies, as reflected in the share-prices. Through this study, the aim is to draw conclusions on the aspects that drive the share-price of companies. A detailed literature study was performed on the value-creation process that takes place in a company. The literature study has a significant focus on Value-Based Management and the elements that should be considered when evaluating the manner in which companies create shareholder value through the operational activities that are performed. Through applying the principles of value-based management, the management of companies should maximise the value-created for shareholders by utilising company resources in the most effective and efficient way possible. Valuebased management should not be seen as a once-of initiative, but should be ingrained in the day-to-day operating and management activities of companies. The objective of applying value based management principles in a company should be to enhance the value of financial assets through the optimisation of the real assets of the company. Value is created in a company when the company can maintain a return on capital that is greater than the cost of capital. Through the literature study several value-drivers were identified that influence the shareholder value-creation process and that should be managed optimally. These value-drivers have been identified to be (1) sales growth, (2) cash profit margin - earnings before interest, tax, depreciation and amortisation (EBITDA), (3) cash tax rate, (4) working capital, (5) capital expenditure, (6) WACC- the risk and inflation adjusted weighted average cost of capital, and (7) the competitive advantage period. The competitive advantage period is defined as the time during which a company has a positive net present value when discounted at the WACC. Any actions that the management of a company can take to optimise these value-drivers will have a positive effect on the value created for shareholders. The link between shareholder value-creation and share-price was investigated in the literature study. It was found that different factors influence share prices and that some have nothing to do with the company itself, but more with investor sentiment about the economy as a whole and other socio-political factors. The empirical study was based on analysing key value-drivers and financial ratios that were identified during the literature study, in order to establish the relationship between company value-creation and the share-price. The data sample that was used in the empirical study consisted of 55 publicly listed companies that had a net asset value of one billion rand (R1, 000,000,000) or more in 1998. This data sample parameter was chosen in order to consider companies in the empirical study that have significant market presence in the respective industries, sectors and sub-sectors. The time horizon of the empirical study was over a 1 0-year period, from 1998 to 2007. The relationship that exists between the dependent variables of (1) Average Share Price (ASP) and (2) Year-End Share Price (YESP) and the independent variables of (1) net assets, (2) turnover, (3) trading profit, (4) operating profit, (5) profit before interest and tax, (6) Net Operating Profit After Tax (NOPAT), (7) retained profits, (8) free cash flow, (9) Economic Value-Added (EVA), (1 0) Earnings Per Share (EPS), (11) Cash Flow Per Share (CFPS), (12) the price earnings ratio, (13) operating assets, (14) Return On Assets (ROA), and (15) Return On Equity (ROE) were analysed during the empirical study. These dependent and independent variables were chosen based on the insights gained through the literature study and was identified as appropriate to formulate conclusions on the relationship that exists between shareholder value-creation and share-price. The distributions of the above-mentioned variables are discussed in detail and distribution figures are provided to contextualise the spread of the variables and provide background on the data that was used in the empirical study. Although the study of the variables was conducted over a 1 0-year period, from 1998 to 2007, distribution figures for the years 1998 and 2007, are depicted and discussed in order to provide a comparison of the changes that took place over the 1 0-year period. Due to the nature of the variables analysed during the empirical study, the Spearman Rank Correlation Coefficient is used to measure the relationship that exists between the dependent and independent variables. The Spearman Rank Coefficient is a factor model that explains complex phenomena through a small number of basic causes or factors. Given the relative large number of shares available on the share market, the estimation of dependent, share-price variables cannot be performed without simplification to dimensionality, therefore the use of the Spearman Rank Coefficient. The coefficient of correlation between the dependent and independent variables was calculated for the each of the years over the 1 0-year period and the applicability to explain the relationship between shareholder value-creation and share-price was analysed. Through the statistical analyses and the interpretation of the results, it was concluded that earnings per share and cash flow per share are the most appropriate indicators for estimating the relationship that exists between shareholder value-creation and the share-price as reflected on the share market. / Thesis (M.B.A.)--North-West University, Vaal Triangle Campus, 2010.

This paper uses survey data by the Hong Kong Stock Exchange (HKEx) from 1991-2013 to test the role that institutional ownership has on the relative informational efficiency of stock prices in the Hang Seng Index, using the R2 of stock prices as a measurement of efficiency. This paper finds that on the aggregate level, the presence of institutional ownership is positively associated with R2, reflecting a negative effect on the level of information incorporated into stock prices. However, in isolating foreign institutions, the relationship with R2 reverses, and I find a positive correlation with the informational efficiency of stock prices. Moreover, this paper finds that a period characterized by high growth in institutional shareholding does not necessarily correspond to a greater level of improvement in the informational environment of stock markets. The results however, lack significance, perhaps due to the shortcomings of the survey data which is limited to 21 annual observations when incorporating a t-1 year lag. With more observations we would expect a substantial increase in the significance of the coefficient on our explanatory variables.

Various models driven by a hidden Markov chain in discrete or continuous time are developed to capture the stylised features of market variables whose levels or values constitute as the underliers of financial derivative contracts or investment portfolios. Since the parameters are switching regimes, the changes and developments in the economy as soon as they arise are readily reflected in these models. The change of probability measure technique and the EM algorithm are fundamental techniques utilised in the optimal parameter estimation. Recursive adaptive filters for the state of the Markov chain and other auxiliary processes related to the Markov chain are derived which in turn yield self-tuning dynamic financial models. A hidden Markov model (HMM)-based modelling set-up for commodity prices is developed and the predictability of the gold market under this setting is examined. An Ornstein-Uhlenbeck (OU) model with HMM parameters is proposed and under this set-up, we address two statistical inference issues: the sensitivity of the model to small changes in parameter estimates and the selection of the optimal number of states. The extended OU model is implemented on a data set of 30-day Canadian T-bill yields. An exponential of a Markov-switching OU process plus a compound Poisson process is put forward as a model for the evolution of electricity spot prices. Using a data set compiled by Nord Pool, we illustrate the vast improvements gained in incorporating regimes in the model. A multivariate HMM is employed as a framework in providing the solutions of two asset allocation problems; one involves the mean-variance utility function and the other entails the CVaR constraint. Finally, the valuation of credit default swaps highlights the important considerations necessitated by pricing in a regime-switching environment. Certain numerical schemes are applied to obtain approximations for the default probabilities and swap rates.

We analyze empirically the role played by energy inflation as a determinant of downward corrections in house prices. Using a dataset for 18 OECD economies spanning the last four decades, we identify periods of downward house price adjustment and estimate conditional logit models to measure the effect of energy inflation on the probability of these house price corrections after controlling for other relevant macroeconomic variables. Our results give strong evidence that increases in energy price inflation raise the probability of such corrective periods taking place. This phenomenon could be explained by various channels: through the adverse effects of energy prices on economic activity and income reducing the demand for housing; through the particular impact on construction and operation costs and their effects on the supply and demand of housing; through the reaction of monetary policy on inflation withdrawing liquidity and further reducing demand; through improving attractiveness of commodity versus housing investment on asset markets; or through a lagging impact of common factors on both variables, such as economic growth. Our results contribute to the understanding of the pass-through of oil price shocks to financial markets and imply that energy price inflation should serve as a leading indicator for the analysis of macro-financial risks. (authors' abstract)

Since 1979, China embarked on an economic reform to modernize the country. The reform was so successful that China was able to grow by an impressive rate of 9 percent per anum between 1979 and 1997. The rapid development of the economy leads to a drastic increase in demand for energy. Since China has the largest population in the world, its energy demand is nothing but huge. Each year, for example, China needs to install as much as 10,000 MW of new electricity generation capacity, which equals the curent capacity of Netherlands. This increase in demand for energy, which is likely to continue, wil have implications for global energy markets, the world price of energy and for the global environment as emissions of greenhouse gases grow rapidly. Against this background, there is an urgent need for the country to better manage the energy sector so that the market can function in an orderly manner. To tackle this issue, I single out three important energy problems to study. First, I wil examine the current situation of the energy imbalance in China. Second, I wil forecast how rapid the energy demand wil grow in future so that the deficit between the demand and domestic supply can be identified. Lastly, I wil discuss some methods that can be used to manage the demand. My finding shows that energy-capital and energy-material inputs are complementary, whereas the relationship of energy and labour is insignificant. In addition, the simulation exercises also reveals that a high energy pricing policy might not be effective in mitigating the demand and in encouraging firms to employ labour intensive techniques. Also, rising energy prices may bring spiral inflation and deterioration in the balance of payments and foreign resources. Therefore, government should act cautiously when increasing energy prices.

No description available.

Trade liberalization and globalization have resulted in the free flow of goods, services, capital and people. In this regard ports play a vital role in linking supply chains, as goods flow from the point of inception through the chain up to the customer at the end. This research was conducted to determine and evaluate the role of logistics in the value chain of steel products that pass through Durban Port. The impact of logistics - measured in terms of costreduction, shorter lead times and better customer service - that would contribute to the competitive advantage of businesses was evaluated. Other countries like China and India are also manufacturers of steel products, and it is therefore important for South Africa not to lose international markets due to prices and products that are not internationally competitive. In essence, this paper unpacks the debates surrounding the high prices of steel products from South Africa, and suggests how these prices can be reduced. In this regard the investigation into steel products provided an excellent case study, as steel contributes significantly to the GDP of the country. The study analyses all logistics activities like transportation, warehousing, handling, quality control of goods and a just-in-time management approach. Informal interviews and a case study based on Durban Port highlight the role that logistics activities play in adding value to goods that pass through Durban Port. The implications of the findings are discussed and proposals for redefining the role of logistics in an organization are offered. / Thesis (M.A.)-University of KwaZulu-Natal, 2008

This thesis comprises three essays that explore several theoretical and empirical features of affine term structure models. In the first essay, we focus on the ability of continuous-time affine term structure models to capture time variability in the second conditional moment. Using data on US Treasury yields, we conclude that affine term structure models are much better at extracting time-series volatility from the cross-section of yields than argued in the literature. These models have nonetheless difficulty capturing volatility dynamics at the short end of the maturity spectrum, perhaps indicating some form of segmentation between long-maturity and short-maturity bonds. These results are robust to the choice of sample period, interpolation method and estimation method. In the second essay, we propose the use of the unscented Kalman filter technique for the estimation of affine term structure models using non-linear instruments. We focus on swap rates and show that the unscented Kalman filter leads to important reductions in bias and gains in precision. The use of the unscented Kalman filter results in substantial improvements in out-of-sample forecasts. Our findings suggest that the unscented Kalman filter may prove to be a good approach for a number of problems in fixed income pricing in which the relationship between the state vector and the observations is nonlinear, such as the estimation of term structure models using interest rate derivatives or coupon bonds, and the estimation of quadratic term structure models. The third essay provides a tractable framework for pricing defaultable securities with recovery risk. Pricing solutions are explored for a large family of discrete-time affine processes and a five-factor Gaussian model is estimated on BBB and B Standard and Poor's yield indices. This rich econometric setup allows the model to simultaneously capture two important stylized facts of defaultable securities: The positive correlation between the loss given default and the intensity of default, and the negative correlation between the intensity of default and the risk-free interest rate.