| Summary: | Thesis (MComm (Business Management))--University of Stellenbosch, 2011. === ENGLISH ABSTRACT: The increase in globalisation and integration of world financial markets has seen a significant
enhancement in the amount in foreign investments. This coupled with the downfall of the
apartheid regime has given rise to an opportunity for companies to diversify their investment and
operational portfolios internationally. Furthermore world foreign direct investment has reached a
high during recent years. This indicates that companies are undertaking more opportunities to
invest internationally.
This study was undertaken from the perspective of South African companies who may be
considering to invest abroad. This is due to the fact that a clear research gap regarding their
perspective has been found. The gap was found because most studies chose to focus on countries
such as the United States of America, China and Japan, while none focused on the point of view
of South African companies to the best of the available knowledge. The second factor was that
studies did not only focus on the financial considerations, but instead included social and
political factors. This study, due to the research gap found, chose to focus on the financial
considerations of South African companies when considering making capital investments
abroad.
The top 50 companies in South Africa were chosen according to the Financial Mail’s Top
Companies issue. It was decided that 30 of these companies would be sufficient as the research
sample for the study. A questionnaire was drawn up and used as an aide memoire in personal
interviews with these executives of the relevant companies. This allowed an opportunity to
explore their perceptions and opinions regarding the factors that were selected as important from
the literature study. In addition to this the executives provided company information that would
be used in the sensitivity analysis.
It was found that there are a number of company- and country-specific factors that need be
contemplated when considering capital investments abroad. The company-specific factors
include the profitability, cash flow, liquidity, solvency and future long-term growth
characteristics of the prospective investment opportunity. This should be done in comparison
with the host country to ensure that it will be worthwhile to increase the company’s risk factors.
The country-specific factors include any restrictions placed on the cross-border movement of capital, the taxation legislation, and the availability of reliable information regarding the foreign
market. The availability of foreign financing, availability of foreign exchange hedging
instruments, investment incentives and the availability of labour and capital in order to apply the
correct operating leverages are also important. The company-specific and country-specific
factors need be considered in conjunction with each other. Furthermore all factors need be
compared between the home and host countries in order to ascertain whether the advantages of
entering into the foreign market are large enough. === AFRIKAANSE OPSOMMING: Die toename in globalisering en integrasie van finansiele markte in die wêreld het ‘n beduidende
toename in die hoeveelheid buitelandse investerings na vore gebring. Tesame met die ondergang
van apartheid het dit geleenthede aan maatskappye gebied om hul investerings en operasionele
portefeuljes internasionaal te diversifeer. Verder het globale buitelandse direkte investering ‘n
hoogtepunt in die onlangse jare bereik. Dit toon dat maatskappye meer geleenthede onderneem
om internasionaal te investeer.
Die studie was onderneem vanuit die perspektief van Suid-Afrikaanse maatskappye wat dit
moontlik oorweeg om in die buiteland te investeer. ‘n Duidelike navorsingsgaping is gevind op
grond van die verskille tussen die maatskappye se perspektiewe. Die gaping het ontstaan
aangesien meeste studies gefokus het op lande soos die Verenigde State van Amerika, China en
Japan, met so ver bekend geen studie wat fokus vanuit Suid-Afrikaanse maatskappye se
perspektief nie. Die tweede faktor was dat die studies nie slegs op finansiele inagnemings
gefokus het nie, maar ook sosiale en politieke faktore ingesluit het. As gevolg van die
navorsingsgaping wat gevind is, fokus hierdie studie op die finansiele oorgewings vir Suid-
Afrikaanse maatskappye wanneer hulle kapitaalinvesterings in die buiteland oorweeg.
Die 50 top maatskapye in Suid-Afrika was gekies volgens die “Financial Mail” se uitgawe van
vooraanstaande maatskappye. Daar is besluit dat 30 van hierdie maatskappye ‘n voldoende
navorsingsteekproef vir die studie sal wees. ‘n Vraelys was saamgestel om as hulpmiddel te dien
vir die persoonlike onderhoude wat met die senior bestuurders gevoer is. Dit het die geleentheid
geskep om hul perspektiewe en opinies rakende die belangrike faktore wat uit die literatuurstudie
geidentifiseer is, te verken. Die uitvoerende beamptes het ook maatskappy-inligting verskaf wat
in die sensitiwiteitsanalise gebruik sou word.
Daar was gevind dat ‘n aantal maatskappy- en land-spesifieke faktore bestaan waaroor besin
moet word wanneer buitelandse kapitaalinvesterings oorweeg word. Die maatskappy-spesifieke
faktore sluit in winsgewendheid, kontantvloei, likiditeit, solvabiliteit en toekomstige langtermyn
groei-eienskappe van die voornemende investeringsgeleentheid. Dit moet gedoen word in
vergelyking met die land waarin geinvesteer gaan word on te verseker dat dit die moeite werd sal
wees om die maatskappy se risikofaktore te verhoog. Die land-spesifieke faktore sluit in enige beperkings wat geplaas word op die beweging van kapitaal oor grense, die belasting-wetgewing,
en die beskikbaarheid van betroubare inligting rakende die buitelandse mark. Die beskikbaarheid
van buitelandse finansiering, beskikbaarheid van verskansingsinstrumente vir buitelandse valuta,
investeringsaansporingsmaatreels en die beskikbaarheid van arbeid en kapitaal om die korrekte
bedryfshefboomwerking toe te pas is ook belangrik. Die maatskappy-spesifieke en landspesifieke
faktore moet gesamentlik oorweeg word. Verder moet alle faktore tussen die tuisland
en die land waarin geinvesteer gaan word, vergelyk word om vas te stel of dit voordelig sal wees
om die buitelandse mark te betree.
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