The Sharenet Daily 
Tuesday, 07 June 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
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)

The correlation between implied earnings growth and actual performance

In our monthly analysis of the valuation of the local equity market, we place little to no value in attempting to forecast data. Forecasting suffers from at least two problems. In the first instance forecasting of uncertain events has a low degree of predictability and secondly even if one were to correctly forecast certain factors such as the oil price for an oil company or the input cost of maize to a poultry producer, there is little to no correlation with investment performance.

Fundamental company analysts tend to build models that attempt to assess the main drivers of a company's performance, be it the price of oil, or maize or margins and volume growth of a retailer etc. We do agree that analysis plays a very important part in the understanding of the business drivers and risks. When investing hard earned money into a business an investor will want to have an understanding of the main factors involved.

However of even more importance than the primary drivers is the valuations component. The reason that forecasting has a degree of predictability on actual investor returns is that at times both analysts and investors tend to become very optimistic about future prospects. This optimism is quickly factored into prices, which in turn leads to lower than expected returns.

Conversely when expectations about future earnings are on the lower end of the spectrum, actual future investment returns realised tend to be higher. The scenario tends to be a case of build in low expectations and wait to be surprised on the upside. We tested this theory looking back in time.

On the assumption then that an investor is looking for say a 15% compounded nominal return over a 5 year period, we can look back in time at what the market prices were implying for company earnings growth.

On the assumptions used, the market moves from a case of implying 5% earnings growth to 25% earnings growth.

We then overlayed this with the actual 5 year compounded return that an investor would have received had he invested at that point in time. The chart below provides a summary.

Chart : Implied earnings growth on JSE and actual compounded return

Source: Seed Investments

The results back up our hypothesis in that at the times when the market is implying high earnings, this tends to correlate with low 5 year actual returns.

Conversely at times when the implied earnings expectations fall to below 10%, investors tend to be rewarded on the upside with superior investment performance.

With the market flat over the last 6 months, despite earnings growth, the implied growth is slowly being lowered from higher levels.

Kind regards

Ian de Lange
021 9144 966

Tue, 07 Jun 2011
Top News
South Africa's rand firmed more than 1 percent against the dollar on Tuesday, gaining along with other emerging market currencies on the soft greenback.  Full story

The rand is likely to weaken by 6 percent in the next 12 months as new signs of weakness in the global economy put investors off high-risk assets, a Reuters poll showed on Tuesday.  Full story
Waves of NATO aircraft hit Tripoli on Tuesday in the most sustained bombardment of the Libyan capital since Western forces began air strikes in March.  Full story
Thousands of protesters gathered in front of the Yemeni vice president's residence on Tuesday, demanding the acting leader for wounded President Ali Abdullah Saleh form a transitional council to create a new government.  Full story
The head of Moldova's tennis federation died of wounds sustained when a parked car blew up on Tuesday in the centre of the capital Chisinau as he walked by, police and doctors said.  Full story
European shares fell for the fifth straight day on Tuesday, with investors worried by slowing economic growth and the euro zone peripheral debt. . .  Full story
Gold fell on Tuesday, as steadier stock markets prompted some investors to take profits from bullion, pulling it off a one-month high hit. . .  Full story
Wall Street bounced in light volume on Tuesday, a day after the S&P 500 fell to its lowest in over two months, with. . .  Full story
Britain's top share index closed marginally higher on Tuesday as UK insurer Resolution's bumper cash return helped boost insurance-related firms, while integrated oils weighed. . .  Full story

The U.S. dollar fell against major currencies on Tuesday after a senior Chinese currency regulator warned about the risks of excessive dollar holdings, while. . .  Full story
Australian stocks rebounded to end the day almost unchanged after the Reserve Bank of Australia held rates steady and sounded less likely to. . .  Full story
Tokyo shares on Tuesday snapped a three-day losing streak in which the market slid 3 percent, as hedge funds covered short positions and. . .  Full story
Gold inched up on Tuesday, after rising to its strongest in more than a month in the previous session, as fears about a. . .  Full story
SA Business
South Africa's rand firmed slightly against the dollar on Tuesday paring some of its overnight losses which were prompted by increased importer demand for the greenback.. . .  Full story
The rand ended weaker against the dollar in local trade on Monday as importers sold the currency for dollars after it hit a fresh one-month high of 6.6750 early in the session.. . .  Full story

A Nigerian court handed a setback to South Africa's Telkom on Tuesday, ruling disputed lease agreements between its Nigerian unit and a local company were valid.. . .  Full story
Shipping and logistics group Grindrod plans to expand its Mozambican and South African coal terminals to meet fast-growing demand for export capacity from miners, its chief executive said on Tuesday.. . .  Full story
Zimbabwe's second-largest supermarket chain by assets, OK Zimbabwe, recorded a 153 percent increase in full-year earnings in the year through March 2011 as the country's economy recovers.. . .  Full story
Company News
Further to the cautionary announcement dated Monday, 24 January 2011, and the further cautionary announcements dated, Tuesday, 8 March 2011 and. . .  Full story
Wesizwe announced that the official launch date for its Frischgewaagd-Ledig mine development project has been agreed as 4 July 2011.. . .  Full story
Unitholders are referred to the publication of Oasis' abridged audited results for the year ended 31 March 2011 on SENS on. . .  Full story
The company announced that Mr Jack Thompson, a non executive director of the company, resigned as a director of Century Aluminum. . .  Full story

Business Day reported that Spur MD Pierre van Tonder commented that the company is looking for more opportunities even after acquiring a 60% stake in restaurant chain Cappuccino's for R25 million. "We are always seeking new growth opportunities," he said. The. . .  Full story
Business Day reported that Fiuranium CEO Deon van der Mescht announced that the company will postpone the commissioning of its uranium plant at its tailings treatment business to conserve cash ahead of a convertible debenture maturing next June. The postponement is. . .  Full story
Company Results
First Uranium's consolidated revenue was USD172 million for March 2011, an increase of 86% from USD93 million, resulting in the company reflecting a gross profit of USD20 million (2010: gross loss of USD18 million). Remembering that First Uranium remains in a capital development and growth phase, the consolidated loss for the year was USD70 million (2010: loss of USD92.2 million). Basic loss per common share was reduced to 38cps (2010: basic loss per common share of 56cps). Prospects. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0031818.30240.270.76%
JSE Top 4017:0028494.90217.800.77%
JSE Gold17:002464.34-46.34-1.85%
JSE Financial17:0021560.31135.710.63%
JSE Industrial17:0033049.61226.700.69%
JSE Indust 2517:0027794.34180.520.65%
JSE Resource17:0053617.10519.500.98%
DJ Futures20:0012150.0071.000.59%
DJ Ind19:3512161.8971.930.59%
SP 50019:561293.497.320.57%
FTSE 10017:355864.651.490.03%
All Ords08:374641.10-7.60-0.16%
NZSE 5007:323505.61-9.15-0.26%
NameTimeRPMove% Move
Gold/R kg20:00332630-4777-1.42%
Brent Crude19:56115.52.550.48%
Rand / Dollar19:586.7049-0.0778-1.15%
Rand / Pound19:5510.9934-0.0693-0.63%
Rand / Euro19:559.8450-0.0453-0.46%
Rand / NZD19:585.5094-0.0135-0.24%
Rand / AUD19:557.1945-0.0868-1.19%
Yen / Dollar19:5880.15000.03000.04%
Euro / Dollar19:570.6811-0.0048-0.70%
Dollar / Euro19:571.46830.01040.71%
Pound / Dollar19:550.6079-0.0033-0.54%

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The JSE Today
Trading Statistics

Major Moves Up
SharenameSaleMove% MoveVolume
1 BAUBA  1991910.56.%10280
2 WITSGOLD  44003007.32.%15326
3 MRHLD  29201605.80.%2062523
4 TRADEH  632325.33.%10400
5 CBH  450204.65.%142500
6 HULAMIN  758283.84.%35962
7 WESIZWE  20473.55.%359929
8 AMA  18563.35.%166730
9 EQSTRA  665203.10.%13504
10 ARCMITTAL  81962463.09.%291277
11 WINHOLD  17053.03.%178003
12 GROUP-5  3100902.99.%400988
13 BIDVEST  152404412.98.%1042072
14 PBT  13942.96.%27400
15 AVENG  36101002.85.%1484263
16 TRNSHEX  32992.81.%116459
17 IMPLATS  187505002.74.%1342237
18 ADCOCK  64401702.71.%1393932
19 EHSV  58001502.65.%6266
20 VERIMARK  19652.62.%180642

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Major Moves Down
SharenameSaleMove% MoveVolume
1 VILLAGE  165-21-11.29.%278
2 ANOORAQ  550-37-6.30.%7700
3 KAP  235-15-6.00.%32252
4 MUSTEK  480-30-5.88.%1367633
5 EFFICIENT  495-25-4.81.%1900
6 ROLFES  168-7-4.00.%2650
7 GBGOLD  1320-50-3.65.%7000
8 MERAFE  121-4-3.20.%3977522
9 KEATON   315-10-3.08.%19500
10 DRDGOLD  328-10-2.96.%706554
11 PARACON  175-5-2.78.%35000
12 EASTPLATS  694-19-2.66.%114002
13 GFIELDS  10135-270-2.59.%4280546
14 URONE  2300-50-2.13.%52012
15 BCX  480-10-2.04.%20900
16 HARMONY  9169-181-1.94.%989491
17 INVPROP  1030-18-1.72.%106000
18 ONELOGIX  118-2-1.67.%42460
19 AFRO-C  182-3-1.62.%2800
20 GRANPRADE  310-5-1.59.%76719

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New Highs
SharenameSaleHighMove% MoveVolume
1 VERIMARK  19619952.62.%180642
2 ASSORE  22700227003001.34.%33922
3 MEDCLIN  31513151220.70.%1142261

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New Lows
SharenameSaleLowMove% MoveVolume
1 EFFICIENT  495200-25-4.81.%1900
2 WITSGOLD  440040003007.32.%15326

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Index Summary
Index NameRPMove% Move
Top 4028,494.90217.800.77%
Mid Cap42,195.29322.820.77%
Small Cap32,316.23113.850.35%
Resource 2053,617.10519.500.98%
Industrial 2527,794.34180.520.65%
Financial 158,111.7453.500.66%
Financial & Ind. 3030,850.19199.100.65%
All Share31,818.30240.270.76%
Oil & Gas 26,684.20481.161.84%
Mining 35,255.62266.480.76%
Gold Mining2,464.34-46.34-1.85%
Platinum Mining71.881.592.26%
Oil & Gas Producers 14,347.60258.711.84%
Basic Materials 29,894.82247.960.84%
Chemicals 13,713.11-22.67-0.17%
Forestry & Paper 14,966.91248.831.69%
Industrial Metals 29,273.84568.471.98%
Industrials 28,076.69357.431.29%
General Industrials 76,742.60870.041.15%
Consumer Goods 27,310.5435.860.13%
Automobiles & Parts 3,
Household Goods150.3010.64%
Health Care 33,551.05287.570.86%
Beverages 84.75.570.68%
Food Producers 47,797.36423.400.89%
Index NameRPMove% Move
Personal Goods 430.47-3.99-0.92%
Consumer Services 54,163.93514.240.96%
General Retailers 41,006.13212.920.52%
Travel & Leisure 3,656.9128.650.79%
Media 89.461.311.49%
Support Services 2,390.5915.390.65%
Telecommunications 68,963.23405.730.59%
Financials 21,560.31135.710.63%
Banks 39,973.99168.360.42%
Non-life Insurance 30,502.93191.560.63%
Life Insurance 15,835.40132.120.84%
General Financial 2,309.7916.780.73%
Technology 21,183.04-134.02-0.63%
SHARIAH TOP40 3,139.21300.95%
FTSE/JSE SHARIAH ALL3,205.18300.95%
COAL MINING21,646.222971.39%
FTSE JSE Fledgling 4,610.21-17-0.37%
FTSE/JSE Alt X 1,058.50-7-0.68%
RESOURCE 29,624.892640.90%
DIVIDEND PLUS169.5410.85%
FTSE/JSE RAFI 406,643.93590.90%
Capped Top 4014,885.071070.73%
Capped All Share16,036.701170.73%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
08 Jun 2011RACECMarch 2011 (Interim)
09 Jun 2011ACUCAPMarch 2011 (Final)
09 Jun 2011KEATONMarch 2011 (Final)
13 Jun 2011BSI STEELMarch 2011 (Final)
13 Jun 2011MIXTELMarch 2011 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
CLOVERPREF11-06-0211-06-1711-06-27R 0.0586
INVICTA11-06-0111-07-0111-07-11R 1.2600
PERGRIN11-06-0111-07-1511-07-25R 0.3500
CROOKES11-05-3111-07-0111-07-11R 0.6500
ILLOVO11-05-3011-07-0111-07-11R 0.3400
Ex Div**
Share NameDec-DateLDTPay-DateAmount
CERAMIC11-05-1711-06-0311-06-13R 15.0000
SBRJSEP1111-05-2011-06-0311-06-15R 1.4500
SPAR11-05-1111-06-0311-06-13R 1.4200
PICKNPAY11-04-1811-06-0311-06-13R 1.0550
CORONAT11-05-1711-06-0311-06-13R 0.8000

Upcoming AGMs**
CodeCompany NameDateStatus
SLMSanlam Ltd08/06/2011Confirmed
SLMBSanlam Ltd08/06/2011Confirmed
SLMP1Sanlam Ltd08/06/2011Confirmed
SLMASanlam Ltd08/06/2011Confirmed
TLMTeleMasters Holdings Ltd10/06/2011Confirmed

Stock Exchange News Service
07/06/201117:27 Telkom SA Limited - Update on Multi-Links
07/06/201117:17 Illovo Sugar Limited - Company Secretary
07/06/201116:38 Exxaro - Trading of Exxaro Ordinary Shares on behalf of the Exxaro
07/06/201116:32 Santam Limited - Dealings in securities
07/06/201115:32MMG - MICROmega Holdings Limited - Further cautionary announcement
07/06/201114:49 Convergenet Holdings Limited - Director`s dealings in securities
07/06/201114:00 Pinnacle - Dealing in securities by a family trust of the Chief Executive
07/06/201112:33 Wesizwe Platinum Limited - Wesizwe announces date for offical project
07/06/201112:30 Kumba Iron Ore Limited - Exercise of share options by a director of Kumba
07/06/201111:53 Firestone Energy Limited - Appendix 3Y
07/06/201111:30Alert - Alert Steel Holdings Limited - Posting of circular and notice of
07/06/201111:13EXT - Extract Resources Ltd broadcast: resource upgrade
07/06/201111:11EXT - Extract Resources Limited - Husab project established as the 4th largest
07/06/201111:05 Oasis Crescent Property Fund - No change statement and notice of Annual
07/06/201111:00 Anglo American plc - Directors` appointments
07/06/201111:00 Mustek Limited - Withdrawal of cautionary announcement
07/06/201110:55 Vukile Property Fund Limited - Dealing in securities by the company
07/06/201110:11 Comair Limited - Change to the board of directors
07/06/201109:01 Nampak Limited - Exercise of share options and the subsequent sale of
07/06/201108:57ILVSIG - The Standard Bank of South Africa Limited - Capital reduction
07/06/201108:55SCIB : TBSSTE - The Standard Bank Of South Africa Limited - Dividend
07/06/201108:45 The Don Group Limited - Change to the board of directors
07/06/201108:23 Eastern Platinum Limited - Annual General Meeting proxy deadline extended
07/06/201108:00GLD - NewGold Issuer Limited - Listing of additional Newgold debentures
07/06/201107:10 British American Tobacco p.l.c - Transaction in own shares
07/06/201107:06 BHP Billiton Plc - Transaction in shares
07/06/201107:05BBTNIA - Nedbank Limited - Proposed Distribution Announcement in relation to the

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