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Sponsorship is a major contributor to income in the South African sports arena, and is a critical component allowing sports unions to remain financially viable and sustainable. Sports sponsoring companies, however, have long questioned the financial returns generated from these ventures. The purpose of this paper is to understand whether financial returns of companies with sports sponsorship in South Africa are significantly different to those without. This research was conducted on Johannesburg Stock Exchange (JSE) listed companies that sponsored sport consistently between 2000 and 2015 for a period of two years. A quantitative methodology was employed whereby share price, revenue and earnings growth were analysed, comparing firms that did not adopt strategies involving sports sponsorships to those that did.

A quantitative methodology was employed, whereby share price, revenue and earnings growth were analysed, comparing firms that did not adopt strategies involving sports sponsorships to those that did. South Africa is an emerging market and a member of the BRICS Forum ranked 14th in the sport sponsorship market globally (Sport Marketing Frontiers, 2011), becoming increasingly dominant in the global sports industry (Goldman, 2011). The population consisted of JSE-listed Main Board and alternative exchange companies that participated in any form of consistent sports sponsorship in the given time frame: 2000-2015, where the company’s share price, revenue and earnings per share (EPS) data for the period were available from the INET BFA database. The JSE is ranked 17th in terms of market capitalisation (over $1 trillion) in the world, being the largest stock exchange on the African continent with over $30bn being traded on average monthly. Multiple journals today publish research done on the JSE, for example the International Journal of Sports Marketing and Sponsorship, Investment Analysts Journal and the South African Journal of Accounting Research. This stock exchange is 125 years old and has over 400 listed companies of which 358 are domestic (Kruger et al., 2014).

Results show that companies involved in sports sponsorship during the period analysed did not experience enhanced share price or revenue growth in excess of those companies not involved in sports sponsorship. As a whole, sports sponsoring companies did however experience greater income growth (EPS) than those companies not involved in sports sponsorship. Enhanced revenue growth was found in the consumer services sector, indicating that sport sponsorship in this sector drives brand image and recall resulting in enhanced revenues. These results though indicate that a multitude of differing objectives may exist for companies engaging with sports sponsorship, with increased sales not the singular objective. In general it is concluded that sports sponsorship is considered to achieve a broad spectrum of outcomes that are likely to contribute to increased profitability.

The relatively small size of 40 firms on the JSE in the South African sports sponsorship market is a limitation for this research. The purely quantitative approach limited the ability to gain the required level of insight into those sectors with small samples, which a qualitative study would reveal. SABMiller as example could not be analysed against its sector peers, given that it is one of the most prominent and consistent sports sponsors in South Africa across all major sporting codes. The telecommunications sector was represented entirely by companies that were involved in sports sponsorship and, hence, no in-depth comparison could be conducted within this sector. Vodacom, a major sponsor of sport in South Africa, could not be compared with its peers utilising purely financial and statistical methods. Cell C is one of the most prominent sponsors of rugby in South Africa, through its title sponsorship of the Cell C Sharks, and was not included in this study as it is not listed on the JSE. It is suggested that such companies should be included in a qualitative study approach.

The results of the Mann-Whitney U test for the consumer services and financial sectors confirm no significant difference in EPS growth for companies utilising consistent sports sponsorship as part of their marketing mix to those that do not. The consumer services sector has seen above-average revenue growth from sports sponsorship compared with its sector peers; however, the sector was unable to convert this increased revenue growth into increased profits, suggesting that the cost of sponsoring, as well as the operating costs associated with sports sponsorship, counteract any growth in revenue.

The sample of sports-sponsoring companies experienced a larger annual mean EPS growth rate of 30.6 per cent compared to the remaining JSE Main Board companies which grew EPS annually at 27.4 per cent. The results of the Mann-Whitney U test confirm a significant difference in EPS growth for companies utilising consistent sports sponsorship as part of their marketing mix. From a practical interpretive perspective, this result reveals that those companies in South Africa involved in sports sponsorship consistently attain greater than market-related profit growth. This poses some interesting points for discussion, given that revenue growth was not statistically different, which suggests that many sponsors are utilising the sponsorships for purposes other than sales growths that result in a profitable outcome. The potential range of options is large but would likely comprise the creation of stronger supplier relationships, resulting in optimised business inputs. Sponsors might be utilising sponsorships to improve corporate social status, which assists them in creating regulatory compliance, in some instances. Additionally, these sponsorships may be utilised to maintain key client relationships that provide the highest levels of profitability, and whilst this might not grow revenue through new business acquisition, it may result in higher profitability as a result of a loyal and stable customer base.

Much of the available research focusses on the sponsorship of specific sporting events and the share price impact thereof at specific occasions like the announcement, renewal and termination. Where research is conducted across a multitude of sporting events and codes, this predominantly focusses on share price performance only, with varying and somewhat inconclusive results. There is little research focussing on wider, more comprehensive sets of sponsored events and sporting codes, and that seeks to provide an understanding of financial returns for sponsoring properties. In a study of more than 50 US-based corporations it was found that, as a group, corporations which consistently invested in sports sponsorships outperformed market averages, and that those with higher sponsorship spend achieved higher returns (Jensen and Hsu, 2011). The study utilised descriptive statistics. More analysis, utilising detailed statistical analysis, is required to better understand the effects of sponsorship on the wider set of variables analysed. In this case, a five-year compound annual growth rate was calculated for stock price appreciation, total revenue, net income and EPS, and analysed descriptively with only means and standard deviation. Measurement of such variables assists with an understanding of the materialized results of sponsorship as opposed to much of the work in this field, which analyses market reactions to sponsorship announcements.

The purpose of this paper is to examine the impact of Broad-Based Black Economic Empowerment (BBBEE) on the risk and returns of listed and delisted property firms on the Johannesburg Stock Exchange (JSE). The study was investigated to understand the impact of Black Economic Empowerment (BEE) property sector charter and effect of government intervention on property listed markets.

The study examines the performance trends of the listed and delisted property firms on the JSE from January 2006 to January 2012. The data were obtained from McGregor BFA database to compute the risk and return measures of the listed and delisted property firms. The study employs a capital asset pricing model (CAPM) to derive the alpha (outperformance) and beta (risk) to examine the trend amongst the BEE and non-BEE firms, Sharpe ratio was also employed as a measurement of performance. A comparative study is employed to analyse the risks and returns between listed property firms that are BEE compliant and BEE non-compliant.

Results show that there exists differences in returns and risk between BEE-compliant firms and non-BEE-compliant firms. The study shows that BEE-compliant firms have higher returns than non-BEE firms and are less risky than non-BEE firms. By establishing this relationship, this possibly affects the investor’s decision to invest in BEE firms rather than non-BBBEE firms. This study can also assist the government in strategically adjusting the policy.

This study employs a CAPM which is a single-factor model. Further study could employ a multi-factor model.

The results of this investigation, with the effects of BEE on returns, using annualized returns, the Sharpe ratio and alpha (outperformance), results show that BEE firms perform better than non-BEE firms. These results pose several implications for investors particularly when structuring their portfolios, further study would need to examine the role of BEE on stock returns in line with other factors that affect stock returns. The results in this study have several implications for government agencies, there may be the need to monitor the effect of the BEE policies on firm returns and re-calibrate policies accordingly.

This study investigates the performance of listed property firms on the JSE which are BEE compliant. This is the first study to investigate listed property firms which are BEE compliant.

This study aims to investigate the impact of the macroeconomic environment on South African industrial sector returns.

Using standardized coefficients derived from time-series factor models, the authors quantify the impact of macroeconomic influences on industrial sector returns. The authors analyze the structure of the resultant residual correlation matrices to establish the level of factor omission and apply a factor analytic augmentation to arrive at a specification that is free of omitted common factors.

The authors find that global influences are the most important drivers of returns and that industrial sectors are highly integrated with the global economy. The authors show that specifications that comprise only macroeconomic factors and proxies for omitted factors in the form of residual market factors are likely to be underspecified. This study demonstrates that a factor analytic augmentation is an effective approach to ensuring an adequately specified model.

The findings have a number of implications that are of interest to investors, econometricians and researchers. While the study focusses on a single market, the South African stock market, as represented by the Johannesburg Stock Exchange (JSE), it is a highly developed and globally integrated market. In terms of market capitalization, it exceeds the Madrid Stock Exchange, the Taiwan Stock Exchange and the BM&F Bovespa. Yet, a limited number of studies investigate the macroeconomic drivers of the South African stock market.

Investors should be aware that while the South African domestic environment, especially political risk, has an impact on returns, global influences are the greatest determinants of returns. No industrial sectors are insulated from global influences and this limits the potential for diversification. This study suggests an alternative set of macroeconomic factors that may be used in further analysis and asset pricing studies. From an econometric perspective, this study demonstrates the usefulness of a factor analytic augmentation as a solution to factor omission in models that use macroeconomic factors to proxy for systematic influences that describe asset prices.

The contribution lies in providing insight into a large and well-developed yet understudied financial market, the South African stock market. This study considers a much broader set of macroeconomic factors than prior studies. A methodological contribution is made by estimating and interpreting standardized coefficients to discriminate between the impact of domestically and internationally driven factors. This study shows that should coefficients not be standardized, inferences relating to the relative importance of factors will differ. Finally, the authors unify an approach of using pre-specified factors with a factor analytic approach to address factor omission and to ensure a valid and readily interpretable specification.

This paper aims to test the effects of financial reforms on the structural stability of the parameter estimates in the determinants of capital structure.

A panel of 100 non‐financial companies listed on the Johannesburg Stock Exchange is constructed, and a panel least squares estimation technique is used to test for lagged, current and leading structural breaks in the firm specific determinants of leverage.

The results show that structural reforms have a significant role in influencing the empirical relationship between leverage and its determinants. Specifically, the lifting of international sanctions and stock market liberalisation have a significant impact on the stability of the profitability, growth and tax rate variables for the book and market values of the debt to equity ratio. Furthermore, when the total and short term debt ratios are considered, only stock market liberalisation appears to have a significant influence on the stability of the profitability parameter.

This paper adds to the existing body of literature on capital structure by documenting the extent of structural breaks in the parameter estimates of the relationship between leverage and firm specific determinants of capital structure for listed non‐financial firms in South Africa.

Share repurchases are increasingly employed in South Africa. Disclosure on share repurchases in annual reports is poor, and a high percentage of share repurchases are not announced in real time on the Johannesburg Stock Exchange (JSE). A comprehensive database of share repurchases by JSE-listed companies has been created up to 2009, but post-recession repurchase behaviour is not known. This study aims to examine South African share repurchase behaviour (activity, repurchase entity, repurchase type and transparency) in the post-recession period and compare this to the 2000–2009 period.

Comprehensive share repurchase data for all JSE-listed companies (excluding those in the basic materials and financial industries) were obtained by scrutinising annual reports and JSE announcements.

The repurchasing of shares reached a peak during the financial recession of 2008/2009, with share repurchases stabilising at a lower level post-recession. Repurchases executed by subsidiaries have decreased post-recession, probably owing to the introduction of dividends tax. However, 45% of the share repurchase value was not announced via the JSE (compared to 22% in 2000–2009).

Real-time JSE announcements of all share repurchases are required to improve transparency.

Owing to low announcement rates, a lack of transparency relating to share repurchases was observed in South Africa post-recession. Enhanced corporate governance requirements could improve transparency.

The paper evaluates the cross-transmission of returns and volatility shocks between Nigeria and South Africa stock markets to infer the extent of interdependence between the two markets. The paper also makes inference to optimal portfolio weights of holding assets in the two markets.

The paper uses an asymmetric vector autoregressive-exogenous generalised autoregressive conditional heteroscedasticity (VAR-X GARCH) model to assess the extent of returns and volatility spillovers between Nigeria and South Africa.

The results of the empirical analysis show evidence of shock spillovers from the South African stock market to the Nigerian stock market. Moreover, based on the dynamic Sharpe ratio and portfolio weight optimisation, the results indicate the possibility of portfolio diversification when holding simultaneous positions in the two stock markets.

The results imply the possibility of economic profit for investors who take positions in the two stock markets. The lack of synchronisation of stock markets in the two largest economies in Africa is in contrast with the situations in other regions where stock markets returns of large economies often co-move.

The paper is the first to use the asymmetric VAR-X GARCH model to assess the cross-transmission of shocks between stock markets.

For years, interim financial reports in South Africa were regulated by the South African Companies Act No. 61 of 1973 (as amended) (i.e. statutory requirements) and by the Johannesburg Stock Exchange (JSE) Listing Requirements (i.e. regulatory requirements) only. However, on the international front, major progress was being made in respect of improving the quality of interim financial reporting. South Africa soon followed suit and issued its own accounting statement, AC 127, which is based on the international standard (IAS 34). The School of Accountancy at the University of Pretoria commenced a research project on interim financial reporting in 1997 to investigate compliance with related reporting requirements. This paper is a product of the project. The purpose of the study reported in this paper was to: [a] Compare the requirements stated in IAS 34 and AC 127 with the local regulatory and statutory requirements, to determine whether these requirements are duplicated and to establish in which respect the accounting standards require additional disclosure requirements. [b] Provide an overview of the extent to which companies listed on the JSE adhered to IAS 34 and AC 127 and complied with regulatory and statutory requirements in their interim financial reports in the period 1997 to 1999. [c] Make recommendations regarding the improvement of local statutory and regulatory disclosure requirements.

Opinions have been divided on whether there is a rational explanation to the reason behind seasoned equity offerings (SEOs) or whether the explanation lies within the behavioural intricacies attributed to stock market participants. The paper aims to discuss these issues.

This study investigates the long-run performance of firms conducting SEOs on the Johannesburg Stock Exchange (JSE) over the period of 1998–2015, by examining the return performance and operating performance of firms, along with the impact of investor sentiment on these variables.

The results of this study are inconsistent with the existing literature, which argues that the long-run performance of issuing firms signalled an initial underreaction to SEOs buoyed by over-optimistic investors.

Instead, the long-run performance of issuing firms is adequately explained by the rational models centred on the risk-return framework, implying that investors are reacting swiftly to SEOs in an unbiased fashion.

Investor sentiment does not materially influence the long-run share performance or operating performance of issuing firms, casting doubt on the ability of the market timing theory to explain the long-run performance of SEOs. The authors thus find that SEO performance cannot be explained by behavioural-based reasoning, in contrast to some asset pricing studies on the JSE which indicate the role of sentiment in explaining returns.

The presence of a day-of-the-week effect has been investigated by many researchers over many years, using a variety of financial data and methods. However, differences in methodology between studies could have led to conflicting results. The purpose of this paper is to expand on an existing study to observe whether an analysis of the same data set with some added years and using a different statistical technique provide the same results.

The study examines the presence of a day-of-the-week effect on the Johannesburg Stock Exchange (JSE) indices for the period March 1995-2016, using a GARCH model.

The findings show that, contrary to the original study, the day-of-the week effect is present in both volatility and return equations. The highest and lowest returns are observed on Monday and Friday, respectively, while volatility is observed on all five days from Monday to Friday.

This study adds to the existing literature on day-of-the-week effect of JSE indices, where different patterns or, in some cases, no pattern have been noted. Few previous studies on the day-of-the-week effect observed the effect at micro-level for separate industries or made use of a GARCH model. The present study thus expands on the study of Mbululu and Chipeta (2012), by adding four additional observation years and using a different statistical technique, to observe differences that arise from a different time period and statistical technique. The results indicate that a day-of-the-week effect is mostly a function of the statistical technique applied.