Emerging stock markets provide great opportunities for investment growth and risk diversification. However, they are more vulnerable to extreme market events. This study examines the effects of the COVID-19 pandemic on stock performance in sub-Saharan African stock markets. An event study method was used to determine whether there was any significant difference in sector returns before and during the pandemic, and panel data regression was used to determine the causal relationship between COVID-19 events and the abnormal returns observed. Four stock exchanges were chosen, including the two largest and two fastest-growing markets in sub-Saharan Africa. According to the study’s findings, the information technology, consumer staples, and healthcare sectors outperformed during the pandemic, while the industrials, materials, and real estate sectors underperformed. The financial and consumer discretionary proved to be the most stable sectors during the pandemic. We also observed that the imposition of lockdown had a negative impact on the performance of most sectors in sub-Saharan African markets, whereas government assistance in the form of economic stimulus packages had no significant positive impact on stock performance except in the South African market. Furthermore, we find that increases in COVID-19 cases and deaths had no negative impact on capital markets, where stocks have responded positively to economic recovery aid. The study concludes that during the COVID-19 pandemic, stocks reacted more to government actions than the occurrence of the pandemic itself.
The purpose of this study was to analyze the impact of financial performance on the tone used in the chief executive officer (CEO) statements of South Africa’s (SA) top 40 JSE-listed companies in the 2021 financial year. This study implements the quantile regression analysis and the generalized linear regression model. To perform this assessment, the integrated annual reports (IARs) containing the CEO and annual financial statements for the top 40 JSE-listed companies were extracted from their official websites. The tone level in CEO statements was determined using Azure Machine Learning (AML). This study’s findings reveal that financial performance has a positive impact on the tone of CEO statements of the top 40 JSE-listed companies, i.e., as financial performance improves, the positive tone in CEO statements also increases. Additionally, results revealed that moderately and extremely profitable companies use a more positive tone. It is recommended that users of financial statements should carefully scrutinize the tone used in CEO statements, to identify whether or not it is aimed at concealing poor performance or motivated by good performance. The study contributes to the limited tone-management literature in developing countries and in SA in particular. The computerized techniques offered by both the Statistical Package for Social Sciences (SPSS) and AML secures the validity and reliability of the content analysis, therefore, the study’s shortcomings do not compromise the generalizability of the results. The study’s sample truly represents all of the JSE’s listed companies.
In this study, we design stepwise ordinary least squares regression models using various amalgamations of firm features, loan characteristics and macroeconomic variables to forecast workout recovery rates for defaulted bank loans for private non-financial corporates under downturn conditions in Zimbabwe. Our principal aim is to identify and interpret the determinants of recovery rates for private firm defaulted bank loans. For suitability and efficacy purposes, we adopt a unique real-life data set of defaulted bank loans for private non-financial firms pooled from a major anonymous Zimbabwean commercial bank. Our empirical results show that the firm size, the collateral value, the exposure at default, the earnings before interest and tax/total assets ratio, the length of the workout process, the total debt/total assets ratio, the ratio of (current assets–current liabilities)/total assets, the inflation rate, the interest rate and the real gross domestic product growth rate are the significant determinants of RRs for Zimbabwean private non-financial firm bank loans. We reveal that accounting information is useful in examining recovery rates for defaulted bank loans for private corporations under distressed financial and economic conditions. Moreover, we discover that the prediction results of recovery rate models are augmented by fusing firm features and loan characteristics with macroeconomic factors.
Board members and the chairman of the board must provide shareholders and other stakeholders with annual reports that include the chairman’s statement. The statement provides an important message to stakeholders concerning financial performance, non-financial information and future outlook of the company. Stakeholders are concerned about the transparency and usefulness of the disclosed as this would have an impact on whether the chairman’s message is readable or not. The purpose of this study is to evaluate whether messages from the chairman of the board are readable or not. A sample of 40 Johannesburg Stock Exchange listed companies, for the financial period ending 2021, was selected to meet the study objectives. The Gunning Fog Index (Fog index) was applied to assess the readability of the chairman’s statement. The study found that it was difficult to read the chairman’s statements for the selected corporations and South African companies.
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