Department of Accounting and Financial Management

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    The Impact of Internal and External Factors on the Profitability of Sudanese Banking sector (2011-2018)
    ( 2021) Hushan Sharafeldin Siedahmed Fadl ; Nawal Hussein Abbas
    Research Title: The Impact of Internal and External Factors on the Profitability of Sudanese Banking Sector, 2011-2018 Student’s Name: Husham Sharafeldin Siedahmed Fadl Degree: Doctorate of Business Administration (DBA) - Finance The aim of this research is to examine the impact of internal (bank‘s specific) factors and external (industry-specific and macroeconomic) factors on the profitability of the Sudanese banking sector. The research adopts non-experimental research design based on positivist philosophical approach, and deductive explanatory approach. The research depends mainly on secondary data and during the period (2011- 2018). The data is collected from a sample of 160 annual reports of 20 Sudanese banks, which represents 54% of the whole study population, which amounted to 37 banks. The data have been collected from the Bank‘s headquarter, the Central Bank of Sudan, the Bank's official websites, Exchange offices, Ministry of Finance and National Economy, and the Sudanese Central Bureau of Statistics. The study is purely quantitative, with hypotheses developed and tested by employing balanced panel regression models using E-views- 10 statistical tools to provide answers to the research questions. The independent variables include eight internal factors and four external factors. The internal factorscomprise; expense ratio, income diversification, capitalization, deposits ratio, capital adequacy ratio, financing risk ratio, financing ratio and financing to deposits ratio. The external factors include one industry specific factor (concentration ratio) and three macroeconomic factors (real gross domestic product growth rate, inflation rate, parallel exchange rate to official exchange rate ratio). The research findings reveal that internal factors do influence on the profitability of Sudanese banking sector. It shows that profitability is significantly affected by expense ratio, income diversification, capitalization, deposits ratio, capital adequacy ratio, financing risk, concentration and real gross domestic product growth rate. The positive signs of coefficients of income diversification, capitalization ratio, deposits ratio, financing ratio, financing to deposits ratio, real gross domestic product growth rate indicate positive association between these factors and profitability. Also, the findings show that profitability is negatively associated with expense ratio, capital adequacy ratio, financing risk, concentration, inflation and parallel to official exchange rate. The research recommends that banking sector in Sudan should stress and highlight the importance of internal and external factors to make more effective decisions based on positive factors and mitigate negative variables effects. This can be v achieved by improving cost efficiency, adopting income diversification strategy, enhancing capitalization, managing financing portfolio efficiently, and taking into consideration the impact of real gross domestic product growth rate, inflation rate and parallel to official exchange rate. المستخلص عنوان البحث:أثر العوامل الداخلية والخارجية فى ربحية قطاع المصارف السودانية ،2011-2018م اسم الطالب:هشام شرف الدين سيدأحمد فضل الدرجة: دكتوراه إدارة الأعمال (تمويل) يهدف البحث إلى اختبار أثر العوامل الداخلية الخاصة بالمصارف،والعوامل الخارجية الخاصة بالصناعة والعوامل الاقتصادية الكلية على ربحية قطاع المصارف السودانية. انتهج البحث التصميم غير التجريبي مبنيا على الفلسفة الوضعية والمنهج الاستدلالي التفسيري.اعتمد البحث بصورة أساسية على البيانات الثانوية خلال الفترة(2011 إلى 2018)م .اُختُبرت البيانات لعينة مكونة من 160 تقريراً سنوياً لعدد 20 مصرفاً سودانياً، تمثل 54% من مجتمع الدراسة البالغ37مصرفاً. جُمِعت البيانات عبر الإتصال المباشر بإدارة المصارف،وبنك السودان المركزي، والمواقع الرئيسة للمصارف السودانية بالشبكة العنكبوتية، وتقارير الصرافات، ووزارة المالية والإقتصاد الوطنى، وتقارير الجهاز المركزي للإحصاء. استخدمت الدراسة المنهج الكمي فى تطوير الفرضيات واختبارها ونماذج الانحدار المتوازن للسلاسل الزمنية المقطعية.كما استخدمت الدراسة برنامج (Eviews -10)الإحصائي في تحليل البيانات والإجابة على أسئلة الدراسة .تشتمل المتغيرات المستقلة على ثمانية عواملداخلية وأربعة عوامل خارجية.العوامل الداخلية الخاصة بالمصارف تشمل؛ نسبة المصروفات، وتنوع الدخل، والرسملة، ونسبة الودائع،وكفاية رأس المال، ومخاطر التمويل، ونسبة التمويل،ونسبة التمويل إلى الودائع. بينما تشتمل العوامل الخارجية على عامل واحد خاصبالصناعة؛ وهو نسبة تركيز الأصول، وثلاثة عوامل اقتصادية كلية(نسبة نمو الناتج القومي الاجمالى الحقيقى، ومعدل التضخم، ونسبة سعر الصرف الموازى إلى الرسمى). خلص البحث إلى عدة نتائج منها: أن العوامل الداخلية والعوامل الخارجية لها تأثير على ربحية قطاع المصارف السودانية. حيث أظهرت نتائج البحث أن ربحية قطاع المصارف السودانية (معدل العائد على الأصول) لها علاقة ذات دلالة إحصائية مع نسبة المصروفات، وتنوع الدخل، والرسملة، ونسبة الودائع، وكفاية رأس المال، ومخاطر التمويل، ونسبة التركيز، ومعدل النمو الحقيقي للناتج القوميالإجمالي . وتشير الإشارات الموجبة لمعاملات تنوع الدخل، والرسملة، ونسبة الودائع، ونسبة التمويل، ونسبة التمويل للودائع، ومعدل النمو الحقيقي للناتج القوميالإجمالي تشير إلى وجود علاقة طردية موجبة بين هذه العوامل وربحية قطاع المصارف السودانية،وأيضا أظهرت النتائج أن ربحية قطاع المصارف السودانية تتأثر سلباً بنسبة المصروفات، وكفاية رأس المال، والمخاطر التمويلية، ونسبة التركيز، ومعدل التضخم، ونسبة سعر الصرف الموازى إلى الرسمي. يوصي البحث قطاع المصارف السودانية بإبراز أهمية العوامل الداخلية والخارجية لاتخاذ القرارات الفعالة بناءاً على العوامل الايجابية والتقليل من أثر العوامل ذات التأثير السلبي. ويتحقق ذلك بتحسين كفاءة التكلفة،وتبني إستراتيجية تنويع الدخل،وإدارة محفظة التمويل بكفاءة، والأخذ فى الاعتبار أثر معدل نمو الناتج المحلي الاجمالي الحقيقي ومعدل التضخم ونسبة سعر الصرف الموازي الى الحقيقى.
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    Behavioral Factors Influencing Individual Investment Decision Making in Khartoum Stock Exchange
    (University of Khartoum, 2020) GarElnabi Ahmed Abdelgadir Ibrahim
    Abstract The main objective of this research is to explore the behavioral finance factors influencing the individual investment decision making at Khartoum Stock Exchange (KSA). The research adopted a descriptive method and relied on primary and secondary data, collected by using the questionnaire distributed to individual investors in KSE. The sample consisted of 204 individual investors selected randomly from the 22 brokerage firms listed in Khartoum Stock Exchange. The research assumed that there are behavioral factors that effect on individual investment decision making. Cornbach Alpha is used to measure the internal consistency and reliability. The formats of continuous variables 5- point Likert-scale measurements are used. The SPSS was used for data analysis. Findings of the research revealed that there was significant relationship between behavioral factors that include Representativeness, Overconfidence, Anchoring, Loss Aversion, Historical cost, Mental Accounting, Customer Preference and React-quickly to other investors and investment decision making in KSE with (R-Squared, is 0.302,F= 14.83, and p = 0.0000). Other variables such as Availability bias, Regret Aversion, decisions to buy and sell stocks of other investors have insignificant influence on individual investment decision making at KSE. The study recommends that investors in KSE should view the global and regional variables that may have impact on prices, also training programs to create investor's awareness about behavioral factors though firm's websites to protect them against cognitive errors and emotional biases. مستخلص يهدف هذا البحث إلى اكتشاف أثر العوامل السلوكية على عملية اتخاذ القرارات المتعلقة بالمستثمرين الأفراد في سوق الخرطوم للأوراق المالية في السودان. استخدم البحث المنهج الوصفي مع التحليل. وقد تم جمع البيانات من مصادر أولية وثانوية عن طريق استخدام الاستبيان الموزع على المستثمرين الأفراد في سوق الخرطوم للأوراق المالية لعينة مكونة من 204 مستثمر يمثلون 22 شركة من شركات الوساطة المدرجة بالسوق والتي تم اختيارها عشوائيا من مجموعة شركات الوساطة العاملة في سوق الخرطوم للأوراق المالية . استخدم البحث معامل آلفا ومعامل لكرت الخماسي لاختبار موثوقية الاتساق الداخلي والمصداقية، كما استخدم أيضاً برنامج التحليل الإحصائي للبيانات (SPSS) في تحليل البيانات للحصول على النتائج. أظهرت نتائج البحث أن العوامل السلوكية المتمثلة في التمثيل، الثقة الزائدة ، ربط أسعار الأسهم بقيمة ثابتة ، الخوف من الخسارة ، التكلفة التاريخية ، المحاسبة الذهنية، تفضيلات العملاء ، ردة الفعل السريعة تجاه قرارات المستثمرين الآخرين ذات تأثير جوهري على قرارات المستثمرين الأفراد في سوق الخرطوم (R-Squared.302, is 0.302, F= 14.83, and p=000) أرجع البحث هذه النتائج إلي مجموعة من العوامل من بينها ضعف كفاءات البيئة الاستثمارية وتأثر سوق المال بالظروف السياسية غير المستقرة. يوصي البحث بضرورة ربط المستثمرين بالمتغيرات العالمية التي تؤثر علي الاستثمارات في الأوراق المالية وعقد البرامج التدريبية والورش التي تعمل علي زيادة الوعي والمعرفة بالعوامل السلوكية والعاطفية التي تقود للقرارات الاستثمارية الخاطئة.
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    Capital Structure Choice: Evidence from Listed Firms Operating in an Islamic-based economy “The case of Sudan”
    (University of Khartoum, 2018-06) Mohammed, Emadeldin Widatalla
    The aim of this research is to explore how capital structure choice is affected by the imposition of Islamic laws and to examine the impact of firm-specific and macroeconomic factors on firms’ capital structure in an interest-free economy. The study uses the information of 13 non-financial public firms listed in Khartoum stock exchange (KSE), during the period (2006 to 2015). Eight firm-specific variables (size, liquidity, profitability, growth, tangibility, tax, Zakat, and ownership), and four macroeconomic factors (market development, inflation rate, finance cost, and types of Islamic finance provided by banks) have been studied to determine how they affect firms’ financing behavior. This research uses panel data regression analysis as statistical tool. The research reveals that firms’ specific characteristics and macroeconomic factors do have some influence on firms’ capital structure choice. It shows that leverage is significantly affected by size, liquidity, profitability and growth at 1%, 10%, 1% and 5% level of significance respectively. The negative signs of coefficients of liquidity, profitability, growth and tangibility, indicate negative association between these factors and leverage. The findings show that leverage is positively associated with size and business profit tax. The negative relation between leverage and Zakat reveals that the Muslims society willingly prefer to pay charges on their income in the form of zakat, rather than in the form of tax. This finding supports the theoretical model that zakat would encourage firms to use more equity than debt. Positive relation between inflation and leverage does support market timing theory. The positive relation between leverage and capital market development, and equity type of Islamic finance reveal the importance of financial sector as a determinant of firms’ capital structure mix. The research recommends a government interference to develop Khartoum stock exchange market and banking sector, and a minimal government control over the private sector as government ownership in private sector negatively affects firms’ capital structure decision. This can be achieved either by selling its shareholding to private investors, or by giving free hand to listed firms to decide on their internally generated profits in a way that is more favorable to their shareholders.
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    The Impact of Exchange Rate Fluctuations on Financial Performance of Sudanese Banks.
    (University of Khartoum, ) Osman, Osama Eltayeb Elfaki ; Nawal Alhussein Abbas Alhussein ; Accounting and Finance
    The aim of this research is to determine the effect of exchange rate fluctuations on commercial banks’ financial performance in Sudan for the period (2000-2015). The research adopts a design based on positivist philosophical approach, and deductive and descriptive approaches. Data was collected mainly from secondary sources such as reports of the Central Bank of Sudan and those of Sudanese commercial banks. The research assumed that fluctuations in exchange rates contribute to the deterioration of the financial performance of the banking sector of Sudan during the research period. The research develops three models to determine the relationship between fluctuations in exchange rates, plus other macroeconomic variables such as lending rate, foreign direct investment and net exports as independent variables, and indicators of financial performance of commercial banks, namely return on assets, return on equity and liquidity as dependent variables. E-views 9 programme was used for data analysis. Findings of the research revealed that there was an inverse relationship between fluctuations in the exchange rate and the financial performance indicators of the Sudanese banks except liquidity (0.203) with statistical probability (P .Value < 0.05). The research found that financial performance was significantly affected negatively by lending rate and net export at 5% level of significance, while foreign direct investment was positively (0.32) affecting banking profitability. This was mainly due to effects of economic embargo against banking sector in Sudan for about two decades, which caused reduction and confusion in executing transactions in foreign currencies. The research recommends the reviewing of the monetary and fiscal policies, to reduce government spending to avail financial resources to the real sector and enhance infrastructure in order to maintain the stability of exchange rates and accordingly enhance the financial performance of banks in Sudan.
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    Determinants of Islamic Corporate Social Responsibility Disclosure Level in Sudanese Banks′ Annual Reports
    (University of Khartoum, ) Ibrahim, Abdelrahman Mohamed ; Nawal Hussein Abbas ; Department of Accounting and Financial Management
    The main objective of the research is to investigate the level of Islamic Corporate Social Responsibility (ICSR) disclosure in Sudanese banks’ annual reports for the period 2006-2015 and its determinants. To achieve the research objectives, the research adopts a holistic approach that includes the utilization of an extensive theoretical framework which integrates Legitimacy, Stakeholder, Agency, Signalling, Political Economy, and Social contract theories. Using the content analysis and a disclosure index, the study examines a panel dataset covering the period 2006 - 2015. The data is collected from a sample of 149 annual reports for 17 Sudanese banks it represents 57% of the whole study population, which amounted to 30 Sudanese banks. The annual reports have been collected either from the bank's official websites or directly from the bank’s headquarter. The study is purely quantitative, with hypotheses developed and tested by employing regression models using STATA-13 and E-views- 9 statistical tools to provide answers to the research questions. Findings revealed that for the bank’s specific characteristics, the profitability and bank’s age are significantly influencing the level of Islamic Corporate Social Responsibility disclosure in the Sudanese bank's annual reports. Regarding the Shariah Supervisory Board′s attributes; the size of Shariah Supervisory Board, Doctoral qualification, and cross-directorship were found to have a positive effect on the level of Islamic Corporate Social Responsibility Disclosure in Sudanese Islamic Banks’ Annual Reports. Furthermore, the effective Islamic Shariah governance and its characteristics were found to influence the ICSR disclosure level in Sudanese banks’ annual reports. The study also showed that the disclosure level in the annual reports had witnessed continuous evolution over the period under study. However, the results indicated the lack of awareness among banks management towards the importance of Islamic Corporate Social Responsibility disclosure as strategic means in legitimizing their existence within the Islamic community. The study recommended that the Sudanese regulatory bodies should adopt ICSR training programmes to educate those who work in the field of banking, and the public the best practices of Islamic Corporate Social Responsibility that lead to the social development and the achievement of the welfare of the Islamic community. These bodies should stress and highlight the importance of bank’s specific characteristics and Shariah Supervisory Board attributes that can lead to high level of Disclosure. Furthermore, the development of the concrete and unambiguous definition of Islamic Corporate Social Responsibility disclosure for Islamic banks is recommended. Finally, further research is recommended to adopt qualitative methods in investigating the subject of Islamic Corporate Social Responsibility disclosure in Sudanese banks. The qualitative techniques would help in perceiving the obstacles of Islamic Corporate Social Responsibility disclosure and reveal the degree of management awareness about the status quo of Islamic Corporate Social Responsibility disclosure in Sudanese Banks and their willingness to adopt a unified disclosure index.