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 The Sharenet Daily 
Tuesday, 14 May 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)

?Smart Beta? Tracking Funds

Globally there is an increase in index tracking unit trusts (also known as mutual funds). According to Morningstar’s latest global flow report, passive products captured 41% of estimated net flows – USD 355 billion – worldwide in 2012, with 22% of the world’s mutual fund and ETF assets already invested in passive strategies. Index funds grew faster than active funds in almost every geographic region in 2012, including Asia, Europe and the US.

In the US, passive strategies grew by 10% last year, and now cover a quarter of total assets under management.

A traditional index such as the JSE All Share index (ALSI) or the Top 40 index is constructed using the market capitalisation weight of the shares in the investment universe – i.e. a company such as SAB Miller (with a market capitalisation of R840billion) has a weight of 11.6% in the Top 40 index, while Woolies (with a market capitalisation of R63 billion) has a weight of just 1.3%. The difference in the weights has everything to do with the relative sizes of the two companies and nothing at all to do with the relative investment merits.

Be that as it may, this typical approach to tracker fund construction has been widely used and enjoys investor acceptance because so many “active” fund managers fail to consistently beat the index.

But a fund that tracks such an index does have its drawbacks. For example as shares and the sectors in which they are classified become more expensive, so the index tracker funds are forced to include them at larger weightings. Conversely a share may fall in price (with a probable increase in its value) and therefore constitute a smaller weighting in the portfolio, forcing a market capitalisation tracker fund to disinvest.

Relative price movements can be seen in the main sector weights of the ALSI, which is what a typical tracker fund would try and replicate. At the peak of the commodity cycle in 2008, local resource shares comprised over half of the weight of the ALSI. A typical market capitalisation weighted tracker fund would be forced to replicate this index, despite there being better value in the other sectors.

There are, however, other ways to construct an index and increasingly these, so called “smart beta” funds, are gaining more and more acceptance. Instead of using traditional market capitalisation weights, an index of shares can be constructed using a range of fundamental factors. For example when constructing a value portfolio one may look for factors such as the price to earnings ratio, the dividend yield, cash flow or price to book information.

In this way, smart beta funds do not track traditional market capitalisation indices, but are developed to track specific desirable features of shares in the investment universe. Smart beta funds are therefore designed to outperform traditional indices.

The Seed Equity Fund

On 30 April 2013, Seed launched the Seed Equity Fund, which invests directly into local equities and listed property under advice from Paul van Rensburg, professor of finance at UCT. Paul, who is also portfolio manager and founder of SalientQuants, has an excellent long term track record managing quant-based portfolios.

The Fund consists of two smart Beta building blocks constructed using fundamental factors – a Value portfolio and a Momentum portfolio. The Value component aims to capture the value effect in markets by purchasing shares that are under-priced relative to earnings, book value and dividends. Conversely, the Momentum component endeavours to capture the momentum effect in markets by purchasing shares that display strong recent price and earnings momentum.

The sector breakdown reveals a Fund that is constructed very differently from the ALSI, with 16.4% in resources, 32.7% in industrials, and 50.8% in financials and property. Because of the construction of the portfolio on fundamental factors, there is an expectation that such a fund outperforms a simple market capitalisation method over time and this has been the case, as depicted in the chart below.


*Value Portfolio and Momentum Portfolio returns are simulated up to Dec 2009 and live thereafter, including a 1.00% pa management fee. Seed Equity Fund returns are simulated using a 50/50 split between Value and Momentum, including a 1.00% management fee.

If you would like to learn more about index funds and specifically the Seed Equity Fund, please do not hesitate to contact us.

Kind regards,

Ian de Lange

021 914 4966

Tue, 14 May 2013
Top News
South African stocks rose on Tuesday, following in the footsteps of major overseas markets, but mining shares restricted the upside momentum due to fresh worries about a union turf war that has slowed production at gold and platinum mines.  Full story

Revenue rose 1% to R1.13 billion (R1.12 billion). Net attributable profit was 11.5% lower at R29.7 million (R33.6 million). In addition, headline earnings per share was also down 11.5% to 138.6cps (156.7cps). Outlook There are no positive signs that cost pressures on consumers will ease  Full story
Russia expelled a U.S. diplomat on Tuesday after saying he had been caught red-handed with disguises, special equipment and wads of cash as he tried to recruit a Russian intelligence agent to work for the CIA.  Full story
Weary and caked in mud, the first group of Kurdish militants to leave Turkey under a peace plan to end three decades of war descended a mountain into Iraq on Tuesday to be met with embraces from PKK comrades.  Full story
Greek public sector workers walked off the job on Tuesday to protest against a government decision to ban a strike by high-school teachers, shutting down several schools and reducing staff at hospitals to a minimum.  Full story
Wall Street stocks rose to record highs on Tuesday on hopes steady U.S. growth will extend their stellar run, while the strengthening dollar. . .  Full story
Gold prices fell on Tuesday, as economic optimism and another intraday record high in U.S. equities sapped bullion's safe-haven appeal.. . .  Full story
European shares stretched to a new five-year closing high on Tuesday, helped by a batch of forecast-beating company results and renewed signs of. . .  Full story
U.S. stocks rose and extended a recent rally on Tuesday, with the Dow and the S&P 500 hitting new intraday highs as investors. . .  Full story

Britain's top share index scaled fresh 5-1/2 year highs on Tuesday, taking heart from a handful of upbeat earnings and with a bid. . .  Full story
U.S. stocks extended gains in late-morning trading on Tuesday, led by gains in banks, including Bank of America and Citigroup. Both the Dow and. . .  Full story
U.S. stocks opened littled changed on Tuesday, continuing a trend of sideways motion as investors took a breather following three weeks of. . .  Full story
European shares steadied near five-year highs on Tuesday after early losses, with charts pointing to further upside and improving U.S. economic fundamentals lifting the. . .  Full story
SA Business
The IMF on Tuesday forecast economic growth of 5.4 percent in 2013 and 5.7 percent in 2014 for the economies of sub-Saharan Africa on the back of rising investment and booming. . .  Full story
South Africa's current account deficit is expected to average 6.2 percent of gross domestic product over the next three years, a National Treasury document presented to parliament on Tuesday said.. . .  Full story
South Africa's rand traded near three-week lows on Tuesday as workers at platinum producer Lonmin began a wildcat strike, rekindling fears of a repeat of last year's work stoppages.. . .  Full story

Zambia's Konkola Copper Mines, owned by London-listed Vedanta Resources, is restarting its Nchanga smelter, which halted production in April, the company. . .  Full story
Village Main Reef, one of South Africa's smaller gold producers, said on Tuesday it would shut "non-profitable" operations at its Buffelsfontein. . .  Full story
The IMF on Tuesday forecast economic growth of 5.4 percent in 2013 and 5.7 percent in 2014 for the economies of sub-Saharan Africa. . .  Full story
South Africa's Treasury sold a total 2.35 billion rand of its 2023, 2031 and 2048 government bonds on Tuesday.. . .  Full story

South Africa's national airline will take delivery of twenty Airbus A320 aircraft valued at 10 billion rand starting in the next. . .  Full story
Platinum miner Lonmin, at the centre of violent South African strikes last year, will tell unions to curb expectations of forthcoming wage talks,. . .  Full story
Ghana's bourse is up more than 50 percent so far this year, but the reluctance of key companies to list in. . .  Full story
Johannesburg-listed shares of Lonmin opened down more than five percent on Tuesday after workers embarked on a wildcat strike, shutting down. . .  Full story
Company News
Muvoni received and accepted a firm intention to make an offer letter from Horizon Investment & Financial Services (Pty) Ltd. ("Horizon"). . .  Full story
Unitholders were referred to the circular dated 27 March 2013 (the "circular") posted to unitholders in respect of, inter alia: *the adoption. . .  Full story
Shareholders were advised of the following changes to the board of directors and various committees of Mixtel: *Enos Banda has been. . .  Full story
Shareholders are advised that Ansys is currently in the process of finalising its results for the year ended 28 February 2013.. . .  Full story
Company Results
Revenue for the year ended 28 February 2013 jumped to R5.6 billion (2012: R5 billion). Gross profit shot up to R792.1. . .  Full story
Revenue increased by 5% to R4.2 billion (R4 billion). Profit before interest and tax declined 56% to R143.3 million (R323.5 million).. . .  Full story
Operating loss narrowed to GBP3.3 million (loss of GBP4.1 million). Loss attributable to ordinary shareholders also improved to GBP3.0 million (GB3.8. . .  Full story
Revenue for the interim period decreased to USD735 million (2012: USD751 million). EBITDA soared to USD168 million (2012: USD75 million), operating. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0040711.32304.000.75%
JSE Top 4017:0036053.37313.000.88%
JSE Gold17:001471.584.000.31%
JSE Financial17:0032000.06210.000.66%
JSE Industrial17:0052629.35672.001.29%
JSE Indust 2517:0045877.12674.001.49%
JSE Resource17:0045132.29-127.00-0.28%
DJ Futures10/0515040.00-4.000.00%
DJ Ind19:5815181.7390.050.60%
SP 50019:581648.1814.410.88%
FTSE 10017:356686.0654.300.82%
All Ords08:515202.507.700.15%
NZSE 5007:484645.85-25.79-0.55%
NameTimeRPMove% Move
Gold $19:591425.98-4.82-0.34%
Gold R19:5813178.5287.390.67%
Gold R/kg19:5842404431200.74%
Silver $19:5923.3930-.2310-0.98%
Platinum $19:591500.0021.001.42%
Palladium $19:59729.5015.902.23%
Brent Crude19:58102.71-1.02-0.98%
Rand / Dollar19:599.23930.08850.97%
Rand / Pound19:5514.04800.06640.47%
Rand / Euro19:5511.95760.07040.59%
Rand / NZD19:587.57820.02430.32%
Rand / AUD19:559.14550.02620.29%
Yen / Dollar19:59102.21800.49200.48%
Euro / Dollar19:550.77230.00230.30%
Dollar / Euro19:591.2941-0.0037-0.29%
Pound / Dollar19:550.65580.00260.40%

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 PUTPROP  71010417.16.%4072
2 ATLATSA  1671711.33.%198792
3 SYNERGY-A  12001009.09.%20000
4 HOSP-B  600509.09.%1992931
5 MMG  212126.00.%774
6 ASSORE  3310018215.82.%129380
7 PETMIN  224125.66.%16096
8 ADAPTIT  258135.31.%44289
9 CURRO  2030924.75.%56919
10 ROLFES  665253.91.%83310
11 RMIH  2550903.66.%1075087
12 RAUBEX  2021713.64.%720746
13 METAIR  35491243.62.%212723
14 BELL  2330803.56.%4283
15 LIFEHC  36851233.45.%2883499
16 SOVFOOD  540183.45.%4070
17 NIVEUS  1600513.29.%50800
18 DATATEC  53811713.28.%103707
19 MAS  1550493.26.%5645
20 WESCOAL  12843.23.%530641

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Major Moves Down
SharenameSaleMove% MoveVolume
1 SYCN-N  246-129-34.40.%152978
2 MAZOR  175-20-10.26.%50000
3 KEATON   150-15-9.09.%55200
4 MIXTEL  355-25-6.58.%27800
5 LONMIN  3770-257-6.38.%1172747
6 SANTOVA  102-6-5.56.%308500
7 IMPLATS  9890-535-5.13.%6770555
8 ILIAD  390-20-4.88.%36114
9 EHSV  1500-75-4.76.%19817
10 CONTROL  110-5-4.35.%29000
11 ALTECH  3280-142-4.15.%18989
12 TELKOM  1280-54-4.05.%2043414
13 ANGLOPLAT  30100-1190-3.80.%577879
14 ARCMITTAL  2600-100-3.70.%873914
15 ABIL  2140-80-3.60.%11023992
16 ARM   17244-553-3.11.%697155
17 ASCEN A  470-15-3.09.%450000
18 MUSTEK  580-18-3.01.%52790
19 KAP  310-9-2.82.%10375
20 SPURCORP  2995-75-2.44.%82743

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New Highs
SharenameSaleHighMove% MoveVolume
1 RMIH  25502550903.66.%1075087
2 MEDCLIN  694069492103.12.%560656
3 ILLOVO  375138301012.77.%899513
4 NASPERSN  661206612016202.51.%1335200
5 WOOLIES  774877681792.36.%2439175
6 SABMILLER  513505141210001.99.%1308839
7 CAPCO  46904736901.96.%942308
8 MMIHLDGS  25802580421.65.%4279538
9 INVLTD  701170441111.61.%548351
10 AFRIMAT  910920101.11.%379291
11 MONDIPLCP  12729127291301.03.%706282
12 DISCOVERY  87008864790.92.%969074
13 OMNIA  15820164581200.76.%199104
14 IMPCB  96000096000070000.73.%5000
15 BATS  52700529483200.61.%943902
16 BIDVEST  2619026640900.34.%875978
17 MASSMART  2030020300500.25.%267352
18 HYPROP  8108827380.10.%146799
19 SUPRGRP  26342673-1-0.04.%610127
20 REMGRO  1960019800-9-0.05.%738236

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New Lows
SharenameSaleLowMove% MoveVolume
1 IMPLATS  98909555-535-5.13.%6770555
2 ANGLOPLAT  3010029658-1190-3.80.%577879
3 ABIL  21402084-80-3.60.%11023992
4 ANGLO  2181521329-354-1.60.%4963247
5 EXXARO  1385013620-50-0.36.%866680

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Index Summary
Index NameRPMove% Move
Top 4036,053.00313.000.88%
Mid Cap56,684.0091.000.16%
Small Cap45,126.00119.000.26%
Resource 2045,132.00-127.00-0.28%
Industrial 2545,877.00674.001.49%
Financial 1511,929.00106.000.90%
Financial & Ind. 3049,418.00649.001.33%
All Share40,711.00304.000.75%
Oil & Gas 31,254.00167.000.54%
Mining 27,654.00-104.00-0.38%
Gold Mining1,471.004.000.31%
Platinum Mining38.00-1.00-4.82%
GENERAL MINING7,840.004.000.05%
Oil & Gas Producers 16,804.0089.000.54%
Basic Materials 24,364.00-80.00-0.33%
Chemicals 19,730.00159.000.81%
Forestry & Paper 21,457.00150.000.71%
Industrial Metals 25,029.00-388.00-1.53%
Industrials 43,012.00-60.00-0.14%
General Industrials
Consumer Goods 49,262.00721.001.49%
Automobiles & Parts 8,036.00281.003.63%
Household Goods158.0010.92%
Health Care 65,932.00644.000.99%
Index NameRPMove% Move
Food Producers 72,391.00501.000.70%
Personal Goods 773.0011.001.48%
Consumer Services 86,974.001594.001.87%
General Retailers 65,483.00787.001.22%
Travel & Leisure 5,469.00-9.00-0.18%
Support Services 2,367.004.000.21%
Telecommunications 84,658.001563.001.88%
Financials 32,000.00210.000.66%
Banks 52,321.00-70.00-0.13%
Non-life Insurance 50,276.001248.002.55%
Life Insurance 30,392.00446.001.49%
General Financial 2,883.0016.000.59%
Technology 38,439.00742.001.97%
SHARIAH TOP40 3,271.00140.43%
FTSE/JSE SHARIAH ALL3,415.00120.37%
COAL MINING17,685.00-61-0.34%
FTSE JSE Fledgling 5,825.00210.37%
FTSE/JSE Alt X 941.00111.27%
RESOURCE 24,679.00-56-0.23%
DIVIDEND PLUS212.0000.14%
FTSE/JSE RAFI 408,083.00360.45%
Capped Top 4019,047.001620.86%
Capped All Share20,626.001530.75%
JSE TABACO 6,734.00410.61%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
15/05/2013BIOSCIDecember 2013 (Interim)
15/05/2013DATATECFebruary 2013 (Final)
15/05/2013HOLDSPORTFebruary 2013 (Final)
15/05/2013HWANGEDecember 2012 (Final)
15/05/2013HWANGE-ADecember 2012 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ANGLD13/05/201324/05/201314/06/2013R 0.5000
RAUBEX13/05/201331/05/201310/06/2013R 0.3500
CLOVERPREF10/05/201324/05/201303/06/2013R 0.0448
OCEANA09/05/201321/06/201301/07/2013R 1.0000
FPT09/05/201324/05/201303/06/2013R 0.2611
Ex Div**
Share NameDec-DateLDTPay-DateAmount
OCTODEC25/04/201310/05/201320/05/2013R 0.7870
PREMIUM25/04/201310/05/201320/05/2013R 0.6620
DCENTRIX16/04/201310/05/201320/05/2013R 0.1202

Upcoming AGMs**
CodeCompany NameDateStatus
PIKPick n Pay Stores Ltd.15/05/2013Unconfirmed
LBHPLiberty Holdings Ltd.17/05/2013Confirmed
LBHP1Liberty Holdings Ltd.17/05/2013Confirmed
LBHP2Liberty Holdings Ltd.17/05/2013Confirmed
LBHLiberty Holdings Ltd.17/05/2013Confirmed

Stock Exchange News Service
14/05/201317:15JUBILEE PLATINUM PLC - Director's Dealing
14/05/201317:15OLD MUTUAL PLC - Notification of Transactions of Directors/Persons Discharging M...
14/05/201317:15ANNUITY PROPERTIES LTD - Proposed property acquisition
14/05/201317:06JSE LIMITED - Index Change Advice - 20130522 Vividend Income Fund Shares In Issu...
14/05/201317:03JSE LIMITED - Index Change Advice - 20130514 Consolidated Infrastructure Group S...
14/05/201317:02GOLD FIELDS LIMITED - Dealing in securities
14/05/201317:00NU-WORLD HOLDINGS LIMITED - Unaudited Interim Report for the six months ended 28...
14/05/201316:40IVUZI INVESTMENTS LIMITED - Full Capital Redemption - IVA320
14/05/201316:25CALGRO M3 HOLDINGS LIMITED - Dealings in securities by a director
14/05/201316:00NETCARE LIMITED - Disclosure of acquisition of securities
14/05/201315:35IVUZI INVESTMENTS LIMITED - New Instrument Listing - IVA332
14/05/201315:30VILLAGE MAIN REEF LIMITED - Village Main Reef announces intention to cease non-p...
14/05/201315:01ATLATSA RESOURCES CORPORATION - Atlatsa announces results for the quarter ended ...
14/05/201315:00ILIAD AFRICA LIMITED - Dealing by Director of a Major Subsidiary
14/05/201315:00AUSTRO GROUP LIMITED - Trading Statement
14/05/201315:00ATLATSA RESOURCES CORPORATION - Atlatsa announces unaudited condensed consolidat...
14/05/201315:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - New Instrument Listing - TWC014
14/05/201315:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - New Instrument Listing - TWCM03
14/05/201315:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - New Instrument Listing - TWCJ03
14/05/201315:00MUVONI TECHNOLOGY GROUP LTD - Confirmation of section 114 scheme of arrangement,...
14/05/201314:53VUKILE PROPERTY FUND LIMITED - Finalisation announcement and salient dates in re...
14/05/201314:50MIX TELEMATICS LIMITED - Changes to the board of Directors
14/05/201313:42LONMIN PLC - Operational Update
14/05/201313:35AFRIMAT LIMITED - Directors' Dealings and Company Secretary Dealings
14/05/201313:20ANSYS LIMITED - Trading Statement
14/05/201313:13ANGLO AMERICAN PLC - Notification of interest in shares
14/05/201313:13FORTRESS INCOME FUND LIMITED - Posting of Circular Incorporating A Notice of Gen...
14/05/201312:45MASSMART HOLDINGS LIMITED - Trading of Massmart ordinary shares on behalf of the...
14/05/201311:22BRITISH AMERICAN TOBACCO PLC - Notification Of Transactions Of Directors, Person...
14/05/201311:05ABSA CAPITAL - Capital Redemption ABBB01
14/05/201310:29RBA HOLDINGS LIMITED - Appointment of new independent non-executive director
14/05/201310:00VILLAGE MAIN REEF LIMITED - Changes to the board of directors and executive func...
14/05/201309:36REMGRO LIMITED - Dealing in securities by a director
14/05/201309:31TAWANA RESOURCES NL - Low Cost Iron Ore Opportunity In Liberia
14/05/201309:30NEW GOLD ISSUER LIMITED - Listing of additional NewGold Platinum Debentures - NG...
14/05/201309:25INVESTEC BANK LIMITED - Breached Barrier- EXXIHB
14/05/201309:20VILLAGE MAIN REEF LIMITED - Dealings in securities by an associate of a director...
14/05/201309:19URANIUM ONE INC - Uranium One Announces 10% Increase in Q1 2013 Production to 3....
14/05/201309:16INVESTEC BANK LIMITED - New Listing ESPIBA
14/05/201309:00CLOVER INDUSTRIES LIMITED - Notification in terms of section 122(3) of the Compa...
14/05/201309:00A E C I LIMITED - Amendment To Proxy Form For Voting At Annual General Meeting T...
14/05/201308:47BHP BILLITON PLC - 2013 Global Metals, Mining and Steel Conference
14/05/201308:40INGUZA INVESTMENTS (PTY) LIMITED - Interest Rate Reset - ING194
14/05/201308:00PHUMELELA GAMING & LEISURE LIMITED - Director's dealings in Securities
14/05/201307:05STEFANUTTI STOCKS HOLDINGS LTD - Reviewed Condensed Consolidated Results for the...
14/05/201307:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
14/05/201307:05CORONATION FUND MANAGERS LIMITED - Reviewed interim results for the six months e...
14/05/201307:05LIFE HEALTHCARE GROUP HOLDINGS LTD - Unaudited Group results and cash dividend d...

Click here for more SENS news