The relationship between banking sector and stock market development in selected Southern African countries : A panel data approach (1995-2017)

Abstract

The study investigated the relationship between banking sector development and stock market development in Southern Africa, with special focus on the Southern Africa Development Community (SADC). Using the Seemingly Unrelated Regression (SUR) and System Generalised Methods of Moments (SGMM) on data from nine SADC countries, study results show that banks and stock markets complement each other in funding economic growth in the region. The results also show that regional integration through the trade protocol (TP) and the finance and investment protocol (FIP) improves the complementary effect of banks and stock markets on economic growth. The growth model outlined shows that stepping up efforts to promote regional integration improves the complementarity between the expansion of the banking industry and the growth of the stock market in terms of financing economic growth. The study also looked at how institutional settings affected how the banking industry and stock market development interacted. The findings demonstrate that the rule of law does not change the nature of the relationship, but it does lessen the complimentary impact of stock market and banking sector expansion on economic growth. The study used the banking sector development and stock market development models to test the validity of the findings and determine whether the association holds. Therefore, the study further investigated the determinants of banking sector and stock market development where stock market and banking sector indicators were included as regressors. Stock market development was found to have a positive impact on banking sector development while stock market capitalisation positively impacted credit extended by deposit money banks. This result confirmed the complementary relationship shown by the growth model. Urbanisation had a positive effect on banking sector development, private credit extension and banking sector efficiency but it negatively impacted banking sector stability. Population density had a positive impact on private credit extension and banking sector stability while inequality positively influenced banking sector development and banking sector stability. The results also reveal that banking sector development positively influences stock market development and stock market capitalisation while private credit by deposit money banks enhanced stock market development, stock market size, stock market liquidity and stock market efficiency. This conclusion also supported the notion that the growth of the banking sector and the stock market, as well as the size of the stock market and the credit extended by banks, all contribute to the development of the stock market in terms of its size, liquidity and efficiency. This result showed that banking sector development contributed more to the development of stock markets compared to the effect of stock markets on banks. Press freedom was found to positively affect stock market size and stock market liquidity. Industrialisation on the other hand had a negative effect on stock market size while capital flight negatively impacted stock market development, stock market size and stock market liquidity. The study also uncovered the positive effect of pegged exchange rate regime on stock market development and stock market capitalisation while the crawling and managed regimes positively influenced stock market size. On the contrary, the floating regime had a detrimental effect on stock market development and stock market capitalisation. The findings also show that the banking sector in SADC is still underdeveloped characterised by low credit extension and high inefficiency though it is stable. Stock markets were also found to be underdeveloped characterised by small size, low liquidity and low levels of efficiency. These findings suggest that the rise of the banking industry and the stock market complement one another in providing capital for economic expansion, and that regional integration strengthens this complementary relationship. The rule of law, however, lessens this complimentary effect. To improve the complementarity between the growth of the banking sector and the growth of the stock market in providing financing for economic growth, policymakers should concentrate on fostering regional integration and enhancing the rule of law. The expansion of the banking sector has been found to have a higher positive impact on stock market development than vice versa. Therefore, they should focus their efforts on improving loan extension and efficiency in this area.

Lolu cwaningo luphenye ubudlelwano phakathi kokuthuthukiswa komkhakha wamabhange kanye nokuthuthukiswa kwezimakethe zamasheya e-Afrika eseNingizimu, kugxilwe ngokukhethekile eMphakathini oThuthukayo oseNingizimu ne-Afrika (SADC). Kusetshenziswa ukwehla okubonakala kungahlobene (i-SUR) kanye nendlela yezikhathi ezijwayelekile zohlelo (i-SGMM) emininingwaneni evela emazweni ayisishiyagalolunye e- SADC, imiphumela yocwaningo ikhombisa ukuthi amabhange nezimakethe zamasheya kuyahambisana ekuxhaseni ngezimali ukukhula komnotho esifundeni. Imiphumela iphinde ikhombise ukuthi ukuhlanganiswa kwesifunda ngenqubo esemthethweni yokuhweba (TP) kanye nezezimali nenqubo esemthethweni yokutshalwa kwezimali (FIP) kuthuthukisa umphumela ohambisanayo wamabhange nezimakethe zamasheya ekukhuleni komnotho. Isifanekiso sokukhula esiveziwe sikhombisa ukuthi ukuqinisa imizamo yokukhuthaza ukuhlanganiswa kwesifunda kuthuthukisa ukuhambisana phakathi kokunwetshwa kwemboni yamabhange kanye nokukhula kwemakethe yamasheya mayelana nokuxhasa ukukhula komnotho ngezimali. Lolu cwaningo luphinde lwabheka ukuthi izilungiselelo zesikhungo ziyithinta kanjani indlela imboni yamabhange kanye nokuthuthukiswa kwezimakethe zamasheya. Okutholakele kukhombisa ukuthi umthetho awushintshi uhlobo lobudlelwano, kodwa wehlisa umthelela ohambisanayo wezimakethe zamasheya kanye nokwanda komkhakha wamabhange ekukhuleni komnotho. Ucwaningo lusebenzise ukuthuthukiswa komkhakha wamabhange kanye nezindlela zokuthuthukiswa kwezimakethe zamasheya ukuze kuvivinywe ukufaneleka kokutholiwe kanye nokunquma ukuthi inhlangano iphethe. Ngakho-ke, ucwaningo luqhube lwaphenya ngezinqumo zomkhakha wamabhange kanye nokuthuthukiswa kwezimakethe zamasheya lapho izinkomba zemboni yamasheya kanye nezamabhange zafakwa khona njengezihlehlayo. Ukuthuthukiswa kwezimakethe zamasheya kutholwe kunomthelela omuhle ekuthuthukisweni komkhakha wamabhange kuyilapho ukutholwa kwezimali ezimakethe zamasheya kunomthelela omuhle emalini yezikweletu enwetshwe amabhange emali efakwa ebhange. Lo mphumela uqinisekisa ubudlelwano obuhambisanayo obuboniswa isifanekiso sokukhula. Ukufudukela emadolobheni kunomphumela omuhle ekuthuthukisweni komkhakha wamabhange, ukwandiswa kwezikweletu ezizimele kanye nokusebenza kahle komkhakha wamabhange kodwa kunomthelela omubi ekuzinzeni komkhakha wamabhange. Ukuminyana kwabantu kunomthelela omuhle ekwandiseni izikweletu ezizimele kanye nokuzinza komkhakha wamabhange kuyilapho ukungalingani kunomthelela omuhle ekuthuthukisweni komkhakha wamabhange kanye nokuzinza komkhakha wamabhange. Imiphumela iphinde iveze ukuthi ukuthuthukiswa komkhakha wamabhange kuba nomthelela omuhle ekuthuthukisweni kwezimakethe zamasheya kanye nokufakwa kwemali ezimakethe zamasheya, kuyilapho izikweletu ezizimele ngamabhange emali efakwayo zithuthukisa ukuthuthukiswa kwezimakethe zamasheya, ubukhulu bezimakethe zamasheya, ukutholakala kwezimali kwezimakethe zamasheya kanye nokusebenza kahle kwezimakethe zamasheya. Lesi siphetho siphinde sisekele umbono wokuthi ukukhula komkhakha wamabhange kanye nemakethe yamasheya, kanye nobukhulu bemakethe yamasheya kanye nesikweletu esinwetshiwe ngamabhange, konke kunomthelela ekuthuthukisweni kwemakethe yamasheya ngokobukhulu bayo, umthamo omkhulu womsebenzi emakethe kanye nokusebenza kahle. Lo mphumela ukhombisa ukuthi ukuthuthukiswa komkhakha wamabhange kufaka isandla kakhulu ekuthuthukisweni kwezimakethe zamasheya uma kuqhathaniswa nomthelela wezimakethe zamasheya emabhange. Inkululeko yabezindaba itholwe inomthelela omuhle kusayizi wemakethe yamasheya kanye nokuqina kwemakethe yamasheya. Ukuthuthukiswa kwezimboni ngakolunye uhlangothi kunomphumela ongemuhle kusayizi wemakethe yamasheya kuyilapho ukuphuma ngokushesha kwemali ezweni kunomthelela ongemuhle ekuthuthukisweni kwezimakethe zamasheya, ubukhulu bezimakethe zamasheya kanye nokuqina kwemakethe yamasheya. Ucwaningo luphinde lwembula umthelela omuhle wezinga lokushintshana elingaguquki elikhonjiwe ekuthuthukisweni kwezimakethe zamasheya kanye nokusetshenziswa kwemali kwezimakethe zamasheya, kuyilapho lubonisa ukuthi ukukhasa nokuphathwa kwemibuso kunomthelela omuhle kubukhulu bemakethe yamasheya. Ngokuphambene nalokho, umbuso lapho imali yesizwe ihlelwe yimakethe yokuhwabelana kolunye uhlobo lwemali kwenye ngokuhlinzekwa nokufunwa unomthelela omubi ekuthuthukisweni kwezimakethe zamasheya kanye nokufakwa kwemali ezimakethe zamasheya. Okutholakele futhi kukhombisa ukuthi umkhakha wamabhange ku-SADC, nakuba uzinzile, usengakathuthukiswa ngokugcwele futhi ubonakala ngokwandiswa okuphansi kwezikweletu kanye nokungasebenzi kahle. Izimakethe zamasheya nazo zitholwe zingathuthukisiwe ngokugcwele zibonakala ngosayizi omncane, ukuthengwa kwezimali okuphansi kanye namazinga aphansi okusebenza kahle. Lokhu okutholakele kuphakamisa ukuthi ukukhula kwemboni yamabhange kanye nemakethe yamasheya kuyahambisana ekuhlinzekeni ngemali yokwandisa umnotho, nokuthi ukuhlanganiswa kwesifunda kuqinisa lobu budlelwano obuhambisanayo. Umthetho, nokho, uyawunciphisa lo mphumela ohambisanayo. Ukwenza ngcono ukuhambisana phakathi kokukhula komkhakha wamabhange kanye nokukhula kwemakethe yamasheya ekuhlinzekeni ngezimali zokukhula komnotho, abakhi benqubomgomo kufanele bagxile ekukhuthazeni ukuhlanganiswa kwesifunda kanye nokuthuthukisa umthetho. Ukwandiswa komkhakha wamabhange kutholakale ukuthi kunomthelela omuhle kakhulu ekuthuthukisweni kwezimakethe zamasheya kunangokuphambene. Ngakho-ke, kufanele bagxilise imizamo yabo ekuthuthukiseni ukwandiswa kwemali mboleko nokusebenza kahle kule ndawo.

Thuto e batlisisitse tswalano mahareng a ntshetsopele ya lekala la dibanka le ntshetsopele ya mebaraka ya setoko tsa Borwa ba Afrika, ho tsepamisitswe haholo ho Ditjhaba tse Ntshetswangpele tsa Borwa ba Afrika (SADC). Ho sebediswa mokgwa o bonahalang o sa amaneng (SUR) le mokgwa o akaretsang wa nako (SGMM) mabapi le dintlha tsa pokello tse tswang dinaheng tse robong tsa SADC, diphetho tsa thuto di bontsha hore dibanka le mebaraka ya matsete di a tlatsana ho tshehetsa kgolo ya moruo sebakeng seo.Diphetho di boetse di bontsha hore kopanyo ya dibaka ka prothokholo ya kgwebo (TP) le prothokholo ya ditjhelete le matsete (FIP) e ntlafatsa bokgoni ba ho tlisa sephetho se tlatselletsang sa dibanka le dimmaraka tsa thekiso kgolong ya moruo. Mohlala wa kgolo o bontshitsweng o bontsha hore ho matlafatsa matsapa a ho kgothaletsa kopanyo ya lebatowa ho ntlafatsa tlatsetso dipakeng tsa katoloso ya indasteri ya dibanka le kgolo ya mmaraka wa setoko mabapi le ho tshehetsa kgolo ya moruo ka ditjhelete. Thuto ena e boetse ya sheba hore na maemo a mekgatlo a ama jwang indasteri ya dibanka le ntshetsopele ya mmaraka wa matsete. Diphumano di bontsha hore molao ha o fetole sebopeho sa dikamano, empa o fokotsa tshusumetso e tlatsanang ya mmaraka wa thekiso le keketseho ya lekala la dibanka kgolong ya moruo. Thuto e sebedisitse ntshetsopele ya lekala la dibanka le mehlala ya ntshetsopele ya mmaraka wa setoko ho leka bonnete ba diphumano le ho fumana hore na ho kopana ho a tsamaelana. Ka hona, thuto e ile ya tswela pele ho batlisisa dintlha tse kgethollang lekala la dibanka le ntshetsopele ya mmaraka wa setoko moo matshwao a mmaraka a setoko le a dibanka a kenyelleditsweng e le phetoho e hlalosang. Ntshetsopele ya mmaraka wa setoko e fumanwe e na le tshusumetso e ntle ho ntshetsopele ya lekala la dibanka ha ho tsetelwa kgwebong ho mmaraka wa setoko e fumanwa e e na le tshusumetso e ntle ho mokitlane o atolositsweng ke dibanka tsa ditjhelete tsa depositi. Sephetho sena se tiisa kamano e tlatsanang e bontshitsweng ke mohlala wa kgolo.Ho aha ditoropong ho na le bokgoni ba ho tlisa sephetho se setle ntshetsopeleng ya lekala la dibanka, katoloso ya mekitlane ya poraefete le katleho ya lekala la dibanka empa e na le tshusumetso e mpe botsitsong ba lekala la dibanka. Palo ya baahi e na le tshusumetso e ntle katolosong ya mekitlane ya poraefete le botsitsong ba lekala la dlibanka ha ho se lekane ho susumetsa ntshetsopele ya lekala la dibanka le botsitso ba lekala la dibanka. Diphetho di boetse di senola hore ntshetsopele ya lekala la dibanka e na le tshusumetso e ntle ho ntshetsopele ya mmaraka wa setoko le ho tsetela mmarakeng wa setoko, ha mekitlane ya poraefete ka dibanka tsa depositi e matlafatsa ntshetsopele ya mmaraka wa setoko, boholo ba mmaraka wa setoko,thekiso ya setoko le katleho ya mmaraka wa setoko.Qeto ena e boetse e tshehetsa mohopolo wa hore kgolo ya lefapha la dibanka le mmaraka wa setoko, hammoho le boholo ba mmaraka wa setoko le mekitlane e atolositsweng ke dibanka, kaofela di kenya letsoho ntshetsopeleng ya mmaraka wa setoko ho latela boholo ba ona, thekiso ya setoko le bokgoni. Sephetho sena se bontsha hore ntshetsopele ya lekala la dibanka e kenya letsoho haholo ntshetsopeleng ya mebaraka ya thekiso ha e bapiswa le bokgoni ba ho tlisa sephetho ya mmaraka wa setoko dibankeng.Tokoloho ya baphatlalatsi e ile ya fumanwa e ama boholo ba mmaraka wa setoko le thekiso ya mmaraka wa setoko. Ntshetsopele ya diindasteri ka lehlakoreng le leng e na le bokgoni ba ho tlisa sephetho se sebe ho boholo ba mmaraka wa setoko ha ho tswa ha tjhelete naheng ho na le tshusumetso e mpe ho ntshetsopele ya mmaraka wa setoko, boholo ba mmaraka le ho rekiswa ha maraka wa setoko.Thuto ena e boetse bo sibollotse bokgoni ba ho tlisa sephetho se setle sa puso ya sekgahla sa phapanyetsano ho ntshetsopele ya mmaraka wa setoko le ho tsetela mmarakeng wa setoko, ha e ntse e bontsha hore mebuso e kgasang le e laolwang e na le tshusumetso e ntle ho boholo ba mmaraka wa setoko. Ho fapana le hoo, puso e phaphametseng e na le bokgoni ba ho tlisa sephetho se sebe ho ntshetsopele ya mmaraka wa setoko le ho tsetela mmarakeng. Diphumano di boetse di bontsha hore lekala la dibanka ka hara SADC, leha le tsitsitse, le ntse le fokola mme le tsebahala ka katoloso e tlase ya mekitlane le ho se sebetse hantle ho hoholo. Dimmaraka tsa disetoko le tsona di ile tsa fumanwa di sa ntlafatswe tse kgethollwang ka boholo bo fokolang, thekiso ya thepa le maemo a tlaase a tshebetso.Diphumano tsena di fana ka maikutlo a hore ho phahama ha indasteri ya dibanka le mmaraka wa setoko di a tlatselletsana ka ho fana ka tjhelete bakeng sa katoloso ya moruo, le hore kopanyo ya dibaka e matlafatsa kamano ena e tlatselletsang. Molao, leha ho le jwalo, o fokotsa bokgoni ba ho tlisa sephetho sena se tlatsetsang. Ho ntlafatsa tlatsetso dipakeng tsa kgolo ya lekala la dibanka le kgolo ya mmaraka wa setoko molemong wa ho fana ka ditjhelete bakeng sa kgolo ya moruo, baetsi ba melawana ba lokela ho tsepamisa maikutlo ho kgothaletseng kopanyo ya dibaka le ho matlafatsa molao.Katoloso ya lekala la dibanka e fumanwe e na le kgahlamelo e hodimo e ntle ntshetsopeleng ya mmaraka wa setoko ho feta ka tsela e fapaneng. Ka hona, ba lokela ho tsepamisa boiteko ba bona ho ntlafatsa katoloso ya mokoloto le katleho sebakeng sena.