Derivatives usage and firm value : evidence from South African listed firms

Vengesai, Edson; Chikwara, Collin

doi:10.31920/1750-4562/2020/v15n2a10

Cited by 4 publications

(2 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The study was based on logistic regression analysis based on a sample of 40 companies listed on the Indonesian Stock Exchange from 2015 to 2018. Collin and Edson (2020) stressed that there is a hedging premium for South African non-financial firms that use derivatives and amongst derivative users, such that firms with great extent of derivative use generate higher firm value. The study applied a dynamic panel data model estimated with the Generalised method of Moments (GMM) on a panel of 150 non-financial firms listed on the Johannesburg Stock Exchange (JSE).…”

Section: Research Questionsmentioning

confidence: 99%

An Empirical Examination of the Correlation between Derivatives Usage and Key Financial Indicators in Botswana

2023

RJFA

View full text Add to dashboard Cite

The study evaluated derivative usage of 21 firms listed on the Botswana Stock Exchange (BSE) in relation to five key financial indicators that included financial gearing, solvency, liquidity, profitability, and firm size. A logit regression model was run on the data covering year 2019 to the year 2021. The logit model revealed at 99% level of confidence that, a firm's derivative usage is significantly and positively related to its financial gearing as measured by non-current liabilities to total equity (D/E) ratio. The study also revealed that usage of derivatives by firms listed on the Botswana Stock Exchange (BSE) had no significant relationship with solvency ratio (as measured by total liabilities to total assets ratio), firm size (as measured by total assets) and liquidity ratio (as measured by cash and cash equivalents to total assets). However, the research observed a significant and negative association between derivative usage and profitability ratio (as measured by Profit Before Interest and Taxation (PBIT) to Average total assets ratio). It was further noted that listed firms in Botswana are only using employee options, collateral based swaps, interest rate swaps, and foreign exchange swaps to hedge risks. Hence the study recommends policy makers to institutionalize derivative markets that offer a variety of products that include futures derivative contracts which are currently not in use in the market. The establishment of derivative market in Botswana will reduce an over-reliance on financial borrowing from the banking sector and government agencies by local investors, domestic firms, and multinational firms in Botswana. The use of derivatives also reduces the weighted average cost of capital and hence increases firm's market value.

show abstract

Section: Research Questionsmentioning

confidence: 99%

An Empirical Examination of the Correlation between Derivatives Usage and Key Financial Indicators in Botswana

2023

RJFA

View full text Add to dashboard Cite

show abstract

“…Penelitian sebelumnya menyoroti dua pandangan yang bertentangan. Pertama, anggapan bahwa dengan mengurangi kecenderungan perubahan keuntungan dan adanya keadaan ketika marginal tax rate melebihi average tax rate maka hedging bisa meningkatkan kinerja perusahaan, menurunkan biaya financial distress dan meningkatkan pendanaan perusahaan, mengurangi biaya underinvestment dari biaya agensi dari hutang yang mahal untuk pembiayaan eksternal dan mengurangi asimetri informasi (Vengesai et al, 2020). Kedua, anggapan bahwa penggunaan derivatif merugikan nilai perusahaan.…”

Section: Pendahuluanunclassified

Determinan Firm Value Creation Di Indonesia

Mispiyanti,

Junaidi

2022

Owner

View full text Add to dashboard Cite

Firm value creation menjadi penting bagi entitas bisnis yang sukses. Penciptaan nilai bagi pelanggan akan membantu dalam operasional dan pelayanan. Di sisi lain, penciptaan nilai bagi pemegang saham berupa peningkatan dividen dan harga saham dapat menambah dana operasional entitas tersebut kedepannya. Penelitian ini bertujuan untuk menganalisis bukti empiris faktor pendorong peningkatan firm value creation pada perusahaan di Indonesia yang terdaftar di Bursa Efek Indonesia tahun 2015 – 2020. Sampel dalam penelitian ini sebanyak 337 perusahaan yang dipilih berdasarkan metode purposive sampling dan dianalisis menggunakan regresi data panel. Hasil penelitian ini menunjukkan bahwa hedging tidak berpengaruh terhadap firm value creation dikarenakan banyak dana yang perlu dipersiapkan perusahaan Indonesia yang terdaftar di Bursa Efek Indonesia untuk melakukan hedging dalam jumlah besar. Sedangkan debt financing berpengaruh positif terhadap firm value creation yang menunjukkan kemampuan perusahaan dalam menyeimbangkan perolehan dan penggunaan dana tersebut pada proyek investasi produktif. Namun firm size berpengaruh negatif terhadap firm value creation dikarenakan perusahaan yang memiliki total aset besar cenderung lebih kecil dividennya. Hasil penelitian mengimplikasikan tingginya biaya hedging di Indonesia sehingga banyak perusahaan yang tidak menggunakan hedging dalam memitigasi risiko. Selain itu, perusahaan mampu mengelola debt financing dalam pengalokasian ke investasi mampu meningkatkan firm value creation. Namun, firm size yang besar belum tentu meningkatkan firm value creation tetapi menurunkan firm value creation.

show abstract