Tuesday, 18 October 2011 - 20:00
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Some Thoughts for Retirement Coronation recently published their Corolab booklet with quite a few interesting articles that are summarized here.
1. Plan for higher inflation:
Over the last 10 years South Africa mostly experienced low inflation. However, we often feel that our personal inflation rates are a lot higher than the published rate (currently 5.3%). The reason for this is because the 5.3% is the average rate across South Africans’ basket of goods, but each individual’s basket is made up differently. E.g. Recreational equipment had a negative inflation rate of 5% for the past 12 months while electricity stands at 18% and private transport (including petrol) at 17%. Inflation of individual sectors ranges between -5% and +18%, which means your own inflation rate is as personal as your own investment strategy.
It is therefore important to look at your inflation rate and how your investment strategy should be developed to incorporate that.
2. The returns from the last decade versus the longer term history:
The graph below shows the annualised real returns of the last decade relative to long term average returns (last 111 years of data).
Clearly, local assets have done extremely well compared to the longer term averages while offshore equities in rand terms have been dismal. However, if you purely use the returns of the last decade as a proxy of what might happen in the future then you could well be disappointed.
Coronation set out their 10 year forecast of the various asset classes. Naturally these returns don’t materialize in linear format but could be lumpy. From the table below it is clear that the returns from local asset classes could be muted despite a bleaker inflation outlook. It is also evident that history might not repeat itself, with future returns most likely coming from offshore assets.
Coronation makes the point that at a 6% inflation rate you probably require nearly 6 times the level of income at the end of say 25 years to be able to buy the same basket of goods.
This makes it important to invest in growth assets that are able to grow faster than inflation over a longer period.
3. Life expectancy:
Finally, the change in life expectancy because of better healthcare technology could mean that the average person is going to live longer. The table below illustrates the life expectancy of people at certain ages. For example, a female that is currently 65 years old is expected to live a further 20 years (age 85)
Therefore, your personal inflation rate, changes in future returns and life expectancy all influence the investment strategy you need to follow.
Kind regards,
Vincent Heys
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Tue, 18 Oct 2011
Top News
Yields on South African government bonds rose to their highest in more than a week on Tuesday after a weekly auction that saw investors dump the longer end of the curve ahead of a budget speech next week in which more issuance is expected to be announced. Full story
South African stocks ended slightly lower on Tuesday with miners among the worst performers as growth worries in China hit industrial metal prices. Full story |
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Israeli soldier Gilad Shalit and hundreds of Palestinians crossed Israel's borders in opposite directions on Tuesday as a thousand-for-one prisoner exchange brought joy to families but did little to ease decades of conflict. Full storyU.S. Secretary of State Hillary Clinton visited Libya on Tuesday to urge its disparate militias to unite around their new leaders, while loyalists of ousted Muammar Gaddafi launched a counter-attack in his hometown of Sirte. Full storyA Milan judge on Tuesday cleared Silvio Berlusconi in a fraud and embezzlement case related to his private broadcaster Mediaset, a rare legal victory for the weakened Italian prime minister who is a defendant in three other trials. Full story |
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Markets | U.S. stocks rose on Tuesday as
bank earnings, though unspectacular, were strong enough to
reassure investors about the sector and overshadow debt worries
and. . . Full story | | European shares fell on Tuesday,
led by French banking stocks after a Moody's warning about
France's credit rating fuelled worries about possible contagion
in. . . Full story | | U.S. shares rose on Tuesday,
buoyed by a jump in financial shares on results from Bank of
America and other big banks, bucking. . . Full story | | U.S. stocks rose on Tuesday,
led by financials, as better-than-expected bank earnings
overshadowed new worries about the crisis in Europe, fueled by
a warning. . . Full story |
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| Gold dropped more than
1 percent on Tuesday, on track for its largest decline in two
weeks, as investors worried about slowing Chinese. . . Full story | | Britain's leading share index
ended lower on Tuesday as nervous investors retreated from
riskier assets, forcing the FTSE 100 below a significant
technical level. . . Full story | | European shares fell on Tuesday,
with French banks among the worst hit after Moody's warned over
the outlook for France's rating, the latest. . . Full story | | U.S. stocks opened little
changed on Tuesday after Moody's said it would review France's
credit rating and investors grappled with less-than-stellar
earnings from some. . . Full story |
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SA Business | President Jose Eduardo Dos Santos cut Angola's growth forecast for 2011 to 3.7 percent on Tuesday due mainly to lower crude production but the economy should bounce back with a 12 percent expansion next year.. . . Full story | | South Africa's rand softened against the dollar on Tuesday and was seen coming under pressure as investors steered clear of risky assets, disappointed by comments that European leaders are unlikely to come up with a quick solution to the debt crisis.. . . Full story |
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| Canadian miner Eastern Platinum reported a 29 percent drop in third-quarter production at its flagship Crocodile River mine in South Africa. . . Full story | | The rand fell 1.3 percent against the dollar to an eight day low as negative sentiment linked to the euro zone. . . Full story | | Global miner Xstrata said on Tuesday that its South African coal operations were severely affected by a strike over an employee. . . Full story | | South Africa raised 2.1 billion rand in a sale of 2017 and 2041 bonds on Tuesday although demand for the longer-dated. . . Full story |
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| South Africa exported 86,567 tonnes of white maize last week compared with 40,204 tonnes in the previous week, the South African Grain Information Service (SAGIS) said on Tuesday.. . . Full story |
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Company News | At the annual general meeting of the shareholders of the Value held on 18 October 2011, all the ordinary and special. . . Full story | | The company is proud to report that Scooters Pizza (a subsidiary of Taste) won the brand builder of the year award. . . Full story | | The board of directors of KAP announces that in-principle agreement has been reached between KAP and Steinhoff International Holdings Ltd ("Steinhoff"),. . . Full story | | The board of directors of Steinhoff announced that in-principle agreement (the "Agreement") has been reached between Steinhoff and KAP. . . Full story |
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| Delta shareholders are referred to the group's unaudited results announcement for the six months ended 27 June 2011 and the comments on prospects contained therein dated 4 August 2011. The group expects its 2011 second half sales revenue and volumes to. . . Full story | | In the third quarter of 2011, weaker market conditions and scheduled maintenance during the high electricity tariff winter months, resulted in an operating capacity utilisation of 52%. Ferrochrome production was 18% lower in the third quarter of 2011, compared to the. . . Full story |
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Company Results | Revenue for the interim period skyrocketed to R209 million (2010: R96.2 million). Gross profit increased to R35.1 million (2010: R19.9 million),. . . Full story | | Revenue for the year ended 30 June 2011 dropped to R770 million (R818.6 million) and gross profit fell to R135.1 million. . . Full story | | Revenue for the interim period ended 31 August 2011 decreased to R19.1 million (2010: R23.1 million). Gross profit fell to R18.7. . . Full story | | Profit from operations soared to R744 million (loss of R1 million). Net attributable profit surged to R744 million (R103 million). However,. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 31054.20 | -41.03 | -0.13% | JSE Top 40 | 17:00 | 27762.88 | -35.43 | -0.13% | JSE Gold | 17:00 | 2786.52 | -48.69 | -1.72% | JSE Financial | 17:00 | 21255.78 | -74.68 | -0.35% | JSE Industrial | 17:00 | 33234.19 | 198.04 | 0.60% | JSE Indust 25 | 17:00 | 28061.94 | 220.41 | 0.79% | JSE Resource | 17:00 | 50325.89 | -410.35 | -0.81% | DJ Futures | 19:56 | 11400.00 | 142.00 | 1.26% | DJ Ind | 19:45 | 11489.37 | 92.37 | 0.81% | SP 500 | 20:00 | 1214.81 | 13.95 | 1.16% | Nasdaq | 20:00 | 2634.86 | 19.94 | 0.76% | FTSE 100 | 17:35 | 5410.35 | -26.35 | -0.48% | DAX | 18:06 | 5877.41 | 17.98 | 0.31% | CAC40 | 18:06 | 3141.10 | -24.96 | -0.79% | Nikkei | 08:26 | 8741.91 | -137.69 | -1.55% | Shanghai | 09:26 | 2383.49 | -56.92 | -2.33% | Hang-Seng | 10:46 | 18076.46 | -797.53 | -4.23% | All Ords | 07:40 | 4249.50 | -88.40 | -2.04% | NZSE 50 | 06:46 | 3279.11 | -37.85 | -1.14% |
| | Name | Time | RP | Move | % Move | Gold | 19:59 | 1652.67 | -17.55 | -1.05% | Gold/Rand | 20:00 | 13237.23 | -92.55 | -0.69% | Gold/R kg | 20:00 | 425577 | -6520 | -1.51% | Silver | 19:59 | 31.8350 | .0750 | 0.24% | Platinum | 19:59 | 1529.50 | -18.50 | -1.20% | Palladium | 19:57 | 616.25 | 1.05 | 0.17% | R157 | 17:06 | 6.79 | .07 | 1.04% | R204 | 17:06 | 7.86 | .06 | 0.77% | Brent Crude | 19:56 | 112.17 | -.48 | -0.43% | Rand / Dollar | 19:59 | 8.0096 | 0.0277 | 0.35% | Rand / Pound | 19:55 | 12.5415 | -0.0030 | -0.02% | Rand / Euro | 19:55 | 10.9982 | 0.0259 | 0.24% | Rand / NZD | 19:58 | 6.3542 | 0.0299 | 0.47% | Rand / AUD | 19:55 | 8.1925 | 0.0667 | 0.82% | Yen / Dollar | 19:59 | 76.8070 | -0.0050 | -0.01% | Euro / Dollar | 19:55 | 0.7278 | -0.0001 | -0.01% | Dollar / Euro | 19:58 | 1.3728 | -0.0004 | -0.03% | Pound / Dollar | 19:55 | 0.6366 | 0.0016 | 0.25% |
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The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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18/10/2011 | 155 | 172 | 86 | 413 | 271,999,318 | R11,918,290,678 | 101576 | 2533023 | 17/10/2011 | 161 | 162 | 96 | 419 | 207,941,493 | R10,202,340,008 | 103006 | 2279175 | 14/10/2011 | 206 | 133 | 83 | 422 | 201,555,338 | R10,006,475,910 | 85433 | 2697100 | 13/10/2011 | 139 | 189 | 95 | 423 | 228,220,207 | R11,745,585,945 | 115670 | 2366511 | 12/10/2011 | 242 | 118 | 79 | 439 | 271,082,570 | R12,463,293,236 | 115983 | 2465014 |
Index Summary Index Name | RP | Move | % Move | Top 40 | 27,762.88 | -35.43 | -0.13% | Industrial | 33,234.19 | 198.04 | 0.60% | Mid Cap | 41,630.66 | -82.73 | -0.20% | Small Cap | 31,520.23 | 33.30 | 0.11% | Resource 20 | 50,325.89 | -410.35 | -0.81% | Industrial 25 | 28,061.94 | 220.41 | 0.79% | Financial 15 | 7,938.34 | -34.05 | -0.43% | Financial & Ind. 30 | 30,894.70 | 124.25 | 0.40% | All Share | 31,054.20 | -41.03 | -0.13% | Oil & Gas | 26,517.44 | 118.09 | 0.45% | Mining | 32,795.57 | -358.51 | -1.08% | Gold Mining | 2,786.52 | -48.69 | -1.72% | Platinum Mining | 62.21 | -1.06 | -1.68% | GENERAL MINING | 8,020.44 | -61.27 | -0.76% | Oil & Gas Producers | 14,257.94 | 63.50 | 0.45% | Basic Materials | 27,714.19 | -310.55 | -1.11% | Chemicals | 12,838.79 | -6.35 | -0.05% | Forestry & Paper | 12,137.83 | -140.19 | -1.14% | Industrial Metals | 27,619.66 | -530.16 | -1.88% | Industrials | 27,231.94 | 54.63 | 0.20% | General Industrials | 76,901.84 | 184.87 | 0.24% | Consumer Goods | 29,025.26 | 154.74 | 0.54% | Automobiles & Parts | 3,725.03 | -11.33 | -0.30% | Household Goods | 142.93 | -1 | -0.79% | Health Care | 34,472.03 | 81.41 | 0.24% | Beverages | 97.26 | .72 | 0.75% |
| | Index Name | RP | Move | % Move | Food Producers | 49,820.44 | -43.44 | -0.09% | Personal Goods | 418.48 | 2.69 | 0.65% | Consumer Services | 54,638.12 | 745.57 | 1.38% | General Retailers | 44,609.65 | 722.56 | 1.65% | Travel & Leisure | 3,478.59 | -25.28 | -0.72% | Media | 80.53 | 1.11 | 1.40% | Support Services | 2,253.38 | -.70 | -0.03% | Telecommunications | 65,900.03 | 646.39 | 0.99% | Financials | 21,255.78 | -74.68 | -0.35% | Banks | 39,562.87 | -291.12 | -0.73% | Non-life Insurance | 33,449.20 | -21.82 | -0.07% | Life Insurance | 15,761.55 | 57.49 | 0.37% | General Financial | 2,105.82 | 2.41 | 0.11% | Technology | 23,615.21 | 34.87 | 0.15% | SHARIAH TOP40 | 2,974.92 | -13 | -0.43% | FTSE/JSE SHARIAH ALL | 3,038.71 | -13 | -0.43% | COAL MINING | 23,942.92 | -624 | -2.54% | FTSE JSE Fledgling | 4,476.45 | -8 | -0.19% | FTSE/JSE Alt X | 1,104.84 | 5 | 0.42% | SA LISTED PROPERTY | 386.02 | | -0.28% | CAPPED PROPERTY | 318.49 | | -0.44% | RESOURCE | 27,805.78 | -244 | -0.87% | DIVIDEND PLUS | 166.97 | 0 | 0.12% | FTSE/JSE RAFI 40 | 6,423.99 | -8 | -0.12% | Capped Top 40 | 14,607.18 | -13 | -0.09% | Capped All Share | 15,690.90 | -19 | -0.12% |
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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 | 14 Oct | SBK | STANDARD BANK GROUP LIMIT... | HOLD | 14 Oct | AIP | ADCOCK INGRAM HLGS LD | HOLD | 14 Oct | LHC | LIFE HEALTHCARE GRP HLDG ... | BUY | 14 Oct | EQS | EQSTRA HOLDINGS LTD | HOLD | 14 Oct |
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Results Expected** Expected | Company Name | Fin. Date | 19 Oct 2011 | ANSYS | August 2011 (Interim) | 19 Oct 2011 | MAS | August 2011 (Interim) | 19 Oct 2011 | ODERSON | August 2011 (Interim) | 19 Oct 2011 | PICKNPAY | August 2011 (Interim) | 19 Oct 2011 | PIKWIK | August 2011 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | PSG | 11-10-14 | 11-10-28 | 11-11-07 | R 0.2600 | LONFIN | 11-10-14 | 11-10-28 | 11-11-25 | R 0.0030 | DATATEC | 11-10-12 | 11-11-18 | 11-11-28 | R 0.0700 | CMH | 11-10-12 | 11-12-08 | 11-12-19 | R 0.1300 | ADCORP | 11-10-12 | 11-11-04 | 11-11-14 | R 0.5700 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | WBHO | 11-09-05 | 11-10-14 | 11-10-24 | R 2.2000 | PHUMELELA | 11-09-30 | 11-10-14 | 11-10-24 | R 0.4300 | AFROX | 11-07-19 | 11-10-14 | 11-10-24 | R 0.2200 | PUTPROP | 11-09-23 | 11-10-14 | 11-10-24 | R 0.1500 | AMAPS | 11-09-26 | 11-10-14 | 11-10-24 | R 0.0800 |
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Upcoming AGMs** Code | Company Name | Date | Status | VLE | Value Group Ltd | 18/10/2011 | Confirmed | AER | Amalgamated Electronic Corporation Ltd | 18/10/2011 | Confirmed | PGR | Peregrine Holdings Ltd | 18/10/2011 | Confirmed | BAU | Bauba Platinum Ltd | 19/10/2011 | Unconfirmed | DST | Distell Group Ltd | 19/10/2011 | Confirmed |
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