Thursday, 13 December 2012 - 20:00
Charts
What is Driving up the Local Equity Market? Over this last year and in November the JSE has powered up to new highs. For sure the gains have only come from a certain section of the market – as we noted last month Industrials and Financials are driving the market to new highs.
November ended the month on a new high and this has again continued into December. The local JSE has now made new highs in August, September, October, November and now also in December.
Ultimately we believe that a company generating higher and higher profitability will be represented by a share price that moves up over time. But over the last 12 months earnings growth on JSE listed companies has slowed from an annual growth of 30% in July to just 4.8% in November. Clearly there are other factors driving prices up.
One US based fund manager, Ken Fisher, who very often goes against the prevailing trend has a firm view that the only determinant of prices is supply and demand. In the long term there is an almost unlimited supply of shares, but in the shorter term up to say two years the supply of shares is relatively stable because new share issues and major merger and acquisitions take some time to conclude.
The demand side for equities can be categorised into fundamental and non-fundamental factors. Fundamental drivers include economic activity and corporate profitability. Non fundamental drivers include sentiment and liquidity. All of these are important drivers of demand but at different times have differing influences on prices.
The chart below gives a just one possible reason for the on-going demand for local equities and especially selected industrials and financials despite earnings growth falling back – i.e. the requirement for yield from investors in a global environment that is providing very few opportunities. For a period of time investors are prepared to bid up prices because on a relative basis they are attractive.
When priced relative to bonds, there have only been 3 periods of time in the last 10 years when local investments were as attractive – in the period 2002/2003, in the period from September 2008 and now more recently in June to September.
Therefore despite the more elevated share prices and the new monthly highs, liquidity driven demand for yield has continued to be a driver of share prices. This chart indicates that there is still relatively good value in local equities when compared to a bond alternative.
Kind regards,
Ian de Lange
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Thu, 13 Dec 2012
Top News
South African stocks fell slightly on Thursday, snapping a three-day record-setting run, as investors cashed in on profits while worries about U.S. fiscal problems dampened sentiment. Full story
South Africa's Kumba Iron Ore will supply the local unit of ArcelorMittal with up to 4.8 million tonnes of ore at $65 per tonne next year as the companies try to resolve a pricing dispute. Full story |
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European governments reached a
landmark deal on Thursday that gives the European Central Bank
new powers to supervise banks, boosting confidence in the single
currency bloc as it enters the fourth year of its debt crisis. Full storySyrian rebels are gaining
ground and might win, Russia's Middle East envoy said on
Thursday, in the starkest such admission from a major ally of
President Bashar al-Assad in 20 months of conflict. Full storyJapan scrambled fighter jets on
Thursday after a Chinese government plane entered what Japan
considers its airspace over disputed islets in the East China
Sea, escalating tension between Asia's two biggest economies. Full story |
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Markets | World shares and commodity
prices slipped on Thursday as investors looked past the Federal
Reserve's announcement of further monetary stimulus and set
their sights. . . Full story | | U.S. stocks fell slightly on
Thursday, pulling back from six straight days of gains despite a
batch of positive economic releases as "fiscal. . . Full story | | Britain's leading share index
fell on Thursday as concerns over U.S. fiscal negotiations
resurfaced, prompting investors to consolidate recent gains made
during the longest. . . Full story | | European shares slipped from
18-month highs on Thursday, led by weakness in heavyweight
healthcare stocks, after uncertainty over U.S. budget talks
prompted investors to. . . Full story |
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| Gold prices fell more than 1
percent on Thursday, failing to sustain gains made after the
Federal Reserve unveiled a fresh round of. . . Full story | | U.S. stocks opened flat on
Thursday after data showed first time claims for jobless
benefits fell sharply last week, but investors were cautious
about. . . Full story | | U.S. stock index futures rose
on Thursday after data showed initial jobless claims fell in
the latest week, producer prices fell more. . . Full story | | European shares dipped on
Thursday as new stimulus steps from the Federal Reserve were
overshadowed by concern over U.S. austerity measures, though
traders made. . . Full story |
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SA Business | South Africa's Standard Bank may sell 60 percent of its UK commodities and foreign exchange trading businesses to the Industrial & Commercial Bank of China for at least $600 million, the. . . Full story | | Coal of Africa said on Thursday it has re-hired 178 workers it sacked last week for going on an illegal strike at its Mooiplaats mine in South Africa.. . . Full story | | South Africa's rand firmed against the dollar on Thursday after the U.S. Federal Reserve announced a new round of monetary stimulus to bolster the world's biggest economy.. . . Full story |
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| South Africa's competition watchdog levied a $10 million price-fixing fine on consumer foods maker Foodcorp, a takeover target of poultry producer Rainbow Chicken.. . . Full story |
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Company News | Shareholders were previously advised that the Sishen Iron Ore Company (Pty) Ltd. ("SIOC") and ArcelorMittal South Africa Ltd. ("AMSA") were engaging. . . Full story | | Shareholders are hereby advised that, with the exception of Ordinary Resolution number 10 (Authority to place unissued shares under the directors'. . . Full story | | In compliance with the AIM Rules, Datatec announced the following:
*The allotment of 605 901 ordinary ZAR0.01 shares as the second of. . . Full story | | Shareholders are referred to the cautionary announcement dated 16 November 2012, and are advised that as negotiations have been terminated, caution. . . Full story |
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| Coal ("the company") advised that it has signed a Memorandum of Understanding ("MOU") with the National Union of Mineworkers ("NUM") relating. . . Full story | | The Financial Mail reported the weaker rand has prompted South African investors to increase their exposure to rand hedge stocks such. . . Full story | | Shareholders are referred to the notice of annual general meeting contained in the 2012 integrated report, posted to shareholders on 15. . . Full story | | Business Day's "Bottom Line" column wonders if Cadiz could be a takeover target, as financial services RE:CM acquired 15% of the. . . Full story |
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Company Results | Revenue increased to R454.8 million (R393.7 million). Operating profit rose to R41.8 million (R27.3 million). Net attributable profit was up by. . . Full story | | Revenue for the year grew to R34.9 million (R32.2 million). Profit attributable to equity holders increased to R4.3 million (R3.7 million).. . . Full story | | | | The following are BK Prefs maiden interim results and therefore are incomparable. Revenue for the interim period was R5.5 million. Loss. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 38676.70 | -86.00 | -0.22% | JSE Top 40 | 17:00 | 34287.11 | -127.00 | -0.37% | JSE Gold | 17:00 | 2240.12 | 7.00 | 0.32% | JSE Financial | 17:00 | 28858.20 | 38.00 | 0.13% | JSE Industrial | 17:00 | 46235.84 | -27.00 | -0.06% | JSE Indust 25 | 17:00 | 39772.56 | -80.00 | -0.20% | JSE Resource | 17:00 | 50766.85 | -397.00 | -0.78% | DJ Futures | 19:22 | 13212.00 | -13.00 | -0.10% | DJ Ind | 19:52 | 13177.49 | -67.96 | -0.51% | SP 500 | 19:52 | 1419.10 | -9.38 | -0.66% | Nasdaq | 19:52 | 2989.09 | -24.72 | -0.82% | FTSE 100 | 18:35 | 5929.61 | -16.24 | -0.27% | DAX | 19:10 | 7581.98 | -32.81 | -0.43% | CAC40 | 19:10 | 3643.13 | -3.53 | -0.10% | Nikkei | 08:30 | 9742.73 | 161.27 | 1.68% | Shanghai | 09:26 | 2061.48 | -21.25 | -1.02% | Hang-Seng | 10:28 | 22445.58 | -57.77 | -0.26% | All Ords | 07:47 | 4592.90 | 1.10 | 0.02% | NZSE 50 | 06:48 | 3974.73 | -20.53 | -0.51% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:58 | 1697.01 | -13.68 | -0.80% | Gold R | 19:58 | 14705.13 | -96.90 | -0.65% | Gold R/kg | 19:52 | 473035 | -4134 | -0.87% | Silver $ | 19:59 | 32.3750 | -1.0050 | -3.01% | Platinum $ | 19:59 | 1607.00 | -23.00 | -1.41% | Palladium $ | 19:59 | 689.00 | -2.20 | -0.32% | R157 | 17:43 | 5.41 | -.01 | -0.28% | R204 | 16:47 | 6.09 | -.01 | -0.16% | R207 | 16:55 | 6.36 | -.02 | -0.39% | Brent Crude | 19:48 | 108.56 | .55 | 0.51% | Rand / Dollar | 19:59 | 8.6693 | 0.0180 | 0.21% | Rand / Pound | 19:55 | 13.9236 | -0.0068 | -0.05% | Rand / Euro | 19:55 | 11.3267 | 0.0177 | 0.16% | Rand / NZD | 19:58 | 7.3095 | 0.0125 | 0.17% | Rand / AUD | 19:55 | 9.1185 | -0.0125 | -0.14% | Yen / Dollar | 19:59 | 83.4300 | 0.3000 | 0.36% | Euro / Dollar | 19:55 | 0.7647 | -0.0001 | -0.01% | Dollar / Euro | 19:59 | 1.3067 | 0.0001 | 0.01% | Pound / Dollar | 19:55 | 0.6207 | 0.0013 | 0.21% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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13/12/2012 | 169 | 190 | 67 | 426 | 184,265,497 | R12,452,581,811 | 139905 | 1126741 | 12/12/2012 | 243 | 102 | 79 | 424 | 245,021,585 | R13,454,979,817 | 147116 | 1072734 | 11/12/2012 | 205 | 151 | 88 | 444 | 206,603,887 | R12,960,731,199 | 158654 | 1020745 | 10/12/2012 | 166 | 163 | 80 | 409 | 187,897,632 | R11,158,334,700 | 134064 | 1061841 | 07/12/2012 | 163 | 173 | 81 | 417 | 164,339,086 | R9,424,937,345 | 105958 | 1080264 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 34,287.00 | -127.00 | -0.37% | Industrial | 46,235.00 | -27.00 | -0.06% | Mid Cap | 54,156.00 | 358.00 | 0.67% | Small Cap | 40,463.00 | -125.00 | -0.31% | Resource 20 | 50,766.00 | -397.00 | -0.78% | Industrial 25 | 39,772.00 | -80.00 | -0.20% | Financial 15 | 10,767.00 | 17.00 | 0.17% | Financial & Ind. 30 | 43,176.00 | -71.00 | -0.17% | All Share | 38,676.00 | -86.00 | -0.22% | Oil & Gas | 27,385.00 | -568.00 | -2.03% | Mining | 32,884.00 | -174.00 | -0.53% | Gold Mining | 2,240.00 | 7.00 | 0.32% | Platinum Mining | 55.00 | .00 | 0.02% | GENERAL MINING | 8,700.00 | -65.00 | -0.75% | Oil & Gas Producers | 14,724.00 | -305.00 | -2.03% | Basic Materials | 28,232.00 | -117.00 | -0.41% | Chemicals | 16,352.00 | 20.00 | 0.13% | Forestry & Paper | 17,563.00 | 255.00 | 1.48% | Industrial Metals | 27,641.00 | 37.00 | 0.14% | Industrials | 36,998.00 | 413.00 | 1.13% | General Industrials | 107.00 | 1.00 | 1.17% | Consumer Goods | 41,090.00 | -182.00 | -0.44% | Automobiles & Parts | 7,253.00 | 30.00 | 0.42% | Household Goods | 187.00 | 2 | 1.33% | Health Care | 52,608.00 | 45.00 | 0.09% | Beverages | 133.00 | .00 | 0.46% |
| | Index Name | RP | Move | % Move | Food Producers | 70,232.00 | -727.00 | -1.03% | Personal Goods | 670.00 | -10.00 | -1.59% | Consumer Services | 82,942.00 | -346.00 | -0.42% | General Retailers | 67,757.00 | -500.00 | -0.73% | Travel & Leisure | 4,752.00 | -34.00 | -0.73% | Media | 119.00 | .00 | -0.18% | Support Services | 2,273.00 | -20.00 | -0.89% | Telecommunications | 80,314.00 | 192.00 | 0.24% | Financials | 28,858.00 | 38.00 | 0.13% | Banks | 51,143.00 | 177.00 | 0.35% | Non-life Insurance | 47,841.00 | 625.00 | 1.32% | Life Insurance | 25,068.00 | -171.00 | -0.68% | General Financial | 2,653.00 | 36.00 | 1.41% | Technology | 32,743.00 | 41.00 | 0.13% | SHARIAH TOP40 | 3,369.00 | -20 | -0.60% | FTSE/JSE SHARIAH ALL | 3,480.00 | -16 | -0.47% | COAL MINING | 20,309.00 | -19 | -0.10% | FTSE JSE Fledgling | 5,746.00 | -19 | -0.33% | FTSE/JSE Alt X | 985.00 | 17 | 1.79% | SA LISTED PROPERTY | 501.00 | | 0.09% | CAPPED PROPERTY | 408.00 | | 0.25% | RESOURCE | 28,004.00 | -209 | -0.74% | DIVIDEND PLUS | 210.00 | 1 | 0.72% | FTSE/JSE RAFI 40 | 7,863.00 | -11 | -0.15% | Capped Top 40 | 18,069.00 | -71 | -0.39% | Capped All Share | 19,558.00 | -43 | -0.22% | JSE TABACO | 5,792.00 | -22 | -0.39% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | RMI | RAND MERCH INS HLDGS LTD | HOLD | 11/12/2012 | IPL | IMPERIAL HOLDINGS LTD | HOLD | 10/12/2012 | BIL | BHP BILLITON PLC | HOLD | 10/12/2012 | TRU | TRUWORTHS INTERNATIONAL L... | SELL | 10/12/2012 | AMS | ANGLO AMERICAN PLATINUM C... | HOLD | 10/12/2012 |
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Results Expected** Expected | Company Name | Fin. Date | 14/12/2012 | AH-VEST | September 2012 (Interim) | 14/12/2012 | OSIRIS | August 2013 (Final) | 14/12/2012 | RACEC | September 2012 (Final) | 14/12/2012 | TELEMASTR | September 2012 (Final) | 14/12/2012 | WINHOLD | September 2012 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | CULLINAN | 12/12/2012 | 27/12/2012 | 07/01/2013 | R 0.0100 | AFPREFINV | 10/12/2012 | 27/12/2012 | 07/01/2013 | R 0.2606 | NAMPAK 6%P | 06/12/2012 | 18/01/2013 | 28/01/2013 | R 0.0600 | NAMPAK 6.5 | 06/12/2012 | 18/01/2013 | 28/01/2013 | R 0.0650 | REX TRUE6% | 05/12/2012 | 27/12/2012 | 07/01/2013 | R 0.0600 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | ABIL PREF | 19/11/2012 | 07/12/2012 | 18/12/2012 | R 3.2700 | MRPRICE | 14/11/2012 | 07/12/2012 | 18/12/2012 | R 1.3300 | ABIL | 19/11/2012 | 07/12/2012 | 18/12/2012 | R 1.1000 | AME | 20/11/2012 | 07/12/2012 | 18/12/2012 | R 1.0000 | CROOKES | 27/11/2012 | 13/12/2012 | 24/12/2012 | R 0.8000 |
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Upcoming AGMs** Code | Company Name | Date | Status | RAR | Rare Holdings Ltd. | 13/12/2012 | Confirmed | RARP | Rare Holdings Ltd. | 13/12/2012 | Confirmed | SLO | Southern Electricity Company Ltd. | 13/12/2012 | Confirmed | PPE | Purple Capital Ltd. | 14/12/2012 | Confirmed | PPEP | Purple Capital Ltd. | 14/12/2012 | Confirmed |
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