Aspiring Academic Earns a PhD in Finance


Aspiring academic Dr Lorraine Muguto from the School of Accounting, Economics and Finance was awarded a Doctor of Philosophy for a thesis titled: Analysis of Stock Return Volatility and its Response to Investor Sentiment: An Examination of Emerging and Developed Markets by UKZN in May.

Muguto investigated whether the volatility patterns in emerging BRICS (Brazil, Russia, India, China, South Africa) and developed G7 (Canada, France, Germany, Italy, Japan, the United Kingdom, the United States and the European Union) stock markets are influenced by investor behavioural biases.

The findings showed that volatility patterns differ across markets even from the same grouping, which contradicts previous studies’ generalisations that countries from the same grouping exhibit similar volatility patterns and that emerging markets are more volatile than developed ones. Investor sentiment explained volatility patterns in both emerging and developed markets. This implies that investors in both sets of markets are susceptible to investor behavioural biases. Similar findings were reported when volatility spillovers were examined in the two sets of markets.

In light of these findings, Muguto suggests that financial market stakeholders such as investors, policymakers and scholars should consider the time and cross-market variation in volatility; increasing volatility co-movements and spillovers across markets; and the significant impact of investor behavioural biases when measuring and examining stock market contingent risk.

Muguto’s study adds to knowledge creation in the area of finance as it can be used by scholars to model volatility and volatility spillovers more accurately. It will also assist investors to better manage their investment portfolios while firms can forecast their financing needs and costs and policymakers can design policies that improve the efficiency and functioning of stock markets.

The year 2022 has been productive for Muguto who co-authored and published an article titled, A comparative analysis of the nature of stock return volatility in BRICS and G7 markets in the Journal of Risk and Financial Management with her supervisor Professor Paul Muzindutsi; and one on Country risk and the interaction between gold price and gold stock index return volatilities: Evidence from the South African market in the International Journal of Trade and Global Markets with Muzindutsi, Mr Hilary Muguto and Dr Edson Vengesai. She presented a research paper titled Short-Run Vs Long-Run Tracking Performance: Does it Matter? at the Southern Africa Finance Association Hybrid Conference 2022 in Cape Town. The paper was co-authored with Professor Kerry-Ann McCullough and Dr Ailie Charteris.

She intends to continue publishing and collaborating with seasoned researchers who assisted her in her doctoral journey. She said: ‘I will also help aspiring researchers who are starting out to find their feet in research. I received that kind of help from my Master’s and PhD supervisors, Dr Charteris and Professor Muzindutsi, respectively, and the School of Accounting, Economics and Finance team.’

When not conducting research, Muguto is a basketball fanatic who has represented UKZN in the University Sports South Africa games. She received the Most Valuable Player award in one of the KwaZulu-Natal qualifying final matches.

Words: Hazel Langa

Photograph: Abhi Indarajan