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 The Sharenet Daily 
Tuesday, 16 October 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)

Currency Fair Value

Where the rand is trading on any given day versus a range of other currencies is a very topical subject, with almost everyone having their opinion on where it should be trading, where they think it will go, and the reasons for its more recent moves.

Like most financial instruments, one can arrive at a fair value for a currency against either a single currency, or a basket of currencies, through a number of methods. While a fair value can be calculated it doesn’t mean that the currency will immediately move to the fair value, it can take up to 10 years (or in certain cases even longer) to revert to fair value. When using longer term valuation techniques, rather than shorter term ‘signals’, it is important to have a long term view, otherwise short term forex gyrations can result in decisions that will destroy capital.

At Seed we make use of the Purchasing Power Parity (PPP) method to determine the fair value of the rand. This method is based on the assumption that in a perfect world, goods and services should cost the same in whatever market (country) they trade in, when taking into account the current exchange rates. Where there is a mismatch between prices, arbitrage will take place and the laws of supply and demand will ensure that the exchange rates will move to reflect the mismatch in pricing, bringing the prices between the two regions into equilibrium.

Naturally we don’t live in a perfect world. Each country has its own competitive advantages, there are costs involved in transporting any good or service, countries have foreign reserves and other measures to manipulate the exchange rate, there are taxes and levies imposed by governments, and in more repressive regimes laws are created to restrict trade of goods and services. PPP will therefore not work 100%, but over time will give a good idea of where the currency should be trading. Over time this ‘fair value’ acts as a magnet that helps to anchor an exchange rate around the fair value.

The chart below shows the ‘fair value’ of the rand versus the US dollar over the past 28 years. It is clear in the chart that while the rand doesn’t spend much time at fair value, the ZARUSD PPP fair value exchange rate does provide an anchor to the exchange rate at any point in time. At the end of 2001 and 2008 the model indicated that it was a good time to be reducing exposure to the USD and at the end of 2004 and 2010 it was a good time to be accumulating USD.

By using this method to determine fair value, one would have been too early in bringing forex back at the end of 2000, but this decision would have paid off on a 4 year horizon with the rand strengthening from R7.60/USD to R5.60/USD from the end of 2000 to the end of 2004.

The current rand weakness (from R8.30/USD at the end of September to R8.75/USD currently) has only brought the rand closer to fair value which we estimate sits between R8.85/USD and R9.00/USD. Naturally there is the risk that the currency continues to weaken through fair value, but we use this tool to assist in our decisions on when to send currency offshore and when to repatriate it.

Take care,

Mike Browne

021 914 4966

Tue, 16 Oct 2012
Top News
Revenue for the interim period increased by 10% to R936.1 million (2011: R847.3 million). Gross profit rose by 10% to R385.4 million (2011: R351.1 million), operating profit climbed slightly by 3% to R69.7 million (2011: R67.8 million), while net profit for the period for the period lowered  Full story

South African stocks booked a record close for the second straight day on Tuesday, as firm U.S. data and hopes that debt-laden Spain will seek a bailout buoyed appetite for riskier assets, despite the labour unrest in the domestic mining sector.  Full story
World shares rose for a second day on Tuesday and the euro gained against the U.S. dollar as U.S. corporate earnings concern eased,. . .  Full story
U.S. stocks climbed on Tuesday after stronger-than-expected quarterly earnings from such bellwethers as Goldman Sachs and Johnson & Johnson helped ease concerns about a. . .  Full story
Britain's top share index notched up strong gains on Tuesday, and was on the cusp of breaking out of its recent trading range,. . .  Full story
Gains in financial shares led European stock markets higher on Tuesday, and persistent speculation Spain may be edging closer to asking for a. . .  Full story

U.S. stocks extended gains, with the S&P 500 up 1 percent on Tuesday, as solid earnings from such bellwethers as Goldman Sachs and. . .  Full story
U.S. stocks added to gains on Tuesday, with the Nasdaq rising 1 percent, helped by stronger-than-expected quarterly earnings from such bellwethers as Goldman Sachs. . .  Full story
Gold rose on Tuesday after two days of sharp losses, lifted by a dollar drop and after data showed U.S. consumer prices climbed. . .  Full story
U.S. stocks opened higher on Tuesday after the latest quarterly earnings and outlooks posted by Goldman Sachs, Coca-Cola and others outweighed investor fears about. . .  Full story

Nigeria announced the preferred bidders on Tuesday for 10 state power distribution firms it is selling for 197.25 billion naira as. . .  Full story
A plunge in Iran's currency could slice 5 percent or more off MTN Group's full-year earnings, the latest setback for the South African. . .  Full story
South African bullion producer Gold Fields has given striking workers at its South Africa mines until Thursday to return to work. . .  Full story
Atlatsa Resources on Tuesday said it had dismissed over 1,000 employees at its Bokoni platinum mine in South Africa after they. . .  Full story

Zambia plans to lift a ban on the entry of new mobile phone companies to increase competition and improve cellular service,. . .  Full story
An illegal strike at Kumba Iron Ore's giant Sishen mine in South Africa ended on Tuesday after police arrested 40 miners. . .  Full story
South Africa's largest iron ore producer, Kumba Iron Ore, said on Tuesday the illegal occupation of its Sishen mine by striking. . .  Full story
South Africa's rand was a touch firmer against the dollar on Tuesday but remained vulnerable to labour unrest that has sent. . .  Full story
Company News
Shareholders were previously advised that the Sishen Iron Ore Company (Pty) Ltd. ("SIOC") and ArcelorMittal South Africa Ltd. ("AMSA") were continuing. . .  Full story
Pioneer announced the retirement of AndrT Hanekom ("AndrT") as group managing director with effect from 31 March 2013. AndrT will continue. . .  Full story
Anglo drew attention to an announcement issued by Kumba Iron Ore, the text of which is set out below: Kumba. . .  Full story
Following the announcement released on SENS on 28 September 2012, Shareholders are reminded of the annual general meeting of ordinary shareholders. . .  Full story

Mediclinic shareholders are referred to the announcements released on SENS on Monday, 27 August 2012 and Tuesday, 18 September 2012 and published in the South African press on Tuesday, 28 August. . .  Full story
Pioneer Foods provides this trading statement based on the provisional results for the twelve months to 30 September 2012 and further to the trading update published on SENS on 5 September. . .  Full story
Kumba announces that the illegal occupation of the company's Sishen Mine has been brought to an end by the police who removed the strikers in the early hours of the morning. . .  Full story
Company Results
Revenue grew 55% to R176.3 million (R113.4 million) whilst operating profit jumped 54% to R16.4 million (R10.7 million). Attributable income to equity holders of the company soared by 69%to R9.0 million (5.3 million). Furthermore, headline earnings per share rose 45% to. . .  Full story
Revenue for the interim period ended 31 August 2012 was CAD44.2 million (CAD54.9 million), while gross profit came in at CAD4.2 million (CAD9.6 million), and headline loss per share was CAD5cps (CAD7cps). Operational highlights Strong operations continue to support the financial position of. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0036974.24354.000.97%
JSE Top 4017:0032767.23310.000.96%
JSE Gold17:002455.9140.001.69%
JSE Financial17:0027337.46379.001.41%
JSE Industrial17:0043509.18312.000.72%
JSE Indust 2517:0037342.71246.000.67%
JSE Resource17:0050249.08550.001.11%
DJ Futures19:5813480.00121.000.91%
DJ Ind19:5813549.39125.160.93%
SP 50019:581454.3514.220.99%
FTSE 10017:355870.5464.931.12%
All Ords07:404513.908.400.19%
NZSE 5006:483940.7024.330.62%
NameTimeRPMove% Move
Gold $19:581744.778.370.48%
Gold R19:5815206.54-67.62-0.44%
Gold R/kg19:58488540-2302-0.47%
Silver $19:5832.8500.16600.51%
Platinum $19:581636.25-6.35-0.39%
Palladium $19:58636.708.901.42%
Brent Crude19:58115.39-.41-0.35%
Rand / Dollar19:588.7147-0.0817-0.93%
Rand / Pound19:5514.0152-0.0951-0.67%
Rand / Euro19:5511.3704-0.0227-0.20%
Rand / NZD19:587.0920-0.0876-1.22%
Rand / AUD19:558.9553-0.0682-0.76%
Yen / Dollar19:5878.86900.18800.24%
Euro / Dollar19:580.7664-0.0059-0.76%
Dollar / Euro19:581.30460.01000.77%
Pound / Dollar19:550.6202-0.0017-0.27%

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 CALGRO  546469.20.%463793
2 ELBGROUP  28002258.74.%1500
3 ROCKWELL  260208.33.%1500
4 LONAFRIC  150107.14.%36077
5 AFRO-C  400246.38.%230435
6 KEATON   221115.24.%170043
7 S-OCEAN  16385.16.%9546
8 ROLFES  388184.86.%25207
9 COMPCLEAR  365154.29.%919
10 OMNIA  128405084.12.%286599
11 WOOLIES  66902503.88.%5914293
12 IMPLATS  151655453.73.%1363952
13 COMAIR  14553.57.%784
14 BRAIT  31331063.50.%256966
15 ZEDER  27593.38.%569795
16 WBHO  140834423.24.%68907
17 TFG  128504003.21.%931264
18 VIVIDEND  560173.13.%9100
19 REXTRU-N  1650503.13.%333
20 OCEANA  58001703.02.%4224

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Major Moves Down
SharenameSaleMove% MoveVolume
1 PUTPROP  610-45-6.87.%60
2 PETMIN  210-14-6.25.%79799
3 ADAPTIT  142-8-5.33.%131540
4 TRUSTCO  109-5-4.39.%136000
5 KELLY  184-7-3.66.%1283
6 MVELASERV  820-30-3.53.%372
7 CAPITEC-N  4300-149-3.35.%153993
8 AFOVR-N  1650-50-2.94.%4214
9 CMH  1190-35-2.86.%12880
10 AMECOR  161-4-2.42.%35998
11 ARB  420-10-2.33.%42240
12 CADIZ  145-3-2.03.%34626
13 MTN  15500-312-1.97.%6319047
14 PALLINGHT  200-4-1.96.%450228
15 ATLATSA  152-3-1.94.%60700
16 POYNTING  105-2-1.87.%66500
17 ILIAD  491-9-1.80.%77480
18 EASTPLATS  167-3-1.76.%12700
19 MIXTEL  226-4-1.74.%54838
20 CONDUIT  115-2-1.71.%66946

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New Highs
SharenameSaleHighMove% MoveVolume
1 CALGRO  546547469.20.%463793
2 ELBGROUP  280028002258.74.%1500
3 OMNIA  12840130895084.12.%286599
4 WOOLIES  669067152503.88.%5914293
5 BRAIT  313331331063.50.%256966
6 SHOPRIT  17434174963822.24.%1951903
7 HCI  925096002012.22.%657264
8 MONDILTDP  929993001992.19.%399884
9 MMIHLDGS  21152119452.17.%5457802
10 MONDIPLCP  940094001992.16.%732488
11 OLDMUTUAL  24592480512.12.%4867880
12 NASPERSN  547485479510481.95.%1004892
13 DATATEC  550155481011.87.%372422
14 RICHEMONT  57355770721.27.%9724078
15 CAPCO  32613265160.49.%192488
16 ASPEN  14770148850.560562
17 HOWDEN  286030000.6899
18 CAPITEC-N  43004500-149-3.35.%153993

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New Lows
SharenameSaleLowMove% MoveVolume
1 KELLY  184184-7-3.66.%1283
2 CADIZ  145145-3-2.03.%34626
3 ARCMITTAL  38503810-65-1.66.%466870
4 ASTRAL  98009800-156-1.57.%136022

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Index Summary
Index NameRPMove% Move
Top 4032,767.00310.000.96%
Mid Cap51,955.00559.001.09%
Small Cap38,349.00273.000.72%
Resource 2050,249.00550.001.11%
Industrial 2537,342.00246.000.67%
Financial 1510,163.00145.001.45%
Financial & Ind. 3040,535.00354.000.88%
All Share36,974.00354.000.97%
Oil & Gas 28,945.00242.000.84%
Mining 32,086.00351.001.11%
Gold Mining2,455.0040.001.69%
Platinum Mining50.001.003.86%
GENERAL MINING8,332.0066.000.80%
Oil & Gas Producers 15,563.00130.000.85%
Basic Materials 27,483.00316.001.16%
Chemicals 15,486.00164.001.07%
Forestry & Paper 16,742.00277.001.68%
Industrial Metals 26,314.00517.002.01%
Industrials 35,231.00396.001.14%
General Industrials
Consumer Goods 38,185.00205.000.54%
Automobiles & Parts 6,906.0095.001.40%
Household Goods187.0010.71%
Health Care 50,479.0052.000.10%
Index NameRPMove% Move
Food Producers 65,054.00706.001.10%
Personal Goods 572.007.001.38%
Consumer Services 79,125.001662.002.15%
General Retailers 64,463.001693.002.70%
Travel & Leisure 4,343.0011.000.25%
Support Services 2,210.00-38.00-1.70%
Telecommunications 74,469.00-1239.00-1.64%
Financials 27,337.00379.001.41%
Banks 47,936.00591.001.25%
Non-life Insurance 47,854.00809.001.72%
Life Insurance 23,833.00427.001.83%
General Financial 2,446.0040.001.70%
Technology 34,270.00435.001.29%
SHARIAH TOP40 3,231.00240.75%
FTSE/JSE SHARIAH ALL3,338.00250.76%
COAL MINING21,335.0080.04%
FTSE JSE Fledgling 5,531.00-11-0.20%
FTSE/JSE Alt X 1,134.00141.33%
RESOURCE 27,644.002921.07%
DIVIDEND PLUS200.0021.45%
FTSE/JSE RAFI 407,530.00700.94%
Capped Top 4017,274.001660.97%
Capped All Share18,699.001790.97%
JSE TABACO 5,839.00-1-0.02%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
17/10/2012ALERTJune 2012 (Final)
17/10/2012DATATECAugust 2012 (Interim)
17/10/2012ODERSONAugust 2012 (Interim)
17/10/2012OSIRISAugust 2012 (Final)
19/10/2012ANSYSAugust 2012 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
AFRO-C12/10/201207/12/201218/12/2012R 0.1050
AFROC-P12/10/201207/12/201218/12/2012R 0.2980
CMH11/10/201207/12/201218/12/2012R 0.2500
HOLDSPORT09/10/201223/11/201203/12/2012R 0.7000
BARWORLD6%P09/10/201226/10/201209/11/2012R 0.0600
Ex Div**
Share NameDec-DateLDTPay-DateAmount
WBHO03/09/201212/10/201222/10/2012R 2.4200
CAPITEC26/09/201212/10/201222/10/2012R 1.6900
JDGROUP27/08/201212/10/201222/10/2012R 1.3200
RAINBOW28/08/201212/10/201222/10/2012R 0.3200
FONEWORX28/09/201212/10/201222/10/2012R 0.0700

Upcoming AGMs**
CodeCompany NameDateStatus
DSTDistell Group Ltd.17/10/2012Confirmed
CVHCapevin Holdings Ltd.18/10/2012Confirmed
TSHTsogo Sun Holdings Ltd.18/10/2012Confirmed
PGRPeregrine Holdings Ltd.18/10/2012Unconfirmed
AFRAFGRI Ltd.19/10/2012Confirmed

Stock Exchange News Service
16/10/201217:45OLDINGS LIMITED - Dealings in securities by a director
16/10/201217:40VUNANI PROPERTY INVESTMENT FUND LTD - Notice Of Sale Of Vpif Linked Units
16/10/201217:40I LIMITED - Restructuring Of The Groups Debt Partial Sale Of Assets By A Subsid...
16/10/201217:33CAPITEC BANK HOLDINGS LIMITED - Dealing in securities by associates of a directo...
16/10/201217:18THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited New Fin...
16/10/201217:16VALUE GROUP LIMITED - Unaudited Interim Financial Results
16/10/201217:15FORBES & MANHATTAN COAL CORP - Forbes - announces new board composition
16/10/201217:00NEDBANK LIMITED - sens issue
16/10/201216:25ELLIES HOLDINGS LIMITED - Dealing in securities by a director of a major subsidi...
16/10/201216:20GOLD FIELDS LIMITED - Final ultimatum for unlawful strikers at gold fields to re...
16/10/201216:17ARCELORMITTAL SOUTH AFRICA LIMITED - Sishen Iron Ore Company Proprietary Limited...
16/10/201216:15ABSA CAPITAL - Notice of the expiry and maturity
16/10/201216:13AFRICAN BANK LIMITED - Interest Rate Reset
16/10/201216:00KUMBA IRON ORE LIMITED - Sishen Supply Agreement
16/10/201215:53ABSA BANK LIMITED - ACL102 - Interest Rate Reset
16/10/201215:20REAL PEOPLE INV HOLD (PTY) LTD - Interest Rate Reset
16/10/201215:17INVICTA HOLDINGS LIMITED - Posting of circular and notice of extraordinary gener...
16/10/201215:00THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited New Fin...
16/10/201215:00SA RESOURCES CORPORATION - Bokoni Labour Unrest - Update
16/10/201215:00IVUZI INVESTMENTS LIMITED - Full Capital Redemption
16/10/201214:26INVESTEC BANK LIMITED - Issue of Exchange Traded Notes (ETNS)
16/10/201214:24Astral Foods Limited - Trading Statement
16/10/201214:20COMBINED MOTOR HOLDINGS LIMITED - Financial Assistance Notice
16/10/201212:59ABSA BANK LIMITED - ABN58 - Interest Rate Reset
16/10/201212:49CHROMETCO LIMITED - Director's dealings in securities
16/10/201212:17O RESOURCES LIMITED - Trading of Exxaro ordinary shares on behalf of the Exxaro ...
16/10/201212:15Avi Limited - Dealing In Avi Shares By Directors Of Avi
16/10/201212:11FORBES & MANHATTAN COAL CORP - Forbes Coal reports 11% growth in consolidated EB...
16/10/201212:02FORBES & MANHATTAN COAL CORP - Condensed interim consolidated financial stateme...
16/10/201211:08PIONEER FOOD GROUP LIMITED - Retirement of the group managing director
16/10/201211:00CAPITAL & COUNTIES PROPERTIES PLC - Notification of Major Interests in Shares
16/10/201210:57COMMISSIONER STREET NO 1 (PTY) LTD - MFS1A1 ; MFS1A2 and MFS1B - Rating downgrad...
16/10/201210:45INDWA INVESTMENTS LIMITED - Listing of Tap Issue
16/10/201210:45INDWA INVESTMENTS LIMITED - Listing of Tap Issue
16/10/201210:35ANGLO AMERICAN PLC - Anglo American update re. Kumba Iron Ore
16/10/201210:34SACOIL HOLDINGS LIMITED - Response to share price movement
16/10/201210:31MEDICLINIC INTERNATIONAL LIMITED - Results of General Meeting
16/10/201210:29KAGISO MEDIA LIMITED - Notice of AGM
16/10/201210:27JSE LIMITED - Alert Steel Holdings Limited Sea Kay Holdings Limited late submis...
16/10/201210:20JSE LIMITED - 1time Holdings Limited Late Submission Of Interim Financial Statem...
16/10/201210:00RESILIENT PROPERTY INCOME FUND LTD - Full Capital Redemption
16/10/201210:00OLDINGS LIMITED - Disposal of Property
16/10/201209:54PIONEER FOOD GROUP LIMITED - Trading Statement
16/10/201209:35MASSMART HOLDINGS LIMITED - Notification of Directors dealing in Massmart Holdin...
16/10/201209:33RCS INVESTMENT HOLDINGS (PTY) LTD - Interest Rate Reset
16/10/201209:30KUMBA IRON ORE LIMITED - Sishen Mine Illegal Occupation By Strikers Ended
16/10/201209:00ALLIED TECHNOLOGIES LIMITED - Appointment of Chief Operating Officer
16/10/201208:45SYNTHESIS FUNDING LIMITED - SYN950 Synthesis Funding Limited - New Financial In...
16/10/201208:38GOLD ONE INTERNATIONAL LIMITED - Operations at Ezulwini Suspended Amidst Industr...
16/10/201208:30 HOLDINGS LIMITED - Unaudited condensed financial results for the six months end...
16/10/201208:15GROUP FIVE LIMITED - Proposed amendements to the existing Group Five BEE transac...
16/10/201208:00DEUTSCHE BANK AG - Deutsche Bank AG - Termination of Listing - TOPWDY
16/10/201207:31INVESTEC BANK LIMITED - New Listing- BTIIHB
16/10/201207:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
16/10/201207:05OANDO PLC - Oando PLC Withdraws Proposed Resolutions at EGM

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