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 The Sharenet Daily 
Tuesday, 27 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 - Characteristics of Winning Shares

The May 2014 edition of the Bank Credit Analyst produced a very useful report, discussing some of the merits of active versus passive fund management.

Firstly this is not an “either or” debate. While it is impossible for the average active fund manager to outperform a passive index after fees are taken into account, there will always be successful stock pickers that do systematically deviate from their benchmark and successfully outperform the market on an ongoing basis.

An active manager is one that relies on analytical research, forecasts, and their own judgement in order to decide which portfolio to construct. Passive investors, on the other hand, tend to construct a portfolio close to a given index – typically a market cap weighted index.

Active managers will find more success where prices deviate substantially from their fundamental fair values. Two areas where this is often found are the small cap and emerging market universe.

The report defined characteristics of superior active managers and then went on to define certain characteristics of winning stocks as follows.

Firstly, small cap shares (i.e. size characteristics) have been associated with alpha (typically defined as the excess return above a benchmark index). Since 1926 small cap stocks have outperformed large caps by an average of 2.8% per year.


BCA notes that value stocks have also outperformed and when ranking stocks by price to book ratio, those with low ratios (i.e. value stocks) have outperformed those with high ratios by an average of 4.8% per annum.

BCA found that other value metrics have also been useful in predicting relative returns for stocks globally. These are criteria such as low versus high price to earnings, low versus high price to cash flow and high versus low dividend yields.

Value stocks tend to outperform more in market downturns and underperform when markets are up strongly, offering a partial hedge against market risk.


When looking at price momentum, an investor must consider the time horizon. Evidence suggests that over a short term horizon of one month, momentum is negative so that stocks that performed well last month tend to underperform this month (price reversion).

Over medium term periods of 2 to 12 months momentum turns positive so that past winners continue to outperform, turning negative again over one to five years.

Some of the reasons for shares, which have done well over the last year, continuing to outperform can be ascribed to institutional investors scaling in and out of positions, the persistency of buying and selling over several months, especially for large cap shares, and also a case of equity prices not immediately reflecting new information about a company.

While a traditional passive fund tracks an index that is constructed using a market cap weighting, the independent research from BCA indicates that it makes a lot more sense to construct a portfolio using value and momentum factors. Indeed, this is exactly how we have designed the Seed Equity Fund. A value portfolio, using the four value criteria noted above, is systematically constructed and then equally combined with a momentum portfolio using price and earnings momentum.

The result is a Fund that has the attributes of an actively managed portfolio and the proven ability to outperform traditional indices over time, yet at a lower cost.

Kind regards,

Ian de Lange

021 914 4966

Tue, 27 May 2014
Top News
World stock markets edged up while the euro softened against the dollar and yen on Tuesday following strong U.S. economic data and on expectations of more rate cuts from the European Central Bank.  Full story

South Africa's rand fell 1 percent against the dollar on Tuesday to its softest level in nearly a week, after the release of data showing the economy shrunk in the first quarter of the year, raising the spectre of a recession.  Full story
Egypt's presidential election was extended by a day on Tuesday in an effort to boost lower than expected turnout that threatened to undermine the credibility of the frontrunner, former army chief Abdel Fattah al-Sisi.  Full story
Boko Haram gunmen attacked a Nigerian military base and adjacent police barracks simultaneously in the northeastern town of Buni Yadi, killing at least 31 security personnel, security sources and witnesses said.  Full story
Vietnam and China traded accusations on Tuesday over the sinking of a Vietnamese fishing boat not far from where China has parked an oil rig in the disputed South China Sea, as tensions fester between the two countries over the giant drilling platform.  Full story
U.S. stocks advanced on Tuesday after the S&P 500 touched a record high, buoyed by the latest round of merger activity and as. . .  Full story
European shares rose to multi-year highs on Tuesday, bolstered by U.S. economic data, mergers and acquisitions talk and expectations of more policy easing by. . .  Full story
Britain's main equity index climbed on Tuesday, lifted by gains in chip designer ARM and InterContinental Hotels Group (IHG), which pushed the market. . .  Full story
European shares climbed to multi-year highs on Tuesday, with encouraging U.S. economic data, mergers and acquisitions talk and expectations of more policy easing by. . .  Full story

World share markets climbed closer to record levels on Tuesday on expectations the European Central Bank will extend its easy monetary policy, while. . .  Full story
Gold slipped 2 percent to a 3-1/2 month low on Tuesday, extending losses after strong U.S. data lifted optimism about the economy, while. . .  Full story
Britain's main equity index advanced on Tuesday, led by InterContinental Hotels Group (IHG) , which became the latest stock to gain ground on potential. . .  Full story
U.S. stocks edged higher on Tuesday as merger activity and expectations for rates cuts by the European Central Bank stoked bids for equities. . .  Full story
SA Business
The new boss of South Africa's Adcock Ingram announced an overhaul of the struggling drugmaker to allow its different businesses to. . .  Full story
South Africa raised its maize output forecast for this year by 4 percent on Tuesday, putting the country on track for. . .  Full story
New South African mining minister Ngoako Ramatlhodi pledged on Tuesday to mediate in a crippling platinum miners strike now in its. . .  Full story
Gold held steady below $1,300 an ounce on Monday after ending flat for two straight weeks, but a Ukraine presidential election win by. . .  Full story

South Africa's economy shrank in the first quarter of this year, the first quarterly contraction since a recession five years. . .  Full story
Zambia and Botswana will start building a $259 million bridge in June to replace the ferry service between the two states,. . .  Full story
South Africa's biggest apparel retailer, Mr Price Group Ltd, broadly met forecasts with a 22 percent rise in full-year profit on. . .  Full story
South African packaging firm Nampak reported a 10 percent rise in first-half profit on Tuesday, helped by rising demand in. . .  Full story

South Africa's treasury sold 2.35 billion rand ($227 million)worth of its 2030, 2037 and 2048 bonds on Tuesday.. . .  Full story
Ethiopia has pushed the door ajar for foreign retailers keen to enter the fast-growing market of 90 million people, welcoming them as managers but keeping the state in control.. . .  Full story
South Africa's second-biggest drugmaker Adcock Ingram posted close to a $4 million first-half loss on Tuesday, hit by rising raw materials prices and costs related to a failed $1.2 billion takeover. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0049824.45-197.27-0.39%
JSE Top 4017:0044859.43-146.45-0.33%
JSE Gold17:001385.49-61.32-4.24%
JSE Financial17:0036522.22-317.22-0.86%
JSE Industrial17:0065447.25-98.39-0.15%
JSE Indust 2517:0057940.45-77.65-0.13%
JSE Resource17:0056473.24-264.80-0.47%
DJ Futures19:3816630.00-4.00-0.02%
DJ Ind19:5816663.1856.910.34%
SP 50019:581909.038.500.45%
FTSE 10017:356844.9429.190.43%
All Ords08:575490.80.400.01%
NZSE 5007:485145.85-7.83-0.15%
NameTimeRPMove% Move
Gold $19:591267.00-25.79-2.00%
Gold R19:5913260.95-107.80-0.81%
Gold R/kg19:58426222-3146-0.73%
Silver $19:5919.0770-.3420-1.76%
Platinum $19:591462.30-9.20-0.63%
Palladium $19:59832.001.500.18%
Brent Crude19:58110.01-.53-0.48%
Rand / Dollar19:5910.46790.12371.20%
Rand / Pound19:5517.54220.14470.83%
Rand / Euro19:5514.25550.13510.96%
Rand / NZD19:598.93470.08670.98%
Rand / AUD19:559.67180.10311.08%
Yen / Dollar19:59102.10500.17900.18%
Euro / Dollar19:590.73430.00140.19%
Dollar / Euro19:591.3619-0.0025-0.18%
Pound / Dollar19:550.59540.00190.32%

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  11887.27.%300
2 TRUSTCO  159106.71.%72927
3 NET1UEPS  115004904.45.%140
4 COMAIR  480194.13.%2041
5 BUILDMX  260104.00.%121061
6 KEATON   23593.98.%27786
7 METMAR  13653.82.%38654
8 INTEWASTE  13543.05.%149609
9 HOSP-A  1697472.85.%69171
10 HOLDSPORT  44901102.51.%197553
11 LITHA  16442.50.%61062
12 TRNSHEX  37492.47.%21643
13 VIVIDEND  548132.43.%1732578
14 BOWCALF  765152.00.%5050
15 TORRE  27051.89.%56750
16 CADIZ  11021.85.%32903
17 DIGICOR  22041.85.%61000
18 ROCKCASTL  1520251.67.%245195
19 VALUE  57591.59.%25000
20 ONELOGIX  40061.52.%70635

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Major Moves Down
SharenameSaleMove% MoveVolume
1 CENRAND  300-90-23.08.%10176
2 SPANJRD  415-85-17.00.%9850
3 EHSV  619-78-11.19.%71492
4 ADVHLTH  212-21-9.01.%1354628
5 ROLFES  355-35-8.97.%335145
6 POYNTING  282-23-7.54.%201148
7 NUWORLD  1950-125-6.41.%200
8 ATLATSA  425-25-5.56.%5800
9 ANGGOLD  16541-879-5.05.%1439736
10 ALTRON  2746-119-4.15.%53850
11 AUSTRO  149-6-3.87.%139000
12 NAMPAK  3580-135-3.63.%2055722
13 ALTRON-P  2675-100-3.60.%151878
14 HARMONY  3004-112-3.59.%1991539
15 NORTHAM  4350-159-3.53.%863442
16 SEARDELN  193-7-3.50.%233135
17 SIBANYE  2703-97-3.46.%4989000
18 CASHBIL  13811-489-3.42.%76223
19 GFIELDS  3925-135-3.33.%2560838
20 PAN-AF  252-8-3.08.%525819

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New Highs
SharenameSaleHighMove% MoveVolume
1 VIVIDEND  548548132.43.%1732578
2 NIVEUS  29102910301.04.%47313
3 RMIH  31503215-10-0.32.%1158990
4 ALTRON-P  26752823-100-3.60.%151878

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New Lows
SharenameSaleLowMove% MoveVolume
1 EHSV  619576-78-11.19.%71492
2 ROLFES  355350-35-8.97.%335145
3 SYCR  27002401-70-2.53.%6835
4 DRDGOLD  26926010.37.%697250

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Index Summary
Index NameRPMove% Move
Top 4044,859.43-146.45-0.33%
Mid Cap63,113.59-545.31-0.86%
Small Cap53,755.97-173.92-0.32%
Resource 2056,473.24-264.80-0.47%
Industrial 2557,940.45-77.65-0.13%
Financial 1514,038.26-139.70-0.99%
Financial & Ind. 3061,509.95-175.52-0.28%
All Share49,824.45-197.27-0.39%
Oil & Gas 44,700.21-551.66-1.22%
Mining 33,605.73-135.43-0.40%
Gold Mining1,385.49-61.32-4.24%
Platinum Mining48.92-.63-1.27%
GENERAL MINING9,823.7417.160.17%
Oil & Gas Producers 24,034.48-296.62-1.22%
Basic Materials 29,728.49-90.87-0.30%
Chemicals 24,189.29-149.82-0.62%
Forestry & Paper 32,040.29348.491.10%
Industrial Metals 19,616.53-138.79-0.70%
Industrials 46,024.32-291.70-0.63%
General Industrials 144.64-1.02-0.70%
Consumer Goods 61,386.40198.770.32%
Automobiles & Parts 9,057.83-47.56-0.52%
Household Goods367.04-3-0.83%
Health Care 80,480.24-898.74-1.10%
Beverages 198.72.770.39%
Index NameRPMove% Move
Food Producers 72,968.70-441.77-0.60%
Personal Goods 1,095.348.190.75%
Consumer Services 11,730.29-78.41-0.66%
General Retailers 64,001.40-820.20-1.27%
Travel & Leisure 5,865.45-9.76-0.17%
Media 260.96-1.15-0.44%
Support Services 2,761.4819.510.71%
Telecommunications 10,611.89-24.89-0.23%
Financials 36,522.22-317.22-0.86%
Banks 63,467.98-988.68-1.53%
Non-life Insurance 55,383.19-597.22-1.07%
Life Insurance 35,134.09-167.01-0.47%
General Financial 3,639.52-32.15-0.88%
Technology 41,799.6796.070.23%
SHARIAH TOP40 4,209.87-17-0.41%
FTSE/JSE SHARIAH ALL4,319.33-21-0.48%
COAL MINING17,713.63-130-0.73%
FTSE JSE Fledgling 6,758.51-17-0.25%
FTSE/JSE Alt X 1,228.1550.37%
CAPPED PROPERTY 439.60-0.24%
RESOURCE 30,865.35-173-0.56%
DIVIDEND PLUS223.59-2-0.77%
FTSE/JSE RAFI 409,896.23-61-0.61%
Capped Top 4023,759.41-88-0.37%
Capped All Share25,231.20-104-0.41%
JSE TABACO 7,935.29100.12%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
28/05/2014ADCORPFebruary 2014 (Final)
28/05/2014CHROMETCOFebruary 2014 (Final)
28/05/2014DIAMONDCPDecember 2013 (Final)
28/05/2014FIUUNITMarch 2014 (Final)
28/05/2014IMUNITI-PMarch 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
CHEMSPECPREF26/05/1412/06/1423/06/14ZAR 0.0160
ILLOVO26/05/1427/06/1407/07/14ZAR 0.6000
VUKILE26/05/1412/06/1423/06/14ZAR 0.7168
TONGAAT26/05/1412/06/1426/06/14ZAR 2.1000
WILDRNESS23/05/1406/06/1426/06/14BWP 0.1000
Ex Div**
Share NameDec-DateLDTPay-DateAmount
JSE11/03/1423/05/1402/06/14ZAR 3.5000
OCTODEC06/05/1423/05/1402/06/14ZAR 0.8860
PREMIUM06/05/1423/05/1402/06/14ZAR 0.8450
JSE11/03/1423/05/1402/06/14ZAR 0.5000
OASIS06/05/1423/05/1402/06/14ZAR 0.4205

Upcoming AGMs**
CodeCompany NameDateStatus
ACLArcelorMittal South Africa Ltd.27/05/2014Confirmed
MLAPArcelorMittal South Africa Ltd.27/05/2014Confirmed
SNTSantam Ltd.27/05/2014Confirmed
MTNMTN Group Ltd.27/05/2014Confirmed
ADHADvTECH Ltd.27/05/2014Unconfirmed

Stock Exchange News Service
27/05/201417:50SENTULA MINING LIMITED - Posting of Circular and Notice of General Meeting
27/05/201417:41RESILIENT PROPERTY INCOME FUND LTD - Acquisition of Jubilee Mall
27/05/201417:35IMPERIAL HOLDINGS LIMITED - Disclosure of Significant Holding of Imperial Ordina...
27/05/201417:30BASIL READ HOLDINGS LIMITED - Integrated annual report and details of the annual...
27/05/201417:30TRADEHOLD LIMITED - Directorate Changes
27/05/201417:07AFROCENTRIC INVESTMENT CORP LIMITED - Dealings in securities
27/05/201417:01BNP PARIBAS ARBITRAGE ISSUANCE B.V. - BNP Paribas Arbitrage Issuance - ZA072
27/05/201417:00VIVIDEND INCOME FUND LIMITED - Dealing In Vividend Linked Units By An Associate ...
27/05/201416:55CAPITEC BANK LIMITED - National Consumer Tribunal judgement
27/05/201416:40INTU PROPERTIES PLC - Director/PDMR Shareholding
27/05/201416:34INVESTEC BANK LIMITED - Dividend Announcement: VODIHB
27/05/201416:30GLOBAL ASSET MANAGEMENT LTD - Resignation of a non-executive director
27/05/201416:22COMPU-CLEARING OUTSOURCING LIMITED - Changes to the board
27/05/201416:10ALLIED ELECTRONICS CORPORATION LTD - Director's Dealings
27/05/201416:00INGUZA INVESTMENTS (RF) LIMITED - ING254-New Instrument Listiing
27/05/201415:47JD GROUP LIMITED - Finalisation Announcement in respect of the Rights Offer
27/05/201415:40EFFICIENT GROUP LIMITED - Dealings in securities by director and director and as...
27/05/201415:35SANTAM LIMITED - Results of AGM
27/05/201415:30EXXARO RESOURCES LIMITED - Results of Annual General Meeting
27/05/201414:45OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
27/05/201414:12MTN GROUP LIMITED - 19th Annual General Meeting Business Update
27/05/201414:05INVESTEC BANK LIMITED - First expiry announcement -ESPIBQ
27/05/201414:00MR PRICE GROUP LIMITED - Audited results and final cash dividend declaration of ...
27/05/201414:00PRECINCT FUNDING 1 (RF) LTD - Precinct Funding 1 (RF) Limited - Annual Financial...
27/05/201414:00SACOIL HOLDINGS LIMITED - Trading statement
27/05/201413:45OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
27/05/201413:30GOLDMAN SACHS INTERNATIONAL - New Financial Instrument Listing - GSIS03
27/05/201413:15NAMPAK LIMITED - Unaudited interim report and dividend declaration for the six m...
27/05/201413:11POYNTING HOLDINGS LIMITED - Results of General Meeting
27/05/201413:05ADVTECH LIMITED - Result of Annual General Meeting
27/05/201412:55REMGRO LIMITED - Results of Claw-Back Offer to Qualifying Grindrod Shareholders
27/05/201412:29GOLD FIELDS LIMITED - Media release - South Deep fatality
27/05/201412:00INVESTEC PLC - Notification of major interest in shares
27/05/201411:48NEW GOLD ISSUER LIMITED - NGPLT-Additional Listings of NewGold Platinum Debentur...
27/05/201411:46NEW GOLD ISSUER LIMITED - NGPLD-Additional Listing of NewGold Palladium Debentur...
27/05/201411:19EVRAZ HIGHVELD STEEL & VANADIUM LTD - Group unaudited results for the Quarter En...
27/05/201410:30SANTAM LIMITED - Operational update to shareholders following Annual General Mee...
27/05/201410:17LABAT AFRICA LIMITED - Results of the Labat rights offer and Section 122 Announc...
27/05/201410:00KIBO MINING PLC - Shareholder Update: Financial Quarter 1 2014
27/05/201410:00MASSMART HOLDINGS LIMITED - Trading of Massmart ordinary shares on behalf of the...
27/05/201409:45AFRICA ETF ISSUER LTD (RF) - ETFPLD - ISIN code: ZAE000182531 -LISTING OF ADDITI...
27/05/201409:27TAWANA RESOURCES NL - Results Of Annual General Meeting
27/05/201409:15ONELOGIX GROUP LIMITED - Fairness opinion in respect of an acquisition of additi...
27/05/201409:09GRINDROD INDEX TRACKER MAN RF PTY LTD - Listing of 700 000 Additional Preftrax S...
27/05/201409:02SATRIX COLLECTIVE INVESTMENT SCHEME - Partial delisting of STXDIV securities - S...
27/05/201409:01SATRIX COLLECTIVE INVESTMENT SCHEME - Partial delisting of Satrix Fini securitie...
27/05/201409:00SEKUNJALO INVESTMENTS LIMITED - Dealing In Sekunjalo Investments Limited Shares ...
27/05/201409:00SATRIX COLLECTIVE INVESTMENT SCHEME - Partial delisting of Satrix 40 securities ...
27/05/201408:57BIOSCIENCE BRANDS LIMITED - Extension of return date of provisional liquidation ...
27/05/201408:31QUANTUM PROPERTY GROUP LIMITED - Renewal of cautionary announcement
27/05/201408:30PIONEER FOOD GROUP LIMITED - Dealing In The Companys Shares By A Director
27/05/201408:26PICK N PAY STORES LIMITED - Pick n Pay Stores Limited - New Financial Instrument...
27/05/201407:10ADCOCK INGRAM HOLDINGS LIMITED - Investor presentation on Adcock Ingram's unaudi...
27/05/201407:05VERIMARK HOLDINGS LIMITED - Summarised audited group financial information for t...
27/05/201407:05ADCOCK INGRAM HOLDINGS LIMITED - Unaudited Financial Results for the six-month p...

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