Bibliography: leaves 103-112. / This study investigates the effects that various ownership structures have on company performance. It is assumed that the ownership structure of the firm dictates the manner in which the firm monitors its managers. It is further assumed that the objective of the firm is to maximise shareholder wealth. The study therefore analyses which ownership structure provides shareholders with the greatest returns. Such a system would add the most to an economy's efficiency. It was concluded that of the three systems identified, not one system provided shareholders with a return significantly different from the others. The study added to the current South African debate as to whether or not the concentration of economic power detracts from the country's economic efficiency. Statistical evidence proves that companies owned by any of the large South African groupings are no less productive than companies otherwise owned.

Includes bibliographical references (leaves 105-110). / This study investigates the ability of Burns and Scapens' (2000) Institutional Framework, drawn from Old Institutional Economics, to explain diversity in management accounting practice. The framework contends that management accounting practices can shape, and be shaped by, the taken for granted ways of thinking (institutions) that exist within an organisation, and is offered in response to the perceived inability of neo-classical economics to explain diversity in management accounting practices (Burns & Scapens, 2000; Soin, Seal & Cullen, 2002; Scapens, 2006). This inability contributes to uncertainty regarding the value or relevance of the management accounting technique studied. One area in which this is particularly apparent is that of Activity Based Costing (ABC) where a paradox has emerged: while ABC is reported as being a superiour costing technique, the lack of widespread use thereof implies otherwise (Gosselin, 1997). This study tests the ability of the Institutional Framework to explain the change in management accounting practices that occurred in a medium sized South African university during the seven year period from 2000 to 2006. The case presents a situation where ABC might seem indicated, but instead a uniquely tailored response was devised. This case demonstrates the constraining influence of institutions on management accounting change and shows how institutions standing in opposition to change were altered through management processes, which is of practical relevance to management wishing to effect change successfully. Further, the study shows that that the relationship between economic considerations and institutional influences are not as suggested by the theory, and that the link between economic rationality and the institutional framework can be readily articulated.

Includes abstract. / Includes bibliographical references (leaves 80-84). / This paper examines the effect of straight debt announcements on the daily stock returns of Johannesburg Stock Exchange (JSE) listed companies, on The Bond Exchange of South Africa (BESA), during the period 2000 to 2008. The study is an event study that uses the market model to generate expected returns. The average abnormal returns are standardised by their time series standard errors of regression and tested for significance by the t-test. The evidence indicates that the null hypothesis should not be rejected. Furthermore, the study is examined within the context of contemporary capital structure theory.

This dissertation proposes an Index of Financial Inclusion (IFI) for Sub-Saharan Africa and then uses the developed index to investigate the significance of the relationship between financial inclusion and economic development and growth. This is important because there is no consensus in the literature on how to measure financial inclusion or on the direction of the causal relationship between financial inclusion and economic development or growth. This dissertation aims to contribute to these two debates whilst focusing on Sub-Saharan Africa, where development (potentially encouraged by financial inclusion) is desperately needed. The IFI for Sub-Saharan Africa is arrived at by first determining those dimensions of financial inclusion that are important for the countries in the region. This was done through a text analysis of National Financial Inclusion Strategies (NFISs) of 13 Sub- Saharan African countries overlaid on a detailed literature review. Access, Usage and Quality are the key dimensions for measuring levels of financial inclusion in the region. Thereafter, appropriate variables for the measurement of those dimensions were identified and combined using different methodologies: the simple geometric mean method, the inverse Euclidean distance method and, lastly, the factor analysis method. The relationship between the developed index and economic development and growth is tested using correlations and regression analyses. It was demonstrated that the IFI fits the NFISs of Sub-Saharan African countries and is practically executable. This implies that the IFI is perhaps more appropriate to be used in the region than the global measures previously proposed. Weak correlations between the IFI and economic development or growth were found. These last tests were hampered by small sample sizes and thus the causation debate, mentioned in the motivation paragraph, could not be resolved. However, the proposed IFI for Sub- Saharan Africa shows potential.

This study tests whether a gross-profit-to-assets premium exists on the Johannesburg Stock Exchange (JSE) by constructing portfolios over a 16-year time period from 2002 to 2018. The use of gross-profit-toassets as a stock selection tool has been found to be a viable investment strategy in some developed markets. However, this concept has not been tested on the JSE, which is a sophisticated stock exchange within a developing economy. This approach may also be a viable strategy for South African investors and, thus, is worth investigating. In addition, there exists the possibility of improving value strategies by adding a gross-profit-to-assets quality strategy overlay to hedge against the “value trap” to which the former method is susceptible. This study, therefore, compares value investing to quality investing strategies in terms of their returns by constructing both long and long-short portfolios using four metrics namely: gross-profit-to-asset ratios, book-to-price ratios, earnings-to-price ratios, and a double sort of gross-profit-to-assets ratios and bookto-price ratios. In addition, excess and abnormal returns are calculated, and portfolios are once again compared to each other. When excess returns are calculated, each separately constructed portfolio is compared to the market index, and then to the risk-free rate. Lastly, the individual portfolios are compared to expected returns, calculated using the Capital Asset Pricing and the Fama and French Five Factor (2015) asset pricing models. The study finds that long only portfolios constructed using gross-profit-to-assets outperformed both bookto-price and earnings-to-price metrics. Further, it is found that adding gross-profit-to-assets to a value strategy, using the book-to-price ratio, is an improvement on a simple value strategy – probably because it avoids the “value trap” problem. While the long only portfolios show positive results, the long-short portfolios are not as successful. For long-short portfolios, gross-profit-to-assets and the double-sort are still superior to book-to-price and earnings-to-price, but when compared to the market index, the portfolios all underperform. Regressions of the excess returns of both the long and long-short portfolios against the five factors of Fama and French's Five Factor Model (2015) show that the intercepts (alphas) of the various portfolio excess returns are not statistically significant and, in the case of the long portfolios, are weakly negative. Within the assumptions of this model, these findings, therefore, fail to confirm that the various factorbased investment strategies statistically outperform the market on a risk-adjusted basis.

South Africa's electricity tariff determinations have been a matter of much public debate. This has been highlighted in popular media in South Africa, with above inflation increases in electricity tariffs allowed by the National Energy Regulator of South Africa (NERSA) in Multi-Year Price Determination (MYPD) 2 and MYPD 3. However these increases are below those applied for by Eskom. Estimating the cost of equity capital is a key element of the tariff determination process. This study therefore aims to evaluate the cost of equity methodologies used by regulators, and to assess whether NERSA's (South Africa) methodology is in line with international best practice. This study analysed the published cost of equity methodologies of 14 electricity regulators operating within developed and developing economies. A review of academic literature indicates that the Capital Asset Pricing Model (CAPM) understates the returns of low beta stocks, such as utilities. Furthermore, the Fama and French Three Factor model (FF3F) has been shown to have better explanatory power and results in higher estimates of the cost of equity. In spite of these empirical findings, this study found a preference for the CAPM among regulators, with no regulators using the FF3F model. The CAPM is selected due to its widespread use and the fact that it is simple to implement. This finding indicates that regulators are systemically under-compensating utilities for the risk undertaken. NERSA's (South Africa) cost of equity methodology was found to be in line with regulatory methodology, although its lack of consideration of alternatives and its relative lack of disclosure into the estimation does result in less transparency and potentially less reliable estimates of the cost of equity. Until a definitive answer has been reached, it is likely that the CAPM will continue to be used in a regulatory environment.

Includes bibliographical references. / Share repurchases have long been permitted in the United States of America, but it is only relatively recently that they have become a frequently-used means of returning funds to shareholders in that country. In other countries, it was also only relatively recently that share repurchases were even permitted, and in South Africa, repurchases have been permitted only since 1999, when the Companies Act was amended to allow for them. Repurchases in South Africa are fairly closely regulated, not only by statute, but also, in the case of listed shares, by regulations contained in the Listing Requirements of the Johannesburg Stock Exchange. In essence, the regulations, read with the legislation, allow for three types of repurchase, namely, a specific repurchase incorporating a pro-rata offer; a specific purchase incorporating a specific offer, and a general repurchase. Specific repurchases have more demanding requirements than general repurchases as far analysis in the context of the "signalling hypothesis," and for that reason, the focus of this study is on specific repurchases. Studies in the USA and elsewhere have shown that repurchases may be carried out for any of a number of reasons. Most studies in the USA have also shown that repurchases are associated with significant positive abnormal returns on the share prices; the increase in prices is usually attributed to the signalling hypothesis, which holds that managers use repurchases as a means of signalling to the market that they believe that the shares are underpriced. The objectives of the present study are twofold: - To identify the reasons for South African companies carrying out repurchases; and - To determine whether such repurchases create shareholder value.

Bibliography: leaves 145-155. / The efficiency of the private markets is important in ensuring a healthy economy. This study sets out to shed light on the decision-making process applied by South African venture capitalists when they allocate capital. Venture capital is defined in this study as including private equity. The study comprises an extensive survey by way of a detailed questionnaire which was mailed to 66 members and non-members of the South African Venture Capital and Private Equity Association (SA VCA) and achieved a 77% response rate. The questionnaire was based on previous work done in Western and Eastern Europe, and India. This ensured that quantitative South African results could be compared with international results. Quantitative statistical analyses were conducted and the results are presented. The study first identifies the criteria applied in the general evaluation of investments. Second, the required rates of return are established for each stage in the business cycle of the potential investment. Third, various risk factors which might affect the required rate of return are considered. Fourth, the study identifies the valuation methods employed at each stage in the business cycle of the potential investment. Fifth, the use of portfolio theory by South African venture capitalists and private equity investors is examined. In keeping with most similar studies around the world, South African VCs seek out quality entrepreneurial teams. They do this using an array of evaluation criteria which endeavour to flush out the risks inherent in the investments they are evaluating. In South Africa VCs seek strong management and overwhelmingly rate integrity as the most important management quality. Far less important are market issues, followed by product or service issues. This may reflect the perceived dearth of management talent in South Africa. This study analyses the required rates of return of different groupings of VCs by investment stage. It yields results consistent with financial theory as it applies to venture capital: the earlier the stage of investment, the higher the perceived risk profile of that investment. The study finds that more mature VC funds have lower required rates of return than less mature funds. Funds with a development or empowerment objective have lower required rates of return than those without. Independent funds require higher rates of return than captive and semi-captive funds. The required rates of return have only increased by about 2% since the more buoyant mid to late 1990s. The debt-equity ratio has an increasing effect on the required rates of return as the investment moves through the earlier stages of investment to the later stages. While the required rate of return of an investment is generally determined by the risk band in which it falls, the effect of the debt equity ratio is dependent upon an assessment of the individual risk characteristics of the investment. The general and specific factors which affect risk and required rate of return are ranked by South African VCs and the results are in keeping with international results. The general factors identify the lack of importance of the state of the general economy and long-term gilts to the VC's required rate of return, but the importance of the state of the actual sector in which the investee participates. Insofar as specific risks are concerned, management is of particular importance as an indicator of risk, both in respect of the quality of management and the predictability of management's behaviour. An analysis was done of the valuation methods which are used at the different stages of the investment cycle. South African VCs prefer to use the discounted cash flow method of valuation at all stages of the investment, although different techniques are also used in the earlier stages of the investment cycle. A final valuation is based on a preferred method while using the other methods as a check. Gut feeling is an important component of this process. This research also confirms that the newly adopted SAVCA (BVCA) Valuation Guidelines have not affected the valuation process when an investment is made. Most South African VCs apply reasonably sophisticated portfolio theory to their investment portfolios and the majority regard their portfolios as well-diversified. Implications for both South African entrepreneurs and South African VCs are also presented.

Bibliography: leaves 77-81. / The King Reports, as well as legislative developments culminating from these reports, are aimed at enhancing corporate governance standards in South Africa and aligning them with international best practice. Notwithstanding these measures, a number of significant failures in corporate governance rocked South African business during this period, severely denting the perception of the quality and standard of corporate governance. Given the importance of international investors' confidence, a continuous review of the South African corporate governance structure is imperative. This dissertation aims at performing a comparative and critical analysis of the corporate governance structures in South Africa. The objective is to seek alternative or improved corporate governance mechanisms that will enhance the current dispensation. For this purpose, various international corporate governance models are analysed and their monitoring mechanisms identified. The possibility of utilising some of these mechanisms to enhance corporate governance in South Africa is examined. The institutional environment in South Africa (I.e. the controlled shareholder environment, inactive and illiquid markets) prevents the market model mechanisms of the US and UK from playing a greater monitoring role. Further market model mechanisms aimed at promoting the independent monitoring of management have to a large extent been incorporated into the South African corporate governance framework. However, the ongoing failures of large listed and unlisted companies, including smaller banks in South Africa, that appear to indicate poor levels of, or ineffective, corporate governance, calls for the enforcement and acceptance of the monitoring guidelines set out in the King Reports. The German and Japanese bank governance model has a limited application in South Africa. The level of bank debt financing is generally lower than equity financing, thereby restricting banks' ability to become monitors through their debt control rights.

Includes bibliographical references (leaves 83-88). / This study intends to offer further insight into the determinants of capital structure of industrial firms listed on the Johannesburg Stock Exchange. The amount of debt in a firm is an indication of leverage and this study uses various different ratios as a proxy for capital structure. Using multiple regressions, the study sets out to establish whether a relationship exists between a selection of determinants and the capital structure of a firm. The study considers previous research and seminal theories such as the Modigliani-Miller theorem, the trade-off theory, the agency theory and the pecking order theory. The determinants used in this study (and their respective measures) are; the firm's business risk (standard deviation of sales), size (natural log of sales), asset composition (fixed assets/total assets), profitability (earnings before interest and tax/total assets), growth opportunities (market value of equity/book value of equity) and age of the firm (years since incorporation). The study also considers the differentiation between long and short-term debt in identifying the determinants of capital structure. The sample constitutes seventy-one listed industrial firms, for each year, during the period from 2001 to 2005. Using cross-sectional multiple regression, the study attempts to establish whether relationships change over time. Comparing the coefficient of determination of the models over the five years, no significant trend was noted. Overall however, there did appear to be a general decline in the coefficient of determination from 2001 to 2002, and increases in 2003 and 2005. The decline in 2002 could potentially be related to the global market downturn and devaluation of the Rand during this period. In the multiple regression tests done on the pooled sample, there was found to be a positive correlation between both business risk and tangibility, with total and long-term debt, and a negative correlation with short-term debt. It is suggested that riskier firms are dissuaded from issuing shares at their low market prices, therefore prefer debt, and firms with more tangible assets have more to offer as means of collateral. The size and age of the firm were found to have a negative correlation with total and long-term debt, and firm size a positive correlation with short-term debt. Across all leverage ratios, there was evidence of a significant negative correlation with profitability. The findings of the latter three determinants; firm size, age and profitability, are consistent with the pecking order theory. This theory suggests that firms prefer to use their accumulated income before taking on more debt or issuing equity. The findings of this study were found to be consistent with past empirical research.