Having trouble reading this email? View in your web browser
 The Sharenet Daily 
Tuesday, 30 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)

Does Active Management Outperform

We at Seed Investments write weekly newsletters and also compile a monthly market overview. Please click here to sign up on our mailing list to receive the emails directly to your mailbox.

We have recently compiled a brief overview on the Seed Absolute Return Fund, taking a look at the strategies implemented in the fund, who should invest in this fund and why. Click here to go to Seed's Articles and Research and feel free download the review and some of our fund fact sheets.

Many research papers and countless reports have been commissioned to investigate whether active managers outperform the market, especially once costs are taken into account. The emphatic response is that managers (in general) don’t outperform the market. While this is generally true, any purely passive strategy will also underperform the market as there are always costs involved in managing any strategy.

Most studies focus on a single period when comparing the performance of a fund or a group of funds versus the market. This approach is disingenuous as, while there are periods of both out and under performance for active managers, the period chosen is typically altered to match the desired outcome – i.e. the chart is fitted to the data! The 2 charts below show how two different conclusions can be reached on the South African market.

Chart 1: 10 Year Performance of the ALSI vs the Average Value Equity Manager and the Average General Equity Manager

Chart 2: 3 Year Performance of the ALSI vs the Average Value Equity Manager and the Average General Equity Manager

Chart 1 indicates that over the past 10 years active managers (Value and General Equity) have managed to outperform the market (ALSI) after taking into account all costs involved in managing the funds. Over a shorter period (3 years in chart 2) the ALSI has been able to beat both category averages. There will naturally be a bit of survivorship in both data sets, but the evidence is there that if you do your homework and choose a good manager there is the potential to outperform the market over the long term.

The above analysis is highly dependent on the starting point, and as such can be changed to suit the needs of the argument. At Seed we therefore look at rolling performance to get a better idea of what has been achieved over different periods. A comparison over rolling periods removes a large element of starting point bias.

Chart 3: Rolling 12 Month Performance of the ALSI vs Rolling 12 month Alpha of the Average General Equity Manager

Chart 3 above clearly shows that local managers do best when the market delivers low (or negative) nominal returns, as it is in this environment that stock selection skills are more important. Manager performance is cyclical, and determining the market environment going forward plays a role in the selection of the managers within the Seed Funds.

In previous reports we have discussed how smart beta investing (investing into passive strategies that are, by design, different to the index and are able to outperform) can form part of an investor’s toolbox. We are agnostic when it comes to deciding between active and passive investment vehicles and focus purely on those investments/strategies that have the greatest chance of delivering market beating returns after all costs have been levied.

We therefore typically construct our Funds with a combination of smart beta AND active managers. In this way we attempt to extract the best of both worlds.

Take care,

Mike Browne

021 914 4966

Tue, 30 Oct 2012
Top News
Revenue fro the quarter shrunk to USD87.4 million (USD144.6 million). Gross loss was greater at USD2.1 million (loss of USD1.6 million). Net loss attributable to equity holders was narrower at USD19.6 million (loss of USD91.8 million).  Full story

South African stocks ended slightly higher on Monday after petrochemicals giant Sasol rose on a weaker rand and a slightly firmer crude oil price and as earnings forecasts lifted other shares.  Full story
Reassuring business updates from oil major BP and several major banks lifted European shares on Tuesday, with a key European equity index reaching. . .  Full story
Britain's blue-chip index posted its biggest gain in two weeks on Tuesday after BP's earnings topped forecasts, although volumes were among the lowest. . .  Full story
Gold prices firmed on Tuesday as stock markets rose and the dollar weakened, but moves were limited as New York markets remained closed. . .  Full story
World shares rose modestly in subdued trading on Tuesday as investors waited to see the full impact of a massive storm that wrought. . .  Full story

European shares rallied on Tuesday, led by Swiss bank UBS, which confirmed it will slash 10,000 jobs, and by oil major BP whose dividend. . .  Full story
Britain's top share index pushed higher on Tuesday, led by strong gains from BP after the oil major's forecast-beating results, in a likely. . .  Full story
European stocks rose on Tuesday, led by Swiss bank UBS after it confirmed cost-cutting plans and UK energy firm BP after it raised. . .  Full story
Hong Kong shares sank to their lowest in almost two weeks on Tuesday, with local developers extending losses in the wake of fresh. . .  Full story

South Africa's rand traded within a narrow range on Tuesday as the closure of stock and bond markets in the United. . .  Full story
Barclays Plc has temporarily suspended its bid for a stake in Namibia's Bank Windhoek until it completes a process to combine. . .  Full story
Junior South African gold producer Village Main Reef said on Tuesday production had resumed at its Tau Lekoa mine and output. . .  Full story
South African miner Lonmin, the world's third-largest platinum producer, is to raise $800 million from shareholders to cut debt and finance. . .  Full story
Company News
Shareholders of the company are advised that Mr Johannes Theodorus Kleinhans has resigned as non-executive director and vice-chairman of the company. . .  Full story
Shareholders were advised that, at the Annual General Meeting of Wescoal shareholders held today, 30 October 2012, all the resolutions were. . .  Full story
Shareholders were advised that on Monday 29 October 2012 Blue Label dispatched to shareholders its Integrated Annual Report for the year. . .  Full story
Merafe Resources announce the appointment of Mr Ditabe Chocho as Chief Financial Officer (CFO) of the company with effect from. . .  Full story

The company announced the appointment of Mr Kevin Wakeford, an independent non-executive director, as chairman of the board, following the resignation of Mr Paul Smith as executive chairman.. . .  Full story
Shareholders are advised that further to the SENS announcement dated 30 July 2012, the property consisting of Portion 64 (a portion 420 of the farm Melkpost No 4, Atlantis) was transferred to Hisense on 24 October 2012. The net proceeds. . .  Full story
Company Results
Oanda published results for the nine months to 30 September 2012. Revenue amounted to USD3.1 billion. Gross profit was USD326.3 million. . .  Full story
Sales revenue for the period increased to R330.6 million (2011: R272 million). Gross profit rose to R63.1 million (2011: R57.6 million),. . .  Full story
Revenue increased by 17% to BWP672.3 million (BWP576.3 million). Gross profit rose to BWP289.4 million (BWP257.4 million). EBITDA improved by 16%. . .  Full story
Revenue jumped 7.5% to R1.6 billion (2011: R1.4 billion) whilst gross profit rose to R437.1 million (2011: R409.5 million). EBITDA rose. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0037147.02154.000.42%
JSE Top 4017:0033003.14126.000.38%
JSE Gold17:002308.83-8.00-0.35%
JSE Financial17:0027335.87112.000.41%
JSE Industrial17:0043593.34205.000.47%
JSE Indust 2517:0037465.95178.000.48%
JSE Resource17:0050844.69173.000.34%
DJ Futures15:3413062.008.000.06%
DJ Ind26/1013107.213.530.03%
SP 50026/101411.94-1.03-0.07%
FTSE 10018:355849.9054.800.95%
All Ords08:054505.706.300.14%
NZSE 5006:503941.28-10.02-0.25%
NameTimeRPMove% Move
Gold $19:581709.85.460.03%
Gold R19:5714760.98-66.77-0.45%
Gold R/kg19:56475207-1953-0.41%
Silver $19:5831.7700-.0050-0.02%
Platinum $19:581551.5016.501.07%
Palladium $19:58593.907.201.23%
Brent Crude19:48110.12.950.87%
Rand / Dollar19:588.6407-0.0340-0.39%
Rand / Pound19:5513.8529-0.0218-0.16%
Rand / Euro19:5511.20240.01060.09%
Rand / NZD19:577.0854-0.0215-0.30%
Rand / AUD19:558.9618-0.0027-0.03%
Yen / Dollar19:5879.6220-0.2140-0.27%
Euro / Dollar19:550.7710-0.0037-0.48%
Dollar / Euro19:581.29600.00600.46%
Pound / Dollar19:550.6220-0.0016-0.26%

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 INVPROP  149943941.42.%39302
2 BAUBA  1101010.00.%200
3 DELTA  600488.70.%25300
4 LONMIN  71954757.07.%1411705
5 ADCORP  31001003.33.%36579
6 CADIZ  15553.33.%19850
7 TRNSHEX  310103.33.%574967
8 SABLE  2375753.26.%200
9 BRAIT  34851103.26.%687294
10 ALTRON  2285723.25.%3082
11 ARM   180365363.06.%371747
12 NIVEUS  1100302.80.%5000
13 CAT  1695452.73.%19965
14 BCX  499132.67.%639309
15 DISTELL  97002452.59.%13720
16 IMPLATS  156203852.53.%1286068
17 CLICKS  60501442.44.%417739
18 REINET  1565342.22.%2155394
19 BRIMST-N  970202.11.%4400
20 ILIAD  500102.04.%391

Click here for more Major Moves...
Major Moves Down
SharenameSaleMove% MoveVolume
1 LONAFRIC  140-16-10.26.%2000
2 SOVFOOD  480-35-6.80.%2000
3 EASTPLATS  145-7-4.61.%56170
4 AMA  259-11-4.07.%148416
5 AFRIMAT  670-25-3.60.%60336
6 S-OCEAN  150-5-3.23.%3000
7 TIMES  1370-45-3.18.%16600
8 SENTULA  170-5-2.86.%36929
9 PHUMELELA  865-25-2.81.%4325
10 EHSV  1750-49-2.72.%1539
11 ROLFES  380-10-2.56.%115589
12 ALTECH  4049-100-2.41.%21772
13 HOSP-A  1465-35-2.33.%116144
14 TIGBRANDS  27930-667-2.33.%232936
15 LITHA  430-10-2.27.%28768
16 VPIF  880-20-2.22.%1283677
17 GROWPNT  2405-54-2.20.%6512541
18 REDEFINE  892-20-2.19.%12523526
19 ALTRON-P  2140-45-2.06.%128373
20 TRUWTHS  9490-175-1.81.%1668209

Click here for more Major Moves...

New Highs
SharenameSaleHighMove% MoveVolume
1 SABLE  23752375753.26.%200
2 BRAIT  348535191103.26.%687294
3 RMBH  38813887621.62.%1088445
4 MEDCLIN  46574690471.02.%1576734
5 SASFIN  32503250250.78.%2230
6 HCI  951510080650.69.%43429
7 ASPEN  1572015749700.45.%665818
8 SABVEST-N  1550155050.32.%2865
9 STEINHOFF  2877290070.24.%3166403
10 SANLAM  38793905-1-0.03.%1931874

Click here for more Major Moves...
New Lows
SharenameSaleLowMove% MoveVolume
1 ARCMITTAL  34603454-20-0.57.%272182
2 GOLDONE  344310-1-0.29.%29023
3 NEPI-NPL  3503400.305037
4 AECI  7406736360.08.%480065
5 LONMIN  719563004757.07.%1411705

Click here for more Major Moves...

Index Summary
Index NameRPMove% Move
Top 4033,003.00126.000.38%
Mid Cap51,536.00313.000.61%
Small Cap38,092.00168.000.44%
Resource 2050,844.00173.000.34%
Industrial 2537,465.00178.000.48%
Financial 1510,188.0049.000.49%
Financial & Ind. 3040,729.00187.000.46%
All Share37,147.00154.000.42%
Oil & Gas 28,120.00-466.00-1.63%
Mining 32,710.00217.000.67%
Gold Mining2,308.00-8.00-0.35%
Platinum Mining52.001.002.65%
GENERAL MINING8,634.0056.000.66%
Oil & Gas Producers 15,119.00-251.00-1.63%
Basic Materials 27,990.00180.000.65%
Chemicals 15,252.00-11.00-0.07%
Forestry & Paper 16,582.00-1.00-0.01%
Industrial Metals 27,236.00289.001.07%
Industrials 35,368.00205.000.59%
General Industrials
Consumer Goods 37,647.00139.000.37%
Automobiles & Parts 6,838.00-65.00-0.95%
Household Goods189.0010.58%
Health Care 51,932.00314.000.61%
Index NameRPMove% Move
Food Producers 65,255.00-284.00-0.43%
Personal Goods 563.007.001.40%
Consumer Services 80,338.00380.000.48%
General Retailers 63,941.00157.000.25%
Travel & Leisure 4,450.0034.000.79%
Support Services 2,405.0056.002.41%
Telecommunications 75,396.00481.000.64%
Financials 27,335.00112.000.41%
Banks 48,926.00494.001.02%
Non-life Insurance 46,195.00141.000.31%
Life Insurance 23,617.00-24.00-0.10%
General Financial 2,448.0024.001.02%
Technology 33,231.00-15.00-0.05%
SHARIAH TOP40 3,264.00150.48%
FTSE/JSE SHARIAH ALL3,368.00190.58%
COAL MINING22,104.00-73-0.33%
FTSE JSE Fledgling 5,545.00-24-0.43%
FTSE/JSE Alt X 1,074.00-26-2.42%
CAPPED PROPERTY 382.00-0.59%
RESOURCE 27,981.00910.33%
DIVIDEND PLUS200.0000.34%
FTSE/JSE RAFI 407,568.00310.42%
Capped Top 4017,392.00640.37%
Capped All Share18,783.00770.41%
JSE TABACO 5,548.00-22-0.41%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
31/10/2012BUILDMXAugust 2012 (Interim)
31/10/2012CHEMSPECSeptember 2012 (Interim)
31/10/2012MASMay 2012 (Q)
31/10/2012WEARNEAugust 2012 (Interim)
01/11/2012AFRIMATAugust 2012 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
REBOSIS25/10/201209/11/201219/11/2012R 0.4250
NUWORLD25/10/201230/11/201210/12/2012R 0.5650
SPANJAARD24/10/201216/11/201226/11/2012R 0.1500
PICKNPAY24/10/201207/12/201218/12/2012R 0.1475
PIKWIK24/10/201207/12/201218/12/2012R 0.0717
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SBR00306/08/201226/10/201205/11/2012R 1.3500
PSG08/10/201226/10/201205/11/2012R 0.3300
BARWORLD6%P09/10/201226/10/201209/11/2012R 0.0600

Upcoming AGMs**
CodeCompany NameDateStatus
WSLWescoal Holdings Ltd.30/10/2012Confirmed
CLIClient?le Ltd.30/10/2012Confirmed
JSCJasco Electronics Holdings Ltd.31/10/2012Confirmed
MURMurray - Roberts Holdings Ltd.31/10/2012Confirmed
NT1PNet 1 UEPS Technologies Inc31/10/2012Confirmed

Stock Exchange News Service
30/10/201217:28COMBINED MOTOR HOLDINGS LIMITED - Dealing in Securities by a director
30/10/201217:24CARGO CARRIERS LIMITED - Un-audited results for the six months ended 31 August 2...
30/10/201217:15M CUBED HOLDINGS LIMITED - Delisting Announcement
30/10/201217:07IS PROPERTY FUND LIMITED - Dealing in securities by a director of the company
30/10/201216:57ITALTILE LIMITED - Results of the General Meeting
30/10/201216:44GE MAIN REEF LIMITED - Production resumes at Tau Lekoa Gold Mine
30/10/201216:20ROUP LIMITED - Dealing in PSG Group Limited shares
30/10/201216:05ALERT STEEL HOLDINGS LIMITED - Circular to Alert Steel Shareholders
30/10/201216:00METROFILE HOLDINGS LIMITED - Dealings in securities by directors
30/10/201215:30LE HOLDINGS LIMITED - Resignation from the board of directors
30/10/201215:16ROLFES HOLDINGS LIMITED - Dealings in securities by director
30/10/201215:15ALERT STEEL HOLDINGS LIMITED - AET - Alert Steel's loss narrows
30/10/201214:47DISCOVERY HOLDINGS LIMITED - Dealings in securities by directors
30/10/201214:46DISCOVERY HOLDINGS LIMITED - Dealing in securities by directors
30/10/201213:43ALERT STEEL HOLDINGS LIMITED - Reviewed condensed consolidated provisional finan...
30/10/201212:44WESCOAL HOLDINGS LIMITED - Results of the annual general meeting
30/10/201211:59LABEL TELECOMS LIMITED - No Change Statement and Notice of AGM
30/10/201211:50ELLIES HOLDINGS LIMITED - Dealing in securities by a director of a major subsidi...
30/10/201211:39MERAFE RESOURCES LIMITED - Appointment of Chief Financial Offer
30/10/201210:55STANDARD BANK GROUP LIMITED - Appointment of Company Secretary
30/10/201210:45JSE LIMITED - Growthpoint Properties Limited - GPT20 - New financial instrument ...
30/10/201210:37JSE LIMITED - The Nitro Securitisation 4 Issuer Trust - BINTR - Notice of meetin...
30/10/201210:32OANDO PLC - Oando Teleconference Call
30/10/201210:30O RESOURCES LIMITED - Trading of Exxaro ordinary shares on behalf of the Exxaro ...
30/10/201210:30R AND JACK MINES LIMITED - Appointment Of Chairman
30/10/201210:09INDWA INVESTMENTS LIMITED - New Instrument Listing - IND307
30/10/201210:09TRADEHOLD LIMITED - Unaudited interim consolidated financial results for the six...
30/10/201210:09A RESOURCES NL - High-Priority Soil Anomalies Defined and Significant Trenching ...
30/10/201210:08INDWA INVESTMENTS LIMITED - Listing of Tap Issue - IND306
30/10/201210:07BIDVESTCO LIMITED - New Instrument Listing - BIDC28
30/10/201210:04EIGN FOOD INVESTMENTS LIMITED - Dealings in securities by director of a major su...
30/10/201209:11AMATED APPLIANCE HOLDINGS LD - Disposal Of Property To Hisense South Africa Prop...
30/10/201209:01REDEFINE PROP INTERNATIONAL LTD - Audited condensed consolidated results for the...
30/10/201209:00REDEFINE PROP INTERNATIONAL LTD - Redefine International P.L.C - Results for the...
30/10/201209:00AQUARIUS PLATINUM LIMITED - Financial and Production Results to 30 September 201...
30/10/201209:00N PLC - Fourth Quarter 2012 Production Report and Update on Lonmins Future Strat...
30/10/201209:00TELE LIMITED - Results of Annual General Meeting
30/10/201208:59N LIMITED - Directors Dealings
30/10/201208:57FIRESTONE ENERGY LIMITED - Notice of Annual General Meeting
30/10/201208:02SATRIX COLLECTIVE INVESTMENT SCHEME - Partial delisting of securities
30/10/201208:01SATRIX COLLECTIVE INVESTMENT SCHEME - Partial delisting of securities - STX40
30/10/201208:00SATRIX COLLECTIVE INVESTMENT SCHEME - Listing of additional securities
30/10/201208:00FERRUM CRESCENT LIMITED - Notice of annual general meeting
30/10/201208:00CONSOLIDATED INFRASTRUCTURE GRP LTD - Reviewed consolidated results for the fina...
30/10/201207:08 PROPERTY FUND - Information announcement regarding a public censure imposed by ...
30/10/201207:05JSE LIMITED - Censure imposed by the JSE Limited on Sycom Property Fund relating...
30/10/201207:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
30/10/201207:05BHP BILLITON PLC - Presentation - Delivering value through optimisation

Click here for more SENS news