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 The Sharenet Daily 
Tuesday, 05 November 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 - The Cash Safety Trap

The move from defined benefit funds to defined contribution funds and the subsequent transfer of pre and post retirement investment risk to the retiree, has created some very interesting scenarios for retirement funds members both approaching retirement and in their post retirement phase.

I have seen a number of “life stage” retirement portfolios which change the investment risk as a member nears retirement. Whilst the rationale is sound to a degree, those members who are planning to use investment linked living annuities rather than purchasing a guaranteed annuity need to be very careful of moving their entire investment amount to cash a couple of years before retirement. The reason why this happens is that it is assumed that people nearing retirement should not be exposed to capital volatility. Whilst this may be true for people purchasing a guaranteed annuity from an insurance company, this rationale ignores the fact that members transferring to a living annuity often have a thirty year plus time horizon for their investment. A recent presentation by Prescient graphically illustrated this example.

In this example we had a fund member (Mr Cash) who transferred all of his assets into cash three years before retiring in June 2008. Anybody who has had any exposure to equity markets will realize that our poor member’s retirement date was just before the biggest market crash in many years. The graph above also shows an example of a member (Mr Balanced) who stayed in a generic balanced fund (which can have exposure of up to 75% in equities) this is totally contrary to conventional wisdom on retirement funds. Our two members left their investment portfolios as is when transferring to a living annuity.

At retirement date Mr Balanced, who had invested in the generic balanced fund, had approximately R 600 000 more capital than Mr Cash and was feeling very smug. A month or so later he was feeling suicidal and Mr Cash felt that he had made the correct decision. Unfortunately, what normally would happen now is that Mr Balanced would say he cannot afford to stay in the balanced fund because “we are going to have a double dip” and he is going to lose all the money that he had saved for his retirement, he wants to switch into cash to be like Mr Cash (safe and steady). If he listened to his financial advisor (we will assume that he wasn’t feeling suicidal as well) and stayed in his balanced portfolio, three years later he would be substantially better off than Mr Cash.

The problem with long term cash investments, is that whilst you do not see much capital volatility, you are almost guaranteed to lose money in real terms in the long run. The graph illustrates that using absolute return or more flexible balanced funds will reduce this volatility but illustrates the point graphically that if you are going to be using an investment linked living annuity you can’t afford to be in cash type portfolios either before retirement or after retirement.

Kind regards,

Barry Hugo

021 914 4966

Tue, 05 Nov 2013
Top News
South African stocks scaled record closing peaks for the second straight session on Tuesday, with platinum producers such as Impala Platinum leading the uphill charge on a weaker rand.  Full story

Gold prices fell on Tuesday after a reading of U.S. service-sector business activity came in stronger than expected, lifting the dollar, while the euro retreated ahead of a European Central Bank meeting later this week.  Full story
A gunman opened fire in a crowded New Jersey mall late on Monday before killing himself, officials said, sparking a mass evacuation of the complex by police who did not realize he was dead for several hours.  Full story
D emocratic Republic of Congo's M23 rebel group on Tuesday called an end to a 20-month revolt after the army captured its last hilltop strongholds, raising hopes for peace in a region where millions have died in nearly two decades of violence.  Full story
The head of the U.N. nuclear watchdog is considering an invitation to visit Tehran for scheduled talks, a possible sign of progress in a long-stalled investigation into suspected nuclear arms research by Iran.  Full story
European shares slipped off a five-year high on Tuesday, led lower by car-makers and insurers as more European blue chips undershot earnings expectations.. . .  Full story
Britain's top share index weakened on Tuesday, with insurer RSA sinking after a profit warning while banks also dropped sharply.. . .  Full story
Stock markets around the world edged lower on Tuesday as uncertainty over the European Central Bank's next policy move gave investors caution, with. . .  Full story
U.S. stocks fell on Tuesday, as investors took profit following two days of gains, ahead of data later in the week they hoped. . .  Full story

U.S. stocks drifted down to session lows Tuesday in the wake of data showing U.S. service-sector business activity picked up in October and. . .  Full story
U.S. stocks fell at the open on Tuesday ahead of services sector data, putting the S&P 500 on pace to halt a two-day. . .  Full story
European shares halted gains just below five-year highs and the euro steadied near seven-week lows on Tuesday as uncertainty over the European Central. . .  Full story
Britain's benchmark equity index, which hit a 5-month high last week, failed to make much headway on Tuesday as a fall in the. . .  Full story
SA Business
Global brewer SABMiller reached a wage deal with more than 2,000 workers in South Africa on Tuesday, ending a five-week strike that had little impact on beer production.. . .  Full story
South Africa's HSBC Purchasing Managers' Index rose to 51.5 in October from 49.8 in September, its biggest expansion in 10 months as producers recovered from labour strikes, a survey showed on Tuesday.. . .  Full story

South Africa's rand fell more than 1.3 percent against the dollar on Tuesday to its weakest level in two months as. . .  Full story
Steel maker ArcelorMittal South Africa and Kumba Iron Ore said on Tuesday they had reached a supply agreement deal, replacing one. . .  Full story
South Africa's National Union of Mineworkers will consider a revised wage offer from Northam Platinum, the world's fifth largest platinum producer,. . .  Full story
COPY USN. . .  Full story

South Africa's central bank plans to invest in the Korean won and the Australian and New Zealand dollars as it diversifies its currency reserves, Deputy Governor Daniel Mminele said on Tuesday.. . .  Full story
Company News
ArcelorMittal and Sishen Iron Ore Company (Pty) Ltd ("SIOC"), a subsidiary of Kumba, (collectively the "Parties") previously advised that they were. . .  Full story
Further to the trading statement released on SENS on 11 October 2013, a review of the financial results for the year. . .  Full story
With regard to the audited results for the year ended 30 June 2013, shareholders are advised that the abridged annual financial. . .  Full story
Ordinary shareholders and N-Share shareholders of Seardel (collectively, the "Seardel Shareholders") are referred to the announcement released by Seardel on SENS. . .  Full story

A conference call for analysts and investors will be held today, 5 November 2013, at 9.00 GMT. A copy of this announcement is available for download from our website at intugroup.co.uk. . .  Full story
Shareholders are advised that, at the general meeting of StratCorp shareholders held on Friday, 1 November 2013, all the ordinary resolutions were passed by the requisite majorities of votes of shareholders. . .  Full story
The directors of Lib-Hold announced that Steven Braudo and Thabo Dloti have been appointed as executive directors of Lib-Hold, effective 4 November 2013.. . .  Full story
Company Results
Revenue increased to R465.7 million (R351.4 million). Gross profit rose to R53.9 million (R37.1 million) and operating profit soared to R98. . .  Full story
Revenue jumped to R43.0 million (R34.9 million). Gross profit increased to R25.3 million (R22.3 million). However, EBITDA decreased to R3.36 million. . .  Full story
Dividend An interim ordinary dividend of NAD2cps has been declared. Outlook The African continent's demand for micro insurance products has not been exhausted. Demand. . .  Full story
Rockcastle published its first set of quarterly results since changing its year-end from March to June each year in 2013 and. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0045750.2378.790.17%
JSE Top 4017:0040929.7066.360.16%
JSE Gold17:001285.14-12.84-0.99%
JSE Financial17:0033326.89-282.75-0.84%
JSE Industrial17:0059774.59-253.22-0.42%
JSE Indust 2517:0052400.49-249.59-0.47%
JSE Resource17:0052625.891114.662.16%
DJ Futures19:4815575.002.000.01%
DJ Ind20:0015629.87-9.25-0.06%
SP 50020:001765.48-2.45-0.14%
FTSE 10018:356746.84-16.78-0.25%
All Ords07:535425.7041.500.77%
NZSE 5006:484938.7028.020.57%
NameTimeRPMove% Move
Gold $19:591310.10-3.55-0.27%
Gold R20:0013377.176.840.05%
Gold R/kg20:004300762200.05%
Silver $19:5921.6300.01200.06%
Platinum $19:591446.50-.30-0.02%
Palladium $19:59747.001.000.13%
Brent Crude20:00105.72-.19-0.18%
Rand / Dollar19:5910.21080.08190.81%
Rand / Pound19:5516.35260.19861.23%
Rand / Euro19:5513.75800.05740.42%
Rand / NZD28/108.15300.02280.00%
Rand / AUD19:559.68870.04820.50%
Yen / Dollar19:5998.5730-0.0880-0.09%
Euro / Dollar19:550.74230.00250.34%
Dollar / Euro19:591.3468-0.0043-0.32%
Pound / Dollar19:550.6232-0.0030-0.48%

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 BK-ONE-PR  325258.33.%10300
2 IMPLATS  127637175.95.%2468428
3 LITHA  285165.95.%245788
4 ZEDER  459245.52.%324475
5 PALLINGHT  230125.50.%175000
6 WCC  200105.26.%1990
7 FINBOND  236114.89.%688808
8 KEATON   230104.55.%48306
9 ANGLO  2515110014.14.%3772313
10 ANGLOPLAT  4150015003.75.%384495
11 TREMATON  360133.75.%150000
12 LONMIN  54211903.63.%366809
13 CONDUIT  15053.45.%113231
14 AQUARIUS  769253.36.%594411
15 DCENTRIX  465153.33.%188145
16 PREMIUM  1870553.01.%583951
17 VALUE  700202.94.%500
18 COMPCLEAR  360102.86.%10000
19 PHUMELELA  1850502.78.%32469
20 SIBANYE  1537362.40.%2071604

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Major Moves Down
SharenameSaleMove% MoveVolume
1 RANGOLD  214-26-10.83.%100
2 S-OCEAN  144-16-10.00.%300
3 MAS  1720-180-9.47.%900
4 ROCKWELL  350-35-9.09.%4600
5 SEARDEL  285-15-5.00.%257270
6 FONEWORX  240-10-4.00.%76562
7 ARCMITTAL  3774-146-3.72.%625450
8 ARGENT  520-20-3.70.%75912
9 TRADEH  1301-49-3.63.%14169
10 GOLDONE  193-7-3.50.%25903
11 TRENCOR  6845-238-3.36.%83221
12 MIXTEL  535-15-2.73.%293633
13 ESORFRANK  130-3-2.26.%2114586
14 AFROX  2126-49-2.25.%53049
15 ALTRON  2350-55-2.24.%8109
16 GFIELDS  4455-102-2.24.%3274461
17 RMBH  4845-110-2.22.%1793808
18 ARM   19500-437-2.19.%352024
19 INTUPROP  5485-115-2.05.%3282087
20 METROFILE  480-10-2.04.%158958

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New Highs
SharenameSaleHighMove% MoveVolume
1 FINBOND  236236114.89.%688808
2 TREMATON  360360133.75.%150000
3 MASTDRILL  10751075252.38.%1700
4 BILLITON  32270326087372.34.%2675401
5 CML  840085001281.55.%485930
6 DISTELL  13600142001000.74.%31292
7 WESCOAL  21521710.47.%309464
8 SABMILLER  5293753289-122-0.23.%1076158
9 MONDIPLCP  1820618318-44-0.24.%418233
10 MONDILTDP  1817018270-80-0.44.%231857
11 COMAIR  296345-4-1.33.%1937361
12 INTUPROP  54855617-115-2.05.%3282087

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New Lows
SharenameSaleLowMove% MoveVolume
1 ROCKWELL  350101-35-9.09.%4600

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Index Summary
Index NameRPMove% Move
Top 4040,929.7066.360.16%
Mid Cap60,040.27108.340.18%
Small Cap50,781.13223.160.44%
Resource 2052,625.891114.662.16%
Industrial 2552,400.49-249.59-0.47%
Financial 1512,585.89-150.30-1.18%
Financial & Ind. 3055,539.47-391.35-0.70%
All Share45,750.2378.790.17%
Oil & Gas 38,019.6631.030.08%
Mining 31,969.30807.202.59%
Gold Mining1,285.14-12.84-0.99%
Platinum Mining51.002.234.57%
GENERAL MINING9,249.14250.902.79%
Oil & Gas Producers 20,442.4716.690.08%
Basic Materials 28,373.78644.142.32%
Chemicals 23,813.40205.990.87%
Forestry & Paper 29,749.31-46.89-0.16%
Industrial Metals 23,607.81246.531.06%
Industrials 43,927.06-85.40-0.19%
General Industrials 131.49-.49-0.37%
Consumer Goods 56,112.24-213.44-0.38%
Automobiles & Parts 8,869.88-74.73-0.84%
Household Goods259.31-3-1.22%
Health Care 76,825.05303.360.40%
Beverages 180.75-.41-0.23%
Index NameRPMove% Move
Food Producers 71,306.51113.820.16%
Personal Goods 1,036.42-9.88-0.94%
Consumer Services 10,314.03-97.82-0.94%
General Retailers 65,724.56-457.96-0.69%
Travel & Leisure 5,738.7711.010.19%
Media 201.14-3.01-1.47%
Support Services 2,670.06-24.45-0.91%
Telecommunications 9,388.22-51.64-0.55%
Financials 33,326.89-282.75-0.84%
Banks 56,953.97-851.21-1.47%
Non-life Insurance 48,760.1812.760.03%
Life Insurance 32,154.39-295.12-0.91%
General Financial 3,160.81-11.25-0.35%
Technology 45,551.85-137.20-0.30%
SHARIAH TOP40 3,885.95521.36%
FTSE/JSE SHARIAH ALL4,003.25471.19%
COAL MINING19,731.373531.82%
FTSE JSE Fledgling 6,275.36-12-0.19%
FTSE/JSE Alt X 1,070.44-8-0.73%
CAPPED PROPERTY 431.68-0.25%
RESOURCE 28,775.646052.15%
DIVIDEND PLUS218.27-1-0.48%
FTSE/JSE RAFI 409,041.41360.39%
Capped Top 4021,621.35190.09%
Capped All Share23,159.28330.14%
JSE TABACO 7,173.83721.01%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
06/11/2013AFDAWNAugust 2013 (Interim)
06/11/2013MEDCLINSeptember 2013 (Interim)
06/11/2013PERGRINSeptember 2013 (Interim)
06/11/2013PERGRINPSeptember 2013 (Interim)
07/11/2013BSI STEELSeptember 2013 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
TRUSTCO04/11/1322/11/1309/12/13ZAR 0.0200
IVT PREF01/11/1322/11/1302/12/13ZAR 3.3967
AFRIMAT31/10/1329/11/1309/12/13ZAR 0.1100
REDEFINE31/10/1315/11/1325/11/13ZAR 0.3500
SPANJAARD31/10/1315/11/1325/11/13ZAR 0.1500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
PSG14/10/1301/11/1311/11/13ZAR 0.4300

Upcoming AGMs**
CodeCompany NameDateStatus
GRFGroup Five Ltd.05/11/2013Confirmed
FVTFairvest Property Holdings Ltd.05/11/2013Unconfirmed
FVTPFairvest Property Holdings Ltd.05/11/2013Unconfirmed
MURMurray - Roberts Holdings Ltd.06/11/2013Confirmed
NHMNortham Platinum Ltd.06/11/2013Confirmed

Stock Exchange News Service
05/11/201317:35EOH HOLDINGS LIMITED - Dealings In Securities By An Associate Of A Director
05/11/201317:15EXXARO RESOURCES LIMITED - Disclosure of beneficial interests in securities
05/11/201317:00LONDON FINANCE AND INVEST. GRP PLC - Crossing of 7% threshold in terms of UK dis...
05/11/201316:58MMI HOLDINGS LIMITED - Dealing in Securities by a Director
05/11/201316:50FIRSTRAND LIMITED - Dealing in securities by directors
05/11/201316:37ARCELORMITTAL SOUTH AFRICA LIMITED - Withdrawal of cautionary announcement
05/11/201316:31NORTHAM PLATINUM LIMITED - Zondereinde Mine Update
05/11/201316:30OLD MUTUAL PLC - Total Voting Rights and Shares in Issue
05/11/201316:30KUMBA IRON ORE LIMITED - Iron Ore Supply Agreement
05/11/201316:04GROUP FIVE LIMITED - Results of Annual General Meeting
05/11/201315:45METAIR INVESTMENTS LIMITED - Dealings In Securities
05/11/201315:30REDEFINE INTERNATIONAL PLC - TR-1: Notification of Major Interest in Shares
05/11/201315:30IMPERIAL GROUP LIMITED - Release of audited financial statements - Imperial Grou...
05/11/201315:29INDWA INVESTMENTS LIMITED - Interest Rate Reset-IN0Q
05/11/201315:21MAZOR GROUP LIMITED - Unaudited condensed consolidated interim results
05/11/201315:18COMAIR LIMITED - Correction announcement: Dealing in securities by directors
05/11/201315:03BOWLER METCALF LIMITED - Director's Dealing in Securities
05/11/201315:00AUSTRO GROUP LIMITED - Posting of circular, salient dates and time of mandatory ...
05/11/201314:50RESILIENT PROPERTY INCOME FUND LTD - Interest Rate Reset-RES18
05/11/201314:32AUSTRO GROUP LIMITED - Trading Statement
05/11/201314:05RARE HOLDINGS LIMITED - Acquisition of property and assets and withdrawal of cau...
05/11/201314:00ROCKCASTLE GLOBAL REAL EST CO LTD - Availability of abridged unaudited financial...
05/11/201314:00VIVIDEND INCOME FUND LIMITED - Clearance For Directors Dealings
05/11/201313:30B&W INSTRUMENTATION & ELECTRICAL LD - Further Trading Statement
05/11/201313:24MIRANDA MINERAL HOLDINGS LIMITED - Notification in terms of section 122 of the C...
05/11/201313:15CAPITEC BANK HOLDINGS LIMITED - Acceptance by a director of options granted in t...
05/11/201313:14ROCKCASTLE GLOBAL REAL EST CO LTD - Abridged unaudited financial statements for ...
05/11/201312:47CAPEVIN HOLDINGS LIMITED - Changes To The Board Of Directors, Appointment Of A N...
05/11/201312:42DISCOVERY LIMITED - No change statement and notice of annual general meeting
05/11/201312:15HYPROP INVESTMENTS LIMITED - No change statement and notice of Annual General Me...
05/11/201312:00SEARDEL INVESTMENT CORPORATION LTD - Posting of circular and Notice of General M...
05/11/201311:05SEKUNJALO INVESTMENTS LIMITED - Media release
05/11/201310:49SEKUNJALO INVESTMENTS LIMITED - Audited Group Results For The Year Ended 31 Augu...
05/11/201310:45DEUTSCHE BANK AG - Termination of listing
05/11/201310:16COMAIR LIMITED - Dealings in securities by director
05/11/201309:40BNP PARIBAS ARBITRAGE ISSUANCE B.V. - New Listing Announcement
05/11/201309:35COMAIR LIMITED - Dealing in securities by a director
05/11/201309:35SIBANYE GOLD LIMITED - Results of general meeting
05/11/201309:00INTU PROPERTIES PLC - Interim Management Statement for the Period from 1 July 20...
05/11/201308:55BLUE LABEL TELECOMS LIMITED - Directors dealings
05/11/201308:45HOSPITALITY PROPERTY FUND LIMITED - Dealings in securities
05/11/201307:32STRATCORP LIMITED - Results of the General Meeting
05/11/201307:30LIBERTY HOLDINGS LIMITED - Changes in Directorate
05/11/201307:05LONMIN PLC - Total Voting Rights and Capital as at 31 October 2013
05/11/201307:05CONSOLIDATED INFRASTRUCTURE GRP LTD - Dealing in securities by an associate of a...
05/11/201307:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

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