A financial planning model for retirement, taking into account the impact of pre-retirement funding income, age and taxation
- Authors: Barnes, Andrew
- Date: 2006
- Subjects: Retirement -- South Africa Retirement income -- Planning -- South Africa Pensions -- Planning -- South Africa Finance, Personal Investments Income tax -- Law and legislation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:895 , http://hdl.handle.net/10962/d1004532
- Description: Individuals are often not aware of the required level of contributions needed to fund a retirement savings plan. This problem is compounded by the fact that the assistance provided to these individuals by way of commercially-available retirement planning models does not take into account the effect of income tax on the level of required retirement savings contributions and recent changes in the tax legislation to the income tax payable by individuals has had a significant effect on these required levels. As a preamble to the research process, an exploratory questionnaire was administrated to a sample of individuals, which was designed to measure the level of awareness of these individuals of the contributions to a retirement savings plan needed to fund their postretirement financial needs, and of the impact of age, the level of income and income tax on their contributions. Responses to the questionnaire indicated a low level of awareness of retirement planning amongst these individuals. A retirement planning model was then designed to test the effect of earnings, age and changes in tax legislation on the level of an individual's required monthly contributions to a retirement savings plan. Independent variables of age and income were processed using the model. These same variables were then processed using the Old Mutual and Liberty Life retirement planning models and a comparison was made between the model developed in the research and these commercially developed models, to assess their usefulness and limitations. Based on the above comparison, it appeared that the Old Mutual and Liberty Life retirement models both included the effects of the individual marginal tax rates in their calculations. However, they appeared to be using marginal tax rates which were higher than those reflected in the 2006 individual income tax tables. In addition these models did not include the effect of income tax exemptions and deductions and they therefore provided more conservative estimates than the retirement planning model designed in the research. Recent tax adjustments have had the effect of greatly increasing the after-tax income of individuals and therefore it is important to include the effects of changes in tax legislation in determining the monthly contributions to a retirement savings plan.
- Full Text:
- Date Issued: 2006
- Authors: Barnes, Andrew
- Date: 2006
- Subjects: Retirement -- South Africa Retirement income -- Planning -- South Africa Pensions -- Planning -- South Africa Finance, Personal Investments Income tax -- Law and legislation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:895 , http://hdl.handle.net/10962/d1004532
- Description: Individuals are often not aware of the required level of contributions needed to fund a retirement savings plan. This problem is compounded by the fact that the assistance provided to these individuals by way of commercially-available retirement planning models does not take into account the effect of income tax on the level of required retirement savings contributions and recent changes in the tax legislation to the income tax payable by individuals has had a significant effect on these required levels. As a preamble to the research process, an exploratory questionnaire was administrated to a sample of individuals, which was designed to measure the level of awareness of these individuals of the contributions to a retirement savings plan needed to fund their postretirement financial needs, and of the impact of age, the level of income and income tax on their contributions. Responses to the questionnaire indicated a low level of awareness of retirement planning amongst these individuals. A retirement planning model was then designed to test the effect of earnings, age and changes in tax legislation on the level of an individual's required monthly contributions to a retirement savings plan. Independent variables of age and income were processed using the model. These same variables were then processed using the Old Mutual and Liberty Life retirement planning models and a comparison was made between the model developed in the research and these commercially developed models, to assess their usefulness and limitations. Based on the above comparison, it appeared that the Old Mutual and Liberty Life retirement models both included the effects of the individual marginal tax rates in their calculations. However, they appeared to be using marginal tax rates which were higher than those reflected in the 2006 individual income tax tables. In addition these models did not include the effect of income tax exemptions and deductions and they therefore provided more conservative estimates than the retirement planning model designed in the research. Recent tax adjustments have had the effect of greatly increasing the after-tax income of individuals and therefore it is important to include the effects of changes in tax legislation in determining the monthly contributions to a retirement savings plan.
- Full Text:
- Date Issued: 2006
An empirical analysis of the long-run comovement, dynamic returns linkages and volatility transmission between the world major and the South African stock markets
- Authors: Chinzara, Zivanemoyo
- Date: 2008
- Subjects: Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:970 , http://hdl.handle.net/10962/d1002704 , Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
- Description: The international linkages of stock markets have important implications for cost of capital and portfolio diversification. Recent trends in globalization, financial liberalization and financial innovation raises questions with regard to whether African stock markets are being integrated into world equity markets. This study examines the extent to which the South African (SA) equity market is integrated into the world equity markets using daily data for the period 1995-2007. The study is divided into three main parts, each looking at the different ways in which integration can be considered. The first investigates whether there is long run comovement between the SA and the major global equity markets. Both bivariate and multivariate Johansen (1988) and Johansen and Juselius (1990) cointegration approaches were utilised. Vector Error Correction Models (VECMs) are then estimated for portfolios which show evidence of cointegration. The second part analyses returns linkages using the Vector Autoregressive (VAR), block exogeneity, impulse response and variance decomposition. The third part examines the behaviour of volatility and volatility linkages among the stock markets. Firstly volatility is analysed using the GARCH, EGARCH and GJR GARCH. Simultaneously, the hypothesis that investors receive a premium for investing in more risky stock markets is explored using the GARCH-in mean. The long term trend of volatility is also examined. Volatility linkages are then analysed using the VAR, block exogeneity, impulse response and variance decomposition. The first part established that no bivariate cointegration exists between the SA and any of the stock markets being studied, implying that pairwise portfolio diversification is potentially worthwhile for SA portfolio managers. However, multivariate cointegration exists for some portfolios, with the US, UK, Germany and SA showing evidence of error correction for some of these portfolios. Findings on return linkages is that there are significant returns linkages among the markets, with the US and SA being the most exogenous and most endogenous respectively. Findings regarding volatility are that the volatility in all the markets is inherently asymmetric and that except for the US there is no risk premium in any of the markets. The long term trend of volatility in all the stock markets was found to be relatively stable. The final finding was that significant volatility linkages exist among the markets, with the US being the most exogenous and SA and China showing evidence of bidirectional linkages. Overall, except for volatility linkages, the integration of SA into the global equity markets is still quite low. Thus, both SA and international investors can capitalise on this portfolio diversification potential. On the other hand, policy makers should capitalise on this and make policies that will attract the much needed foreign investors.
- Full Text:
- Date Issued: 2008
- Authors: Chinzara, Zivanemoyo
- Date: 2008
- Subjects: Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:970 , http://hdl.handle.net/10962/d1002704 , Stock exchanges -- South Africa , Globalization -- Economic aspects -- South Africa , International economic relations , Portfolio management -- South Africa , Monetary policy -- South Africa
- Description: The international linkages of stock markets have important implications for cost of capital and portfolio diversification. Recent trends in globalization, financial liberalization and financial innovation raises questions with regard to whether African stock markets are being integrated into world equity markets. This study examines the extent to which the South African (SA) equity market is integrated into the world equity markets using daily data for the period 1995-2007. The study is divided into three main parts, each looking at the different ways in which integration can be considered. The first investigates whether there is long run comovement between the SA and the major global equity markets. Both bivariate and multivariate Johansen (1988) and Johansen and Juselius (1990) cointegration approaches were utilised. Vector Error Correction Models (VECMs) are then estimated for portfolios which show evidence of cointegration. The second part analyses returns linkages using the Vector Autoregressive (VAR), block exogeneity, impulse response and variance decomposition. The third part examines the behaviour of volatility and volatility linkages among the stock markets. Firstly volatility is analysed using the GARCH, EGARCH and GJR GARCH. Simultaneously, the hypothesis that investors receive a premium for investing in more risky stock markets is explored using the GARCH-in mean. The long term trend of volatility is also examined. Volatility linkages are then analysed using the VAR, block exogeneity, impulse response and variance decomposition. The first part established that no bivariate cointegration exists between the SA and any of the stock markets being studied, implying that pairwise portfolio diversification is potentially worthwhile for SA portfolio managers. However, multivariate cointegration exists for some portfolios, with the US, UK, Germany and SA showing evidence of error correction for some of these portfolios. Findings on return linkages is that there are significant returns linkages among the markets, with the US and SA being the most exogenous and most endogenous respectively. Findings regarding volatility are that the volatility in all the markets is inherently asymmetric and that except for the US there is no risk premium in any of the markets. The long term trend of volatility in all the stock markets was found to be relatively stable. The final finding was that significant volatility linkages exist among the markets, with the US being the most exogenous and SA and China showing evidence of bidirectional linkages. Overall, except for volatility linkages, the integration of SA into the global equity markets is still quite low. Thus, both SA and international investors can capitalise on this portfolio diversification potential. On the other hand, policy makers should capitalise on this and make policies that will attract the much needed foreign investors.
- Full Text:
- Date Issued: 2008
An analysis of the money market linkages between South Africa and selected major world economies
- Authors: Barnor, Joel A
- Date: 2009
- Subjects: South African Reserve Bank , Banks and banking, Central -- South Africa , Money market -- South Africa , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , International economic relations , Interest rates -- South Africa , Financial institutions -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:956 , http://hdl.handle.net/10962/d1002690 , South African Reserve Bank , Banks and banking, Central -- South Africa , Money market -- South Africa , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , International economic relations , Interest rates -- South Africa , Financial institutions -- South Africa
- Description: Globalisation and financial liberalisation has increased the linkages across countries in recent times. The existence of money market links has important implications for both domestic monetary policy and for investment decisions. This study examines the linkages between South Africa’s money market and selected major international money markets. The objectives of the study are firstly to examine the links between the repo rate of South Africa and the central bank rates of the EU, Japan, UK and US. Secondly, is to compare the influence of domestic and foreign monetary policy decisions on South Africa’s money market. The third objective is to examine the long run relationship between the South African money market and the money markets of its major trading partners. Three estimation techniques are used to examine the different links. Principal components analysis, four tests of cointegration, and stationarity tests of the spreads/risk premium between South Africa’s interest rates and the interest rates of the other countries. All three techniques show that there is no long-run link between South Africa’s central bank rates and the central bank rates of the other countries. This shows that the repo rate does not depend on movements in other central bank rates. Domestic money market interest rates respond strongly to changes in the repo rate whilst showing no dependence on central bank rates of the other countries. This confirms the autonomy of the South African Reserve Bank in carrying out policy objectives. When the risk premium is accounted for under the third technique, evidence of integration is found. This indicates that the risk premium plays a crucial part in the level of integration between South Africa and the countries included in the study.
- Full Text:
- Date Issued: 2009
- Authors: Barnor, Joel A
- Date: 2009
- Subjects: South African Reserve Bank , Banks and banking, Central -- South Africa , Money market -- South Africa , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , International economic relations , Interest rates -- South Africa , Financial institutions -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:956 , http://hdl.handle.net/10962/d1002690 , South African Reserve Bank , Banks and banking, Central -- South Africa , Money market -- South Africa , Monetary policy -- South Africa , Foreign exchange rates -- South Africa , International economic relations , Interest rates -- South Africa , Financial institutions -- South Africa
- Description: Globalisation and financial liberalisation has increased the linkages across countries in recent times. The existence of money market links has important implications for both domestic monetary policy and for investment decisions. This study examines the linkages between South Africa’s money market and selected major international money markets. The objectives of the study are firstly to examine the links between the repo rate of South Africa and the central bank rates of the EU, Japan, UK and US. Secondly, is to compare the influence of domestic and foreign monetary policy decisions on South Africa’s money market. The third objective is to examine the long run relationship between the South African money market and the money markets of its major trading partners. Three estimation techniques are used to examine the different links. Principal components analysis, four tests of cointegration, and stationarity tests of the spreads/risk premium between South Africa’s interest rates and the interest rates of the other countries. All three techniques show that there is no long-run link between South Africa’s central bank rates and the central bank rates of the other countries. This shows that the repo rate does not depend on movements in other central bank rates. Domestic money market interest rates respond strongly to changes in the repo rate whilst showing no dependence on central bank rates of the other countries. This confirms the autonomy of the South African Reserve Bank in carrying out policy objectives. When the risk premium is accounted for under the third technique, evidence of integration is found. This indicates that the risk premium plays a crucial part in the level of integration between South Africa and the countries included in the study.
- Full Text:
- Date Issued: 2009
The impact of oil prices on the trade balance of South Africa
- Authors: Mili, Akhona
- Date: 2017
- Subjects: Petroleum products -- Prices Balance of trade -- South Africa Petroleum industry and trade -- Economic aspects
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8630 , vital:33228
- Description: The Autoregressive Distributed Lag model was used to estimate and analyse the relationship between crude oil prices and the trade balance of South Africa. This study estimated the trade balance model and analysed the relationship between crude oil prices and the trade balance of South Africa from the period 1990 to 2015. The bounds cointegration test confirmed the existence of a long-run relationship between the trade balance and real oil prices, real effective exchange rate, domestic income, real interest rate and the inflation rate. The results confirm that changes in oil prices have a negative impact on the trade balance whereas, currency devaluation, real interest, inflation rate and domestic income had a positive effect on the trade balance. The negative sign and significance of the Error Correction Term and diagnostic tests confirmed the reliability of the results.
- Full Text:
- Date Issued: 2017
- Authors: Mili, Akhona
- Date: 2017
- Subjects: Petroleum products -- Prices Balance of trade -- South Africa Petroleum industry and trade -- Economic aspects
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10353/8630 , vital:33228
- Description: The Autoregressive Distributed Lag model was used to estimate and analyse the relationship between crude oil prices and the trade balance of South Africa. This study estimated the trade balance model and analysed the relationship between crude oil prices and the trade balance of South Africa from the period 1990 to 2015. The bounds cointegration test confirmed the existence of a long-run relationship between the trade balance and real oil prices, real effective exchange rate, domestic income, real interest rate and the inflation rate. The results confirm that changes in oil prices have a negative impact on the trade balance whereas, currency devaluation, real interest, inflation rate and domestic income had a positive effect on the trade balance. The negative sign and significance of the Error Correction Term and diagnostic tests confirmed the reliability of the results.
- Full Text:
- Date Issued: 2017
- «
- ‹
- 1
- ›
- »