Investment decisions in a changing South Africa from 1990 to 1999 (transition) : analysis of the decade of the 1990s

Harris, Stanley E. (2003-03)

Thesis (MPhil)--Stellenbosch University, 2003.

Thesis

ENGLISH ABSTRACT: This study is an investment performance review covering the ten years from 1990 to 1999. To many investors the 1990s were a tough decade because of the political, economic and social changes, which caused investment uncertainty. The primary focus is to examine the implications of these changes during the 1990s on the investment strategies of South Africans. Furthermore, the aim is to provide insight into investment decision-making during the period of transition and transformation. The analyses specifically address the importance of the investment environment on portfolio construction and maintenance. The objective is to see how far the investors ventured in their efforts to 'beat" the South African share market under changing conditions. The structure of the portfolio was evaluated as well as the investor's preferences and beliefs during the period under review. It also looked at the investors' attitudes and philosophies. Effective portfolio management was important because changing conditions were becoming challenging. The investor's investment mix and the risk associated with each investment determined the effectiveness of managing the portfolio. Furthermore, this study examines the investors' objectives, constraints and strategies. In the final analysis, this study examines investment strategy and investment performance in retrospect. It presents a ten-year historical analysis of the South African environment which was affecting investment decisions. It was also found that investors were fulfilling their expectations, they were looking at medium and long-term investment opportunities. Furthermore, stock-picking was done with greater caution. The opening of global investment markets further enhanced the investment opportunities. Moreover the investors realised the importance of diversification in order to reduce risk. The investors will be presented with challenges and opportunities in the next decade (or century). Therefore this study also concludes with an assessment of possible future investment scenarios for the South African investors. Finally, investment decision was interpreted against the political, economical, social and other changes that took place during the period of transition. The key to investment success was the investor's ability to manage the changing South African environment.

AFRIKAANSE OPSOMMING: Hierdie studie is 'n oorsig van die beleggingsvaardighede gedurende die tydperk 1990 tot 1999. Vir baie beleggers was die negentigs 'n baie moeilike dekade as gevolg van die politieke, ekonomiese en sosiale veranderings. Hierdie veranderings het onsekerheid laat ontstaan by die beleggers. Die primêre fokus is om die implikasies van die veranderings op die beleggingsstrategieë van die Suid Afrikaanse belegger te ondersoek. Verder, is die doelook om insig te bekom oor die beleggingsbesluitneming gedurende die periode van verandering en transformasie. Hierdie analise salook in besonder aandag gee aan die belangrikheid van die gepaardgaande beleggingsomgewing en op die konstruksie en instandhouding van die beleggingsportefeulje. Die doel is om ook vas te stel hoe die beleggers gespekuleer het om die Suid Afrikaanse aandele mark te klop gedurende die periode van verandering. Die samestelling van die portefeulje is ge-evalueer sowel as die beleggers se voorkeure en menings. Daar is ook ondersoek ingestel na die belegger se houding en filosofie. Effektiewe beleggingsbestuur was belangrik gedurende die tydperk omdat die veranderde omstandighede uitdagend geword het. Die belegger se beleggingssamestelling en die gepaardgaande risiko het die doeltreffendheid van die bestuur van die portefeulje bepaal. Verder ondersoek hierdie studie ook die beleggers se doelwitte, beperkinge en strategieë. In die finale analise is dit hoofsaaklik 'n retrospektiewe ontleding van beleggingbestuursvaardighede gedurende die 1990s. Dit is n tienjaar historiese analise van die Suid Afrikaanse beleggingsomgewing wat 'n invloed gehad het op die beleggingsbesluitnemings. Die beleggers het hul verwagtings goed hanteer en het gesoek na medium- en langtermyn beleggingsmoontlikhede. Bowendien is die beleggings gedoen met groter omsigtigheid. Die opening van die wêreld markte het ook groter beleggingsmoontlikhede geskep. Verder het die beleggers ook besef dat diversifikasie belangrik is om risiko te verminder. Beleggers sal te staan kom voor uitdagings sovel as gunstige beleggingsmoontlikhede in die volgende dekade (of eeu). Daarom sluit hierdie studie af met toekomstige beleggingsmoontlikhede en die faktore wat sal bydra tot die toekomstige beleggingsaksie en besluitneming. Ten slotte, die beleggingsbesluit is geïnterpreteer teen die politieke, ekonomiese en sosiale veranderinge wat plaasgevind het. Die sleutel tot die beleggingssukses was die vermoë van die beleggers om die veranderde omstandighede te kan hanteer.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/53476