Bio

LECTURER AND CONSULTANT

Has over twenty years experience in lecturing in Finance, Investments and Portfolio Management, Management Accounting and Corporate Governance at the Department of Finance and Accounting, School of Business. Setup the University of Nairobi Mombasa Campus structures as the first coordinator for more than seven years from 2004 to 2012.

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Has over twenty years experience in lecturing in Finance, Investments and Portfolio Management, Management Accounting and Corporate Governance at the Department of Finance and Accounting, School of Business. Setup the University of Nairobi Mombasa Campus structures as the first coordinator for more than seven years from 2004 to 2012.

Publications


2015

Iraya, C, MWANGI MIRIE, Wanjohi G.  2015.  The effect of corporate governance practices on earnings management of companies listed at the Nairobi Securities Exchange. European Scientific Journal. 11(1 (January)):169-178. Abstract

The objective of the study was to establish the effect of corporate governance practices on earnings management of companies listed at the Nairobi Security Exchange (NSE). The target population consisted of the 49 companies that had been continuously and actively trading at the NSE between January 2010 and December 2012. Secondary data was used covering the period 2010 to 2012 and analyzed using linear regression to test the effect of the independent variables on the dependent variable. The study found that earnings management is negatively related to ownership concentration, board size and board independence but positively related to board activity and CEO duality. The study recommended the need for effective corporate governance practices in listed companies in Kenya to contribute to reduced earnings management and avert possible collapse of listed companies in Kenya.

2014

MWANGI, MIRIE, Iraya C.  2014.  Determinants of Financial Performance of General Insurance Underwriters in Kenya. International Journal of Business and Social Science. 5(13):210-215. Abstract

The objective of the study was to establish the effect of corporategovernance practices on earnings management of companies listed at the Nairobi Security Exchange (NSE). The target population consisted of the 49companies that had been continuously and actively trading at the NSE between January 2010 and December 2012. Secondary data was used covering the period 2010 to 2012 and analyzed using linear regression to test the effect of the independent variables on the dependent variable. The study found that earnings management is negatively related to ownership concentration, board size and board independence but positively related to board activity and CEO duality. The study recommended the need fore ffective corporate governance practices in listed companies in Kenya to contribute to reduced earnings management and avert possible collapse of listed companies in Kenya.

2013

IRAYA, MWANGICYRUS, Lucy M.  2013.  Performance of socially screened portfolio at the Nairobi Securities Exchange. International Journal of Humanities and Social Sciences. 3(6):73-83. Abstract

Since its introduction in the early 1970s, socially responsible investment (SRI) has gained prominence as both a rival and a complement to conventional investment. SRI is the philosophy and practice of making strategic investment decisions by integrating financial and non-financial considerations, including personal values, societal demands, environmental concerns and corporate governance issues. One of the major concerns in socially responsible investing is whether there is a difference between the performance of socially screened portfolios and that of conventional funds. This study sought to determine whether applying social screens to a portfolio would affect the portfolio`s performance. Two portfolios were formulated each comprised of 20 firms. One comprised of the NSE 20-share index firms and the second comprised 20 firms that passed the negative screening criterion that was employed. The descriptive research design approach was used. The target population was all the firms listed at the NSE. The risk adjusted returns were computed using the Sharpe index. Monthly and annual returns were calculated for years 2007 - 2011. F and T-tests were used to determine whether there was significant difference between the risk adjusted returns of the two portfolios. The NSE-20 portfolio had a higher average Sharpe ratio than the social screened portfolio hence it outperformed the socially screened portfolio when compared in terms of risk adjusted returns. The study concludes that social screening results in reduced portfolio performance.

IRAYA, MWANGICYRUS, Jerotich OJ.  2013.  The Relationship between Corporate Social Responsibility Practices and Financial Performance of Firms in the Manufacturing, Construction and Allied Sector of the Nairobi Securities Exchange. International Journal of Business, Humanities and Technology. 3(2):81-90. Abstract

Literature provides conflicting results on the relationship between corporate social responsibility (CSR) practice and firm financial performance with some studies showing a positive relationship (Waddock & Graves, 1997; Cheruiyot, 2010), others negative (Cordeiro & Sarkis, 1997; Wagner et al, 2002) and still others showing that there is no relationship between the two variables (McWilliams & Siegel, 2000; Aragon & Lopez, 2007). It is with this background that this study sought to establish the relationship between corporate social responsibility practice and financial performance of firms listed in the manufacturing, construction and allied sector of the Nairobi Securities Exchange. Although the study was meant to be a census survey, non-availability of complete data for some of the companies resulted in only 10 out of the 14 companies in the sector being studied. Secondary data was obtained from the audited financial reports of the companies for the period from 2007 to 2011. Corporate social responsibility score was obtained using content analysis of reports of the companies on various components of corporate social responsibility as reported in their audited financial reports. A multiple regression model was established to determine the relationship between the two variables. Control variables of manufacturing efficiency and capital intensity were also introduced in the regression model. The results indicated the existence of a relationship between the independent variables (corporate social responsibility score, manufacturing efficiency and capital intensity) used in the model and the dependent variable (return on assets) with a correlation coefficient of 0.870. The results of the study also showed that there was an insignificant positive relationship between corporate social responsibility practice and financial performance. Financial performance and manufacturing efficiency was found to have a significant linear inverse relationship.

2012

IRAYA, MWANGICYRUS.  2012.  Socially responsible investments and portfolio performance: A critical literature review. , Nairobi: University of Nairobi Abstract

Since its introduction in the early 1970s, socially responsible investment (SRI) has gained prominence as both a rival and a complement to conventional investment. SRI is the philosophy and practice of making strategic investment decisions by integrating financial and non-financial considerations, including personal values, societal demands, environmental concerns and corporate governance issues. One of the major concerns in socially responsible investing is whether there is a difference between the performance of socially screened portfolios and that of conventional funds.

This study is a literature review of socially responsible investment and portfolio performance. The objectives of the study are to establish the documented relationship between socially responsible investment (SRI) and portfolio performance; to investigate, from the literature, whether investor demographic characteristics moderate the relationship between socially responsible investment and portfolio performance, to examine whether the relationship between SRI and portfolio performance is intervened by portfolio management process, to identify and document research gaps in socially responsible investment and lastly to establish researchable issues in socially responsible investment. The study presents a conceptual model guided by the modern portfolio theory, the stakeholders’ theory, the institutional theory and the new social movement theory.

Literature reviewed on the performance of SRI mutual funds has been inconclusive with three schools of thought emerging: SRI under-performs, over-performs or performs as well as conventional mutual funds. The paper concludes that the conflicting results are caused by the fact that the relationship between SRI and portfolio performances is not direct but is intervened by other variables such as the portfolio management process. Five factors in the portfolio management process that are affected by SRI have been identified (Havemann and Webster, 1999). These are the portfolio diversification process, the size and structure of the investable universe, concentration and the research costs incurred in monitoring the investee companies. Another explanation into the conflicting results is that the relationship between SRI and portfolio performances may be moderated by the investors’ demographic characteristics such age, gender, level of education and amount of funds under management (Nilsson, 2008; Nilsson, 2009; Junkus and Berry, 2010).

A number of research gaps arise from the analysis of the issues examined in this paper. These include: Firstly, lack of consensus on why SRI occurs even when empirical evidence on the impact of SRI on portfolio performance is inconclusive. Secondly, difficulties in assessment of non-financial risk and return created by SRI especially given the inability to quantify social, ethical, governance, moral and environmental issues. Thirdly, most studies have not controlled for any intervening or moderating variable affecting the relationship between SRI and portfolio performance. Variables such as differences in demographic characteristics of the fund managers and portfolio management process may affect the relationship between SRI and portfolio performance.

Arising from the research gaps identified, several areas of further study have been suggested. These include: Firstly, a research instrument be developed to empirically test the variables that impact on socially responsible investment including the moderating and intervening variables. Secondly, a study can be undertaken to investigate the heterogeneity among investor clienteles and its implications for understanding the effects of social values on asset prices. Thirdly, given that investors have different reasons for investing in SRI profiled mutual funds, future research with regard to this segmentation would be to find out the reasons why investors belong to certain groups. Fourthly, further research can be done focusing on the type of mutual funds that could be marketed to the different investors’ segments and finally, an index can be developed to quantify the non-financial risk and returns existing in SRI mutual funds.

IRAYA, MWANGICYRUS, Duncan M.  2012.  An Investigation into the Existence of Exchange Rate Arbitrage in The Mombasa Spot Market. International Journal of Humanities and Social Sciences. 2(21):182-196. Abstract

This study sought to investigate if exchange rate arbitrage existed in the Mombasa spot market. The study was conducted in a background of gains in information efficiencies, drastic reductions in information costs and increased market vibrancy. The study is descriptive in nature. The population in this study comprised all the banks and forex bureaus that were operational in Mombasa between January and December, 2010. Those included 26 banks and 14 forex bureaus. A census was conducted. The study covered 252 days in the year 2010. Analysis of both triangular and locational arbitrage opportunities was done. The findings showed that both arbitrages existed in the spot market but descriptive statistics indicated a comparative decline from earlier studies with comparative sums, means, counts and maximums generally declining. A decline of 59% on locational arbitrage frequencies was registered on Mule (2004). Further, declines of 64% on locational and 67% on triangular arbitrage frequencies were registered from Muhoro (2005). The results also indicated that triangular arbitrage presented more arbitrage opportunities than locational arbitrage. While the mean arbitrage was 147.1% higher, the sum was 52.7% greater and 291.8% more margins were realized. In addition, hard currencies that were more frequently traded including the US Dollar, Sterling Pound and Euro were more efficiently priced than hard currencies that were hardly traded including the Australian Dollar, Japanese Yen and the Canadian Dollar. This study therefore lent support to literature and studies that have identified market vibrancy, information cost reductions and greater proliferation of information as foctors that lead to greater market pricing efficiency and less arbitrage opportunities. The study equally lent support to existence of pricing inefficiencies in the foreign exchange market that lead to exchange rate arbitrage opportunities.

IRAYA, MWANGICYRUS, Millicent O, Samuel A.  2012.  Capital Structure Adjustment, Speed of Adjustment and Optimal Target Leverage among Firms Quoted on the Nairobi Stock Exchange. International Journal of Humanities and Social Sciences. 2(9):100-114. Abstract

The literature provides conflicting assessments about how firms choose their capital structures, with the trade off, pecking order and market timing hypothesis all receiving some empirical support. The study’s objectives were to determine whether firms in Kenya have an optimal target leverage, whether an adjustment towards this target takes place and finally to ascertain the speed of adjustment towards this target leverage. Secondary data was collected from the records maintained at NSE. From these records financial statements for 12 years starting from the year 1999 to 2010, were extracted. Out of the 30 firms targeted, only 23 firms met the criteria of having complete data for at least ten years. Analysis was done using descriptive statistics together with a partial regression model. Estimations from the model established that firms in Kenya do have target capital structure. On average however, a typical firm closes about 5.3% of the gap between the current and the desired leverage within one year. At this rate it takes about 10 years to close half of the gap between a typical firm’s current and the desired leverage ratios. The slow adjustment is consistent with the hypothesis that other considerations such as market timing or pecking order outweigh the costs of deviating from the optimal leverage.

1992

IRAYA, MWANGICYRUS.  1992.  Forecasting demand in health services: The case of University of Nairobi Health clinics. , Nairobi: University of Nairobi

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