Thursday, 07 April 2011 - 20:00
Sharenet is pleased to announce the launch of our new publication, The Sharenet Daily. We have built on the success of our Daily Equity Report, while adding more content and helpful information. The result is a publication that gives readers a quick, easy to read and informative synopsis of market activity, company results and news on the JSE for the day, as well as an overview of what transpired on important overseas markets.
The Sharenet Daily includes helpful charts that give a graphical impression of events, and our news content is sourced from a number of contributors, including Reuters. In addition, Sharenet's popular price information is available in our Spot Price format which provides a snapshot of the JSE and world indices, currencies and commodities.
All the JSE trading statistics; major movers; latest dividends; upcoming AGM dates and more are provided to insure that you keep abreast of market developments. The Sharenet Daily is published at 8pm each day on the website and also distributed via email for your convenience. As always, we welcome your comments, feedback and suggestions at support@sharenet.co.za
Charts
Rand Fair Value Talk to anyone who’s been investing for longer than 10 years and you will no doubt get to hear their views on the rand. The performance of their offshore investments over this period will no doubt heavily bias their views. Many investors got burned at the turn of the century mainly as a result of three factors:
• Selling cheaply priced local assets (i.e. local equity market cheap)
• Selling cheaply priced currency (i.e. rand at extremely weak levels versus most currencies)
• Buying expensive foreign assets (i.e. ploughing money into the top of the tech boom in developed markets)
This scarring often heavily influences investors’ decision making going forward. The poor returns were amplified because both asset returns AND currency movements worked against those investors with money in developed market equities over the past 10 years or so.
One of investing good lessons is that you can’t change what’s happened in the past, and that all investment decisions should be based on future return expectations. Investors should therefore try, as best as possible, to forget previous successes and failures without forgetting the lessons learnt along the way.
Another investment lesson is that performance is never in a straight line.
Below is a chart of the ZAR v USD over the past 26 or so years. The black smoothed line is the value of 1 USD on Purchasing Power Parity (PPP) basis. The theory behind PPP is that over the long term currencies should move relative to one another based on the inflation differential, so that over time goods and services will have a similar cost across countries to avoid arbitrage of goods and services between countries. The chart clearly shows that this is the trend over time.
Clearly there are some flaws with this process as different countries have different skill sets, there are transportation costs and import duties, etc. For this reason when looking at this method one needs to take a long term outlook (i.e. longer than 5 years) and only act when there is a sufficient margin of safety. Furthermore, investors should ensure that the assets that they are investing into in the foreign currency are fairly or attractively priced.
On this chart it is clear that December 2001 wasn’t a great time to be expatriating ZAR, but what is also clear is that the ZAR can trade in cheap or expensive territory for an extended period. The ZAR stayed one standard deviation too strong for a decade from the end of 1986 to the end of 1996, but over this period still depreciated from R2.26 per USD to R4.68 per USD (7.6% per annum) as a result of the inflation differentials between the two countries.
An investor looking to take money offshore one would rather be taking it over now than at the end of 2001 or even 2008. At current levels there is a margin of safety built into return assumptions, one doesn’t need to forecast significant rand strength, and if the rand does trade back to fair value (currently sitting at R8.71) over the next 10 years (an extremely long period) then investors would gain real increase of 3.5% per annum to their USD returns, and 5.4% per annum should fair value be reached in 5 years. Should the ZAR stay strong, investors should only expect the inflation differential (likely to be around 3% per annum for the next 5 years or so).
As always, investing is a long term pursuit (speculators operate over the shorter term). Being a long term investor doesn’t preclude you from transacting over shorter term periods should circumstances warrant (i.e. if the ZAR weakened to R10 to the USD overnight we’d be looking to repatriate offshore assets), but does require that you think for the longer term.
To vote in our poll on where you think/want the ZAR to end the year vs the USD click through to our Facebook page and find the question on our Fan Page’s wall.
Take care,
Mike Browne
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Thu, 07 Apr 2011
Top News
South Africa's rand steadied near three-month highs against the dollar on Thursday after strong output data supported expectations for an interest rate rise by the end of the year. Full story
Kenya has licensed HSBC Limited to open a representative office for marketing and liaison purposes in the country, the east African nation's central bank said on Thursday. Full story |
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A major aftershock rocked northeast Japan on Thursday and a tsunami warning was issued for the coast devastated by last month's massive quake and tsunami that crippled a nuclear power plant. Full storyAn anti-tank missile fired from Gaza hit an Israeli school bus on Thursday, wounding two people, and Israeli forces retaliated by shelling the territory, killing three Palestinians, Palestinian medics said. Full storyWith time running short, Democratic and Republican leaders in the U.S. Congress said on Thursday they were pessimistic about budget talks and blamed each other for the looming threat of a government shutdown. Full story |
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Markets | Gold was little changed on
Thursday afternoon, retreating from a record high after another
strong earthquake hit Japan.. . . Full story | | European stocks ended lower on
Thursday, as a new earthquake and a tsunami alert in
northeastern Japan sparked a late-session bout of profit. . . Full story | | Global equities fell after a
strong earthquake shook Japan and the euro fell against the
dollar as the European Central Bank raised rates. . . Full story | | Britain's top share index fell
on Thursday after a second large earthquake to strike Japan
within a month knocked investor confidence, with traders. . . Full story |
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| U.S. stocks fell on Thursday
shortly after an earthquake with a magnitude of 7.4 hit Japan
and a tsunami warning was issued.. . . Full story | | Banks led European shares to
their highest level in nearly a month on Thursday as strategists
said interest rate rises would not derail. . . Full story | | Australian stocks eased 0.1
percent on Thursday, breaking a 7-day winning streak, as some
heavyweight stocks such as BHP Billiton slipped after
sustaining a. . . Full story | | Gold ticked lower to hover
below a record on Thursday ahead of an expected euro zone
interest rate hike, while ETF holdings dropped. . . Full story |
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SA Business | Major rich and developing countries need to press ahead with economic reforms to ensure a global recovery becomes self-sustaining despite the. . . Full story | | South Africa's maize, wheat and soybeans futures edged up on Thursday, with the maize contracts recording the biggest gains in line. . . Full story | | Growth in South Africa's manufacturing output quickened to 6.0 percent year-on-year in volume terms in February compared with a revised 1.6. . . Full story | | Zambia's export earnings surged more than 67 percent in 2010 as mining companies in Africa's top copper producer expanded output as. . . Full story |
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| South Africa's Reserve Bank will base its future policy action on its assessment of second round effects of higher oil and. . . Full story | | Harmony Gold said on Thursday that a bond issue was one option to fund development of its promising Wafi-Golpu prospect in. . . Full story | | South Africa's power, iron and steel workers want a 20 percent wage hike this year, suggesting unions will use high world. . . Full story | | Gold Fields, the world's fourth largest gold producer, said on Thursday the shaft at its KDC mine in South Africa that. . . Full story |
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| South Africa's government bonds retreated on Thursday and yields climbed in profit-taking after strong demand over the past week, but the. . . Full story | | South Africa's net gold and foreign exchange reserves stood at $44.725 billion at the end of March from $44.775 billion in. . . Full story | | South Africa is to build a 15 billion rand rare metals processing complex, Business Report newspaper reported on Thursday.. . . Full story | | Paper maker Mondi said on Thursday it plans to spin off its South African packaging business from the group and list. . . Full story |
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Company News | Shareholders of Glenrand ("Glenrand shareholders") are referred to the announcement released by Glenrand on SENS on 24 March 2011 and published. . . Full story | | Further to the announcement released on SENS this morning, the company advised that The distribution ratio for the proposed distribution of. . . Full story | | Further to the announcement of 29 March 2011 regarding the proposed transactions, the Registrar of Companies has registered the following in. . . Full story | | Old Mutual announced that, following receipt of the remaining regulatory approval from the New York State Insurance Department, completion of the. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 32633.25 | -254.22 | -0.77% | JSE Top 40 | 17:00 | 29389.94 | -264.62 | -0.89% | JSE Gold | 17:00 | 2819.62 | -31.78 | -1.11% | JSE Financial | 17:00 | 21898.50 | -81.19 | -0.37% | JSE Industrial | 17:00 | 32337.66 | -170.14 | -0.52% | JSE Indust 25 | 17:00 | 27006.23 | -198.82 | -0.73% | JSE Resource | 17:00 | 58048.17 | -723.47 | -1.23% | DJ Futures | 20:00 | 12316.00 | -39.00 | -0.32% | DJ Ind | 19:35 | 12365.86 | -60.89 | -0.49% | SP 500 | 18:40 | 1334.15 | -1.39 | -0.10% | Nasdaq | 18:40 | 2802.13 | 2.31 | 0.08% | FTSE 100 | 17:35 | 6007.37 | -33.76 | -0.56% | DAX | 18:00 | 7178.78 | -36.33 | -0.50% | CAC40 | 17:46 | 4028.30 | -19.86 | -0.49% | Nikkei | 08:26 | 9590.93 | 6.56 | 0.07% | Shanghai | 09:22 | 3008.07 | 6.84 | 0.23% | Hang-Seng | 10:36 | 24281.80 | -3.25 | -0.01% | All Ords | 08:37 | 5005.50 | -5.90 | -0.12% | NZSE 50 | 07:26 | 3450.36 | .48 | 0.01% |
| | Name | Time | RP | Move | % Move | Gold | 19:58 | 1457.34 | -1.11 | -0.08% | Gold/Rand | 20:00 | 9713.61 | -30.53 | -0.31% | Gold/R kg | 20:00 | 312293 | -1582 | -0.50% | Silver | 19:58 | 39.5580 | .0830 | 0.21% | Platinum | 19:57 | 1781.00 | -6.45 | -0.36% | Palladium | 19:57 | 773.50 | -10.75 | -1.37% | R157 | 09:06 | 7.73 | .03 | 0.39% | R204 | 17:06 | 8.36 | -.02 | -0.24% | Brent Crude | 19:56 | 122.66 | 1.00 | 0.82% | Rand / Dollar | 19:58 | 6.6653 | -0.0138 | -0.21% | Rand / Pound | 19:55 | 10.8683 | -0.0123 | -0.11% | Rand / Euro | 19:55 | 9.5523 | -0.0245 | -0.26% | Rand / NZD | 19:57 | 5.1880 | -0.0065 | -0.13% | Rand / AUD | 19:55 | 6.9800 | 0.0025 | 0.04% | Yen / Dollar | 19:58 | 84.9400 | -0.4400 | -0.52% | Euro / Dollar | 19:55 | 0.6995 | 0.0020 | 0.29% | Dollar / Euro | 19:57 | 1.4290 | -0.0039 | -0.27% | Pound / Dollar | 19:55 | 0.6131 | 0.0009 | 0.15% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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07/04/2011 | 140 | 205 | 84 | 429 | 260,190,578 | R13,173,671,789 | 109418 | 2075935 | 06/04/2011 | 242 | 109 | 70 | 421 | 290,764,685 | R13,563,693,754 | 106565 | 1929190 | 05/04/2011 | 219 | 132 | 78 | 429 | 251,738,134 | R10,439,040,904 | 78531 | 1807082 | 04/04/2011 | 197 | 145 | 73 | 415 | 219,118,224 | R9,815,944,176 | 89949 | 1694363 | 01/04/2011 | 200 | 136 | 81 | 417 | 278,937,111 | R13,076,718,578 | 106885 | 2036488 |
Index Summary Index Name | RP | Move | % Move | Top 40 | 29,389.94 | -264.62 | -0.89% | Industrial | 32,337.66 | -170.14 | -0.52% | Mid Cap | 41,906.00 | -61.10 | -0.15% | Small Cap | 32,397.26 | 73.18 | 0.23% | Resource 20 | 58,048.17 | -723.47 | -1.23% | Industrial 25 | 27,006.23 | -198.82 | -0.73% | Financial 15 | 8,331.22 | -32.37 | -0.39% | Financial & Ind. 30 | 30,508.36 | -188.64 | -0.61% | All Share | 32,633.25 | -254.22 | -0.77% | Oil & Gas | 30,178.46 | -300.43 | -0.99% | Mining | 37,894.15 | -474.98 | -1.24% | Gold Mining | 2,819.62 | -31.78 | -1.11% | Platinum Mining | 75.92 | -.84 | -1.09% | Oil & Gas Producers | 16,226.40 | -161.54 | -0.99% | Basic Materials | 31,986.81 | -376.78 | -1.16% | Chemicals | 13,501.25 | -22.41 | -0.17% | Forestry & Paper | 14,639.91 | -152.66 | -1.03% | Industrial Metals | 31,052.30 | 7.36 | 0.02% | Industrials | 28,123.96 | 21.18 | 0.08% | General Industrials | 77,137.68 | -147.47 | -0.19% | Consumer Goods | 26,202.89 | -239.48 | -0.91% | Automobiles & Parts | 3,170.24 | 22.64 | 0.72% | Household Goods | 160.02 | -1 | -0.55% | Health Care | 31,571.41 | -223.54 | -0.70% | Beverages | 83,382.85 | -758.62 | -0.90% | Food Producers | 47,659.89 | 250.09 | 0.53% |
| | Index Name | RP | Move | % Move | Personal Goods | 386.02 | -5.89 | -1.50% | Consumer Services | 53,885.86 | 2.52 | 0.00% | General Retailers | 41,650.75 | -5.05 | -0.01% | Travel & Leisure | 3,638.27 | 16.33 | 0.45% | Media | 84,232.44 | 229.92 | 0.27% | Support Services | 2,389.25 | -47.39 | -1.94% | Telecommunications | 66,688.26 | -686.27 | -1.02% | Financials | 21,898.50 | -81.19 | -0.37% | Banks | 41,537.57 | -153.71 | -0.37% | Non-life Insurance | 31,523.82 | 484.98 | 1.56% | Life Insurance | 16,471.96 | -32.76 | -0.20% | General Financial | 2,306.02 | -16.34 | -0.70% | Technology | 21,055.74 | 182.58 | 0.87% | SHARIAH TOP40 | 3,326.75 | -37 | -1.11% | FTSE/JSE SHARIAH ALL | 3,379.95 | -34 | -1.00% | COAL MINING | 23,030.84 | -506 | -2.15% | FTSE JSE Fledgling | 4,512.17 | -25 | -0.56% | FTSE/JSE Alt X | 1,023.50 | 3 | 0.30% | SA LISTED PROPERTY | 370.46 | | 0.08% | CAPPED PROPERTY | 307.05 | | -0.26% | RESOURCE | 32,059.89 | -391 | -1.20% | DIVIDEND PLUS | 170.24 | 0 | 0.04% | FTSE/JSE RAFI 40 | 6,853.21 | -51 | -0.74% | Capped Top 40 | 15,298.61 | -132 | -0.85% | Capped All Share | 16,415.47 | -124 | -0.75% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | NED | NEDBANK GROUP LTD | HOLD | 05 Apr | SBK | STANDARD BANK GROUP LIMIT... | SELL | 05 Apr | AIP | ADCOCK INGRAM HLGS LD | HOLD | 05 Apr | LHC | LIFE HEALTHCARE GRP HLDG ... | BUY | 05 Apr | EQS | EQSTRA HOLDINGS LTD | SELL | 05 Apr |
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Results Expected** Expected | Company Name | Fin. Date | 08 Apr 2011 | PHUMELELA | January 2011 (Interim) | 11 Apr 2011 | FAIRVEST | December 2010 (Interim) | 11 Apr 2011 | FAIRVESTP | December 2010 (Interim) | 11 Apr 2011 | ZEDER | February 2011 (Final) | 11 Apr 2011 | ZEDERP | February 2011 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | NAIL -N- | 11-04-05 | 11-04-19 | 11-05-03 | R 0.1760 | NAIL | 11-04-05 | 11-04-19 | 11-05-03 | R 0.1760 | SBR003 | 11-04-05 | 11-04-19 | 11-05-05 | R 1.4100 | NTC PREF | 11-04-01 | 11-04-19 | 11-05-03 | R 3.4161 | TELEMASTR | 11-04-01 | 11-04-19 | 11-05-03 | R 0.0400 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | SASOL | 11-03-07 | 11-04-01 | 11-04-11 | R 3.1000 | EXXARO | 11-02-24 | 11-04-01 | 11-04-11 | R 3.0000 | NEDBANK | 11-02-28 | 11-04-01 | 11-04-11 | R 2.6800 | STANBANK | 11-03-03 | 11-04-01 | 11-04-11 | R 2.4500 | BOWCALF | 11-03-09 | 11-04-01 | 11-04-11 | R 0.1560 |
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Upcoming AGMs** Code | Company Name | Date | Status | MMH | Miranda Mineral Holdings Ltd | 07/04/2011 | Confirmed | MRF | Merafe Resources Ltd | 13/04/2011 | Unconfirmed |
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