Precision, consistency and bias in emerging equity markets

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dc.contributor.authorNel, W. S.en_ZA
dc.contributor.authorBruwer, B. W.en_ZA
dc.contributor.authorLe Roux, N. J.en_ZA
dc.date.accessioned2016-01-20T10:07:11Z
dc.date.available2016-01-20T10:07:11Z
dc.date.issued2014-05
dc.descriptionCITATION: Nel, W.S., Bruwer, B.W. & Le Roux, N.J. 2014. Precision, consistency and bias in emerging equity markets. Journal of Economics and Behavioral Studies, 6(5):386-399.en_ZA
dc.descriptionThe original publication is available at http://ifrnd.org
dc.description.abstractThe use of multiples is a popular approach employed by analysts to perform valuations. These multiples are based on optimal value drivers, the valuation performance of which should be underpinned by empirical findings from carefully designed, unbiased research initiatives. This paper firstly investigates the risk of biasing the design of market-based studies which aim to test the valuation performance of individual value drivers. The evidence revealed that, when testing the valuation performance of value drivers, there is an inherent risk of biasing the design of a study of this kind, and therefore, its outcome. Secondly, the paper presents evidence in support of the consistency of previous research findings regarding the valuation performance of individual value drivers in the South African market over the period 2001-2010. To this end, the paper introduces a new approach for the analysis of multi-dimensional equity valuation research data in the form of principal component analysis (PCA)-based biplots. Thirdly, the paper provides evidence that multiples-based modeling seems to be biased to the downside, which is an important consideration for analysts who choose to adjust their valuations outside of these models.en_ZA
dc.description.urihttp://ifrnd.org/ResearchPapers.aspx?VolumeID=197
dc.description.versionPublisher's versionen_ZA
dc.format.extent14 pages : illustrations
dc.identifier.citationNel, W.S., Bruwer, B.W. & Le Roux, N.J. 2014. Precision, consistency and bias in emerging equity markets. Journal of Economics and Behavioral Studies, 6(5):386-399.
dc.identifier.issn2220-6140 (online)
dc.identifier.urihttp://hdl.handle.net/10019.1/98206
dc.language.isoen_ZAen_ZA
dc.publisherInternational Foundation for Research & Developmenten_ZA
dc.rights.holderInternational Foundation for Research & Developmenten_ZA
dc.subjectJohannesburg Stock Exchangeen_ZA
dc.subjectValue drivers -- South Africaen_ZA
dc.subjectCorporations -- South Africa -- Valuationen_ZA
dc.titlePrecision, consistency and bias in emerging equity marketsen_ZA
dc.typeArticleen_ZA
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