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Welcome to the Sharenet Daily Equity Report
 Issue: 03 March 2011 20:00

Manager Outlooks

Today we spent the morning listening to four successful asset managers (and it was interesting to hear each of their thoughts) discuss how they are positioning their portfolios to best deliver excellent risk adjusted returns.

I will take a look at some of the more insightful comments made. While I will mention some of the ideas in their portfolios it is important to remember that each investor’s individual circumstances are crucial when assessing whether an investment is appropriate or not. Also, the managers stressed the importance of a portfolio approach, i.e. sometimes the best ideas (at the time) aren’t the ones that generate the returns. Importantly, investors need to construct their portfolio as a portfolio of assets, rather than a haphazard collection of ‘good ideas’ without regard to sector, size, and cycle constraints and dynamics.

• Commodities are important – but those commodities that are consumed have an advantage over those that are merely used or stored. In this regard, companies producing/mining commodities like sugar, wheat, paper, and even oil and coal have an advantage over those mining resources like copper, iron ore, gold, etc. If there is a global slowdown consumers will still need to eat and fuel their vehicles and other machinery, but can stop building and other industrial activities which would affect the demand for most hard resources.

• Developed market (US) growth is precariously positioned – oil is a major input into the global economy (particularly developed economies) and it literally does grease the wheels of growth! All developed economies have evolved to be heavily reliant on oil, and emerging countries are generally increasing their reliance on so called black gold. It is interesting to note that a 150% increase in the oil price over a rolling 2 year period has always been followed by a recession in the US. We have just passed this mark recently, so we will see if the trend continues.

Source: Atlantic Asset Management

• A large increase in the oil price is disinflationary – contrary to popular belief. Over the short term there will be inflationary pressures from a large increase in the oil price as it has first and second round effects on the inflation numbers, but over time any major move in the oil price will slow the economy down (and potentially even into recession) which is typically followed by lowering inflation (chart below). In the chart we have tracked the change in oil price against future inflation over time.

• Yield is important when investing – as it provides a valuation framework with which you can compare asset values against each other. Across the entire spectrum of assets (equity, property, pref shares, nominal bonds, inflation linked bonds, cash, etc) the most certain variable when investing is typically the yield at which you buy the asset. There will be more risk on the yield of some assets than others, but these are compensated by a higher expected return over time.

• Prospects are an important consideration when investing – as investors need to be confident that they will receive their yield. While it is more difficult at assessing the future prospects than past events, growth (for equity and property) and sustainability of yield (for all income producing assets) is important over the long run. Good quality institutions will typically perform better than poor quality institutions over time, but one needs to ensure that one doesn’t overpay for any asset. To quote Adrian Saville, “the surest way to turn a good company into a bad investment is to overpay for it.”

Ultimately there were many other pearls of wisdom that came about from our discussions with the different managers this morning. After a day like today we come back to the office and attempt to distil all the ideas to help us refine and mould our investment views.

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Take care,

Mike Browne
021 9144 966

Thu, 03 Mar 2011

South Africa's rand retreated against the dollar on Thursday after jumping nearly two percent the previous day, while market anticipation of increased supply weighed on government bonds.  Full story
When crude prices fall, oil companies tend to pass on the reductions -- albeit grudgingly -- to motorists. In most of Africa, the same cannot be said of interest rates.  Full story
Standard Bank, Africa's biggest bank, reported its third straight decline in annual profit on slack demand for loans and said it would continue to keep a lid on costs.  Full story
Revenue decreased from R34.4 million to R33.3 million in 2010. Operating income increased to R71.3 million (R53.1 million), while profit attributable to ordinary shareholders was up to R55.6 million (R42.9 million). In addition, headline earnings per share rose to 14cps (11.9cps). Divide  Full story

South Africa's genetically modified crop area for the 2010/11 season rose 6 percent but perceptions make it hard for other African. . .  Full story
Aspen Pharmacare, Africa's biggest generic drug maker, reported a 15 percent rise in half-year profit boosted by its international operations as. . .  Full story
Revenue for the interim period ended December 2010 jumped by 33% to R6 billion (2009: R4.5 billion). Gross profit rose by. . .  Full story
Spur Corporation showed strong revenue growth of 13.3% to R203.3 million (R179.5 million). Operating profit before finance income increased to R70.7. . .  Full story

Trading Statistics


Major Moves Up
SharenameSaleMove% MoveVolume
1 MMG  1502116.28.%6677
2 TRUSTCO  1041415.56.%10395
3 RA-HOLD  4004512.68.%150
4 OANDO  348288.75.%23571
5 JUBILEE  338278.68.%7700
6 SPANJRD  395246.47.%10000
7 ZURICHSA  2000010005.26.%1000
8 CBH  365154.29.%2038218
9 MONDIPLCP  62902564.24.%485419
10 SACOIL  21683.85.%4980677
11 HUGE  13553.85.%63700
12 MRHLD  2400853.67.%3208059
13 SASOL  3899913493.58.%6618006
14 DORBYL  290103.57.%101450
15 GRANPRADE  290103.57.%38000
16 CLICKS  39601353.53.%1285646
17 ARM   218307283.45.%396689
18 CAPCO  1743513.01.%1207475
19 MONDILTDP  62251742.88.%344759
20 OMNIA  76492002.68.%27305

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Major Moves Down
SharenameSaleMove% MoveVolume
1 BRAIT  1870-206-9.92.%9175885
2 VILLAGE  200-16-7.41.%24120
3 AFEAGLE  140-10-6.67.%15950
4 BWI  101-7-6.48.%37800
5 ESORFRANK  165-10-5.71.%845236
6 TRNSHEX  270-15-5.26.%70586
7 WESCOAL  101-4-3.81.%21255
8 DAWN  790-30-3.66.%681100
9 DELTA  800-25-3.03.%157888
10 LONAFRIC  185-5-2.63.%91
11 GOLDREEF  1690-44-2.54.%54961
12 PNR-FOODS  5595-135-2.36.%144348
13 ZEDER  254-6-2.31.%386787
14 PALCAP  251-5-1.95.%99951
15 ALTECH  5760-110-1.87.%43803
16 WINHOLD  170-3-1.73.%2504833
17 FREEWORLD  1115-19-1.68.%11417
18 TRENCOR  3580-60-1.65.%62195
19 PSG  4235-65-1.51.%24221
20 DRDGOLD  335-5-1.47.%323001

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New Highs
SharenameSaleHighMove% MoveVolume
1 TRUSTCO  1041051415.56.%10395
2 ZURICHSA  200002000010005.26.%1000
3 SACOIL  21621883.85.%4980677
4 CAPCO  17431745513.01.%1207475
5 EHSV  940099650.110653

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New Lows
SharenameSaleLowMove% MoveVolume
1 BRAIT  18701815-206-9.92.%9175885
2 ESORFRANK  165165-10-5.71.%845236
3 DELTA  800795-25-3.03.%157888
4 STANBANK  98809700-44-0.44.%6791788
5 GROUP-5  2765272590.33.%276098
6 PPC  26952628451.70.%1006595

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Spot Prices
NameTimeRPMove% Move
JSE Overall17:0032350.12377.031.18%
JSE Top 4017:0029211.84385.401.34%
JSE Gold17:002767.799.410.34%
JSE Financial17:0021079.1332.660.16%
JSE Industrial17:0031550.41231.900.74%
JSE Indust 2517:0026396.23219.780.84%
JSE Resource17:0059446.411199.262.06%
DJ Futures19:4012228.00182.001.51%
DJ Ind19:0512235.19168.391.40%
SP 50016:501325.3316.891.29%
FTSE 10018:356005.0990.201.52%
All Ords07:394902.804.500.09%
NZSE 5006:323397.3115.320.45%
NameTimeRPMove% Move
Gold/R kg19:56314339-2906-0.92%
Brent Crude19:56114.01-3.14-2.68%
Rand / Dollar19:596.90580.03130.46%
Rand / Pound19:5511.19820.00700.06%
Rand / Euro19:559.62530.09450.99%
Rand / NZD19:575.11160.00650.13%
Rand / AUD19:557.00550.01650.24%
Yen / Dollar19:5982.43000.64000.78%
Euro / Dollar19:550.7172-0.0038-0.53%
Dollar / Euro19:571.39370.00710.51%
Pound / Dollar19:550.61470.00240.39%

Click here for the Sharenet Spot Price page
Index Summary
Index NameRPMove% Move
Top 4029,211.84385.401.34%
Mid Cap40,870.55136.290.33%
Small Cap31,826.49-64.90-0.20%
Resource 2059,446.411199.262.06%
Industrial 2526,396.23219.780.84%
Financial 157,979.2318.130.23%
Financial & Ind. 3029,598.11185.290.63%
All Share32,350.12377.031.18%
Oil & Gas 29,577.381023.303.58%
Mining 38,902.91699.501.83%
Gold Mining2,767.799.410.34%
Platinum Mining78.161.532.00%
Oil & Gas Producers 15,903.21550.213.58%
Basic Materials 32,718.07595.801.85%
Chemicals 13,498.23156.801.18%
Forestry & Paper 14,239.36427.803.10%
Industrial Metals 30,619.98511.401.70%
Industrials 27,486.08-70.28-0.26%
General Industrials 76,431.29-374.97-0.49%
Consumer Goods 25,989.43201.450.78%
Automobiles & Parts 3,000.4156.611.92%
Household Goods155.3210.79%
Health Care 31,151.89102.730.33%
Beverages 80,133.10850.881.07%
Food Producers 46,889.2653.090.11%
Index NameRPMove% Move
Personal Goods 403.402.400.60%
Consumer Services 53,068.43171.450.32%
General Retailers 39,201.82328.020.84%
Travel & Leisure 3,795.65-33.10-0.86%
Media 87,196.01-593.95-0.68%
Support Services 2,483.12-2.83-0.11%
Telecommunications 61,564.67957.931.58%
Financials 21,079.1332.660.16%
Banks 38,857.28-34.66-0.09%
Non-life Insurance 30,893.34-203.70-0.66%
Life Insurance 16,009.47183.811.16%
General Financial 2,256.49-14.84-0.65%
Technology 20,576.7567.020.33%
SHARIAH TOP40 3,340.51651.98%
FTSE/JSE SHARIAH ALL3,384.09611.83%
COAL MINING21,744.672911.36%
FTSE JSE Fledgling 4,638.3400.00%
FTSE/JSE Alt X 1,030.4990.86%
CAPPED PROPERTY 303.55-0.06%
RESOURCE 32,708.526602.06%
DIVIDEND PLUS164.4310.65%
FTSE/JSE RAFI 406,781.69861.29%
Capped Top 4015,135.201871.25%
Capped All Share16,242.661821.14%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
04 Mar 2011MVELAGP-PDecember 2010 (Interim)
04 Mar 2011MVELAGRPDecember 2010 (Interim)
04 Mar 2011SALLIESDecember 2010 (Interim)
04 Mar 2011SALLIES-CDecember 2010 (Interim)
04 Mar 2011UBUBELEDecember 2010 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
EXXARO11-02-2411-04-0111-04-11R 3.0000
GRINDROD PREF11-02-2411-03-1111-03-22R 3.8600
GRINDROD11-02-2411-03-1111-03-22R 0.2700
LIB-HOLD11-02-2411-03-1711-03-28R 2.9100
BATS11-02-2411-03-0411-05-05R 0.8100
Ex Div**
Share NameDec-DateLDTPay-DateAmount

Upcoming AGMs**
CodeCompany NameDateStatus
RACRACEC Group Ltd03/03/2011Confirmed
DONThe Don Group Ltd03/03/2011Confirmed
PCNParacon Holdings Ltd08/03/2011Confirmed
PCNPParacon Holdings Ltd08/03/2011Confirmed
QPGQuantum Property Group Ltd08/03/2011Confirmed

Stock Exchange News Service
03/03/201117:15 Old Mutual Plc - Notification of Transactions Of Directors
03/03/201117:05 The Don Group Limited - Results of annual general meeting and general
03/03/201116:11 Woolworths Holdings Limited - Dealing in securities by directors
03/03/201115:54THG - Trackhedge (Proprietary) Limited - Distribution announcement - salient
03/03/201115:53RAFIND - Newfunds eRAFI(TM) SA Industrial 25 Index ETF - Distribution
03/03/201115:52NEWFSA - Newfunds NEWSA Index Portfolio - Distribution announcement - salient
03/03/201115:51RAFISA - NewFunds eRAFI(TM) Overall SA Index ETF Portfolio - Distribution
03/03/201115:50NFSH40 - NEWFUNDS SHARIAH TOP 40 INDEX ETF - Distribution announcement - Salient
03/03/201115:49RAFRES - Newfunds eRAFI(TM) SA Resource 20 Index ETF - Distribution
03/03/201115:48RAFFIN - NEWFUNDS eRAFI(TM)SA Financial 15 Index ETF - Distribution announcement
03/03/201115:46 Liberty Holdings Limited - Dealings in securities by a director
03/03/201115:38 Racec - Results of Annual General Meeting
03/03/201114:45BBET40 - The BettaBeta Equally Weighted Top 40 portfolio - Distribution
03/03/201114:06 The Spar Group Limited - Exercise of options and sale of shares
03/03/201114:06 Simmer & Jack Mines, Limited - Unbundling - Provisional unbundling ratio
03/03/201114:05 Litha Healthcare Group Limited - Announcement regarding the Acquistion of
03/03/201114:04 Gold Fields Limited - Dealing in securities by a director
03/03/201114:03 Gold Fields Limited - Dealing in securities by senior executive
03/03/201113:52 Aspen - Press Release - Revised
03/03/201113:50 Anglogold Ashanti: Mankayi Case - Constitutional Court Ruling
03/03/201113:46 Netcare Limited - Appointment of company secretary
03/03/201113:34 Austro Group Limited - Results of annual general meeting
03/03/201113:29 Harmony Gold Mining Company Ltd - Press release: spectacular drill
03/03/201113:05 IPSA GROUP PLC - Change of Accounting Reference Date to 31 March 2011
03/03/201113:04FFA/FFB - Fortress Income Fund Limited - Dealing In Securities
03/03/201112:20HYPIVC - Investec Bank Limited - Declared interest announcement on Hyprop
03/03/201112:19HYPIVB - Investec Warrants - Declared interest announcement on Hyprop
03/03/201112:16SBKIDI - Investec Bank Limited - Declared dividend announcement on Standard Bank
03/03/201112:15 IFCA Technologies Limited - Update on General issue of shares for cash,
03/03/201112:03STXIDF - Investec Warrants - Distribution announcement on SATRIX 40 enhanced
03/03/201112:02PTXSPY - PROPTRAX SAPY - Distribution announcement - salient dates
03/03/201112:01 Aspen Pharmacare Holdings Limited - Aspen increases revenue by 33 percent
03/03/201112:00 Aspen Pharmacare Holdings Limited - Unaudited interim financial results
03/03/201112:00 Spur Corporation Limited - Unaudited condensed consolidated interim
03/03/201111:25 MMI Holdings Limited - Trading statement in terms of the JSE Listings
03/03/201111:00 Central Rand Gold Limited - TR-1: Notification of major interest in shares
03/03/201110:42 Nedbank Group - Forfeiture of restricted share plan shares held by
03/03/201110:25 Remgro Limited - Dealings in securities by a director
03/03/201110:24 Acucap Properties Limited - Dealing in securities by directors
03/03/201110:21 Lonrho Plc - Exercise of Options
03/03/201110:19 Distribution and Warehousing Network Limited - Withdrawal of cautionary
03/03/201110:16 Shoprite Holdings Limited - Dealings in securities by a director
03/03/201109:44 Real Africa Holdings Ltd - Profit and dividend announcement for the six
03/03/201108:48 The Bidvest Group Limited - Voluntary announcement - Partial sale of
03/03/201108:15GEN - ICC - Industrial Credit Company Africa holdings Limited - Termination of
03/03/201108:05STXFIN - Satrix FINI Portfolio - Distribution Announcement - Salient Dates -
03/03/201108:04STXDIV - Satrix Dividend Plus Portfolio - Distribution Announcement - Salient
03/03/201108:03STXSWX - SATRIX SWIX Top 40 Portfolio - Distribution announcement - Salient
03/03/201108:02STXRES - Satrix Resi Portfolio - Distribution announcement - Salient dates -
03/03/201108:01STXIND - Satrix Indi Portfolio - Distribution announcement - Salient dates -
03/03/201108:00SBK - Standard Bank Group Limited - Audited results and dividend
03/03/201108:00STX40 - Satrix 40 Portfolio - Distribution Announcement - Salient Dates -
03/03/201108:00 Vox Telecom - Renewal of cautionary announcement
03/03/201107:18 Anglo American Plc - Treasury Shares - Transfers
03/03/201107:14 British American Tobacco p.l.c- Transaction in own shares
03/03/201107:11 Lonmin Plc - Notification of Directors` and PDMRs` share dealings
03/03/201107:07 BHP Billiton Plc - Transaction in shares
03/03/201107:05 RMB Holdings Limited - Trading statement: six months ended 31 December

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