Monday, 10 October 2011 - 20:00
Charts
VIX: Uncertainty may mean Opportunity Local and international markets have been incredibly volatile in recent times, with news of the US credit rating downgrade and the threatening European sovereign debt crisis giving investors much cause for concern. Many investors are now tempted to sell off risky assets, but this may be to their detriment as they have already borne some losses and will probably be selling lower than they should. Many analysts regard these periods of increased volatility as ideal opportunities to buy, where informed and less risk-averse investors can profit at the expense of those who are overcome by emotion and uncertainty.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX*) is a measure widely used to determine expected future short term volatility in the market, and is also referred to as the “investor fear gauge”.
VIX values below 20 correspond to more complacent times in the markets, while values above 30 indicate large amounts of volatility as a result of market fear and uncertainty. The VIX has closed above 40 only 166 times since its inception in Jan 1990, indicating that these levels are the result of extreme levels of emotion and insecurity in markets.
Source: Yahoo Finance
The VIX started climbing towards the end of July this year as uncertainty in global markets mounted, and breached the 40 level in the first week of August. Between 4 and 8 August the index recorded its biggest three-day increase ever, and closed on a 29-month high of 48. However, this is still way below the all time high of 80.86 seen during the height of the global financial crisis in 2008. At the moment the index is around the 40 mark, but speculation suggests that the previous high in August might be breached depending on the result of the European sovereign debt crisis.
Analysts usually regard VIX levels above 40 as a good entry point into markets. Historic data indicates that on average US equities have given returns of 3.2% over the 3 months following a VIX close above 40. However, this approach cannot be followed blindly as events preceding the rise in the VIX must also be considered before any investment decision is made. The average figure of 3.2% disguises the massive losses that have resulted in some cases. In 2008, the S&P 500 fell by 34% over 5 months after the VIX rose above 40 on the 2nd of October. Conversely, the S&P rose by 22% over 3 months when the VIX reached 44.28 in August 1998. These contradictory results are a result of the preceding market movements and other macroeconomic factors, and make it impossible to discern a definite buy signal based on the VIX alone.
It is clear that markets often behave irrationally, and that the VIX cannot be used in isolation to predict future market movements. However it does tell us is that risk-taking investors may be able to benefit from the irrational and fearful behaviour of others in these uncertain times.
Kind regards,
Cor van Deventer
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
* The VIX is constructed by analysing the prices of a wide range of both put and call options on the S&P 500 index, the leading indicator of U.S. equities. The option prices are then used to calculate the implied volatility of the index underlying the options, resulting in a measure of the market’s expectation of 30-day volatility.
Mon, 10 Oct 2011
Top News
South Africa's rand gained as much as 2.3 percent against the dollar on Monday, touching a near two-week high as investors ventured back into emerging markets on a raft of positive news about euro zone debt. Full story
Commodities trader and miner Glencore is pursuing 50:50 joint ventures with South African partner Cyril Ramaphosa across the mining sector with an emphasis on bolt-on deals, industry sources and analysts briefed by the commodities group said. Full story |
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Libyan transitional government forces said they had cornered Muammar Gaddafi loyalists in the centre of the deposed leader's hometown on Monday, but many desperate civilians were still trying to flee the fierce street fighting. Full storyA strong showing by hardline leftist Arnaud Montebourg in France's Socialist Party primary vote makes the selection of a moderate candidate less of a certainty and could drag the party's 2012 presidential campaign further to the left. Full storyThai rescue workers scrambled on Monday to prevent a humanitarian disaster as the worst flooding in half a century swamped large sections of the country, shut factories and stranded thousands of people. Full story |
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Markets | European shares rose for a fourth
day on Monday, on optimism a plan devised by France and Germany
would help resolve the euro. . . Full story | | U.S. stocks rallied on Monday
as investor sentiment got a lift from a pledge by German and
French leaders to tackle the euro-zone. . . Full story | | Bank and commodity stocks hoisted
Britain's top shares to a five-week closing high on Monday, on
mounting optimism over the prospects for a. . . Full story | | Gold rose 2 percent on
Monday, moving in tandem with equities and commodities in a
risk rally, as the dollar tumbled after a. . . Full story |
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| World stocks rallied for a
fourth straight session on Monday and the euro jumped on a
pledge by the German and French leaders. . . Full story | | European shares rose for a fourth
day on Monday, on optimism that a plan devised by France and
Germany would help resolve the. . . Full story | | European shares extended gains
on Monday, on optimism a plan being devised by France and
Germany would help resolve the euro zone debt. . . Full story | | U.S. stocks rose sharply in
early trading on Monday after a renewed pledge by France and
Germany to come up with a plan. . . Full story |
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SA Business | South African stocks booked their highest close in nearly three weeks on Monday, rising 2.4 percent as a pledge by European. . . Full story | | Sierra Leone secured its first fibre optic connection to the outside world on Monday with the arrival of the Africa Coast. . . Full story | | The Tanzanian shilling hit another record low against the dollar on Monday and traders expected it to remain under pressure this. . . Full story | | Wal-Mart and Massmart should increase their planned fund to support South African suppliers to at least 500 million rand from 100. . . Full story |
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| Impala Platinum ,
the world's second-largest producer of the precious metal, has
reached a two-year wage deal with South Africa's National Union
of Mineworkers. . . Full story | | Impala Platinum, the world's second-largest producer of the precious metal, said on Monday it has reached a two-year wage deal with. . . Full story | | Shares of South Africa's FirstRand tumbled more than 5 percent as the stock trades ex-dividend, or without the right to its. . . Full story | | South Africa's rand started the week on a firmer note on Monday, maintaining gains below the psychologically important 8.00 level in. . . Full story |
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| South Africa's rand gained over 1.4 percent against the dollar on Monday as investors bought risky assets, encouraged by a German and French pledge over the weekend to shore up banks.. . . Full story | | AngloGold Ashanti chief executive officer Mark Cutifani has said talk of mine nationalisation in South Africa is hurting investment in the sector, local Business Day newspaper reported on Monday.. . . Full story |
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Company News | Shareholders were advised that the annual report for the year ended 30 June 2011 has been posted to shareholders on Monday,. . . Full story | | Shareholders were advised that the company disposed of its interest in StratCol Ltd ("StratCol"), an associated company in which StratCorp held. . . Full story | | Shareholders were advised that, at the annual general meeting of shareholders of the company held on 10 October 2011 at the. . . Full story | | Astrapak announced the appointment of Ms Gugu Pride Duda as an independent non-executive director to the board with effect from 10. . . Full story |
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| Shareholders were advised that Ansys is currently finalising its interim results for the period ended 31 August 2011. Ansys' earnings per share and headline earnings per share for the period are expected to be between 3.72 and 4.47 cents per share. . . Full story | | On 29 March 2011, Cenrand identified three critical challenges facing the company, which included the rising water table in the Central Basin, the appearance of double voids (termed composite double voids) and the challenges of dilution through its proposed long hole. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 30884.70 | 639.80 | 2.12% | JSE Top 40 | 17:00 | 27654.48 | 653.02 | 2.42% | JSE Gold | 17:00 | 2715.99 | 7.87 | 0.29% | JSE Financial | 17:00 | 21214.68 | 197.24 | 0.94% | JSE Industrial | 17:00 | 32848.32 | 768.04 | 2.39% | JSE Indust 25 | 17:00 | 27773.22 | 740.48 | 2.74% | JSE Resource | 17:00 | 50296.78 | 1201.97 | 2.45% | DJ Futures | 19:56 | 11325.00 | 259.00 | 2.34% | DJ Ind | 19:45 | 11368.58 | 265.46 | 2.39% | SP 500 | 20:00 | 1188.31 | 32.85 | 2.84% | Nasdaq | 20:00 | 2553.50 | 74.15 | 2.99% | FTSE 100 | 17:35 | 5399.00 | 95.60 | 1.80% | DAX | 18:06 | 5847.29 | 171.59 | 3.02% | CAC40 | 18:06 | 3161.47 | 68.86 | 2.23% | Nikkei | 07/10 | 8605.62 | 83.60 | 0.98% | Shanghai | 09:26 | 2344.79 | -14.43 | -0.61% | Hang-Seng | 09:46 | 17437.95 | -269.06 | -1.52% | All Ords | 07:38 | 4262.30 | 37.30 | 0.88% | NZSE 50 | 06:46 | 3372.85 | -10.79 | -0.32% |
| | Name | Time | RP | Move | % Move | Gold | 19:58 | 1673.00 | 35.35 | 2.16% | Gold/Rand | 20:00 | 13133.89 | 98.10 | 0.75% | Gold/R kg | 20:00 | 422254 | -622 | -0.15% | Silver | 19:59 | 32.0350 | .8700 | 2.79% | Platinum | 19:59 | 1520.00 | 31.25 | 2.10% | Palladium | 19:58 | 609.75 | 24.20 | 4.13% | R157 | 17:06 | 6.61 | -.12 | -1.78% | R204 | 17:06 | 7.71 | -.12 | -1.53% | Brent Crude | 19:56 | 108.51 | 2.91 | 2.76% | Rand / Dollar | 19:59 | 7.8505 | -0.1115 | -1.40% | Rand / Pound | 19:55 | 12.2747 | -0.0928 | -0.75% | Rand / Euro | 19:55 | 10.7212 | 0.0511 | 0.48% | Rand / NZD | 19:57 | 6.1617 | 0.0441 | 0.72% | Rand / AUD | 19:55 | 7.8470 | 0.0647 | 0.83% | Yen / Dollar | 19:58 | 76.6500 | -0.1590 | -0.21% | Euro / Dollar | 19:55 | 0.7319 | -0.0148 | -1.98% | Dollar / Euro | 19:56 | 1.3658 | 0.0269 | 2.01% | Pound / Dollar | 19:55 | 0.6377 | -0.0049 | -0.76% |
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The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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10/10/2011 | 251 | 121 | 71 | 443 | 266,162,566 | R11,147,298,470 | 100857 | 2575703 | 07/10/2011 | 239 | 107 | 71 | 417 | 232,165,146 | R11,307,751,848 | 90131 | 2532892 | 06/10/2011 | 224 | 119 | 71 | 414 | 292,484,257 | R16,823,576,216 | 122944 | 3312569 | 05/10/2011 | 177 | 173 | 79 | 429 | 294,756,850 | R13,474,859,930 | 114803 | 3212100 | 04/10/2011 | 84 | 289 | 65 | 438 | 348,539,112 | R14,855,231,660 | 136212 | 3146716 |
Index Summary Index Name | RP | Move | % Move | Top 40 | 27,654.48 | 653.02 | 2.42% | Industrial | 32,848.32 | 768.04 | 2.39% | Mid Cap | 41,066.88 | 264.59 | 0.65% | Small Cap | 31,097.75 | -.11 | -0.00% | Resource 20 | 50,296.78 | 1201.97 | 2.45% | Industrial 25 | 27,773.22 | 740.48 | 2.74% | Financial 15 | 7,931.56 | 88.81 | 1.13% | Financial & Ind. 30 | 30,673.96 | 699.66 | 2.33% | All Share | 30,884.70 | 639.80 | 2.12% | Oil & Gas | 25,373.00 | -68.08 | -0.27% | Mining | 33,024.76 | 915.56 | 2.85% | Gold Mining | 2,715.99 | 7.87 | 0.29% | Platinum Mining | 63.62 | 2.11 | 3.43% | GENERAL MINING | 8,128.20 | 271.93 | 3.46% | Oil & Gas Producers | 13,642.60 | -36.60 | -0.27% | Basic Materials | 27,890.95 | 783.15 | 2.89% | Chemicals | 12,798.53 | 265.93 | 2.12% | Forestry & Paper | 12,369.95 | 405.92 | 3.39% | Industrial Metals | 27,306.51 | 933.08 | 3.54% | Industrials | 26,646.16 | 281.99 | 1.07% | General Industrials | 75,045.65 | 1366.72 | 1.85% | Consumer Goods | 28,418.45 | 910.46 | 3.31% | Automobiles & Parts | 3,623.13 | 4.53 | 0.13% | Household Goods | 148.08 | 2 | 1.35% | Health Care | 34,456.53 | 339.22 | 0.99% | Beverages | 95.61 | 3.56 | 3.87% |
| | Index Name | RP | Move | % Move | Food Producers | 49,638.41 | 493.91 | 1.01% | Personal Goods | 400.50 | 14.08 | 3.64% | Consumer Services | 53,817.78 | 603.23 | 1.13% | General Retailers | 43,234.29 | 928.68 | 2.20% | Travel & Leisure | 3,409.26 | 13.63 | 0.40% | Media | 79.26 | -.10 | -0.13% | Support Services | 2,215.21 | 7.52 | 0.34% | Telecommunications | 66,855.68 | 2111.01 | 3.26% | Financials | 21,214.68 | 197.24 | 0.94% | Banks | 40,078.35 | 208.13 | 0.52% | Non-life Insurance | 33,948.73 | 121.25 | 0.36% | Life Insurance | 15,530.61 | 333.19 | 2.19% | General Financial | 2,065.78 | 25.03 | 1.23% | Technology | 22,784.59 | 69.02 | 0.30% | SHARIAH TOP40 | 2,967.35 | 78 | 2.71% | FTSE/JSE SHARIAH ALL | 3,028.70 | 73 | 2.49% | COAL MINING | 23,830.59 | 604 | 2.60% | FTSE JSE Fledgling | 4,454.76 | 9 | 0.21% | FTSE/JSE Alt X | 1,091.77 | -13 | -1.21% | SA LISTED PROPERTY | 382.45 | | 0.46% | CAPPED PROPERTY | 315.54 | | 0.56% | RESOURCE | 27,804.47 | 657 | 2.42% | DIVIDEND PLUS | 164.94 | 2 | 1.20% | FTSE/JSE RAFI 40 | 6,404.51 | 140 | 2.24% | Capped Top 40 | 14,541.32 | 336 | 2.36% | Capped All Share | 15,605.11 | 321 | 2.10% |
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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 | 06 Oct | SBK | STANDARD BANK GROUP LIMIT... | SELL | 06 Oct | AIP | ADCOCK INGRAM HLGS LD | HOLD | 06 Oct | LHC | LIFE HEALTHCARE GRP HLDG ... | BUY | 06 Oct | EQS | EQSTRA HOLDINGS LTD | HOLD | 06 Oct |
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Results Expected** Expected | Company Name | Fin. Date | 11 Oct 2011 | METMAR | August 2011 (Interim) | 11 Oct 2011 | VERIMARK | August 2011 (Interim) | 12 Oct 2011 | ADCORP | August 2011 (Interim) | 12 Oct 2011 | DATATEC | August 2011 (Interim) | 13 Oct 2011 | DIPULA A | August 2011 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | NAIL -N- | 11-10-06 | 11-10-21 | 11-10-31 | R 0.1267 | NAIL | 11-10-06 | 11-10-21 | 11-10-31 | R 0.1267 | INSIMBI | 11-10-04 | 11-10-21 | 11-10-31 | R 0.0200 | DCENTRIX | 11-10-04 | 11-10-21 | 11-10-31 | R 0.1340 | NTC PREF | 11-10-03 | 11-10-21 | 11-10-31 | R 3.3842 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | BEE-SASOL | 11-09-12 | 11-10-07 | 11-10-17 | R 9.9000 | SASOL | 11-09-12 | 11-10-07 | 11-10-17 | R 9.9000 | AVENG | 11-09-05 | 11-10-07 | 11-10-17 | R 1.4500 | CASHBIL | 11-09-20 | 11-10-07 | 11-10-17 | R 1.3900 | ASPEN | 11-09-13 | 11-10-07 | 11-10-17 | R 1.0500 |
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Upcoming AGMs** Code | Company Name | Date | Status | BFS | Blue Financial Services Ltd | 10/10/2011 | Confirmed | WSL | Wescoal Holdings Ltd | 11/10/2011 | Confirmed | ARH | ARB Holdings Ltd | 11/10/2011 | Confirmed | BLU | Blue Label Telecoms Ltd | 12/10/2011 | Unconfirmed | DAW | Distribution and Warehousing Network Ltd | 13/10/2011 | Unconfirmed |
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