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 The Sharenet Daily 
Tuesday, 06 May 2014 - 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)

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Seed Weekly - Global Equity or Bonds?

As multi managers we spend a great deal of our time researching the best areas to allocate our clients’ capital – both at the underlying fund manager level, but often more importantly into which asset class and what region.

The end of the Global Financial Crisis (GFC) came some 5 and a bit years ago and now seems like ancient history, but during the GFC investors couldn’t see how it was going to end – there truly were Armageddon stories going around. After a solid 5 years of performance from global equity markets investors can rightly be questioning the wisdom of remaining in global equities over other asset classes, like global bonds, that haven’t performed as well in this period.

The chart below shows the relative performance of the Dow Jones Industrial (DJIA) and MSCI All Country World indices versus Global Bonds over the past 5 years. While the equity indices have more than doubled over this period (returning in excess of 17% pa) global bonds have largely tracked sideways, returning just under 4% pa. Should one be switching to bonds?

At Seed our emphatic answer would be “No!”

Firstly, we do expect equities to deliver materially higher returns than bonds over time. Secondly, and more importantly, global equities (here proxied by the DJIA) continue to offer significantly better value when compared to global bonds (here proxied by the US Government 10 Year Bond (US Govt 10 Yr).

One of the best ways to value an asset is to determine the yield that it is offering and then the prospects in the growth of that yield. Higher yielding assets are naturally preferred to lower yielding assets. One unemotional way of valuing asset classes relative to one another is to compare the relative yields offered by different asset class compared to their historical relationship. This method is used as each asset class will have a different equilibrium yield dependant on its risk profile. When making an asset allocation decision we therefore want to determine whether we are being sufficiently compensated for taking on extra risk.

The chart below shows the difference in yield offered by the DJIA and the US Govt 10 Yr over the past 40 years. It is evident from the chart that the current difference in the yield of the DJIA and US Govt 10 Yr is significantly (more than 1 standard deviation) higher than average. The conclusion from this chart is that equities are offering investors significantly better value than bonds.

A factor that is further in favour of equities is strong expected economic growth in developed markets that will potentially have the impact of stronger earnings for longer (good for equities) and also rising interest rates (bad for bonds) as central banks around the world look to tighten monetary policy.

Where our Fund mandates allow for global exposure, Seed has taken advantage of this valuation differential by being materially overweight global equity, while holding a minimum in global bonds. We have held this position for a while (as this valuation gap has been apparent for a while) and will continue to hold it as long as the valuation gap remains.

Take care,

Mike Browne

021 914 4966

Tue, 06 May 2014
Top News
South African stocks ended flat on Tuesday ahead of a national election but shares of Mediclinic International soared after the private hospital group said its annual earnings likely more than quadrupled.  Full story

South Africa's rand firmed against a broadly weaker dollar as some risk appetite returned to emerging markets on Tuesday, but the local currency was expected to stay within a narrow range ahead of a national election.  Full story
Both sides have been burying their dead as Ukraine slides further towards war, with supporters of Russia and of a united Ukraine accusing each other of tearing the country apart.  Full story
Thailand's Constitutional Court is almost certain to rule against Prime Minister Yingluck Shinawatra on abuse of power charges on Wednesday, forcing her from office and raising the possibility of fresh mass protests by her supporters.  Full story
NATO's top military commander in Europe said on Monday he no longer thought regular Russian troops would enter eastern Ukraine, predicting Moscow could achieve its goals through the unconventional forces stirring up trouble there.  Full story
European stock markets fell broadly on Tuesday, apart from Lisbon which swam against the tide in response to new signs of economic recovery. . .  Full story
Stock markets around the world fell on Tuesday, pressured by ongoing geopolitical uncertainty, which pushed investors to take profits with major indexes near record. . .  Full story
Britain's top share index retreated from a nine-week high on Tuesday, knocked by weak results from Barclays and Aberdeen Asset Management , while falls. . .  Full story
The dollar slid to an eight-week low against the euro on Tuesday on bullish European data and the growing belief that the dollar. . .  Full story

Wall Street edged lower on Tuesday, led by losses in financial stocks, while the technology sector was weighed by a selloff in shares. . .  Full story
Gold prices fell on Tuesday, surrendering early gains as weak physical demand made investors wary about the outlook, though tensions in Ukraine and. . .  Full story
Wall Street edged lower at the open on Tuesday as investors hesitated to push the market higher, with major indexes near record levels.. . .  Full story
European stocks were flat on Tuesday as upbeat outlook statements from chemical groups Solvay and DSM were offset by sharp falls in Barclays. . .  Full story
SA Business
World no. 2 platinum producer Impala Platinum said on Tuesday that if a 15-week strike continued at its South African operations. . .  Full story
South Africa's treasury sold 2.35 billion rand ($223 million) worth of 2030, 2036 and 2041 bonds on Tuesday.. . .  Full story
David Jones Ltd said a takeover proposal from South Africa's Woolworths Holdings Ltd has been approved by Australia's foreign investment review. . .  Full story
South Africa's seasonally adjusted HSBC Purchasing Managers' Index fell further in April, dipping into contraction territory as companies felt the pinch. . .  Full story

South Africa has revised its 2013 maize output to 11.811 million tonnes from 11.69 million tonnes after reviewing deliveries to silos. . .  Full story
South Africa produced 1.87 million tonnes of wheat in 2013, unchanged from 2012, the government's Crop Estimates Committee said on Tuesday.. . .  Full story
South Africa's Harmony Gold has scaled back the size and expenditure on building its Papua New Guinea Wafi-Golpu mine, enabling it. . .  Full story
Russian stocks touched a one-week high on Tuesday, benefiting from lack of military intervention by Moscow in Ukraine. Broader emerging markets took support. . .  Full story

South African bullion producer Harmony Gold said on Tuesday it had swung back to a quarterly profit despite a fall in production as it benefited from a smaller foreign-exchange loss on a U.S. denominated loan.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0048942.0261.210.13%
JSE Top 4010:1843810.7834.050.08%
JSE Gold17:001556.45-18.74-1.19%
JSE Financial17:0036515.0158.990.16%
JSE Industrial17:0062871.88196.390.31%
JSE Indust 2517:0055375.94183.460.33%
JSE Resource17:0057171.20-148.36-0.26%
DJ Futures19:5816355.00-202.49-1.22%
DJ Ind19:5816416.72-113.83-0.69%
SP 50019:581871.27-13.39-0.71%
FTSE 10016:336800.22-22.20-0.33%
All Ords08:405462.7019.300.35%
NZSE 5007:485174.90-25.35-0.49%
NameTimeRPMove% Move
Gold $19:591308.59-1.15-0.09%
Gold R19:5813709.60-86.99-0.63%
Gold R/kg19:5844082269031.59%
Silver $19:5919.6170.03800.19%
Platinum $19:591452.207.550.52%
Palladium $19:59815.251.650.20%
Brent Crude19:58107.39-.33-0.31%
Rand / Dollar19:5910.4788-0.0548-0.52%
Rand / Pound19:5517.75970.01730.10%
Rand / Euro19:5514.5949-0.0238-0.16%
Rand / NZD19:589.18440.03670.40%
Rand / AUD19:559.81160.03480.36%
Yen / Dollar19:59101.5300-0.6220-0.61%
Euro / Dollar19:550.7175-0.0030-0.42%
Dollar / Euro19:591.39300.00550.40%
Pound / Dollar19:550.5886-0.0040-0.67%

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 DIAMONDCP  1201615.38.%6000
2 VUNANI  1722214.67.%4000
3 CULLINAN  3003011.11.%1500
4 SABVEST  42003509.09.%3755
5 NET1UEPS  99956857.36.%514
6 PUTPROP  799496.53.%51637
7 MEDCLIN  76504356.03.%2750233
8 TRANSCAP  560315.86.%23535146
9 OCTODEC  22201215.76.%49167
10 CASHBIL  136736414.92.%12867
11 PETMIN  274124.58.%235384
12 KEATON   245104.26.%67445
13 CLOVER  2075753.75.%148196
14 BCX  606213.59.%1180027
15 VPIF  985333.47.%1540
16 ALTRON-P  2485763.14.%190690
17 MRHLD  2586763.03.%1643799
18 AFROX  2069562.78.%414501
19 BELL  1849492.72.%17965
20 PREMIUM  1900502.70.%105269

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Major Moves Down
SharenameSaleMove% MoveVolume
1 MARSHALL  802-88-9.89.%7596
2 WCC  122-13-9.63.%76030
3 OANDO  110-9-7.56.%18600
4 SOVFOOD  560-35-5.88.%4500
5 CAMAC  707-43-5.73.%647
6 MMG  855-45-5.00.%2300
7 WESIZWE  105-5-4.55.%472758
8 THARISA  2400-100-4.00.%10074
9 HARMONY  3440-120-3.37.%1092199
10 DAWN  968-32-3.20.%39280
11 ADAPTIT  780-24-2.99.%158875
12 ARB  655-20-2.96.%300
13 FINBOND  301-9-2.90.%78164
14 ATT  1781-49-2.68.%56342
15 NUWORLD  1850-50-2.63.%4100
16 SANTOVA  190-5-2.56.%54058
17 RESN  400-10-2.44.%494032
18 DIGICOR  220-5-2.22.%893370
19 GFIELDS  4390-95-2.12.%1272942
20 DCENTRIX  420-9-2.10.%86275

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New Highs
SharenameSaleHighMove% MoveVolume
1 SABVEST  420042003509.09.%3755
2 PUTPROP  799799496.53.%51637
3 MEDCLIN  765078474356.03.%2750233
4 PETMIN  274275124.58.%235384
5 CLOVER  20752095753.75.%148196
6 BCX  606606213.59.%1180027
7 CML  10650107152802.70.%1264106
8 RBPLAT  694171551412.07.%193403
9 LIFEHC  42514318751.80.%2632828
10 BRAIT  59565974771.31.%511293
11 JSE  978099241101.14.%369535
12 RMIH  30703133331.09.%870614
13 ETFPLD  86198799570.67.%421386
14 OLDMUTUAL  36203640180.50.%9417354
15 INVPLC  92009346410.45.%1107173
16 SIBANYE  2790289460.22.%3633471
17 ADVTECH  856892-14-1.61.%486440
18 SOVFOOD  560650-35-5.88.%4500

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New Lows
SharenameSaleLowMove% MoveVolume

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Index Summary
Index NameRPMove% Move
Top 4043,810.7834.050.08%
Mid Cap63,825.87-112.16-0.18%
Small Cap53,452.65250.150.47%
Resource 2057,171.20-148.36-0.26%
Industrial 2555,375.94183.460.33%
Financial 1513,974.7634.740.25%
Financial & Ind. 3059,307.85201.610.34%
All Share48,942.0261.210.13%
Oil & Gas 44,950.69106.700.24%
Mining 34,162.34-132.57-0.39%
Gold Mining1,556.45-18.74-1.19%
Platinum Mining51.18-.17-0.33%
GENERAL MINING9,826.51-28.17-0.29%
Oil & Gas Producers 24,169.1657.380.24%
Basic Materials 30,026.56-82.82-0.28%
Chemicals 23,985.0834.300.14%
Forestry & Paper 29,623.54280.140.95%
Industrial Metals 20,568.1295.780.47%
Industrials 45,519.9016.480.04%
General Industrials 144.26-.10-0.07%
Consumer Goods 59,649.13-32.64-0.05%
Automobiles & Parts 9,578.66-45.29-0.47%
Household Goods365.68-1-0.17%
Health Care 78,465.891011.621.31%
Index NameRPMove% Move
Food Producers 70,715.6797.450.14%
Personal Goods 1,046.80-1.70-0.16%
Consumer Services 10,728.1115.220.14%
General Retailers 62,804.4932.070.05%
Travel & Leisure 5,752.79-2.96-0.05%
Media 224.13.870.39%
Support Services 2,690.3845.181.71%
Telecommunications 10,311.97148.241.46%
Financials 36,515.0158.990.16%
Banks 62,844.27198.920.32%
Non-life Insurance 52,575.75-255.22-0.48%
Life Insurance 34,995.40-29.53-0.08%
General Financial 3,802.3832.620.87%
Technology 42,561.90551.331.31%
SHARIAH TOP40 4,206.5070.17%
FTSE/JSE SHARIAH ALL4,321.1860.13%
COAL MINING18,383.64-73-0.40%
FTSE JSE Fledgling 6,819.47330.49%
FTSE/JSE Alt X 1,204.50-4-0.30%
CAPPED PROPERTY 441.63-0.32%
RESOURCE 31,313.07-85-0.27%
DIVIDEND PLUS224.9310.28%
FTSE/JSE RAFI 409,848.7250.06%
Capped Top 4023,207.80420.18%
Capped All Share24,779.98320.13%
JSE TABACO 7,709.24-0-0.00%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
08/05/2014CULINAN5.5March 2014 (Interim)
08/05/2014CULINANPRMarch 2014 (Interim)
08/05/2014CULLINANMarch 2014 (Interim)
08/05/2014CULPREF3March 2014 (Interim)
08/05/2014GFIELDSMarch 2014 (Q)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
RIPLC30/04/1416/05/1405/06/14GBP 0.0150
CLICKS24/04/1427/06/1407/07/14ZAR 0.5350
REBOSIS24/04/1416/05/1426/05/14ZAR 0.4850
CMH23/04/1406/06/1417/06/14ZAR 0.5000
PSG16/04/1409/05/1419/05/14ZAR 0.9000
Ex Div**
Share NameDec-DateLDTPay-DateAmount
NTC PREF01/04/1430/04/1412/05/14ZAR 3.5667
MPACT05/03/1430/04/1412/05/14ZAR 0.5800
FPT10/04/1430/04/1412/05/14ZAR 0.2900
KAYDAV26/03/1430/04/1412/05/14ZAR 0.0750
BLACKSTAR16/04/1430/04/1430/05/14GBP 0.0080

Upcoming AGMs**
CodeCompany NameDateStatus
BGABarclays Africa Group Ltd.06/05/2014Confirmed
MRFMerafe Resources Ltd.06/05/2014Confirmed
RNGRandgold - Exploration Co Ltd.08/05/2014Confirmed
JSEJSE Ltd.08/05/2014Confirmed
GFIGold Fields Ltd.09/05/2014Confirmed

Stock Exchange News Service
06/05/201417:50DELTA PROPERTY FUND LIMITED - Provisional results for the group
06/05/201417:47RESILIENT PROPERTY INCOME FUND LTD - Dealings in securities by directors and by ...
06/05/201417:42PSG GROUP LIMITED - Exercise And Acceptance Of Options By Directors In Terms Of ...
06/05/201417:34AFRICA ETF ISSUER LTD (RF) - ETFPLD - Listing of Additional AfricaPalladium debe...
06/05/201417:30OASIS CRESCENT PROPERTY FUND - Final preliminary audited results and distributio...
06/05/201417:30SHERBOURNE CAPITAL LIMITED - Trading Statement
06/05/201417:10JSE LIMITED - Index Change Advice - 20140512 Control Instruments Group Deletion
06/05/201417:10PPC LIMITED - Update Regarding the Proposed Restructuring of a Component of PPCs...
06/05/201417:05JSE LIMITED - Index Change Advice - 20140515 Growthpoint Acucap Sycom Acqusition
06/05/201417:00ALERT STEEL HOLDINGS LIMITED - Change in board of directors
06/05/201416:48SILVERBRIDGE HOLDINGS LIMITED - Dealings in securities by a director
06/05/201416:07RESILIENT PROPERTY INCOME FUND LTD - Full Capital Redemption-RES28
06/05/201416:04FIRSTRAND BANK LIMITED - New Instrument Listing-FRC204-205
06/05/201415:41BARCLAYS AFRICA GROUP LIMITED - Results of AGM
06/05/201415:30DRDGOLD LIMITED - Notice Of General Meeting
06/05/201415:25DELTA PROPERTY FUND LIMITED - New Financial Instrument Listing - DLTC03
06/05/201415:25INGUZA INVESTMENTS (RF) LIMITED - New Instrument Listing-INGR04 & ING252
06/05/201415:09DELTA PROPERTY FUND LIMITED - Correction announcement: Dealing in securities by ...
06/05/201415:03INGUZA INVESTMENTS (RF) LIMITED - Full Capital Redemption -ING221 & INGR03
06/05/201415:00HOLDSPORT LIMITED - Audited Summarised Consolidated Results for the year ended 2...
06/05/201415:00ATLATSA RESOURCES CORPORATION - Appointment of three non-executive directors
06/05/201414:50INGENUITY PROPERTY INVESTMENTS LTD - Trading Statement
06/05/201413:30MERAFE RESOURCES LIMITED - Results of Annual General Meeting
06/05/201413:25MEDICLINIC INTERNATIONAL LIMITED - Trading statement Audited group results for ...
06/05/201413:17MONDI LIMITED - Final Dividend Euro/Sterling Exchange Rate
06/05/201413:12PREMIUM PROPERTIES LIMITED - Reviewed condensed provisional consolidated financi...
06/05/201413:05OCTODEC INVESTMENTS LIMITED - Reviewed condensed consolidated interim financial ...
06/05/201412:48ISA HOLDINGS LIMITED - Further Trading Statement
06/05/201412:28SYNTHESIS FUNDING LIMITED - Synthesis Funding Limited - New Financial Instrument...
06/05/201412:18LEWIS GROUP LIMITED - Interest Rate Reset-LEW01
06/05/201412:01BETTABETA CIS - Distribution announcement
06/05/201412:00IMPERIAL HOLDINGS LIMITED - Appointment to the Board of Directors of Imperial
06/05/201412:00ABSA BANK LIMITED - Interest Rate Reset-ABN92
06/05/201412:00BETTABETA CIS - Distribution announcement
06/05/201411:55ABSA BANK LIMITED - Interest Rate Reset-ABFN10
06/05/201411:37TRENCOR LIMITED - Distribution of annual report, no change statement and notice ...
06/05/201411:30MPACT LIMITED - Dealings in securities by a director
06/05/201410:15GROUP FIVE LIMITED - Dealing in securities by a director
06/05/201410:13POYNTING HOLDINGS LIMITED - Dealings in securities by an associate of a director...
06/05/201410:12POYNTING HOLDINGS LIMITED - Dealings in securities by a director
06/05/201409:42AFRICAN BANK LIMITED - ABLI02-Full Capital Redemption
06/05/201409:20NEW GOLD ISSUER LIMITED - GLD-Additional Listing of NewGold Debentures
06/05/201408:52BARCLAYS AFRICA GROUP LIMITED - Reference to Barclays Plc Interim Management Sta...
06/05/201408:51WESCOAL HOLDINGS LIMITED - Change in board of directors
06/05/201408:00LONMIN PLC - Regulatory Release - Update on Protected Strike Action
06/05/201408:00TRANSACTION CAPITAL LIMITED - Unaudited financial results for the half year ende...
06/05/201408:00GLENCORE XSTRATA PLC - First Quarter report 2014
06/05/201408:00JUBILEE PLATINUM PLC - 3rd ARC furnace successfully commissioned and operational
06/05/201407:06HARMONY GOLD MINING COMPANY LIMITED - Press Release - Harmony records solid resu...
06/05/201407:05HARMONY GOLD MINING COMPANY LIMITED - Results for the third quarter FY14 and nin...

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