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 The Sharenet Daily 
Tuesday, 05 June 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)

?Life Cover Is A Waste Of Money!?

There are many people that have a mental block when it comes to life cover. The very idea that someone else is going to “benefit” from their death and that they have to “waste” their hard earned money on something that will give them no benefit, causes them to lose every trace of rational behaviour.

There are 3 basic reasons why one would need life cover, namely;

  • covering one’s future income stream for the benefit of dependants,
  • covering one’s debts

  • for the provision of liquidity in one’s estate (rather than a fire sale of prime assets).

    Once these basic obligations have been fulfilled, then one typically has sufficient life cover.

    Below is a copy of a letter I wrote to a client who, apart from his aversion to life cover, is an extremely intelligent and rational person.

    “As discussed with you previously, your present situation is that R20 000 pm is needed by your dependents as a future income. You presently have a shortfall of approximately one million rand to cover that income. One million rand life cover will cost you R261.55 pm. If we divide R261.55 into one million rand you’ll see that you have to pay this R261.55 pm for 318 years to make up the one million rand (if we assume a no interest).

    You have stated that you will rather invest R1 000 pm into SATRIX 40. If we assume a growth rate of 10% pa compounded monthly; it will take you 22½ years to build up one million rand capital. If you invest R738.45 pm into SATRIX 40 and R261.55 into a life policy it will take you just over 25 years to build up one million rand capital, but you would not have the down side risk of insufficient capital should you prematurely pass away.”

    Despite the obvious risks that the client’s dependants are exposed to while he is building up capital, he decided not to take the cover. To date, they haven’t needed it, but they still have 22 years before the SATRIX 40 investment will probably reach one million rand!

    Another argument I often hear against the use of life cover, especially when it is for individuals with high value but illiquid estates (like buildings or farms), is that their heirs should sell a building or take out a bond. However if we look at a 50 year old male who has a sizeable estate and needs to pay R5million in estate duty, a R5 million building yielding 10% would produce an income of R500 000 pa, while a bond of R5 million over 10 years would cost approximately R66 075 p.m. It generally does not make sense that an otherwise rational businessman would want to choose these options rather than pay a life cover premium of R2 600pm.

    Unfortunately life cover, like rugby and politics, seems to be one of those areas where reason often takes a back seat and emotions take control. It is important to make an accurate assessment of future obligations and then to assess the most efficient way to meet this obligation.

    Kind regards,

    Barry Hugo

    021 914 4966

  • Tue, 05 Jun 2012
    Top News
    South African stocks posted modest gains on Tuesday with stronger-than-expected data on the U.S. service sector boosting Johannesburg's beaten-down mining sector.  Full story

    South Korean fixed-line carrier KT Corp is waiting for the South African government to propose new conditions after it turned down its reduced offer to acquire 20 percent of Telkom, a senior executive said on Tuesday.  Full story
    A senior Chinese official demanded on Tuesday that foreign embassies stop issuing air pollution readings, saying it was against the law and diplomatic conventions, in pointed criticism of a closely watched U.S. embassy index.  Full story
    An adviser to Iran's supreme leader has urged world powers to formally recognise its nuclear rights to bring about a "favourable result" at talks on its atomic programme later this month, state media reported on Tuesday.  Full story
    Thousands of Egyptians poured into Cairo's Tahrir Square on Tuesday to reclaim a revolt they say has been hijacked after Hosni Mubarak was jailed for life and his top security officials freed in a sign they say his old guard is still in charge.  Full story
    European shares rose on Tuesday after a choppy, nervous session as investors tentatively bought into beaten-down shares on hopes for global central bank. . .  Full story
    U.S. stocks inched higher in choppy trade on Tuesday as investor angst about the euro zone's fiscal crisis was offset by data showing. . .  Full story
    The euro fell and German bond prices gained on Tuesday as the euro zone debt crisis showed signs of escalating after Spain said. . .  Full story
    Gold prices edged lower in light volume o n T uesday, as the market took a breather after last week's rally and investors. . .  Full story

    U.S. stocks added to modest gains after the Institute for Supply Management's services index came in a touch higher than expectations.. . .  Full story
    Gold steadied on Tuesday, recovering early losses linked to euro weakness, as renewed focus on the slow pace of the U.S. recovery altered. . .  Full story
    European equity markets erased earlier gains to turn negative on Tuesday, with investor expectations of imminent global policy action wavering and technical charts printing. . .  Full story
    Hong Kong shares nudged higher on Tuesday, partly on short-covering ahead of emergency G7 talks on the euro zone debt crisis, although investors. . .  Full story
    SA Business
    South African diversified miner Exxaro will upgrade a railway line in the Republic of Congo to transport at least 10 million. . .  Full story
    Exxon Mobil Corp, the world's largest publicly listed energy company, warned on Tuesday that too much government regulation could undermine a. . .  Full story
    Kenya has received the first tranche of a $600 million syndicated loan that is expected to boost the central bank's foreign. . .  Full story
    The rand gained for a second straight session against the dollar on Tuesday, strengthening to a four-day high as it pulled. . .  Full story

    The South African rand touched a four-day high against the dollar on Tuesday and government bonds closed firmer, pushing yields lower. . .  Full story
    The ability of the world's largest clothes retailer, Zara owner Inditex, to adapt to austerity in Europe and the unfurling crisis in Spain. . .  Full story
    South Korean fixed-line carrier KT Corp is waiting for the South African government to propose new conditions after it turned down its reduced. . .  Full story
    South Africa's elite Hawks police unit has opened an investigation into allegations of corruption at mobile phone giant MTN relating to. . .  Full story

    South Africa's elite Hawks police unit has opened an investigation into allegations of corruption at mobile phone giant MTN relating to its purchase of. . .  Full story
    South Africa may issue five new bonds as early as this week, helping to plug a 10-year benchmark gap and extend. . .  Full story
    South Africa may issue five new bonds as early as this week, helping to plug a 10-year benchmark gap and extend the government. . .  Full story
    . . .  Full story
    Company News
    Unitholders are referred to the voluntary announcement released on SENS on 4 June 2012 by Capital Property Fund ("CPL") as well. . .  Full story
    StratCorp's auditors have updated the review opinion, an extract of which was quoted in the reviewed condensed provisional financial statements for. . .  Full story
    Mr Seth Radebe has resigned as an independent non-executive director of Actowers with effect from Monday 4 June 2012.. . .  Full story
    Business Day reported that Pick n Pay announced that the Nkomamonta Organic Farmers Co-operative in Tzaneen, in Limpopo, will supply 217. . .  Full story

    Business Day reported that Pick n Pay announced that the Nkomamonta Organic Farmers Co-operative in Tzaneen, in Limpopo, will supply 217. . .  Full story
    The JSE advised that the auditor's reviewed report on Stratcorp's provisional results for the year ended 29 February 2012 contains a. . .  Full story
    Resgen announced the appointment of Macquarie First South Capital (Pty) Ltd. as JSE sponsor to Resgen, with effect from Friday, 1. . .  Full story
    Shareholders of MMI were advised that the company, through its wholly-owned subsidiary Momentum Group Ltd. ("Momentum"), entered into a binding sale. . .  Full story
    Company Results
    Gross operating revenue declined to R180.5 million (R225.4 million). Operating profit decreased by more than two-thirds to R9.5 million (R34.3 million).. . .  Full story
    Revenue increased to R347.3 million (2010: R18.8 million). Gross profit fell to R6.3 million from R11.4 million and the total comprehensive. . .  Full story
    Revenue increased to R380.8 million (R306.1 million). Gross profit rose to R156.3 million (R94.7 million) and an operating profit of R6.9. . .  Full story
    Revenue increased by 24% to R5.6 billion (2011: R4.5 billion). Operating profit rose by 26% to R634.6 million (2011: R505.5 million),. . .  Full story
    World Markets (Spot Prices)
    NameTimeRPMove% Move
    JSE Overall17:0033117.8541.550.13%
    JSE Top 4017:0029180.7635.980.12%
    JSE Gold17:002640.7017.180.65%
    JSE Financial17:0024955.629.850.04%
    JSE Industrial17:0037384.40-157.82-0.42%
    JSE Indust 2517:0031502.89-144.76-0.46%
    JSE Resource17:0047076.76463.040.99%
    DJ Futures19:5812100.00-3.00-0.02%
    DJ Ind19:5812128.409.830.08%
    SP 50019:581283.905.860.46%
    FTSE 10001/065260.19-60.67-1.15%
    All Ords08:414092.4059.001.46%
    NZSE 5007:503420.79-31.21-0.90%
    NameTimeRPMove% Move
    Gold $19:581617.30-.83-0.05%
    Gold R19:5713644.04-96.34-0.70%
    Gold R/kg19:58438847-4292-0.97%
    Silver $19:5828.5050.26900.95%
    Platinum $19:581438.5014.000.98%
    Palladium $19:58618.7010.601.74%
    Brent Crude19:5898.89.800.82%
    Rand / Dollar19:588.4376-0.0546-0.64%
    Rand / Pound19:5512.9375-0.0928-0.71%
    Rand / Euro19:5510.5018-0.1043-0.98%
    Rand / NZD19:576.3740-0.0459-0.71%
    Rand / AUD19:558.2153-0.0432-0.52%
    Yen / Dollar19:5878.73900.40400.52%
    Euro / Dollar19:550.80320.00310.39%
    Dollar / Euro19:581.2443-0.0050-0.40%
    Pound / Dollar19:550.65030.00050.08%

    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 CAPEVIN  11500149014.89.%1708
    2 EASTPLATS  2152010.26.%6418
    3 OANDO  10999.00.%8014
    4 TASTE  302248.63.%193551
    5 KELLY  260197.88.%294179
    6 AQUARIUS  890657.88.%27385
    7 BRIMST-N  875404.79.%5618390
    8 ASSORE  2949010703.76.%387668
    9 AMA  25593.66.%14300
    10 ANNUITY  528183.53.%215000
    11 PSG  60502003.42.%42627
    12 WITSGOLD  32001003.23.%2611
    13 MAZOR  14542.84.%4443
    14 ATLATSA  22062.80.%3500
    15 URONE  1865452.47.%7278
    16 CLOVER  1370302.24.%6974
    17 COAL  466102.19.%551299
    18 EXXARO  193254082.16.%393715
    19 ARM   174903692.16.%755948
    20 AFROX  1920402.13.%106846

    Click here for more Major Moves...
    Major Moves Down
    SharenameSaleMove% MoveVolume
    1 DIGICOR  255-25-8.93.%18865
    2 ONELOGIX  170-14-7.61.%2000
    3 WINHOLD  103-7-6.36.%33286
    4 TELKOM  2000-131-6.15.%2996258
    5 TRNSHEX  320-20-5.88.%216955
    6 OCEANA  4705-255-5.14.%15992
    7 ELBGROUP  2000-100-4.76.%32410
    8 ROLFES  300-15-4.76.%49000
    9 CERAMIC  12450-550-4.23.%500
    10 ARB  350-15-4.11.%24720
    11 CBH  446-19-4.09.%90926
    12 BEE-SASOL  25000-1000-3.85.%2200
    13 ILIAD  522-18-3.33.%331
    14 IQUAD  300-10-3.23.%5000
    15 PHUMELELA  965-32-3.21.%3830
    16 BELL  1931-64-3.21.%84785
    17 AVUSA  2111-65-2.99.%4223
    18 ZEDER  265-8-2.93.%1893706
    19 CADIZ  175-5-2.78.%168885
    20 GOLIATH  360-10-2.70.%4200

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    New Highs
    SharenameSaleHighMove% MoveVolume
    1 CAPEVIN  1150012200149014.89.%1708
    2 TASTE  302324248.63.%193551
    3 ASSORE  294902969910703.76.%387668
    4 PSG  605061692003.42.%42627
    5 LIFEHC  29562965521.79.%3499083
    6 TRUWTHS  85108570901.07.%3141545
    7 KEATON   35836530.85.%138817
    8 PUTPROP  69569550.72.%315
    9 ILLOVO  275028150.35339

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    New Lows
    SharenameSaleLowMove% MoveVolume
    1 DIGICOR  255255-25-8.93.%18865
    2 TELKOM  20001980-131-6.15.%2996258
    3 ARCMITTAL  51135113-22-0.43.%186135

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    Index Summary
    Index NameRPMove% Move
    Top 4029,180.7635.980.12%
    Mid Cap47,850.85100.320.21%
    Small Cap35,389.93-93.18-0.26%
    Resource 2047,076.76463.040.99%
    Industrial 2531,502.89-144.76-0.46%
    Financial 159,410.02-2.05-0.02%
    Financial & Ind. 3035,024.90-141.76-0.40%
    All Share33,117.8541.550.13%
    Oil & Gas 26,977.9875.670.28%
    Mining 30,318.18337.471.13%
    Gold Mining2,640.7017.180.65%
    Platinum Mining50.89.220.43%
    GENERAL MINING7,496.03100.301.36%
    Oil & Gas Producers 14,505.5640.690.28%
    Basic Materials 25,990.89280.031.09%
    Chemicals 14,306.30144.171.02%
    Forestry & Paper 13,410.0934.530.26%
    Industrial Metals 29,374.24290.841.00%
    Industrials 32,407.18-47.66-0.15%
    General Industrials
    Consumer Goods 31,925.08-163.35-0.51%
    Automobiles & Parts 5,638.50-22.65-0.40%
    Household Goods168.65-1-0.54%
    Health Care 42,386.44353.820.84%
    Beverages 106.41-1.23-1.14%
    Index NameRPMove% Move
    Food Producers 59,540.75-9.87-0.02%
    Personal Goods 455.942.100.46%
    Consumer Services 65,941.05-293.51-0.44%
    General Retailers 55,040.00232.190.42%
    Travel & Leisure 3,805.01-11.53-0.30%
    Media 96.98-1.71-1.73%
    Support Services 2,381.76-5.59-0.23%
    Telecommunications 66,047.14-933.08-1.39%
    Financials 24,955.629.850.04%
    Banks 48,545.99-41.79-0.09%
    Non-life Insurance 42,877.312.550.01%
    Life Insurance 19,251.3526.180.14%
    General Financial 2,
    Technology 27,934.05279.901.01%
    SHARIAH TOP40 2,922.41160.56%
    FTSE/JSE SHARIAH ALL3,045.45150.51%
    COAL MINING25,532.234761.90%
    FTSE JSE Fledgling 5,271.24-43-0.81%
    FTSE/JSE Alt X 1,213.35544.70%
    SA LISTED PROPERTY 420.920.19%
    CAPPED PROPERTY 340.150.16%
    RESOURCE 26,068.082571.00%
    DIVIDEND PLUS190.7800.08%
    FTSE/JSE RAFI 406,843.8320.03%
    Capped Top 4015,432.53140.09%
    Capped All Share16,757.75200.12%
    JSE TABACO 5,085.74-41-0.81%

    Click here for the Sharenet Index Summary page
    Latest Consensus Changes**
    CodeCompany NameStatusUpdated
    Results Expected**
    ExpectedCompany NameFin. Date
    06 Jun 2012BRAITMarch 2012 (Final)
    06 Jun 2012FIURANIUMMarch 2012 (Final)
    07 Jun 2012ACUCAPMarch 2012 (Final)
    07 Jun 2012LABATFebruary 2012 (Final)
    08 Jun 2012BSI STEELMarch 2012 (Final)

    Recent Dividends**
    Share NameDec-DateLDTPay-DateAmount
    HOWDEN12-05-3012-06-2912-07-09R 1.4600
    TRUSTCO12-05-3012-06-2912-07-20R 0.0225
    WILDRNESS12-05-3012-06-0812-06-27R 0.0860
    HOWDEN12-05-3012-06-2912-07-09R 0.2900
    TFG PREF12-05-2912-09-1412-09-25R 0.0650
    Ex Div**
    Share NameDec-DateLDTPay-DateAmount
    SPAR12-05-0912-06-0112-06-11R 1.5500
    PICKNPAY12-04-1812-06-0112-06-11R 1.0835
    CORONAT12-05-1512-06-0112-06-11R 0.9500
    PIKWIK12-04-1812-06-0112-06-11R 0.5257
    LIFEHC12-05-1112-06-0112-06-11R 0.4500

    Upcoming AGMs**
    CodeCompany NameDateStatus
    PAMPalabora Mining Company Ltd.05/06/2012Confirmed
    PAMCDPalabora Mining Company Ltd.05/06/2012Confirmed
    MPTMpact Ltd.05/06/2012Confirmed
    SLMP1Sanlam Ltd.06/06/2012Confirmed
    SLMASanlam Ltd.06/06/2012Confirmed

    Stock Exchange News Service
    05/06/201217:46CLN279 - The Standard Bank of South Africa Limited - New Financial Instrument
    05/06/201217:44 1time holdings Limited - Notification in terms of section 122(3) of
    05/06/201217:30 Invicta Holdings Limited - Audited group results for the year ended 31
    05/06/201217:20 Capitec Bank Holdings Limited - Dealing in securities by an Associate of a
    05/06/201217:14 Adcock Ingram Holdings Limited - Dealings in securities by a director
    05/06/201217:05 Santam - Dealings in Securities
    05/06/201216:56BIRCS - RCS Investment Holdings (Proprietary) Limited - Listing of New
    05/06/201216:51 SA Corporate - Update to Voluntary Announcement
    05/06/201216:37TCP - Transaction Capital - Abridged pre-listing statement
    05/06/201216:18 Mazor Group Limited - Cautionary Announcement
    05/06/201216:08 Oasis Crescent Property Fund - Dealing in Oasis Crescent Property Fund
    05/06/201216:00 RBPlat - Dealing in securities by a director of a major Subsidiary
    05/06/201215:55BIFR1 - FirstRand Bank Limited - Listing of New Financial Instrument
    05/06/201215:41BITOY - Toyota Financial Services (South Africa) (Proprietary) Limited -
    05/06/201215:30 Mpact - Results of the General Meeting regarding the Odd-Lot Offer and
    05/06/201215:29 MPACT Limited - Report on proceedings at Annual General Meeting
    05/06/201215:29 Labat Africa Limited - Reconciliation of headline earnings and
    05/06/201214:47BIRDF - Redefine Properties Limited - New Financial Instrument Listing
    05/06/201214:09 StratCorp - Review Opinion in respect of the Reviewed Condensed
    05/06/201213:08BIIVU - iVuzi Investments Limited - Listing of Tap Issue
    05/06/201213:04 Exxaro - Trading of Exxaro Ordinary Shares on behalf of the Exxaro
    05/06/201212:53BIFR1 - FirstRand Bank Limited - Full Capital Redemption
    05/06/201212:46 ISA Holdings Limited - No Change Statment and Notice of Annual General
    05/06/201212:12BRT/BRN - Brimstone Investment Corporation Limited - Dealing in securities
    05/06/201212:00 ChemSpec - Condensed consolidated audited results for the year ended 31
    05/06/201211:58 Ingenuity Property Investments Limited - Dealing in securities by
    05/06/201211:38 Palabora Mining Company Limited - Results of Annual General Meeting
    05/06/201211:34 DRDGOLD Limited - Exercise of options and sale of shares
    05/06/201211:11BIRCS - RCS Investment Holdings (Proprietary) Limited - Full Capital Redemption
    05/06/201211:05 Spanjaard Limited - Dealings in securities by a Director
    05/06/201211:00CLR/CLRP - Clover Industries Limited - Renewal of outsourcing services agreement
    05/06/201210:51 SACMH - Reviewed Condensed Provisional Annual Results for the year ended
    05/06/201210:27 Gold One International Limited - Court Interdict Granted Against
    05/06/201210:14RMBT40 - RMB Top 40 Exchange Traded Fund - Distribution announcement - Salient
    05/06/201210:12RMBINF - RMB Government Inflation Linked Bond Fund - Distribution
    05/06/201210:06 Africa Cellular Towers Limited - Resignation of an Independent Non-
    05/06/201210:03PTXSPY - PropTrax SAPY - Partial delisting of Proptrax Sapy securities
    05/06/201209:00 Uranium One Inc - Uranium One announces signing of coordination agreement
    05/06/201208:32GEN - General - STA - Emphasis of matter
    05/06/201208:31GEN - GENERAL - TCS - Emphasis of matter
    05/06/201208:30GEN - General - LAB - Emphasis of matter
    05/06/201208:14 Resource Generation Limited - Appointment of Macquarie First South Capital
    05/06/201208:00 Ferrum Crescent Limited- Iron Ore Project Mining Right Granted
    05/06/201207:05 MMI Holdings Limited - MMI acquires Momentum Short-Term Insurance from

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