Tuesday, 17 September 2013 - 20:00
Charts
Seed weekly - Investment Journey
Following up on Barry’s report in July that dealt with the opportunity cost of not taking sufficient risk in your investment portfolio, this report will explain the investment journey that you should be prepared for when making investment decisions.
The mention of investment journey is in reference to the upside potential and downside risks that are inherent when choosing investments that have different risk profiles to money market investments. The rationale is that the higher the risk of the instrument, the higher the payoff to compensate the investor for taking on the additional risk. Naturally this is not a linear relationship but generally holds over the long term (in excess of 5-7 years).
The below graph shows the losses made in the 2008 crash and the subsequent returns achieved by the different indices. From the below, it is clear that an investor who was invested solely in bonds would have experienced a slight uptick during the crash in 2008, but in subsequent years would have struggled to keep up with the returns made by the South African equity market. Investors in a typical money market fund would hardly have experienced any volatility over this period but the graph shows that the performance thereof lags all other investments. While equity markets do experience greater losses, the returns in bull markets typically make up for the initial losses. The chart shows that this is the case, although returns for global equities haven’t been as stellar as local and emerging markets.
Blending different assets classes wisely can have the effect of limiting losses and reducing volatility when compared to a pure equity investment. By investing into multi asset funds (the chart above uses the average Multi Asset – High Equity fund as a proxy) investors are able to reduce their losses in bear markets and then participate in a significant portion of the upside.
The above chart clearly illustrates the different ‘investment journeys’ that investors can take. Should there be a willingness to suffer larger losses over shorter periods, investors can expect to be compensated with excess returns over the long term when compared to lower risk investments.
The above argument is dependent on being invested in an index. Investments in actively managed unit trusts or share portfolios would have resulted in different return profiles that would leave the investor either better or worse off depending on the success of the particular manager.
At Seed we understand that different clients have different needs, especially in terms of the level of risk taken on. Before any investments are made, a recommended strategy unique to the client gets formulated which determines the optimal level of risk that the client should take. The recommended strategy takes into account the entire portfolio, as no investment should be viewed in isolation.
We believe that the limitation of permanent capital losses is vital to the overall success of any investment strategy and are therefore proponents of diversifying into more than one asset class and geographical location. This will take the client on an investment journey that will be more robust in an ever volatile environment.
Kind regards,
Stefan Keeve
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 17 Sep 2013
Top News
Revenue for the year increased to R386.8 million (2012: R340.6 million). Gross profit rose to R60.3 million (2012: R53.1 million), operating profit jumped to R35.7 million (2012: R29.1 million), while profit attributable to the equity holders of the parent strengthened to R26.3 million (2012 Full story
South Africa's rand traded within a few cents of the previous day's five-week highs on Tuesday and should tread in a narrow range in the absence of market-moving data. Full story |
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The Costa Concordia was
pulled upright off the Italian island of Giglio on Tuesday, in a
tense salvage operation that revealed the damage to a once
gleaming cruise liner that had lain on its side for 20 months
after capsizing, killing 32 people. Full storyThe U.S. Navy on Tuesday
ordered a review of security at all of its facilities as
questions arose about how a former serviceman with a history of
violence and mental illness received clearance to work at a base
where he killed 12 people before police shot him dead. Full storyBangladesh's Supreme Court
sentenced an Islamist leader to death for war crimes on Tuesday,
overturning a life sentence imposed by a tribunal, triggering
outrage from his lawyers and protests from his supporters. Full story |
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Markets | U.S. stocks rose on Tuesday on
expectations the Federal Reserve will make only modest changes
to a monetary policy that has been highly. . . Full story | | Auto stocks dragged European
shares off a five-year high on Tuesday when data showing a drop
in car sales last month doused recent. . . Full story | | The dollar retreated and
global equity markets were mostly flat on Tuesday even though
Wall Street advanced, just ahead of the start of. . . Full story | | Britain's top share index fell
off 1-1/2 month highs, with Lloyds bank among the worst
stocks, while traders held off adding to positions. . . Full story |
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| Gold eased to around $1,310 an
ounce on Tuesday on prospects that the U.S. Federal Reserve will
announce a modest reduction in its. . . Full story | | U.S. stocks edged up at the
open on Tuesday ahead of the start of a highly anticipated
Federal Reserve two-day meeting, while inflation. . . Full story | | European shares edged lower on
Tuesday, pressured by weakness in carmakers following a fall in
demand for autos last month, but the market. . . Full story | | Hong Kong shares slipped from
a 17-week high on Tuesday, led by financial counters as turnover
dropped ahead of the two-day meeting at. . . Full story |
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SA Business | South African dairy and beverages maker Clover reported a slight rise in full-year earnings on Tuesday, lifted by higher selling prices, and said it plans to launch new products and enter new markets to boost growth.. . . Full story | | Tanzania's current account deficit widened 4.3 percent to $4.23 billion in the year to July following a decline in receipts of aid and loans, its central bank said on Monday.. . . Full story |
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| Kenya plans to streamline its income and excise taxes and broaden the tax base to improve efficiency and generate more revenues, its finance minister said on Tuesday.. . . Full story | | Employment in South Africa's non-agriculture sector dipped 0.3 percent in the second quarter of this year to 8.437 million people compared with the previous three months, but edged up 0.1 percent. . . Full story | | South African investment bank and asset manager Investec plans to cut 70 jobs from its Australian operation, its chief executive said on Tuesday.. . . Full story |
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Company News | At the general meetings of Investec Ltd. and Investec plc held on the 9 July 2013 shareholders approved the creation of. . . Full story | | Phumelela announced that it expects headline earnings per share and basic earnings per share for the twelve months ended 31 July. . . Full story | | Shareholders were advised that, at the annual general meeting of Keaton held at The Michelangelo Hotel, Nelson Mandela Square, West Street,. . . Full story | | Rockwell announced that it has recovered four rough diamonds each exceeding 100 carats in weight, from its operations in the Middle. . . Full story |
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| Shareholders were referred to the previous cautionary announcements, the last of which was dated 22 August 2013, and were advised that the contents referred to therein have ceased to have any. . . Full story | | Investec plc is today, 17 September 2013, hosting an investor pre-close briefing at 9:00 (BST time) (10:00 South African time) which will focus on developments within the group's core business areas. . . Full story | | Resgen has signed a share subscription agreement with Blumont Group Ltd. ("Blumont") (SGX: A33) for the issue of shares to Blumont representing 15% of Resgen's expanded capital base. The issue of. . . Full story |
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Company Results | Revenue increased to R801.7 million (R636.2 million). Gross profit rose to R167.3 million (R127.2 million) and operating profit before interest improved. . . Full story | | A net attributable loss of R94.4 million (profit of R4 million) was made. In addition, a headline loss per share of. . . Full story | | Revenue for the year ended 30 June 2013 shot up to R8 billion (2012: R7.2 billion). Gross profit rose to R2.2. . . Full story | | Operating loss was recorded at R52.4 million (2012: profit of R77.7 million), while loss attributable to owners of the parent. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 43762.87 | 167.95 | 0.39% | JSE Top 40 | 17:00 | 39174.83 | 114.60 | 0.29% | JSE Gold | 17:00 | 1193.67 | 14.24 | 1.21% | JSE Financial | 17:00 | 31518.74 | 213.15 | 0.68% | JSE Industrial | 17:00 | 57704.49 | 319.99 | 0.56% | JSE Indust 25 | 17:00 | 50577.50 | 256.69 | 0.51% | JSE Resource | 17:00 | 49783.93 | -108.96 | -0.22% | DJ Futures | 19:58 | 15485.00 | 54.00 | 0.35% | DJ Ind | 19:58 | 15542.32 | 47.54 | 0.31% | SP 500 | 19:58 | 1704.89 | 7.29 | 0.43% | Nasdaq | 19:58 | 3744.23 | 26.38 | 0.71% | FTSE 100 | 17:35 | 6570.17 | -52.69 | -0.80% | DAX | 18:08 | 8596.95 | -16.05 | -0.19% | CAC40 | 18:08 | 4145.51 | -6.71 | -0.16% | Nikkei | 08:34 | 14311.67 | -93.00 | -0.65% | Shanghai | 09:28 | 2185.56 | -45.84 | -2.05% | Hang-Seng | 10:28 | 23180.52 | -71.89 | -0.31% | All Ords | 08:43 | 5245.20 | 3.50 | 0.07% | NZSE 50 | 07:50 | 4698.03 | 4.41 | 0.09% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1312.19 | -.01 | 0.00% | Gold R | 19:59 | 12851.50 | -10.81 | -0.08% | Gold R/kg | 19:58 | 413299 | -3922 | -0.94% | Silver $ | 19:59 | 21.7600 | .0340 | 0.16% | Platinum $ | 19:59 | 1424.50 | -10.00 | -0.70% | Palladium $ | 19:59 | 703.25 | 1.05 | 0.15% | R157 | 17:27 | 6.07 | .07 | 1.17% | R186 | 17:42 | 8.15 | .08 | 0.99% | R204 | 17:09 | 7.09 | .08 | 1.14% | R207 | 17:09 | 7.40 | .06 | 0.89% | Brent Crude | 19:58 | 107.75 | -5.03 | -4.46% | Rand / Dollar | 19:59 | 9.7961 | -0.0060 | -0.06% | Rand / Pound | 19:55 | 15.5555 | -0.0121 | -0.08% | Rand / Euro | 19:55 | 13.0870 | 0.0038 | 0.03% | Rand / NZD | 19:59 | 8.0759 | 0.0637 | 0.80% | Rand / AUD | 19:55 | 9.1664 | 0.0213 | 0.23% | Yen / Dollar | 19:59 | 99.1950 | 0.1030 | 0.10% | Euro / Dollar | 19:59 | 0.7486 | -0.0014 | -0.19% | Dollar / Euro | 19:59 | 1.3360 | 0.0025 | 0.19% | Pound / Dollar | 19:55 | 0.6283 | -0.0005 | -0.08% |
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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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17/09/2013 | 204 | 134 | 61 | 399 | 194,367,663 | R13,042,820,642 | 146178 | 1625364 | 16/09/2013 | 188 | 166 | 71 | 425 | 163,939,529 | R10,492,178,552 | 134375 | 1548673 | 13/09/2013 | 145 | 222 | 58 | 425 | 191,622,860 | R10,739,354,239 | 119963 | 101676 | 12/09/2013 | 245 | 128 | 62 | 435 | 233,454,466 | R15,002,000,454 | 159745 | 1860226 | 11/09/2013 | 190 | 160 | 73 | 423 | 186,464,298 | R12,767,237,832 | 150187 | 1254280 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 39,174.83 | 114.60 | 0.29% | Industrial | 57,704.49 | 319.99 | 0.56% | Mid Cap | 57,526.16 | 558.19 | 0.98% | Small Cap | 47,202.68 | 101.08 | 0.21% | Resource 20 | 49,783.93 | -108.96 | -0.22% | Industrial 25 | 50,577.50 | 256.69 | 0.51% | Financial 15 | 11,928.67 | 94.52 | 0.80% | Financial & Ind. 30 | 53,400.23 | 279.05 | 0.53% | All Share | 43,762.87 | 167.95 | 0.39% | Oil & Gas | 36,198.17 | -41.62 | -0.11% | Mining | 30,215.59 | -52.14 | -0.17% | Gold Mining | 1,193.67 | 14.24 | 1.21% | Platinum Mining | 49.69 | .24 | 0.49% | GENERAL MINING | 8,701.75 | -40.10 | -0.46% | Oil & Gas Producers | 19,463.09 | -22.38 | -0.11% | Basic Materials | 26,873.09 | -29.37 | -0.11% | Chemicals | 22,653.52 | 79.96 | 0.35% | Forestry & Paper | 27,801.92 | 72.95 | 0.26% | Industrial Metals | 25,087.25 | 188.45 | 0.76% | Industrials | 43,162.47 | 320.63 | 0.75% | General Industrials | 129.05 | 1.17 | 0.91% | Consumer Goods | 52,848.69 | 32.37 | 0.06% | Automobiles & Parts | 7,576.88 | 13.59 | 0.18% | Household Goods | 228.04 | 0 | 0.00% | Health Care | 75,430.28 | 327.53 | 0.44% | Beverages | 170.21 | .45 | 0.27% |
| | Index Name | RP | Move | % Move | Food Producers | 71,005.48 | 914.56 | 1.30% | Personal Goods | 974.99 | -6.09 | -0.62% | Consumer Services | 10,277.52 | 145.03 | 1.43% | General Retailers | 64,032.46 | 962.70 | 1.53% | Travel & Leisure | 5,573.58 | 11.66 | 0.21% | Media | 208.98 | 3.57 | 1.74% | Support Services | 2,596.41 | -11.85 | -0.45% | Telecommunications | 9,047.70 | 45.24 | 0.50% | Financials | 31,518.74 | 213.15 | 0.68% | Banks | 54,448.89 | 826.75 | 1.54% | Non-life Insurance | 49,257.86 | 171.00 | 0.35% | Life Insurance | 29,977.74 | 222.80 | 0.75% | General Financial | 2,871.00 | -41.93 | -1.44% | Technology | 43,457.05 | 60.44 | 0.14% | SHARIAH TOP40 | 3,694.52 | -2 | -0.06% | FTSE/JSE SHARIAH ALL | 3,810.59 | 5 | 0.12% | COAL MINING | 21,267.34 | 428 | 2.05% | FTSE JSE Fledgling | 5,777.25 | -6 | -0.10% | FTSE/JSE Alt X | 1,002.12 | -3 | -0.26% | SA LISTED PROPERTY | 495.55 | | 0.21% | CAPPED PROPERTY | 415.15 | | 0.27% | RESOURCE | 27,231.48 | -44 | -0.16% | DIVIDEND PLUS | 213.33 | 2 | 0.73% | FTSE/JSE RAFI 40 | 8,623.49 | 33 | 0.38% | Capped Top 40 | 20,737.89 | 70 | 0.34% | Capped All Share | 22,164.55 | 89 | 0.40% | JSE TABACO | 6,714.97 | 21 | 0.32% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | APN | ASPEN PHARMACARE HLDGS | HOLD | 16/09/2013 | MTN | MTN GROUP LIMITED | BUY | 16/09/2013 | JSE | JSE LTD | BUY | 16/09/2013 | DSY | DISCOVERY HOLDINGS LIMITE... | HOLD | 13/09/2013 | HAR | HARMONY GOLD MINING COMPA... | HOLD | 12/09/2013 |
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Results Expected** Expected | Company Name | Fin. Date | 18/09/2013 | CASHBIL | June 2013 (Final) | 18/09/2013 | JASCO | June 2013 (Final) | 18/09/2013 | JASCOP | June 2013 (Final) | 18/09/2013 | KGMEDIA | June 2013 (Final) | 18/09/2013 | PUTPROP | June 2013 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | ROLFES | 16/09/13 | 11/10/13 | 21/10/13 | ZAR 0.0500 | ROCKCASTLE | 13/09/13 | 04/10/13 | 14/10/13 | USD 0.0400 | DAWN | 12/09/13 | 22/11/13 | 02/12/13 | ZAR 0.1650 | SIBANYE | 12/09/13 | 27/09/13 | 07/10/13 | ZAR 0.3700 | RMIH | 12/09/13 | 04/10/13 | 14/10/13 | ZAR 0.5500 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | DSY B PREF | 30/08/13 | 13/09/13 | 23/09/13 | ZAR 4.2151 | BIDVEST | 26/08/13 | 13/09/13 | 23/09/13 | ZAR 3.9600 | NASPERS-N | 25/06/13 | 13/09/13 | 23/09/13 | ZAR 3.8500 | CAPITEC-P | 30/08/13 | 13/09/13 | 23/09/13 | ZAR 3.5706 | ASSORE | 28/08/13 | 13/09/13 | 23/09/13 | ZAR 3.5000 |
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Upcoming AGMs** Code | Company Name | Date | Status | KEH | Keaton Energy Holdings Ltd. | 17/09/2013 | Confirmed | MIX | MiX Telematics Ltd. | 19/09/2013 | Confirmed | PSV | PSV Holdings Ltd. | 20/09/2013 | Confirmed | VLE | Value Group Ltd. | 23/09/2013 | Confirmed | ANP | Annuity Properties Ltd. | 23/09/2013 | Confirmed |
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