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 The Sharenet Daily 
Wednesday, 21 August 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 Prospects for Local Equity

As with any asset manager, we at Seed Investments spend the majority of our time performing research on a wide variety of investment ideas and proposals. One area that we focus on, is trying to determine where the value lies when assessing the various asset classes. While the valuation of an asset class relative to its own history is important, it is often equally as important to determine its valuation relative to other asset classes, as investment decisions are never made in isolation.

The future returns from an investment into the stock market are dependent on a number of variables including earnings growth, the interest or discount rate, and the valuation of the market now when compared with its likely valuation in 3 to 5 years time. Ultimately, we have found that when the Price to Earnings (PE) ratio is below 11, investors tend to receive a superior return over the next 5 years. Conversely, as is the case now, where the PE ratio is above 16.5, investors tend to receive a below average return over the next 5 years. The average PE multiple of JSE listed companies over the last 27 years is 13.8. The market’s PE is currently 18, which indicates that extreme caution is required for investors with a 5 year investment horizon.

When plotting the ALSI’s current PE ratio versus its subsequent 5 year return, we can see (in the chart below) that the starting PE has a large impact on the expected return profile. From the chart we can also see that from current levels, investors should expect low returns when compared to history.

We also look at the level of earnings versus its longer term trend. Should earnings be materially above trend AND the PE multiple on these earnings high, there will be additional cause for concern. From our analysis it appears that the market’s current earnings are, on average, close to trend. It may be that certain sectors have inflated earnings while others, such as the resource sector, have depressed earnings.

When comparing equity to property and bonds on a relative yield basis it is evident that the local equity market is also in expensive territory. While the charts below are useful, they don’t capture the full picture, and must therefore be used in conjunction with other valuation tools.

This research, inter alia, has led us to use this month’s market strength to further reduce the allocation to local equity across our Fund range. The Seed Flexible Fund now has its lowest allocation to local equity since it was launched over 3 years ago. Property has underperformed equity by nearly 25% over the past three and a half months, and we have used this weakness to increase the exposure to property. We are mindful of the risks in interest rate sensitive assets (read property and bonds) with interest rates near all time lows, and have therefore rather chosen to take interest rate exposure through property shares that should still deliver inflation beating earnings growth for the foreseeable future.

Take care,

Mike Browne

021 914 4966

Wed, 21 Aug 2013
Top News
Gold prices fell on Wednesday, under pressure from gains in the dollar and uncertainty over whether the U.S. Federal Reserve will begin curbing its bullion-friendly economic stimulus next month.  Full story

Six weeks of wage talks between South African gold producers and unions have failed to bridge the chasm between their positions, increasing the prospect of crippling strikes in a declining industry battling low prices and soaring costs.  Full story
Syria's opposition accused President Bashar al-Assad's forces of gassing many hundreds of people - by one report as many as 1,300 - on Wednesday in what would, if confirmed, be the world's worst chemical weapons attack in decades.  Full story
Deposed Egyptian leader Hosni Mubarak will leave jail as early as Thursday after a court ruling that jolted a divided nation already in turmoil seven weeks after the army toppled Islamist President Mohamed Mursi.  Full story
The European Union stopped short of agreeing immediate cuts in financial or military assistance to Cairo on Wednesday, as the bloc's foreign ministers held emergency talks to find ways to help bring an end to violence in Egypt.  Full story
Global equity markets slid for a fifth day on Wednesday and the dollar strengthened ahead of a report from the latest Federal Reserve. . .  Full story
U.S. stocks dipped on Wednesday, with investors reluctant to make big bets before the Federal Reserve publishes the minutes of its July policy-setting meeting.. . .  Full story
European stocks fell on Wednesday, after a sell-off the previous day, as investors avoided making fresh bets before eagerly awaited Federal Reserve minutes.. . .  Full story
Britain's benchmark equity index fell for the third straight day on Wednesday to six-week lows, with investors anxious over the prospect of a. . .  Full story

U.S. stocks opened slightly lower on Wednesday as investors held off bets ahead of the publication of the minutes of the latest U.S.. . .  Full story
Hong Kong shares posted a fifth-straight day of losses on Wednesday as investors remained cautious on concerns over outflows from Asian markets ahead. . .  Full story
Britain's benchmark equity index edged lower for the third consecutive day on Wednesday, as investors trimmed equity holdings on prospects of a forthcoming scaling. . .  Full story
. . .  Full story
SA Business
South Africa's rand weakened more than 1 percent against the dollar and government bonds dropped after data on Wednesday showed that headline consumer inflation in July breached the ceiling of the. . .  Full story
South Africa's headline consumer inflation breached the ceiling of the central bank's target band in July, overshooting market expectations as higher fuel prices weighed on consumer prices.. . .  Full story
South Africa has yet to emerge from the global financial crisis and the impact of the downturn has had ramifications across society, the country's central bank governor Gill Marcus said on. . .  Full story

The Tanzanian unit of South Africa's Vodacom plans to invest 200 billion shillings to expand its network this year but said. . .  Full story
South Africa's Sibanye Gold said on Wednesday it had acquired the West Rand operations of junior miner Gold One International for. . .  Full story
South African drinks company Distell Group reported a 10 percent increase in full-year profit on Wednesday, boosted by strong sub-Saharan sales. . .  Full story
South African insurer Sanlam has raised 1.16 billion rand through a 10-year subordinated bond issue paying a coupon of 8.7 percent,. . .  Full story

South African construction firm Aveng Ltd said on Wednesday its chief executive, Roger Jardine, would resign at the end of this month.. . .  Full story
The Turkish central bank's latest tightening may briefly boost the lira, but the currency could need far higher interest rates to protect it from the current emerging markets rout.. . .  Full story
India's imposition of capital controls shows how the prospect of a rollback of U.S. monetary policy is already starting a global war for capital.. . .  Full story
Company News
Notification is hereby given that Jennifer Bennette has resigned as an alternate director to Rose Raisibe Matjiu with effect from 21 August 2013. Jennifer Bennette will retain her current position as. . .  Full story
Shareholders are referred to prior cautionary announcements, the last of which was published on 13 August 2013, relating to the International Finance Corporation ("IFC") in principle agreement for the subscription of. . .  Full story
Further to the trading statement released on SENS on 25 July 2013, shareholders are advised that Eqstra is expecting to report a consolidated net profit after taxation from continuing operations for. . .  Full story
Company Results
Revenue for the interim period soared to R308.8 million (2012: R161.3 million). Earnings before interest, taxation, depreciation and amortisation ("EBITDA") shot. . .  Full story
Revenue rose to R11.7 billion (R10.2 million) and operating profit increased to R1.1 billion (R929.6 million). Profit attributable to equity holders. . .  Full story
Revenue rose to R19 billion (R18.8 billion). Operating profit declined to R645.7 million (R658.9 million). Net attributable profit decreased to R424.8. . .  Full story
Revenue for the year decreased to USD66.0 billion (USD72.2 billion) and operating profit was lower at USD19.2 billion (USD23.8 billion). Profit. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0042762.37-2.85-0.01%
JSE Top 4017:0038386.762.750.01%
JSE Gold17:001447.1733.712.38%
JSE Financial17:0030362.01-211.84-0.69%
JSE Industrial17:0055759.64119.380.21%
JSE Indust 2517:0048934.99127.920.26%
JSE Resource17:0050181.6112.580.03%
DJ Futures18:4814918.00-67.00-0.45%
DJ Ind19:5214956.52-46.47-0.31%
SP 50019:521648.79-3.56-0.22%
FTSE 10017:356390.84-62.62-0.97%
All Ords08:445090.3021.500.42%
NZSE 5007:484551.5143.150.96%
NameTimeRPMove% Move
Gold $19:591373.041.860.14%
Gold R20/0813922.4111.370.08%
Gold R/kg19:5245109829910.67%
Silver $19:5922.9900-.0170-0.07%
Platinum $19:591518.50.500.03%
Palladium $19:59745.10-1.20-0.16%
Brent Crude19:38109.78-.12-0.11%
Rand / Dollar19:5910.22360.07180.71%
Rand / Pound19:5516.02550.15010.95%
Rand / Euro19:5513.68770.06010.44%
Rand / NZD20/088.0906-0.1316-1.60%
Rand / AUD19:559.24950.03510.38%
Yen / Dollar19:5997.57000.25500.26%
Euro / Dollar20/080.7453-0.0046-0.61%
Dollar / Euro19:591.3374-0.0044-0.32%
Pound / Dollar19:550.6370-0.0012-0.19%

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 GOLDONE  2304021.05.%198724
2 CLIENTELE  14301209.16.%4500
3 SIBANYE  1067747.45.%1760936
4 ALERT  13553.85.%10026
5 SEARDELN  270103.85.%26300
6 NETCARE  2471863.61.%1099672
7 URONE  2690863.30.%1852
8 WESCOAL  16253.18.%62802
9 ANGGOLD  149094583.17.%1753753
10 LIFEHC  36401103.12.%938172
11 ARB  505153.06.%1011061
12 NET1UEPS  74662012.77.%1305
13 EOH  65741742.72.%51622
14 TRNPACO  1735452.66.%83282
15 ARM   186004542.50.%514228
16 ALTRON  2100502.44.%44089
17 FINBOND  13732.24.%57495
18 WILDRNESS  23052.22.%1000
19 BASREAD  750152.04.%149498
20 CONDUIT  15032.04.%4890425

Click here for more Major Moves...
Major Moves Down
SharenameSaleMove% MoveVolume
1 CADIZ  110-15-12.00.%18930
2 PUTPROP  621-79-11.29.%2000
3 ZURICHSA  23000-2000-8.00.%200
4 ATLATSA  305-24-7.29.%30600
5 KEATON   165-11-6.25.%45820
6 INDEQTY  465-25-5.10.%549
7 SYNERGY-B  620-30-4.62.%1800
8 MMG  314-14-4.27.%15100
9 VIVIDEND  500-19-3.66.%598254
10 SEARDEL  265-10-3.64.%5500
11 TRNSHEX  350-13-3.58.%39217
12 HOSP-B  521-19-3.52.%101386
13 CAPITAL  927-32-3.34.%2628099
14 DRDGOLD  581-19-3.17.%304175
15 POYNTING  160-5-3.03.%6830
16 DIGICOR  165-5-2.94.%221324
17 RESILIENT  4850-140-2.81.%347134
18 EHSV  1850-50-2.63.%627
19 ILIAD  450-12-2.60.%124361
20 BARWORLD  8550-217-2.48.%622525

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New Highs
SharenameSaleHighMove% MoveVolume
1 NETCARE  24712471863.61.%1099672
2 EOH  657466011742.72.%51622
3 TREMATON  30930941.31.%1510
4 MONDIPLCP  16329163702021.25.%311334
5 NASPERSN  86390868009901.16.%1045128
6 RICHEMONT  1030610350680.66.%4057290
7 REDEFINTL  74878610.13.%393858
8 BEE-SASOL  34000341000.1476
9 OMNIA  1945019799-50-0.26.%76685
10 SEARDEL  265290-10-3.64.%5500
11 ATLATSA  305334-24-7.29.%30600

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New Lows
SharenameSaleLowMove% MoveVolume
1 ZURICHSA  2300023000-2000-8.00.%200
2 CAPITAL  927922-32-3.34.%2628099
3 TONGAAT  1188511823-105-0.88.%236908
4 SYCOM  22852262-15-0.65.%86882
5 ACUCAP  40564056-24-0.59.%133555
6 VUKILE  150014990.1383569

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Index Summary
Index NameRPMove% Move
Top 4038,386.762.750.01%
Mid Cap55,225.48-71.93-0.13%
Small Cap46,241.3884.210.18%
Resource 2050,181.6112.580.03%
Industrial 2548,934.99127.920.26%
Financial 1511,517.26-69.30-0.60%
Financial & Ind. 3051,650.90-.63-0.00%
All Share42,762.37-2.85-0.01%
Oil & Gas 35,907.58643.241.82%
Mining 30,575.16-95.71-0.31%
Gold Mining1,447.1733.712.38%
Platinum Mining47.64.050.11%
GENERAL MINING8,679.25-64.45-0.74%
Oil & Gas Producers 19,306.84345.851.82%
Basic Materials 27,010.16-61.78-0.23%
Chemicals 22,483.09-38.39-0.17%
Forestry & Paper 26,335.10229.550.88%
Industrial Metals 23,421.17-31.09-0.13%
Industrials 40,761.09-127.73-0.31%
General Industrials 121.14-.69-0.57%
Consumer Goods 52,943.20214.050.41%
Automobiles & Parts 8,487.1963.400.75%
Household Goods182.3000.12%
Health Care 70,465.231243.341.80%
Beverages 167.22.870.52%
Index NameRPMove% Move
Food Producers 70,168.23-305.90-0.43%
Personal Goods 1,029.336.800.67%
Consumer Services 9,377.7229.300.31%
General Retailers 57,286.61-545.60-0.94%
Travel & Leisure 5,530.65-8.02-0.14%
Media 188.742.151.15%
Support Services 2,854.1445.061.60%
Telecommunications 9,020.61-89.94-0.99%
Financials 30,362.01-211.84-0.69%
Banks 50,833.85-352.12-0.69%
Non-life Insurance 47,119.1030.630.07%
Life Insurance 29,589.56-195.98-0.66%
General Financial 2,877.50-7.36-0.26%
Technology 42,431.25600.781.44%
SHARIAH TOP40 3,655.77-5-0.14%
FTSE/JSE SHARIAH ALL3,761.50-2-0.06%
COAL MINING20,564.271040.51%
FTSE JSE Fledgling 5,641.52-13-0.23%
FTSE/JSE Alt X 995.81-8-0.75%
CAPPED PROPERTY 394.82-1.13%
RESOURCE 27,461.61120.05%
DIVIDEND PLUS205.78-1-0.30%
FTSE/JSE RAFI 408,461.25-3-0.03%
Capped Top 4020,279.76140.07%
Capped All Share21,640.3250.02%
JSE TABACO 6,836.6210.02%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
22/08/2013AFROXJune 2013 (Interim)
22/08/2013EHSVJune 2013 (Interim)
22/08/2013EXXAROJune 2013 (Interim)
22/08/2013GFIELDSJune 2013 (Interim)
22/08/2013GFIELDSPJune 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
IMPERIAL20/08/201319/09/201330/09/2013R 4.4000
IMPERIALP20/08/201319/09/201330/09/2013R 3.4966
BLUETEL20/08/201306/09/201316/09/2013R 0.2500
EMIRA20/08/201306/09/201316/09/2013R 0.5890
SHOPRIT20/08/201306/09/201316/09/2013R 2.1500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
FIRSTRANDB-P01/08/201316/08/201326/08/2013R 3.2025
BATS31/07/201316/08/201330/09/2013R 0.4500
CAPITAL31/07/201316/08/201326/08/2013R 0.3558
SABVEST30/07/201316/08/201326/08/2013R 0.1800
SABVEST-N30/07/201316/08/201326/08/2013R 0.1800

Upcoming AGMs**
CodeCompany NameDateStatus
MRPPMr Price Group Ltd.21/08/2013Confirmed
MPCMr Price Group Ltd.21/08/2013Confirmed
MPCBMr Price Group Ltd.21/08/2013Confirmed
TASTaste Holdings Ltd.22/08/2013Confirmed
ISBInsimbi Refractory and Alloy Supplies Lt...23/08/2013Confirmed

Stock Exchange News Service
21/08/201317:46HUGE GROUP LIMITED - Cancellation of Share Option Agreement with a past director...
21/08/201317:25WORKFORCE HOLDINGS LIMITED - Unaudited condensed interim financial results
21/08/201317:16EFFICIENT GROUP LIMITED - Dealings in securities by directors, the company secre...
21/08/201317:15TRANSPACO LIMITED - Reviewed Condensed Consolidated Results for the year ended 3...
21/08/201317:14TRANSPACO LIMITED - CANCELLATION OF S335380 Reviewed Condensed Consolidated Resu...
21/08/201317:03AUSTRO GROUP LIMITED - Dealings in securities by a director of a major subsidiar...
21/08/201317:02JSE LIMITED - Index Change Advice - 20130826 Sable Holdings Deletion
21/08/201316:37SEPHAKU HOLDINGS LIMITED - Resignation of Alternate Director
21/08/201316:25OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
21/08/201316:20BEIGE HOLDINGS LIMITED - Renewal of Cautionary Announcement
21/08/201315:23MR PRICE GROUP LIMITED - Report on proceedings at annual general meeting
21/08/201315:15NUTRITIONAL HOLDINGS LIMITED - Changes to the Board of Directors
21/08/201314:56MARSHALL MONTEAGLE PLC - Director trade in securities
21/08/201314:50ADCORP HOLDINGS LIMITED - Change to the board
21/08/201314:25MR PRICE GROUP LIMITED - Trading update for the 18 weeks ended 3 August 2013
21/08/201314:15WILLIAM TELL HOLDINGS LIMITED - Resignation of a director
21/08/201313:59FIRSTRAND BANK LIMITED - New Instrument Listing - FRC180
21/08/201313:50GOLD FIELDS LIMITED - Restructuring of Gold Fields board to reflect new strategi...
21/08/201313:26HOSPITALITY PROPERTY FUND LIMITED - Reviewed results for the year ended 30 June ...
21/08/201313:21DISTELL GROUP LIMITED - Results of the Group for the year ended 30 June 2013 and...
21/08/201312:17ABSA BANK LIMITED - NEWUSD; NEWGBP and NEWEUR - Distribution of accrued interest...
21/08/201312:01CHEMICAL SPECIALITIES LIMITED - Correction announcement: Dealing in securities b...
21/08/201312:00ANGLOGOLD ASHANTI LIMITED - AngloGold Ashanti Takes Prudent Step to Relax Loan C...
21/08/201312:00EMIRA PROPERTY FUND - New Instrument Listing - EPFC06 and EPFC07
21/08/201312:00FIRSTRAND BANK LIMITED - Interest Rate Reset - FRJ18, FRS82 and FRC172
21/08/201311:50MERAFE RESOURCES LIMITED - Disclosure of Beneficial Interests in Securities
21/08/201311:37SYNTHESIS FUNDING LIMITED - Synthesis Funding Limited - New Financial Instrument...
21/08/201311:10CALGRO M3 HOLDINGS LIMITED - Dealing in securities by a director
21/08/201311:07ARGENT INDUSTRIAL LIMITED - Results of annual general meeting
21/08/201311:06PSG GROUP LIMITED - Dealing in PSG Group Limited shares by an associate of a dir...
21/08/201310:15EFFICIENT GROUP LIMITED - Trading Statement
21/08/201310:08STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank Of South Africa Limit...
21/08/201310:06STANDARD BANK OF SOUTH AFRICA LD - SCIB: Notice of expiry of Standard Bank share...
21/08/201310:00INTERWASTE HOLDINGS LIMITED - Unaudited condensed consolidated financial results...
21/08/201310:00THE THEKWINI WAREHOUSING CONDUIT (RF) LTD - New Financial Instrument Listing - T...
21/08/201310:00AVENG LIMITED - Resignation of Aveng Group CEO Roger Jardine
21/08/201309:53STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank Of South Africa Limit...
21/08/201309:45FOUNTAINHEAD PROPERTY TRUST - Dealings in securities by an associate of a direct...
21/08/201309:37TRUSTCO GROUP HOLDINGS LIMITED - withdrawal of cautionary
21/08/201309:35STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank Of South Africa Limit...
21/08/201309:30THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited New Fin...
21/08/201309:18HUGE GROUP LIMITED - Director's Dealing in Securities
21/08/201309:07HUGE GROUP LIMITED - Director's Associate Dealing in Securities
21/08/201309:00Transnet SOC Limited - TNF18 FRN Issue
21/08/201308:44FORBES & MANHATTAN COAL CORP - Notice of posting of circular for voting at Speci...
21/08/201308:20EQSTRA HOLDINGS LIMITED - Further Trading Statement and year end results present...
21/08/201307:51BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
21/08/201307:30SIBANYE GOLD LIMITED - Sibanye Gold announces the acquisition of Gold One Intern...
21/08/201307:30GOLD ONE INTERNATIONAL LIMITED - Gold One Merges West Rand Assets with Sibanye G...
21/08/201307:05TRANSPACO LIMITED - Reviewed Condensed Consolidated Results for the year ended 3...

Click here for more SENS news