Possible economic consequences of HIV/AIDS include: increased risk of group life cover, retirement benefit and medical care costs; increased cost of labour due to high staff turnover, absenteeism and compassionate or sick leave; and cost of HIV/AIDS management programs. Given the exposure of most South African firms to these costs, this research examines the extent to which publicly listed firms voluntarily disclose information about HIV/AIDS. It equally ascertains factors that influence firms to voluntarily disclose such socially sensitive but economically consequential information. Results show that firm listing, firm size and belonging to the industrial sector are important in influencing firms to disclose information about HIV/AIDS. These results largely support the notion that firms with reputational capital are generally forthcoming with economically important information.
Credit portfolio managers must be able to identify the interdependencies between exposures in a portfolio and be able to relate credit risk to tangible portfolio effects on which action could be taken. To these ends, this paper draws on the macroeconometric vector error correcting model (VECM) developed by De Wet et al. (2009) and applies the proposed methodology of Pesaran, Schuermann, Treutler and Weiner (2006) to a dummy credit portfolio within the South African economy. It illustrates the ability to link macroeconomic factors to a credit portfolio, that scenario analysis can be performed and that portfolio management and value enhancing applications can be pursued.
The real exchange rate of South Africa can be forecasted using the direct or the indirect methods of forecasting. This article compares the forecasting results of direct and indirect forecasting of the real exchange rate by using two univariate models and a multivariate model. The direct models outperformed the indirect models in-sample and the indirect models generally outperformed the direct models out-of-sample. Given the closeness of the forecasting results, the modeller should decide whether it is worth the effort to forecast the real exchange rate indirectly if similar results can be obtained from a (less time-consuming) direct method.
The paper examines the causal relationship between stock market development and economic growth in South Africa while controlling for the effect of banking variable. It applies vector error correction model (VECM), generalized impulse response function (GIRF) and variance decomposition (VDC). In the long-run, the finding suggests evidence of bidirectional causality between financial development and economic growth using bank credit to private sector (BCP). When stock market variables are used, turnover ratio (TR) and value of shares traded (VT); both indicate unidirectional causality from economic growth to stock market development. The generalized Impulse response function and variance decomposition indicate that financial development contains some useful information in predicting the future path of economic growth.