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 The Sharenet Daily 
Tuesday, 02 April 2013 - 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)

The Basics of Bonds

Bonds play an important role in investments but, as an asset class, are often misunderstood by retail investors. While they can provide an attractive yield pickup (when compared to cash and equities) there are some risks that investors need to be aware of.

Yield Curve

There is often mention of the bond yield curve.

What is this, and what does it mean?

The yield curve is basically a ‘best fit’ line that shows the annual return that you will receive for investing into a bond with a given maturity date on the condition that you reinvest interest coupons at current rates.

The chart above shows the current yield curve for South African government bonds. The yield curve is currently upward sloping (i.e. investors receive higher yields for taking a longer view) which is normal. It makes sense that investors would generally demand a higher return in exchange for longer terms on their investment (loan to the government). Inverted yield curves (i.e. long term yields below short term yields) are usually an indication that a recession is approaching, or that the economy is in recession. In this environment investors expect that inflation will fall and are therefore willing to accept lower nominal returns in the future, in the expectation that the real return they receive will be sufficient to compensate for the risks involved.


Bonds are often thought of no or low risk assets. This is only true for certain bonds, and then also only certain definitions of risks.

What are the major risks that bond holders face?

One of the biggest risks for bonds is inflation. As a normal bond essentially promises you a fixed nominal return over a fixed period, any unexpected inflation will eat away at your real (after inflation) return. An example is where an investor buys a 20 year bond yielding 8% (current case in South Africa – see chart above). This investment should, at current inflation, deliver a real return slightly in excess of 2% - which isn’t great, but is at least positive. The risk for this investor is that inflation averages 10% over this period. In this case the investor still receives 8% pa, but will lose purchasing power over the investment period. Conversely, should inflation fall and average 3% over this period, the investor will be rewarded (in real terms).

Default risk is also an important risk, especially for bonds linked to companies (credit bonds). A credit manager made quite a rather poignant statement at a recent meeting, “the probability of a company defaulting increases to 1 (i.e. 100%) as you lengthen the time horizon” – i.e. all companies will eventually default on their obligation given enough time. Investors need to be aware of this risk and ensure that they are being sufficiently compensated for the risk of default. Countries where the government has the ability to print more money and is struggling to pay their debt, will typically speed up the printing press to cover their obligations – governments therefore seldom default on their local currency obligations, but can default where the issue is denominated in another currency (i.e. South Africa issuing USD denominated bonds). Increased money supply typically leads to increased inflation (which affects the purchasing power of your fixed investment) and can lead to hyperinflation (most recently seen in Zimbabwe earlier in this century).

Bonds have their time and place in investment portfolios, but as with other asset classes can either be cheap or expensive – relative to other assets or relative to history. At Seed we believe that locally and globally bonds are currently very expensive as nominal yields are close to all time lows and the real yields are insufficient to compensate for the low starting yield. We therefore have a very low weighting to traditional bonds across our portfolios.

Take care,

Mike Browne

021 914 4966

Tue, 02 Apr 2013
Top News
Gold fell to a 2-1/2 week trough on Tuesday, moving down with other precious metals due to a session high in the dollar index and better appetite for assets seen as higher risk, such as European stocks.  Full story

Sibanye Gold said on Tuesday it had started talks that may lead to job cuts at its Beatrix West operation in South Africa after an underground fire hit output and revenue.  Full story
North Korea said on Tuesday it would revive a mothballed nuclear reactor able to produce bomb-grade plutonium but stressed it was seeking a deterrent capacity and did not repeat recent threats to attack South Korea and the United States.  Full story
A fire caused by faulty electrical equipment killed 13 boys at an Islamic school in Myanmar on Tuesday, the fire service said, although some Muslims voiced concern since it followed a wave of anti-Muslim violence in the Buddhist-majority country.  Full story
Former South African president Nelson Mandela's condition has not changed after a weekend improvement, the government said on Tuesday, and it denied media reports suggesting the anti-apartheid hero had suffered a relapse in his pneumonia.  Full story
U.S. stocks rose on Tuesday, pushing the S&P 500 within striking distance of its all-time intraday high, as healthcare stocks surged after a. . .  Full story
Major stock markets rose on Tuesday, with the U.S. S&P 500 index nearing its all-time intraday high, while the dollar rallied from a. . .  Full story
European shares rose on Tuesday, boosted by Vodafone on rumours of a multi-billion-pound break-up bid for the UK telecoms group, as merger &. . .  Full story
Britain's top shares closed sharply higher on Monday as a return of M&A fervour, after heavyweight Vodafone was reported to be the subject. . .  Full story

U.S. stocks edged higher at the open on Tuesday ahead of factory orders data, putting the S&P 500 within striking distance of its. . .  Full story
European shares extended early gains on Tuesday, with a blue chip index breaking above a resistance level buoyed by M&A news and slightly better-than-feared. . .  Full story
Britain's benchmark share index rose on Tuesday, with a surge in telecoms group Vodafone pushing the index back towards 5-year highs reached. . .  Full story
Hong Kong shares ended a choppy Tuesday slightly higher as markets reopened after the long Easter break, buoyed by gains in index heavyweight. . .  Full story
SA Business
South Africa's seasonally adjusted Purchasing Managers' Index fell back into contraction territory at 49.3 in March from 53.6 in February, after a decline in new sales orders, sponsor Kagiso Tiso Holdings. . .  Full story
South Africa's Standard Bank said on Tuesday it had agreed to fund 20 billion rand worth of renewable energy projects in Africa's biggest economy together with the Industrial and Commercial Bank. . .  Full story
South Africa's rand hovered near two week highs against the dollar on Tuesday with sentiment still buoyant after a sharply narrower February trade deficit, although an overally dim economic outlook could. . .  Full story

South African drugmaker Adcock Ingram on Tuesday fired back at a $675 million takeover bid from conglomerate Bidvest, saying the offer. . .  Full story
New car sales in South Africa totaled 54,946 units in March, a 2.1 percent drop from the same month last year. . .  Full story
South Africa collected 814 billion rand in revenue in the fiscal year ended March 31 compared with a target of 810. . .  Full story
South Africa lost about 11 billion rand in revenue from the mining sector in 2012/13 due to a wave of illegal. . .  Full story

South Africa Finance Minister Pravin Gordhan revised the budget deficit for 2012/13 to 5.1 percent of gross domestic product from a. . .  Full story
South Africa collected 814 billion rand in revenue in the fiscal year ended March 31, compared with a target of 810. . .  Full story
South African platinum producer Lonmin PLC appointed Anglo American Platinum (Amplats) executive Ben Magara as its new chief executive on Tuesday. . .  Full story
Nigerian infrastructure company IHS will manage 2,000 transmitter towers for France Telecom in Cameroon and Ivory Coast in a deal that. . .  Full story
Company News
Shareholders are advised that it was noted by the JSE's proactive monitoring process that the calculation of diluted earnings and diluted. . .  Full story
As a result of increased work related commitments in her capacity as an executive of a large, global group and limited. . .  Full story
Shareholders are referred to the announcements released on SENS on 8 January 2013, 18 January 2013, 15 February 2013 and 19. . .  Full story
The board of directors of Racec notified its shareholders that Mr John Bester has been appointed as an independent non-executive director. . .  Full story

The Independent Board of Adcock has reviewed the Bidvest Letter together with its external advisers, consulted with senior counsel and the Takeover Regulation Panel and engaged with the Company's shareholders representing. . .  Full story
Shareholders are advised that the company's Integrated Annual Report, containing the annual financial statements for the year ended 31 December 2012, was posted to shareholders on 30 March 2013. The Integrated. . .  Full story
Resgen announced a strategic partnership with Noble Group that will facilitate construction of Resgen's Boikarabelo mine. Resgen has made a placement of 21 352 350 ordinary shares at 40 cents per. . .  Full story
Company Results
JohnDan has changed its year-end from September to December each year. Therefore, these results are for a 15 month period and are incomparable to prior financial year results. Revenue amounted to R37.6 million. Gross profit was R23.6 million and operating profit. . .  Full story
Revenue for the interim period decreased by 9% to R47.9 million (2011: R52.6 million). Gross profit was down by 6% to R30 million (2011: R31.8 million), while profit attributable to the equity holders of the parent company grew to R12.2 million. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0040041.32181.000.45%
JSE Top 4017:0035393.26134.000.38%
JSE Gold17:001819.52-36.00-1.97%
JSE Financial17:0031186.98316.001.03%
JSE Industrial17:0049983.52474.000.96%
JSE Indust 2517:0043160.10399.000.93%
JSE Resource17:0047426.37-400.00-0.84%
DJ Futures19:5214585.0081.000.56%
DJ Ind19:5814666.5193.660.64%
SP 50019:581571.829.650.62%
FTSE 10015:196488.8277.081.20%
All Ords07:404995.5015.600.31%
NZSE 5006:484411.41-11.34-0.26%
NameTimeRPMove% Move
Gold $19:591576.10-23.08-1.44%
Gold R19:5814495.65-197.77-1.35%
Gold R/kg19:58467341-4994-1.06%
Silver $19:5927.3300-.6520-2.33%
Platinum $19:591572.00-20.50-1.29%
Palladium $19:59766.00-11.30-1.45%
Brent Crude19:50110.57.880.80%
Rand / Dollar19:589.19600.00790.09%
Rand / Pound19:5513.9055-0.0545-0.39%
Rand / Euro19:5511.82070.01570.13%
Rand / NZD19:587.74330.04230.55%
Rand / AUD19:559.64380.05900.62%
Yen / Dollar19:5893.39000.18000.19%
Euro / Dollar19:550.77970.00140.18%
Dollar / Euro19:581.2821-0.0024-0.19%
Pound / Dollar19:550.66130.00480.73%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 FORBES  45013944.69.%3000
2 LONAFRIC  1243844.19.%96138
3 FINBOND  1704536.00.%3206518
4 WITSGOLD  108018020.00.%3000
5 CONTROL  1371714.17.%40100
6 FONEWORX  2502511.11.%59479
7 SEARDEL  1321210.00.%1169
8 TRNSHEX  377329.28.%124054
9 KAYDAV  128108.47.%832105
10 BRIMSTON  1399997.62.%2972
11 VALUE  620406.90.%55420
12 PETMIN  228136.05.%57154
13 S-OCEAN  16595.77.%477266
14 REUNERT  81004255.54.%205248
15 EASTPLATS  14075.26.%27544
16 PREMIUM  1900935.15.%45323
17 TASTE  394195.07.%55035
18 METROFILE  420205.00.%10723
19 TORRE  13064.84.%206138
20 ZEDER  371174.80.%710219

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Major Moves Down
SharenameSaleMove% MoveVolume
1 NUWORLD  1800-200-10.00.%100
2 ARB  510-30-5.56.%25531
3 ONELOGIX  290-15-4.92.%50174
4 BUILDMX  215-11-4.87.%9878
5 DCENTRIX  333-17-4.86.%6316
6 CONDUIT  172-8-4.44.%371996
7 ROLFES  665-30-4.32.%37457
8 TRUSTCO  114-4-3.39.%600000
9 ANGLOPLAT  37120-1096-2.87.%329633
10 ARM   18395-537-2.84.%325462
11 TRANSCAP  690-20-2.82.%27107
12 LITHA  356-10-2.73.%138391
13 URONE  2460-65-2.57.%10354
14 CALGRO  535-14-2.55.%32211
15 GFIELDS  6854-176-2.50.%1858428
16 HOSP-B  620-15-2.36.%702432
17 LONMIN  4025-93-2.26.%2714690
18 ANGLO  23400-535-2.24.%4123308
19 GOLDONE  245-5-2.00.%21009
20 ANGGOLD  21100-409-1.90.%742571

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New Highs
SharenameSaleHighMove% MoveVolume
1 FINBOND  1702254536.00.%3206518
2 FONEWORX  2502502511.11.%59479
3 TRNSHEX  377377329.28.%124054
4 KAYDAV  128130108.47.%832105
5 ZEDER  371379174.80.%710219
6 GRINDROD  20912127914.55.%2469977
7 SEPHAKU  675700264.01.%128040
8 SUPRGRP  25252525953.91.%823228
9 MPACT  24292501903.85.%236441
10 OASIS  14001400503.70.%493
11 ADVTECH  722762223.14.%134938
12 CML  493049301302.71.%691910
13 CARGO  11451145252.23.%2995
14 REDEFINE  10071025171.72.%2347888
15 SABMILLER  49358495748081.66.%912630
16 BEE-SASOL  30000305003901.32.%163
17 REMGRO  18550187482351.28.%721494
18 BATS  50121503895511.11.%1142856
19 NEPI  64906760400.62.%54889
20 RANGOLD  30130110.33.%1607

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New Lows
SharenameSaleLowMove% MoveVolume
1 GFIELDS  68546849-176-2.50.%1858428
2 ANGGOLD  2110020860-409-1.90.%742571

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Index Summary
Index NameRPMove% Move
Top 4035,393.00134.000.38%
Mid Cap56,338.00433.000.78%
Small Cap44,387.00386.000.88%
Resource 2047,426.00-400.00-0.84%
Industrial 2543,160.00399.000.93%
Financial 1511,691.00125.001.09%
Financial & Ind. 3047,022.00457.000.98%
All Share40,041.00181.000.45%
Oil & Gas 30,859.0034.000.11%
Mining 29,628.00-300.00-1.00%
Gold Mining1,819.00-36.00-1.97%
Platinum Mining47.00.00-0.17%
GENERAL MINING8,018.00-63.00-0.78%
Oil & Gas Producers 16,592.0018.000.11%
Basic Materials 25,944.00-213.00-0.82%
Chemicals 19,803.00194.000.99%
Forestry & Paper 21,984.00251.001.16%
Industrial Metals 24,830.0046.000.19%
Industrials 41,691.00513.001.25%
General Industrials
Consumer Goods 47,479.00765.001.64%
Automobiles & Parts 8,469.00.000.00%
Household Goods170.0000.28%
Health Care 60,564.0063.000.10%
Index NameRPMove% Move
Food Producers 68,618.00-396.00-0.57%
Personal Goods 744.0021.002.92%
Consumer Services 80,546.00105.000.13%
General Retailers 62,903.00679.001.09%
Travel & Leisure 5,273.00-29.00-0.56%
Media 124.00.00-0.01%
Support Services 2,350.0031.001.35%
Telecommunications 77,660.00334.000.43%
Financials 31,186.00316.001.03%
Banks 54,411.00677.001.26%
Non-life Insurance 49,270.00222.000.45%
Life Insurance 28,809.00347.001.22%
General Financial 2,821.0017.000.61%
Technology 36,456.0016.000.05%
SHARIAH TOP40 3,287.00-1-0.06%
FTSE/JSE SHARIAH ALL3,433.0010.03%
COAL MINING20,945.00880.42%
FTSE JSE Fledgling 6,036.0020.04%
FTSE/JSE Alt X 973.00728.10%
RESOURCE 26,099.00-219-0.83%
DIVIDEND PLUS214.0010.86%
FTSE/JSE RAFI 408,125.00190.24%
Capped Top 4018,688.00700.38%
Capped All Share20,281.00930.46%
JSE TABACO 6,404.00701.11%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
05/04/2013VIVIDENDFebruary 2013 (Interim)
11/04/2013ZEDERFebruary 2013 (Final)
11/04/2013ZEDERPFebruary 2013 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
TELEMASTR28/03/201319/04/201329/04/2013R 0.0050
REBOSIS27/03/201312/04/201322/04/2013R 0.4450
KAYDAV27/03/201312/04/201322/04/2013R 0.0700
BASREAD27/03/201313/06/201324/06/2013R 1.7500
FAIRVEST27/03/201319/04/201329/04/2013R 0.0086
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ABSABANK-P12/02/201327/03/201308/04/2013R 29.5055
NEDBANK25/02/201327/03/201308/04/2013R 4.1200
ABSA12/02/201327/03/201308/04/2013R 3.6900
SASFIN-P11/03/201327/03/201308/04/2013R 3.5565
A-V-I11/03/201327/03/201308/04/2013R 0.9000

Upcoming AGMs**
CodeCompany NameDateStatus
CILConsolidated Infrastructure Group Ltd.08/04/2013Unconfirmed

Stock Exchange News Service
02/04/201317:50INVESTEC BANK LIMITED - Expiry of TOPIIA Autocall Index Warrants
02/04/201317:45DEUTSCHE BANK AG - Deutsche Bank AG: DBAGL8 Distribution
02/04/201317:44DEUTSCHE BANK AG - Deutsche Bank AG: Distrubtion
02/04/201317:40JSE LIMITED - Range River Gold Ltd - Amended application form for acceptance of ...
02/04/201317:40METAIR INVESTMENTS LIMITED - Directors' dealings in securities
02/04/201317:33BAYPORT SECURITISATION (RF) LTD - Listing of new financial instruments
02/04/201317:30METAIR INVESTMENTS LIMITED - Directors' dealings in securities
02/04/201317:28ELLIES HOLDINGS LIMITED - Dealings in securities by a director of Ellies
02/04/201317:05ONELOGIX GROUP LIMITED - Dealings in securities by a director of a major subsidi...
02/04/201317:00NETCARE LIMITED - Declaration of Preference Dividend Number 14
02/04/201317:00MR PRICE GROUP LIMITED - Retirement Of Alternate Director
02/04/201317:00VALUE GROUP LIMITED - Restatement of Diluted Earnings Per Share
02/04/201316:45PRIMESERV GROUP LIMITED - Posting of circular and notice of general meeting
02/04/201316:36BSI STEEL LIMITED - Dealing in securities by a director
02/04/201316:33BSI STEEL LIMITED - Dealing in securities by a director
02/04/201316:31INGUZA INVESTMENTS (PTY) LIMITED - Interest Rate Reset - ING187, ING188 and ING1...
02/04/201316:26BSI STEEL LIMITED - Trading in securities by company secretary
02/04/201316:20SASOL LIMITED - Dealing in securities by a director of a major subsidiary of Sas...
02/04/201316:15CAPITAL & COUNTIES PROPERTIES PLC - Director / PDMR Awards
02/04/201316:15BK ONE LIMITED - Amendment to agreement and the renewal of cautionary announceme...
02/04/201316:12GIJIMA GROUP LIMITED - Resignation of independent non-executive director
02/04/201316:09SENTULA MINING LIMITED - Update on the Disposal of the Megacube Assets
02/04/201316:00RACEC GROUP LIMITED - Change to the board of directors - Appointment of non exec...
02/04/201315:54CITY OF TSHWANE METRO MUNICIPALITY - New Instrument Listing
02/04/201315:38CITY OF TSHWANE METRO MUNICIPALITY - New Instrument Listing - COTO1
02/04/201315:30INGUZA INVESTMENTS (PTY) LIMITED - Full Capital Redemption - ING154
02/04/201315:10BRANDCORP (PROPRIETARY) LIMITED - BCP1 and BCP2 - Interest Rate Reset
02/04/201314:55REUNERT LIMITED - Appointment of non-executive director
02/04/201314:44SIBANYE GOLD LIMITED - Dealing in Securities by a Director
02/04/201314:40NIVEUS INVESTMENTS LTD - Notice of General Meeting and Circular posting announce...
02/04/201314:25ADCOCK INGRAM HOLDINGS LIMITED - Statement by Dr Khotso Mokhele, Chairman of Adc...
02/04/201314:24ADCOCK INGRAM HOLDINGS LIMITED - Unsolicited proposal from the Bidvest Group Lim...
02/04/201314:00BRITISH AMERICAN TOBACCO PLC - Voting Rights and Capital
02/04/201313:59RBA HOLDINGS LIMITED - Partially underwritten rights offer
02/04/201313:50BRIMSTONE INVESTMENT CORPORATION LD - Dealings in securities by directors and th...
02/04/201313:45THE BIDVEST GROUP LIMITED - Withdrawal of cautionary announcement
02/04/201313:15ANGLO AMERICAN PLC - Directors Interests
02/04/201313:06ANGLO AMERICAN PLC - Total voting rights
02/04/201313:00SABMILLER PLC - Change in Particulars of an Executive Director
02/04/201312:41FONEWORX HOLDINGS LIMITED - Unaudited Condensed Consolidated Interim Results for...
02/04/201312:37CAPITEC BANK HOLDINGS LIMITED - Capitec Bank Global scale ratings
02/04/201312:15LONRHO PLC - TR-1: Notification of major interest in shares
02/04/201312:13NEDBANK LIMITED - Expiry of Share Instalments - VODNID, SABNII, SAPNIJ, SBKNIM, ...
02/04/201312:10INVESTEC BANK LIMITED - Investec Bank Limited: Senior Bond Issue - IBL49
02/04/201312:04LONMIN PLC - Director Change - appointment of Ms Phuti Mahanyele as a non-execut...
02/04/201312:00LONMIN PLC - Directorate Change - Lonmin Plc Appoints Ben Magara as Chief Execut...
02/04/201311:30THE ZSHARES ETF SCHEME - Distribution Announcement
02/04/201311:30NEDBANK LIMITED - NCLN79 - New Financial Instrument Listing
02/04/201311:30OLD MUTUAL PLC - Form 8.3 Disclosure
02/04/201311:22TSOGO SUN HOLDINGS LIMITED - Change in directorate
02/04/201310:47SIBANYE GOLD LIMITED - Sibanye Gold Enters Into Section 189 Discussions Regardin...
02/04/201310:15FIRSTRAND BANK LIMITED - Interest Rate Reset - FRC157 and FRC159
02/04/201310:10LIBERTY HOLDINGS LIMITED - Posting of Liberty Holdings Integrated Annual Report,...
02/04/201310:04JUBILEE PLATINUM PLC - Reviewed interim results for the six month period ended 3...
02/04/201310:00MERAFE RESOURCES LIMITED - Director's Dealing in Securities
02/04/201309:25SANTAM LIMITED - Director's Dealings
02/04/201308:55FIRESTONE ENERGY LIMITED - Termination of Restated Investment Agreement
02/04/201308:46INTU PROPERTIES PLC - Notification of Transactions of Directors/Persons Discharg...
02/04/201308:41RESOURCE GENERATION LIMITED - Notice under sections 708A(5)(e) of the Corporatio...
02/04/201308:40RESOURCE GENERATION LIMITED - Appendix 3B
02/04/201308:39RESOURCE GENERATION LIMITED - Resource Generation establishes strategic partners...
02/04/201308:32INSIMBI REFRACTORY & ALLOY SUP LTD - Changes to the board
02/04/201308:00AFRICAN EAGLE RESOURCES PLC - Corporate and Dutwa Project Update and Changes to ...
02/04/201308:00BRITISH AMERICAN TOBACCO PLC - Close Period Share Repurchase Programme
02/04/201307:23ATLATSA RESOURCES CORPORATION - Unaudited pro forma financial effects relating t...
02/04/201307:05ATLATSA RESOURCES CORPORATION - CANCELLATION OF S330110 Unaudited Pro Forma Fina...
02/04/201307:05JOHN DANIEL HOLDINGS LIMITED - Audited Provisional Report for the 15 months ende...

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