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- South African Journal of Economic and Management Sciences
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- Volume 12, Issue 4, 2009
South African Journal of Economic and Management Sciences - Volume 12, Issue 4, 2009
Volumes & issues
Volume 12, Issue 4, 2009
An investigation into the role of listed property shares in a retirement fund portfolio in South Africa : asset allocationSource: South African Journal of Economic and Management Sciences 12, pp 392 –400 (2009)More Less
The main aim of this research paper was to investigate the role of listed property shares in a retirement fund portfolio in South Africa, one objective being to determine the appropriate weightings to be allocated to listed property shares. This research paper uses data collected from January 1995 to December 2004. The Elton and Gruber computer programme is used to test the data to give optimal weightings to the listed property sector and to produce an efficient frontier. The results of this research paper demonstrated the benefits offered by listed property shares and revealed that the sector should be treated as a separate asset class from equity owing to low correlation of returns between these two classes of assets. Results also demonstrated that an increase in the allocation to the listed property sector results in better investment performance over the study period.
Volatility forecasting and value-at-risk estimation in emerging markets : the case of the stock market index portfolio in South Africa : asset allocationSource: South African Journal of Economic and Management Sciences 12, pp 401 –411 (2009)More Less
Accurate modelling of volatility is important as it relates to the forecasting of Value-at-Risk (VaR). The RiskMetrics model to forecast volatility is the benchmark in the financial sector. In an important regulatory innovation, the Basel Committee has proposed the use of an internal method for modelling VaR instead of the strict use of the benchmark model. The aim of this paper is to evaluate the performance of RiskMetrics in comparison to other models of volatility forecasting, such as some family classes of the Generalised Auto Regressive Conditional Heteroscedasticity models, in forecasting the VaR in emerging markets. This paper makes use of the stock market index portfolio, the All-Share Index, as a case study to evaluate the market risk in emerging markets. The paper underlines the importance of asymmetric behaviour for VaR forecasting in emerging markets' economies.
Using an inflation-augmented price-earnings ratio to guide tactical asset allocation : asset allocationAuthor A.D. SavilleSource: South African Journal of Economic and Management Sciences 12, pp 412 –428 (2009)More Less
Asset allocation plays a central role in determining investment outcomes, and available evidence shows that portfolio results can be enhanced through tactical asset allocation if managers use the simple price-earnings ratio as a predictor of equity returns. Recently, some international evidence has emerged which shows that, by augmenting the price-earnings metric with information about consumer price inflation, further enhancements can be achieved in tactical asset allocation. This study reviews these arguments as they apply to South Africa, and finds that an inflation-augmented price-earnings ratio is more successful in forecasting equity returns than is the simple price-earnings ratio. Moreover, the metric is found to be significant in explaining relative asset class returns. On a risk-adjusted basis, however, the tool fails to improve the portfolio results when compared to a buy-and-hold strategy.
Author Gert HumanSource: South African Journal of Economic and Management Sciences 12, pp 429 –447 (2009)More Less
Managing multiple buyer-seller relationships in business-to-business networks demands an understanding of a firm's competence to manage in an interconnected environment. This paper reports on an attempt to measure network competence by using the NetCompTest scale in business-to-business markets in South Africa. Based on a pilot study refinement, the paper proposes an adjusted measurement scale and details the results of a second round of measurement conducted amongst 495 business-to-business managers in South Africa. The results established partial support for the use of the NetCompTest scale in a South African context, and analysis of variance indicated that some differences in the measurement based on firm and individual characteristics can be observed in the data. The paper assists in theory-building and provides managerial insights for managing buyer-supplier relationships in networks.
Author Johan CoetzeeSource: South African Journal of Economic and Management Sciences 12, pp 448 –461 (2009)More Less
The Financial Sector Charter (FSC) requires South African retail banks to provide retail products and services to the rural-based unbanked. The challenge is deciding whether or not banking the unbanked must be pursued through personal or remote channels. This study considers the challenge facing the four largest South African retail banks. It investigated trends in servicing this market since the effective date of the Charter. It found that banks are currently using an integrated approach combining personal and remote interaction and emphasising the promotion of financial literacy. It remains to be seen whether this approach truly adds value for the unbanked. It is recommended that further research be done to establish exactly what the behavioural characteristics of the unbanked are over a period of continuous use of bank products and services.
Dynamics of trade between the formal sector and informal traders : the case of fruit and vegetable sellers at Natalspruit market, Ekurhuleni : networksSource: South African Journal of Economic and Management Sciences 12, pp 462 –474 (2009)More Less
The informal sector in South Africa is a significant, but not well understood phenomenon. One important question relates to the nature of the relationship between the formal and informal sector. This article uses Porter's five forces model to interrogate the linkages between informal fruit and vegetable traders in the Natalspruit Market (Ekurhuleni) and their formal suppliers, primarily the Johannesburg Fresh Produce Market. While the threat of new products is low, the street traders' position is weakened by the threat of new entrants, consumer bargaining power and lack of cooperation among street traders. In relation to supplier power, we conclude that while this varies according to a number of factors, the formal sector is dominant over informal fruit and vegetable sellers in this market. This finding rests primarily on the observation that, because of their fragmentation, the informal traders' collective buying power is not being used in the same way as large formal retailers of fruit and vegetables to obtain better terms of trade with the formal economy supplier.
Links or disconnect : a first consideration of inflation expectations and inflation credibility, with specific reference to South Africa : analysis of survey dataSource: South African Journal of Economic and Management Sciences 12, pp 475 –492 (2009)More Less
This paper compares international and domestic inflation expectations and inflation credibility, and hypothesises about a possible link or disconnect between inflation expectations and inflation credibility among South Africans. No similar tests have previously been performed using South African data, and there is also a general lack of domestic and international literature on any such possible link or disconnect. While research shows that inflation expectations are taken into account by all countries targeting inflation, inflation credibility is very seldom considered. Although the hypothesis is confirmed in certain instances, it is refuted by a disconnect between the inflation expectations and inflation credibility of male and female respondents in South Africa, which cannot be explained by available data.
Socio-demographic and behavioural determinants of visitor spending at the Kruger National Park in South Africa : analysis of survey dataSource: South African Journal of Economic and Management Sciences 12, pp 493 –512 (2009)More Less
The Kruger National Park is one of the most visited national parks in the world and one of South Africa's prime tourism destinations. It attracts more than 1 million visitors per year and, as such, plays an important role in the regional and national economy. The article aims to assess the extent to which socio-demographic and behavioural indicators influence the spending of tourists to the Park. From 2001-2007 surveys have been conducted amongst tourists to the Park including a number of socio-demographic, behavioural and motivational questions, totalling 2 904 questionnaires used in the analysis. The methodology includes both cross-sectional regression analysis and pseudo-panel data analysis to identify and compare possible influences on spending. Findings indicate that, even though a combination of socio-demographic, behavioural and motivational factors influence spending at National Parks, behavioural indicators seem to be the most important and consistent influencer.
Opportunity recognition : delineating the process and motivators for serial entrepreneurs : analysis of survey dataAuthor Boris UrbanSource: South African Journal of Economic and Management Sciences 12, pp 513 –532 (2009)More Less
Opportunity recognition is a fundamental research issue in entrepreneurship which this paper empirically investigates for serial entrepreneurs. Initially key definitions and boundary conditions of opportunity recognition are explored to elucidate the relevant motivators driving serial entrepreneurs. After operationalising the various concepts, data are collected by surveying serial entrepreneurs (n= 77) based on pre-determined selection criteria. Since the study's objective is to build solid theory on these new phenomena, descriptive analysis on the empirical results is provided. To test the hypotheses inferential statistics employing parametric and non-parametric tests are used. The findings reveal that the opportunity recognition behaviours are manifest among serial entrepreneurs, with few significant differences on how many new, major businesses have been pursued, or whether they can be said to be successes.