DSpace Angular :: Browsing by Author "Mazviona, Batsirai Winmore"

Browsing by Author "Mazviona, Batsirai Winmore"

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An Analysis of Factors Affecting the Performance of Insurance Companies in Zimbabwe
(2017-06-21) Mazviona, Batsirai Winmore; Dube, Mbakisi; Sakahuhwa, Tendai
The study sought to examine factors affecting the performance of insurance companies in Zimbabwe. We utilized secondary data from twenty short-term insurance companies. The data was for the period from 2010 to 2014. We used factor analysis and multiple linear regression models to determine the factors affecting performance and identifying their impact. Our findings revealed that expense ratio, claims ratio and the size of a company significantly affect insurance companies’ performance negatively. Whilst leverage and liquidity affect performance positively. We recommend that insurance companies should introduce mechanisms that reduces operational costs such as automated systems.
An Analysis of the Impact of Demutualization on Stock Market Liquidity
(OMICS Publishing Group, 2014) Nyangara, Davis; Mazviona, Batsirai Winmore
This paper analyzes the impact of demutualization on stock market liquidity using annual data available from 24 demutualized and 26 mutual stock exchanges for the period 1990 to 2011. We use a panel data regression model to examine the nature and significance of the relationship between stock exchange demutualization and two measures of stock market liquidity (turnover rate and the value of volume traded relative to Gross Domestic Product (GDP). The findings indicate that demutualized exchanges exhibit significantly greater liquidity compared to mutual exchanges after controlling for age, size, trading technology, and level of economic development. We also observe that, world-wide, the trend has been that automation of trading precedes demutualization, and that the time between automation and demutualization has a positive but statistically insignificant effect on liquidity. The study is a remarkable departure from the traditional focus on the exchange governance effects of demutualization. Furthermore, it contributes to the literature on financial market development by documenting some of the key drivers of stock market liquidity, which in itself is a widely acknowledged driver of economic growth.
Day of the week effect on the Zimbabwe Stock Exchange: A non-linear GARCH analysis
(Academy of Business and Retail Management, 2015-11) Mazviona, Batsirai Winmore; Ndlovu, Milton Webb
This study analysed the day of the week effect on the Zimbabwe Stock Exchange (ZSE) by taking into account volatility of returns. The purpose of the study was to establish whether daily mean returns across a trading week differ from each other. We employ a non-linear approach in modelling the day of the week effects. In particular, we used the Generalised Autoregressive Conditional Heteroscedasticity (GARCH) and the Exponential GARCH (EGARCH) models. We used industrial and mining daily closing indices data from 19 February 2009 to 31 December 2013. The data was retrieved from the ZSE website. EViews 7 software was utilised for data analysis. In order to test the null hypothesis of equality of daily mean returns, a Wald test was carried out. The Wald F-statistic rejected the null hypothesis of equality of mean returns for the industrial index. We found the traditional negative Monday and positive Friday effect for the industrial index in GARCH (1,1) and EGARCH (1,1) models. The GARCH (1,1) detected a negative Friday effect and the EGARCH (1,1) detected negative Wednesday effect for the mining index. We found evidence of model dependency for the mining index results.
Does Firm Size Affect Stock Returns? Evidence from the Zimbabwe Stock Exchange
(Academy of Business and Retail Management, 2014-11) Mazviona, Batsirai Winmore; Nyangara, Davis
The objective of the study is to investigate the relationship between firm size and stock returns for firms listed on the Zimbabwe Stock Exchange (ZSE) between June 2009 and July 2013. We adopt the regression model employed by Banz in 1981, with innovations. The regression is based on constructed portfolios, with market capitalization as the basis for portfolio construction. The portfolios comprise at most 5 stocks, and stocks are sorted in ascending order by market capitalization for selection into portfolios. The sample period spans from June 2009 to July 2013. We select the sample period beginning from 2009 because that is when the government of Zimbabwe demonetized the Zimbabwean dollar and adopted a basket of foreign currencies as legal tender. The data prior to 2009 is also distorted by hyperinflation and therefore is not reliable. The sample size covers 64 companies listed on the ZSE, of which 60 are industrial and 4 are mining companies. We find that the estimated coefficient for the firm size factor is not significant at the 5% level of significance. Therefore, firm size has a positive yet insignificant effect on stock returns for companies listed on the ZSE for the period June 2009 to July 2013. Contrary to the general empirical findings, larger firms on the ZSE tend to exhibit higher risk-adjusted returns than smaller firms.
Enhanced Index Tracking-an Extension of the Elton and Gruber (1976) Model
(SCIENCEDOMAIN international, 2014-05) Nyangara, Davis; Mazviona, Batsirai Winmore; Chowa, Taonaziso
Aims: The purpose of the study is to make a case for the development of middle-range models for use in developing markets by modifying the Elton and Gruber (1976) model to come up with semi-optimized index-tracking models with desirable tracking and excess return features. Study Design: Non-experimental empirical design. Place and Duration of Study: Zimbabwe, Department of Finance and Department of Insurance and Actuarial Science, covering the period between February 2009 and June 2010. Methodology: We use weekly data of 71 industrial closing prices from the Zimbabwe Stock Exchange (ZSE) for the period starting February 2009 to June 2010 to compare the return and tracking performance of the adapted models against simple capitalization- based tracking models. Results: We find that the semi-optimized models yield tracking and excess return results that are not statistically significantly different from simple capitalization-based models, at the 1% significance level, yet only utilizing about half as many stocks. Conclusion: The use of semi-optimized index-tracking models has potential to significantly reduce transaction costs while keeping tracking error within reasonable limits. However, their use results in inferior excess return performance on a risk-adjusted basis when compared to simple capitalization-based models. The use of the correlation coefficient in filtering stocks to include in a tracking portfolio yields superior tracking error results but inferior excess return results compared to the use of the ratio of beta to idiosyncratic risk. Portfolios with higher Active Share measures produce poorer tracking error and excess return results compared to lower Active Share portfolios. The use of passive portfolio management strategies on the ZSE is supported by our findings.
An Essay on the Ethical and Corporate Governance Issues in the 2003/4 Zimbabwean Banking Crisis
(OMICS Publishing Group, 2014) Nyangara, Davis; Nyangara, Melody R.; Mazviona, Batsirai Winmore
This paper reviews the ethical and corporate governance issues that characterized the 2003/4 Zimbabwean banking crisis. There are contrasting views on the legal and moral roots of the crisis, and consequently, different analysts have come up with different assessments of the morality and professional propriety of measures adopted by the Reserve Bank of Zimbabwe (RBZ), as bank regulator, in response to the developments in the banking industry. While there is an almost universal acknowledgement among analysts that corporate governance and ethical shortcomings contributed to the crisis, there appears to be no universal theory justifying the response of the regulator. A critical review of the events surrounding the crisis, with some benefit of hindsight, points to a form of collective responsibility among bankers, regulators, and politicians. This analysis draws on deontological and teleological ethical theories to assess the resolution of the myriad of ethical dilemmas that characterized the period before and during the crisis. The analysis also relies on legal and prudential guidelines on good governance in banking institutions, in particular the Banking Act (Chapter 24:20).
An Examination of the Impact of Total Quality Management on Customer Satisfaction in the Zimbabwean Insurance Industry
(IAMURE Multidisciplinary Research, 2017-04) Mazviona, Batsirai Winmore
The subject of total quality management (TQM) is increasingly becoming topical worldwide, chiefly because of current intensified competition in the financial markets. Consumer satisfaction is an important determining factor in a company’s success. Quality frameworks and programs should be dynamic to meet the ever changing customer expectations and preferences. The Zimbabwe insurance industry has been labeled as poor and delivering poor services to the insured. Furthermore, insurance policyholders have raised concerns and complaints about the sub-standard services that they are getting from their insurers. Thus the research was aimed at investigating TQM’s impact on customer satisfaction in the insurance industry. Data and information necessary in the achieving of the research objectives involved the use of mainly primary data through the use of questionnaires. The data was gathered in Bulawayo from insurance consumers and insurance companies’ employees. The descriptive research approach was utilized in this study. Chi-square tests were used to examine hypotheses. The fundamental findings from this study are that insuranceconsumers in Zimbabwe are not satisfied with the services they are getting from their insurers. It is concluded that insurers should implement TQM as a holistic approach towards meeting and exceeding customers’ expectations to enhance customer satisfaction.
Managing Pension Funds in Zimbabwe: Ethical Issues and Challenges
(David Publishing, 2013-07) Mazviona, Batsirai Winmore
This article is motivated by the predicament that hit pensioners in Zimbabwe following the introduction of the multi-currency system. Zimbabwe experienced economic woes which rendered the Zimbabwean dollar worthless and consequently necessitating a switch to stable currencies. The pension assets and liabilities were invested in the local currency before the currency reform, and the result of the multi-currency system was a mismatch of the assets and liabilities of the pension funds financial position which led to paltry pension benefits. The nature of pension funds places a great responsibility on the stakeholders who are involved in running these schemes and therefore ensuring that reasonable expectation by beneficiaries is met. The article focuses on the core aspects surrounding the structure and managing of pension funds in Zimbabwe. The researcher investigated the roles of important stakeholders in the Zimbabwean pension industry, namely, government, trustees, investment managers, and actuaries. The article further delves into the ethical issues and challenges faced by those managing Zimbabwean pension funds. The researcher conducted a total of 30 personal interviews to collect primary data from professionals in the Zimbabwean pension industry which were split as follows: 10 trustees, 10 investment managers, and 10 actuarial consultants. Secondary data were also used in this study and it comprised of journals, newspaper articles, investment reports, and textbooks. The researcher recommends that pension funds develop sound corporate governance mechanisms that will encourage the best ethical practices among all of their stakeholders. The findings provide evidence for a need to empower pension fund trustees through training and introduction of a pension protection scheme. In addition, the current regulatory system needs to be reviewed to capture the changing economic environment upon which pensions funds operate.
Measuring Investor Sentiment On The Zimbabwe Stock Exchange
(AESS Publishers, 2015) Mazviona, Batsirai Winmore
Investor sentiment is belief about future cash flows and investment risks not justified by current relevant information. Additionally, investment decisions made without support from information. In classical finance theory, investor sentiment does not play any role in the cross-section of stock prices, realized returns, or expected returns. But inexplicable events such as the crash of October, 1987, The Great Crash of 1929, the Tonics Boom and Go-Go Years of the 1960s, the Nifty Fifty bubble of the 1970s have cast doubt on the standard finance model in which stock prices equal the rational expectations of unemotional investors. Behavioural finance attempts to explain these disparities using investor sentiment. The aims of the study are to document market measures of investor sentiment and to demonstrate whether investor sentiment exerts an influence on the Zimbabwe Stock Exchange. Daily return and trading volume data of 66 stocks, excluding delisted and suspended stocks, for the period from 19 February 2009 to 31 December 2012 were considered. A high-low volume sentiment indicator variable is introduced to distinguish when the market has higher or lower sentiment. An ordinary linear regression was used to show the evidence of the effect of investor sentiment indicator on stock returns. The researcher found that approximately 40% of the market moved contrary to the market sentiment indicator. The remaining 60% co-moved with the sentiment indicator, with the level of effect differing in magnitude, indicating that the sentiment indicator had a positive effect on the indicator. However, these results though are not statistically robust using the binomial test as only five out of the sixty-six stocks (approximately 7%) were significant at a 5% interval. This is less than the number of significant results expected under the null hypothesis. Hence, the null hypothesis cannot conclusively be accepted or rejected, and the effect of the sentiment indicator on returns could not be completely ruled out or established.
Modelling Day of the Week Effect on the Zimbabwe Stock Exchange
(Scienpress Ltd, 2016-05-01) Mazviona, Batsirai Winmore; Ndlovu, Milton Webb
The study examined the day of the week effect on the Zimbabwe Stock Exchange (ZSE). The objective of the study was to relate the overall stock market returns to the individual returns of trading days (Monday, Tuesday, Wednesday, Thursday and Friday). The aim was to establish whether returns of trading days were statistically different from each other. The ordinary least square regression model was used to model the returns. The study focussed on ZSE stocks with data from 19 February 2009 when the ZSE started to trade in United States dollars to 31 December 2013. A total of 62 stocks were used in this study. These stocks constitute the Industrial and Mining indices. Industrial and mining indices data were also utilised in the modelling exercise. Data was obtained from the ZSE website and other secondary data were sourced from journal articles, papers and reports. Data analysis was done in EViews 7. We found little presence of day of the week effect, about 26% of the stocks had significant positive and negative returns. We conclude that the mean returns of the stocks on the ZSE under the study period do not vary across trading days at the 5% level of significance.
Risk and Concentration of Portfolios on the Zimbabwe Stock Exchange after Currency Reform
(Science Domain International, 2014) Mazviona, Batsirai Winmore; Nyangara, Davis
Aims: The objectives of this study are to assess the level and impact of concentration of portfolios on the ZSE and to determine the number of stocks to be held in a concentrated portfolio to achieve effective risk reduction. Study Design: Portfolio Model. Place and Duration of Study: Zimbabwe, Department of Insurance and Actuarial Science and Department of Finance, between February 2013 and March 2013. Methodology: We analysed the level of concentration of portfolios held on the Zimbabwe Stock Exchange (ZSE). The market capitalization weights and the daily closing prices of 62 stocks in the industrial index for the four-year period form 19 February 2009 to 31 December 2012. Results: The Herfindahl-Hirschman Index and the Roll measure of concentration were employed to analyse the level of concentration of portfolios mimicking the industrial index and it was observed that portfolios held on the ZSE are highly un concentrated with an approximate measure of 14% under the HHI measure as at 31 December 2012. The daily returns over the period were calculated and used to estimate the risk of the portfolio. The findings indicates that stocks in the industrial index of the ZSE have relatively low correlation due to the small difference in risk between equally weighted portfolios with no correlation and equally weighted portfolios with historical correlation. Conclusion: The empirical evidence highlights that an optimal portfolio size averaging 20 to 25 stocks of the Industrial Index stocks will have to be included in order to achieve effective risk reduction.
Risk Management Practices for Short-Term Insurance in Zimbabwe
(2014-07) Mazviona, Batsirai Winmore
The study examined the current risk management practices of insurance companies and revealed that the risk management practices are not adequate. The objective of the study was to document the risk management practices in the short-term insurance industry. The key features investigated are risk management culture, risk control and extreme event management. A questionnaire was used as a research instrument for data collection. Closed questions were structured on a five point Likert-scale. A total of eighty six questionnaires were sent to short-term insurance companies. Purposive sampling was used to come up with research participants. The research participants comprised of claims processors, credit controllers, interns, managers and underwriters in the short-term insurance industry. The study period was from February 2013 to May 2013. The analysis was carried out in SPSS 16.0. Additionally, secondary sources which include journal articles were used to supplement the primary data. There is poor risk management culture in short-term insurance companies. The results show that the risk management practitioners in the Zimbabwean short-term insurance industry are not appropriately qualified and management does not view risk management as a tool that can provide their firms a competitive edge. Insurance companies have measures in place to manage high frequency low severity events, however have no measures in place to envision and manage low frequency high severity events. The implications of these findings are that, for a new approach like Enterprise Risk Management (ERM) to succeed there has to be a paradigm shift in the Zimbabwean short term insurers’ approach to risk management the first being to strengthen their risk management culture. The efforts to adopt ERM must start in the board room and the short term insurance companies should integrate risk management into their organisation’s objectives, philosophy, practices, and strategic plans.
A Test of the Weak Form Efficiency of the Zimbabwe Stock Exchange After Currency Reform
(2013-06) Mazviona, Batsirai Winmore; Nyangara, Davis
The Zimbabwean dollar lost its value and purpose as a medium of exchange as a result of the hyper inflation which had its greatest impact on the Zimbabwean economy between 2007 and 2008. The introduction of the multi-currency system, which entails the use of various foreign currencies to transact, resulted in the Zimbabwe Stock Exchange (ZSE) adopting the United States dollar (USD) as its main currency. The researchers investigated the weak form efficiency of the ZSE after introduction of the multi-currency system by testing if it is possible to create an excess return by the use of technical trading rules. According to the efficient market hypothesis (EMH) and the random walk theory, in an efficient market it is not possible to predict the future stock prices by analysing historical stock prices. The profitability of technical analysis and technical trading rules has been researched and debated extensively, but researchers are yet to reach a consensus. This article focuses exclusively on the ZSE. The purpose of this article is to test whether the ZSE exhibits weak form market efficiency. The data used to carry out the empirical study was obtained from the ZSE for the period 19 February 2009 to 28 June 2012. The efficiency of the ZSE is tested using the daily closing prices and indices over the aforementioned period. The data was then subjected to a number of tests namely auto-correlation, the runs test and the Q-statistic test. The results of the study provide evidence that the ZSE is not weak form efficient. This article adds to the existing body of knowledge and offers for the first time an investigation of the weak form efficiency on the ZSE following currency reform.

Browsing by Author "Mazviona, Batsirai Winmore"

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