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 The Sharenet Daily 
Tuesday, 31 January 2012 - 20:00
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 Power of Reinvesting

The All Share Index (ALSI) closed at an all time high on 17 January to much fanfare from market commentators and investors alike. Simplistically put, R100 invested into the ALSI (excluding the impact of all costs) at its peak on 22 May 2008 would only have risen back to the R100 level on the 17th, having been ‘underwater’ for the past 3 years and 8 months.

Importantly this index only looks at price movements of the constituent shares and doesn’t include the effects of dividends paid out. Savvy investors that reinvested their dividends would have gained parity in November 2010, and the R100 investment in May 2008 would now be worth R112. The chart below shows the difference between the ALSI (dividends paid out) and the ALSI Total Return (dividends reinvested) since the peak rebased to 100.

Some investors take their dividends (the yield has averaged just under 3% over the past 10 years) and use it for discretionary spending, some use it to fund their living expenses (particularly those using their dividends to fund their retirement), and others reinvest their dividends until they retire.

Naturally investors in retirement require their dividends, but for those investors that don’t need their dividends the decision to reinvest or pay out for consumption (i.e. spent on ‘wants’ and not ‘needs’) can produce quite a large difference in the final amount invested in the market over time.

For the purpose of this article we’ll take a look at two hypothetical investors:
• Investor A
o Sold his business for R1 000 000 and invested it in the stock market.
o Started working at Company XYZ and lived off his salary.
o Reinvested dividends consistently as they were paid out.
o Worked at XYZ for 10 years before retiring.
• Investor B
o Sold his business for R1 000 000 and invested it in the stock market.
o Started working at Company XYZ (same job and pay as Investor A) and lived off his salary.
o Used dividends paid out as a ‘bonus’ which were spent on overseas trips and luxury electronics.
o Worked at XYZ for 10 years before retiring.

At retirement we now have two investors who need to make lifestyle decisions based on the income they can generate in their retirement years. The difference in savings between the two investors is actually quite staggering. The chart below shows what would have happened based on returns generated and dividends paid out of the ALSI over the past 10 years:

Investor A would have saved up R4.1 million versus Investor B’s R3.1 million, a full R1 million difference and as such Investor A will be able to receive an income all the way through retirement that is more than 33% higher than Investor B (if both live off the same drawdown percentage – i.e. the same investment risk).

It is apparent from this report that seemingly innocuous decisions can have such dramatic differences if repeated over an extended period. The gap between the two investors would be significantly wider (both in percentage and rand terms) the longer the investment horizon. It is therefore critical for those investors that are 20 / 30 / 40 years from retirement to keep reinvesting all proceeds in order to take advantage of the 8th Wonder of the World – Compounding.

All the best for 2012 from the team at Seed Investments, may it be prosperous in all respects!

Take care,

Mike Browne
021 9144 966

Tue, 31 Jan 2012
Top News
Month-end window dressing help boost South African stocks to their best January performance in six years, as unit trusts and hedge funds loaded up on rising shares to bolster their portfolios.  Full story

South Africa's trade account recorded a surplus of 4.7 billion rand in December compared with an 8.0 billion rand deficit in November, the South African Revenue Service said on Tuesday.  Full story
Hong Kong shares were set to open higher on Tuesday, bolstered by strength in Chinese financials, with the benchmark indexes poised for their best month since October last year.  Full story
French lawmakers appealed to their country's highest court on Tuesday to overturn a law that makes it illegal to deny that the mass killing of Armenians by Ottoman Turks nearly a century ago was genocide.  Full story
Italian authorities have ended the search for bodies in the submerged sections of the capsized Costa Concordia, more than two weeks after the giant cruise liner capsized off the Tuscan coast, officials said on Tuesday.  Full story
U.S. stocks fell on Tuesday as optimism over a possible deal by Greece in its debt wrangling dissipated after a batch of. . .  Full story
Britain's top share index got a boost from strong corporate results, higher oil prices and improved risk appetite on Tuesday, enabling it to. . .  Full story
European stocks rose on Tuesday on renewed hopes for a Greek debt deal, though gains were capped by weaker-than-expected U.S. data that cast. . .  Full story
Commodity prices rose and global equities edged higher on Tuesday, spurred by investors' hopes Greece is close to resolving its debt crisis, but U.S.. . .  Full story

Gold prices were on course for their biggest monthly rise since August on Tuesday, boosted by economic unease in Europe and the United. . .  Full story
European shares trimmed gains on Tuesday after weaker-than-expected U.S. consumer confidence readings and other data cast some doubt on the strength of the recovery. . .  Full story
U.S. stocks opened higher on Tuesday on signs of progress in dealing with Europe's long-running sovereign debt crisis.. . .  Full story
European stocks were higher around midday on Tuesday, reversing a sharp two-day slide and resuming their six-week rally on renewed hopes for a. . .  Full story
SA Business
Aquarius Platinum, the world's fourth-largest primary producer, joined a chorus of warnings from the platinum industry that a South African drive. . .  Full story
Miner Xstrata posted record output from its Australian thermal coal operations in 2011, boosting total coal production 7 percent, as the. . .  Full story
South African sovereign bonds weakened against the dollar on Tuesday before a weekly auction at which the government is taking the. . .  Full story
Growth in credit demand by South Africa's private sector was largely steady at 6.21 percent year-on-year in December compared with 6.22. . .  Full story

The South African rand traded slightly firmer against the dollar on Tuesday, drawing strength from hopes of a successful conclusion to. . .  Full story
Insurers Old Mutual and Sanlam are in talks to set up a joint venture to buy JPMorgan's South African fund administration. . .  Full story
Impala Platinum, the world's second largest platinum producer, said on Tuesday it was appointing Terence Goodlace as chief executive officer to. . .  Full story
A Nigerian court has ruled that Bharti Airtel's ownership of its subsidiary Airtel Nigeria is "null and void" because co-founder and. . .  Full story
Company News
Great Basin announced that Mr H Wayne Kirk has resigned as a non-executive, independent director of the company with effect 30. . .  Full story
Shareholders of the company are advised that Mrs. Diane Godfrey ("Diane"), has resigned as the company secretary to Erbacon with effect. . .  Full story
RBPlat is in the process of finalising its annual financial results for the year ended 31 December 2011. The group advises. . .  Full story
Holders of Vukile linked units are referred to the detailed cautionary announcement released on SENS on 14 November 2011 and the. . .  Full story

Shareholders are referred to the announcement dated 15 December 2011 and are advised that the funding requirements are not yet finalised.. . .  Full story
The directors of AFGRI Ltd advise that Ms Marion Shikwinya has been appointed as AFGRI's company secretary with effect from 1. . .  Full story
Shareholders are advised that with effect from 10 January 2012, Afzal Patel an independent non-executive director has resigned from the board. . .  Full story
According to Business Report, retailer Pick n Pay has reportedly boycotted some of its suppliers who did not agree "to drop. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0033792.48162.710.48%
JSE Top 4017:0030176.19131.860.44%
JSE Gold17:002950.86-23.85-0.80%
JSE Financial17:0023580.4889.980.38%
JSE Industrial17:0035519.02297.990.85%
JSE Indust 2517:0029758.79253.730.86%
JSE Resource17:0055537.5553.420.10%
DJ Futures19:5612545.00-57.00-0.45%
DJ Ind19:4512607.93-45.79-0.36%
SP 50020:001310.47-2.54-0.19%
FTSE 10018:355681.6110.520.19%
All Ords07:394325.70-8.70-0.20%
NZSE 5006:463296.20-11.02-0.33%
NameTimeRPMove% Move
Gold/R kg20:00434409-601-0.14%
Brent Crude19:56110.79.070.06%
Rand / Dollar19:597.8090-0.0243-0.31%
Rand / Pound19:5512.2746-0.0092-0.07%
Rand / Euro19:5510.2055-0.0985-0.96%
Rand / NZD19:576.44270.02300.36%
Rand / AUD19:558.2822-0.0250-0.30%
Yen / Dollar19:5876.2930-0.0630-0.08%
Euro / Dollar19:550.76490.00420.55%
Dollar / Euro19:591.3071-0.0071-0.54%
Pound / Dollar19:550.6343-0.0020-0.31%

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

Major Moves Up
SharenameSaleMove% MoveVolume
1 HUDACO  108858858.85.%74156
2 LONAFRIC  150107.14.%20000
3 SANTAM  146857045.04.%57332
4 CBH  490204.26.%287468
5 ONELOGIX  17274.24.%218666
6 CALGRO  410153.80.%185069
7 A-V-I  41501503.75.%5371756
8 BARWORLD  87553133.71.%1642589
9 HULAMIN  849293.54.%127116
10 CML  2535853.47.%312028
11 PAN-AF  21373.40.%6133641
12 MIXTEL  15553.33.%55100
13 BLUETEL  625203.31.%1169511
14 ASSORE  228006983.16.%85888
15 GBGOLD  1020313.13.%17850
16 BLACKSTAR  1000303.09.%6419
17 AVUSA  2005532.72.%68472
18 ALTRON-P  2341602.63.%2248396
19 ANGLOPLAT  5540014002.59.%749663
20 PERGRIN  1000252.56.%2292

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Major Moves Down
SharenameSaleMove% MoveVolume
1 DORBYL  136-24-15.00.%20000
2 AQUARIUS  2006-184-8.40.%552324
3 VILLAGE  235-13-5.24.%2017625
4 PBT  165-9-5.17.%98265
5 MRHLD  2680-120-4.29.%6039740
6 ACUCAP  4000-150-3.61.%24424
7 REXTRU-N  1600-50-3.03.%7
8 OANDO  130-4-2.99.%19769
9 HOWDEN  1650-50-2.94.%17956
10 ELLIES   263-7-2.59.%349947
11 ANOORAQ  385-10-2.53.%11528
12 RBPLAT  5940-140-2.30.%72606
13 EQSTRA  778-17-2.14.%356191
14 ITLTILE  500-10-1.96.%17818
15 PHUMELELA  1080-20-1.82.%4270
16 JASCO  111-2-1.77.%109475
17 GFIELDS  12900-231-1.76.%3018218
18 IMPLATS  17169-258-1.48.%4718109
19 JUBILEE  201-3-1.47.%44578
20 NUWORLD  1675-25-1.47.%3000

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New Highs
SharenameSaleHighMove% MoveVolume
1 HUDACO  10885108858858.85.%74156
2 ONELOGIX  17217274.24.%218666
3 VIVIDEND  520520101.96.%290000
4 RMIH  15001528251.69.%3294735
5 IMPERIAL  13862139681811.32.%2283156
6 FAMBRANDS  46504650551.20.%33607
7 KUMBAIO  53625538506251.18.%1554623
8 REMGRO  12720127251451.15.%1259978
9 BIDVEST  1678417180-6-0.04.%1337570
10 VILLAGE  235252-13-5.24.%2017625

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New Lows
SharenameSaleLowMove% MoveVolume
1 DORBYL  136136-24-15.00.%20000

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Index Summary
Index NameRPMove% Move
Top 4030,176.19131.860.44%
Mid Cap45,629.38311.530.69%
Small Cap34,244.42291.200.86%
Resource 2055,537.5553.420.10%
Industrial 2529,758.79253.730.86%
Financial 158,910.0233.260.37%
Financial & Ind. 3033,237.89226.670.69%
All Share33,792.48162.710.48%
Oil & Gas 30,194.15310.271.04%
Mining 35,885.23-17.28-0.05%
Gold Mining2,950.86-23.85-0.80%
Platinum Mining63.45-.16-0.25%
GENERAL MINING8,966.3612.560.14%
Oil & Gas Producers 16,234.84166.831.04%
Basic Materials 30,350.85-5.56-0.02%
Chemicals 14,051.6522.160.16%
Forestry & Paper 12,689.84-85.08-0.67%
Industrial Metals 31,537.79306.970.98%
Industrials 30,555.99209.810.69%
General Industrials 86,129.55710.660.83%
Consumer Goods 30,520.0171.130.23%
Automobiles & Parts 4,617.23-2.27-0.05%
Household Goods164.3100.00%
Health Care 36,718.44282.580.78%
Index NameRPMove% Move
Food Producers 56,461.18634.691.14%
Personal Goods 442.852.890.66%
Consumer Services 60,263.67908.071.53%
General Retailers 50,408.33422.720.85%
Travel & Leisure 3,840.0935.450.93%
Media 86.101.902.26%
Support Services 2,312.08-11.69-0.50%
Telecommunications 66,070.481240.801.91%
Financials 23,580.4889.980.38%
Banks 44,381.68284.610.65%
Non-life Insurance 35,609.791707.135.04%
Life Insurance 18,632.4393.990.51%
General Financial 2,241.285.730.26%
Technology 26,635.61-41.80-0.16%
SHARIAH TOP40 3,228.55120.38%
FTSE/JSE SHARIAH ALL3,304.44140.43%
COAL MINING26,071.775142.01%
FTSE JSE Fledgling 4,996.12180.37%
FTSE/JSE Alt X 1,210.7890.78%
CAPPED PROPERTY 330.08-0.57%
RESOURCE 30,598.62330.11%
DIVIDEND PLUS188.3721.02%
FTSE/JSE RAFI 407,058.08310.44%
Capped Top 4015,851.87730.46%
Capped All Share17,068.69830.49%
JSE TABACO 4,625.72-51-1.09%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
01 Feb 2012ARROWASeptember 2011 (Final)
01 Feb 2012ARROWBSeptember 2011 (Final)
01 Feb 2012MVELAGP-PDecember 2011 (Interim)
01 Feb 2012MVELAGRPDecember 2011 (Interim)
01 Feb 2012TELEMASTRSeptember 2012 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
HUDACO12-01-2612-03-0212-03-12R 3.1000
FOORDCMPS12-01-1912-02-0312-02-13R 0.4961
WINHOLD11-11-2812-02-1012-02-20R 0.0700
TREMATON11-11-1512-02-0312-02-13R 0.0200
TFG PREF11-11-0312-03-1512-03-26R 0.0650
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SBR00311-11-0812-01-2712-02-06R 1.4700
PNR FOODS11-11-2812-01-2712-02-06R 0.4000

Upcoming AGMs**
CodeCompany NameDateStatus
WNHWinhold Ltd31/01/2012Confirmed
NPKONampak Ltd01/02/2012Confirmed
NPKNampak Ltd01/02/2012Confirmed
NPP2Nampak Ltd01/02/2012Confirmed
NPKPNampak Ltd01/02/2012Confirmed

Stock Exchange News Service
31/01/201217:34 Racec Group Limited - Renewal of cautionary announcement
31/01/201217:31 EOH Holdings Limited - No change statement and notice of Annual
31/01/201217:25 Mvelaphanda Group Limited - Trading Statement
31/01/201217:07 Famous Brands Limited - Dealings in securities
31/01/201217:02 John Daniel Holdings Limited - Lazaron rights offer results
31/01/201217:00 New Europe Property Investments plc - Trading Statement
31/01/201216:11 Great Basin Gold Limited - Resignation of director
31/01/201216:10BIBAY - Bayport Securitisation (RF) Ltd - Bayport Securitisation Annual
31/01/201216:09BIFR1 - FirstRand Bank Limited - Listing of New Financial Instruments
31/01/201216:00 Erbacon Investment Holdings Limited - Change in company secretary
31/01/201216:00 Anooraq Resources Corporation - Changes to the board of directors
31/01/201216:00 Royal Bafokeng Platinum Limited - Trading statement for the year ended
31/01/201215:59SBV/SVN - Sabvest Limited - Trading Statement
31/01/201215:13 Assore Limited - Trading Statement
31/01/201215:08 PSG Group Limited - Dealing in securities by the PSG Group Limited
31/01/201214:58FFA/FFB - Fortress Income Fund Limited - Trading Statement
31/01/201214:17BIOCI - OntheCards Investments II (Proprietary) Limited - Interest Rate
31/01/201213:30INL/INP - Investec - Voting Rights and Capital
31/01/201213:00 Gold One International Limited - Additional Gold One Presentation
31/01/201212:45 Vukile Property Fund Limited - Posting of circular and Notice of
31/01/201212:18BIIIPL - iNguza Investments (Proprietary) Limited - Interest Rate Reset
31/01/201212:15 SABMiller plc - Total voting rights and capital
31/01/201212:12BIDEN - Denel SOC Limited - Full Capital Redemption
31/01/201211:54 Africa Cellular Towers Limited - Renewal of cautionary
31/01/201211:50 BioScience Brands Limited - Amended Notice of General Meeting
31/01/201211:42 Anglo American plc - Directors` appointments
31/01/201211:42 AFGRI Limited - Appointment of Company Secretary
31/01/201211:10 Firestone Energy Limited - Appendix 5B
31/01/201211:00 Firestone Energy Limited - Quarterly activities report for the Period
31/01/201210:53BICAP - Capitec Bank Limited - Listing of New Financial Instruments
31/01/201210:53 Ellies Holdings Limited - Dealing in securities
31/01/201210:43 MiX Telematics Limited - Changes to the board of directors
31/01/201210:41 AVI Limited - Updated trading statement for the six months ended 31
31/01/201210:39 Pan African Resources plc - Joint briefing presentation by Pan African
31/01/201210:38 Securedata Holdings Limited - Cautionary Announcement
31/01/201210:00 Afrimat Limited - Director`s dealings
31/01/201209:03 Massmart Holdings Limited - Trading Statement for the six months to 25
31/01/201209:01 Aquarius Platinum Limited - Production results to 31 December 2011
31/01/201209:00 Ferrum Crescent Limited - Appendix 5B mining exploration entity
31/01/201208:44 Coal of Africa Limited - Appendix 5B - Mining Exploration Entity Quarterly
31/01/201208:42 Coal of Africa Limited - Report for the quarter ended 31 December 2011
31/01/201208:30 Merafe Resources Limited - Production report for the year ended
31/01/201208:00 Fountainhead Property Trust - Voluntary announcement regarding
31/01/201208:00GDO/GGM - Gold One/Goliath Gold - Further update on the Acquisition by Goliath
31/01/201208:00 Implats - Appointment of Chief Executive Officer
31/01/201208:00STX40 - SATRIX 40 - Listing of additional Satrix 40 securities
31/01/201207:56 Gold One International Limited - Gold One Presentations
31/01/201207:16 Murray & Roberts Holdings Limited - Notice of General Meeting to
31/01/201207:15 Murray & Roberts Holdings Limited - Business Update
31/01/201207:08 Gold One International Limited - December 2011 Quarterly Results
31/01/201207:05 Gold One International Limited - Quarterly Activities Report / Quarter
31/01/201207:05GLD - NewGold Issuer Limited - Partial de-listing of NewGold debentures

Click here for more SENS news