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 The Sharenet Daily 
Tuesday, 23 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)

Stock Market Crashes

This month marked the 25th anniversary of one of the biggest stock market crashes ever. 20 October 1987 is known on international markets as black Monday, where in one day the US market lost over 20% and between October 14 and 19th prices fell 28.5%. Over this period, the value of all US shares lost almost $1 trillion.

A stock market crash is an event where there is a sudden price decline across a broad section of the market, where prices are driven down sharply by negative psychological sentiment. The history of publicly quoted market prices is one which is littered both with price bubbles and with spectacular crashes.

For many investors it is this possibility of a meltdown in prices that scares them from investing a reasonable proportion of their capital. Indeed, it is healthy to have a sceptical attitude towards quoted prices because, while fundamentals ultimately drive prices over the longer term, it is also important to understand that the emotional factors of fear and greed can drive prices far away from their true values.

25 year ago on Monday the 19th, panic set in and everyone turned seller, resulting in the Dow Jones Industrial Average plummeting 22.6% on the day. This was the biggest single decline since 1929 and was the subject of plenty of debate including a detailed report to the US president titled the “Presidential Task Force on Market Mechanisms”.

Prices had been driven up over 40% from the previous year to August 1987. Over a 5 year period from August 1982, the Dow had risen by a compounded 28.5% to its then peak in August 1987. Despite the spectacular October crash the Dow Jones Industrial Average ended up slightly for the year.

The benefit of hindsight and a large degree of rationality allowed market participants to investigate some of the reasons that may have sparked the panic. Some of the reasons put forward included:

  • On Friday 16 October, UK markets were closed due to a major storm

  • In the week prior to the crash, an unexpectedly large US trade deficit was released, which led to the possibility of a decline in the dollar relative to other currencies

  • The most widespread explanation was so called program trading, which is computerised trading by large institutions using buy and sell levels

  • Another major cited factor was the increased use of derivatives. Typically futures and options are used as portfolio insurance, but the writers of these were forced to sell as prices plummeted, further exacerbating downward pressure

  • Relatively expensive valuations. PE ratios had expanded to a level of 20, from a long term average of 15.

    The long term log chart of the Dow Jones Industrial Average below puts the crash into perspective. Devastating at the time, with the benefit of hindsight, this particular crash was relatively short-lived and had very little impact on the economy.

    Chart : Dow Jones Industrial Average

    There is never one specific cause of a market crash and indeed while some have predicted previous crashes including that in 1987, this is near impossible with any degree of regular success. The market decline in 2008 was as a result of a whole different set of circumstances.

    We believe that the single biggest factor that investors need to pay attention to is valuation. This in itself is not an absolute, as emotions of greed can, and often do, stretch valuations. Reducing exposure as valuations become stretched may initially hamper performance, but it often proves beneficial as prices fall back to more normalised levels.

    Kind regards,

    Ian de Lange

    021 914 4966

  • Tue, 23 Oct 2012
    Top News
    South African stocks fell for a second straight day on Friday as bullion producers such as Anglo Gold Ashanti took a hit from a decline in the spot price for the precious metal and wildcat strikes in the domestic mining sector.  Full story

    Revenue increased to R182.3 million (R110 million). Gross profit rose to R46 million (R27.6 million), but operating profit declined to R3.7 million (R5 million). A total comprehensive loss/income for the period of R23.1 million (profit of R2.3 million) was made. In addition, headline earning  Full story
    Gold fell 1 percent on Tuesday, tumbling below technical support and hovering just above $1,700 an ounce, pressured by economic worries that slammed. . .  Full story
    U.S. stocks dropped sharply on Tuesday as a sluggish economy caught up with some of the world's biggest multinationals, hitting their earnings and. . .  Full story
    Global shares and the euro tumbled on Tuesday after a slew of weak U.S. corporate earnings results and credit ratings downgrades of several. . .  Full story
    A top European share index slid to its lowest level in more than one-and-a-half months on Tuesday, hit by worries over company results. . .  Full story

    Britain's top share index fell for a third session on Tuesday, weighed down by concerns over weak earnings and the euro zone crisis. . .  Full story
    U.S. stocks opened sharply lower on Tuesday as a trio of disappointing earnings from Dow components seemed to confirm concerns about the slow. . .  Full story
    European shares extended their earlier losses on Tuesday, with a key index falling to a its lowest level in one and a half. . .  Full story
    U.S. stocks opened sharply lower on Tuesday as a trio of disappointing earnings from Dow components seemed to confirm concerns about the slow. . .  Full story

    South Africa's Gold Fields sacked 8,500 wildcat strikers on Tuesday after they ignored an ultimatum to return to work or face. . .  Full story
    Strikes and violence at South African mines have piled pressure on the government to boost social spending in its 3-year budget. . .  Full story
    South African national oil company PetroSA has reached an exploration agreement with Democratic Republic of Congo's (DRC) state oil company, Cohydro. . .  Full story
    South Africa's rand fell more than 1.5 percent against the dollar to a week's low on Tuesday, weighed by strikes which. . .  Full story

    Mozambique is set to buy 630,000 tonnes of oil products for delivery from December to May from Trafigura, industry sources said. . .  Full story
    South African construction firm Basil Read said on Tuesday it would sell its engineering unit to Australia's WorleyParsons Ltd for $105. . .  Full story
    South Africa's Royal Bafokeng Platinum said on Tuesday quarterly production dipped by 1 percent, hit by a three-day wildcat strike and. . .  Full story
    Canadian business law and litigation firm Fasken Martineau said on Monday it is combining forces with South Africa's Bell Dewar, beefing. . .  Full story
    Company News
    Shareholders are advised that the annual financial statements will be distributed to shareholders on 23 October 2012 and contain no modifications. . .  Full story
    Datatec announced the allotment of 25 400 ordinary R0.01 shares following the exercise of share options. Application has been made to. . .  Full story
    The board of directors of Advtech, the education and recruitment group, announced the appointment of Professor Shirley Zinn as an independent. . .  Full story
    RBPlat released a quarterly review and production report for the period 1 July to 30 September 2012.Third quarter safety, production and. . .  Full story
    Company Results
    Group revenue increased by 17% to R1.18 billion (2011: R1.01 billion) while gross profit jumped 15% to R490.78 million (2011: R428.03. . .  Full story
    Interest income declined 4.9% to R25.3 million (R26.6 million). An operating profit of R13.6 million (loss of R5.5 million). There was. . .  Full story
    Revenue improved to R461.4 million (R388.5 million). Operating profit was up 18.7% to R215.3 million (R181.4 million). A net attributable profit. . .  Full story
    Revenue increased to R285.7 million (R251.1 million) whilst operating profit jumped 12.9% to R147.5 million (R130.6 million). Total comprehensive income attributable. . .  Full story
    World Markets (Spot Prices)
    NameTimeRPMove% Move
    JSE Overall17:0036678.03-289.00-0.78%
    JSE Top 4017:0032497.47-286.00-0.87%
    JSE Gold17:002344.406.000.27%
    JSE Financial17:0027236.60-108.00-0.40%
    JSE Industrial17:0042993.22-214.00-0.50%
    JSE Indust 2517:0036865.16-202.00-0.55%
    JSE Resource17:0050010.38-758.00-1.49%
    DJ Futures19:4213065.00-187.00-1.41%
    DJ Ind19:5813116.11-227.40-1.70%
    SP 50019:581413.83-19.36-1.35%
    FTSE 10017:355797.91-85.00-1.44%
    All Ords07:474568.003.400.07%
    NZSE 5006:484004.2616.100.40%
    NameTimeRPMove% Move
    Gold $19:591708.99-19.91-1.15%
    Gold R19:5814968.9843.990.29%
    Gold R/kg19:58481358-2139-0.44%
    Silver $19:5931.7950-.5770-1.78%
    Platinum $19:591572.50-35.00-2.18%
    Palladium $19:59595.00-27.20-4.37%
    Brent Crude19:58108.31-1.97-1.79%
    Rand / Dollar19:588.75810.12551.45%
    Rand / Pound19:5513.93260.14051.02%
    Rand / Euro19:5511.36100.08290.74%
    Rand / NZD19:587.11430.05110.72%
    Rand / AUD19:558.98680.06730.75%
    Yen / Dollar19:5979.8200-0.1160-0.15%
    Euro / Dollar19:550.77070.00560.73%
    Dollar / Euro19:591.2971-0.0091-0.70%
    Pound / Dollar19:550.62710.00290.46%

    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 BASREAD  100015017.65.%1979964
    2 LONAFRIC  1561611.43.%2000
    3 BAUBA  120109.09.%32957
    4 HUGE  135108.00.%2500
    5 INDEQTY  300207.14.%4000
    6 CONDUIT  11076.80.%43000
    7 MIXTEL  310186.16.%78015
    8 AFRIMAT  700304.48.%19800
    9 TRNSHEX  300124.17.%434132
    10 ALTRON-P  2195854.03.%79184
    11 DIGICOR  19773.68.%78980
    12 HULAMIN  345123.60.%34769
    13 DCENTRIX  430143.37.%16221
    14 GOLDONE  350102.94.%78200
    15 ALTECH  43901202.81.%27583
    16 EASTPLATS  15942.58.%78704
    17 INVPROP  1475352.43.%27943
    18 ADCORP  2917682.39.%120813
    19 AMECOR  17442.35.%133800
    20 JDGROUP  4639841.84.%211546

    Click here for more Major Moves...
    Major Moves Down
    SharenameSaleMove% MoveVolume
    1 NICTUS  175-35-16.67.%5000
    2 ROCKWELL  240-20-7.69.%1180
    3 COMAIR  140-8-5.41.%1012
    4 IMPLATS  14744-776-5.00.%1400816
    5 CALGRO  541-28-4.92.%148379
    6 AQUARIUS  511-24-4.49.%74413
    7 DRDGOLD  578-27-4.46.%397796
    8 JASCO  142-5-3.40.%126027
    9 EXXARO  16830-530-3.05.%947225
    10 BELL  1940-60-3.00.%10500
    11 ARCMITTAL  3580-110-2.98.%806652
    12 GROWPNT  2465-74-2.91.%1506336
    13 OCTODEC  1900-57-2.91.%359
    14 PPC  2890-83-2.79.%1149765
    15 PALLINGHT  214-6-2.73.%186743
    16 METROFILE  381-10-2.56.%3550
    17 BARWORLD  7085-185-2.54.%579677
    18 VILLAGE  120-3-2.44.%817160
    19 JUBILEE  120-3-2.44.%33700
    20 ANGLOPLAT  39650-960-2.36.%201821

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    New Highs
    SharenameSaleHighMove% MoveVolume
    1 BRAIT  338034120.503027
    2 DISTELL  980010161-6-0.06.%25387
    3 SHOPRIT  1805018466-213-1.17.%1439785

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    New Lows
    SharenameSaleLowMove% MoveVolume
    1 ARCMITTAL  35803500-110-2.98.%806652
    2 LONMIN  68286705-144-2.07.%375751
    3 CAPITEC-N  35453320-56-1.56.%87697
    4 RAINBOW  12701270-20-1.55.%7122
    5 TRANSCAP  730702-10-1.35.%30586
    6 ASTRAL  95499437-16-0.17.%53201
    7 STEFSTOCK  1018915181.80.%204700

    Click here for more Major Moves...

    Index Summary
    Index NameRPMove% Move
    Top 4032,497.00-286.00-0.87%
    Mid Cap51,540.00-202.00-0.39%
    Small Cap38,288.00-36.00-0.10%
    Resource 2050,010.00-758.00-1.49%
    Industrial 2536,865.00-202.00-0.55%
    Financial 1510,101.00-46.00-0.46%
    Financial & Ind. 3040,113.00-216.00-0.54%
    All Share36,678.00-289.00-0.78%
    Oil & Gas 27,923.00-590.00-2.07%
    Mining 32,108.00-453.00-1.39%
    Gold Mining2,344.006.000.27%
    Platinum Mining49.00-1.00-2.22%
    GENERAL MINING8,453.00-113.00-1.32%
    Oil & Gas Producers 15,014.00-316.00-2.07%
    Basic Materials 27,485.00-367.00-1.32%
    Chemicals 15,347.00-53.00-0.34%
    Forestry & Paper 16,451.00-34.00-0.21%
    Industrial Metals 26,483.00-269.00-1.01%
    Industrials 35,083.00-142.00-0.41%
    General Industrials
    Consumer Goods 37,219.00-46.00-0.12%
    Automobiles & Parts 6,967.00-6.00-0.09%
    Household Goods183.0000.49%
    Health Care 50,277.00-468.00-0.92%
    Index NameRPMove% Move
    Food Producers 65,776.00-193.00-0.29%
    Personal Goods 551.00-4.00-0.82%
    Consumer Services 79,460.00-447.00-0.56%
    General Retailers 64,683.00-602.00-0.92%
    Travel & Leisure 4,383.0028.000.66%
    Support Services 2,306.0038.001.71%
    Telecommunications 73,559.00-1006.00-1.35%
    Financials 27,236.00-108.00-0.40%
    Banks 47,978.00-146.00-0.30%
    Non-life Insurance 46,450.00-190.00-0.41%
    Life Insurance 23,504.00-78.00-0.33%
    General Financial 2,468.00-1.00-0.07%
    Technology 33,591.00-101.00-0.30%
    SHARIAH TOP40 3,201.00-41-1.28%
    FTSE/JSE SHARIAH ALL3,307.00-39-1.19%
    COAL MINING21,504.00-663-2.99%
    FTSE JSE Fledgling 5,568.00210.38%
    FTSE/JSE Alt X 1,108.00-28-2.51%
    SA LISTED PROPERTY 485.00-0.83%
    CAPPED PROPERTY 392.00-0.52%
    RESOURCE 27,512.00-416-1.49%
    DIVIDEND PLUS200.0000.17%
    FTSE/JSE RAFI 407,464.00-67-0.89%
    Capped Top 4017,122.00-150-0.87%
    Capped All Share18,545.00-145-0.78%
    JSE TABACO 5,660.00-20-0.36%

    Click here for the Sharenet Index Summary page
    Latest Consensus Changes**
    CodeCompany NameStatusUpdated
    Results Expected**
    ExpectedCompany NameFin. Date
    24/10/2012CILAugust 2012 (Final)
    24/10/2012PICKNPAYAugust 2012 (Interim)
    24/10/2012PIKWIKAugust 2012 (Interim)
    24/10/2012ROCKCASTLEAugust 2012 (Interim)
    24/10/2012SECDATAJuly 2012 (Final)

    Recent Dividends**
    Share NameDec-DateLDTPay-DateAmount
    FAMBRANDS22/10/201230/11/201210/12/2012R 1.0800
    OCTODEC22/10/201209/11/201219/11/2012R 0.6610
    PREMIUM22/10/201209/11/201219/11/2012R 0.6000
    LONFIN19/10/201202/11/201230/11/2012R 0.0035
    VIVIDEND19/10/201202/11/201212/11/2012R 0.2600
    Ex Div**
    Share NameDec-DateLDTPay-DateAmount
    CAXTON6%CPP29/08/201219/10/201229/10/2012R 4.1000
    SHFINV-PREF04/09/201219/10/201229/10/2012R 3.7000
    NTC PREF05/10/201219/10/201229/10/2012R 3.6402
    EOH12/09/201219/10/201229/10/2012R 0.7000
    ELBGROUP19/09/201219/10/201229/10/2012R 0.5200

    Upcoming AGMs**
    CodeCompany NameDateStatus
    TKGTelkom SA Ltd.24/10/2012Confirmed
    TKGATelkom SA Ltd.24/10/2012Confirmed
    IMPImpala Platinum Holdings Ltd.24/10/2012Confirmed
    TKGBTelkom SA Ltd.24/10/2012Confirmed
    FFAFortress Income Fund Ltd.24/10/2012Confirmed

    Stock Exchange News Service
    23/10/201217:32METROFILE HOLDINGS LIMITED - Listing Of Additional Shares And Dealings In Securi...
    23/10/201217:30CAPITAL SHOPPING CENTRES GROUP PLC - Notification of Major Interest in Shares
    23/10/201217:08METAIR INVESTMENTS LIMITED - Notice of disposal of a beneficial interest
    23/10/201217:03JUBILEE PLATINUM PLC - Total voting rights - M & G Investments
    23/10/201217:00REDEFINE PROP INTERNATIONAL LTD - Appointment of alternate director
    23/10/201217:00JUBILEE PLATINUM PLC - Total voting rights Prudential Plc
    23/10/201216:56GROWTHPOINT PROPERTIES LIMITED - Acquisition and Cautionary
    23/10/201216:52RAINBOW CHICKEN LIMITED - No Change Statement And Notice Of Annual General Meeti...
    23/10/201216:44NEWFUNDS COLLECTIVE INVEST SCHEME - Distribution and Reinvestment Announcement
    23/10/201216:30PREMIUM PROPERTIES LIMITED - Dealing in securities by associate of a director
    23/10/201216:00INVICTA HOLDINGS LIMITED - Acquisition of Man-Dirk Proprietary Limited
    23/10/201215:30MAZOR GROUP LIMITED - Trading Statement
    23/10/201215:28TRANS HEX GROUP LIMITED - Trading Statement
    23/10/201215:25TRACKHEDGE (PTY) LIMITED - Distribution announcement - Quarter ended 30 Septembe...
    23/10/201215:12GRINDROD LIMITED - Acquisition of ordinary shares
    23/10/201215:10NEWFUNDS COLLECTIVE INVEST SCHEME - Distribution announcement - Quarter ended 30...
    23/10/201215:00DATATEC LIMITED - Further issue of shares
    23/10/201214:45SEA KAY HOLDINGS LIMITED - Resignation of Mrs K van der Vyver
    23/10/201214:16NEWFUNDS COLLECTIVE INVEST SCHEME - Distribution and Reinvestment Announcement
    23/10/201213:55NY GOLD MINING COMPANY LIMITED - Harmony issues final ultimatum to striking work...
    23/10/201213:00SHERBOURNE CAPITAL LIMITED - Equity Partners Funding
    23/10/201210:59BASIL READ HOLDINGS LIMITED - Basil Read sells TWP Holdings for cash considerati...
    23/10/201210:59Basil Read Holdings Limited - Worleyparsons Limited To Acquire 100% Of Twp Holdi...
    23/10/201210:50IMITED - Dealing in AVI shares by a director of AVI
    23/10/201210:45CAPITAL & COUNTIES PROPERTIES PLC - Notification of Major Interests in Shares
    23/10/201210:04JSE LIMITED - GeneralPublic consultation process on proposed amendments to JSE L...
    23/10/201210:00FIRSTRAND BANK LIMITED - Full Capital Redemption
    23/10/201210:00FAIRVEST PROPERTY HOLDINGS LIMITED - Correction of Annexure to Revised Listing P...
    23/10/201209:30ADVTECH LIMITED - Appointment to the Board
    23/10/201209:18W G WEARNE LIMITED - Trading Statement
    23/10/201209:18HUDACO INDUSTRIES LIMITED - Disclosure of acquisition of securities
    23/10/201208:30ROYAL BAFOKENG PLATINUM LIMITED - Quarterly Review And Production Report For The...
    23/10/201207:38ROPERTY FUND LTD - Abridged pre-listing statement
    23/10/201207:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

    Click here for more SENS news