Thursday, 27 October 2011 - 20:00
Charts
Sector Diversification All of the companies on the JSE are grouped into industry sectors based on the business sector that they fall into, e.g. Standard Bank falls into Financials and MTN into Telecommunications. As much as it’s unwise to invest all your money in one share it’s also unwise to invest all your money into one sector. The average investor might believe that his portfolio is diversified if he is invested into different companies, but if he is invested into only one sector he will face similar risks as if he’s invested into one share (although slightly less amplified).
Companies in the same sector or industry are typically driven by the same economic factors and experience similar business cycles. An example of this is when we experience periods with high interest rates, banks come under pressure due to households borrowing less money, and more people default on their current loans. In the same period food retailers with low profit margins generate high turnover as a result of higher inflation that typically leads to an increase in revenue.
Below is a graph of the rolling 12 month returns of the 9 major sectors on the JSE.
It is logical (and evident from the chart above) that there are periods when certain sectors outperform the others. For an example Technology, from mid 2007 to the end of 2008, underperformed most sectors, but for the most of 2010 it outperformed the other sectors.
The graph below shows the ranking of the different sectors compared against each other. They are ranked according to their 12 month rolling return. The sectors with the highest ranking (i.e. best performance) are on top and the worst performers are at the bottom.
From this chart you can see that there are certain sectors that are more cyclical than others. Consumer Goods is an example of a sector that isn’t very cyclical, which would be expected as it is comprised of shares like SABMiller, Richemont, Tiger Brands, and Clover.
For this reason it is better to invest across all of the different sectors, although you can still manage your level of exposure to each of the different sectors. If you believe that one sector will outperform the other sectors you can increase your weighting to that specific sector to capture some of the expected excess return and vice versa.
While this article has purely focused on share portfolios, for most investors a share portfolio will only form a portion of your total investable assets. A similar principle can be used for your investments into the other asset classes and for your other investments.
If you have any questions or require any assistance with wealth or asset management please feel free to contact us on 021 9144 966 or info@seedinvestments.co.za
We can also be reached through Facebook or Twitter (@Seed_Invest).
Kind regards,
Gerbrandt Kruger
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Thu, 27 Oct 2011
Top News
South Africa's blue-chip index surged to its highest level in nearly five months on Thursday, with miners adding the most points on rallying metal prices as investors welcomed Europe's plan to tackle its debt crisis. Full story
South Africa's rand extended its gains against the dollar on Thursday as investors flocked to higher-risk assets in a positive response to an overnight deal on the euro zone debt crisis. Full story |
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Egypt released an American-Israeli it held as an alleged spy and Israel freed 25 Egyptians in a prisoner swap Thursday that will ease strains between Cairo's new rulers and the United States and Israel. Full storyRescue workers pulled a man from the rubble alive Thursday, more than four days after a huge quake killed at least 534 in Turkey, while homeless survivors fearing death from cold begged for aid and some accused the government of a slow response. Full storyThailand's prime minister said Bangkok was fighting the forces of nature on Thursday as residents fled, rivers swelled and floodwater threatened to burst through dikes protecting the capital. Full story |
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Markets | U.S. stocks surged more than 2
percent on Thursday after European leaders reached a
long-awaited agreement to boost the region's bailout fund and
struck. . . Full story | | European shares soared to
their highest close in 12 weeks on Thursday, with banks surging
after European Union leaders struck a deal to. . . Full story | | Gold rose 1.5 percent
on Thursday, fueled by a dollar drop, commodities rally and
uncertainty over the details of a deal struck by. . . Full story | | World stocks surged and the
euro jumped to a seven-week high against the dollar on Thursday
after European leaders agreed on a sweeping. . . Full story |
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| Britain's top share index jumped
to a near three-month high on Thursday as bullish investors
uncorked their champagne bottles and toasted Europe's plan. . . Full story | | European shares soared to their
highest close in 12 weeks on Thursday, with banks surging, after
European Union leaders struck a deal to. . . Full story | | U.S. stocks jumped more than 2
percent at the open on Thursday after European leaders agreed
to boost the region's bailout fund and. . . Full story | | European shares extended gains on
Thursday afternoon, with banks surging after European Union
leaders struck a deal to help resolve the euro zone. . . Full story |
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SA Business | MTN Group, Africa's largest mobile operator, reported a 4 percent rise in third-quarter subscribers on Thursday and said it had been. . . Full story | | South Africa's white maize futures fell on Thursday weighed down by a strong rand after hitting an all-time high the previous. . . Full story | | World no.3 gold producer AngloGold Ashanti is set to report a solid third-quarter result tied to record gold prices for the. . . Full story | | South Africa's banks will face a "significant challenge" to meet tougher liquidity requirements under new global banking regulations, the Reserve Bank. . . Full story |
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| South Africa said on
Thursday it would further relax foreign exchange controls to
allow companies to top up capital in their offshore businesses
and. . . Full story | | Toyota Motor Corp said it
would keep its Thai production suspended for a fourth week and
reduce output in North America and South. . . Full story | | South Africa's 180,000 barrels-per-day SAPREF refinery shut one of its process units for repairs after a problem was discovered during a. . . Full story | | Toyota Motor Corp said on Thursday it would keep its Thai production suspended through next week and reduce output at more. . . Full story |
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| Global miner Anglo American
is mulling a $10-$15 billion expansion of its coal
operations in Australia's Queensland state despite plans for
"unfair" taxes. . . Full story | | South Africa's rand opened firmer and gained nearly two percent on the dollar in early trade on Thursday as emerging markets. . . Full story | | South Africa's Royal Bafokeng Platinum said on Thursday a wage strike by contract miners at its Bafokeng Rasimone Platinum mine had. . . Full story | | DRDGold, South Africa's fourth-largest gold producer, said on Thursday first-quarter headline earnings more than doubled as it reaped the benefits of. . . Full story |
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Company News | Chemspec advised shareholders that the company expects an improvement in the company's loss and headline loss per share for the six. . . Full story | | Shareholders are advised that all of the resolutions proposed in the Notice to Members, dated 28 September 2011 incorporated in the. . . Full story | | The company is pleased to report that having completed the acquisition of the Tirisano project, with effect from September 1, 2011,. . . Full story | | At the 45th annual general meeting of the shareholders of Rainbow held on 27 October 2011, all the ordinary and special. . . Full story |
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| Notice was given that preference dividend number 151 at a rate of 6% per annum for the period ended 30 September. . . Full story | | A review of the financial results for the year ended 31 August 2011 by management has indicated that the loss and. . . Full story | | Shareholders were advised that, at the annual general meeting of Sentula held on 27 October 2011, all the resolutions as set. . . Full story | | Shareholders are advised that the company's annual report, incorporating the audited financial statements for the year ended 31 May 2011, was. . . Full story |
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Company Results | Revenue increased to R50.5 million (August 2010: R48.5million) and gross profit rose to R19.5 million (August 2010: R17.9 million). Net attributable. . . Full story | | Revenue for the period decreased to USD144.6 million (2010: USD149.1 million). Gross loss was recorded at USD1.6 million (2010: profit of. . . Full story | | Gold and silver revenue increased to R806.2 million (September 2010: R623.6 million). Operating profit more than doubled to R202.5 million (September. . . Full story | | Revenue for the year ended 31 August 2011 increased to R1.4 billion (2010: R1.2 billion). Gross profit rose to R409.5 million. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 32452.55 | 715.93 | 2.26% | JSE Top 40 | 17:00 | 29159.47 | 723.10 | 2.54% | JSE Gold | 17:00 | 2996.45 | 28.27 | 0.95% | JSE Financial | 17:00 | 21778.52 | 273.62 | 1.27% | JSE Industrial | 17:00 | 34288.39 | 504.50 | 1.49% | JSE Indust 25 | 17:00 | 29052.72 | 464.62 | 1.63% | JSE Resource | 17:00 | 53975.87 | 1958.43 | 3.76% | DJ Futures | 19:46 | 12120.00 | 268.00 | 2.26% | DJ Ind | 19:41 | 12197.96 | 328.92 | 2.77% | SP 500 | 19:56 | 1282.57 | 40.57 | 3.27% | Nasdaq | 19:56 | 2741.39 | 90.72 | 3.42% | FTSE 100 | 17:35 | 5713.82 | 160.58 | 2.89% | DAX | 18:06 | 6337.84 | 321.77 | 5.35% | CAC40 | 18:06 | 3368.62 | 199.00 | 6.28% | Nikkei | 08:26 | 8926.54 | 178.07 | 2.04% | Shanghai | 09:26 | 2435.61 | 8.13 | 0.34% | Hang-Seng | 10:26 | 19688.70 | 622.16 | 3.26% | All Ords | 07:36 | 4403.90 | 103.10 | 2.40% | NZSE 50 | 06:46 | 3303.47 | 6.49 | 0.20% |
| | Name | Time | RP | Move | % Move | Gold | 20:00 | 1747.97 | 24.47 | 1.42% | Gold/Rand | 19:59 | 13441.38 | -285.14 | -2.08% | Gold/R kg | 19:56 | 432639 | -5885 | -1.34% | Silver | 20:00 | 35.2100 | 1.7800 | 5.32% | Platinum | 20:00 | 1634.50 | 45.55 | 2.87% | Palladium | 19:59 | 667.25 | 25.10 | 3.91% | R157 | 17:06 | 6.53 | -.12 | -1.80% | R204 | 17:06 | 7.56 | -.13 | -1.69% | Brent Crude | 19:56 | 113.19 | 1.89 | 1.70% | Rand / Dollar | 20:00 | 7.6895 | -0.2746 | -3.45% | Rand / Pound | 19:55 | 12.3659 | -0.3098 | -2.44% | Rand / Euro | 19:55 | 10.9431 | -0.1182 | -1.07% | Rand / NZD | 19:59 | 6.3137 | -0.0581 | -0.91% | Rand / AUD | 19:55 | 8.2635 | -0.0193 | -0.23% | Yen / Dollar | 20:00 | 75.9020 | -0.3340 | -0.44% | Euro / Dollar | 19:55 | 0.7030 | -0.0164 | -2.28% | Dollar / Euro | 19:56 | 1.4233 | 0.0331 | 2.38% | Pound / Dollar | 19:55 | 0.6202 | -0.0061 | -0.97% |
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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 |
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27/10/2011 | 276 | 102 | 77 | 455 | 349,734,097 | R17,962,346,304 | 125835 | 2424035 | 26/10/2011 | 171 | 147 | 90 | 408 | 287,903,124 | R12,747,403,174 | 86206 | 2115920 | 25/10/2011 | 222 | 153 | 84 | 459 | 294,009,374 | R14,997,571,591 | 122393 | 2584048 | 24/10/2011 | 202 | 153 | 78 | 433 | 232,839,226 | R11,475,126,036 | 94041 | 2536503 | 21/10/2011 | 229 | 115 | 82 | 426 | 271,192,784 | R13,189,349,713 | 86643 | 2328221 |
Index Summary Index Name | RP | Move | % Move | Top 40 | 29,159.47 | 723.10 | 2.54% | Industrial | 34,288.39 | 504.50 | 1.49% | Mid Cap | 42,413.08 | 314.28 | 0.75% | Small Cap | 31,858.77 | 232.65 | 0.74% | Resource 20 | 53,975.87 | 1958.43 | 3.76% | Industrial 25 | 29,052.72 | 464.62 | 1.63% | Financial 15 | 8,152.58 | 119.02 | 1.48% | Financial & Ind. 30 | 31,919.88 | 504.33 | 1.61% | All Share | 32,452.55 | 715.93 | 2.26% | Oil & Gas | 28,188.63 | 719.50 | 2.62% | Mining | 35,190.24 | 1295.63 | 3.82% | Gold Mining | 2,996.45 | 28.27 | 0.95% | Platinum Mining | 65.48 | 2.66 | 4.23% | GENERAL MINING | 8,644.36 | 380.71 | 4.61% | Oil & Gas Producers | 15,156.51 | 386.86 | 2.62% | Basic Materials | 29,575.35 | 1049.07 | 3.68% | Chemicals | 12,885.49 | 93.16 | 0.73% | Forestry & Paper | 12,069.97 | 127.52 | 1.07% | Industrial Metals | 27,922.68 | 813.84 | 3.00% | Industrials | 27,967.11 | 455.15 | 1.65% | General Industrials | 79,330.99 | 1468.82 | 1.89% | Consumer Goods | 30,328.62 | 417.84 | 1.40% | Automobiles & Parts | 3,845.05 | 43.02 | 1.13% | Household Goods | 153.10 | 4 | 2.77% | Health Care | 34,733.02 | 353.10 | 1.03% | Beverages | 98.41 | -.06 | -0.06% |
| | Index Name | RP | Move | % Move | Food Producers | 51,661.79 | 349.73 | 0.68% | Personal Goods | 458.83 | 16.18 | 3.66% | Consumer Services | 57,059.87 | 699.67 | 1.24% | General Retailers | 46,946.02 | 454.69 | 0.98% | Travel & Leisure | 3,508.82 | 46.68 | 1.35% | Media | 85.38 | 1.93 | 2.31% | Support Services | 2,234.18 | 5.12 | 0.23% | Telecommunications | 66,521.89 | 1241.53 | 1.90% | Financials | 21,778.52 | 273.62 | 1.27% | Banks | 40,272.33 | 334.36 | 0.84% | Non-life Insurance | 34,433.71 | 606.23 | 1.79% | Life Insurance | 16,405.91 | 322.57 | 2.01% | General Financial | 2,204.74 | 63.33 | 2.96% | Technology | 23,400.54 | -.97 | -0.00% | SHARIAH TOP40 | 3,160.31 | 102 | 3.35% | FTSE/JSE SHARIAH ALL | 3,211.85 | 96 | 3.08% | COAL MINING | 23,975.70 | 599 | 2.56% | FTSE JSE Fledgling | 4,547.70 | 2 | 0.05% | FTSE/JSE Alt X | 1,188.86 | 5 | 0.42% | SA LISTED PROPERTY | 388.51 | | 0.35% | CAPPED PROPERTY | 320.98 | | 0.60% | RESOURCE | 29,797.11 | 1050 | 3.65% | DIVIDEND PLUS | 172.13 | 2 | 1.29% | FTSE/JSE RAFI 40 | 6,707.75 | 155 | 2.37% | Capped Top 40 | 15,309.20 | 360 | 2.41% | Capped All Share | 16,382.79 | 354 | 2.21% |
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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 | 25 Oct | SBK | STANDARD BANK GROUP LIMIT... | HOLD | 25 Oct | AIP | ADCOCK INGRAM HLGS LD | HOLD | 25 Oct | IPF | INVESTEC PROPERTY FUND LT... | HOLD | 25 Oct | LHC | LIFE HEALTHCARE GRP HLDG ... | HOLD | 25 Oct |
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Results Expected** Expected | Company Name | Fin. Date | 28 Oct 2011 | FINBOND | August 2011 (Interim) | 28 Oct 2011 | FPT | September 2011 (Final) | 28 Oct 2011 | METMAR | August 2011 (Interim) | 28 Oct 2011 | TCS | August 2011 (Interim) | 28 Oct 2011 | TCSP | August 2011 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | PREMIUM | 11-10-21 | 11-11-11 | 11-11-21 | R 0.5580 | OCTODEC | 11-10-21 | 11-11-11 | 11-11-21 | R 0.6430 | OASIS | 11-10-20 | 11-11-04 | 11-11-14 | R 0.4710 | FAMBRANDS | 11-10-20 | 11-12-08 | 11-12-19 | R 0.8000 | CLICKS | 11-10-20 | 12-01-20 | 12-01-30 | R 0.8800 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | NTC PREF | 11-10-03 | 11-10-21 | 11-10-31 | R 3.3842 | SHFINV-PREF | 11-09-06 | 11-10-21 | 11-10-31 | R 3.3500 | EOH | 11-09-12 | 11-10-21 | 11-10-31 | R 0.4800 | ELBGROUP | 11-09-21 | 11-10-21 | 11-10-31 | R 0.4000 | OPTIMUM | 11-08-25 | 11-10-21 | 11-10-31 | R 0.3000 |
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Upcoming AGMs** Code | Company Name | Date | Status | PNG | Pinnacle Point Group Ltd | 27/10/2011 | Unconfirmed | RBW1 | Rainbow Chicken Ltd | 27/10/2011 | Confirmed | RBW | Rainbow Chicken Ltd | 27/10/2011 | Confirmed | SNU | Sentula Mining Ltd | 27/10/2011 | Confirmed | TCS | Total Client Services Ltd | 28/10/2011 | Confirmed |
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