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 The Sharenet Daily 
Wednesday, 01 October 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 - Capital Protection

One of the many pearls of wisdom dispensed by Warren Buffett is “Rule No. 1: Never lose money. Rule No. 2: Don’t forget rule No. 1”. Unfortunately this is easier said than done in the real world. Fund managers are acutely aware of investor aversion to losses.

Losses on portfolios can be due to market movements in the price of the investments or when investments go under or default on their obligations. The latter is permanent capital loss, as there is no opportunity to recover the losses suffered. African Bank is an example of this. Investors may get some of their capital back, but will unlikely get a material portion of it back.

When suffering losses, an investor requires a return higher than the loss to return to breakeven. The graph below shows the subsequent required return needed to breakeven for a particular levels of loss.

From the above graph we can see that the breakeven return required grows exponentially as losses increase. When investors suffer a 10% loss, they only need 11% to get back where they were. At a 50% loss the investments needs to have subsequent return of 100% to breakeven.

Fund managers have different ways in trying to minimise possible capital losses. If the fund manager is managing a multi asset class fund he/she will be able to underweight or avoid asset classes that are expensive (high in risk) and rather allocate capital to asset classes that are cheap (low in risk). An active fund manager can also try to reduce possible losses by individually picking the instruments he/she wants to include in their portfolio. They can select the companies that are undervalued and avoid ones that are expensive.

No fund manager is exactly alike and each has a different way in classifying risk and varying levels of risk aversion. The more aggressive fund managers will tend to outperform a conservative manager at the end of strong bull market. In bull markets a conservative manager will typically start taking profits from the stocks that performed well and deploy the capital into asset classes where there are opportunities. The aggressive manager will tend to ride the run as far as possible and will experience a bigger drawdown when the markets correct. Managers that avoid deep drawdowns typically perform better over full market cycles.

The graph below is a drawdown comparison between two funds (blue and green) and the category’s average fund (yellow). The blue line is a typical conservative manager and the green line a more aggressive manager. Both of these funds fall into the (ASISA) South African MA High Equity category.

During the financial crisis of 2008 the blue fund manager was able to protect capital much better than the green fund. The maximum drawdown of the blue fund was 11.8% compared to the green’s 23.4% and the average manager’s 16.8%.

This is one of the reasons one should take time to understand a fund manager’s philosophy and investment process. You might just be able to spare yourself some heartache by avoiding making an investment with an aggressive fund manager at the peak of a market cycle.

At Seed we understand that risk needs to be taken to generate inflation beating returns, but seek to structure our solution Funds (Seed Flexible and Seed Absolute Return) in order to ensure that they don’t experience permanent capital destruction.

Kind regards,

Gerbrandt Kruger

021 914 4966

Wed, 01 Oct 2014
Top News
South African stocks fell for the third straight session on Wednesday, dragged down by mining companies such as Lonmin and AngloGold Ashanti which slid on plunging spot metal prices.  Full story

Local markets  Full story
France laid down the gauntlet to EU partners on Wednesday with a 2015 budget setting out how it would bring its borrowing back to within EU limits two years later than promised, a retreat it blamed on a fragile economy.  Full story
Hong Kong authorities will not immediately move to clear tens of thousands of pro-democracy protesters occupying large areas of the city, and will let them stay for weeks if need be, a source with ties to leader Leung Chun-ying said on Wednesday.  Full story
The man being treated for Ebola in Texas showed no signs of fever or symptoms of the virus when he left Liberia for the United States via Brussels on Sept. 19, the Liberian government said on Wednesday.  Full story
Stock markets worldwide launched the fourth quarter on a negative note on Wednesday, as tepid manufacturing data weighed on European markets and the. . .  Full story
Gold rebounded from the previous session's nine-month lows on Wednesday as the dollar index pulled back from early highs in the wake of. . .  Full story
Australian shares added 0.8 percent on Wednesday, supoorted by a rebound in recently battered banking stocks, though sentiment remained fragile on softer-than-expected retail sales. . .  Full story
Japan's Nikkei share average dropped to a two-week low on Wednesday in choppy trade as civil unrest in Hong Kong curbed risk appetite,. . .  Full story

. . .  Full story
The dollar advanced on Tuesday after weak euro zone inflation data for September heightened expectations of stimulus from the European Central Bank, while world. . .  Full story
Gold fell to a nine-month low on Tuesday as the dollar surged and commodities led by crude oil tumbled on expectations of further. . .  Full story
Hong Kong's benchmark index fell to a three-month low on Tuesday, finishing on its biggest monthly fall since May 2012 as investors dumped. . .  Full story
SA Business
Less than a year after tearing up a $57 million annual supply contract with its main buyer, Anglo American Platinum is struggling to implement a new strategy of selling directly to end-users against a backdrop of weak prices, sources say.. . .  Full story
South Africa's rand remained on the back foot against the U.S. dollar on Wednesday, still spooked by data showing yawning trade and budget deficits.. . .  Full story

South Africa's new vehicle sales rose 11.5 percent year-on-year in September to 60,854 units, data from the trade and industry department showed on Wednesday.. . .  Full story
South Africa's top public health worker union said on Wednesday it wanted a 15 percent across-the-board wage increase and would begin a series of protest marches over poor government services this week.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0548875.03-461.28-0.93%
JSE Top 4017:0043679.72-480.59-1.09%
JSE Gold17:001245.79-19.73-1.56%
JSE Financial17:0037034.73-213.60-0.57%
JSE Industrial17:0565599.66-508.36-0.77%
JSE Indust 2517:0057838.57-533.04-0.91%
JSE Resource17:0051716.55-840.24-1.60%
DJ Futures19:4616726.00-206.00-1.22%
DJ Ind19:5216794.91-247.99-1.46%
SP 50019:521947.08-25.21-1.28%
FTSE 10017:356557.52-65.20-0.98%
All Ords08:465334.5037.700.71%
NZSE 5006:485274.5819.540.37%
NameTimeRPMove% Move
Gold $20:001214.486.260.52%
Gold R19:5913665.0529.080.21%
Gold R/kg19:52439265-2175-0.49%
Silver $20:0017.2140.23101.36%
Platinum $20:001283.31-8.19-0.63%
Palladium $19:59779.007.500.97%
Brent Crude19:4895.25-1.95-2.01%
Rand / Dollar20:0011.2549-0.0311-0.28%
Rand / Pound19:5518.1774-0.0901-0.49%
Rand / Euro19:5514.1898-0.0657-0.46%
Rand / NZD19:598.7775-0.0438-0.50%
Rand / AUD19:559.8155-0.0596-0.60%
Yen / Dollar20:00109.3020-0.3170-0.29%
Euro / Dollar19:550.79270.00130.16%
Dollar / Euro19:591.2608-0.0022-0.17%
Pound / Dollar19:550.61770.00130.21%

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 TELEMASTR  1102427.91.%10000
2 NUWORLD  260033514.79.%8910
3 BLUETEL  1000889.65.%10888667
4 SABVEST  44003007.32.%731
5 TELKOM  57653025.53.%2557285
6 SILVERB  12054.35.%12500
7 MMG  1640603.80.%51066
8 ASCEN_B  25493.67.%4101072
9 ROCKWELL  330103.12.%1200
10 ARCMITTAL  38251062.85.%571001
11 FINBOND  29982.75.%388953
12 BARWORLD  95002502.70.%533526
13 PIKWIK  2300602.68.%319455
14 KAP  414102.48.%437221
15 TRUWTHS  69501552.28.%3517430
16 REMGRO  232844822.11.%922365
17 OCTODEC  2148442.09.%150311
18 ASTRAL  155353102.04.%102627
19 AECI  121912412.02.%80988
20 SUPRGRP  3155611.97.%359791

Click here for more Major Moves...
Major Moves Down
SharenameSaleMove% MoveVolume
1 DAWN  802-138-14.68.%13800
2 TRNSHEX  325-25-7.14.%39235
3 TRNPACO  1800-100-5.26.%7782
4 LITHA  237-13-5.20.%24758
5 LONMIN  3220-165-4.87.%2149549
6 ADCORP  3000-145-4.61.%165442
7 DIGICOR  210-10-4.55.%317807
8 EASTPLATS  970-43-4.24.%3995
9 COMAIR  412-18-4.19.%345056
10 ATLATSA  302-13-4.13.%45889
11 ARB  670-28-4.01.%5530
12 ANCHOR  645-25-3.73.%590419
13 SYCOM  2480-95-3.69.%154119
14 MIXTEL  425-16-3.63.%30000
15 IMPERIAL  16807-588-3.38.%691466
16 PPC  2860-96-3.25.%4570680
17 ACUCAP  4451-141-3.07.%168231
18 CSG  190-6-3.06.%12222
19 POYNTING  260-8-2.99.%41270
20 INTEWASTE  130-4-2.99.%136051

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New Highs
SharenameSaleHighMove% MoveVolume
1 NUWORLD  2600270033514.79.%8910
2 BLUETEL  10001025889.65.%10888667
3 A-V-I  69487070-42-0.60.%1039864
4 AFRO-C  501532-6-1.18.%487078

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New Lows
SharenameSaleLowMove% MoveVolume
1 DAWN  802802-138-14.68.%13800
2 LONMIN  32203216-165-4.87.%2149549
3 ADCORP  30002749-145-4.61.%165442
4 PPC  28602831-96-3.25.%4570680
5 ARM   1400013894-328-2.29.%588814
6 HOLDSPORT  39303613-80-2.00.%345507
7 ASSORE  2108320834-417-1.94.%67623
8 METAIR  32403200-50-1.52.%226994
9 RICHEMONT  90889080-132-1.43.%5372777
10 NORTHAM  36373451-45-1.22.%324785

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Index Summary
Index NameRPMove% Move
Top 4043,679.72-480.59-1.09%
Mid Cap64,378.95-105.18-0.16%
Small Cap54,691.76-6.07-0.01%
Resource 2051,716.55-840.24-1.60%
Industrial 2557,838.57-533.04-0.91%
Financial 1514,178.33-86.94-0.61%
Financial & Ind. 3061,539.33-522.70-0.84%
All Share48,875.03-461.28-0.93%
Oil & Gas 46,107.00-307.99-0.66%
Mining 29,683.59-565.01-1.87%
Gold Mining1,245.79-19.73-1.56%
Platinum Mining36.72-1.03-2.73%
GENERAL MINING8,804.25-165.61-1.85%
Oil & Gas Producers 24,790.88-165.60-0.66%
Basic Materials 26,570.18-450.86-1.67%
Chemicals 24,408.56191.530.79%
Forestry & Paper 32,342.02-182.38-0.56%
Industrial Metals 16,151.64107.070.67%
Industrials 45,134.43214.270.48%
General Industrials 148.121.851.26%
Consumer Goods 59,647.35-752.90-1.25%
Automobiles & Parts 7,336.85-113.22-1.52%
Household Goods371.9610.22%
Health Care 90,820.20-890.90-0.97%
Beverages 209.92-4.03-1.88%
Index NameRPMove% Move
Food Producers 81,805.10-30.77-0.04%
Personal Goods 907.68-13.18-1.43%
Consumer Services 11,779.52-102.07-0.86%
General Retailers 63,831.58-733.77-1.14%
Travel & Leisure 5,865.7631.280.54%
Media 269.54-2.15-0.79%
Support Services 2,716.31-76.15-2.73%
Telecommunications 11,351.40-29.25-0.26%
Financials 37,034.73-213.60-0.57%
Banks 63,421.54-210.02-0.33%
Non-life Insurance 53,908.01173.550.32%
Life Insurance 35,041.42-232.24-0.66%
General Financial 3,586.00-52.58-1.45%
Technology 44,598.72-189.15-0.42%
SHARIAH TOP40 4,002.12-52-1.28%
FTSE/JSE SHARIAH ALL4,167.87-46-1.10%
COAL MINING16,170.07-52-0.32%
FTSE JSE Fledgling 6,718.82-36-0.53%
FTSE/JSE Alt X 1,307.1400.00%
CAPPED PROPERTY 470.97-0.49%
RESOURCE 28,125.32-461-1.61%
DIVIDEND PLUS216.29-1-0.51%
FTSE/JSE RAFI 409,557.58-88-0.92%
Capped Top 4023,187.35-248-1.06%
Capped All Share24,767.71-233-0.93%
JSE TABACO 8,101.41-43-0.52%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
03/10/2014ISAAugust 2014 (Interim)
03/10/2014PHUMELELAJuly 2014 (Final)
03/10/2014SOVFOODAugust 2014 (Interim)
06/10/2014CASHBILJune 2015 (Final)
06/10/2014FIRESTONEJune 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
LONFIN30/09/1414/11/1412/12/14GBP 0.0045
TELEMASTR30/09/1417/10/1427/10/14ZAR 0.0200
AFRO-C30/09/1421/11/1401/12/14ZAR 0.1800
INVPREFR30/09/1417/10/1427/10/14ZAR 12.9895
ASTRAPAKP30/09/1417/10/1427/10/14ZAR 3.8959
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ARM04/09/1426/09/1406/10/14ZAR 6.0000
SASFIN-P10/09/1426/09/1406/10/14ZAR 3.6492
MMI HLDGS10/09/1426/09/1406/10/14ZAR 0.8500
SPURCORP11/09/1426/09/1406/10/14ZAR 0.6400
MMI HLDGS10/09/1426/09/1406/10/14ZAR 0.5000

Upcoming AGMs**
CodeCompany NameDateStatus
WEAWG Wearne Ltd.01/10/2014Confirmed
DLTDelta Property Fund Ltd.02/10/2014Confirmed
TWRTower Property Fund Ltd.02/10/2014Confirmed
RBXRaubex Group Ltd.03/10/2014Confirmed
KEHKeaton Energy Holdings Ltd.06/10/2014Confirmed

Stock Exchange News Service
01/10/201417:40AWETHU BREWERIES LIMITED - Change in Directors' responsibilities
01/10/201417:35ATTACQ LIMITED - TRP121: Notification of a disposal of beneficial interest in se...
01/10/201417:35AWETHU BREWERIES LIMITED - Announcement regarding the late publication of the an...
01/10/201417:30JSE LIMITED - Index Change Advice - 20141006 Unbundling of Quantum Foods from Pi...
01/10/201417:30OLD MUTUAL PLC - Old Mutual plc Sale of Skandia Germany & Skandia Austria Comple...
01/10/201417:05REDEFINE PROPERTIES LIMITED - Interest rate reset: RDFB01
01/10/201417:03HUGE GROUP LIMITED - Change in designated adviser
01/10/201417:00NASPERS LIMITED - Director's Dealings
01/10/201416:53HARMONY GOLD MINING COMPANY LIMITED - Notification in terms of Section 122(3)(b)...
01/10/201416:52DRDGOLD LIMITED - Production update: 5%-7% rise in gold production expected
01/10/201416:50AMALGAMATED ELECTRONIC CORP LTD - Change statement and notice of annual general ...
01/10/201416:35STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank of South Africa Limit...
01/10/201416:30PROTECH KHUTHELE HOLDINGS LIMITED - Update and renewal of cautionary announcemen...
01/10/201416:30TRUWORTHS INTERNATIONAL LIMITED - Directors dealings in the companys securities
01/10/201416:08ANGLO AMERICAN PLC - Total voting rights
01/10/201416:00DATATEC LIMITED - Notification of change in a major interest in Datatec shares
01/10/201416:00NETCARE LIMITED - Declaration of preference dividend number 17
01/10/201415:30ZEDER INVESTMENTS LIMITED - Finalisation announcement
01/10/201415:15Macquarie Securities South Africa Ltd - Dividend declaration announcement - MAQP...
01/10/201415:10IVUZI INVESTMENTS LIMITED - IVA499-50 Listing of Tap Issue
01/10/201415:06NET 1 UEPS TECHNOLOGIES INC - Notification of director's dealings in Net1 securi...
01/10/201415:05NET 1 UEPS TECHNOLOGIES INC - Notification of director's dealings in Net1 securi...
01/10/201415:00IVUZI INVESTMENTS LIMITED - IVA502-New Instrument listiing
01/10/201415:00DELTA INTERNATIONAL PROPERTY HOLDINGS LIMITED - Discontinuance in Bermuda and re...
01/10/201414:50ALLIED ELECTRONICS CORPORATION LTD - Acquisition by Altech Autopage of Nashua Mo...
01/10/201414:50EQUITES PROPERTY FUND LIMITED - Change to the company secretary
01/10/201414:47NATIONAL TREASURY - Market making press release R2044
01/10/201414:40VUKILE PROPERTY FUND LIMITED - Dealings in securities by a director of Vukile
01/10/201414:24THE STANDARD BANK OF SA LTD - The Standard Bank of South Africa Limited Financia...
01/10/201413:47LONMIN PLC - Total Voting Rights and Capital as at 30 September 2014
01/10/201413:15RESILIENT PROPERTY INCOME FUND LTD - RES25-Full Capital Redemption
01/10/201413:10NEWFUNDS COLLECTIVE INVEST SCHEME - Change to index constitutents
01/10/201412:50REDEFINE PROPERTIES LIMITED - Results of Accelerated Bookbuild
01/10/201412:40BRITISH AMERICAN TOBACCO PLC - Voting Rights and Capital
01/10/201411:40MICROMEGA HOLDINGS LIMITED - Trading Statement
01/10/201411:15SEPHAKU HOLDINGS LIMITED - Operational update
01/10/201410:55NEWFUNDS COLLECTIVE INVEST SCHEME - Change to index constituents
01/10/201410:29DISTELL GROUP LIMITED - Dealings in securities by a director of a major subsidia...
01/10/201410:22Transnet SOC Limited - TSP176 Commercial Paper
01/10/201410:19TRUSTCO GROUP HOLDINGS LIMITED - Dealing in securities by company secretary
01/10/201410:15IMBALIE BEAUTY LIMITED - Trading Update
01/10/201410:00Transnet SOC Limited - TSP164 Commercial Paper Tap
01/10/201410:00AFRICA ETF ISSUER LTD (RF) - Listing of additional AfricaPalladium debentures - ...
01/10/201409:49FIRESTONE ENERGY LIMITED - Annual Report 2014
01/10/201409:33BLUE LABEL TELECOMS LIMITED - Cautionary announcement
01/10/201409:00NORTHAM PLATINUM LIMITED - Notice of annual general meeting and no change statem...
01/10/201408:58TAWANA RESOURCES NL - Environmental Protection Agency Confirms Approval to Progr...
01/10/201408:56REDEFINE PROPERTIES LIMITED - Accelerated Bookbuild
01/10/201408:05GLENCORE PLC - Total voting rights
01/10/201408:00GLENCORE PLC - Share repurchase programme
01/10/201408:00DISTRIB. AND WAREHOUSING NETWORK LD - Trading statement
01/10/201408:00ANGLO AMERICAN PLAT LTD - Investors and analysts site visit to Mogalakwena Mine ...
01/10/201408:00FERRUM CRESCENT LIMITED - Release of final results for the year ended 30 June 20...
01/10/201407:55THE WATERBERG COAL COMPANY LTD - Financial Statements for the year ended 30 June...
01/10/201407:30INVESTEC AUSTRALIA PROPERTY FUND - Appointment of independent non executive dire...
01/10/201407:05BONATLA PROPERTY HOLDINGS LIMITED - Interim Results For The Six Month Period End...
01/10/201407:05POYNTING HOLDINGS LIMITED - Reviewed Condensed Consolidated Results for the Year...
01/10/201407:05VILLAGE MAIN REEF LIMITED - Results for the 12 months ended 30 June 2014

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