Thursday, 23 February 2012 - 20:00
Charts
Budget Speech 2012 Being a country’s Finance Minster is never an easy task. It is one of those jobs where you’re only able to please some of the people some of the time. With many world economies currently struggling with sluggish growth and high debt levels, this job is understandably not on the top of everyone’s list of most desirable job list.
South Africa is fortunate in that it doesn’t have high debt levels and growth is at least expected to be positive, but the levels of unemployment require that we grow at rates not often seen in South Africa. Public debt is expected to rise to 38% of GDP in 2014/2015 and then fall from there, this is much more sustainable than the figures closer to (and in some cases above) triple figures in Europe. Economic growth is expected to come in at 2.7% for 2012 which compares unfavourably to Sub Sahara Africa (5.5%) and developing Asia (7.3%), but is better than Developed economies at 1.2%. With inflation to the end of January coming in at 6.3%, South Africans should see nominal economic growth of around 9% in 2012.
The budget contained the usual target areas, but it was noticeable that there was a slight shift in focus from spending on consumption to spending on development of infrastructure. Pravin Gordhan wants government departments to rein back on salaries and focus instead on improving efficiency of delivery – it is estimated that only 68% of planned expenditure was spent in the current financial year! Social spending currently comprises 58% of government expenditure – up from 49% a decade ago – and the Minster admitted that the best way to reduce this dependence is through job creation and economic growth, not just increasing the subsidies.
In tough economic times there is extra focus on revenue collection and in this instance SARS (which Mr Gordhan used to be head of) has assisted in bringing in 5 million tax returns in the most recent tax season – this is some 23% more than the prior year. There was also an extra R 1 billion in tax revenue from the recent Voluntary Disclosure Programme. By widening the tax net the government is hopefully able to keep tax increases to a minimum by spreading the burden across a bigger income pool.
Personal Income Tax
There was the usual bracket creep for income tax rates. The chart below shows the monthly tax payable and average tax rate for the new (2013) tax year for tax payers under 65. It also shows the tax saving made at various income levels – you will notice that there are bigger percentage savings for the lower income levels.
The change in medical expense treatment has been discussed before by Treasury. Previously, qualifying medical expenditure came off your income (and in essence was credited at your marginal rate) this has been now been changed to a tax credit system. This change has the effect of giving a bigger tax break to those with marginal tax rates below 30% and reduces the deduction from those with higher marginal rates. R230 per month for the first two beneficiaries and R154 per month for each beneficiary thereafter from qualifying medical spend (medical aid contributions) will be taken off your tax bill from 1 March 2012.
Two of the bigger announcements that will particularly affect high net worth individuals with large discretionary savings are the increase in the tax on dividends to 15% (remember this tax is moving from the company’s responsibility to the tax payer’s responsibility from 1 April 2012). Secondly the inclusion rate on capital gains will be increased from 25% to 33.3% for individuals and special trusts and 50% to 66.6% for companies and other trusts. This will make the effective tax rate on capital gains just over 13% for individuals in the top income bracket (from 10%) and nearly 27% for family (and other) trusts (from the previous 20%). To help alleviate some of the pain the annual CGT threshold has been increased to R 30 000 (from R 20 000) the exclusion on death to R 300 000 (R 200 000) and on primary residences to R 2m (R 1.5m).
As savers in recognised retirement products (pension, provident, retirement funds) get relief from dividend tax and capital gains, the Treasury is, in essence, trying to make these regulated savings mechanisms more attractive. Naturally you do pay income tax rates when they mature, so each individual would need to look at their own specific situation. There is also consideration being given to savings products that would provide tax exempt growth for the short to medium term – with limits being imposed to avoid high net worth investors getting any undue benefit.
The annual budget is an opportune time for investors to relook at their investments to determine whether they have taken advantage of the breaks offered by government and optimised their portfolio based on the current and proposed legislation.
Take care,
Mike Browne
info@seedinvestments.co.za
www.seedinvestments.co.za
021 9144 966
Thu, 23 Feb 2012
Top News
South Africa's rand gained against the dollar on Thursday, taking its cue from a euro that hit multi-week highs on German data that eased concerns about growth in the euro zone. Full story
South African stocks rose 0.38 percent on Thursday as shares of Africa's largest furniture retailer Steinhoff surged after it said it expects sharply higher H1 earnings and plans to list its European unit. Full story |
|
Afghanistan wants NATO to put on public trial those who burned copies of the Koran at a NATO base, President Hamid Karzai's office said on Thursday, after a third day of bloody protests over the incident. Full storySyrian tanks pushed into a rebel stronghold in the battered city of Homs on Thursday and U.N. investigators accused President Bashar al-Assad's government of crimes against humanity. Full storySimultaneous early morning attacks on mostly Shi'ite targets across Iraq killed at least 60 people and wounded dozens on Thursday in one of the bloodiest days of violence since U.S. troops pulled out in mid-December. Full story |
|
|
Markets | Brent oil priced in euros
hit a record high on Thursday on heightened tension
between Iran and the West while U.S. stocks struggled. . . Full story | | Britain's top shares rose
on Thursday as investors welcomed robust corporate earnings
newsflow, with Royal Bank of Scotland spearheading an
advance in banking stocks. . . Full story | | U.S. stocks rose
on Thursday after a labor market report indicated the
economy was slowly recovering, but the data was not enough. . . Full story | | Gold rose to a three-month
high on Thursday and headed for its biggest one-week rally in a
month as Europe's bailout deal with. . . Full story |
|
| U.S. stocks opened little
changed on Thursday after labor market data indicated
that while the economy continued to recover, progress was slow.. . . Full story | | European equities edged
lower on Thursday on the back of poor earnings from Commerzbank
and Dexia and a gloomy report on the. . . Full story | | Britain's leading share
index pushed higher on Thursday, with investors cheering shoots
of improvement in bluechip earnings and balance sheets, as well
as in. . . Full story | | The Euro STOXX 50 volatility
index, Europe's main gauge of equity market investor
anxiety, known as the VSTOXX index, dropped to a seven-month. . . Full story |
|
SA Business | South Africa's Steinhoff International could raise at least $2 billion when it eventually floats its European unit, the furniture maker's head. . . Full story | | Major South African coal producers that own shares in the Richards Bay Coal Terminal (RBCT) may invest to expand the terminal. . . Full story | | South Africa's biggest-listed clothes retailer Truworths reported a 14 percent increase in first-half profit, lifted by higher prices and new stores.. . . Full story | | South Africa's top two lenders said on Thursday they expected profits to rise by around 20 percent, the latest sign banks. . . Full story |
|
| Major South African
coal producers that own shares in the Richards Bay Coal Terminal
(RBCT) may invest to expand the terminal to handle. . . Full story | | Profit
prospects are poor for South Africa's platinum miners as they
collectively hold back from making the deep production cuts
necessary to reduce a. . . Full story | | South African logistics firm Imperial reported a flat first-half profit, after last year's results were lifted by a black empowerment deal,. . . Full story | | South African paper maker Mondi reported a 49 percent rise in full-year profit on Thursday, buoyed by recovering demand and said. . . Full story |
|
| Spot gold edged lower on Thursday, taking a breather after hitting a three-month high in the previous session, while sentiment remains supported on hopes of further monetary easing after sluggish economic. . . Full story | | South Africa is under no pressure to issue a new global bond as proceeds from a well-subscribed sale in January will meet its foreign commitments in the first few months of. . . Full story | | Shares in Bharti Airtel Ltd fell as much as 4 percent on Thursday after South Africa-based Econet Wireless said it is seeking at least $3.1 billion in damages in a dispute. . . Full story |
|
Company News | Shareholders are advised that the Company expects earnings per share ("EPS") and headline earnings per share ("HEPS") for the 12 months. . . Full story | | Shareholders are referred to the cautionary announcements published on SENS on 17 October 2011, 28 November 2011 and 12 January 2012,. . . Full story | | As previously communicated to shareholders FirstRand considers diluted normalised earnings per share from continuing operations to most accurately represent operational performance. . . Full story | | Further to the cautionary announcements dated 12 January 2012, 28 November 2011, 28 September 2011, 18 August 2011, 23 May 2011. . . Full story |
|
Company Results | Turnover was up 21.2% to R552.8 million (R456.2 million). Operating profit increased by 4.2% to R63.3 million (R60.8 million). Net attributable. . . Full story | | Revenue increased to R302.8 million (R232.7 million). Gross profit rose to R52.9 million (R42.5 million), while operating profit grew to R31. . . Full story | | Revenue for the interim period increased by 14.9% to R31.5 billion (2010: R27.5 billion). Gross profit rose by 12.8% to R5.6. . . Full story | | Revenue increased by 22% to R38.4 billion (R31.4 billion) and operating profit rose to R2.6 billion (R2.2 billion). Net profit attributable. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 34108.20 | 101.68 | 0.30% | JSE Top 40 | 17:00 | 30402.63 | 113.74 | 0.38% | JSE Gold | 17:00 | 2822.24 | 9.31 | 0.33% | JSE Financial | 17:00 | 24250.79 | 210.69 | 0.88% | JSE Industrial | 17:00 | 36499.10 | 90.03 | 0.25% | JSE Indust 25 | 17:00 | 30606.45 | 98.60 | 0.32% | JSE Resource | 17:00 | 54103.40 | -8.22 | -0.02% | DJ Futures | 19:16 | 12965.00 | 48.00 | 0.37% | DJ Ind | 19:45 | 12973.41 | 34.74 | 0.27% | SP 500 | 20:00 | 1360.65 | 2.99 | 0.22% | Nasdaq | 20:00 | 2948.58 | 15.41 | 0.53% | FTSE 100 | 18:35 | 5937.89 | 21.34 | 0.36% | DAX | 19:06 | 6809.46 | -34.41 | -0.50% | CAC40 | 19:06 | 3447.31 | -.06 | -0.00% | Nikkei | 08:26 | 9595.57 | 41.57 | 0.44% | Shanghai | 09:26 | 2409.55 | 5.97 | 0.25% | Hang-Seng | 10:26 | 21380.99 | -168.29 | -0.78% | All Ords | 07:37 | 4367.50 | -4.60 | -0.11% | NZSE 50 | 06:46 | 3323.16 | -5.07 | -0.15% |
| | Name | Time | RP | Move | % Move | Gold | 19:59 | 1786.30 | 10.08 | 0.57% | Gold/Rand | 20:00 | 13713.07 | 14.79 | 0.11% | Gold/R kg | 20:00 | 440875 | 5886 | 1.35% | Silver | 19:59 | 35.4460 | 1.2510 | 3.66% | Platinum | 19:59 | 1720.00 | 1.00 | 0.06% | Palladium | 19:59 | 715.50 | -2.50 | -0.35% | R157 | 15:06 | 6.67 | .06 | 0.91% | R204 | 17:06 | 7.54 | .06 | 0.80% | Brent Crude | 19:56 | 124.89 | 1.50 | 1.22% | Rand / Dollar | 19:59 | 7.6768 | -0.0368 | -0.48% | Rand / Pound | 19:55 | 12.0277 | -0.0405 | -0.34% | Rand / Euro | 19:55 | 10.2291 | -0.0001 | 0.00% | Rand / NZD | 19:58 | 6.4008 | 0.0117 | 0.18% | Rand / AUD | 19:55 | 8.2118 | 0.0006 | 0.01% | Yen / Dollar | 19:58 | 80.1400 | -0.1090 | -0.14% | Euro / Dollar | 19:55 | 0.7506 | -0.0039 | -0.52% | Dollar / Euro | 19:59 | 1.3316 | 0.0070 | 0.53% | Pound / Dollar | 19:55 | 0.6366 | -0.0014 | -0.22% |
|
Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
---|
23/02/2012 | 165 | 168 | 86 | 419 | 461,389,422 | R14,075,753,347 | 100485 | 2107216 | 22/02/2012 | 140 | 186 | 87 | 413 | 260,627,284 | R13,323,663,639 | 93501 | 1923969 | 21/02/2012 | 164 | 155 | 81 | 400 | 250,963,560 | R12,117,791,523 | 74201 | 2133714 | 20/02/2012 | 180 | 144 | 85 | 409 | 195,412,533 | R8,972,011,057 | 65519 | 1867969 | 17/02/2012 | 244 | 99 | 82 | 425 | 247,100,254 | R11,957,838,675 | 92849 | 2155145 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 30,402.63 | 113.74 | 0.38% | Industrial | 36,499.10 | 90.03 | 0.25% | Mid Cap | 46,451.12 | -57.34 | -0.12% | Small Cap | 35,019.00 | 46.00 | 0.13% | Resource 20 | 54,103.40 | -8.22 | -0.02% | Industrial 25 | 30,606.45 | 98.60 | 0.32% | Financial 15 | 9,201.72 | 104.35 | 1.15% | Financial & Ind. 30 | 34,232.11 | 212.16 | 0.62% | All Share | 34,108.20 | 101.68 | 0.30% | Oil & Gas | 30,156.31 | -189.19 | -0.62% | Mining | 34,940.73 | 55.00 | 0.16% | Gold Mining | 2,822.24 | 9.31 | 0.33% | Platinum Mining | 62.98 | 1.64 | 2.67% | GENERAL MINING | 8,727.39 | -25.39 | -0.29% | Oil & Gas Producers | 16,214.49 | -101.72 | -0.62% | Basic Materials | 29,700.89 | 50.83 | 0.17% | Chemicals | 15,007.01 | -26.40 | -0.18% | Forestry & Paper | 13,786.01 | 172.76 | 1.27% | Industrial Metals | 31,266.47 | -56.83 | -0.18% | Industrials | 31,417.46 | 190.95 | 0.61% | General Industrials | 87,612.52 | 1049.27 | 1.21% | Consumer Goods | 31,543.89 | 86.23 | 0.27% | Automobiles & Parts | 4,925.20 | .00 | 0.00% | Household Goods | 173.71 | 8 | 4.59% | Health Care | 37,839.31 | 52.69 | 0.14% | Beverages | 105.04 | -.18 | -0.17% |
| | Index Name | RP | Move | % Move | Food Producers | 56,228.88 | -185.24 | -0.33% | Personal Goods | 463.23 | 3.80 | 0.83% | Consumer Services | 62,117.34 | 230.70 | 0.37% | General Retailers | 51,992.13 | -20.48 | -0.04% | Travel & Leisure | 3,683.91 | -43.79 | -1.17% | Media | 89.19 | .65 | 0.73% | Support Services | 2,364.88 | 2.24 | 0.09% | Telecommunications | 66,355.73 | -230.19 | -0.35% | Financials | 24,250.79 | 210.69 | 0.88% | Banks | 45,853.77 | 763.34 | 1.69% | Non-life Insurance | 36,623.40 | 371.01 | 1.02% | Life Insurance | 19,404.41 | 119.52 | 0.62% | General Financial | 2,314.45 | 14.62 | 0.64% | Technology | 26,834.05 | 64.53 | 0.24% | SHARIAH TOP40 | 3,205.69 | 6 | 0.19% | FTSE/JSE SHARIAH ALL | 3,289.42 | 5 | 0.15% | COAL MINING | 27,244.55 | -201 | -0.73% | FTSE JSE Fledgling | 5,219.27 | -9 | -0.16% | FTSE/JSE Alt X | 1,253.32 | 3 | 0.28% | SA LISTED PROPERTY | 407.40 | | -0.19% | CAPPED PROPERTY | 330.48 | | -0.19% | RESOURCE | 29,905.11 | 12 | 0.04% | DIVIDEND PLUS | 193.85 | 0 | 0.18% | FTSE/JSE RAFI 40 | 7,133.35 | 37 | 0.52% | Capped Top 40 | 16,013.77 | 66 | 0.41% | Capped All Share | 17,244.53 | 53 | 0.31% | JSE TABACO | 4,782.51 | -44 | -0.92% |
|
Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | HSP | HOLDSPORT LIMITED | BUY | 20 Feb | NED | NEDBANK GROUP LTD | HOLD | 20 Feb | SBK | STANDARD BANK GROUP LIMIT... | HOLD | 20 Feb | PFG | PIONEER FOODS GROUP LTD | SELL | 20 Feb | AIP | ADCOCK INGRAM HLGS LD | HOLD | 20 Feb |
|
|
Results Expected** Expected | Company Name | Fin. Date | 24 Feb 2012 | DELTA | December 2011 (Final) | 24 Feb 2012 | KIBO | September 2011 (Final) | 24 Feb 2012 | LIB-HOLD | December 2011 (Final) | 24 Feb 2012 | LIBHOLD-P | December 2011 (Final) | 24 Feb 2012 | LIBHOLD-P1 | December 2011 (Final) |
|
Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | SA CORP | 12-02-22 | 12-03-15 | 12-03-26 | R 0.1448 | IMPERIALP | 12-02-22 | 12-03-15 | 12-03-26 | R 3.3843 | ROLFES | 12-02-22 | 12-03-09 | 12-03-19 | R 0.0500 | TRNPACO | 12-02-22 | 12-03-15 | 12-03-26 | R 0.3100 | MASSMART | 12-02-22 | 12-03-09 | 12-03-19 | R 2.5200 |
|
|
Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | FIRSTRANDB-P | 12-02-03 | 12-02-17 | 12-02-27 | R 3.0516 | CAPITAL | 12-02-01 | 12-02-17 | 12-02-27 | R 0.3427 | CULINAN5.5 | 12-02-03 | 12-02-17 | 12-02-27 | R 0.0550 |
|
Upcoming AGMs** Code | Company Name | Date | Status | CUL | Cullinan Holdings Ltd. | 23/02/2012 | Confirmed | CULP | Cullinan Holdings Ltd. | 23/02/2012 | Confirmed | KEL | Kelly Group Ltd | 23/02/2012 | Confirmed | CUP3 | Cullinan Holdings Ltd. | 23/02/2012 | Confirmed | CUP2 | Cullinan Holdings Ltd. | 23/02/2012 | Confirmed |
|
|
Stock Exchange News Service Click here for more SENS news
|