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 The Sharenet Daily 
Wednesday, 08 August 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)

Using Dividends as an Income Source

Many investors, particularly those that are approaching retirement, have an aversion to investing in the stock market. The reason most often used is that the stock market is “too risky for me”. While the daily and monthly gyrations in the markets make the average investor shudder, the opportunity cost of investing in cash and not having a growing income stream is too high for most investors. We have often said and written that the riskiest investment strategy over the long run is not to have enough risk in your portfolio.

In a simple exercise I have compared two investors that are 5 years from retirement (not taking tax into account. Taking tax into account would favour the investor who invests into shares). Investor A makes an investment into the ALSI (local stock market) and Investor B leaves his investment in cash. In both cases the investors let their savings grow with all distributions (dividends and interest income) reinvested for the first 5 years. From the 6th year both investors live off the distributions. The chart below shows the initial yield received by each investor (relative to their initial investment) in their first year of retirement.

It is clear from the chart that in most of the periods Investor A would be significantly better off in his first year of retirement than Investor B. The peaks in the dividend yield have coincided with strong market returns and strong dividend growth.

Investor A is further benefited by the fact that he’ll have a growing income stream once he moves into the drawdown phase, whereas Investor B’s income will be determined by the prevailing interest rates. Dividends are inflation proofed over time, with the chart below showing the annual growth in income (over rolling 5 year periods) of a cash investment versus an equity investment. An equity investor’s income would have grown, on average, at 13% per annum over this period, well above the average inflation rate. For those investors relying purely on interest income the picture is dire. Even before the effects of inflation there are many periods where a cash investor would need to reduce their standard of living. After taking into account tax and inflation the picture is even worse!

One of the reasons for the major discrepancy is that the market values of the shares grow above inflation over time, whereas the nominal cash investment never changes. By investing with this mindset, investors should be able to better weather those periods of poor market returns in the understanding that they are not going to be relying on the capital to provide an income, but rather the growing dividend stream.

At Seed we are aware of the importance of dividends in the total return generated by any portfolio, and as such our portfolios and funds currently have an allocation to higher yielding shares. This will not only provide a greater yield than the average equity investor (as depicted above) but has also traditionally provided more protection to investors in negative markets.

Take care,

Mike Browne

021 914 4966

Wed, 08 Aug 2012
Top News
South Africa's Top-40 index ended up 0.09 percent on Wednesday, unwinding some of the gains that had pushed it to an all-time high in earlier trade, as doubts arise over whether the euro zone is any nearer to resolving its debt crisis.  Full story

Total revenues for the interim period ended 30 June 2012 jumped to GBP8.4 billion (2011: GBP6.5 billion). Profit before tax lowered to GBP733 million (2011: GBP909 million), but profit attributable to equity holders of the parent rose to GBP931 million (2011: GBP738 million). Furthermore, he  Full story
Troops loyal to President Bashar al-Assad assaulted rebel strongholds in Aleppo on Wednesday in one of their biggest ground attacks since rebels seized chunks of Syria's biggest city three weeks ago.  Full story
Gunmen killed three people in an attack on a mosque in the Nigerian town of Okene on Tuesday, a day after 19 were killed in gunfire at a church in the same town in a new outbreak of sectarian violence in central Nigeria, police said on Wednesday.  Full story
Some 2,400 people, including two generals, fled the violence in Syria to reach neighbouring Turkey overnight, the state-run Anatolian news agency said on Wednesday.  Full story
Gold edged up, but remained in a tight range, on Wednesday as trading was quiet again due to investor uncertainty about whether central. . .  Full story
European shares held near four-month highs on Wednesday with gains in miners and the scandal-hit banking sector outpacing weakness in autos and oils as. . .  Full story
Britain's blue chip share index rose by just a few points on Wednesday, consolidating around a four-month peak as a slide in a. . .  Full story
Global shares were little changed o n W ednesday, while the euro fell as a lack of details prompted investors to tone down. . .  Full story

U.S. stocks were little changed on Wednesday in light trading, as there were few signals to push shares in either direction one day. . .  Full story
U.S. stocks erased early losses and turned positive on Wednesday, led by gains in materials and consumer staples shares.. . .  Full story
U.S. stocks dipped at the open on Wednesday following three days of gains on Wall Street as traders awaited more signals about central. . .  Full story
Australian shares rose for a third straight session to a three-month closing high on Wednesday, adding 0.5 percent on expectations Europe can boost its. . .  Full story

South Africa's rand was largely steady against the dollar on Wednesday ahead of a domestic national holiday, with traders looking for. . .  Full story
South African physical coal prices rebounded on Wednesday to the highest level since a short-lived rally in June, lifted by strikes. . .  Full story
South Africa's manufacturing output grew 0.8 percent year-on-year in volume terms in June, undershooting market expectations after a revised 4.4 percent. . .  Full story
South Africa's Top-40 index hit an all-time high on Wednesday as a global rally in emerging market assets sparked by hopes. . .  Full story

Emerging stocks were steady on Wednesday near three-month highs, as gains in Asia on optimism for further global economic stimulus were offset by. . .  Full story
South Africa's gold output fell by 4 percent by volume in June, while total mineral production rose 4.2 percent compared with. . .  Full story
Insurer Old Mutual reported a better-than-expected 12 percent rise in half-year profit, helped by a strong performance at its South African. . .  Full story
. . .  Full story
Company News
Shareholders were advised that, for the year ended 31 May 2012, OneLogix expects its earnings per share (''EPS'') to be between. . .  Full story
The following document has been submitted to the National Storage Mechanism (NSM) (http://www.hemscott.com/nsm.do) : *the company's Half Year Financial Report 2012. . .  Full story
The board of directors of Trustco provided the now customary voluntary trading update in respect of the financial quarter ending 30. . .  Full story
In compliance with the JSE Limited Listings Requirements, the following information is disclosed: *Mr Paul Smith has been appointed an executive. . .  Full story

Kumba announced the appointment of Mr Fani Titi as non-executive chairman of Kumba with effect from 1 October 2012. Mr Titi. . .  Full story
Shareholders are cautioned that the implementation of any proposed acquisition, which will result in the issue of more than 100% of. . .  Full story
Following the cautionary announcements dated 20 July 2012 and 1 August 2012, the board of directors of the company advised shareholders. . .  Full story
Further to the announcement dated 18 January 2012 wherein Taste advised shareholders about the acquisition by one of its wholly-owned subsidiaries,. . .  Full story
Company Results
Revenue declined to R1.2 billion (R1.3 billion). EBITDA increased to R262.9 million (R206 million). Net attributable profit rose to R138.1 million. . .  Full story
Revenue decreased to EUR2.8 billion (2011: EUR2.9 billion) whilst operating profit declined to EUR0.3 billion (2011: EUR0.4 billion). Consequently, net attributable. . .  Full story
Revenue for the interim period ended 30 June 2012 increased to R4.3 billion (2011: R4 billion). Gross profit grew to R2.5. . .  Full story
Revenue decreased to EUR2.8 billion (2011: EUR2.9 billion) whilst operating profit declined to EUR0.3 billion (2011: EUR0.4 billion). Consequently, net attributable. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0035494.647.000.02%
JSE Top 4017:0031251.6827.000.09%
JSE Gold17:002393.981.000.08%
JSE Financial17:0027171.13-62.00-0.23%
JSE Industrial17:0041336.29-34.00-0.08%
JSE Indust 2517:0035315.01-19.00-0.06%
JSE Resource17:0047749.20163.000.34%
DJ Futures19:2413140.0083.000.64%
DJ Ind19:5813176.5859.070.45%
SP 50019:581402.258.020.58%
FTSE 10017:355845.924.680.08%
All Ords08:404332.9021.500.50%
NZSE 5007:563581.79-3.02-0.08%
NameTimeRPMove% Move
Gold $19:591611.60-.33-0.02%
Gold R19:5813055.25-99.37-0.76%
Gold R/kg19:58419188-3114-0.74%
Silver $19:5927.9930-.0910-0.32%
Platinum $19:591405.50-1.00-0.07%
Palladium $19:59585.202.500.43%
Brent Crude19:58112.45.250.22%
Rand / Dollar19:598.1007-0.0606-0.74%
Rand / Pound19:5512.6569-0.0695-0.55%
Rand / Euro19:5510.0081-0.1160-1.15%
Rand / NZD19:586.6055-0.0530-0.80%
Rand / AUD19:558.5578-0.0662-0.77%
Yen / Dollar19:5978.4670-0.1290-0.16%
Euro / Dollar19:550.80890.00260.32%
Dollar / Euro19:591.2351-0.0046-0.37%
Pound / Dollar19:550.6381-0.0018-0.28%

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 LONAFRIC  1122224.44.%19577
2 MAZOR  1702013.33.%208599
3 ARGENT  665406.40.%19200
4 OCEANA  51992895.89.%11808
5 AFRO-C  360205.88.%33672
6 AMA  285155.56.%857563
7 GOLIATH  400205.26.%5500
8 EASTPLATS  16385.16.%45998
9 CBH  375185.04.%82392
10 HUGE  12054.35.%53500
11 ROCKCASTL  989394.11.%4933
12 DAWN  675253.85.%14471
13 EHSV  2280803.64.%20839
14 TREMATON  17363.59.%100
15 KAP  310103.33.%86974
16 ARB  400123.09.%26751
17 COAL  375102.74.%1714168
18 ARROW-B  590152.61.%37540
19 AMECOR  20052.56.%59295
20 CALGRO  410102.50.%53659

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Major Moves Down
SharenameSaleMove% MoveVolume
1 CAPEVIN  600-10900-94.78.%20000
2 TASTE  290-30-9.38.%595352
3 ABIL  3350-150-4.29.%7059131
4 BLUETEL  588-26-4.23.%176758
5 CAPEVINH  575-25-4.17.%21000
6 BASREAD  1125-45-3.85.%48171
7 TELKOM  1816-68-3.61.%201052
8 AVUSA  2290-85-3.58.%1660
9 JDGROUP  4265-155-3.51.%763976
10 EXCELL  123-4-3.15.%462923
11 VALUE  501-16-3.09.%16156
12 AQUARIUS  465-14-2.92.%584927
13 FORBES  900-27-2.91.%100
14 PETMIN  243-7-2.80.%304778
15 ADAPTIT  115-3-2.54.%24669
16 WBHO  12440-320-2.51.%144641
17 CITYLDG  8005-195-2.38.%28338
18 PALLINGHT  220-5-2.22.%602640
19 IMPERIAL  19031-419-2.15.%649700
20 TFG  14110-305-2.12.%378329

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New Highs
SharenameSaleHighMove% MoveVolume
1 ROCKCASTL  989989394.11.%4933
2 ARROW-B  590590152.61.%37540
3 METAIR  27302850652.44.%105094
4 SPANJRD  600600101.69.%19750
5 CIPLAMED  826840111.35.%572763
6 BRAIT  29202950301.04.%529481
7 BIDVEST  20613207731370.67.%510367
8 CAPCO  28062817100.36.%42861
9 MRPRICE  1284512985150.12.%512589
10 SYNERGY-B  6406500.650878
11 OLDMUTUAL  21352171-13-0.61.%7892137
12 LIB-HOLD  93209510-80-0.85.%385069
13 ADCOCK  62536630-87-1.37.%365994
14 CAPEVINH  5750-25-4.17.%21000

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New Lows
SharenameSaleLowMove% MoveVolume
1 CAPEVIN  600600-10900-94.78.%20000
2 DIGICOR  250250-5-1.96.%33050
3 COMAIR  1201170.1175944

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Index Summary
Index NameRPMove% Move
Top 4031,251.0027.000.09%
Mid Cap51,649.00-185.00-0.36%
Small Cap37,348.0029.000.08%
Resource 2047,749.00163.000.34%
Industrial 2535,315.00-19.00-0.06%
Financial 1510,135.00-21.00-0.21%
Financial & Ind. 3038,805.00-33.00-0.09%
All Share35,494.007.000.02%
Oil & Gas 26,546.00-455.00-1.69%
Mining 30,790.00222.000.73%
Gold Mining2,393.001.000.08%
Platinum Mining48.00.00-0.02%
GENERAL MINING7,941.0083.001.06%
Oil & Gas Producers 14,273.00-244.00-1.68%
Basic Materials 26,380.00186.000.71%
Chemicals 15,311.0023.000.15%
Forestry & Paper 13,825.00103.000.75%
Industrial Metals 28,609.00148.000.52%
Industrials 34,784.00-43.00-0.13%
General Industrials
Consumer Goods 35,716.0088.000.25%
Automobiles & Parts 6,181.00147.002.45%
Household Goods163.000-0.25%
Health Care 49,796.00-276.00-0.55%
Index NameRPMove% Move
Food Producers 64,527.00-70.00-0.11%
Personal Goods 498.001.000.38%
Consumer Services 73,327.00-377.00-0.51%
General Retailers 63,006.00-550.00-0.87%
Travel & Leisure 3,924.00-17.00-0.44%
Support Services 2,
Telecommunications 73,140.00-272.00-0.37%
Financials 27,171.00-62.00-0.23%
Banks 50,321.00-125.00-0.25%
Non-life Insurance 45,687.00130.000.29%
Life Insurance 21,835.0047.000.22%
General Financial 2,462.00-11.00-0.48%
Technology 30,495.00140.000.46%
SHARIAH TOP40 3,051.0070.24%
FTSE/JSE SHARIAH ALL3,182.0050.18%
COAL MINING23,161.005062.24%
FTSE JSE Fledgling 5,556.00380.69%
FTSE/JSE Alt X 1,074.0030.32%
RESOURCE 26,350.00970.37%
DIVIDEND PLUS195.000-0.01%
FTSE/JSE RAFI 407,249.0000.01%
Capped Top 4016,496.00110.07%
Capped All Share17,956.0040.02%
JSE TABACO 5,638.0000.00%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
13 Aug 2012BELLJune 2012 (Interim)
13 Aug 2012CONTROLJune 2012 (Interim)
13 Aug 2012GROUP 5June 2012 (Final)
13 Aug 2012SA CORPJune 2012 (Interim)
13 Aug 2012URONEJune 2012 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
MONDILTD12-08-0712-08-1712-09-18R 0.0890
SHOPRIT 5%12-08-0712-08-2412-09-03R 0.0500
FIRSTRANDB-P12-08-0712-08-1712-08-27R 3.3309
MONDIPLC12-08-0712-08-1712-09-18R 0.0890
RESILIENT12-08-0712-08-2412-09-03R 1.2074
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SABMILLER12-05-2412-08-0212-08-17R 0.6950
SYNERGY A12-07-1912-08-0212-08-13R 0.4422
BRAIT12-06-0612-08-0212-08-14R 0.2059
SYNERGY B12-07-1912-08-0212-08-13R 0.1953
MAS12-07-1912-08-0212-08-17R 0.0160

Upcoming AGMs**
CodeCompany NameDateStatus
ANDAndulela Investment Holdings Ltd.08/08/2012Confirmed
ANDPAndulela Investment Holdings Ltd.08/08/2012Confirmed
TSXTrans Hex Group Ltd.08/08/2012Confirmed
TASTaste Holdings Ltd.10/08/2012Confirmed
AFPAlexander Forbes Preference Share Invest...10/08/2012Unconfirmed

Stock Exchange News Service
08/08/201217:35The Don Group Limited - Disposal Of Sandton 4 Property And Disposals Update
08/08/201217:35TRANSACTION CAPITAL LIMITED - Dealing in securities
08/08/201217:25Randgold & Exploration Company Ltd - Trading Statement
08/08/201217:20JUBILEE PLATINUM PLC - Company Operations Update
08/08/201217:15ONELOGIX GROUP LIMITED - Trading Statement
08/08/201217:15Capitec Bank Holdings Limited - Dealing In Securities By An Associate Of A Compa...
08/08/201217:13Alexander Forbes Pref Share Inv Ltd - No Change Statement And Notice Of Annual G...
08/08/201217:00 LIMITED - Dealing in securities by directors of listed companies
08/08/201217:00Investec Plc - Transactions In Investec Plc Ordinary Shares
08/08/201216:55CONSOLIDATED INFRASTRUCTURE GRP LTD - Dealings in securities by an associate of ...
08/08/201216:50ARROWHEAD PROPERTIES LIMITED - Interest distribution for the quarter ended 30 J...
08/08/201216:45Impala Platinum Holdings Limited - Trading Statement
08/08/201216:41ANGLO AMERICAN PLC - Half year report
08/08/201216:40TRUSTCO GROUP HOLDINGS LIMITED - Voluntary Trading Update
08/08/201216:30ABSA BANK LIMITED - Tap Issuance
08/08/201216:04Simmer And Jack Mines Limited - Changes To The Board Of Directors
08/08/201215:51INVESTEC BANK LIMITED - Interim Dividend- MTNIHI
08/08/201215:49INVESTEC BANK LIMITED - Interim Dividend- MTNIDK
08/08/201215:47TRANS HEX GROUP LIMITED - Updated transaction details and extension of cautionar...
08/08/201215:22Mpact Limited - Revised Trading Statement
08/08/201215:15SASOL LIMITED - Trading statement for the financial year ended 30 June 2012
08/08/201215:05Business Connexion Group Limited - Notice Of An Acquisition Of A Beneficial Inte...
08/08/201215:00TELE LIMITED - Trading Statement
08/08/201214:40AFRICAN AND OVERSEAS ENTERPRISES LD - Trading Staetement
08/08/201214:35REX TRUEFORM CLOTHING COMPANY LTD - Trading Statement
08/08/201214:22IFA HOTELS AND RESORTS LIMITED - Extention of timeline for fulfilment of the con...
08/08/201214:15AFRICAN BANK LIMITED - Listing of Tap Issue
08/08/201214:00 LIMITED - Sappi Limited exits Chinese Joint Venture
08/08/201214:00Kumba Iron Ore Limited - Appointment Of Non-executive Chairman
08/08/201213:45Queensgate Hotels & Leisure Limited - Detailed Cautionary Announcement Details ...
08/08/201213:44African Bank Investments Limited - Voluntary Disclosure: Dealing In Securities B...
08/08/201213:43MONEYWEB HOLDINGS LIMITED - Percentage movements in year end results
08/08/201213:40TOYOTA FIN SERVICES (SA) PTY LTD - Listing of New Financial Instrument
08/08/201213:14PINNACLE TECHNOLOGY HOLDINGS LTD - Launch of sponsored Level 1 American Deposito...
08/08/201213:00Pbt Group Limited - Finalisation Announcement
08/08/201212:39IENT PROPERTY INCOME FUND LTD - Appointment of an Independant Non-Executive Dire...
08/08/201212:00LONRHO PLC - FASTJET Passenger Statistics for July 2012
08/08/201212:00TRANS HEX GROUP LIMITED - Results of Annual General Meeting
08/08/201211:58FERRUM CRESCENT LIMITED - Amended Constitution
08/08/201211:35TRADEHOLD LIMITED - Directors dealing
08/08/201211:10Taste Holdings Limited - Update On Fish And Chip Acquisition
08/08/201210:13Standard Bank Of South Africa Ld - Scib - The Standard Bank Of South Africa Limi...
08/08/201210:11FIRST URANIUM CORPORATION - Notice of AGM and record date
08/08/201209:30DEUTSCHE BANK AG - Listing
08/08/201208:34Aquarius Platinum Limited - Preliminary Full Year Results To 30 June 2012
08/08/201208:30GOLD ASHANTI LIMITED - Notice
08/08/201208:12Ferrum Crescent Limited - Ferrum - Results Of General Meeting
08/08/201208:03OLD MUTUAL PLC - Interim Dividend for the six months ended 30 June 2012
08/08/201208:02OLD MUTUAL PLC - Interim results for the six months ended 30 June 2012
08/08/201208:01OLD MUTUAL PLC - Interim results for the six months ended 30 June 2012
08/08/201208:00OLD MUTUAL PLC - Old Mutual plc Interim results for the six months ended 30 June...
08/08/201208:00IMITED - Production Update for ACU
08/08/201208:00ROUP LIMITED - Condensed Consilidated reviewed interim results
08/08/201208:00REDEFINE PROP INTERNATIONAL LTD - Redefine International reaches in-principle ag...
08/08/201207:30The Db X-tracker Col Invest Scheme - Listing Of Additional 3 000 000 Dbxeu Secur...
08/08/201207:05British American Tobacco Plc - Transaction In Own Shares

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