The Sharenet Daily 
Thursday, 09 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)

Quality Companies vs Quality Investments

There are many instances where investors (professional and amateur alike) have mistaken a quality company with a quality investment. Successful investors are those who are able to differentiate the two, and who don’t allow emotion to sway their investment decision making process.

First off, let’s define the two terms:

Quality Company

A quality company is a company that has a quality management team. The management team should be efficient allocators of capital, thereby only allocating shareholder capital to profitable ventures. Quality companies are also typically in an industry where there are high barriers to entry, which allows them to consistently grow earnings at above market rates without many competitors joining the industry. These businesses also are generally not capital intensive, generating free cash flow which can be used for (profitable) expansion or distribution back to shareholders (in the form of dividends), as opposed to being forced to reinvest the capital to replace capital intensive equipment.

Quality Investment

On the other hand a quality investment is an investment that one can reasonably expect an above average return over a targeted time horizon. The return generated on an investment is in a large part determined by the price paid for the investment. Overpay and you will struggle to generate excellent long term returns. Invest at a large discount to fair value, and you will increase the odds of receiving a generous return. This is the modus operandi of value investors.

Very often we find poor quality companies that are offering good long term returns as a result of the price relative to fair value. As an investor you need to be (relatively) sure that your fair value calculation is accurate and that you are being paid to take on the risk of purchasing a poor quality investment. Sometimes we are lucky enough that a quality company is trading at a significant discount to its fair value for some reason. This is the time to fill your boots.

Construction Industry

The construction industry is notoriously a poor quality industry. Margins are tight and the business is capital intensive. Over time, however, the industry has offered excellent investment entry points as a result of the shares trading at substantial discounts to fair value. While not being an obvious place to hunt as a result of poor growth prospects and the shadow of the fines they’ve had to pay for anti competitive behaviour, some of the metrics show that they are offering good value. Below are a couple charts showing the value in the sector.

In the chart above we can see that earnings are getting close to historic lows. On these low earnings we can see below that the market is offering attractive multiples. While we don’t expect these to unwind immediately they do offer good long term starting points.

The Seed Flexible Fund currently has a large weighting (via Cannon’s equity allocation) to the construction sector. We expect that this allocation will generate good returns over the look term.

Take care,

Mike Browne
021 9144 966

Thu, 09 Jun 2011
Top News
Growth in South Africa's manufacturing output slowed sharply to 0.4 percent year-on-year in volume terms in April compared with an upwardly revised 4.9 percent rise in March, Statistics South Africa said on Thursday.  Full story

South Africa's gold output rose 1.5 percent in volume terms in April while total mineral production rose 12.4 percent compared with the same month a year earlier, data showed on Thursday.  Full story
Libya's cash-starved rebels on Thursday won more than $1.1 billion (672 million pounds) of aid at a conference of Western and Arab powers that focussed on the end-game for Muammar Gaddafi and the country's civil war.  Full story
More than 1,700 Syrians have fled to Turkey to escape a feared army crackdown, officials said on Thursday, in another sign that President Bashar al-Assad's struggle with protesters is disturbing Syria's neighbours.  Full story
Millions of children's lives and billions of dollars could be saved if vaccines were more widely available in 72 of the world's poorest countries, according to a series of studies published on Thursday.  Full story
U.S. stocks extended gains on Thursday after trade data showed record U.S. exports, easing concerns about a stalled economic recovery following a six-day slide. . .  Full story
European shares rose sharply on Thursday, bouncing from six days of losses as investors snapped up beaten-down stocks, notably those related to commodities.. . .  Full story
U.S. stocks bounced back on Thursday after a six-day slide and oil prices jumped on supply concerns, while the euro fell after the. . .  Full story
Miners rebounded from the previous day's sharp sell-off to help push Britain's top share index higher on Thursday, while oil stocks tracked crude. . .  Full story

Gold prices firmed to session highs above $1,540 an ounce on Thursday as the European Central Bank signalled a rate hike may be. . .  Full story
European shares drifted lower on Thursday, down for a seventh straight day in a choppy session, with retailers coming under pressure on a. . .  Full story
Australian shares rose 0.3 percent on Thursday, breaking a six-day losing streak after disappointing May jobs data doused expectations for a rate rise in. . .  Full story
The Nikkei share average edged higher on Thursday as buying from foreign investors attracted by cheap valuations offset growing worries over a slowing. . .  Full story
SA Business
South Africa's high unemployment rate is a major threat to the country's investment grade rating, said Moody's senior vice president and. . .  Full story
South Africa's rand was little changed from its previous closing level against the dollar in cautious early Thursday trade ahead of. . .  Full story
Africa, regarded as the next iron ore frontier, is only likely to boost global supply from 2020 and only if countries. . .  Full story
South Africa's rand fell against the dollar on Wednesday as importers bought foreign exchange, with bonds following suit and stocks also. . .  Full story

South Africa has named Zola Tsotsi as new chairman of power utility Eskom as the government seeks to reshuffle the leadership. . .  Full story
Global ferrochrome demand is expected to rise by 11 percent to 9.87 million tonnes this year, outstripping expected supply of 9.29 million tonnes, Merafe. . .  Full story
South African maize futures edged up on Thursday, tracking international prices as the market anticipated that a U.S. government report would. . .  Full story
Shares in Australian iron ore miner Territory Resources jumped rose by over 10 percent on Thursday after commodities firm Noble Group. . .  Full story

South Africa's Pan African Resources said on Thursday it was encouraged by its drilling programme on the Bramber tailings dam at Barberton Mines and that more dump material was being investigated.. . .  Full story
. . .  Full story
Members of South Africa's National Union of Mineworkers (NUM) working at Exxaro will go on strike on Monday over planned retrenchments at the miner, the union said on Wednesday.. . .  Full story
Company News
In accordance with rule 3.59 of the Listings Requirements of the JSE Limited, shareholders of the company are hereby advised of. . .  Full story
Further to the announcement on SENS on 17 May 2011, shareholders were advised that the date for proof of funds and. . .  Full story
Shareholders were advised that the board of directors have been informed that a creditor and shareholder/s intends launching an application for. . .  Full story
Shareholders are advised that the group's headline earnings per share based on continuing operations for the year ended 28 February 2011. . .  Full story

The Financial Mail reported that Grindrod's most exciting asset is the company's concession at the Maputo and Matola ports in Mozambique. The port could earn Grindrod a return of between 18%-20%. . .  Full story
Shareholders are referred to the circular to Simmers shareholders dated 2 March 2011, the circular to Village Main Reef Ltd ("Village") shareholders dated 2 March 2011 and the announcements previously released. . .  Full story
Shareholders are advised that Optimum Coal will be hosting a number of analysts at Koornfontein Mines and Optimum Collieries in Mpumalanga. The presentations made during the site visit can be viewed. . .  Full story
Company Results
Rental revenue increased to R493.4 million (R446.7 million). Net profit for the year rose to R629.6 million (R479.5 million) In addition, headline earnings per unit grew to 113.22cpu (98.54cpu). Distribution A final ordinary distribution of 79.49cpu has been declared. Prospects The weak office cycle over the last 18 months, with rising vacancies, has led to a short-term setback in Sycom's growth, but as the recovery of the 'A' grade office market gathers momentum, the high offic. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0031634.17112.840.36%
JSE Top 4017:0028307.10120.440.43%
JSE Gold17:002423.0137.361.57%
JSE Financial17:0021477.497.890.04%
JSE Industrial17:0032878.99-24.35-0.07%
JSE Indust 2517:0027628.02-28.67-0.10%
JSE Resource17:0053265.02549.311.04%
DJ Futures19:5012090.0058.000.48%
DJ Ind19:4512175.03126.091.05%
SP 50019:301292.3512.791.00%
FTSE 10017:355856.3447.450.82%
All Ords08:394621.7013.000.28%
NZSE 5007:263488.75-36.65-1.04%
NameTimeRPMove% Move
Gold/R kg20:003337689130.27%
Brent Crude19:56119.03-.06-0.05%
Rand / Dollar19:596.73430.01980.29%
Rand / Pound19:5510.9899-0.0028-0.03%
Rand / Euro19:559.7742-0.0317-0.32%
Rand / NZD19:595.57240.05881.07%
Rand / AUD19:557.16530.01430.20%
Yen / Dollar19:5980.39000.52000.65%
Euro / Dollar19:580.68910.00320.47%
Dollar / Euro19:581.4509-0.0066-0.45%
Pound / Dollar19:550.61080.00110.18%

Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics

Major Moves Up
SharenameSaleMove% MoveVolume
1 ROLFES  180127.14.%26700
2 MERAFE  12786.72.%7096403
3 MARSHALL  550254.76.%79200
4 OANDO  230104.55.%3000
5 VIVIDEND  484194.09.%41435
6 HUGE  10444.00.%14600
7 PINNACLE  829273.37.%422356
8 RBPLAT  69502063.05.%103425
9 SANTAM  128783783.02.%7702
10 LIFEHC  1730492.91.%36548197
11 MONDILTDP  67871872.83.%931266
12 EQSTRA  664172.63.%66311
13 MONDIPLCP  69301692.50.%1258164
14 PALLINGHT  39992.31.%388874
15 ANGGOLD  296406412.21.%1090462
16 TRNSHEX  33272.15.%153082
17 VERIMARK  20442.00.%365988
18 CERAMIC  127482481.98.%12876
19 ABIL  3516661.91.%2079931
20 ILLOVO  2695501.89.%354632

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Major Moves Down
SharenameSaleMove% MoveVolume
1 TELEMASTR  101-28-21.71.%17000
2 SPANJRD  390-30-7.14.%5000
3 TRADEH  588-44-6.96.%20
4 ARB  322-22-6.40.%1000
5 VILLAGE  160-10-5.88.%128000
6 PALCAP  265-16-5.69.%228092
7 URONE  2090-93-4.26.%102842
8 GBGOLD  1255-43-3.31.%30660
9 AMA  179-6-3.24.%33452
10 DAWN  630-21-3.23.%14879
11 ANOORAQ  532-17-3.10.%62232
12 AVENG  3507-103-2.85.%1382567
13 NASPERSN  39525-1150-2.83.%2983853
14 COAL  860-25-2.82.%225733
15 HCI  7775-220-2.75.%4036
16 EHSV  5750-150-2.54.%338900
17 DCENTRIX  445-11-2.41.%196500
18 WINHOLD  164-4-2.38.%17758
19 COMAIR  215-5-2.27.%4128
20 SENTULA  269-6-2.18.%1688569

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New Highs
SharenameSaleHighMove% MoveVolume
1 PINNACLE  829845273.37.%422356
2 LIFEHC  17301730492.91.%36548197
3 MONDIPLCP  693070001692.50.%1258164
4 VERIMARK  20420642.00.%365988
5 MEDCLIN  31453160200.64.%541862

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New Lows
SharenameSaleLowMove% MoveVolume
1 TELEMASTR  101100-28-21.71.%17000
2 VILLAGE  160150-10-5.88.%128000
3 GBGOLD  12551200-43-3.31.%30660
4 MAZOR  1301270.643412

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Index Summary
Index NameRPMove% Move
Top 4028,307.10120.440.43%
Mid Cap42,135.72-17.17-0.04%
Small Cap32,252.2658.690.18%
Resource 2053,265.02549.311.04%
Industrial 2527,628.02-28.67-0.10%
Financial 158,074.544.930.06%
Financial & Ind. 3030,668.20-16.82-0.05%
All Share31,634.17112.840.36%
Oil & Gas 26,762.5870.820.27%
Mining 34,938.76383.601.11%
Gold Mining2,423.0137.361.57%
Platinum Mining70.96.050.07%
Oil & Gas Producers 14,389.7538.080.27%
Basic Materials 29,665.68322.751.10%
Chemicals 13,800.8654.650.40%
Forestry & Paper 15,120.13237.361.59%
Industrial Metals 29,339.98208.180.71%
Industrials 27,834.42-44.56-0.16%
General Industrials 76,036.17114.840.15%
Consumer Goods 27,235.90208.600.77%
Automobiles & Parts 3,238.1811.330.35%
Household Goods152.2121.53%
Health Care 33,619.34170.090.51%
Beverages 84.53.981.17%
Food Producers 47,649.30-7.11-0.01%
Index NameRPMove% Move
Personal Goods 428.171.600.38%
Consumer Services 53,409.25-735.80-1.36%
General Retailers 40,858.95-150.75-0.37%
Travel & Leisure 3,651.31-1.73-0.05%
Media 87.12-2.46-2.75%
Support Services 2,395.401.130.05%
Telecommunications 68,714.28-448.33-0.65%
Financials 21,477.497.890.04%
Banks 39,833.66-142.64-0.36%
Non-life Insurance 31,227.98916.613.02%
Life Insurance 15,742.1854.660.35%
General Financial 2,298.5117.340.76%
Technology 21,531.234.660.02%
SHARIAH TOP40 3,120.21240.76%
FTSE/JSE SHARIAH ALL3,187.02220.70%
COAL MINING21,577.34-27-0.12%
FTSE JSE Fledgling 4,574.05-23-0.51%
FTSE/JSE Alt X 1,029.03-29-2.70%
CAPPED PROPERTY 318.50-0.04%
RESOURCE 29,404.842901.00%
DIVIDEND PLUS168.9500.04%
FTSE/JSE RAFI 406,607.05260.39%
Capped Top 4014,789.22490.34%
Capped All Share15,946.65490.31%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
13 Jun 2011BSI STEELMarch 2011 (Final)
13 Jun 2011MIXTELMarch 2011 (Final)
13 Jun 2011TELKOMMarch 2011 (Final)
13 Jun 2011TELKOMAMarch 2011 (Final)
13 Jun 2011TELKOMBMarch 2011 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
CLOVERPREF11-06-0211-06-1711-06-27R 0.0586
PERGRIN11-06-0111-07-1511-07-25R 0.3500
INVICTA11-06-0111-07-0111-07-11R 1.2600
CROOKES11-05-3111-07-0111-07-11R 0.6500
TIGBRANDS11-05-3011-06-2411-07-04R 2.8100
Ex Div**
Share NameDec-DateLDTPay-DateAmount
CERAMIC11-05-1711-06-0311-06-13R 15.0000
INVESTEC-P11-05-1911-06-0911-06-30R 3.4161
INVLTDPREF11-05-1911-06-0911-06-30R 3.1884
ABIL PREF11-05-2311-06-0911-06-20R 3.1000
ASTRAL11-05-1611-06-0911-06-20R 3.0500

Upcoming AGMs**
CodeCompany NameDateStatus
PWKPick n Pay Holdings Ltd10/06/2011Confirmed
1TM1time Holdings Ltd10/06/2011Confirmed
TLMTeleMasters Holdings Ltd10/06/2011Confirmed
PIKPick n Pay Stores Ltd10/06/2011Confirmed
DCTDatacentrix Holdings Ltd10/06/2011Confirmed

Stock Exchange News Service
09/06/201117:13 Famous Brands Limited - Dealings in Securities
09/06/201116:53FR1 - FirstRand Bank Limited - New Financial Instrument Listing - Amendment to
09/06/201116:50 Interwaste Holdings Limited - No change statement and notice of annual
09/06/201116:44 Sephaku Holdings - Notification of Share Dealing by the company secretary
09/06/201116:19 Bowler Metcalf Limited - Cautionary announcement
09/06/201116:16 Ububele Holdings Limited - Changes to the Board of Directors
09/06/201116:11 Pinnacle Point Group Limited - Extension of dates of conditions precedent
09/06/201116:08 Pinnacle Point Group Limited - Cautionary announcement
09/06/201116:00Col - Colliers South Africa Holdings Limited - Trading statement
09/06/201115:55 Securedata Holdings Limited - Change to the board of directors
09/06/201115:00 BRAIT S.A.,Societe Anonyme - Dealing in securities by a non-executive
09/06/201114:47 Consolidated Infrastructure Group Limited - Dealing in securities
09/06/201114:30 Excellerate Holdings Limited - Announcement regarding the disposal by
09/06/201113:30 Capitec Bank Holdings Limited - Dealing in securities by a director
09/06/201113:00SIM/VIL - Simmers/Village - Fulfilment of conditions and salient dates for the
09/06/201112:23 Trematon Capital Investments Limited - Dealing in Securities by a Director
09/06/201112:18 Reunert Limited - Voluntary announcement: Competition authorities approve
09/06/201112:15 SA Corporate Real Estate Fund - Dealing in securities by a director
09/06/201111:39 Growthpoint Properties Limited - Acquisition of a 50% Interest in The V&A
09/06/201111:30 Trading of Exxaro ordinary shares
09/06/201111:26SYCIVC - Investec Bank Limited - Declared distribution announcement on Sycom
09/06/201111:25SYCIVB - Investec Bank Limited - Declared distribution announcement on Sycom
09/06/201111:00 Pinnacle Technology Holdings Limited - Trading statement
09/06/201110:34 RBA Holdings Limited - No change statement and notice of annual general
09/06/201109:34CLN72 - The Standard Bank of South Africa Limited - Financial instrument
09/06/201109:32CLN71 - The Standard Bank of South Africa Limited -Financial Instrument
09/06/201109:30CLN88 - The Standard Bank of South Africa Limited - Financial Instrument Partial
09/06/201109:00 Pan African Resources PLC - Encouraging Results of Drilling Programme at
09/06/201109:00 MAS PLC - Change of Voting Rights
09/06/201109:00 Optimum coal analyst site visit
09/06/201108:30 ARB Holdings Limited - Appointment of Independent, Non-executive
09/06/201108:11 Firestone Energy Limited - Firestone Joint Venture reports Progress with
09/06/201108:06STXSWX - SATRIX SWIX TOP 40 PORTFOLIO - Partial delisting of securities
09/06/201108:05 Sycom Property Fund - Audited group results and declaration of the final
09/06/201108:03STXRES - SATRIX RESI PORTFOLIO - Partial delisting of securities
09/06/201108:02STXDIV - SATRIX DIVIDEND PLUS PORTFOLIO - Listing of additional securities
09/06/201108:01STXFIN - SATRIX FINI PORTFOLIO - Partial delisting of securities
09/06/201108:00 Acucap Properties Limited - Audited group results and declaration of the
09/06/201108:00STX40 - SATRIX 40 PORTFOLIO - Partial Delisting of Satrix 40 Securities
09/06/201107:38 News Release: First Uranium announces changes to its board of directors
09/06/201107:10 British American Tobacco p.l.c. - Transaction in own shares
09/06/201107:05 BHP Billiton Plc - Transaction in shares
09/06/201107:05ACL122-Absa Bank Limited - New Financial Instrument Listing
09/06/201107:05 Conduit Capital Limited - Renewal of Cautionary Announcement

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