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 Issue: 24 February 2011 20:00

Budget Speech 2011 - Review

Pravin Gordhan gave his second annual Budget Speech yesterday afternoon. South Africans have become used to a predictable Budget Speech as delivered by the Minister of Finance, and this year was no different. Most of what was said had already been anticipated by the security markets, and other events on the day had more of an impact on our markets than the contents of the Budget.

A great deal is always made of the changes to the personal income tax brackets, as this is the most obvious (and typically highest) tax that individuals have to pay. The major change in this department each year is the shifting of the levels for each marginal tax rate. Every now and then there are changes to the specific tax rates, but for the most part the brackets are shifted to take into account the effects of inflation.

The chart below shows how the brackets have been adjusted for the coming tax year. It does look like quite a busy chart, but we will walk you through it.

The horizontal axis has been calibrated to show increasing monthly income levels. For each income level the chart shows how much tax was paid this year and how much will be paid next year on a monthly basis, as well as the marginal and average tax rates. The chart also indicates (in the green) what the ‘saving’ is at each income level as a result of the bracket creep. Saving is put in inverted commas as with inflation running at just under 4% (and typically around 6% pa) savings for the higher income earners are in nominal terms only.

At the R 35,000 a month income level and above employees will be paying more tax on a real basis (using an average inflation rate of 6%) while those earning less than this amount will in effect be paying less tax in the future should their income go up at the same rate as inflation.

According to a document released yesterday by SARS and the National Treasury there are some 52,446 taxpayers who earned over R 1,000,000 (R 83,333 per month) in the 2009/10 tax year, with 2,046 of them earning over R 5,000,000! This pool of taxpayers clearly plays an important part in the country’s fiscus, and SARS can be commended on working hard to widen the tax net over recent years.

Taxpayers over the age of 65 have always been given an additional rebate (i.e. they pay less tax then taxpayers under 65) and this year a further rebate was announced for taxpayers over the age of 75. The first R59,750 is tax free for taxpayers under 65, this raises to R 93,150 for those between 65 and 75, and R 104,261 per annum is tax free for taxpayers over 75.

The exemption on income earned from interest has increased to R 22,800 for taxpayers under the age of 65. This equates to R 712,500 invested in a 32 day call account at 3.2% being the threshold for all the income to be tax free. As interest rates fall, so the amount that can be invested in interest earning assets increases and vice versa.

Today we took a brief look at some of the aspects in the latest Budget. Next week we’ll take a look at a few more aspects. For links to some excellent summaries and in depth articles, please click through to our Facebook site. By clicking the ‘Like’ button at the top you will be kept up to date with relevant economic and financial news.

Take care,

Mike Browne
021 9144 966

Thu, 24 Feb 2011

Long-term South African government bonds continued to fall on Thursday in anticipation of supply to fund the budget deficit, while the rand climbed and stocks closed moderately lower.  Full story
South Africa plans to issue 135 billion rand of government bonds in the domestic debt market this year to help cover its budget deficit, the National Treasury's head of asset and liability management, Lungisa Fuzile, said on Thursday.  Full story
The yield spread between South Africa's benchmark 2015 and 2026 bonds expanded to a record high on Thursday because of expectations of heavy supply to fund the government's budget deficit.  Full story
Kenya may pass legislation to eliminate tax barriers to Islamic bond issuance by the end of the year with the government looking to launch Islamic treasury bills and bonds, known as sukuk, bankers said.  Full story

South Africa is expected to reap its lowest maize output in four years after lower prices last year discouraged farmers from. . .  Full story
South Africa wants at least 21.4 percent of iron ore output from Kumba Iron Ore's Sishen mine to be sold at. . .  Full story
Higher prices and sales helped more than double diversified South African miner Exxaro's profits last year but it said the stronger. . .  Full story
South African retailer Massmart reported a slight rise in first-half profits and gave a cautious outlook for the rest of the. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 MARSHALL  80020033.33.%4405
2 BWI  1091212.37.%53850
3 ARB  3603510.77.%3012675
4 CROOKES  38002005.56.%2122
5 KEATON   398133.38.%115000
6 LITHA  25583.24.%261094
7 ANOORAQ  978282.95.%9652
8 ONELOGIX  14442.86.%400
9 URONE  43001002.38.%10033
10 CMH  1330302.31.%3600
11 DORBYL  28462.16.%395500
12 SASOL  381257451.99.%3214077
13 ILLOVO  2699491.85.%395017
14 PAN-AF  12421.64.%1047959
15 EQSTRA  640101.59.%74071
16 AFRIMAT  33551.52.%6667
17 TREMATON  14521.40.%1000
18 NASPERSN  386005001.31.%2046294
19 WINHOLD  17221.18.%506461
20 AFGRI  69881.16.%72974

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Major Moves Down
SharenameSaleMove% MoveVolume
1 MVELAGP-P  980-100-9.26.%6783
2 MRHLD  2497-244-8.90.%9949618
3 HUGE  105-10-8.70.%41612
4 ROLFES  173-12-6.49.%14520
5 AMECOR  159-11-6.47.%10
6 ILIAD  750-50-6.25.%152187
7 AFRO-C  166-9-5.14.%13338
8 SAPPI  3554-180-4.82.%2587067
9 SPURCORP  1300-60-4.41.%21685
10 GROUP-5  2901-124-4.10.%148206
11 BELL  1250-53-4.07.%212385
12 JUBILEE  313-12-3.69.%208899
13 CAPEVIN  8750-325-3.58.%9861
14 STEFSTOCK  1090-40-3.54.%206140
15 DAWN  781-28-3.46.%350000
16 COAL  995-35-3.40.%83037
17 CLICKS  3675-126-3.31.%6626499
18 METOREX  540-18-3.23.%5331278
19 PNR-FOODS  5398-172-3.09.%15078
20 REINET  1130-36-3.09.%4042964

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New Highs
SharenameSaleHighMove% MoveVolume
1 MARSHALL  80080020033.33.%4405
2 ARB  3603903510.77.%3012675
3 SASOL  38125391807451.99.%3214077
4 TREMATON  14514521.40.%1000
5 MONDIPLCP  60926400-158-2.53.%403407
6 AFRO-C  166183-9-5.14.%13338

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New Lows
SharenameSaleLowMove% MoveVolume
1 MRHLD  24972463-244-8.90.%9949618
2 GROUP-5  29012870-124-4.10.%148206
3 KELLY  380380-10-2.56.%1316
4 ESORFRANK  179176-4-2.19.%1490453
5 HOSP-B  910910-20-2.15.%29750
6 PPC  27002675-50-1.82.%1810214
7 HULAMIN  795795-10-1.24.%33473
8 STANBANK  98709755-80-0.80.%5275793
9 LONFIN  203203-1-0.49.%28569
10 BWI  109961212.37.%53850

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0031706.47-225.60-0.71%
JSE Top 4017:0028571.23-172.21-0.60%
JSE Gold17:002777.04-31.46-1.12%
JSE Financial17:0020826.62-232.61-1.10%
JSE Industrial17:0030861.09-428.37-1.37%
JSE Indust 2517:0025716.07-357.66-1.37%
JSE Resource17:0058171.5566.630.11%
DJ Futures19:5012010.00-84.00-0.69%
DJ Ind19:3112035.05-70.73-0.58%
SP 50019:101301.28-6.12-0.47%
FTSE 10018:355919.98-3.55-0.06%
All Ords07:384901.10-34.50-0.70%
NZSE 5006:423368.35-3.72-0.11%
NameTimeRPMove% Move
Gold/R kg20:00320551-1381-0.43%
Brent Crude19:56114.333.312.98%
Rand / Dollar19:597.0530-0.0505-0.71%
Rand / Pound19:5511.3600-0.1403-1.22%
Rand / Euro19:559.7427-0.0373-0.38%
Rand / NZD19:585.2536-0.0459-0.87%
Rand / AUD19:557.1268-0.0114-0.16%
Yen / Dollar19:5881.7500-0.6400-0.78%
Euro / Dollar19:550.7249-0.0021-0.29%
Dollar / Euro19:561.37890.00380.28%
Pound / Dollar19:550.62000.00360.58%

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Index Summary
Index NameRPMove% Move
Top 4028,571.23-172.21-0.60%
Mid Cap40,488.12-562.87-1.37%
Small Cap31,858.72-334.96-1.04%
Resource 2058,171.5566.630.11%
Industrial 2525,716.07-357.66-1.37%
Financial 157,871.71-101.58-1.27%
Financial & Ind. 3028,958.97-377.32-1.29%
All Share31,706.47-225.60-0.71%
Oil & Gas 28,905.52562.361.98%
Mining 38,074.33-62.81-0.16%
Gold Mining2,777.04-31.46-1.12%
Platinum Mining77.03-2.10-2.65%
Oil & Gas Producers 15,541.97302.381.98%
Basic Materials 32,016.84-96.84-0.30%
Chemicals 13,440.26-48.87-0.36%
Forestry & Paper 13,866.30-475.94-3.32%
Industrial Metals 29,852.20-328.23-1.09%
Industrials 27,572.84-499.85-1.78%
General Industrials 76,580.84-824.60-1.07%
Consumer Goods 25,626.84-502.49-1.92%
Automobiles & Parts 2,966.44.000.00%
Household Goods151.51-1-0.66%
Health Care 30,940.65-578.28-1.83%
Beverages 78,937.09-1647.08-2.04%
Food Producers 46,673.85-423.48-0.90%
Index NameRPMove% Move
Personal Goods 397.81-9.49-2.33%
Consumer Services 51,240.18-174.84-0.34%
General Retailers 37,490.36-715.47-1.87%
Travel & Leisure 3,848.48-67.16-1.72%
Media 84,836.431026.241.22%
Support Services 2,461.86-56.11-2.23%
Telecommunications 58,704.87-529.05-0.89%
Financials 20,826.62-232.61-1.10%
Banks 38,367.41-446.18-1.15%
Non-life Insurance 30,117.37290.990.98%
Life Insurance 15,801.80-179.35-1.12%
General Financial 2,232.22-26.85-1.19%
Technology 20,158.64-232.55-1.14%
SHARIAH TOP40 3,256.59-4-0.12%
FTSE/JSE SHARIAH ALL3,307.19-8-0.23%
COAL MINING20,937.13-393-1.84%
FTSE JSE Fledgling 4,681.27190.40%
FTSE/JSE Alt X 1,052.2030.28%
CAPPED PROPERTY 302.34-0.54%
RESOURCE 32,005.74360.11%
DIVIDEND PLUS162.31-2-1.34%
FTSE/JSE RAFI 406,648.12-60-0.89%
Capped Top 4014,811.19-109-0.73%
Capped All Share15,923.41-123-0.77%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
25 Feb 2011ACCENTDecember 2010 (Interim)
25 Feb 2011ANDDecember 2010 (Final)
25 Feb 2011AND-PDecember 2010 (Final)
25 Feb 2011EXXARODecember 2010 (Final)
25 Feb 2011FONEWORXDecember 2010 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
HUDACO11-01-2811-03-0411-03-14R 2.3500
CBH11-01-2711-05-0611-05-16R 0.1110
SBRJSEP1110-12-1511-03-0411-03-15R 1.4100
TFG PREF10-11-1611-03-1711-03-28R 0.0650
PARACON10-11-1511-03-0411-03-14R 0.1000
Ex Div**
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
DIALOGUE11-01-1311-02-1811-02-28R 0.1238

Upcoming AGMs**
CodeCompany NameDateStatus
CUP2Cullinan Holdings Ltd25/02/2011Confirmed
VOXVox Telecom Ltd25/02/2011Unconfirmed
CUP3Cullinan Holdings Ltd25/02/2011Confirmed
CULCullinan Holdings Ltd25/02/2011Confirmed
CULPCullinan Holdings Ltd25/02/2011Confirmed

Stock Exchange News Service
24/02/201117:30 Gijima Group Limited - Cautionary Announcement - Resolution of
24/02/201117:28TOPDWH - Deutsche Bank AG - Notice : TOPDWH non barrier event - Amendment to
24/02/201117:15 Convergenet Holdings Limited - Directors` Dealings in Securities
24/02/201117:06 Raubex Group Limited - Raubex Group appoints Felicia Msiza and Bryan Kent
24/02/201117:05 British American Tobacco P.L.C - Publication of Supplementary Prospectus
24/02/201117:00 Wits Gold - Dealings in securities by a director
24/02/201116:50 JD Group Limited - Dealing in Securities: Granting of Share Appreciation
24/02/201116:33TOPDWH - Deutsche Bank AG - Notice: TOPDWH non barrier event
24/02/201116:30 Gold Reef Resorts Limited - Change in Directorate
24/02/201116:28AMSNIH - Nedbank Limited - Dividend distribution announcement in relation to the
24/02/201116:23PTXSPY - PROPTRAX SAPY - Change in company secretary
24/02/201116:13 Central Rand Gold Limited - AMD report release
24/02/201116:00 SABMiller - SABMiller announces the completion of its hotels and gaming
24/02/201115:46 Famous Brands Limited - Dealings in securities
24/02/201115:42 Famous Brands Limited - Dealings in Securities
24/02/201115:40 ARB Holdings Limited - Dealings in securities by directors
24/02/201115:25 Hulamin Limited - Report on proceedings at general meeting
24/02/201115:00 Great Basin Gold Limited - Great Basin Gold provides update on financing
24/02/201114:12 Exxaro Resources Limited - Update to the group financial results for the
24/02/201113:45 Omnia Holdings Limited - Trading statement
24/02/201113:23 Accentuate - Change of Designated Adviser
24/02/201113:01EXT - Extract Resources Limited - Chemical Assays confirm the emergence of new
24/02/201113:00 Redefine Properties International Limited - Subscription for Stapled
24/02/201112:44 Austro Group Limited - Specific Repurchase of Austro Shares
24/02/201112:00 Implats - Appointment of Chief Financial Officer and Executive Director of
24/02/201111:29 Putprop Limited - Trading Update
24/02/201111:28MSMIHC - Investec Warrants - Declared interim dividend announcement on
24/02/201111:25 Wilderness Holdings Limited - Posting of circular and notice of General
24/02/201111:02 Mercantile Bank Holdings Limited - Condensed audited results for the year
24/02/201110:51 Capevin Investments Limited - Unaudited interim results for the six months
24/02/201110:41 Stefanutti Stocks Holdings Limited - Cautionary Announcement
24/02/201110:33 Hudaco Industries Limited - Posting of annual financial statements, no
24/02/201110:06 Aquarius Platinum Limited - New issue announcement, application for
24/02/201109:32ZGOVI - The ZSHARES ETF Scheme - Withdrawal of ZGOVI participatory interests
24/02/201109:31 British American Tobacco p.l.c - Preliminary announcement - year ended
24/02/201109:30 DiamondCorp plc - Diamond sales
24/02/201109:25 Great Basin - Announces closing of C$86.26 million bought deal public
24/02/201108:15 Santova - Appointment of Director
24/02/201108:00GND/GNDP - GRINDROD - Audited results for the year ended 31 December 2010 and
24/02/201108:00STXRAF - Satrix Rafi 40 - Listing of additional Satrix Rafi 40 securities
24/02/201107:07 Liberty Holdings Limited - Financial Results for the year ended 31
24/02/201107:06 Exxaro Resources Limited - News release - Condensed group financial
24/02/201107:05 Massmart Holdings Limited - Reviewed consolidated results for the 26 weeks
24/02/201107:05 Exxaro Resources Limited - Condensed group financial results and

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