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Thursday, 26 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.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
One Last Look at ETFs
In a few of our recent reports we have taken a look at ETFs from a few different angles. Today we will have a look at the findings of research done on global ETFs by well respected investment house Sarasin & Partners.
It should come as no surprise to investors that the best ETFs are large and liquid. Large ETFs are able to minimise costs on a per unit basis and are therefore able to typically give investors a better total return. The shares that the ETF invests into should also be large and liquid to reduce frictional costs (especially in an ETF with large AUM).
There are cases of ETFs with many constituents in the underlying index not buying all the shares in the index (possibly to reduce costs). These ETFs look to mimic the index by using other methods to match the performance of the target index. A case of this is the iShares MSCI Emerging Markets underperforming its benchmark by 15% over 2 and a quarter years. The chart is shown below:
ETFs can trade at a premium or discount to NAV. This factor is mitigated in the local market as the product provider is typically compelled to provide a market in a close range around the NAV. Never the less there is a cost of getting in and out of an ETF that needs to be taken into account when using this investment product. Below is a chart of the daily premium/discount to NAV of the same iShares MSCI Emerging Market Index Fund:
Notice that in times of volatility (late 2008, early 2009) the ETF trades significantly above or below the NAV on a regular basis. Buying at a discount and selling at a premium will generate extra returns, but investors need to be aware of all the facts when transacting.
Investors should be particularly wary of certain ETFs/ETNs that track commodities. ETFs that buy the physical commodity (like the New Gold Issuer ETF) are a good way to track the spot price of commodity. Certain ETFs, however, don’t buy the physical commodity because it’s not feasible (often the commodity has high storage costs) but rather buy the underlying commodity future. Without getting technical, in the case where the commodity isn’t bought, performance of the ETF/ETN can vary significantly from the performance of the commodity as the future contracts need to be rolled on a regular basis. Sarasin cites the case of the Lean Hogs ETF underperforming the Lean Hogs generic futures price by 98.8% over a period of just over 3 years!
Clearly there is a time and a place for ETFs in client portfolios but, just like any financial product, investors need to do their homework before buying them.
Take care,
Mike Browne
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Top News
![[IMAGE]](image.php@width=300&height=150&cropratio=2%253A1&image=%252Fnews_images_sn%252F1295357364.jpg "The Johannesburg Stock Exchange building in Sandton") South Africa's rand firmed slightly against the dollar on Thursday but further gains will be limited by central bank buying and exporter demand below the 7.00 level. Full story ![[IMAGE]](image.php@width=300&height=150&cropratio=2%253A1&image=%252Fnewsimages%252F2011-05-26T144216Z_01_AJOE74P14UJ00_RTROPTP_3_OZABS-WALMART-MASSMART-WTO-20110526.JPG "A man walks past a Makro branch of the South African retailer Massmart in Cape Town") South Africa is unlikely to impose local supply targets in its upcoming ruling on Wal-Mart's $2.4 billion bid for retailer Massmart because such demands could violate international trade rules. Full story |
 More than 40 Yemenis were killed in pitched street battles in the capital on Thursday as fighting aimed at ending President Ali Abdullah Saleh's three-decade-long rule threatened to ignite civil war. Full story  Bosnian Serb wartime general Ratko Mladic was arrested in Serbia Thursday after years on the run from international genocide charges, opening the way for the once-pariah state to approach the European mainstream. Full story  A bicycle bomb wounded seven people including a police officer in Istanbul Thursday, the city's police chief said. Full story |
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Markets |
U.S. stocks rose for a second
day, erasing early losses in a volatile day on Thursday as
earnings helped technology and consumer discretionary. . . Full story |
European shares fell on Thursday
after data showed sluggish growth in the U.S. economy in the
first quarter and on doubts as to. . . Full story |
U.S. stocks lost early gains
and oil prices fell as worries about an economic slowdown
weighed on sentiment, while the euro hit a. . . Full story |
Strength in heavyweight mining
stocks helped Britain's top share index edge higher on Thursday,
countering slippage by banks on euro zone debt concerns.. . . Full story | |||
Gold fell on Thursday, led by a
fall in euro-priced bullion and after the single European
currency came under sudden pressure, but concern. . . Full story |
European shares were flat on
Thursday in a choppy session as investors awaited U.S. GDP data
which would shed light on the health. . . Full story |
Hong Kong shares held onto
mild gains Thursday as large cap banks and oil producers
supported the benchmark, although the gains came stubbornly
tepid. . . Full story |
Australian shares rose 1.7
percent on Thursday for their biggest one-day percentage gain
since Dec 2, recovering after four days of falls as
short-covering. . . Full story | ||||
SA Business |
South Africa's freight logistics group Transnet has reached a deal with trade unions for an 8.5 percent rise in wages, the. . . Full story |
South Africa is in talks with energy intensive users to reduce demand by 5,000 MW or around 13 percent and prevent. . . Full story |
South Africa's maize, wheat and soybeans futures ended higher on Thursday, in line with a rise in U.S. grain prices, but. . . Full story |
South Africa's rand regained its footing against the dollar on Thursday, largely boosted by firmer commodity prices a day after hitting. . . Full story | |||
Coal India, the world's
largest coal miner, is in advanced talks to buy up to 40 percent
of Indonesian low-grade coal producer Golden. . . Full story | South Africa's second-biggest clothing retailer, Foschini, posted a 19.6 rise in full-year profit as consumer spending recovered in Africa's biggest economy.. . . Full story | Mr Price, South Africa's third-biggest listed clothing retailer, plans to raise its dividend payout in 2012 as cash-strapped shoppers flocked to. . . Full story | Brent crude rose above $115 a
barrel on Thursday due to a softer dollar and as an unexpected
drop in U.S. distillate stocks. . . Full story |
Standard Bank, Africa's largest lender by assets, said earnings for the first four months of the year showed a slight decline as demand for credit remains weak and interest rates low.. . . Full story | Brent crude held steady around $115 a barrel on Thursday due to a softer dollar and as an unexpected drop in U.S. distillate stocks overshadowed gains in gasoline and crude inventories.. . . Full story |
Company News |
Shareholders are advised that the company's earnings per share for the twelve month period ended 31 March 2011 is expected to. . . Full story |
Trencor has distributed its annual financial statements in respect of the year ended 31 December 2010 and they are unchanged from. . . Full story |
Trading update for the nine months ended 31 March 2011:
Merger update
*All management reporting is currently prepared on a segmental. . . Full story |
Grindrod Limited shareholders are adiised that at the annual general. . . Full story | |||
Unitholders are advised that Mr Laurence Rapp has been appointed as executive director and Chief Executive Officer ("CEO") of Vukile with effect from 1 August 2011. Mr Rapp's appointment follows Mr Gerhard van Zyl's resignation announced on 28 May 2010 which was effective on 31 March 2011. Mr van Zyl's term was extended with the company, by mutual agreement with the board, until a new CEO was appointed. Mr van Zyl leaves Vukile at the end of July 2011.. . . Full story | |||||||
Company Results | Revenue for the interim period ended 31 March 2011 increased to R7.985 billion (2010: R7.983 billion). Operating profit rose by 15.9%. . . Full story | Revenue increased from R5 050 million to R5 384 million in 2011.Gross profit increased to R1 119 million (2010: R1 097. . . Full story | Revenue decreased to R1.4 billion (R1.9 billion). Gross profit declined to R161.4 million (R496.8 million) and results from operating activities showed. . . Full story | Despite Southern Africa's slow emergence from the global recession, historical low interest rates and severe flooding in northern Namibia, Trustco was. . . Full story |
World Markets (Spot Prices)
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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 |
|---|---|---|---|---|---|---|---|---|
| 26/05/2011 | 219 | 118 | 73 | 410 | 262,504,205 | R12,609,292,032 | 97810 | 1852531 |
| 25/05/2011 | 185 | 140 | 88 | 413 | 288,586,537 | R11,269,385,465 | 89020 | 1728594 |
| 24/05/2011 | 238 | 99 | 70 | 407 | 337,727,147 | R11,162,806,819 | 90213 | 1735391 |
| 23/05/2011 | 93 | 264 | 68 | 425 | 319,312,210 | R12,244,638,663 | 98127 | 1770518 |
| 20/05/2011 | 142 | 181 | 76 | 399 | 303,323,807 | R12,622,485,079 | 103784 | 1955353 |
Major Moves Up
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Major Moves Down
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New Highs
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New Lows
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Index Summary
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Latest Consensus Changes**
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Stock Exchange News Service
| Date | Time | Headline |
| 26/05/2011 | 17:50 | Freeworld Coatings - Trading Statement |
| 26/05/2011 | 17:48 | Insimbi - Further Trading Update |
| 26/05/2011 | 17:12 | Basil Read Holdings Limited - Results of the annual general meeting |
| 26/05/2011 | 17:10 | Ingenuity Property Investments Limited - Dealing in securities by a |
| 26/05/2011 | 17:03 | Pinnacle Technology Holdings Limited - Posting of circular and Notice Of |
| 26/05/2011 | 16:47 | COH - Curro Holdings Limited - Abridged pre-listing statement and rights offer |
| 26/05/2011 | 16:21 | Ingenuity Property Investments Limited - Dealing in securities by a |
| 26/05/2011 | 16:14 | Crookes Brothers Limited - Trading statement |
| 26/05/2011 | 16:00 | Lonmin Plc - Notification of major interest in shares |
| 26/05/2011 | 15:40 | William Tell Holdings Limited - Lifting of suspension of Mr. W. Van Coller |
| 26/05/2011 | 15:30 | WG Wearne Limited - Further cautionary announcement |
| 26/05/2011 | 15:28 | SCIB : USDSCD - Standard Bank - Notice of expiry of Standard Bank currency |
| 26/05/2011 | 15:12 | Sephaku Holdings - Notification of share dealing by director and associate |
| 26/05/2011 | 15:02 | Platmin Limited - Platmin announces Board appointment |
| 26/05/2011 | 15:01 | Platmin Limited - Platmin Limited - Annual Report |
| 26/05/2011 | 15:00 | Platmin Limited - Notice of Annual General Meeting |
| 26/05/2011 | 14:52 | Mobile Industries Limited - Distribution of annual report, no change |
| 26/05/2011 | 14:52 | Trencor Limited - Distribution of annual report, no change statement and |
| 26/05/2011 | 14:40 | Taste Holdings Limited - Revised dealings in securities announcement |
| 26/05/2011 | 14:35 | Capitec Bank Holdings Limited - Dealing in securities by an associate of |
| 26/05/2011 | 14:33 | Brikor Limited - Appointment of independent non-executive chairman and |
| 26/05/2011 | 14:31 | Shoprite Holdings - Dealing in securities by a non-executive director |
| 26/05/2011 | 14:27 | Pinnacle Technology Holdings Limited - Dealing in securities by director |
| 26/05/2011 | 14:27 | Standard Bank Group Limited - Results of Annual General Meeting |
| 26/05/2011 | 14:00 | TFG/TFGP - The Foschini Group Limited - Reviewed Preliminary Condensed |
| 26/05/2011 | 13:49 | Value Group Limited - Directors dealing in securities |
| 26/05/2011 | 13:02 | Petmin Limited - Directors` dealing in securities |
| 26/05/2011 | 12:58 | RMB Holdings Limited - Changes to the board of directors |
| 26/05/2011 | 12:58 | Rand Merchant Insurance Holdings Limited - Appointment to the board of |
| 26/05/2011 | 12:43 | Reunert Ltd - Appointments to the board Sub-committees |
| 26/05/2011 | 12:29 | Taste Holdings Limited - Dealings in securities |
| 26/05/2011 | 11:31 | Spanjaard Limited - Dealings in securities by a director |
| 26/05/2011 | 11:30 | Spanjaard Limited - Dealings in securities by a director |
| 26/05/2011 | 11:19 | MMI Holdings Limited - Trading update for the nine months ended 31 March |
| 26/05/2011 | 11:10 | Palabora Mining Company Limited - No change statement and notice of annual |
| 26/05/2011 | 10:20 | GND & GNDP - Grindrod Limited - Results of Annual General Meeting |
| 26/05/2011 | 10:00 | Vukile Property Fund Limited - Change to the board of directors |
| 26/05/2011 | 08:55 | British American Tobacco p.l.c. - Agrees to acquire Protabaco |
| 26/05/2011 | 08:00 | Standard Bank Group Limited - Update on the group`s performance for the |
| 26/05/2011 | 08:00 | Mr Price - Audited group results and cash dividend declaration for the 53 |
| 26/05/2011 | 07:31 | BHP Billiton Plc - Transaction in shares |
| 26/05/2011 | 07:15 | Anglo American plc - Treasury Shares - Transfers |
| 26/05/2011 | 07:10 | British American Tobacco p.l.c.- Transaction in own shares |
| 26/05/2011 | 07:05 | Trustco Group Holdings Limited - Reviewed Preliminary Consolidated |
| 26/05/2011 | 07:05 | INVS - Investec Bank Limited - The issue of hot enhanced dividend securities |
| 26/05/2011 | 07:05 | Esorfranki Limited - Audited summarised consolidated annual financial |
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