The relationship between cash flow and share prices of general mining firms listed on the Johannesburg Stock Exchange

Abstract

The purpose of this research was to investigate the relationship between cashflows and the share prices of the 12 general mining firms listed on the Johannesburg Stock Exchange (JSE) from 2015 to 2020. Empirical data were collected from the Iress (SA) database and the Statistical Package for Social Sciences (SPSS) version 25 was used to analyse the cashflows and share prices of the mining firms. The study applied an in-depth regression analysis using the pooled OLS model, fixed and random effects models, and the FGLS model and found only the latter model to fit the data favourably. The Agency Theory, the Free Cash Flow (FCF) Hypothesis, and the Financial Leverage Theory provided a basis for the study’s theoretical framework. Based on the study findings, the nature of the relationship between cashflows and share prices is dependent on the cashflow type. The study highlighted that cashflows from investment and financing activities had a statistically significant relationship with the share prices at a 1% significance level. However, the study findings showed a statistically insignificant association between cashflows from operating activities and the share price of the 12 general mining companies listed on the JSE between 2015 and 2020. Based on the study findings, one of the major recommendations is that general mining firms should prioritise cashflows from investing and financing activities since these types of cashflows have a significant impact on their share prices.

Die doel van hierdie navorsing was om die verhouding tussen die kontantvloei en die aandeelpryse van die 12 algemene mynboumaatskappye wat van 2015 tot 2020 op die Johannesburgse Effektebeurs (JSE) genoteer was, te ondersoek. Empiriese data is ingesamel van die Iress-databasis (SA), en die Statistiese Pakket vir die Sosiale Wetenskappe (SPSS) se weergawe 25 is gebruik om die kontantvloei en aandeelpryse van die mynboumaatskappye te ontleed. Die studie het ’n omvattende regressie-ontleding gedoen, asook die gepoelde OLS-model, vaste en ewekansige effektemodelle, en die FGLS-model gebruik, en het bevind dat slegs die laasgenoemde model goed by die data pas. Die agentskapteorie, die Vrye Kontantvloeihipotese (FCF-hipotese) en die Finansiële Hefboomwerkingsteorie het as grondslag vir die studie se teoretiese raamwerk gedien. Aldus die studie se bevindings is die aard van die verhouding tussen die kontantvloei en die aandeelpryse afhanklik van die tipe kontantvloei. Die studie het daarop gewys dat die kontantvloei van beleggings- en finansieringsaktiwiteite ’n statisties-beduidenheidsverhouding met die aandeelpryse teen ’n 1% beduidendheidsvlak het. Die bevindings van die studie het egter ook ’n statisties beduidende verbintenis tussen die kontantvloei van bedryfsaktiwiteite en die aandeelpryse van 12 algemene mynboumaatskappye wat tussen 2015 en 2020 op die JSE genoteer was, aangetoon. Een van die belangrikste aanbevelings, gebaseer op die studie se bevindings, is dat algemene mynboumaatskappye kontantvloei van beleggings- en finansieringsaktiwiteite moet prioritiseer omdat hierdie tipe kontantvloei ’n betekenisvolle invloed op hulle aandeelpryse het.

Inhloso yalolu cwaningo bekuwukuphenya ubudlelwano phakathi kokugeleza kwemali kanye namanani ezabelo ezinkampani ezijwayelekile zezimayini eziyi-12 ezisohlwini lweJohannesburg Stock Exchange (JSE) kusukela ngo-2015 kuya -2020. Imininingwane ethenjelwe kokuhlangenwe nakho yaqoqwa oqoqweni oluhleliwe olugcinwe ohlelweni lwekhompyutha lwe-Iress kanye nenguqulo 25 yokuqoqiwe kwesofthiwe okutshenziselwa ukuhlaziya imininingwane yezibalo (SPSS) yasetshenziswa ukuze kuhlaziywe ukugeleza kwemali kanye namanani ezabelo zezinkampani ezimayini. Ucwaningo lusebenzise ukuhlaziya okujulile kokuhlehla kusetshenziswa isifanekiso esihlanganisiwe se-OLS, izifanekiso zemiphumela engaguquki nengahleliwe, kanye nesifanekiso se-FGLS futhi lwathola isifanekiso sakamuva kuphela ukuze silingane imininingwane ngokufanele. Isimiso sokuxazulula izinkinga ebudlelwaneni phakathi kwabaphathi bebhizinisi namanxusa abo, uMbono weNkomba yaMandla eZimali enkampani, kanye noMbono woMzamo waMasu wokuBoleka Imali ukuze utshale ezimpahleni kunikeze isisekelo sohlaka lombono wocwaningo.

Ngokusekelwe emiphumeleni yocwaningo, imvelo yobudlelwano phakathi kokugeleza kwemali nezintengo zezabelo incike ohlotsheni lokugeleza kwemali. Ucwaningo lwagqamisa ukuthi ukugeleza kwemali okuvela emisebenzini yokutshalwa kwezimali neyokuxhasa ngezimali kunobudlelwano obubalulekile ngokwezibalo namanani ezabelo ezingeni lokubaluleka elingu-1%. Nokho, okutholwe ocwaningweni kubonise ukuhlobana okungabalulekile ngokwezibalo phakathi kokugeleza kwemali okuvela emisebenzini yokusebenza kanye nenani lezabelo lezinkampani ezijwayelekile zezimayini eziyi-12 ezisohlwini lwe-JSE phakathi kuka-2015 no-2020. Ngokusekelwe kulokho okutholwe ocwaningweni, esinye seziphakamiso eziyinhloko ukuthi izinkampani zezimayini jikelele kufanele zibeke phambili ukugeleza kwemali okuvela emisebenzini yokutshala izimali kanye neyokuxhasa ngezimali njengoba lezi zinhlobo zokugeleza kwemali zinomthelela omkhulu emananini azo ezabelo.