Wednesday, 12 March 2014 - 20:00
Charts
Seed Weekly - Emerging Markets ? Starting to Show Value?
As multi managers we are tasked with determining which asset classes are showing the most value and then finding those managers that are best placed to capitalise on the opportunities presented – thereby generating satisfactory risk adjusted returns for our clients.
Asset class, in this context, is an extremely wide term and can be defined as any asset class in any region (or grouping thereof). A few examples include, South African banking companies, global equity, European property, emerging market debt, precious metals, small cap equity, Asian technology companies, etc. As can be seen from the above, asset classes can either be very broadly (global equity) or narrowly (South African banking) defined. We typically allocate into broader asset classes, allowing the underlying manager to find the best opportunities, but there will be times when we’ll make a special allocation to a more tightly defined asset class where we see a special opportunity.
Making these kinds of decisions requires a fair amount of research into the relative performance and valuations of the various asset classes, how the returns are correlated with other asset classes in our Funds, prospects for the asset class, whether there are any managers that have shown a proven ability in the specific asset class, etc.
Over the past few years, for instance, our global equity allocation has been allocated purely to high quality, globally branded companies that have delivered excellent – market beating – returns. While the returns have been great, we understand that all good things come to an end, and valuations of these companies are not as attractive as they were in 2011. We are currently in the process of reducing our allocation to high quality companies in favour of more a more cyclical allocation. Also on the radar is whether to move a portion into Emerging Market (EM) equities.
The chart below shows the relative performance of Developed Market (DM) and EM equities since the inception of the EM index (both in US$). The line going up represents EM outperformance and the line heading down represents DM outperformance.
Emerging Market equities have outperformed Developed Markets by 3.6% per annum over this period, but have been underperforming since October 2010. The underperformance has been a combination of high starting relative valuations (in local currency) being de-rated to more normal levels and the vast majority of EM currencies weakening against the US$ over the past 3 years or so. There naturally is risk that Emerging Markets can continue to underperform over the next couple years, but the entry point is getting more attractive both on a currency and a valuation viewpoint.
We are busy with the process of identifying a suitable EM manager and determining when the correct entry point will be, so that when the time is right we are ready to invest!
Take care,
Mike Browne
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Wed, 12 Mar 2014
Top News
South African stocks fell just over 1 percent on Wednesday, as concerns about slowing growth in China hit mining companies such as Assore and African Rainbow Minerals. Full story
South Africa's parliament passed changes to its main petroleum law on Wednesday, giving the state a stake of 20 percent in new gas and oil exploration and production ventures, a move industry said would have a chilling effect on investment. Full story |
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M alaysia's military has traced what could have been the jetliner missing for almost five days to an area south of the Thai holiday island of Phuket, hundreds of miles from its last known position, the country's air force chief said on Wednesday. Full storyTens of thousands of mourners
chanting anti-government slogans marched through central
Istanbul on Wednesday for the funeral of a teenager wounded in
street protests last summer whose death has sparked renewed
unrest across Turkey. Full story |
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Markets | European shares fell on
Wednesday, sending benchmark indexes to one-month lows, as
mounting worries over China's economic growth rate and
persistent tensions in Ukraine. . . Full story | | Britain's top share index fell
to a one-month low on Wednesday, led down by G4S after the
security firm agreed a settlement with. . . Full story | | Global stock indexes declined
for a fourth day and copper hit four-year lows before rebounding
on Wednesday as increasing concern about China's economic
slowdown. . . Full story | | U.S. stocks were little
changed on Wednesday, as equities recouped much of their earlier
declines amid signs of progress in diplomatic attempts to. . . Full story |
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| Gold hit a near six-month high
on Wednesday, as fears of more corporate defaults in China and
the geopolitical tug-of-war between Russia, Ukraine. . . Full story | | U.S. stocks fell at the open
on Wednesday, putting the S&P 500 on track for a third straight
decline, as concerns grew over. . . Full story | | European shares fell in early
trading on Wednesday, with poor earnings outlook from some
companies and concerns about the Chinese credit market hurting
sentiment.. . . Full story | | Chinese shares listed in
Hong Kong closed at their lowest since July on Wednesday, led by
resources-related counters after commodities markets again
slumped to. . . Full story |
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SA Business | South Africa ended 2013 with a smaller current account deficit than expected but the narrowing was driven by the biggest tumble in imports in four years, a sign that Africa's powerhouse. . . Full story | | Spending in South Africa contracted in the fourth quarter of 2013 as households curbed consumption and the pace of growth in fixed capital spending declined, the central bank said on Wednesday.. . . Full story | | South Africa's rand was trading at its lowest level against the dollar in more than a week on Wednesday amid heightened risk aversion due to political tensions in Ukraine.. . . Full story |
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| South African steel and vanadium producer Evraz Highveld said on Wednesday it was unable to borrow more money after it posted a loss for the second straight year, and said there was doubt about the company's future as a going concern.. . . Full story | | Emerging stocks hit a one-month
low on Wednesday after fears about China's economy dragged down
copper and other commodities, while worries about western
sanctions on Russia weighed on the rouble, forcing the central
bank to intervene.. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 47188.84 | -423.97 | -0.89% | JSE Top 40 | 17:00 | 42607.46 | -448.53 | -1.04% | JSE Gold | 17:00 | 1594.72 | 21.29 | 1.35% | JSE Financial | 17:00 | 33318.37 | -300.38 | -0.89% | JSE Industrial | 17:00 | 61888.48 | -498.18 | -0.80% | JSE Indust 25 | 17:00 | 54862.02 | -497.40 | -0.90% | JSE Resource | 17:00 | 54975.16 | -628.36 | -1.13% | DJ Futures | 10/03 | 14331.64 | -100.36 | 0.00% | DJ Ind | 19:52 | 16322.77 | -28.48 | -0.17% | SP 500 | 20:00 | 1865.08 | -2.55 | -0.14% | Nasdaq | 20:00 | 4314.65 | 7.46 | 0.17% | FTSE 100 | 18:35 | 6620.90 | -64.62 | -0.97% | DAX | 19:08 | 9188.69 | -119.10 | -1.28% | CAC40 | 19:08 | 4306.26 | -43.46 | -1.00% | Nikkei | 08:38 | 14830.39 | -393.72 | -2.59% | Shanghai | 09:28 | 1997.69 | -3.47 | -0.17% | Hang-Seng | 10:28 | 21901.95 | -367.66 | -1.65% | All Ords | 07:39 | 5400.50 | -28.80 | -0.53% | NZSE 50 | 06:48 | 5096.53 | -5.41 | -0.11% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1366.85 | 17.77 | 1.32% | Gold R | 19:59 | 14789.03 | 160.95 | 1.10% | Gold R/kg | 20:00 | 475499 | 5937 | 1.26% | Silver $ | 19:59 | 21.2200 | .3740 | 1.79% | Platinum $ | 19:59 | 1473.50 | 14.00 | 0.96% | Palladium $ | 19:59 | 774.00 | 7.00 | 0.91% | R157 | 16:34 | 7.06 | .03 | 0.43% | R186 | 16:34 | 8.60 | .04 | 0.47% | R204 | 16:34 | 7.95 | .04 | 0.44% | R207 | 16:34 | 8.23 | .03 | 0.37% | Brent Crude | 20:00 | 107.88 | -.20 | -0.19% | Rand / Dollar | 19:59 | 10.8205 | -0.0229 | -0.21% | Rand / Pound | 19:55 | 17.9487 | -0.0488 | -0.27% | Rand / Euro | 19:55 | 15.0491 | 0.0145 | 0.10% | Rand / NZD | 19:59 | 9.1800 | -0.0078 | -0.08% | Rand / AUD | 19:55 | 9.7226 | -0.0178 | -0.18% | Yen / Dollar | 19:59 | 102.6560 | -0.3490 | -0.34% | Euro / Dollar | 19:59 | 0.7192 | -0.0024 | -0.33% | Dollar / Euro | 19:59 | 1.3904 | 0.0047 | 0.34% | Pound / Dollar | 19:55 | 0.6015 | -0.0001 | -0.02% |
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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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12/03/2014 | 155 | 220 | 61 | 436 | 220,844,039 | R17,299,493,592 | 165145 | 928215 | 11/03/2014 | 182 | 168 | 72 | 422 | 209,987,335 | R14,952,123,296 | 162283 | 1195191 | 10/03/2014 | 138 | 227 | 65 | 430 | 179,105,164 | R13,929,955,888 | 156002 | 1134524 | 07/03/2014 | 188 | 188 | 70 | 446 | 187,641,820 | R14,225,576,507 | 158383 | 348124 | 06/03/2014 | 220 | 138 | 58 | 416 | 201,584,426 | R15,537,671,662 | 157346 | 262660 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 42,607.46 | -448.53 | -1.04% | Industrial | 61,888.48 | -498.18 | -0.80% | Mid Cap | 58,646.03 | -22.32 | -0.04% | Small Cap | 51,067.67 | -82.12 | -0.16% | Resource 20 | 54,975.16 | -628.36 | -1.13% | Industrial 25 | 54,862.02 | -497.40 | -0.90% | Financial 15 | 12,751.39 | -119.81 | -0.93% | Financial & Ind. 30 | 57,945.67 | -561.15 | -0.96% | All Share | 47,188.84 | -423.97 | -0.89% | Oil & Gas | 43,588.55 | -684.09 | -1.55% | Mining | 32,794.93 | -319.15 | -0.96% | Gold Mining | 1,594.72 | 21.29 | 1.35% | Platinum Mining | 49.34 | .12 | 0.24% | GENERAL MINING | 9,342.06 | -138.52 | -1.46% | Oil & Gas Producers | 23,436.76 | -367.82 | -1.55% | Basic Materials | 29,193.39 | -241.71 | -0.82% | Chemicals | 24,149.20 | -.73 | -0.00% | Forestry & Paper | 33,150.85 | 140.43 | 0.43% | Industrial Metals | 20,864.49 | 30.24 | 0.15% | Industrials | 41,546.77 | -69.73 | -0.17% | General Industrials | 130.41 | -.10 | -0.08% | Consumer Goods | 56,758.55 | -545.85 | -0.95% | Automobiles & Parts | 9,805.11 | -13.58 | -0.14% | Household Goods | 361.61 | -5 | -1.30% | Health Care | 72,957.12 | -425.52 | -0.58% | Beverages | 175.82 | -2.86 | -1.60% |
| | Index Name | RP | Move | % Move | Food Producers | 63,800.14 | -179.10 | -0.28% | Personal Goods | 1,049.40 | -8.69 | -0.82% | Consumer Services | 11,872.06 | -161.95 | -1.35% | General Retailers | 55,739.77 | -5.76 | -0.01% | Travel & Leisure | 5,310.69 | 4.42 | 0.08% | Media | 289.16 | -6.33 | -2.14% | Support Services | 2,617.41 | -5.00 | -0.19% | Telecommunications | 9,736.94 | -33.75 | -0.35% | Financials | 33,318.37 | -300.38 | -0.89% | Banks | 55,536.99 | -902.90 | -1.60% | Non-life Insurance | 49,026.45 | 503.63 | 1.04% | Life Insurance | 32,636.92 | -270.52 | -0.82% | General Financial | 3,325.63 | -21.55 | -0.64% | Technology | 43,618.64 | 161.32 | 0.37% | SHARIAH TOP40 | 4,058.78 | -40 | -0.97% | FTSE/JSE SHARIAH ALL | 4,155.33 | -32 | -0.77% | COAL MINING | 17,922.22 | 161 | 0.90% | FTSE JSE Fledgling | 6,577.28 | 4 | 0.07% | FTSE/JSE Alt X | 1,196.31 | -1 | -0.09% | SA LISTED PROPERTY | 475.62 | | -0.55% | CAPPED PROPERTY | 418.89 | | -0.31% | RESOURCE | 30,116.42 | -327 | -1.07% | DIVIDEND PLUS | 204.28 | -1 | -0.34% | FTSE/JSE RAFI 40 | 9,382.73 | -83 | -0.87% | Capped Top 40 | 22,563.53 | -234 | -1.03% | Capped All Share | 23,895.92 | -213 | -0.89% | JSE TABACO | 7,460.45 | 26 | 0.35% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | BIL | BHP BILLITON PLC | BUY | 10/03/2014 | RMH | RMB HOLDINGS LIMITED | HOLD | 10/03/2014 | FSR | FIRSTRAND LIMITED | BUY | 10/03/2014 | BVT | THE BIDVEST GROUP LIMITED | HOLD | 10/03/2014 | IPL | IMPERIAL HOLDINGS LTD | SELL | 10/03/2014 |
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Results Expected** Expected | Company Name | Fin. Date | 13/03/2014 | AFGRI | December 2013 (Interim) | 13/03/2014 | EASTPLATS | December 2013 (Final) | 13/03/2014 | EHSV | December 2013 (Final) | 13/03/2014 | ELBGROUP | December 2013 (Interim) | 13/03/2014 | ELBGROUP6 | December 2013 (Interim) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | SASFIN-P | 11/03/14 | 28/03/14 | 07/04/14 | ZAR 3.5351 | SASFIN | 11/03/14 | 04/04/14 | 14/04/14 | ZAR 0.6534 | ILIAD | 11/03/14 | 23/04/14 | 05/05/14 | ZAR 0.2000 | JSE | 11/03/14 | 23/05/14 | 02/06/14 | ZAR 0.5000 | JSE | 11/03/14 | 23/05/14 | 02/06/14 | ZAR 3.5000 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | KUMBA | 11/02/14 | 07/03/14 | 17/03/14 | ZAR 19.9400 | DSY B PREF | 20/02/14 | 07/03/14 | 17/03/14 | ZAR 4.2849 | TRUWTHS | 20/02/14 | 07/03/14 | 17/03/14 | ZAR 2.1600 | TRANSCAP | 17/02/14 | 07/03/14 | 17/03/14 | ZAR 2.1000 | CITYLDG | 13/02/14 | 07/03/14 | 17/03/14 | ZAR 2.0200 |
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Upcoming AGMs** Code | Company Name | Date | Status | REB | Rebosis Property Fund Ltd. | 19/03/2014 | Confirmed |
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