Abstract
M.Com. (Development Economics)
Industrial action has been on the rise in recent years and has culminated in the demand for higher wages, better working conditions, access to education and job security, to name a few. Historically, miners have resorted to strike action to leverage their bargaining power so that their demands are met. This has created a perceived nervousness amongst current and potential shareholders.
23 January 2014 saw the beginning of one of the most costly strikes affecting the platinum sector and the greater South African economy, on a global scale. The five-month long strike tested shareholder confidence and was seen by the fluctuation in the platinum share prices.
This study is one of a comparative nature, which examines the impact of industrial action on shareholder confidence within the platinum sector from 2009 to 2016. The said comparison focuses on the share price movements of Lonmin Platinum, Anglo American Platinum and Impala platinum during periods of strikes (protected and unprotected). In order to draw a conclusion from this comparison, an OLS multiple regression was used to model the effect of such strike activity in relation to the closing price of shares, dividends declared, earnings per share and the price earnings ratio.
The research observed that strikes as a whole have an impact on share prices and shareholder confidence but are not the only determinant of shareholder confidence.