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 The Sharenet Daily 
Tuesday, 01 October 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)

Seed Weekly - Behavioural Finance and Investing

Standard finance theory proposes that all investors are rational in their seeking of returns and reduction of risk, i.e. the rational economic man, but many studies together with observations of actual behaviour reveal that time and time again investors are not as rational as standard finance theory would have us believe. This is because emotions and biases come into play.

For example psychological studies have demonstrated that the emotional “pain” of losing money from investments is nearly three times greater than the joy of earning money. Small market declines can quickly turn into panic selling, as nervous investors hate to experience short term price volatility even on longer term investments. In such cases, rationality goes out of the window and emotions take over.

Behavioural finance has therefore developed to study emotional and cognitive biases or errors that many investors bring to bear on their decision making.

Perhaps one of the most important works on behavioural finance was introduced by two cognitive psychologists, Amos Tversky and Daniel Kahneman, who began research on decision making under uncertainty. Their research paper, “Prospect Theory: An analysis of Decision under Risk.” was published in 1979. In essence prospect theory describes how individuals evaluate gains and losses.

The various biases can be divided into two main categories cognitive and emotional biases. Within these main categories some of the biases that have been identified include framing, overconfidence, illusion of control, availability, anchoring, mental accounting, optimism, and loss aversion.

One such cognitive bias is representativeness, which is a tool that the brain uses in order to rapidly classify information. It allows the brain to quickly process large amounts of data, but it remains a shortcut, which can often lead to erroneous thinking.

Example: You are given the following information:

Mary is quiet, studious and very concerned with social issues. While an undergraduate at Berkley, she majored in English Literature and Environmental Studies.

Given this information, indicate which one of the following 3 is most probable

1. Mary is a Librarian
2. Mary is a Librarian and a member of the London Literature Society
3. Mary works in the banking industry

The best answer is 3, because of the sheer number of the people working in the banking industry versus librarians and therefore it has the highest probability. Selecting 1, individuals are probably making a representativeness mistake, i.e. by assuming that Mary has traits of librarians (English major, quiet and studious), she is one. While many select choice 2, it cannot be because this is a subset of 1.

Investors often make mistakes with this shortcut.

o Attempting to determine the success of an investment in company A, by categorizing company A as a value share, and so drawing conclusions about risks and rewards from this simple classification.
o Assessing the probability of a successful outcome, using a sample of data and incorrectly assuming that the small set of data is representative of the total population of data.
o Assuming that shares with similar traits are likely to be identical, even though they may be quite different in reality.

With the vast scale of information that investors need to deal with, it is obvious that we so easily fall back on making representative biases in decision making. What is important is that we recognise this pitfall and try to take appropriate steps to reduce or avoid this bias.

Kind regards,

Ian de Lange

021 914 4966

Tue, 01 Oct 2013
Top News
Local markets By its close on Tuesday, the JSE All Share had lost 0.19%, with 3.09% losses in gold mining shares and 1.29% losses in resource shares.  Full story

South Africa's Gold Fields said on Tuesday it has finalised its $270 million acquisition of mines belonging to Barrick Gold Corp in Australia. The company said the acquisition of Barrick Gold's Granny Smith, Lawlers and Darlot gold mines will add about 400,000 ounces of output to i  Full story
Up to one million federal workers were thrown temporarily out of work on Tuesday as the U.S. government partially shut down for the first time in 17 years in a standoff between President Barack Obama and congressional Republicans over healthcare reforms.  Full story
The U.S. government launched the centrepiece of President Barack Obama's landmark healthcare reform on Tuesday, opening online insurance marketplaces across the country for millions of uninsured Americans, but technical glitches prevented early access for many.  Full story
U.N. experts charged with starting the process of verifying and eliminating chemical weapons arrived in Syria on Tuesday for the mission endorsed by the U.N. Security Council.  Full story
Stock markets worldwide climbed on Tuesday while safe-haven gold and Treasury bonds fell as investors largely shrugged off the first partial shutdown of. . .  Full story
U.S. stocks rose on Tuesday after limping to the end of the third quarter, but investors appeared confident a deal could be reached. . .  Full story
European shares rebounded on Tuesday as positive euro zone data and rising expectations that a government crisis in Italy will be allayed boosted. . .  Full story
Gold prices sank 3 percent on Tuesday, with stop-loss orders helping send the safe-haven metal to its lowest level in almost two months,. . .  Full story

Britain's top share index closed flat on Tuesday, lagging other European bourses, as weakness in the gold price and poor sales from Unilever. . .  Full story
U.S. stocks edged higher at the open on Tuesday, showing a modestly positive start to the fourth quarter, though concerns remained following a. . .  Full story
Japan's Nikkei stock average pared much of its early rise to close up 0.2 percent on Tuesday, weighed down by worries about the. . .  Full story
Gold edged higher on Tuesday as the U.S. government shut down some of its operations after Congress failed to agree on a spending. . .  Full story
SA Business
South Africa's rand gained against a wobbly dollar on Tuesday after a U.S. government shutdown, although the local currency might not sustain the gains if a PMI survey points to loss of confidence in the local manufacturing sector.. . .  Full story

New car sales in South Africa decreased 1.5 percent year-on-year in September to 54,281 units, the National Association of Automobile Manufacturers (NAAMSA) said on Tuesday.. . .  Full story
South Africa's Treasury sold a total 2.35 billion rand of its 2023, 2030 and 2041 government bonds on Wednesday. This was the first auction of the new 2030 bond first announced. . .  Full story
South Africa's Purchasing Managers' Index fell to an 8 month low in September as a strike in the auto sector hurt new sales orders, suggesting a slow down in the manufacturing. . .  Full story
Company News
Shareholders are hereby advised that Dr Alexander Landia has been appointed an independent non-executive director of the Board of Barloworld with. . .  Full story
The board of Bluetel advised that David Rivkind has resigned as the company's financial director and that his resignation will take. . .  Full story
Shareholders are advised that Mrs Ilze de Wet has been appointed as company secretary with effect from today. She will also. . .  Full story
The board of Afdawn advises that Wendy Luhabe has resigned as non-executive director with immediate effect.. . .  Full story

Shareholders are advised that the Company's annual financial statements for the year ended 30 June 2013 were posted to shareholders on. . .  Full story
Shareholders are referred to the announcement released by Aspen Holdings on 27 June 2013 wherein it was confirmed that the Aspen. . .  Full story
PN 201310010012A Acquisition from MSD of an API manufacturing business and portfolio of products by Aspen: Conditions precedent met ASPEN PHARMACARE HOLDINGS LIMITED (Incorporated. . .  Full story
Shareholders are referred to the announcement released by Aspen Holdings on 27 June 2013 wherein it was confirmed that the Aspen. . .  Full story
Company Results
Revenue increased to R1.13 billion (R1.11 billion). Gross profit declined to R410.3 million (R421.5 million) and operating profit decreased to R161.4. . .  Full story
Revenue from continuing operations for the year ended 30 June 2013 decreased to R716.8 million (2012: R824.7 million). Gross profit was. . .  Full story
. . .  Full story
Revenue for the year jumped to R833.5 million (R516.3 million) and gross profit was higher at R169.4 million (R155.8 million). Results. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0043946.53-85.30-0.19%
JSE Top 4017:0039371.27-78.57-0.20%
JSE Gold17:001187.66-37.83-3.09%
JSE Financial17:0031844.35168.630.53%
JSE Industrial17:0058176.1758.420.10%
JSE Indust 2517:0051098.3989.660.18%
JSE Resource17:0049341.64-646.82-1.29%
DJ Futures20:0015116.0070.000.47%
DJ Ind20:0015191.5861.910.41%
SP 50020:001693.5111.960.71%
FTSE 10017:356460.01-2.21-0.03%
All Ords08:415206.30-11.40-0.22%
NZSE 5006:504743.877.480.16%
NameTimeRPMove% Move
Gold $19:591286.65-40.90-3.08%
Gold R20:0013015.24-287.70-2.16%
Gold R/kg20:00418440-9544-2.23%
Silver $19:5921.1100-.5280-2.44%
Platinum $19:591384.00-18.50-1.32%
Palladium $19:59716.30-4.70-0.65%
Brent Crude20:00106.94-1.69-1.56%
Rand / Dollar19:5910.11560.09380.94%
Rand / Pound19:5516.37300.17981.11%
Rand / Euro19:5513.70260.14671.08%
Rand / NZD19:598.36970.05010.60%
Rand / AUD19:559.51620.16781.79%
Yen / Dollar19:5998.0560-0.1760-0.18%
Euro / Dollar19:590.7393-0.0022-0.30%
Dollar / Euro19:591.35280.00070.05%
Pound / Dollar19:550.6171-0.0005-0.08%

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 CONTROL  1101010.00.%1000
2 FINBOND  220157.32.%211152
3 TRNPACO  18901216.84.%2600
4 MMG  800516.81.%31340
5 PHUMELELA  16001006.67.%119260
6 LITHA  286114.00.%647582
7 CMH  1400503.70.%27770
8 AFRIMAT  1150403.60.%12407
9 WITSGOLD  880303.53.%4100
10 FONEWORX  24883.33.%58500
11 SOVFOOD  574173.05.%124090
12 MASSMART  173004882.90.%403007
13 MAZOR  18052.86.%4815
14 FIRSTRAND  3436862.57.%6651686
15 ARGENT  579142.48.%37861
16 SUPRGRP  2495602.46.%282819
17 FORTRESSB  890202.30.%42648
18 ESORFRANK  18542.21.%600122
19 INVPROP  1599342.17.%52644
20 COAL  14232.16.%50145

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Major Moves Down
SharenameSaleMove% MoveVolume
1 VUNANI  126-49-28.00.%260
2 METMAR  130-15-10.34.%68396
3 KEATON   180-15-7.69.%38999
4 PAN-AF  250-20-7.41.%1201854
5 GRANPRADE  378-21-5.26.%2450337
6 INTEWASTE  109-6-5.22.%157985
7 CENRAND  380-20-5.00.%5480
8 TOWER  857-42-4.67.%17500
9 CALGRO  635-29-4.37.%161003
10 ONELOGIX  354-16-4.32.%27190
11 ALTRON  2400-100-4.00.%17835
12 NORTHAM  4075-165-3.89.%675048
13 ANGGOLD  12951-491-3.65.%1169580
14 ANGLOPLAT  42047-1572-3.60.%298408
15 HOLDSPORT  4975-175-3.40.%253258
16 DELPROP  870-30-3.33.%66232
17 TORRE  145-5-3.33.%1065900
18 WESCOAL  155-5-3.13.%120085
19 HARMONY  3360-105-3.03.%1374191
20 POYNTING  160-5-3.03.%120229

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New Highs
SharenameSaleHighMove% MoveVolume
1 AFRIMAT  11501160403.60.%12407
2 CROOKES  674067401402.12.%9250
3 SEARDEL  30030051.69.%3373
4 CIL  21902200231.06.%20766
5 RCL  17001832100.59.%495338
6 STEINHOFF  35903613150.42.%6336857
7 TELKOM  24302522-13-0.53.%1707754
8 PSG  81028260-65-0.80.%69671
9 PNR-FOODS  86808882-70-0.80.%80489
10 EOH  70797164-58-0.81.%111183
11 INTEWASTE  109116-6-5.22.%157985

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New Lows
SharenameSaleLowMove% MoveVolume
1 GFIELDS  44804449-129-2.80.%2028984
2 AVENG  24302383-10-0.41.%1295303

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Index Summary
Index NameRPMove% Move
Top 4039,371.27-78.57-0.20%
Mid Cap57,288.58-54.06-0.09%
Small Cap48,262.58-250.17-0.52%
Resource 2049,341.64-646.82-1.29%
Industrial 2551,098.3989.660.18%
Financial 1512,034.9675.790.63%
Financial & Ind. 3053,983.75136.470.25%
All Share43,946.53-85.30-0.19%
Oil & Gas 36,414.60171.780.47%
Mining 29,871.22-513.70-1.69%
Gold Mining1,187.66-37.83-3.09%
Platinum Mining49.54-.99-1.96%
GENERAL MINING8,591.62-131.25-1.50%
Oil & Gas Producers 19,579.4692.370.47%
Basic Materials 26,559.88-422.67-1.57%
Chemicals 23,113.27-118.78-0.51%
Forestry & Paper 27,371.10-147.83-0.54%
Industrial Metals 24,171.42-199.24-0.82%
Industrials 42,688.20145.400.34%
General Industrials 127.77.890.70%
Consumer Goods 54,151.40-275.29-0.51%
Automobiles & Parts 7,472.71.000.00%
Household Goods244.0210.42%
Health Care 73,747.61480.000.66%
Beverages 171.26-4.04-2.30%
Index NameRPMove% Move
Food Producers 71,915.43238.380.33%
Personal Goods 1,022.7314.581.45%
Consumer Services 10,121.3067.270.67%
General Retailers 64,010.40472.060.74%
Travel & Leisure 5,500.97-34.09-0.62%
Media 204.601.680.83%
Support Services 2,601.477.770.30%
Telecommunications 9,444.6596.101.03%
Financials 31,844.35168.630.53%
Banks 55,450.42480.870.87%
Non-life Insurance 47,851.59125.060.26%
Life Insurance 29,935.15233.660.79%
General Financial 2,873.68-.84-0.03%
Technology 43,497.69-366.37-0.84%
SHARIAH TOP40 3,698.23-26-0.69%
FTSE/JSE SHARIAH ALL3,813.96-23-0.61%
COAL MINING20,561.18-261-1.25%
FTSE JSE Fledgling 5,960.59100.16%
FTSE/JSE Alt X 1,056.41100.97%
RESOURCE 27,003.20-360-1.32%
DIVIDEND PLUS211.90-0-0.05%
FTSE/JSE RAFI 408,654.51-25-0.29%
Capped Top 4020,840.29-34-0.17%
Capped All Share22,261.25-41-0.18%
JSE TABACO 6,708.19-137-2.00%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
02/10/2013BEIGEJune 2013 (Final)
02/10/2013BEIGEPJune 2013 (Final)
02/10/2013BEIGEPREF2June 2013 (Final)
02/10/2013CHROMETCOAugust 2013 (Interim)
04/10/2013ADRENNAAugust 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
MICROMEGA30/09/1318/10/1328/10/13ZAR 0.0000
BLACKSTAR30/09/1325/10/1322/11/13GBP 0.0050
LONFIN30/09/1315/11/1311/12/13GBP 0.0040
TELEMASTR30/09/1318/10/1328/10/13ZAR 0.0050
ILRPREF130/09/1318/10/1328/10/13ZAR 1.5647
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SASFIN-P11/09/1327/09/1307/10/13ZAR 3.4774
MMI HLDGS11/09/1327/09/1307/10/13ZAR 0.7600
SPURCORP12/09/1327/09/1307/10/13ZAR 0.5600
RMBTOP4002/09/1327/09/1307/10/13ZAR 0.4153
SIBANYE12/09/1327/09/1307/10/13ZAR 0.3700

Upcoming AGMs**
CodeCompany NameDateStatus
WEAWG Wearne Ltd.02/10/2013Confirmed
BDMBuildmax Ltd.03/10/2013Confirmed
SEPSephaku Holdings Ltd.04/10/2013Confirmed

Stock Exchange News Service
01/10/201317:29BARLOWORLD LIMITED - Appointment of independent non-executive director
01/10/201317:25TELEMASTERS HOLDINGS LIMITED - Director's Dealing in Securities
01/10/201317:00IPSA GROUP PLC - Appointment of director
01/10/201316:45BRANDCORP (PROPRIETARY) LIMITED - BCP1 and BCP2 - Interest Rate Resets
01/10/201316:41INDWA INVESTMENTS LIMITED - Listing of Tap Issue - INA402
01/10/201316:40NIVEUS INVESTMENTS LTD - Director's Dealings
01/10/201316:40INDWA INVESTMENTS LIMITED - New Instrument Listing - INA403
01/10/201316:00NETCARE LIMITED - Declaration of preference dividend number 15
01/10/201315:52GOLD FIELDS LIMITED - Gold Fields Completes Acquisition of Barricks Granny Smith...
01/10/201315:30SABMILLER PLC - Application to List Shares
01/10/201315:26REPUBLIC OF SOUTH AFRICA - Announcemnt R2030 Bond issuance
01/10/201315:25GRAND PARADE INVESTMENTS LIMITED - Dealing in securities by an associate of a di...
01/10/201315:19PAN AFRICAN RESOURCES PLC - Total Voting Rights
01/10/201315:08REMGRO LIMITED - Dealings in securities by a director
01/10/201315:05BLUE LABEL TELECOMS LIMITED - Resignation and Appointment of New Financial Direc...
01/10/201315:00WITWATERSRAND CONS GOLD RESOURCES - Renewal of cautionary announcement regarding...
01/10/201315:00SYCOM PROPERTY FUND - SYC - Finalisation of the AECI Pension Fund and Hyprop Som...
01/10/201315:00HYPROP INVESTMENTS LIMITED - Acquisition of Somerset Mall
01/10/201314:50PINNACLE TECHNOLOGY HOLDINGS LTD - Resignation and appointment of Company Secret...
01/10/201314:50PINNACLE TECHNOLOGY HOLDINGS LTD - Director's dealing in securities
01/10/201314:48OMNIA HOLDINGS LIMITED - Dealings in Securities by an Associate of a Director
01/10/201314:15THE DON GROUP LIMITED - Notification in terms of section 122(3) of The Companies...
01/10/201314:09BEIGE HOLDINGS LIMITED - Updated Trading Statement
01/10/201314:00BRITISH AMERICAN TOBACCO PLC - British American Tobacco p.l.c. Voting Rights an...
01/10/201313:30ROCKCASTLE GLOBAL REAL EST CO LTD - Dealings in securities by associates of dire...
01/10/201313:12SOUTH OCEAN HOLDINGS LIMITED - Director's Dealings
01/10/201313:02WESCOAL HOLDINGS LIMITED - Appointment of new Company Secretary
01/10/201312:47ANGLO AMERICAN PLC - Total voting rights
01/10/201312:17OCTODEC INVESTMENTS LIMITED - Change to the boards of directors
01/10/201311:24ANGLO AMERICAN PLC - Directors Interests
01/10/201311:21ALERT STEEL HOLDINGS LIMITED - Notice Of Annual General Meeting
01/10/201310:37HOSKEN CONSOLIDATED INVESTMENTS LTD - Director's Dealings
01/10/201310:36IVUZI INVESTMENTS LIMITED - Full Capital Redemption - IVA340
01/10/201310:35AFRICAN BANK LIMITED - African Bank issues CHF105 million (Swiss francs) senior ...
01/10/201310:33MAURITIUS COMMERCIAL BANK LIMITED - Increase in aggregate nominal amount of MCB'...
01/10/201310:03LONMIN PLC - Regulatory Release - Total Voting Rights and Capital as at 30 Septe...
01/10/201310:00LONMIN PLC - Regulatory Release - Notification of Directors' and PDMRS' Share De...
01/10/201309:57AFRICAN DAWN CAPITAL LIMITED - Changes to the board
01/10/201309:56KAGISO MEDIA LIMITED - No change statement and notice of AGM
01/10/201309:53NEW GOLD ISSUER LIMITED - NGPLT - Listing of additional NewGold Platinum Debentu...
01/10/201309:45ABSA BANK LIMITED - New Financial Instrument Listing - ACL216
01/10/201309:45TELKOM SA LIMITED - TL13 Interest Rate Reset
01/10/201309:41INGUZA INVESTMENTS (RF) LIMITED - Interest Rate Reset - ING167, ING114 and ING89
01/10/201309:39INDWA INVESTMENTS LIMITED - Full Capital Redemption - IND340
01/10/201309:37IDWALA INDUSTRIAL HOLDINGS PTY LTD - Interest Rate Reset - IDW001, IDW002 and ID...
01/10/201309:35AWETHU BREWERIES LIMITED - Provisional reviewed results for the year ended 30 Ju...
01/10/201309:30NEW GOLD ISSUER LIMITED - NGPLT - Listing of additional NewGold Platinum Debentu...
01/10/201309:24FIRSTRAND BANK LIMITED - Listing of Tap Issues - FRJ17, FRJ19, FRX16, FRX17 and ...
01/10/201309:22FIRSTRAND BANK LIMITED - Listing of Tap Issue - FRJ16, FRJ18, FRX18, FRX24 and F...
01/10/201309:20HOLDSPORT LIMITED - TRP121: notification of disposal of beneficial interest in s...
01/10/201309:10FIRSTRAND BANK LIMITED - New Instrument Listing - FRBI25, FRJ20 and FRX20
01/10/201309:00ASPEN PHARMACARE HOLDINGS LIMITED - Acquisition from MSD of an API manufacturing...
01/10/201308:56AWETHU BREWERIES LIMITED - Trading statement
01/10/201308:39DISCOVERY LIMITED - Dealings in securities by a director
01/10/201308:30FAMOUS BRANDS LIMITED - Trading Update
01/10/201308:00FERRUM CRESCENT LIMITED - financial resuts for year ended 30 June 2013
01/10/201308:00KIBO MINING PLC - Kibo Issues of Shares for Cash Settles all Creditors
01/10/201308:00BLACKSTAR GROUP SE - Transaction in own shares
01/10/201307:45RBA HOLDINGS LIMITED - Operational update
01/10/201307:42PHUMELELA GAMING & LEISURE LIMITED - Audited results for the year ended 31 July ...
01/10/201307:06BRITISH AMERICAN TOBACCO PLC - Transaction in own shares
01/10/201307:05BRITISH AMERICAN TOBACCO PLC - Close Period Share Repurchase Programme
01/10/201307:05HOSKEN CONSOLIDATED INVESTMENTS LTD - No change statement and Notice of Annual G...

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