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 Issue: 09 February 2011 20:00 		[Alt-Text]
Outlook for global bonds

Long term interest rates are typically a good predicator of market sentiment. These rates are closely followed and so it was interesting to see BCA Research make the comment yesterday that, “The recent breakout of the U.S. 10-year Treasury yield above 3½% is an important technical signal, highlighting that the macro backdrop is increasingly turning against the bond market.”

Chart US 10 year Treasury yields


Source: Yahoo

Short term interest rates are driven by central banks to either stimulate or curtail growth and inflation, while longer term rates are a clearer reflection of where the market sees inflation over time.

At major turning points the combined market has been wrong. 30 years ago US bonds were yielding 15% as lenders banked on high inflation. As US inflation trended down, so lenders adjusted long rates down in sympathy.

Now we are arguably at another inflection point. Should inflation prove to be difficult to contain, long term interest rates will have to continue to steadily adjust upwards. It will never be in a linear fashion, and so while there will be opportunities on a tactical basis, there is a good probability that this will not be the case strategically.

Graph: real effective funds rate


Against a likely backdrop of higher future inflation, the valuation of global bonds is not attractive, given that they love a low inflation or a steadily declining inflation environment.

The chart presented by BCA Research clearly indicates how the US quickly moved to negative real interest rates in 2008 in a direct attempt to pump liquidity into markets. There was a degree of normalisation in 2009, but as inflation started picking up in 2010, while at the same time that the US maintained near zero interest rates, the real rates turned negative again.

Despite the inflationary concerns across the developed market’s three main central banks, i.e. the US Federal Reserve, UK’s Bank of England and Europe’s, European Central Bank, are likely to hold rates at low levels until early 2012. There is an outside chance that the Bank of England jumps the gun in 2011, given its high inflation numbers.


Source: Wells Fargo Securities

If you are an investor that shares this view of higher inflationary pressure into the future, it is important to assess the composition of your asset allocation.

Kind regards

Ian de Lange
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966

Wed, 09 Feb 2011
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Trading Statistics
DateAdv.Decl.Unch.ActivesVolumeValueTradesOrders
09/02/201114419485423311,874,190R14,978,748,5301294312258278
08/02/201116318278423344,019,210R18,948,931,1411116102314393
07/02/201114319384420280,494,380R15,680,067,0511011372227435
04/02/201120315989451443,491,009R14,446,753,747922702180737
03/02/201120715869434338,656,733R17,250,342,0641137262371736
  
Major Moves Up
SharenameSaleMove% MoveVolume
1 PUTPROP  5605911.78.%1288
2 RANGOLD  310196.53.%7380
3 WINHOLD  181116.47.%324187
4 GOLDREEF  17701056.31.%39639
5 SOVFOOD  680406.25.%33
6 MASONITE  37002005.71.%130
7 ESORFRANK  198105.32.%1192493
8 ANOORAQ  1150454.07.%10241
9 CASHBIL  91583083.48.%10523
10 ALTECH  61992043.40.%188182
11 PLATMIN  635203.25.%4000
12 ALTRON  2800853.13.%416534
13 EQSTRA  670203.08.%252239
14 IPS  10432.97.%600
15 RAINBOW  1750502.94.%16402
16 ARCMITTAL  87202202.59.%707806
17 DORBYL  28572.52.%5000
18 ILIAD  802182.30.%67614
19 PNR-FOODS  56271262.29.%36793
20 ALTRON-P  2700562.12.%353187

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Major Moves Down
SharenameSaleMove% MoveVolume
1 HOWDEN  900-90-9.09.%225
2 ARB  350-30-7.89.%42860
3 MT-EGLE  1100-75-6.38.%7000
4 CROOKES  3825-185-4.61.%11996
5 SASFIN  4000-180-4.31.%150
6 JUBILEE  340-15-4.23.%157158
7 KAP  230-10-4.17.%45000
8 ACUCAP  3140-135-4.12.%165056
9 HUDACO  8500-351-3.97.%7334
10 SAPPI  3699-152-3.95.%6419063
11 OPTIMUM  3375-125-3.57.%69151
12 LITHA  232-8-3.33.%211374
13 S-OCEAN  208-7-3.26.%9700
14 CBH  350-10-2.78.%83216
15 CERAMIC  14200-400-2.74.%413
16 REUNERT  6120-170-2.70.%1483749
17 STEFSTOCK  1110-30-2.63.%31106
18 DELTA  950-25-2.56.%13693
19 BWI  114-3-2.56.%4052256
20 ITLTILE  410-10-2.38.%163000

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New Highs
SharenameSaleHighMove% MoveVolume
1 WINHOLD  181185116.47.%324187
2 ZEDER  27327331.11.%259109
3 RICHEMONT  41494248-4-0.10.%18637977
4 CAPITEC  1700117500-400-2.30.%29716

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New Lows
SharenameSaleLowMove% MoveVolume

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0032677.56-111.30-0.34%
JSE Top 4017:0029507.02-109.19-0.37%
JSE Gold17:002656.58-5.51-0.21%
JSE Financial17:0021357.99-.08-0.00%
JSE Industrial17:0031795.10-113.22-0.35%
JSE Indust 2517:0026516.24-121.92-0.46%
JSE Resource17:0060106.12-284.83-0.47%
DJ Futures19:3212180.00-11.00-0.09%
DJ Ind19:1712211.47-21.68-0.18%
SP 50019:501319.66-4.91-0.37%
Nasdaq19:502790.65-6.40-0.23%
FTSE 10018:356052.29-39.04-0.64%
DAX19:007320.90-2.34-0.03%
CAC4018:404090.74-17.53-0.43%
Nikkei08:2610617.83-18.15-0.17%
Shanghai09:262773.16-26.24-0.94%
Hang-Seng10:2623164.03-320.27-1.36%
All Ords07:374995.1012.000.24%
NZSE 5006:523386.483.300.10%
NameTimeRPMove% Move
Gold19:591362.90-.34-0.02%
Gold/Rand19:579841.1647.100.48%
Gold/R kg19:5631627012390.39%
Silver19:5930.1900-.0700-0.23%
Platinum19:591848.75-3.25-0.18%
Palladium19:58824.25-7.75-0.93%
R15717:067.82-.03-0.38%
R20417:068.41-.04-0.47%
Brent Crude19:56100.70.830.83%
Rand / Dollar19:597.22050.03610.50%
Rand / Pound19:5511.58960.07100.62%
Rand / Euro19:559.89850.10681.09%
Rand / NZD19:575.57240.00180.03%
Rand / AUD19:557.30480.01430.20%
Yen / Dollar19:5982.37000.07000.09%
Euro / Dollar19:550.7292-0.0043-0.59%
Dollar / Euro19:591.37080.00780.57%
Pound / Dollar19:550.6210-0.0010-0.16%

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Index Summary
Index NameRPMove% Move
Top 4029,507.02-109.19-0.37%
Industrial31,795.10-113.22-0.35%
Mid Cap41,221.74-65.73-0.16%
Small Cap32,481.10-70.63-0.22%
Resource 2060,106.12-284.83-0.47%
Industrial 2526,516.24-121.92-0.46%
Financial 158,090.473.950.05%
Financial & Ind. 3029,858.34-83.35-0.28%
All Share32,677.56-111.30-0.34%
Oil & Gas 27,758.24-176.23-0.63%
Mining 39,761.75-179.41-0.45%
Gold Mining2,656.58-5.51-0.21%
Platinum Mining80.22-.37-0.46%
Oil & Gas Producers 14,925.09-94.76-0.63%
Basic Materials 33,330.83-141.12-0.42%
Chemicals 13,527.95-35.23-0.26%
Forestry & Paper 13,908.79-178.67-1.27%
Industrial Metals 30,048.97212.430.71%
Industrials 28,424.46-103.59-0.36%
General Industrials 77,484.73-38.80-0.05%
Consumer Goods 26,704.2028.880.11%
Automobiles & Parts 2,830.57.000.00%
Household Goods158.44-2-1.46%
Health Care 31,655.75182.170.58%
Beverages 82,487.55314.390.38%
Food Producers 48,125.53213.860.45%
Index NameRPMove% Move
Personal Goods 414.39-.40-0.10%
Consumer Services 51,767.60-183.75-0.35%
General Retailers 37,490.22-173.44-0.46%
Travel & Leisure 4,044.4028.530.71%
Media 86,805.82-232.08-0.27%
Support Services 2,552.95-1.41-0.06%
Telecommunications 61,523.15-1121.35-1.79%
Financials 21,357.99-.08-0.00%
Banks 39,529.32-52.93-0.13%
Non-life Insurance 30,553.86.000.00%
Life Insurance 16,124.5374.600.46%
General Financial 2,333.78-10.08-0.43%
Technology 21,032.91157.430.75%
SHARIAH TOP40 3,368.28-20-0.59%
FTSE/JSE SHARIAH ALL3,417.21-19-0.54%
COAL MINING21,537.38-325-1.49%
FTSE JSE Fledgling 4,666.08-13-0.28%
FTSE/JSE Alt X 1,091.22-6-0.52%
SA LISTED PROPERTY 363.08-0.20%
CAPPED PROPERTY 304.46-0.07%
RESOURCE 33,068.81-157-0.47%
DIVIDEND PLUS167.7700.19%
FTSE/JSE RAFI 406,830.09-20-0.29%
Capped Top 4015,239.64-54-0.35%
Capped All Share16,382.49-54-0.33%

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Latest Consensus Changes**
CodeCompany NameStatusUpdated
NEDNEDBANK GROUP LTDHOLD07 Feb
FSRFIRSTRAND LIMITEDBUY07 Feb
SBKSTANDARD BANK GROUP LIMIT...SELL07 Feb
AIPADCOCK INGRAM HLGS LDHOLD07 Feb
LHCLIFE HEALTHCARE GRP HLDG ...BUY07 Feb
Results Expected**
ExpectedCompany NameFin. Date
10 Feb 2011ANGLDDecember 2010 (Final)
10 Feb 2011ANGLD-ADecember 2010 (Final)
10 Feb 2011ANGLD-BDecember 2010 (Final)
10 Feb 2011ANGLD-EDecember 2010 (Final)
10 Feb 2011ARCMITTALDecember 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
SKJSekunjalo Investments Ltd09/02/2011Confirmed
NWNNu-World Holdings Ltd09/02/2011Confirmed
NWLNu-World Holdings Ltd09/02/2011Confirmed
SKBPSekunjalo Investments Ltd09/02/2011Confirmed
SKJPSekunjalo Investments Ltd09/02/2011Confirmed
Stock Exchange News Service
DateTimeHeadline
09/02/201117:38 Cape Empowerment Limited - Dealing in Securities by Director
09/02/201117:34 Adaptit Holdings Limited - Trading Update
09/02/201117:11 PSG Group Limited - Dealing in securities by the PSG Group Limited
09/02/201117:00 Resilient Property Income Fund Limited - Condensed audited consolidated
09/02/201116:58 Mazor Group Limited - Changes to the board of directors
09/02/201116:35 Brikor Limited - Reviewed condensed consolidated financial results for the
09/02/201116:32 Argent Industrial Limited - Dealing in securities by director
09/02/201116:27 Pinnacle Technology Holdings Limited - Trading Statement
09/02/201116:00 IPSA Group Plc - Extension of Marketing Agreement and Change in Repayment
09/02/201115:31 Sappi Limited - Announcement
09/02/201114:55 Merchant & Industrial Properties Limited - Results of the Annual General
09/02/201114:00 British American Tobacco p.l.c. - Management Board Changes at British
09/02/201113:57 Omnia Holdings Limited - Change to the board of directors
09/02/201113:50 Nu-World Holdings Limited - Results of annual general meeting
09/02/201113:16RDFIVC - Investec Warrants - Declared debenture interest announcement on
09/02/201113:15RDFIVB - Investec Warrants - Declared Debenture Interest Announcement On
09/02/201113:14RDFIDG - Investec - Declared interest distribution announcement on Redefine
09/02/201113:13RDFIHD - Investec - Declared interest distribution announcement on Redefine
09/02/201113:05 Wescoal Holdings Limited - Termination of the proposed acquisition of the
09/02/201112:56CCO - Capital & Counties Properties PLC - Notification of 2010 results
09/02/201112:37 Jasco - Change of registered address
09/02/201112:20MND/MNP - Mondi Limited/Mondi Plc - Transactions in Mondi plc ordinary shares
09/02/201111:41 Redefine Properties Limited - Dealing in securities
09/02/201110:51 Italtile Limited - Death of Italtile Ltd chief executive officer,
09/02/201109:28 Litha Healthcare Group Limited - Trading Update
09/02/201109:21 AG Industries Limited - Update on status of AGI and renewal of cautionary
09/02/201109:01 Sappi Limited - Sappi announces cash tender offer for up to $150 Million
09/02/201109:00 ZCI Limited - Term loan agreement between ZCI and African Copper Plc
09/02/201109:00 Sappi Limited - 1st Quarter results for the period ended December 2010
09/02/201108:00 ARB Holdings Limited - Unaudited interim results for the six months ended
09/02/201108:00DBXWD - db x-trackers MSCI World Index EFT - Listing of additional securities
09/02/201107:34 Italtile Limited - Announcement By The Board Of Directors
09/02/201107:15 Anglo American plc - Treasury Shares - Transfers
09/02/201107:05 BHP Billiton Plc - Transaction in shares
09/02/201107:05 Quatum Property Group Limited - Changes to the board of directors

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