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 Issue: 17 February 2011 20:00

An Update on Inflation

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The inflation numbers to the end of January came out yesterday in line with market consensus at 3.7%. This number is still on the low end of the 3% - 6% that the Monetary Policy Committee (MPC) targets, which could result in investors, and citizens alike, thinking that we don’t need to be worried about inflation for the foreseeable future. While I don’t think that we are at risk of runaway inflation, there are some important issues that everyone should be aware of going forward.

Firstly, we are STILL seeing many sectors of the economy demanding (and striking) for wage hikes in excess of 6%. Over 65 000 truck drivers are the latest to go on strike, with their demands for a 10% wage hike per annum for the next 2 years – and now willing to take 9%. Without going into the discussion of whether they are earning a fair wage for what they do – this is always a contentious debate – a 10% wage increase should rationally only be given by their employers if the drivers had improved their productivity by at least 4% over the year.

Rationally, for an employee with no change in job description, his/her wage increase should be inflation plus or minus the change in his/her productivity. Any increase in excess of this amount leads to inflationary pressures, while any increase less than this amount would result in the employee losing purchasing power.

Ultimately wage increases structurally above the current (and targeted) inflation level will be inflationary as the business owners will, at some stage, need to pass the increased costs onto the end consumer.

Secondly, the inflation rate of food and non-alcoholic beverages looks like it’s on an upward trajectory. At the moment it isn’t having an impact on the total inflation number as it is only 3.1% for the 12 months to January 2011, but in January alone it was 2.2%! With this component of the basket compromising nearly 1/6 of the total basket, we can expect to see it having a bigger impact on the inflation number going forward.

Thirdly, and related to the above point, is the cost of fuel. Petrol was up 3.4% in January, and we know that it is going to be up again in February, and most likely in March. The tailwinds to the inflation number towards the end of 2010 of a lower oil price, and stronger rand have disappeared. We think that there is a higher probability that the rand will be weaker than current levels and oil will be more expensive in US$ at the end of the year than the other way around.

While petrol only contributes 4% to the inflation basket, the second round affects are a lot bigger – i.e. cost of food goes up because it costs the farmer more to farm his land and deliver his produce, etc.

Investors should be aware of these risks. With South Africa being a small open economy, we are very susceptible to inflation shocks, and should therefore factor this into our decision making process.

Take care,

Mike Browne
021 9144 966

Thu, 17 Feb 2011

South Africa's nearly week-long truckers' strike over wages has caused some petrol stations to run dry and raised concerns that a prolonged walk-out could deal a blow to Africa's largest economy.  Full story
Rental revenue fell marginally to R725 million (R738.2 million) and a loss attributable to ordinary equity holders amounted R33 million (profit of R46.8 million). Headline earnings per linked unit dropped to 75.09cpu (92.04cpu). Distributions The board has approved and notice is hereby  Full story
Independent energy trader Gunvor Group Ltd has gained access to anthracite coal produced by South Africa's Leeuw Mining and Exploration and to export capacity at Richards Bay Coal Terminal, Leeuw said on Thursday.  Full story
South Africa's merger regulator dismissed on Thursday an appeal by Freeworld Coatings against the timetable of a takeover bid from Kansai Paint.  Full story

AngloGold Ashanti, the world's third-largest gold producer, said its expects to increase annual output for the first time in seven years,. . .  Full story
Impala Platinum, the world's second-biggest platinum producer, reported a 62 percent jump in first-half profit on Thursday, lifted by higher sales. . .  Full story
South African diversified miner Exxaro Resources said on Thursday its full-year profit likely doubled as the global economic recovery pushed commodity. . .  Full story
Revenue was 38% higher, at R15.3 billion (R11.1 billion) for the six months to 31 December 2010. Gross profit rose to. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 FREEWORLD  1181827.46.%11089
2 OCEANA  37981985.50.%26642
3 VIVIDEND  488234.95.%19600
4 BASREAD  1110454.23.%198082
5 CLIENTELE  1000404.17.%276304
6 SACOIL  18573.93.%2048226
7 LITHA  270103.85.%507349
8 WOOLIES  2551913.70.%9838528
9 URONE  44001503.53.%26692
10 JASCO  13443.08.%11925
11 GBGOLD  2050603.02.%1920
12 TRUWTHS  64821722.73.%1371572
13 DAWN  810202.53.%179171
14 ALTRON  2790602.20.%143814
15 BARWORLD  73551552.15.%2318357
16 OMNIA  75701492.01.%90505
17 AFRO-C  16531.85.%159673
18 PERGRIN  1100201.85.%895928
19 MEDCLIN  2974541.85.%234149
20 SPAR  93691691.84.%179624

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Major Moves Down
SharenameSaleMove% MoveVolume
1 WINHOLD  171-19-10.00.%10407
2 SOVFOOD  550-50-8.33.%51853
3 OANDO  340-25-6.85.%18500
4 VILLAGE  216-14-6.09.%1771
5 VERIMARK  155-9-5.49.%10000
6 AMECOR  156-9-5.45.%58000
7 AFEAGLE  171-9-5.00.%4700
8 JUBILEE  328-13-3.81.%191374
9 PUTPROP  540-20-3.57.%3000
10 RANGOLD  280-10-3.45.%1200
11 GOLDONE  238-7-2.86.%83879
12 RBPLAT  6510-188-2.81.%173424
13 EQSTRA  630-18-2.78.%531501
14 EASTPLATS  1240-30-2.36.%18751
15 ALTRON-P  2565-60-2.29.%288295
16 SUNINT  10100-220-2.13.%134111
17 PALCAP  285-6-2.06.%35260
18 INVICTA  4300-90-2.05.%86943
19 COAL  1068-21-1.93.%174183
20 S-OCEAN  211-4-1.86.%70310

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New Highs
SharenameSaleHighMove% MoveVolume
1 AFRO-C  165116531.85.%159673
2 EXXARO  1570016135-150-0.95.%867095

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New Lows
SharenameSaleLowMove% MoveVolume
1 CITYLDG  68306800-39-0.57.%96341
2 PPC  28752840-5-0.17.%923452

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0032722.91-55.21-0.17%
JSE Top 4017:0029498.06-80.11-0.27%
JSE Gold17:002708.4232.051.20%
JSE Financial17:0021600.5754.130.25%
JSE Industrial17:0032081.5333.320.10%
JSE Indust 2517:0026772.098.460.03%
JSE Resource17:0059489.79-369.87-0.62%
DJ Futures19:1012275.0025.000.20%
DJ Ind19:4512294.576.400.05%
SP 50019:361338.101.780.13%
FTSE 10018:356087.382.110.03%
All Ords07:385026.007.400.15%
NZSE 5006:323395.7011.220.33%
NameTimeRPMove% Move
Gold/R kg20:003198731100.03%
Brent Crude19:56103.32-.10-0.10%
Rand / Dollar19:597.1964-0.0478-0.66%
Rand / Pound19:5511.5986-0.0322-0.28%
Rand / Euro19:559.7818-0.0485-0.49%
Rand / NZD19:585.4634-0.0006-0.01%
Rand / AUD19:557.28700.01770.24%
Yen / Dollar19:5683.2800-0.3900-0.47%
Euro / Dollar19:550.7354-0.0017-0.23%
Dollar / Euro19:581.35940.00320.24%
Pound / Dollar19:550.6185-0.0029-0.47%

Click here for the Sharenet Spot Price page
Index Summary
Index NameRPMove% Move
Top 4029,498.06-80.11-0.27%
Mid Cap41,772.13181.020.44%
Small Cap32,458.39129.100.40%
Resource 2059,489.79-369.87-0.62%
Industrial 2526,772.098.460.03%
Financial 158,200.6625.600.31%
Financial & Ind. 3030,147.9615.510.05%
All Share32,722.91-55.21-0.17%
Oil & Gas 27,675.71-65.46-0.24%
Mining 39,314.82-265.21-0.67%
Gold Mining2,708.4232.051.20%
Platinum Mining80.69-.11-0.14%
Oil & Gas Producers 14,880.72-35.20-0.24%
Basic Materials 33,060.37-209.71-0.63%
Chemicals 13,561.09168.981.26%
Forestry & Paper 14,498.44-43.50-0.30%
Industrial Metals 30,764.57-155.19-0.50%
Industrials 28,698.9348.950.17%
General Industrials 78,875.68319.160.41%
Consumer Goods 26,874.88-127.03-0.47%
Automobiles & Parts 2,830.57.000.00%
Household Goods160.53-1-0.55%
Health Care 31,871.12276.590.88%
Beverages 83,290.59-1110.58-1.32%
Food Producers 47,792.40273.780.58%
Index NameRPMove% Move
Personal Goods 416.481.590.38%
Consumer Services 52,598.17416.220.80%
General Retailers 39,000.64551.491.43%
Travel & Leisure 3,952.41-46.35-1.16%
Media 86,592.71421.530.49%
Support Services 2,580.34.470.02%
Telecommunications 61,313.98179.800.29%
Financials 21,600.5754.130.25%
Banks 39,869.3094.500.24%
Non-life Insurance 31,
Life Insurance 16,495.3079.510.48%
General Financial 2,342.5413.190.57%
Technology 20,625.86-135.04-0.65%
SHARIAH TOP40 3,343.00-17-0.51%
FTSE/JSE SHARIAH ALL3,396.15-15-0.43%
COAL MINING22,096.59-205-0.92%
FTSE JSE Fledgling 4,679.52-23-0.49%
FTSE/JSE Alt X 1,097.16-2-0.20%
CAPPED PROPERTY 306.83-0.18%
RESOURCE 32,730.69-203-0.62%
DIVIDEND PLUS168.2600.23%
FTSE/JSE RAFI 406,874.28-7-0.10%
Capped Top 4015,275.80-26-0.17%
Capped All Share16,426.45-20-0.12%

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Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
18 Feb 2011CAPEVINDecember 2010 (Interim)
18 Feb 2011GRINDRODDecember 2010 (Final)
18 Feb 2011GRINDROD PREFDecember 2010 (Final)
18 Feb 2011IMPLATSDecember 2010 (Interim)
18 Feb 2011ITLTILEDecember 2010 (Interim)

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
WINHOLD10-11-2911-02-1111-02-21R 0.1000
TREMATON10-11-0911-02-1111-02-21R 0.0150

Upcoming AGMs**
CodeCompany NameDateStatus
JDGJD Group Ltd17/02/2011Confirmed
TFXTop Fix Holdings Ltd17/02/2011Confirmed
EOHEOH Holdings Ltd17/02/2011Unconfirmed
PFGPioneer Food Group Ltd18/02/2011Confirmed
PFGAPioneer Food Group Ltd18/02/2011Confirmed

Stock Exchange News Service
17/02/201117:38BRT/BRN - Brimstone Investment Corporation Limited - Trading statement
17/02/201117:30 Exxaro Resources Limited - Trading of Exxaro ordinary shares on behalf of
17/02/201117:16HPA/HPB - Hospitality Property Fund Limited - Unaudited Interim Results for the
17/02/201117:15 African Rainbow Minerals Limited - Trading statement in respect of the six
17/02/201117:09 Adcock Ingram Holdings Limited - Dealings in securities by a director
17/02/201117:08 Pangbourne Properties Limited - Condensed reviewed consolidated interim
17/02/201117:00 Efficient Financial Holdings Limited - Change of name update
17/02/201117:00 Howden Africa Holdings Limited - Trading update
17/02/201116:41 Pinnacle Point Group Limited - Clarification announcement
17/02/201116:37- Simmer & Jack Mines, Limited - Accident at Buffelsfontein Gold Mine
17/02/201116:30 Monteagle - Dealing in securities by directors
17/02/201116:28ANGIHG - Investec Bank Limited - Expiry of Hot Enhanced Dividend Securities 14
17/02/201116:16SABIDI - Investec Bank Limited - Expiry of Enhanced Dividend Securities 14
17/02/201116:14 Illovo Sugar Limited - Dealing in Securities
17/02/201116:08IMPIDI - Investec Bank Limited - Expiry of enhanced dividend securities 14
17/02/201116:07 Vukile Property Fund Limited - Cautionary announcement
17/02/201115:54NPNIHG - Investec Bank Limited - Expiry of Hot Enhanced Dividend Securities 14
17/02/201115:52BILIHH - Investec Warrants - Declared dividend announcement on BHP Billiton Plc
17/02/201115:50ANGIDI - Investec Bank Limited - Expiry of enhanced dividend securities 14
17/02/201115:48TBSIDG - Investec Bank Limited - Expiry of enhanced dividend securities 14
17/02/201115:46ASAIDH - Investec Bank Limited - Expiry of Enhanced Dividend Securities 14
17/02/201115:44STXIRU - Investec Bank Limited - Expiry of barrier put securities 14 February
17/02/201115:43TKGIDH - Investec Bank Limited - Expiry Of Enhanced Dividend Securities 14
17/02/201115:41GFIIHH - Investec Bank Limited - Expiry of hot enhanced dividend securities 14
17/02/201115:39SABIHF - Investec Bank Limited - Expiry of Hot Enhanced Dividend Securities 14
17/02/201115:36MVL/NHM - Mvelaphanda Resources Limited/Northam Platinum Limited - Notice of
17/02/201115:35MVL/NHM - Mvelaphanda Resources Limited/Northam Platinum Limited - Revised
17/02/201115:10GEN - Freeworld Coatings Ltd / Kansai Paint Co. Ltd - SRP Ruling
17/02/201115:09SIM/VIL - Simmer & Jack Mines, Limited - Application for a waiver of
17/02/201115:03 JD Group - Results of the annual general meeting - 17 February 2011
17/02/201115:00 SA Corporate Real Estate Fund - Changes to the Board of Directors of SA
17/02/201114:57 Top Fix Holdings Limited - Results of AGM and resignation of a non
17/02/201114:28 City Lodge Hotels Limited - Change to board of directors
17/02/201113:47 William Tell Holdings Limited - Unaudited results for the six months ended
17/02/201113:15 Telkom SA Limited - Announcement of the appointment of the New Chairman of
17/02/201113:12 Consolidated Infrastructure Group Limited - Dealing in securities
17/02/201111:59 Queensgate Hotels And Leisure - Renewal of cautionary announcement
17/02/201110:16 IFCA Technologies Limited - Detailed Cautionary Announcement
17/02/201110:00 Exxaro Resources Limited - Trading statement for the 12-month period
17/02/201109:59 Aquarius Platinum Limited - Interim Dividend Timetable
17/02/201108:42 IFCA Technologies Limited - IFCA Tech secures USD100 million capital
17/02/201108:04 Anglogold Ashanti - Dr James Motlatsi retires as a non-executive
17/02/201108:01 Anglogold Ashanti - Anglogold Ashanti`s $294m profit follows hedge
17/02/201108:00 Reinet Investments S.C.A. Depositary Receipts - Reinet to participate
17/02/201108:00 Impala Platinum Holdings - Consolidated interim results (reviewed) for
17/02/201108:00STXDIV - Satrix Dividend Plus Portfolio - Listing of additional securities
17/02/201107:58 Anglogold Ashanti Limited - Report to shareholders for the quarter and
17/02/201107:53 Simeka Business Group Limited - Updated trading statement
17/02/201107:52 Huge Group Limited - Director`s dealings in securities
17/02/201107:30 Italtile Limited - System wide turnover analysis for the period ended 31
17/02/201107:16 Anglo American plc - Treasury Shares - Transfers
17/02/201107:15 Anglo American plc - Anglo American Share Incentive Plan - SIP
17/02/201107:05 Woolworths Holdings Limited - Unaudited interim group results and cash

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