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 The Sharenet Daily 
Wednesday, 18 June 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 - African Equity in a Multi Asset Fund

Investing into Africa (for the purposes of this article, Africa refers to Africa ex South Africa) has become fairly popular over the past few years. As is often the case, investors are looking for ‘the next big thing’ and it seems that Africa currently can be classified as a candidate for ‘the next big thing’.

One of the reasons why investing into Africa has become popular for South African managers and investors is the change in legislation that allows Reg 28 funds (funds that can be used in retirement products) to invest an extra 5% into Africa on top of the maximum allowed 25% global allocation. With local markets expensive both on a nominal basis and when looking at various valuation metrics, many managers and investors are looking at where else they can expect to generate decent real returns.

When looking at returns generated from Africa equity it is important not to just look at the relative performance over a certain period. More important than the overall performance, is how it has performed relative to South African and Developed Market equities over various periods – essentially looking at the return profile.

An example of what this means is that while the average correlation of monthly returns between Africa equity and SA equity is 17% over the past 12 months on an annual basis it has been above 80% and as low as -80% as shown in the chart below.

When making an allocation we need to assess whether the correlation will fall back to its long term average of around 17% or lower (which is desirable) or if it will remain high as it has over the shorter term.

Assets that have a low (or negative) correlation that are blended with one another and regularly rebalanced gain the benefits of diversification. By blending the asset classes one is generally able to create a solution that either has a better return (with no extra risk) or lower risk (without sacrificing return) or ideally a combination of both when compared to the stand alone asset class. In the case of blending a typical balanced fund (95%) with Africa equity (5%) one has been able to slightly improve the return when compared to the balanced fund and also reduce the downside deviation over the past 12 years.

When a manager or investor is satisfied that the return profile going forward will be sufficiently uncorrelated the next step in the process is to ensure that the valuations are reasonable. It doesn’t make sense to allocate capital to a grossly overvalued asset (currently developed market bonds can be classed in this category) purely because of the diversification benefits that can be achieved. Each asset should only make its way into a portfolio if it offers the opportunity of positive returns. The valuation of Africa equity currently looks reasonable (especially when compared to SA equity).

Furthermore one needs to assess the relative merits of active and passive management, both in the current environment and in the specific asset class universe. At Seed our opinion is the opportunity offered by active managers in Africa equity (especially those that spend a great deal of time in the various countries) far outweighs the extra costs incurred. Over the past month and a half we have started to make small allocations to Africa equity across our multi asset Funds.

Take care,

Mike Browne

021 914 4966

Wed, 18 Jun 2014
Top News
Local markets  Full story

South African power utility Eskom warned of possible electricity outages on Wednesday and Thursday evening, saying its system was severely constrained. Eskom has instituted at least three blackouts this year as demand, which peaks at about 36,000 megawatts during evening hours, put  Full story
Iran is refusing to significantly cut the number of centrifuges it intends to keep to produce nuclear fuel, making it hard to imagine a compromise at this week's talks with six powers, Western and Iranian officials said on Wednesday.  Full story
Afghan presidential candidate Abdullah Abdullah on Wednesday demanded election organisers stop counting ballots because of widespread fraud, potentially derailing what is seen as a make-or-break vote before most foreign troops leave.  Full story
European stock markets were steady on Wednesday, hovering near multi-year highs reached last week and supported by shares in major energy companies as violence. . .  Full story
The dollar dipped and Wall Street equities softened on Wednesday as global markets puzzled over the odds that Federal Reserve Chair Janet Yellen. . .  Full story
U.S. stocks held near the unchanged mark on Wednesday, on the heels of a three-day winning streak for the S&P 500 index and. . .  Full story
Oil companies lifted Britain's blue chip share index on Wednesday as heavy fighting in Iraq pushed crude prices towards $114 a barrel.. . .  Full story

Gold steadied on Wednesday before the conclusion of a U.S. Federal Reserve meeting as investors watched for any sign on whether the central. . .  Full story
U.S. stocks opened flat on Wednesday with investors looking ahead to an impending monetary policy announcement by the Federal Reserve as it concludes. . .  Full story
Britain's top equity index edged higher in cautious trading early on Wednesday, with a rise in crude oil prices following heavy fighting in. . .  Full story
Hong Kong shares finished a choppy session little changed on Wednesday, with turnover staying low as global markets brace for results from the. . .  Full story
SA Business
The shortfall on South Africa's current account unexpectedly narrowed to its smallest since 2012 in the first quarter of the year. . .  Full story
South Africa's economy would have grown 1.6 percent in the first quarter of this year if the direct and indirect effects. . .  Full story
South Africa's headline consumer inflation accelerated more than expected to 6.6 percent year-on-year in May from 6.1 percent in April, Statistics. . .  Full story
South Africa's rand was on shaky ground against the dollar on Wednesday after pushing convincingly through the 10.80 barrier overnight, with. . .  Full story

South Africa's retail sales grew by 1.8 percent year-on-year in April compared with a revised 0.8 percent in March, Statistics South Africa said on Wednesday.. . .  Full story
Spending in South Africa expanded at an annualised 2.7 percent in the first quarter of the year after falling 3.6 percent in the last three months of 2013 as the pace. . .  Full story
South African President Jacob Zuma put the need to boost the economy at the centre of the first major policy speech of his second term on Tuesday, saying he hoped to lift annual growth. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0050693.95-217.10-0.43%
JSE Top 4017:0045723.15-179.10-0.39%
JSE Gold17:001399.141.290.09%
JSE Financial17:0037186.84-355.81-0.95%
JSE Industrial17:0066996.14-382.39-0.57%
JSE Indust 2517:0059378.63-303.76-0.51%
JSE Resource17:0056719.05149.740.26%
DJ Futures19:1216685.00-44.00-0.26%
DJ Ind19:5816785.22-23.27-0.14%
SP 50019:581941.50-0.49-0.03%
FTSE 10017:356778.5611.790.17%
All Ords08:375363.90-16.80-0.31%
NZSE 5007:485184.46-9.04-0.17%
NameTimeRPMove% Move
Gold $19:591271.25.010.00%
Gold R19:5913648.27-128.34-0.93%
Gold R/kg19:58439000-2560-0.58%
Silver $19:5919.7740.03900.20%
Platinum $19:591446.9010.400.72%
Palladium $19:59821.808.101.00%
Brent Crude19:58114.15.930.82%
Rand / Dollar19:5910.7361-0.0978-0.90%
Rand / Pound19:5518.1627-0.1864-1.02%
Rand / Euro19:5514.5742-0.1044-0.71%
Rand / NZD19:599.3236-0.0556-0.59%
Rand / AUD19:5510.0346-0.0862-0.85%
Yen / Dollar19:59102.18900.00800.01%
Euro / Dollar19:590.7366-0.0016-0.22%
Dollar / Euro19:591.35760.00240.18%
Pound / Dollar19:550.59010.00070.12%

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 OANDO  1291715.18.%54835
2 LITHA  195158.33.%4591758
3 VUNANI  185137.56.%5600
4 DIAMONDCP  13886.15.%20000
5 SANTOVA  235135.86.%165672
6 PALLINGHT  399184.72.%1424705
7 ADVTECH  880374.39.%253180
8 HOSP-B  520214.21.%499678
9 METMAR  14053.70.%66309
10 SIBANYE  2579913.66.%3356285
11 NAMPAK  38201303.52.%2250754
12 ATLATSA  465153.33.%15400
13 POYNTING  348113.26.%45962
14 CLIENTELE  1800502.86.%13292
15 TSOGO-SUN  2689692.63.%121944
16 DRDGOLD  33872.11.%1155529
17 WESIZWE  15032.04.%2007884
18 BRAIT  66851251.91.%625770
19 AQUARIUS  44581.83.%836367
20 KEATON   28051.82.%71299

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Major Moves Down
SharenameSaleMove% MoveVolume
1 BRIMST-N  1451-149-9.31.%8027
2 TRUSTCO  160-10-5.88.%10000
3 CAMAC  851-48-5.34.%1557
4 HARMONY  2931-150-4.87.%706828
5 ALTRON-P  2630-129-4.68.%42854
6 ABIL  725-35-4.61.%9178191
7 CADIZ  105-5-4.55.%113281
8 ELBGROUP  4502-198-4.21.%148868
9 THARISA  2450-100-3.92.%1400
10 PETMIN  250-10-3.85.%458671
11 CSG  180-7-3.74.%40020
12 VALUE  530-19-3.46.%43058
13 GRINDROD  2786-92-3.20.%947781
14 ADAPTIT  750-24-3.10.%89864
15 METROFILE  475-15-3.06.%8200
16 FIRSTRAND  3986-124-3.02.%11646598
17 BARWORLD  10077-298-2.87.%1949830
18 TIGBRANDS  30706-893-2.83.%428668
19 MRHLD  2485-72-2.82.%2841878
20 NET1UEPS  11762-338-2.79.%6075

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New Highs
SharenameSaleHighMove% MoveVolume
1 PALLINGHT  399409184.72.%1424705
2 WESIZWE  15016032.04.%2007884
3 BRAIT  668567041251.91.%625770
4 NEPI  93249350390.42.%36699
5 HCI  1720117572-44-0.26.%102275
6 REINET  25862633-14-0.54.%2715476
7 SUNINT  1093411004-66-0.60.%177657
8 BATS  6447465684-526-0.81.%586232
9 INVLTD  95549694-97-1.01.%590807
10 SABMILLER  6205063243-686-1.09.%1325048
11 PSG-KST  790829-16-1.99.%1884570
12 EQUITES  10751100-25-2.27.%41467

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New Lows
SharenameSaleLowMove% MoveVolume

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Index Summary
Index NameRPMove% Move
Top 4045,723.15-179.10-0.39%
Mid Cap63,666.26-459.75-0.72%
Small Cap53,919.24-94.59-0.18%
Resource 2056,719.05149.740.26%
Industrial 2559,378.63-303.76-0.51%
Financial 1514,340.07-166.19-1.15%
Financial & Ind. 3063,105.62-413.02-0.65%
All Share50,693.95-217.10-0.43%
Oil & Gas 47,977.67-349.62-0.72%
Mining 33,198.77173.480.53%
Gold Mining1,399.141.290.09%
Platinum Mining48.97.180.37%
GENERAL MINING9,662.0857.810.60%
Oil & Gas Producers 25,796.71-187.98-0.72%
Basic Materials 29,460.56154.540.53%
Chemicals 24,865.90-71.86-0.29%
Forestry & Paper 33,008.01227.780.69%
Industrial Metals 18,541.36166.230.90%
Industrials 45,410.96-605.02-1.31%
General Industrials 142.69-1.80-1.25%
Consumer Goods 63,719.38-442.02-0.69%
Automobiles & Parts 8,944.61-90.58-1.00%
Household Goods373.0900.02%
Health Care 82,522.34-498.55-0.60%
Beverages 211.74-2.32-1.08%
Index NameRPMove% Move
Food Producers 76,369.25-1642.28-2.11%
Personal Goods 1,108.63-.60-0.05%
Consumer Services 11,941.21-14.23-0.12%
General Retailers 64,146.55-911.22-1.40%
Travel & Leisure 5,794.1919.890.34%
Media 271.221.630.60%
Support Services 2,748.86-67.52-2.40%
Telecommunications 10,820.48-75.98-0.70%
Financials 37,186.84-355.81-0.95%
Banks 64,374.85-1130.90-1.73%
Non-life Insurance 49,862.74-1163.81-2.28%
Life Insurance 35,657.94-265.26-0.74%
General Financial 3,789.44-22.07-0.58%
Technology 42,773.50-96.67-0.23%
SHARIAH TOP40 4,250.4120.05%
FTSE/JSE SHARIAH ALL4,361.95-5-0.11%
COAL MINING17,793.27320.18%
FTSE JSE Fledgling 6,803.13-6-0.08%
FTSE/JSE Alt X 1,257.10-5-0.42%
CAPPED PROPERTY 445.16-0.20%
RESOURCE 30,986.60840.27%
DIVIDEND PLUS223.76-2-0.87%
FTSE/JSE RAFI 4010,000.65-57-0.57%
Capped Top 4024,235.80-105-0.43%
Capped All Share25,677.89-114-0.44%
JSE TABACO 8,238.64-67-0.81%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
20/06/2014AMECORMarch 2014 (Final)
24/06/2014WESCOALMarch 2014 (Final)
25/06/2014NASPERSMarch 2014 (Final)
25/06/2014NASPERS-NMarch 2014 (Final)
25/06/2014OMNIAMarch 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
INVICTA17/06/1404/07/1414/07/14ZAR 1.8465
TELEMASTR17/06/1404/07/1414/07/14ZAR 0.0100
MICROMEGA12/06/1427/06/1407/07/14ZAR 0.2000
AF-OVR 6%PP12/06/1427/06/1407/07/14ZAR 0.0600
SYCOM12/06/1420/06/1430/06/14ZAR 0.9516
Ex Div**
Share NameDec-DateLDTPay-DateAmount
BRAIT PREF29/05/1412/06/1423/06/14ZAR 4.4934
MRPRICE27/05/1412/06/1423/06/14ZAR 3.1400
TONGAAT26/05/1412/06/1426/06/14ZAR 2.1000
ASTRAL19/05/1412/06/1423/06/14ZAR 2.0000
REUNERT20/05/1412/06/1423/06/14ZAR 0.9500

Upcoming AGMs**
CodeCompany NameDateStatus
GGMGoliath Gold Mining Ltd.19/06/2014Confirmed
PSGPSG Group Ltd.20/06/2014Confirmed
PGFPPSG Group Ltd.20/06/2014Confirmed
ZEDZeder Investments Ltd.20/06/2014Confirmed
ZEDPZeder Investments Ltd.20/06/2014Confirmed

Stock Exchange News Service
18/06/201417:37UBS AG - UBNPNA - expiry notice
18/06/201417:12TRUSTCO GROUP HOLDINGS LIMITED - Resignation of current Company Secretary and ap...
18/06/201417:11FOUNTAINHEAD PROPERTY TRUST - Further cautionary announcement
18/06/201417:10UBS AG - New Instrument listing-UBS NPNB
18/06/201417:09AFRICAN EAGLE RESOURCES PLC - Audited Financial Results for year ended 31 Decemb...
18/06/201417:00THE FOSCHINI GROUP LIMITED - Notification of acquisition of beneficial interest ...
18/06/201416:34ASTRAPAK LIMITED - Disposal of the business of Hilfort Plastics Cape Town - APK ...
18/06/201416:30TONGAAT HULETT LIMITED - Tongaat Hulett: Appointment of an Independent Non-Exec...
18/06/201416:29OANDO PLC - Oando Energy Announces Nigerian Government Approval of $1.65 Billion...
18/06/201416:15DIPULA INCOME FUND LIMITED - Dealings in securities by an associate of directors...
18/06/201416:00DEVELOPMENT BANK OF SOUTHERN AFRICA - New Financial Instruments Listing - DVF17/...
18/06/201415:45CAPITAL & COUNTIES PROPERTIES PLC - Listing Application in Connection with the C...
18/06/201415:35LONMIN PLC - Wage negotiations update
18/06/201415:27RECM AND CALIBRE LIMITED - Audited Abridged Results for the year ended 31 March ...
18/06/201415:21HUGE GROUP LIMITED - Associate of Director Dealing in Securities
18/06/201415:00INVESTEC PLC - Director's Dealings
18/06/201414:45ZEDER INVESTMENTS LIMITED - Cautionary announcement
18/06/201414:30INTERWASTE HOLDINGS LIMITED - Disclosure of Offers in Interwaste Holdings Shares...
18/06/201414:30REDEFINE PROPERTIES LIMITED - TRP121: Notification of an acquisition of benefici...
18/06/201414:26THE STANDARD BANK OF SA LTD - Interest rate announcement
18/06/201414:25REDEFINE PROPERTIES LIMITED - Results of debenture holders scheme meeting and sh...
18/06/201414:11CAXTON CTP PUBLISHERS & PRINTERS LD - Director's Dealings in Securities
18/06/201414:00GRINDROD LIMITED - Final Terms and Pro Forma Financial Effects of The Bookbuild ...
18/06/201414:00BRIMSTONE INVESTMENT CORPORATION LD - The participation by Brimstone in a BEE co...
18/06/201414:00THE STANDARD BANK OF SA LTD - Interest rate announcement - CLN61
18/06/201413:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
18/06/201413:00COMMISSIONER STREET NO 1 (PTY) LTD - MFS1A1-Partial Redemption
18/06/201412:17ACUCAP PROPERTIES LIMITED - Dealings in securities by an associate of the compan...
18/06/201412:02PROTECH KHUTHELE HOLDINGS LIMITED - Reviewed provisional report for the year end...
18/06/201411:45ILIAD AFRICA LIMITED - Disclosure of disposal of securities
18/06/201411:39THE STANDARD BANK OF SA LTD - Interest rate announcement
18/06/201411:34ADCORP HOLDINGS LIMITED - Results of General Meeting
18/06/201411:24RAUBEX GROUP LIMITED - Acquisitions of Shisalanga Construction and of the operat...
18/06/201411:10DIPULA INCOME FUND LIMITED - Change to the company secretary
18/06/201411:05FIRSTRAND BANK LIMITED - Full Capital Redemption-FRC114 & FRC57
18/06/201411:00MMI HOLDINGS LIMITED - CareCross acquisition by MMI
18/06/201411:00LONDON FINANCE AND INVEST. GRP PLC - Interim Management Statement - Correction
18/06/201410:18PALLINGHURST RESOURCES LIMITED - Director's Dealings
18/06/201410:07BSI STEEL LIMITED - Dealing in securities
18/06/201410:06STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank of South Africa Limit...
18/06/201410:00AFRICA ETF ISSUER LTD (RF) - ETFPLD ISIN code: ZAE000182531 (Africa ETF) Listin...
18/06/201409:15NEW GOLD ISSUER LIMITED - NGPLD-Additional Listing of NewGold Palladium Debentur...
18/06/201409:15JSE LIMITED - GEN - General - Stratcorp Limited - Emphasis of matter
18/06/201409:10NEW GOLD ISSUER LIMITED - NGPLT-Additional Listing of NewGold Platinum Debenture...
18/06/201408:45STANDARD BANK GROUP LIMITED - Rating outlook revised of The Standard Bank of Sou...
18/06/201408:01NET 1 UEPS TECHNOLOGIES INC - Notification of director`s dealings in Net1 securi...
18/06/201408:00ILLOVO SUGAR LIMITED - No change statement and notice of AGM
18/06/201408:00NEW EUROPE PROPERTY INVESTMENTS PLC - Update on investments
18/06/201408:00NET 1 UEPS TECHNOLOGIES INC - Notification of director`s dealings in Net1 securi...
18/06/201407:05BRITISH AMERICAN TOBACCO PLC - Transaction in own shares

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