Abstract
M.Com. (Financial Management)
In 1995, the South African government needed to address the widening poverty gap.
The manner in which they would do so was through the process of financial market
liberalisation of the JSE. The intention behind the process of financial liberalisation
on the JSE was to increase the liquidity of the JSE. The significance of this study is
that it would provide regulators of financial markets, policy makers and academics
information on the effectiveness of the liberalisation of the JSE on dual listed
companies’ ability to grow in a sustainable manner.
Previous literature has found the risk sharing benefit associated with financial market
liberalisation. With the increased number of participants in market would increase
the chance of successful trades. Previous studies have found that there is a positive
correlation with financial market liberalisation and market liquidity. Exchange controls
have been put in place to prevent capital flight in sudden economic down turns.
Certain studies have found that financial market liberalisation on has had minimal
impact on the market capitalisation
This study investigates the effects the financial liberalisation on the JSE had on dual
listed companies’ sustainable growth rates. A purposive sampling technique was
used in this study and a sample of 28 dual listed companies was selected. The
approach to this study was an explanatory approach and the research paradigm was
archival. The statistical tools which were utilised in the study were broken into two
components, namely, the descriptive statistics and the inferential statistics. The data
that were used in the study were secondary data collected from I-Net Bridge.
The results of this study indicated that the financial liberalisation of the JSE did have
an impact on the sustainable growth rates of dual listed companies on the JSE.
Recommendations were made in this study for the dual listed companies to improve
their net profit margins. The methods in which the dual listed companies are able to
improve their net profit margins are by finding competitive sustainable advantages. It
was further recommended that the Income Tax Act No. 58 of 1962 needs to be
amended to create a conducive economic environment for the dual listed companies
to grow sustainably. It was further recommended that the dual listed companies on
the JSE invest in human capital in order to improve their sustainable growth rate.