The Sharenet Daily 
Tuesday, 10 May 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.

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Top News
SA Business
Company News
Company Results
World Markets (Spot Prices)
JSE Today
JSE Trading Statistics
Major Moves
Index Summary
Latest Consensus Changes / Results Expected
Recent Dividends / Ex Div
Upcoming AGMs
Stock Exchange News Service (SENS)

Another Look at Bonds

In the month of April foreigners transferred a net R6 billion into the equity market and a massive R15,9 billion into the bond market. Naturally these strong net flows had a positive impact on the rand exchange rate.

The reason for the foreign interest in emerging market bonds especially is not difficult to ascertain – what is difficult is to decide just when these investments become expensive.

One of the largest fund managers in the world Pimco, which manages $1,2 trillion, mostly invested into bonds, is negative about the real yields on bonds and especially US bonds. As just one example of a fund manager searching for higher yields, they are investing into ““safe spread” alternatives available globally, including developing/emerging market debt at higher yields denominated in non-dollar currencies.”

This is not necessarily a reflection of the inherent value in local bonds, but more a case of the relative value against very expensive US and other developed market bonds.

What is the fundamental problem?

The central issue is that around the world governments have accumulated far too much debt. Total outstanding debt as a factor of GDP has escalated dramatically. In the US and the UK the same thing occurred back in the 1940’s in WWII.

According to Pimco, In order to slowly reduce this debt burden as a function of the size of the economy in the US, Treasury capped long term bond yields at 2,5%, forcing a situation of negative real yields.

As can be seen from the chart above into the 1950’s to late 1970’s debt as a function of GDP reduced from around 125% to around 40% - mostly due to negative real interest rates.

The report from Carmen Reinhart and Belen Sbrancia titled “The liquidation of Government Debt” found that in the UK and US the annual liquidation of debt due to negative real interest rates was on average 3 – 4% of GDP per year. This is how the chart above reflects a reduction in percentage terms while debt grew in absolute terms.

Negative real interest rates are nothing short of legalised theft from savers of their hard earned savings. Pimco says that by 1979 when Volcker came in as the Federal Reserve chairman and could once again start implementing real interest rates, “US (and UK) debt levels had been normalised, primarily at the expense of savers who had been “repressed” (and depressed!) for over three decades. At that historical turning point, government bonds were labelled “certificates of confiscation”. Not only had savers received Treasury bill rates that were negative for over 25% of the nearly four decades, but they were holding long-term AAA rated bonds trading at 30 to 40 cents on the dollar.”

Even if bond yields stay where they are at 3,3% and the Fed funds rate at close to 0%, “… savers and financial intermediaries are being short-changed by both of these yields and everything in between.”

In general, negative real rates of interest favour real assets as opposed to bonds. Right now locally bonds are trading at fair value, but globally they remain on the expensive side.

Kind regards,

Ian de Lange
021 9144 966

Tue, 10 May 2011
Top News
Group revenue for operations increased by 3.0% to R954.5 million (February 2010: R926.8 million). Net operating income - EBITDA, decreased by 0.9% to R59.9 million (February 2010: R60.5 million). This decrease is off a high base after an increase of 119.1% in February 2010. Operating margins  Full story

Revenue increased to R1.6 billion (R1.4 billion). Gross profit rose to R696.4 million (R596.8 million) and operating profit increased to R166.4 million (R142.4 million). Net attributable profit rose to R94.1 million (R91.4 million). In addition, headline earnings per share grew to 56.2cps (  Full story
Libyan government forces bombarded a residential area outside Misrata Tuesday, said rebels trying to maintain their grip on the city in the face of a fierce onslaught.  Full story
The United States was hoping on Tuesday to question the detained three wives of Osama bin Laden although Pakistani officials played down the possibility of any speedy access, saying no decision had been made.  Full story
Iran's nuclear negotiator said the next talks with world powers must be held without pressure, a reply to a European Union letter indicating Tehran would stick to a refusal to address its disputed uranium enrichment drive.  Full story
Stocks rose on Tuesday as unexpectedly strong Chinese trade data reinforced optimism about the global economy, while oil prices traded higher as investors resumed. . .  Full story
Gold and silver prices rose for a third straight session on Tuesday, as elevated violence in Libya and inflation concerns driven by rallying. . .  Full story
European shares rose on Tuesday, with sharp gains for banks on hopes that they will not suffer any imminent writedown on their Greek. . .  Full story
Britain's FTSE 100 share index hit a one-week closing high on Tuesday after bumper Chinese trade data boosted miners, although analysts said sentiment could. . .  Full story

Wall Street edged higher on Tuesday as China's trade surplus eased fears about a slowdown in global economic growth and Microsoft said it. . .  Full story
European shares rose on Tuesday, with higher metals prices boosting heavyweight miners as strong Chinese trade data lifted optimism about the pace of. . .  Full story
Japanese stocks edged higher on a report that Toyota Motor Corp's output will likely return to normal two or three months earlier than. . .  Full story
Australian stocks fell 0.7 percent on Tuesday on worries about Chinese demand for metals, concerns about possible earnings downgrades due to the strong Aussie. . .  Full story
SA Business
South African power utility Eskom said on Tuesday it had suspended all construction work at its new 4,800 MW Medupi power plant due to protests by some 500 contract workers at the site.. . .  Full story
South African government bonds and the rand weakened in early Tuesday trade as dealers prepared for a sovereign bond auction and recurrent debt problems in the euro zone hit appetite for emerging markets.. . .  Full story

South Africa's rand fell 1.4 percent to a three-week low against the dollar on Tuesday as debt problems in some European countries dented investors' risk appetite and also in a correction after last week's 3-year highs.. . .  Full story
Company News
Shareholders are advised that the company, through its wholly owned subsidiary Bonatla Properties (Proprietary) Limited ("BP"), has concluded an agreement dated 18 April 2011 with the shareholders of Triprop, whereby BP shall acquire 100% of the shares in and loan claims against Triprop with effect from 1 April 2011. Triprop has among its assets, erf 112 Watloo - portions 2 and 3 measuring 6 805 and 22 011 square metres respectively, and erf 84 Watloo, measuring 11 982 square meters, whi. . .  Full story
Company Results
Turnover rose to R102.1 million (R90.9 million). Gross profit increased to R40.5 million (R31.8 million) and profit from operations more than. . .  Full story
Revenue for the interim period ended March 2011 improved to USD938 million (USD661 million) and operating profit rose significantly to USD144. . .  Full story
Sales revenue for the interim period ended 31 March 2011 increased to USD3.697 billion (2010: USD3.196 billion). Gross profit more than. . .  Full story
Revenue increased from R2.6 billion to R2.7 billion in 2011.Gross profit decreased to R575.5 million (2010:R653.5 million) and operating profit decreased. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0032085.56475.781.51%
JSE Top 4017:0028845.18475.721.68%
JSE Gold17:002582.2923.540.92%
JSE Financial17:0021634.42317.191.49%
JSE Industrial17:0032731.27346.261.07%
JSE Indust 2517:0027482.82326.811.20%
JSE Resource17:0055306.061105.072.04%
DJ Futures19:3012680.0042.000.33%
DJ Ind19:3512736.3751.690.41%
SP 50019:361352.686.390.47%
FTSE 10017:356018.8976.201.28%
All Ords08:394803.60-28.10-0.58%
NZSE 5007:363528.759.760.28%
NameTimeRPMove% Move
Gold/R kg19:5633026759851.85%
Brent Crude19:56116.783.723.29%
Rand / Dollar19:586.76620.05050.75%
Rand / Pound19:5511.02580.04840.44%
Rand / Euro19:559.73040.09070.94%
Rand / NZD19:585.36280.02740.51%
Rand / AUD19:557.31280.06630.91%
Yen / Dollar19:5880.79000.51000.64%
Euro / Dollar19:590.69580.69580.00%
Dollar / Euro19:591.43720.00180.13%
Pound / Dollar19:550.61190.00220.36%

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The JSE Today
Trading Statistics

Major Moves Up
SharenameSaleMove% MoveVolume
1 ROLFES  170159.68.%29637
2 TRNSHEX  280207.69.%455626
3 GOLDONE  325175.52.%2472941
4 COAL  910384.36.%365660
5 ASSORE  213998894.33.%41393
6 DRDGOLD  368133.66.%460604
7 RANGOLD  290103.57.%6930
8 SOVFOOD  570183.26.%58988
9 PARACON  16553.13.%816042
10 ELLIES   20463.03.%500
11 REINET  1210342.89.%9495034
12 ILIAD  725202.84.%53797
13 MONDIPLCP  67611862.83.%1091011
14 JDGROUP  47251252.72.%1316917
15 STEINHOFF  2465652.71.%3714557
16 AQUARIUS  38501002.67.%39331
17 JSE  68101752.64.%255894
18 SASOL  360009002.56.%2755349
19 PINNACLE  780192.50.%128848
20 ABIL  3720902.48.%3635439

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Major Moves Down
SharenameSaleMove% MoveVolume
1 RAINBOW  1701-79-4.44.%2400
2 PERGRIN  1100-50-4.35.%18000
3 NUWORLD  2200-100-4.35.%3776
4 VIVIDEND  460-18-3.77.%4000
5 PHUMELELA  1135-40-3.40.%15794
6 DAWN  680-20-2.86.%65091
7 IQUAD  240-7-2.83.%5000
8 GOLDREEF  1652-48-2.82.%5100
9 TRUSTCO  105-3-2.78.%268654
10 ESORFRANK  180-5-2.70.%4392816
11 CROOKES  3800-100-2.56.%74
12 GRANPRADE  308-7-2.22.%36601
13 CBH  401-9-2.20.%10085
14 RAUBEX  1900-40-2.06.%19519
15 PUTPROP  510-10-1.92.%2000
16 OCEANA  3925-75-1.88.%24414
17 S-OCEAN  215-4-1.83.%47000
18 SENTULA  275-5-1.79.%26095
19 PETMIN  300-5-1.64.%216070
20 HULAMIN  690-9-1.29.%119103

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New Highs
SharenameSaleHighMove% MoveVolume
1 MONDIPLCP  676167891862.83.%1091011
2 PINNACLE  780799192.50.%128848
3 AME  440044001002.33.%1704
4 BATS  29975300756242.13.%2137683

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New Lows
SharenameSaleLowMove% MoveVolume
1 BCX  475475-1-0.21.%11715

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Index Summary
Index NameRPMove% Move
Top 4028,845.18475.721.68%
Mid Cap41,603.01273.170.66%
Small Cap32,210.12-10.63-0.03%
Resource 2055,306.061105.072.04%
Industrial 2527,482.82326.811.20%
Financial 158,195.63141.831.76%
Financial & Ind. 3030,746.90425.351.40%
All Share32,085.56475.781.51%
Oil & Gas 27,286.92680.972.56%
Mining 36,377.32674.901.89%
Gold Mining2,582.2923.540.92%
Platinum Mining71.05.400.57%
Oil & Gas Producers 14,671.68366.152.56%
Basic Materials 30,716.57560.731.86%
Chemicals 13,692.0062.720.46%
Forestry & Paper 14,516.13309.922.18%
Industrial Metals 28,983.91384.481.34%
Industrials 27,515.09178.810.65%
General Industrials 75,732.02566.780.75%
Consumer Goods 27,198.80490.181.84%
Automobiles & Parts 3,158.92-11.32-0.36%
Household Goods156.6642.71%
Health Care 31,911.29155.880.49%
Beverages 84.921.792.15%
Food Producers 47,232.4682.360.17%
Index NameRPMove% Move
Personal Goods 423.087.591.83%
Consumer Services 53,878.68538.021.01%
General Retailers 41,581.03308.850.75%
Travel & Leisure 3,717.8914.320.39%
Media 85.451.391.65%
Support Services 2,396.5932.491.37%
Telecommunications 68,696.10-56.46-0.08%
Financials 21,634.42317.191.49%
Banks 40,616.66637.441.59%
Non-life Insurance 31,523.82164.890.53%
Life Insurance 16,127.13308.371.95%
General Financial 2,281.6044.381.98%
Technology 20,419.87182.070.90%
SHARIAH TOP40 3,208.78521.66%
FTSE/JSE SHARIAH ALL3,266.40501.55%
COAL MINING22,761.594171.86%
FTSE JSE Fledgling 4,537.67130.29%
FTSE/JSE Alt X 1,016.52-1-0.09%
RESOURCE 30,531.675921.98%
DIVIDEND PLUS169.5321.24%
FTSE/JSE RAFI 406,706.871101.66%
Capped Top 4015,023.512361.60%
Capped All Share16,143.952321.46%

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Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
11 May 2011ANGLDMarch 2011 (Q)
11 May 2011ANGLD-AMarch 2011 (Q)
11 May 2011ANGLD-BMarch 2011 (Q)
11 May 2011ANGLD-EMarch 2011 (Q)
11 May 2011CULINAN5.5March 2012 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ASTRAPAK11-05-0911-06-2411-07-04R 0.2640
FPT11-05-0611-05-2011-05-30R 0.2771
SBR00311-05-0511-07-2211-08-05R 1.4900
ALTRON PP11-05-0411-06-2411-07-04R 1.0800
REDEFINE11-05-0411-05-2011-05-30R 0.1600
Ex Div**
Share NameDec-DateLDTPay-DateAmount
PSG11-04-1811-05-0611-05-16R 0.4700
BRIMSTON11-02-2211-05-0611-05-16R 0.1500
BRIMST-N11-02-2211-05-0611-05-16R 0.1500
CBH11-01-2711-05-0611-05-16R 0.1110
CIPLAMED11-03-1711-05-0611-05-16R 0.0600

Upcoming AGMs**
CodeCompany NameDateStatus
ANDAndulela Investment Holdings Ltd10/05/2011Confirmed
ANDPAndulela Investment Holdings Ltd10/05/2011Confirmed
ANGAngloGold Ashanti Ltd11/05/2011Confirmed
ANGEAngloGold Ashanti Ltd11/05/2011Confirmed
ANGBAngloGold Ashanti Ltd11/05/2011Confirmed

Stock Exchange News Service
10/05/201117:42GEN - FTSE/JSE Africa Index Series - Business Connexion Group Ltd (South
10/05/201117:30 Chrometco Limited - Resource Update
10/05/201117:25 Vividend Income Fund Limited - Acquisition of a new property
10/05/201117:08 PSG Group Limited - Dealing in PSG Group Limited shares by an Associate
10/05/201117:01 Gold Reef Resorts Limited - Gold Reef Board Management Changes
10/05/201117:00 Gold Reef Resorts Limited - Trading statement
10/05/201117:00 Nu-World Holdings Limited - Unaudited Interim Report for the six months
10/05/201116:55 Capitec - Retirement of a Non-Executive Director
10/05/201116:49 Alert - Reorganisation of Alert Steel Polokwane (Pty) Limited and Alert
10/05/201116:30 Old Mutual plc - Form 8.3
10/05/201116:05 Anglo American Platinum - Dealing in securities by company secretary
10/05/201116:00 Witwatersrand Consolidated Gold Resources Limited - Trading update
10/05/201115:58 Huge Group Limited - Renewal of cautionary announcement
10/05/201115:54 Allied Technologies Limited - Dealing in Securities by a Director
10/05/201115:47 Value - Reviewed financial results for the year ended 28 February 2011
10/05/201115:03 African Brick - Renewal of cautionary announcement
10/05/201115:01 New Europe Property Investments plc - Acceptance of shares in terms of
10/05/201115:00 New Europe Property Investments plc - Issue of equity and total voting
10/05/201114:48 Trading of Exxaro ordinary shares
10/05/201112:49 Adcorp Holdings Limited - Voluntary Trading Statement for the year ended
10/05/201112:28 Nampak Limited - Trading Statement
10/05/201112:21 Esorfranki Limited - Trading Update
10/05/201112:03 O-Line Holdings Limited - Results of General Meeting ("GM")
10/05/201111:36 Trematon Capital Investments Limited - Dealing in Securities by Director
10/05/201111:31 Redefine Properties International Limited - Acquisition of The Crowne
10/05/201111:30 Redefine Properties International Limited - Further cautionary
10/05/201111:30 Resilient Property Income Fund Limited - Dealing in securities
10/05/201110:30 IQuad Group Limited - Dealing in securities
10/05/201110:25RDFIVC - Investec Bank Limited - Declared debenture interest announcement on
10/05/201110:23RDFIVB - Investec Warrants - Declared debenture interest announcement on
10/05/201110:22FPTIVB - Investec Warrants - Declaration of a Distribution Announcement on
10/05/201110:17 Gold One International Limited - Further price and volume query
10/05/201110:07 Bonatla - Acquisition of the shares in and claims against Tricom
10/05/201110:06 Investec Property Fund Limited - Dealing in securities by director
10/05/201110:04 Firestone Energy Limited - Breach of Trading Policy
10/05/201110:04 Firestone Energy Limited - Change of Director`s Interest Notice
10/05/201109:58RDFIHD - Investec Warrants - Declared debenture interest distribution
10/05/201109:57RDFIDG - Investec Warrants - Declared debenture interest distribution
10/05/201109:50ZGOVI - The ZShares ETF Scheme - Withdrawal of ZGOVI participatory interests
10/05/201109:30 Murray & Roberts Holdings Limited - Allocation and acceptance of share
10/05/201108:30 DiamondCorp - Operational Update
10/05/201108:15 Paracon Holdings Limited - Unaudited interim results for the six months
10/05/201108:00 Lonrho Plc - Transfer of Secondary Listing to The Alternative Exchange
10/05/201108:00 Massmart Holdings Limited - Sales update for the 44 weeks to 1 May 2011
10/05/201108:00STX40 - SATRIX 40 - Listing of additional SATRIX 40 securities
10/05/201107:17 BHP Billiton Plc - Transaction In Shares
10/05/201107:14 Santova - Trading statement
10/05/201107:05 Life Healthcare Group Holdings Limited - Unaudited group results and cash

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