Tuesday, 30 April 2013 - 20:00
Charts
The Argument for Property Property is an asset class that most people seem to have an opinion about! Specific experience with property is usually the major determinant in how it’s viewed, and it’s almost impossible to change someone’s thinking...
As multi managers at Seed, part of our job is to determine whether to over or underweight the various asset classes – listed property included – using a variety of indicators to help us determine the intrinsic value of each asset class. It is also interesting to compare our views to those of other asset managers.
For a while now, larger managers have generally been negative on the prospects of listed property going forward, citing excellent multiyear performance coupled with low yields (and a low reference bond yield) and poor growth prospects relative to history. While we agree to a certain degree with this sentiment, we couldn’t help but dig a little deeper.
An asset manager with R200bn in asset allocation mandates (this is the case with at least a couple of managers, but could very well be the case for a few more) that wants to make a sizeable investment into local property (i.e. a 10% position) would need to purchase more than 10% of the local property market! Listed property’s total market capitalisation sits at just over R180bn, so by virtue of their significant assets under management, the local property market becomes largely un-investable to the major asset managers. Seed has just over R1bn of assets under management, and we are therefore able to make a significant investment into all asset classes should they show value (including listed property).
In the case of listed property we do agree that there are risks, particularly if interest rates start to creep up and/or bond yields start to climb, but feel that the opportunities available to investors currently outweigh the negatives. When looking at the yield relative to history, investors are currently receiving slightly in excess of the average yield over the past 9 years (since inception of the SA Listed Property Index – J253). The expectations for growth in yield are much lower than they were in the early 2000’s, but in a low yield environment we are happy with an above inflation initial yield coupled with increases in line with inflation.
Another key valuation point is the relative yield that one can earn on an asset class versus another, compared its historic relationship. The charts below show how property’s yield is currently attractive when compared to the yield one can earn on equity or bonds.
The above charts show that while property isn’t currently a screaming buy when looking purely at valuations, it is preferable to other local assets. A further tailwind for property is the imminent implementation of REIT legislation in South Africa that will bring legislation in line with global property markets and make our property companies more attractive to foreigners. The foreign ownership percentage of property shares is currently much lower than both the local equity and bond markets, and we feel that there will be a larger demand on our property companies going forward.
At Seed we are taking advantage of this opportunity by having a 13% allocation to property in our house view Seed Flexible Fund. This allocation has most definitely added to performance over the past year.
For any questions on our Funds, please feel free to contact us or visit our website directly www.seedinvestments.co.za.
Take care,
Mike Browne
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 30 Apr 2013
Top News
Local markets
At midday on Monday the JSE All Share had fallen 0.25%, as tumbling gold mining shares weighed on the local bourse. Full story
Operating loss narrowed to USD6.5 million (2011: loss of USD14.4 million). Loss attributable to equity holders of the parent fell to USD4.5 million (2011: loss of USD16.1 million), while headline loss per share dropped to USD0.29cps (2011: loss of USD1.01cps).
Dividends
No dividends wer Full story |
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Markets | European shares and oil prices
dipped on Friday at the end of what looked set to be their best
week since November, while. . . Full story | | Britain's benchmark share index
edged lower on Friday to end a three-day rally, as some weak
corporate earnings and caution ahead of U.S.. . . Full story | | European shares opened lower
early on Friday, cooling after five straight sessions of gains,
with some disappointing earnings weighing on indexes.. . . Full story | | China shares ended April
with a whimper on Friday, with growth-sensitive counters from
railway to shipbuilders leading index losses ahead of a
three-day Labour. . . Full story |
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| Australian shares reversed
earlier gains to finish the session 0.1 percent lower on Friday
as the financial sector took a breather from a. . . Full story | | Japan's Nikkei share average
retreated 0.3 percent from a nearly five-year high on Friday, as
investors booked profits ahead of the Golden Week. . . Full story | | European stock futures pointed
to a lower open on Friday following a five-session rally, with
investors trimming their trading positions after some
disappointing company. . . Full story | | Hong Kong shares are set to
start at their highest since March 15 on Friday, with robust
quarterly earnings spurring gains of about. . . Full story |
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Company News | Shareholders are advised that the executive group financial director, Mr. Deon Bekker has resigned with immediate effect. Mr. Johann de Wet,. . . Full story | | Anglo drew attention to an announcement issued by Anglo American Platinum Ltd., the text of which is set out below:. . . Full story | | Anglo American Platinum Ltd is providing an update on the restructuring proposals consultation process. On 28 March 2013, Anglo American Platinum. . . Full story | | Production and financial update for the March 2013 quarter:
*Attributable production from operating mines increased by 20% to 81 471 4E ounces. . . Full story |
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Company Results | Gross rental income was lower at GBP29.4 million (GBP38.5 million). Net attributable profit staged a turnaround to GBP22.3 million (loss of. . . Full story | | Revenue for the interim period lowered to R9.9 million (2012: R12.4 million). Trading loss widened to R12.7 million (2012: loss of. . . Full story | | Revenue for the year ended 28 February 2013 fell to R2 billion (2012: R2.6 billion). Gross profit lowered to R164.9 million. . . Full story | | The following are Osiris' maiden interim results. Gross rental income was GBP36 427. Profit from operations were GBP4 739 . Loss. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 38735.00 | -290.00 | -0.74% | JSE Top 40 | 17:00 | 34068.00 | -295.00 | -0.86% | JSE Gold | 17:00 | 1497.98 | -42.00 | -2.73% | JSE Financial | 17:00 | 30906.69 | 126.00 | 0.41% | JSE Industrial | 17:00 | 49328.73 | -215.00 | -0.43% | JSE Indust 25 | 17:00 | 42692.29 | -196.00 | -0.46% | JSE Resource | 17:00 | 43644.04 | -981.00 | -2.20% | DJ Futures | 19:38 | 14770.00 | 22.00 | 0.15% | DJ Ind | 19:58 | 14831.46 | 12.71 | 0.09% | SP 500 | 19:58 | 1596.58 | 2.97 | 0.19% | Nasdaq | 19:58 | 3326.04 | 19.02 | 0.58% | FTSE 100 | 17:35 | 6430.12 | -27.90 | -0.43% | DAX | 18:08 | 7913.71 | 40.21 | 0.51% | CAC40 | 18:08 | 3856.75 | -11.93 | -0.31% | Nikkei | 08:28 | 13860.86 | -23.27 | -0.17% | Shanghai | 26/04 | 2177.91 | -21.40 | -0.97% | Hang-Seng | 10:28 | 22737.01 | 156.24 | 0.69% | All Ords | 08:44 | 5168.60 | 60.30 | 1.18% | NZSE 50 | 07:48 | 4614.37 | 33.41 | 0.73% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:58 | 1473.18 | -3.29 | -0.22% | Gold R | 19:58 | 13226.94 | -40.20 | -0.30% | Gold R/kg | 19:58 | 425155 | -12521 | -2.86% | Silver $ | 19:58 | 24.2000 | -.3300 | -1.35% | Platinum $ | 19:56 | 1501.25 | -6.75 | -0.45% | Palladium $ | 19:58 | 695.25 | .35 | 0.05% | R157 | 17:21 | 5.19 | .01 | 0.10% | R186 | 17:21 | 6.72 | -.03 | -0.44% | R204 | 17:05 | 5.79 | .01 | 0.17% | R207 | 17:05 | 5.92 | -.02 | -0.34% | Brent Crude | 19:58 | 102.40 | -.40 | -0.39% | Rand / Dollar | 19:58 | 8.9802 | -0.0060 | -0.07% | Rand / Pound | 19:55 | 13.9168 | 0.0273 | 0.20% | Rand / Euro | 19:55 | 11.8088 | 0.0441 | 0.37% | Rand / NZD | 19:58 | 7.6964 | 0.0060 | 0.08% | Rand / AUD | 19:55 | 9.3053 | 0.0070 | 0.08% | Yen / Dollar | 19:57 | 97.5680 | -0.2800 | -0.29% | Euro / Dollar | 19:58 | 0.7601 | -0.0038 | -0.50% | Dollar / Euro | 19:58 | 1.3155 | 0.0063 | 0.48% | Pound / Dollar | 19:55 | 0.6435 | -0.0016 | -0.25% |
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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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30/04/2013 | 151 | 199 | 73 | 423 | 255,898,674 | R15,024,617,262 | 173152 | 1002379 | 29/04/2013 | 143 | 186 | 79 | 408 | 221,766,483 | R16,586,812,314 | 123426 | 1144528 | 26/04/2013 | 206 | 144 | 66 | 416 | 198,860,564 | R12,279,858,348 | 139145 | 1441905 | 25/04/2013 | 266 | 122 | 65 | 453 | 241,945,458 | R14,276,146,173 | 157357 | 1389098 | 24/04/2013 | 166 | 173 | 80 | 419 | 231,127,972 | R15,217,617,551 | 164427 | 1418187 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 34,068.00 | -295.00 | -0.86% | Industrial | 49,328.00 | -215.00 | -0.43% | Mid Cap | 55,662.00 | -143.00 | -0.26% | Small Cap | 44,349.00 | 3.00 | 0.01% | Resource 20 | 43,644.00 | -981.00 | -2.20% | Industrial 25 | 42,692.00 | -196.00 | -0.46% | Financial 15 | 11,426.00 | 55.00 | 0.49% | Financial & Ind. 30 | 46,231.00 | -128.00 | -0.28% | All Share | 38,735.00 | -290.00 | -0.74% | Oil & Gas | 29,348.00 | -148.00 | -0.50% | Mining | 26,934.00 | -697.00 | -2.52% | Gold Mining | 1,497.00 | -42.00 | -2.73% | Platinum Mining | 43.00 | -1.00 | -2.89% | GENERAL MINING | 7,424.00 | -169.00 | -2.23% | Oil & Gas Producers | 15,780.00 | -79.00 | -0.50% | Basic Materials | 23,689.00 | -547.00 | -2.26% | Chemicals | 19,202.00 | 70.00 | 0.37% | Forestry & Paper | 20,721.00 | -66.00 | -0.32% | Industrial Metals | 23,456.00 | 78.00 | 0.33% | Industrials | 40,084.00 | -152.00 | -0.38% | General Industrials | 119.00 | .00 | 0.44% | Consumer Goods | 46,453.00 | -271.00 | -0.58% | Automobiles & Parts | 7,583.00 | -92.00 | -1.20% | Household Goods | 162.00 | -2 | -1.34% | Health Care | 62,551.00 | 309.00 | 0.50% | Beverages | 165.00 | .00 | -0.28% |
| | Index Name | RP | Move | % Move | Food Producers | 67,935.00 | 271.00 | 0.40% | Personal Goods | 719.00 | -7.00 | -1.07% | Consumer Services | 81,648.00 | 90.00 | 0.11% | General Retailers | 62,593.00 | -225.00 | -0.36% | Travel & Leisure | 5,641.00 | -68.00 | -1.20% | Media | 131.00 | 1.00 | 1.23% | Support Services | 2,310.00 | -41.00 | -1.78% | Telecommunications | 76,853.00 | -1333.00 | -1.71% | Financials | 30,906.00 | 126.00 | 0.41% | Banks | 51,699.00 | 305.00 | 0.59% | Non-life Insurance | 44,970.00 | -1862.00 | -3.98% | Life Insurance | 28,509.00 | 80.00 | 0.28% | General Financial | 2,828.00 | 15.00 | 0.53% | Technology | 36,094.00 | 158.00 | 0.44% | SHARIAH TOP40 | 3,099.00 | -50 | -1.62% | FTSE/JSE SHARIAH ALL | 3,249.00 | -48 | -1.47% | COAL MINING | 17,924.00 | -766 | -4.10% | FTSE JSE Fledgling | 5,894.00 | -11 | -0.19% | FTSE/JSE Alt X | 948.00 | -23 | -2.42% | SA LISTED PROPERTY | 566.00 | | 0.52% | CAPPED PROPERTY | 452.00 | | 0.73% | RESOURCE | 23,895.00 | -538 | -2.21% | DIVIDEND PLUS | 208.00 | 0 | -0.22% | FTSE/JSE RAFI 40 | 7,759.00 | -75 | -0.97% | Capped Top 40 | 18,021.00 | -146 | -0.80% | Capped All Share | 19,637.00 | -141 | -0.71% | JSE TABACO | 6,351.00 | -43 | -0.67% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | BIL | BHP BILLITON PLC | BUY | 29/04/2013 | CLS | CLICKS GROUP LTD | SELL | 26/04/2013 | NPN | NASPERS LIMITED | BUY | 26/04/2013 | SUI | SUN INTERNATIONAL LTD | HOLD | 26/04/2013 | HAR | HARMONY GOLD MINING COMPA... | HOLD | 26/04/2013 |
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Results Expected** Expected | Company Name | Fin. Date | 03/05/2013 | BIOSCI | December 2013 (Interim) | 03/05/2013 | HARMONY | March 2013 (Q) | 03/05/2013 | HARMONY-P | March 2013 (Q) | 03/05/2013 | HWANGE | December 2012 (Final) | 03/05/2013 | HWANGE-A | December 2012 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | REDEFINTL | 29/04/2013 | 17/05/2013 | 27/05/2013 | R 0.0147 | PREMIUM | 25/04/2013 | 10/05/2013 | 20/05/2013 | R 0.6620 | OCTODEC | 25/04/2013 | 10/05/2013 | 20/05/2013 | R 0.7870 | CLICKS | 25/04/2013 | 21/06/2013 | 01/07/2013 | R 0.4850 | PIKWIK | 23/04/2013 | 07/06/2013 | 18/06/2013 | R 0.3361 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | NTC PREF | 02/04/2013 | 25/04/2013 | 06/05/2013 | R 3.4966 | SBR003 | 05/02/2013 | 25/04/2013 | 06/05/2013 | R 1.3500 | BARWORLD6%P | 08/04/2013 | 25/04/2013 | 06/05/2013 | R 0.0600 | ZEDER | 08/04/2013 | 25/04/2013 | 06/05/2013 | R 0.0400 |
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Upcoming AGMs** Code | Company Name | Date | Status | BEL | Bell Equipment Ltd. | 30/04/2013 | Confirmed | PAM | Palabora Mining Company Ltd. | 30/04/2013 | Confirmed | PAMCD | Palabora Mining Company Ltd. | 30/04/2013 | Confirmed | GGM | Goliath Gold Mining Ltd. | 30/04/2013 | Confirmed | ABSP | Absa Bank Ltd. | 02/05/2013 | Confirmed |
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