Daily Equity Report |
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Welcome to the Sharenet Daily Equity Report
Issue: 10 February 2011 20:00
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The outlook for longer term interest ratesLong 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 these views of higher inflationary pressure into the future, it is important to assess the composition of your asset allocation.
If you would like to set up a time to meet in order to discuss your portfolio and its positioning, please don't hesitate to contact us.
Kind regards
Ian de Lange
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Thu, 10 Feb 2011
South Africa's rand fell more than 1.0 percent against the dollar on Thursday, hit by worse-than-expected local manufacturing data and tracking weaker emerging markets as investors avoided holding riskier assets. Full story |
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A fall in South African thermal coal prices to $113 a tonne this week has started to draw out Indian buyers who have been sidelined since November, Indian traders said on Thursday. Full storyA spike in iron ore prices lifted Kumba Iron Ore's full-year profit, with the company saying it expected prices to remain firm this year. Full storyRevenue for the interim period ended 31 December 2010 increased to R322.4 million (2009: R249.2 million). Operating profit for the period was higher at R40.3 million (2009: R34.9 million). Attributable to equity holders of the parent rose slightly to R22.8 million (2009: R22.4 million). Head Full story |
Anglo American's thermal coal unit is keen to expand its operations in South Africa and beyond, but is waiting for price. . . Full story | South Africa's Telkom will offer some of its workers voluntary severance packages and met with unions this week, as the struggling. . . Full story | Growth in South Africa's manufacturing output slowed to just 0.2 percent on the year in December and was far below analysts. . . Full story | South Africa's rand fell over 1.0 percent against the dollar after worse-than-expected December manufacturing data on Thursday.. . . Full story |
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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10/02/2011 | 118 | 217 | 92 | 427 | 360,218,925 | R17,171,176,039 | 138620 | 2389912 | 09/02/2011 | 144 | 194 | 85 | 423 | 311,874,190 | R14,978,748,530 | 129431 | 2258278 | 08/02/2011 | 163 | 182 | 78 | 423 | 344,019,210 | R18,948,931,141 | 111610 | 2314393 | 07/02/2011 | 143 | 193 | 84 | 420 | 280,494,380 | R15,680,067,051 | 101137 | 2227435 | 04/02/2011 | 203 | 159 | 89 | 451 | 443,491,009 | R14,446,753,747 | 92270 | 2180737 |
Spot Prices Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 32409.48 | -268.08 | -0.82% | JSE Top 40 | 17:00 | 29247.51 | -259.51 | -0.88% | JSE Gold | 17:00 | 2600.79 | -55.79 | -2.10% | JSE Financial | 17:00 | 21195.54 | -162.45 | -0.76% | JSE Industrial | 17:00 | 31535.18 | -259.92 | -0.82% | JSE Indust 25 | 17:00 | 26293.56 | -222.68 | -0.84% | JSE Resource | 17:00 | 59595.79 | -510.33 | -0.85% | DJ Futures | 19:56 | 12184.00 | -18.00 | -0.15% | DJ Ind | 19:45 | 12206.59 | -33.30 | -0.27% | SP 500 | 19:40 | 1320.63 | -0.25 | -0.02% | Nasdaq | 19:40 | 2789.40 | 0.33 | 0.01% | FTSE 100 | 18:35 | 6020.01 | -32.28 | -0.53% | DAX | 19:00 | 7340.28 | 19.38 | 0.26% | CAC40 | 18:40 | 4095.14 | 4.42 | 0.11% | Nikkei | 08:42 | 10605.65 | -12.18 | -0.11% | Shanghai | 09:22 | 2819.06 | 45.90 | 1.66% | Hang-Seng | 10:36 | 22708.62 | -455.41 | -1.97% | All Ords | 07:36 | 5001.70 | 6.60 | 0.13% | NZSE 50 | 06:32 | 3365.87 | -20.61 | -0.61% |
| | Name | Time | RP | Move | % Move | Gold | 19:59 | 1361.72 | -1.56 | -0.11% | Gold/Rand | 20:00 | 9884.04 | 73.42 | 0.75% | Gold/R kg | 20:00 | 317772 | 1363 | 0.43% | Silver | 19:59 | 30.0500 | -.1200 | -0.40% | Platinum | 19:58 | 1825.75 | -19.75 | -1.07% | Palladium | 19:59 | 817.75 | -9.75 | -1.18% | R157 | 17:06 | 7.83 | .01 | 0.13% | R204 | 17:06 | 8.43 | .02 | 0.24% | Brent Crude | 19:56 | 100.80 | .34 | 0.34% | Rand / Dollar | 19:59 | 7.2585 | 0.0620 | 0.86% | Rand / Pound | 19:55 | 11.6637 | 0.0893 | 0.77% | Rand / Euro | 19:55 | 9.8866 | -0.0078 | -0.08% | Rand / NZD | 19:58 | 5.5642 | 0.0118 | 0.21% | Rand / AUD | 19:55 | 7.2943 | 0.0055 | 0.08% | Yen / Dollar | 19:59 | 83.2000 | 0.8400 | 1.02% | Euro / Dollar | 19:55 | 0.7336 | 0.0052 | 0.71% | Dollar / Euro | 19:59 | 1.3625 | -0.0098 | -0.71% | Pound / Dollar | 19:55 | 0.6200 | -0.0008 | -0.13% |
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Click here for the Sharenet Spot Price page
Index Summary Index Name | RP | Move | % Move | Top 40 | 29,247.51 | -259.51 | -0.88% | Industrial | 31,535.18 | -259.92 | -0.82% | Mid Cap | 41,014.98 | -206.76 | -0.50% | Small Cap | 32,381.56 | -99.54 | -0.31% | Resource 20 | 59,595.79 | -510.33 | -0.85% | Industrial 25 | 26,293.56 | -222.68 | -0.84% | Financial 15 | 8,015.49 | -74.98 | -0.93% | Financial & Ind. 30 | 29,591.03 | -267.31 | -0.90% | All Share | 32,409.48 | -268.08 | -0.82% | Oil & Gas | 28,032.81 | 274.57 | 0.99% | Mining | 39,321.75 | -440.00 | -1.11% | Gold Mining | 2,600.79 | -55.79 | -2.10% | Platinum Mining | 80.00 | -.22 | -0.27% | Oil & Gas Producers | 15,072.72 | 147.63 | 0.99% | Basic Materials | 32,985.63 | -345.20 | -1.04% | Chemicals | 13,504.01 | -23.94 | -0.18% | Forestry & Paper | 14,006.71 | 97.92 | 0.70% | Industrial Metals | 29,787.90 | -261.07 | -0.87% | Industrials | 28,323.93 | -100.53 | -0.35% | General Industrials | 77,170.86 | -313.87 | -0.41% | Consumer Goods | 26,682.49 | -21.71 | -0.08% | Automobiles & Parts | 2,830.57 | .00 | 0.00% | Household Goods | 155.77 | -3 | -1.69% | Health Care | 31,440.49 | -215.26 | -0.68% | Beverages | 82,525.14 | 37.59 | 0.05% | Food Producers | 47,604.98 | -520.55 | -1.08% |
| | Index Name | RP | Move | % Move | Personal Goods | 415.88 | 1.49 | 0.36% | Consumer Services | 50,845.66 | -921.94 | -1.78% | General Retailers | 36,791.93 | -698.29 | -1.86% | Travel & Leisure | 4,007.56 | -36.84 | -0.91% | Media | 85,156.07 | -1649.75 | -1.90% | Support Services | 2,545.47 | -7.48 | -0.29% | Telecommunications | 60,386.39 | -1136.76 | -1.85% | Financials | 21,195.54 | -162.45 | -0.76% | Banks | 38,960.92 | -568.40 | -1.44% | Non-life Insurance | 30,553.86 | .00 | 0.00% | Life Insurance | 16,093.88 | -30.65 | -0.19% | General Financial | 2,311.90 | -21.88 | -0.94% | Technology | 20,886.03 | -146.88 | -0.70% | SHARIAH TOP40 | 3,335.75 | -33 | -0.97% | FTSE/JSE SHARIAH ALL | 3,386.20 | -31 | -0.91% | COAL MINING | 21,563.28 | 26 | 0.12% | FTSE JSE Fledgling | 4,652.10 | -14 | -0.30% | FTSE/JSE Alt X | 1,103.85 | 13 | 1.16% | SA LISTED PROPERTY | 363.54 | | 0.13% | CAPPED PROPERTY | 305.15 | | 0.23% | RESOURCE | 32,788.01 | -281 | -0.85% | DIVIDEND PLUS | 165.91 | -2 | -1.11% | FTSE/JSE RAFI 40 | 6,780.36 | -50 | -0.73% | Capped Top 40 | 15,107.37 | -132 | -0.87% | Capped All Share | 16,248.07 | -134 | -0.82% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | NPN | NASPERS LIMITED | BUY | 08 Feb | JDG | JD GROUP LIMITED | HOLD | 08 Feb | LEW | LEWIS GROUP LIMITED | BUY | 08 Feb | FSR | FIRSTRAND LIMITED | BUY | 07 Feb | NED | NEDBANK GROUP LTD | HOLD | 07 Feb |
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Results Expected** Expected | Company Name | Fin. Date | 11 Feb 2011 | AQUARIUS | December 2010 (Interim) | 11 Feb 2011 | AQUARIUSCVT | December 2010 (Interim) | 14 Feb 2011 | GROUP 5 | December 2010 (Interim) | 15 Feb 2011 | CLIENTELE | December 2010 (Interim) | 15 Feb 2011 | HULAMIN | December 2010 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | FIRSTRANDB-P | 11-02-03 | 11-02-18 | 11-02-28 | R 3.1355 | CAPITAL | 11-02-03 | 11-02-18 | 11-02-28 | R 0.3178 | REDEFINE | 11-02-02 | 11-02-18 | 11-02-28 | R 0.1500 | HUDACO | 11-01-28 | 11-03-04 | 11-03-14 | R 2.3500 | CBH | 11-01-27 | 11-05-06 | 11-05-16 | R 0.1110 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | FOORDCMPS | 11-01-20 | 11-02-04 | 11-02-14 | R 0.5385 | UCS | 10-11-23 | 11-02-04 | 11-02-14 | R 0.0500 |
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Upcoming AGMs** Code | Company Name | Date | Status | ARL | Astral Foods Ltd | 10/02/2011 | Confirmed | OCE | Oceana Group Ltd | 10/02/2011 | Confirmed | ANDP | Andulela Investment Holdings Ltd | 11/02/2011 | Unconfirmed | SKY | Sea Kay Holdings Ltd | 11/02/2011 | Confirmed | AND | Andulela Investment Holdings Ltd | 11/02/2011 | Unconfirmed |
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