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 The Sharenet Daily 
Tuesday, 14 February 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)

2012 Possible Returns

While local shares produced a total return of only 2.6% in 2011, January saw enthusiasm for so called risk assets come back into favour, as the JSE All Share index gained 5.7%, taking the index to a new all time high by the end of January to a level of 33 793.

Many investors still get confused with the nominal value of the index, equating it to the value of shares in general. However this nominal index number is merely an average price for all the shares comprising that index. The price of a share is a multiple of its earnings generated by a factor, known as the PE ratio, or price to earnings ratio. When looking at the market as a whole, it is important to focus not on the nominal index number, but rather on what level of earnings this represents. Having an understanding of the starting point is important in trying to assess the future return.

If we try and anticipate the returns from the market going forward one year and two years, we really need to know only 2 inputs – simple, yes, but not easy. The first is the growth in current earnings, i.e. what the level of total company earnings will be in the future and secondly what the multiple that investors will be prepared to pay for these earnings is.

The index is then merely the product of average company earnings and the PE ratio. Forecasting company earnings is possible, albeit difficult, but even more uncertain is trying to predict what investors will be prepared to pay for those earnings (i.e. the PE ratio). What we do know about the PE ratio is that it is mean reverting and so both high and low PE’s move back to the average over varying periods of time. Over the last 50 years the PE on the JSE has had an average of 11.9 with a one standard deviation range of 8.2 to 15.6.

Looking at the specifics for 2011 helps illustrate the mechanics. At the start of 2011, investors were prepared to pay 17.3 times earnings (i.e. the market was expensive relative to its long run 11.9 times). During the year earnings grew by 34.6%, but by the end of 2011 investors were only prepared to pay 12.7 times earnings. The result in the contraction in rating was an index that declined by 0.4%, despite the exceptional earnings growth.

At the end of January 2012, earnings had climbed slightly to 2 518, while the PE rating had moved to 13.4 times. Looking ahead we can make the following forecast scenarios.

Should company earnings grow by an average of 12% in the year and the market rating remains at the same level as it is currently, investors can expect a total return of around 15%. Should earnings grow by 15% and investors become more enthusiastic again, driving the PE to 16, then a 40% total return is not impossible. On the downside should a reasonable earnings increase be offset by a de-rating of the PE to 11, then investors will sustain a loss of 8%.

The variance in one year forecast reflects the difficulty of shorter term forecasts. Because of the mean reversion in valuations, we prefer to adopt a longer term forecast such as 5 years, which has a higher predictable outcome.

Kind regards,

Ian de Lange
021 9144 966

Tue, 14 Feb 2012
Top News
South African government bonds and the rand weakened on Tuesday as rising global risk appetite dented demand for riskier emerging market assets, but bonds later recovered some losses after a strong debt auction.  Full story

South Africa's port regulator granted a unit of logistics group Transnet a 2.76 percent rise in port tariffs for the 2012/13 financial year to boost the company's cash flows ahead of a planned expansion programme, Transnet said on Tuesday.  Full story
Government forces and opponents of President Bashar al-Assad clashed in cities and countryside across Syria Tuesday and Arab officials confirmed that regional governments would be ready to arm the resistance if the bloodshed did not cease.  Full story
President Barack Obama pressed Chinese leader-in-waiting Xi Jinping on Tuesday over his country's huge trade surpluses with the United States and vowed to keep pressure on China to improve its human rights record.  Full story
India's determination to pursue trade with Iran despite Western sanctions could be undermined as wary exporters back away from fresh deals after a bomb attack in New Delhi blamed on Tehran, a trade association chief said on Tuesday.  Full story
Britain's top shares went into retreat on Tuesday after disappointing U.S. retail sales data raised concern over the strength of the economic recovery, prompting. . .  Full story
World stocks retreated on Tuesday, a day after a U.S. equities benchmark notched an almost seven-month high, and the euro slipped after U.S.. . .  Full story
Gold dropped on Tuesday as the dollar strengthened versus the euro on renewed fears of credit downgrades in major European economies and uncertainty. . .  Full story
European shares fell on Tuesday, after weaker-than-expected U.S. retail sales cast doubt on the strength of the recovery in the world's biggest economy.. . .  Full story

The S&P 500 index retreated on Tuesday from near a seven-month high after weaker-than-expected January U.S. retail sales data curbed investors' appetite for risky. . .  Full story
U.S. stocks opened lower Tuesday after weaker-than-expected January U.S. retail sales data curbed investors' appetite for risky assets.. . .  Full story
European shares turned negative in choppy trading on Tuesday, after weaker-than-expected U.S. retail sales data cast some doubt on the strength of the recovery. . .  Full story
European stocks were up around midday on Tuesday, reversing early losses as data showing German analyst and investor sentiment rising to a level. . .  Full story
SA Business
South African stocks ended 0.29 percent lower on Tuesday, undermined by investors banking profits for resource companies such as Anglo American.. . .  Full story
Kenya's acting finance minister said on Tuesday that inflation in east Africa's biggest economy should continue to fall and urged banks. . .  Full story
The South African rand weakened against the dollar on Tuesday as ratings downgrades in Europe weighed further on investor risk sentiment. . .  Full story
DRDGold, South Africa's fourth-largest gold producer, said on Tuesday that second-quarter earnings climbed 65 percent as it continued to cash in. . .  Full story

Angola's President Jose Eduardo dos Santos has yet to confirm he will lead his MPLA party in a general election in the third quarter of the year, but is widely expected to do so after saying he is ready for any mission his party gives him.. . .  Full story
Company News
The group's interim results for the 2012 financial year (for the six month period ended 31 December 2011) are due to. . .  Full story
Santam delivered pleasing underwriting results for the financial year ended 31 December 2011 with all major business units continuing to perform. . .  Full story
Shareholders are advised that Merchantec Capital have been appointed as PSV's company secretary with effect from 13 February 2012, replacing Monika. . .  Full story
Dawn shareholders were advised that, for the six months ended 31 December 2011, the group expects: * Headline earnings per share. . .  Full story

SPAR shareholders ("Shareholders") are advised that at the annual general meeting of Shareholders ("Meeting") held on Tuesday, 14 February 2012, with. . .  Full story
Shareholders are referred to the announcement released earlier today and are advised that the Xstrata-Merafe Chrome Venture ("the Venture") is currently. . .  Full story
Top Fix shareholders were referred to the cautionary announcement dated 7 February 2012 and are advised to continue to exercise caution. . .  Full story
Shareholders are hereby informed of the following changes to the board of directors ("the board"): *The resignation of Mr Benjamin Webber Marais. . .  Full story
Company Results
Revenue for the interim period ended 31 December 2011 dropped to R4.6 billion (R4.8 billion) and operating profit fell to R219. . .  Full story
Gross sales revenue. . .  Full story
Revenue for the interim period ended 31 December 2011 rose to R912.4 million (R674.8 million) and net operating profit jumped to. . .  Full story
Revenue. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0034112.44-94.99-0.28%
JSE Top 4017:0030442.16-88.71-0.29%
JSE Gold17:002921.102.310.08%
JSE Financial17:0024155.61-43.79-0.18%
JSE Industrial17:0036174.4137.080.10%
JSE Indust 2517:0030352.1151.410.17%
JSE Resource17:0054939.86-437.11-0.79%
DJ Futures19:4612815.00-15.00-0.12%
DJ Ind19:4512828.10-45.94-0.36%
SP 50020:001344.95-6.82-0.50%
FTSE 10018:355899.87-5.83-0.10%
All Ords07:394318.90-40.50-0.93%
NZSE 5007:063330.33-9.69-0.29%
NameTimeRPMove% Move
Gold/R kg20:0042711726280.62%
Brent Crude19:56117.79-.21-0.18%
Rand / Dollar19:597.74310.05510.72%
Rand / Pound19:5512.09830.01150.10%
Rand / Euro19:5510.15370.01930.19%
Rand / NZD19:586.44130.03680.57%
Rand / AUD19:558.25900.01520.18%
Yen / Dollar19:5978.41900.85101.10%
Euro / Dollar19:550.76120.00220.29%
Dollar / Euro19:581.3114-0.0058-0.44%
Pound / Dollar19:550.63730.00260.41%

Click here for the Sharenet Spot Price page
The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 OANDO  138107.81.%11308
2 BRIMST-N  875556.71.%110652
3 MAZOR  170106.25.%18000
4 MONDIPLCP  68002804.29.%1150596
5 ONELOGIX  17874.09.%73578
6 CBH  525203.96.%166620
7 ESORFRANK  13553.85.%54932
8 MONDILTDP  67432433.74.%411241
9 EHSV  38721373.67.%2215
10 S-OCEAN  16053.23.%14685
11 CLIENTELE  1170353.08.%20830
12 DAWN  551162.99.%41350
13 ASTRAL  125203002.45.%361232
14 MIXTEL  16942.42.%260
15 CALGRO  41092.24.%5823
16 ANGLOPLAT  5600012002.19.%733227
17 CITYLDG  72001462.07.%184733
18 MMI-HLDGS  1940301.57.%5223601
19 SASFIN  3096451.47.%6633
20 OMNIA  91711311.45.%117805

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Major Moves Down
SharenameSaleMove% MoveVolume
1 ANOORAQ  405-41-9.19.%26929
2 DCENTRIX  460-35-7.07.%3000
3 DORBYL  136-7-4.90.%21750
4 AQUARIUS  1730-78-4.31.%225887
5 DRDGOLD  550-20-3.51.%8991922
6 JASCO  116-4-3.33.%260250
7 TELEMASTR  130-4-2.99.%10461
8 TELKOM  2745-75-2.66.%1536370
9 ZEDER  260-7-2.62.%221699
10 METROFILE  278-7-2.46.%189933
11 HOLDSPORT  4100-99-2.36.%8662
12 HOSP-B  430-10-2.27.%307
13 AMECOR  230-5-2.13.%29000
14 WESIZWE  145-3-2.03.%179437
15 ANGLO  33560-669-1.95.%2806275
16 EQSTRA  785-15-1.88.%5914
17 AFRO-C  265-5-1.85.%25000
18 LONMIN  12470-232-1.83.%376125
19 AMA  221-4-1.78.%40900
20 REDEFINTL  531-9-1.67.%323033

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New Highs
SharenameSaleHighMove% MoveVolume
1 BRIMST-N  875920556.71.%110652
2 CBH  525560203.96.%166620
3 MMI-HLDGS  19401941301.57.%5223601
4 ASPEN  1027810315880.86.%1497681
5 ABSA  15240152401050.69.%2240502
6 SYNERGY-A  87587550.57.%1000
7 SABMILLER  3079130985710.23.%3061899
8 STANBANK  1102511079250.23.%2924364
9 BIDVEST  1730617476360.21.%835765
10 DISCOVERY  4693478080.17.%703586
11 RESILIENT  373641500.1534868
12 BARWORLD  90509195-74-0.81.%619645

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New Lows
SharenameSaleLowMove% MoveVolume
1 DORBYL  136125-7-4.90.%21750
2 AQUARIUS  17301730-78-4.31.%225887
3 TELKOM  27452721-75-2.66.%1536370

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Index Summary
Index NameRPMove% Move
Top 4030,442.16-88.71-0.29%
Mid Cap46,268.96-118.71-0.26%
Small Cap34,450.5911.710.03%
Resource 2054,939.86-437.11-0.79%
Industrial 2530,352.1151.410.17%
Financial 159,142.18-19.71-0.22%
Financial & Ind. 3033,964.7523.050.07%
All Share34,112.44-94.99-0.28%
Oil & Gas 30,347.01153.620.51%
Mining 35,465.49-363.92-1.02%
Gold Mining2,921.102.310.08%
Platinum Mining62.50.240.39%
GENERAL MINING8,850.41-140.72-1.57%
Oil & Gas Producers 16,317.0382.600.51%
Basic Materials 30,092.24-279.14-0.92%
Chemicals 14,922.9660.310.41%
Forestry & Paper 13,238.85344.792.67%
Industrial Metals 31,778.20-487.95-1.51%
Industrials 31,171.43-31.35-0.10%
General Industrials 87,754.42119.990.14%
Consumer Goods 31,312.2898.760.32%
Automobiles & Parts 4,642.14.000.00%
Household Goods167.93-1-0.35%
Health Care 37,529.80-10.16-0.03%
Index NameRPMove% Move
Food Producers 56,828.06330.260.58%
Personal Goods 448.341.890.42%
Consumer Services 60,304.3015.250.03%
General Retailers 50,593.84-207.82-0.41%
Travel & Leisure 3,719.6913.790.37%
Support Services 2,317.31-2.80-0.12%
Telecommunications 67,289.62-80.98-0.12%
Financials 24,155.61-43.79-0.18%
Banks 45,303.31-65.44-0.14%
Non-life Insurance 35,461.87-181.87-0.51%
Life Insurance 19,379.73-37.40-0.19%
General Financial 2,294.04-11.19-0.49%
Technology 27,142.92-68.09-0.25%
SHARIAH TOP40 3,230.15-16-0.49%
FTSE/JSE SHARIAH ALL3,309.04-16-0.49%
COAL MINING27,237.15190.07%
FTSE JSE Fledgling 5,070.26-9-0.18%
FTSE/JSE Alt X 1,238.00-1-0.11%
CAPPED PROPERTY 334.68-0.02%
RESOURCE 30,315.49-242-0.79%
DIVIDEND PLUS192.28-1-0.29%
FTSE/JSE RAFI 407,133.99-21-0.29%
Capped Top 4016,030.48-36-0.22%
Capped All Share17,247.67-45-0.26%
JSE TABACO 4,881.03230.48%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
15 Feb 2012ANGLDDecember 2011 (Final)
15 Feb 2012ANGLD-ADecember 2011 (Final)
15 Feb 2012ANGLD-BDecember 2011 (Final)
15 Feb 2012ANGLD-EDecember 2011 (Final)
15 Feb 2012CLIENTELEDecember 2011 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
AMPLATS12-02-1312-03-0912-03-19R 2.0000
GROUP 512-02-1312-04-1312-04-23R 0.2200
SHPRT 2ND512-02-1012-02-2412-03-05R 0.0500
SHPRT 3RD512-02-1012-02-2412-03-05R 0.0500
ABSABANK-P12-02-1012-03-2312-04-02R 28.2720
Ex Div**
Share NameDec-DateLDTPay-DateAmount
WINHOLD11-11-2812-02-1012-02-20R 0.0700

Upcoming AGMs**
CodeCompany NameDateStatus
SPPThe SPAR Group Ltd14/02/2012Confirmed
TBSTiger Brands Ltd14/02/2012Confirmed
RLZPReunert Ltd15/02/2012Confirmed
RLPReunert Ltd15/02/2012Confirmed
RLOReunert Ltd15/02/2012Confirmed

Stock Exchange News Service
14/02/201217:52ACL154 - Absa Bank Limited - New Financial Instrument Listing
14/02/201217:51 Nampak - Nampak Limited Share Appreciation Plan 2009 - Acceptance of Share
14/02/201217:50 Nampak Limited - Nampak Limited performance share plan 2009 - Acceptance
14/02/201217:36DV22/DV23 - Development Bank Of Southern Africa Limited - New Financial
14/02/201217:29 Andulela Investment Holdings Limited - Redemption of non-listed
14/02/201217:25CLN237 - The Standard Bank of South Africa Limited - New Financial Instrument
14/02/201217:21CPI/CPIP/BICAP - Capitec/Capitec Bank - Appointment to the boards of Capitec
14/02/201217:06 Rainbow Chicken Limited - Trading statement for the 6 month period ended
14/02/201216:11GRT02 - Growthpoint Properties Limited - Interest Rate Reset
14/02/201216:03 Santam Limited - Trading Statement - 12 Months Ended 31 December 2011
14/02/201215:45 Tiger Brands Limited - Results of Annual General Meeting of
14/02/201215:43BIMTNH - Mobile Telephone Networks Holdings (Proprietary) Limited- Moody`s
14/02/201215:39 Tiger Brands Limited - Trading Update
14/02/201215:37 Nampak - Sale of Shares by a Director of a Major Subsidiary Company
14/02/201215:00MND/MNP - Mondi - Arbitration court ruling clears way for Mondi Swiecie`s
14/02/201214:37 JCI Limited - Renewal of cautionary announcement
14/02/201214:30 PSV Holdings Limited - Change of company secretary
14/02/201214:20 Distribution and Warehousing Network Limited - Trading Statement
14/02/201213:32 Hudaco Industries Limited - Director`s Dealing in securities
14/02/201212:55BIIND - iNdwa Investments Limited - Listing of Tap Issue
14/02/201212:00 Comair Limited - Unaudited interim results for the six months ended
14/02/201211:58BIABL - African Bank Limited - Full Capital Redemption
14/02/201211:53BINTR - Nitro 4 Securitisation Issuer Trust - Full Capital Redemption
14/02/201211:51BINTR - Nitro 4 Securitisation Issuer Trust - Interest Rate Reset
14/02/201210:37BIABL - African Bank Limited - Listing of New Financial Instrument
14/02/201210:11 Comair Limited - Change to the board of directors - appointment of
14/02/201209:59GR1A2A - Greenhouse Funding (Proprietary) Limited - Series 1 - Partial Capital
14/02/201209:45 The Spar Group Limited - Results of the Annual General Meeting
14/02/201209:38 Merafe Resources Limited - Correction to the announcement sent at 09H00:
14/02/201209:28 Top Fix Holdings Limited - Changes to the board of directors and detailed
14/02/201209:00 The SPAR Group Limited - Business Update
14/02/201209:00 Merafe Resources Limited - Shareholders Announcement
14/02/201209:00MND/MNP - Mondi Limited/Mondi plc - Mondi Group: Trading Statement
14/02/201208:49SCIB/KIOSTF - The Standard Bank Of South Africa Limited - Dividend announcement
14/02/201208:48SCIB/AMSSTF - The Standard Bank of South Africa Limited - Dividend announcement
14/02/201208:44 Ellies Holdings Limited - Dealings in securities by Director
14/02/201208:00 Drdgold Limited - Report to shareholders for the 2nd quarter and six
14/02/201207:10 Anglo American plc - Treasury Shares - Transfers
14/02/201207:10SYN894 - Synthesis Funding Limited - New Financial Instrument Listing
14/02/201207:08 Coal of Africa Limited - Appendix 3b - new issue announcement,
14/02/201207:05 BHP Billiton Plc - Major investment and reserve increase at Escondida
14/02/201207:05 CoAL - Issue of Employee Share Options

Click here for more SENS news