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Welcome to the Sharenet Daily Equity Report
 Issue: 08 February 2011 20:00

Another look at commodities

Commodity price rise – both a market positive and a market risk.

For a country such as SA, which is commodity rich, the ongoing rise in the price of many commodities is generally seen as positive.

At the same time on a global basis, many investment strategists are citing this ongoing inflationary rise in prices as the single biggest risk for markets. Rising inflation demands higher interest rates.

While there is some concern that many emerging markets are not being enough in raising interest rates, so far India, Indonesia, Thailand and South Korea have raised their interest rates this year.


Also China today announced an uptick in its core interest rates for the third time in four months. The People’s Bank of China announced that it would raise the one year deposit rate by 0,25% to 3% and the lending rate by 0,25% to 6,06%.

This had a dampening effect on global markets, but at these early stages it is not enough to turn the more bullish sentiment.

Global money supply

Is there is direct link between global money supply and rising commodity prices? We do know that the liquidity created around the world post the 2008 financial crisis was on an unprecedented scale. Now 2½ years later we are seeing the aftermath of this liquidity in rising prices.

The chart below reflects the exponential rise in country reserves, including the current $2,4 trillion on the balance sheet of the US Federal Reserve.

Chart - global reserves

Source: Ecowin

Various commodities

BCA Research put out a note saying that at $100/barrel, the higher price of oil is not yet having a negative impact on the demand for oil and they are still bullish on energy shares. Locally there is really only one direct recipient of higher oil prices – Sasol – the coal and gas to liquid company.

Sasol has a market cap of R240 billion. The company announced at the beginning of February that its expected half year results to December are estimated to increase by 17% to 27%. For the full year to June Inet have broker consensus earnings up 13,6% in 2011, 20% in 2012 and 16% in 2013.

BCA Chart : Oil spend as a percentage of Nominal GDP

The demand for oil is still strong, given factors such as :
• The demand from China which is growing as it transitions into a “car economy”;
• Vehicle miles in the US are growing;
• Sales of SUV and light trucks have reaccelerated

At the same time as the chart above indicates the global energy consumption as a percentage of GDP remains below the 2008 high.

According to their findings, energy prices are sustainable at today’s prices and are set to move higher.

Chart wheat price

Chart sugar price

Chart copper price

Commodity companies on the JSE

With the large weighting of Anglo American, Billiton and Sasol in the overall market, the weighting to the Resource sector for the JSE All Share index has always been high.

At certain times, the resource index has moved sharply away from the overall index, as we saw in 2007 /2008. Over time investors in the more volatile resource sector have been rewarded, but it is not that clear whether this additional return has been commensurate with the additional volatility sustained.

Because the large companies, Anglo American and Billiton are essentially global companies, the two main drivers for local investors are the profitability of their basket of commodities plus the impact of the currency relative to the US dollar, which is the currency commodities are priced in.

Resource index relative to JSE All Share index from January 2000

An ongoing rise in commodities together with some rand weakness could translate into a double whammy for locally listed resource shares.


Ian de Lange
021 9144 966

Tue, 08 Feb 2011

South African stocks inched lower for the second straight day on Tuesday but remained near 2-1/2-year highs, as a rate hike by China made it easier for investors to cash in shares after recent aggressive gains.  Full story
Japan is keen to invest "billions of dollars" in minerals and infrastructure in Africa, trying to catch up to regional rival China for influence on the continent, a Japanese trade official said on Tuesday.  Full story
Nedbank is likely to show an improvement at its struggling retail unit when it reports its full-year results, the chief executive of South Africa's fourth-largest bank said on Tuesday.  Full story
South Africa exported 13,414 tonnes of white maize last week, compared with 12,222 tonnes in the previous week, South African Grain Information Service (SAGIS) data showed on Tuesday.  Full story

A state-owned South African mining company likely to focus on coal and uranium will be up and running by the end. . .  Full story
An 11 billion rand South African manganese building project, which includes a mine and smelter, was on track with first processed. . .  Full story
South Africa's official jobless rate fell to 24.0 percent of the labour force in the fourth quarter of 2010, from 25.3. . .  Full story
ArcelorMittal South Africa, a unit of the world's biggest steelmaker, on Tuesday posted a return to full-year profit, lifted by stronger. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 TRNSHEX  2622510.55.%112679
2 AMECOR  172148.86.%1217
3 SACOIL  169116.96.%1405502
4 HUDACO  88514214.99.%24440
5 MVELARES  39201503.98.%1669933
6 CAPITEC  174016013.58.%82488
7 ARM   228007513.41.%1079626
8 FAMBRANDS  39781283.32.%21804
9 ILIAD  784253.29.%7827
10 WINHOLD  17053.03.%73000
11 OPTIMUM  35001002.94.%65523
12 RICHEMONT  41531182.92.%21674759
13 PIKWIK  1868512.81.%269753
14 DAWN  820202.50.%16481
15 KELLY  440102.33.%2200
16 PICKNPAY  4360902.11.%2971220
17 ANGLOPLAT  7289414892.09.%499243
18 CIPLAMED  740152.07.%1061947
19 PNR-FOODS  55011011.87.%12176
20 WESIZWE  22641.80.%391680

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Major Moves Down
SharenameSaleMove% MoveVolume
1 PUTPROP  501-59-10.54.%3325
2 ONELOGIX  123-12-8.89.%215176
3 GOLDREEF  1665-129-7.19.%121531
4 MASONITE  3500-185-5.02.%3202
5 AMA  210-10-4.55.%3000
6 MERAFE  156-6-3.70.%6473377
7 MONDIPLCP  5949-204-3.32.%1275067
8 PLATMIN  615-20-3.15.%6000
9 VERIMARK  160-5-3.03.%5800
10 MONDILTDP  5919-178-2.92.%198076
11 LONMIN  20850-600-2.80.%194300
12 AFGRI  700-20-2.78.%222747
13 IMPERIAL  10800-299-2.69.%1896384
14 PERGRIN  1072-28-2.55.%268888
15 BWI  117-3-2.50.%133200
16 JUBILEE  355-9-2.47.%273757
17 REUNERT  6290-140-2.18.%322538
18 URONE  4680-100-2.09.%12996
19 VIVIDEND  470-10-2.08.%65950
20 TRENCOR  3525-74-2.06.%113403

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New Highs
SharenameSaleHighMove% MoveVolume
1 HUDACO  885188514214.99.%24440
2 CAPITEC  17401174016013.58.%82488
3 WINHOLD  17017053.03.%73000
4 RICHEMONT  415341531182.92.%21674759
5 TREMATON  13413410.75.%23200
6 BEE-SASOL  31000310000.62
7 BILLITON  2929129839-92-0.31.%4051061
8 EASTPLATS  13031350-7-0.53.%301792
9 ANGLO  3897439710-326-0.83.%5854555

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New Lows
SharenameSaleLowMove% MoveVolume
1 VIVIDEND  470430-10-2.08.%65950
2 CITYLDG  70006950-10-0.14.%147505

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0032788.86-11.37-0.03%
JSE Top 4017:0029616.21-5.49-0.02%
JSE Gold17:002662.0923.390.89%
JSE Financial17:0021358.07-64.63-0.30%
JSE Industrial17:0031908.3270.500.22%
JSE Indust 2517:0026638.1675.120.28%
JSE Resource17:0060390.95-99.26-0.16%
DJ Futures19:1612156.0048.000.40%
DJ Ind19:3512203.5641.930.34%
SP 50019:401322.533.480.26%
FTSE 10018:356091.3340.300.67%
All Ords07:364983.1018.800.38%
NZSE 5006:563383.17-4.24-0.13%
NameTimeRPMove% Move
Gold/R kg19:5631498614290.46%
Brent Crude19:5699.62-.27-0.27%
Rand / Dollar19:587.1715-0.0538-0.74%
Rand / Pound19:5511.5077-0.1182-1.02%
Rand / Euro19:559.7983-0.0264-0.27%
Rand / NZD19:585.5606-0.0063-0.11%
Rand / AUD19:557.3000-0.0355-0.48%
Yen / Dollar19:5981.9300-0.3900-0.47%
Euro / Dollar19:550.7315-0.0047-0.64%
Dollar / Euro19:581.36630.00840.62%
Pound / Dollar19:550.62110.00070.11%

Click here for the Sharenet Spot Price page
Index Summary
Index NameRPMove% Move
Top 4029,616.21-5.49-0.02%
Mid Cap41,287.47-77.97-0.19%
Small Cap32,551.7372.410.22%
Resource 2060,390.95-99.26-0.16%
Industrial 2526,638.1675.120.28%
Financial 158,086.52-32.67-0.40%
Financial & Ind. 3029,941.6928.910.10%
All Share32,788.86-11.37-0.03%
Oil & Gas 27,934.47-196.33-0.70%
Mining 39,941.16-34.62-0.09%
Gold Mining2,662.0923.390.89%
Platinum Mining80.59.740.93%
Oil & Gas Producers 15,019.85-105.56-0.70%
Basic Materials 33,471.95-42.64-0.13%
Chemicals 13,563.18-48.57-0.36%
Forestry & Paper 14,087.46-255.77-1.78%
Industrial Metals 29,836.5452.280.18%
Industrials 28,528.05-110.59-0.39%
General Industrials 77,523.53-4.57-0.01%
Consumer Goods 26,675.32266.421.01%
Automobiles & Parts 2,830.57.000.00%
Household Goods160.7910.60%
Health Care 31,473.584.630.01%
Beverages 82,173.1641.000.05%
Food Producers 47,911.67-192.04-0.40%
Index NameRPMove% Move
Personal Goods 414.7911.792.93%
Consumer Services 51,951.35-259.74-0.50%
General Retailers 37,663.66-78.83-0.21%
Travel & Leisure 4,015.87-12.47-0.31%
Media 87,037.90-1051.24-1.19%
Support Services 2,554.3624.060.95%
Telecommunications 62,644.50372.250.60%
Financials 21,358.07-64.63-0.30%
Banks 39,582.25-217.73-0.55%
Non-life Insurance 30,553.86-121.24-0.40%
Life Insurance 16,049.93-31.59-0.20%
General Financial 2,343.861.130.05%
Technology 20,875.48-112.54-0.54%
SHARIAH TOP40 3,388.13-3-0.09%
FTSE/JSE SHARIAH ALL3,435.78-3-0.09%
COAL MINING21,862.154362.04%
FTSE JSE Fledgling 4,678.96-15-0.31%
FTSE/JSE Alt X 1,096.8980.76%
RESOURCE 33,225.48-54-0.16%
DIVIDEND PLUS167.45-1-0.32%
FTSE/JSE RAFI 406,850.13-12-0.18%
Capped Top 4015,293.7360.04%
Capped All Share16,436.88-3-0.02%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
09 Feb 2011ARBDecember 2010 (Interim)
10 Feb 2011ANGLDDecember 2010 (Final)
10 Feb 2011ANGLD-ADecember 2010 (Final)
10 Feb 2011ANGLD-BDecember 2010 (Final)
10 Feb 2011ANGLD-EDecember 2010 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
FIRSTRANDB-P11-02-0311-02-1811-02-28R 3.1355
CAPITAL11-02-0311-02-1811-02-28R 0.3178
REDEFINE11-02-0211-02-1811-02-28R 0.1500
HUDACO11-01-2811-03-0411-03-14R 2.3500
CBH11-01-2711-05-0611-05-16R 0.1110
Ex Div**
Share NameDec-DateLDTPay-DateAmount
FOORDCMPS11-01-2011-02-0411-02-14R 0.5385
UCS10-11-2311-02-0411-02-14R 0.0500

Upcoming AGMs**
CodeCompany NameDateStatus
AWTAwethu Breweries Ltd08/02/2011Confirmed
RLOReunert Ltd08/02/2011Confirmed
RLZPReunert Ltd08/02/2011Confirmed
RLPReunert Ltd08/02/2011Confirmed
MIPMerchant - Industrial Properties Ltd08/02/2011Confirmed

Stock Exchange News Service
08/02/201117:22GND/GNDP - Grindrod - Results presentations for the year ended 31 December 2010
08/02/201117:00 Command Holdings Limited - Further cautionary announcement and the
08/02/201116:45 Simeka Business Group Limited - Change to the board of directors
08/02/201116:45MND/MNP - Mondi Limited/Mondi Plc - Employee share plans
08/02/201116:37 Pallinghurst Resources Limited - Construction of Tshipi Borwa Manganese
08/02/201116:36SCIB - The Standard Bank Of South Africa Limited - Issue of stock warrants
08/02/201116:35 Netcare Limited - Dealings in securities by directors
08/02/201116:29 Simeka Business Group Limited - Appointment of Auditors
08/02/201116:05 Alert Steel Holdings Limited - Disposal of Alert Plumbing, The Klerksdorp
08/02/201115:46 Reunert Limited - Change to the board of directors
08/02/201115:39 Ingenuity Property Investments Limited - Announcement regarding the
08/02/201115:32CPI / CPIP - Capitec Bank Holdings Limited - Trading statement
08/02/201115:15 Iliad Africa Limited - Appointment of company secretary
08/02/201115:13 Decillion Limited - Renewal of cautionary announcement
08/02/201114:59 Clicks Group Limited - Dealing in securities by non-executive director
08/02/201114:59 Awethu Breweries Limited - Results of the annual general meeting &
08/02/201114:05MVL/NHM - Mvela Resources/Northam - Proposed distribution ratio
08/02/201114:00 Glenrand M I B Limited - Notice of Scheme Meeting
08/02/201113:52AMSIDE - Investec Warrants - Declared final ordinary dividend announcement on
08/02/201112:54 Bauba Platinum Limited - Voluntary suspension and resignation of a
08/02/201111:55 Reunert Limited - Report on proceedings at annual general meeting
08/02/201109:38MVL/NHM - Mvelaphanda Resources / Northam Platinum - Joint announcement
08/02/201109:00 Old Mutual Plc - Old Mutual Asset Management Appoints Peter L. Bain as
08/02/201108:59 Peregrine Holdings Limited - Dealings in securities by a director
08/02/201108:31 Orion Real Estate Limited - Renewal of Cautionary Announcement
08/02/201108:22 Harmony - Results for the second quarter and six months ended 31
08/02/201108:13 Freeworld Coatings Limited - Dealing in securities by director
08/02/201108:00 ArcelorMittal South Africa Limited - Reviewed group financial results
08/02/201108:00ZGOVI - The ZSHARES ETF Scheme - Withdrawal of ZGOVI participatory interests
08/02/201107:05 BHP Billiton Plc - Transaction in shares
08/02/201107:05 ADvTECH Limited - Resignation of company secretary

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