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 The Sharenet Daily 
Tuesday, 21 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 - Capitec ? Growing Earnings and Clients

Capitec Bank has taken the banking sector by storm since its listing in 2002, and is widely regarded as the most innovative player in the sector. Its mantra of Simplicity, Affordability, Accessibility and Personal Service has found favour with SA’s consumers, enabling Capitec to grow its client base rapidly. The bank now boasts nearly 6 million clients and 9,491 employees at 647 branches.


Capitec has its roots intertwined with that of PSG Group, which entered the thriving microlending sector in 1997 by acquiring SmartFin and FinAid, two Gauteng based microfinancing businesses. PSG’s aim was to establish a dominant position in a very fragmented industry by consolidating some of the smaller players.

The microlending business was spun out as a subsidiary of PSG Investment Bank, and sold into The Business Bank in order to use its existing banking license. Thus Capitec Bank was established in March 2001, and the holding company Capital Bank Holdings Ltd listed on the JSE in 2002.

In 2003 PSG unbundled Capitec, and over time PSG’s ownership stake has reduced from around 56% to the current 28%.

Financial Results

The bank recently released its interim results for the six months ended 31 August 2014, and reported an impressive 21% increase in headline earnings per share. Further highlights included an increase in the interim dividend by 21% to 246 cents and a 16% increase in active clients over the past year.

The graph below illustrates the growth in headline earning per share (cents) over time:

Capitec’s number of active clients has grown exponentially since 2005, and now stands at 5.8 million including 2.9 million mobile clients. Primary bank clients, which Capitec defines as those making regular monthly deposits such as salaries, have increased to 2.4 million.

Capitec has realised the importance of diversifying its revenue stream away from its microfinance roots. As a result, management has focused attention on increasing the revenue from transactional banking as opposed to interest and fees earned on loans granted. The increase in active clients has enabled Capitec to make some progress here, and transaction fee income now accounts for 22% of income from banking operations.

The net transaction fee income (millions) over time is illustrated in the graph below. For the six months ended 31 August 2014, transactional income was 33% higher at R 1.2bn compared to the same period last year.

On the liability side, the value of new loans advanced decreased by 2% to R 9.3bn, while the number of new loans reduced by 20% to 1.3 million for the period. The average loan amount is now R 7,059, up 22% from the previous period. This is a result of tighter affordability requirements and granting less low-value, short-term loans. Management took the opportunity to remind investors that they remain cautious in extending credit, and that comprehensive affordability assessments are done before granting any loan. The overall term of the outstanding loan book decreased from 45 to 44 months over the last 6 months.

It is encouraging that Capitec continues to provide very prudently for bad loans: 8% are provided for loans that are up to date, 46% for those who are 1 instalment behind, 74% for two instalments behind and 87% for three instalments. After 90 days in arrears the loan is written off as a bad loan.

Gross loan impairment expenses – that is debt written off and provisions for bad debts – rose by 6% compared to the previous period, with write-offs totalling R 2.1bn. Provisions made previously were more than sufficient to absorb the current period write-offs. Recoveries increased by 58% to R 259m.


Capitec currently trades at a PE of 13 and a dividend yield of 2.4%, comparing favourably with the ALSI’s 16.3 and 3.1% respectively.

The share has been included in the Seed Equity Fund in the recent past as a small portion of both the Momentum and Value building blocks, but is not held currently.

Kind regards

Cor van Deventer

021 914 4966

Tue, 21 Oct 2014
Top News
South Africa's rand clawed to its firmest level in 25 days against the dollar on Tuesday as investors took some comfort from China's GDP data, focusing on growth being slightly stronger than forecast.  Full story

Local markets  Full story
Olympic and Paralympic sprinter Oscar Pistorius started his five-year jail sentence on Tuesday for killing his girlfriend Reeva Steenkamp, marking the end of a trial that has gripped South Africa and millions around the world.  Full story
The United States issued stringent new protocols on Monday for health workers treating Ebola victims, directing medical teams to wear protective gear that leaves no skin or hair exposed to prevent medical workers from becoming infected.  Full story
The fatal attack on a Canadian soldier by a suspected Islamic militant in Quebec was "clearly linked to terrorist ideology," Canada's public safety minister said on Tuesday.  Full story
A measure of global equity markets advanced on Tuesday after technology earnings lifted U.S. shares and the prospect of European Central Bank corporate bond. . .  Full story
Gold hit a six-week high on Tuesday on concerns over a global economic slowdown after China's growth eased in the third quarter and. . .  Full story
Hong Kong shares ended flat on Tuesday following weakness in the local currency and concerns over whether upcoming talks between the government and pro-democracy. . .  Full story
China shares fell on Tuesday, with pharmaceutical and property sectors hit by profit-taking and weak economic data, but losses were capped by optimism. . .  Full story

Japanese stocks fell on Tuesday, with the market latching on to comments from the welfare minister on the country's public pension fund as. . .  Full story
Australian shares lost early gains to end little changed on Tuesday in weak volume after data showing China's economy grew in the third. . .  Full story
China shares eased on Tuesday, with pharmaceutical and property sectors hit by profit-taking and weak economic data, but losses were limited on optimism. . .  Full story
A measure of global equity markets rose on Monday after strong U.S. corporate results lifted Wall Street, despite a quarterly earnings miss from. . .  Full story

Investors piled into South African stocks on Tuesday as Taste Holdings rose after buying a watch-maker and as indices tracked global. . .  Full story
Kleenex and Huggies maker Kimberly-Clark Corp said it would cut 1,100 to 1,300 jobs as it focuses on emerging markets after the spinoff. . .  Full story
Internet access in east Africa is still relatively slow and costly but a Djibouti-based technology start-up company has ambitions to help. . .  Full story
South Africa's Treasury sold 2.35 billion rand ($214 million) in 2030, 2032 and 2048 government bonds Tuesday. Yields were lower than. . .  Full story

The South African central bank's leading business cycle indicator rose 0.8 percent month-on-month in August, due to an increase in the number of residential building plans passed and higher volumes in manufacturing orders, a report showed on Tuesday.. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0048530.47931.221.96%
JSE Top 4017:0043385.89906.362.13%
JSE Gold17:001104.9814.911.37%
JSE Financial17:0036989.98689.031.90%
JSE Industrial17:0065806.961493.692.32%
JSE Indust 2517:0058200.021427.632.51%
JSE Resource17:0049878.41575.191.17%
DJ Futures19:2213029.27-1160.91-8.18%
DJ Ind19:5816587.26187.591.14%
SP 50019:581935.4931.481.65%
FTSE 10015:566360.4593.381.49%
All Ords07:365312.505.200.10%
NZSE 5006:485233.1235.230.68%
NameTimeRPMove% Move
Gold $17:281252.066.340.51%
Gold R17:2813764.2729.230.21%
Gold R/kg19:5844252116240.37%
Silver $17:2817.5660.17501.01%
Platinum $17:281276.2514.701.17%
Palladium $17:27772.9012.901.70%
Brent Crude19:5885.71.310.36%
Rand / Dollar17:2810.9933-0.0301-0.27%
Rand / Pound17:2517.7049-0.0849-0.48%
Rand / Euro17:2513.9915-0.1194-0.85%
Rand / NZD17:288.7589-0.0247-0.28%
Rand / AUD17:259.6646-0.0237-0.24%
Yen / Dollar17:28106.7260-0.2210-0.21%
Euro / Dollar17:280.78590.00440.56%
Dollar / Euro17:281.2724-0.0073-0.57%
Pound / Dollar17:250.61960.00110.18%

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 QUANTUMF  318268.90.%162439
2 TRUSTCO  209147.18.%70150
3 HOSP-B  345206.15.%16381
4 MRPRICE  2139011905.89.%906520
5 PINNACLE  1092575.51.%483824
6 ROLFES  349185.44.%63163
7 HUGE  200105.26.%72568
8 BRAIT  71663475.09.%513709
9 TORRE  315155.00.%163330
10 TELKOM  53402404.71.%2271224
11 REMGRO  2377410634.68.%1060533
12 MASSMART  122455484.68.%291096
13 LIFEHC  43781944.64.%4007294
14 CAT  1465644.57.%958
15 CMH  1200504.35.%300
16 DISTELL  131435474.34.%93576
17 WESCOAL  17174.27.%360000
18 KELLY  250104.17.%851
19 METAIR  35001364.04.%201876
20 ANCHOR  550203.77.%58927

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Major Moves Down
SharenameSaleMove% MoveVolume
1 ARGENT  559-31-5.25.%15421
2 DAWN  650-30-4.41.%28692
3 CONDUIT  144-6-4.00.%138080
4 INFRASORS  120-5-4.00.%13000
5 FONEWORX  250-10-3.85.%64490
6 MIXTEL  385-15-3.75.%13000
7 DRDGOLD  304-10-3.18.%249917
8 REBOSIS  1145-35-2.97.%69969
9 DCENTRIX  375-10-2.60.%27961
10 ALEXANDER  780-20-2.50.%1725776
11 INVPROP  1500-35-2.28.%40721
12 AVENG  2082-41-1.93.%381554
13 KAP  407-8-1.93.%1575137
14 ARCMITTAL  3720-63-1.67.%393240
15 GROUP-5  3878-63-1.60.%440686
16 AECI  11894-168-1.39.%32454
17 MRHLD  2357-33-1.38.%644504
18 ARM   14160-185-1.29.%534262
19 PETMIN  161-2-1.23.%701514
20 VALUE  425-5-1.16.%38215

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New Highs
SharenameSaleHighMove% MoveVolume
1 KELLY  250250104.17.%851
2 ASPEN  356003590910302.98.%1067804

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New Lows
SharenameSaleLowMove% MoveVolume
1 DAWN  650630-30-4.41.%28692
2 REUNERT  57795536-1-0.02.%1475590
3 BASREAD  5204600.18341
4 EQSTRA  55349930.55.%321084
5 IMPLATS  834181001001.21.%2187000
6 ALTRON  20201896301.51.%21795

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Index Summary
Index NameRPMove% Move
Top 4043,385.89906.362.13%
Mid Cap63,708.10723.841.15%
Small Cap54,642.15325.880.60%
Resource 2049,878.41575.191.17%
Industrial 2558,200.021427.632.51%
Financial 1514,140.50301.752.18%
Financial & Ind. 3061,728.021458.992.42%
All Share48,530.47931.221.96%
Oil & Gas 42,907.48923.232.20%
Mining 28,909.19250.090.87%
Gold Mining1,104.9814.911.37%
Platinum Mining36.85.230.63%
GENERAL MINING8,639.4973.400.86%
Oil & Gas Producers 23,070.56496.412.20%
Basic Materials 25,890.19230.430.90%
Chemicals 23,933.98-101.50-0.42%
Forestry & Paper 31,185.32616.632.02%
Industrial Metals 16,922.58-216.94-1.27%
Industrials 45,379.03790.851.77%
General Industrials 150.763.792.58%
Consumer Goods 58,949.911068.531.85%
Automobiles & Parts 7,925.60307.964.04%
Household Goods368.8751.34%
Health Care 9,450.97294.193.21%
Beverages 204.834.602.30%
Index NameRPMove% Move
Food Producers 8,047.7381.221.02%
Personal Goods 919.8621.472.39%
Consumer Services 11,900.92369.753.21%
General Retailers 65,370.612235.403.54%
Travel & Leisure 5,974.5389.331.52%
Support Services 2,699.435.250.19%
Telecommunications 11,640.20323.022.85%
Financials 36,989.98689.031.90%
Banks 64,074.091076.461.71%
Non-life Insurance 49,781.07-341.99-0.68%
Life Insurance 34,381.42946.982.83%
General Financial 3,598.4480.452.29%
Technology 45,806.84532.481.18%
SHARIAH TOP40 3,936.07681.76%
FTSE/JSE SHARIAH ALL4,094.89651.61%
COAL MINING15,760.4890.06%
FTSE JSE Fledgling 6,458.97280.43%
FTSE/JSE Alt X 1,285.3920.13%
RESOURCE 27,130.793071.14%
DIVIDEND PLUS216.2631.33%
FTSE/JSE RAFI 409,437.251681.81%
Capped Top 4023,045.534872.16%
Capped All Share24,594.824731.96%
JSE TABACO 7,833.83-4-0.06%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
22/10/2014ADCORPAugust 2014 (Interim)
22/10/2014TRADEHAugust 2014 (Interim)
22/10/2014TRADEHPAugust 2014 (Interim)
23/10/2014CMHAugust 2014 (Interim)
23/10/2014CMH PREFAugust 2014 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
CSG17/10/1414/11/1424/11/14ZAR 0.0400
OASIS16/10/1407/11/1417/11/14ZAR 0.4900
PICKNPAY16/10/1405/12/1415/12/14ZAR 0.1960
PIKWIK16/10/1405/12/1415/12/14ZAR 0.0940
DATATEC15/10/1421/11/1401/12/14ZAR 0.8800
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ILRPREF130/09/1417/10/1427/10/14ZAR 12.9895
CAXTON6%CPP26/08/1417/10/1427/10/14ZAR 4.9000
ASTRAPAKP30/09/1417/10/1427/10/14ZAR 3.8959
SHFINV-PREF09/09/1417/10/1427/10/14ZAR 3.6500
CAPITEC29/09/1417/10/1427/10/14ZAR 2.4600

Upcoming AGMs**
CodeCompany NameDateStatus
WSLWescoal Holdings Ltd.21/10/2014Confirmed
DSTDistell Group Ltd.22/10/2014Confirmed
IMPImpala Platinum Holdings Ltd.22/10/2014Confirmed
IMPCBImpala Platinum Holdings Ltd.22/10/2014Confirmed
ARHARB Holdings Ltd.22/10/2014Confirmed

Stock Exchange News Service
21/10/201417:34RBA HOLDINGS LIMITED - Renewal of cautionary
21/10/201417:32MTN GROUP LIMITED - Dealing in securities by a director of major subsidiaries
21/10/201417:30EOH HOLDINGS LIMITED - Dealings in Securities by Directors
21/10/201417:30REINET INVESTMENTS S.C.A - Net asset value of Reinet Fund S.C.A., F.I.S. as at 3...
21/10/201417:10JSE LIMITED - Index Change Advice - 20141024 Miranda Mineral Holdings Deletion
21/10/201416:57STANDARD BANK OF SOUTH AFRICA LD - SCIB: The Standard Bank of South Africa Limit...
21/10/201416:43MORVEST BUSINESS GROUP LIMITED - No change statement and notice of AGM
21/10/201416:30TOYOTA FIN SERVICES (SA) LTD - TFS125 - Full Capital Redemption
21/10/201415:53JD GROUP LIMITED - Notice of Annual General Meeting and No Change Statement
21/10/201415:45OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
21/10/201415:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
21/10/201415:26BETTABETA CIS - Distribution announcement - BGREEN
21/10/201415:25BETTABETA CIS - Distribution announcement - BBET40
21/10/201415:15OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
21/10/201415:00OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
21/10/201414:30WESCOAL HOLDINGS LIMITED - Results of Annual General Meeting
21/10/201412:41BOWLER METCALF LIMITED - Amendment to the Notice of Annual General Meeting
21/10/201412:30CAPITAL & COUNTIES PROPERTIES PLC - Notification of Major Interests in Shares
21/10/201412:25COMPAGNIE FINANCIERE RICHEMONT SA - Richemont Securities SA withholding tax rec...
21/10/201412:20FIRSTRAND BANK LIMITED - FRS106-Full Capital Redemption
21/10/201412:20SENTULA MINING LIMITED - Disposal of assets
21/10/201412:00DATATEC LIMITED - Further issue of shares
21/10/201411:00CLIENTELE LIMITED - Dealing in Clientele Limited Shares
21/10/201410:08FREEDOM PROPERTY FUND LTD - Changes to the Board of Directors
21/10/201409:30TASTE HOLDINGS LIMITED - Acquisition of Arthur Kaplan Jewellers and Withdrawl of...
21/10/201409:28TAWANA RESOURCES NL - Quarterly Activities Report for the quarter to 30 Septembe...
21/10/201409:06UBUBELE HOLDINGS LIMITED - BRPs to Apply to High Court for Further Extension to ...
21/10/201409:00AFRICA ETF ISSUER LTD (RF) - Africa ETF Issuer (RF) Limited - ETFPLD
21/10/201408:45AFRIMAT LIMITED - Trading Update for the six months ended 31 August 2014
21/10/201408:00BUSINESS CONNEXION GROUP LIMITED - Clarification announcement: Firm intention by...
21/10/201408:00ADAPT IT HOLDINGS LIMITED - Cautionary Announcement
21/10/201408:00GLENCORE PLC - GLN - Transaction in own shares

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