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 The Sharenet Daily 
Tuesday, 10 February 2015 - 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 - Endowment Policies?

Endowment Policies?

Using endowment policies as an investment vehicle is usually one of my most difficult “sells” as a Wealth Manager. The moment a client hears the word “endowment”, the hairs on the back of his neck tend to rise and the fight or flight syndrome kicks in. Unfortunately, this reaction is not totally unjustified. Endowment policies have a legacy of high total costs (especially in terms of commission), vague returns and conditions, and front end loading of costs. Quite often in the “good old days” of twenty year endowment policies, the first year of premiums disappeared in costs.

Given all of the above, and the fact that I don’t charge initial fees or use any investment products that charge initial investment fees, why on earth would I be suggesting that clients use endowments? The fact is that things have changed. We now have “endowment wrappers” with no upfront costs and transparent costs and returns. They are mainly housed on the various unit trust platforms. When the investment holder is a Trust and the investment objective is long term growth, the use of an Endowment becomes a “no brainer”.

Endowments are often marketed as tax free investments by unscrupulous or ill-informed advisors, this is incorrect. They are, however, often tax efficient vehicles especially when the investor is a Trust.

Below is a comparison of the current tax treatment of endowments and discretionary investments in a trust, which clearly shows the tax advantages of an endowment:

Below is an illustration in the differences in tax paid by a Trust on a R 25m discretionary investment on the one hand, and through an endowment wrapper on the other. In this case the platform charged no extra fee for housing the investment in the endowment wrapper. Returns are assumed at 10% pa (6% capital + 2% income + 2% net dividend).

As can be seen, the discretionary investment has a much higher tax burden, which results in a much lower after tax return. In this instance the discretionary investor’s net investment after 5 years would be just over R 37m (8.2% pa), while the endowment’s net investment after 5 years would be just over R 39m (9.3% pa).

There are restrictions when using the endowment in that you are only allowed one withdrawal in the first five years and that withdrawal is restricted to the contributions plus 5% per annum growth (some companies also allow an interest free loan). But endowments have the added advantage that the taxes are paid by the wrapper so income does not need to be included in the Trust’s tax return. This means that nasty income tax surprises are avoided.

So when your wealth manager wants to use an endowment wrapper to house your investments hear him out. If, however, returns are opaque and costs are difficult to explain and understand think carefully.

Kind regards,

Barry Hugo

021 914 4966

Tue, 10 Feb 2015
Top News

Local markets On Tuesday, the JSE All Share edged up 0.01% as rising financials and industrials just managed to offset losses in gold miners and resource shares.  Full story
President Barack Obama and the family of U.S. aid worker Kayla Mueller confirmed on Tuesday that the last-known American hostage held by Islamic State militants had died, with Obama promising to "find and bring to justice the terrorists who are responsible."  Full story
Dominique Strauss-Kahn told a French court on Tuesday he did not know the women at "festive and playful" sex parties he attended were prostitutes, saying that would have been too risky given his then-role as head of the IMF.  Full story
Ukrainian President Petro Poroshenko said peace talks in Minsk on Wednesday were one of the last chances to declare an unconditional ceasefire in the conflict with Russia-backed separatists, a statement on his website said on Tuesday.  Full story
U.S. and European shares rose on Tuesday after press reports on the possibility of a debt agreement between Greece and its major creditors,. . .  Full story
Gold dipped on Tuesday as an uptick in the dollar offset the supportive impact of concerns over Greece's future in the euro zone. . .  Full story
Hong Kong shares erased earlier losses and ended flat on Tuesday, as rebounding mainland stocks eased worries stemming from overnight weakness in global equity. . .  Full story
Japan's Nikkei share average slipped on Tuesday as Greece's rejection of its bailout terms fuelled concerns fresh turmoil in the euro zone, but. . .  Full story

Australian shares fell for a second day on Tuesday, as concerns about Greek debt negotiations gave investors good reason to cut exposure. . .  Full story
The yen advanced against the dollar and euro on Monday as investors sought safety in the Japanese currency on worries about the conflict. . .  Full story
Gold edged up from the previous session's three-week low on Monday, as European equities were hurt by soft Chinese trade data and worries. . .  Full story
Stock indexes worldwide slipped on Monday on weaker-than-expected Chinese trade data and uncertainty about Greece's position in the eurozone, while oil prices surged after. . .  Full story
SA Business
South Africa's power utility Eskom said on Tuesday it would implement controlled outages from 1400 GMT to 2000 GMT due to. . .  Full story
South Africa's Kumba Iron Ore plans to cut jobs, production costs and capital spending to cope with expected weak prices of. . .  Full story
South Africa's manufacturing production was up 1.1 percent year-on-year in December after a revised 1.9 percent contraction in November, Statistics South. . .  Full story
Anglo American Platinum said on Tuesday its mechanisation drive was in full swing and ready to be tried in Twickenham, a. . .  Full story

South Africa's Kumba Iron Ore plans to cut jobs, production costs and capital spending to cope with expected weak prices of the commodity. . .  Full story
South Africa's Treasury sold a total of 2.35 billion rand ($203 million) worth of its 2030, 2044 and 2048 bonds on. . .  Full story
South Africa's unemployment rate decreased to 24.3 percent of the labour force in the fourth quarter of 2014 from 25.4 percent. . .  Full story
South Africa's Northam Platinum said on Tuesday it will acquire Aquarius Platinum's Everest mine and related assets for 450 million rand. . .  Full story

Rio Tinto is expected to star among the top five global miners with a return of billions of dollars to shareholders at its annual results, even as the firm is set to report its worst half-year profit since 2009.. . .  Full story
Company Results
Revenue for the interim period shot up to R262.5 million (2013: R190.9 million). Gross profit jumped to R117.1 million (2013: R80.5 million), profit from operations grew to R37.9 million (2013: R20.5. . .  Full story
Revenue for the interim came in at R8.1 billion (2013: R8.1 billion). Gross profit plummeted to a loss of R143 million (2013: profit of R537 million), operating loss came in. . .  Full story
Net sales revenue grew to R55.6 billion (R52.4 billion). Operating profit was lower at R843 million (R2 biillion). Profit attributable to owners was at R624 million (loss of R1.4 billion). In. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0252109.544.160.01%
JSE Top 4017:0045916.4041.070.09%
JSE Gold17:001522.72-7.62-0.50%
JSE Financial17:0043177.82163.200.38%
JSE Industrial17:0273253.77257.060.35%
JSE Indust 2517:0064868.57298.370.46%
JSE Resource17:0044267.09-642.26-1.43%
DJ Futures18:1817733.0046.000.26%
DJ Ind19:5817822.4993.280.53%
SP 50019:582060.5013.760.67%
FTSE 10017:596807.09-30.06-0.44%
All Ords07:405757.40-12.70-0.22%
NZSE 5006:485784.0914.520.25%
NameTimeRPMove% Move
Gold $19:591233.53-4.74-0.38%
Gold R19:5714427.0914427.090.00%
Gold R/kg19:5846379726480.57%
Silver $19:5916.9170-.0480-0.28%
Platinum $19:591206.30-7.60-0.63%
Palladium $19:59766.00-11.40-1.47%
Brent Crude19:5857.08-.72-1.25%
Rand / Dollar19:5911.69480.11881.03%
Rand / Pound19:5517.81430.22101.26%
Rand / Euro19:5513.23580.11430.87%
Rand / NZD19:578.66908.66900.00%
Rand / AUD19:559.09440.05970.66%
Yen / Dollar19:59119.36000.75800.64%
Euro / Dollar19:550.88320.00050.06%
Dollar / Euro19:591.1312-0.0012-0.11%
Pound / Dollar19:550.6551-0.0019-0.29%

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 ASTRAPAK  5008019.05.%30850
2 RANGOLD  2523114.03.%523
3 ADAPTIT  1042929.68.%534013
4 SANTAM  2450020369.06.%28802
5 LONFIN  650508.33.%1440
6 KIBO  11998.18.%4772
7 ANCHOR  1080797.89.%374978
8 MIXTEL  299186.41.%836344
9 CONVERGE  210126.06.%766770
10 TSOGO-SUN  29901294.51.%1341386
11 TRNPACO  1900703.83.%3756
12 ADCOCK  45401653.77.%747610
13 REBOSIS  1307473.73.%533915
14 AQUARIUS  23383.56.%2680437
15 MAS  1975633.29.%27178
16 PSG-KST  710223.20.%162983
17 BATS  6538719883.14.%1254779
18 HOLDSPORT  51501513.02.%693912
19 DENEB  17153.01.%324000
20 ROLFES  360102.86.%769957

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Major Moves Down
SharenameSaleMove% MoveVolume
1 GIJIMA  140-10-6.67.%1105
2 RBPLAT  5611-338-5.68.%306304
3 DELTAINT  1800-100-5.26.%1600
4 BRIMST-N  1618-77-4.54.%5349
5 POYNTING  187-8-4.10.%251723
6 TIGBRANDS  35670-1524-4.10.%1679740
7 DRDGOLD  264-11-4.00.%305675
8 NORTHAM  4085-165-3.88.%543475
9 PHUMELELA  1700-65-3.68.%12540
10 ASSORE  16730-616-3.55.%201338
11 YORK  255-9-3.41.%3000
12 TRUWTHS  8117-284-3.38.%1336265
13 KUMBAIO  22900-798-3.37.%527840
14 ANGLOPLAT  37118-1182-3.09.%220679
15 DISTELL  14670-450-2.98.%11448
16 PPC  2050-62-2.94.%1535619
17 BARWORLD  8975-264-2.86.%396275
18 AMECOR  240-7-2.83.%56349
19 AVENG  1678-48-2.78.%3159747
20 RAUBEX  1925-55-2.78.%1297980

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New Highs
SharenameSaleHighMove% MoveVolume
1 ADAPTIT  10421042929.68.%534013
2 SANTAM  245002450020369.06.%28802
3 LONFIN  650650508.33.%1440
4 REBOSIS  13071315473.73.%533915
5 HOLDSPORT  515052981513.02.%693912
6 MONDIPLCP  21829219445922.79.%639357
7 PERGRIN  25692649692.76.%1715632
8 MONDILTDP  21750217775822.75.%741171
9 SANLAM  750075851802.46.%5833751
10 SUNINT  13770139943302.46.%314110
11 OLDMUTUAL  38403855832.21.%4149910
12 INTUPROP  658865881251.93.%2091194
13 DATATEC  60586290580.97.%354818
14 ROCKCASTL  27502790250.92.%460603
15 NEPI  1234012600400.33.%143599
16 ASCEN_A  5705800.252939
17 REMGRO  2727228000-128-0.47.%406709
18 STEINHOFF  64616510-36-0.55.%10945699
19 MPACT  38674249-34-0.87.%45640
20 FORTRESSB  22802305-20-0.87.%95812

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New Lows
SharenameSaleLowMove% MoveVolume
1 RAUBEX  19251898-55-2.78.%1297980

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Index Summary
Index NameRPMove% Move
Top 4045,916.4041.070.09%
Mid Cap74,309.77-368.55-0.49%
Small Cap60,234.119.510.02%
Resource 2044,267.09-642.26-1.43%
Industrial 2564,868.57298.370.46%
Financial 1516,540.9176.670.47%
Financial & Ind. 3069,471.08351.850.51%
All Share52,109.544.160.01%
Oil & Gas 34,752.44-744.05-2.10%
Mining 26,640.32-335.26-1.24%
Gold Mining1,522.72-7.62-0.50%
Platinum Mining36.20-.84-2.27%
GENERAL MINING7,495.61-94.79-1.25%
Oil & Gas Producers 18,685.74-400.07-2.10%
Basic Materials 24,395.65-224.06-0.91%
Chemicals 21,948.7077.510.35%
Forestry & Paper 37,859.40741.292.00%
Industrial Metals 13,194.99-386.88-2.85%
Industrials 47,718.66-263.49-0.55%
General Industrials 165.74-1.11-0.67%
Consumer Goods 64,378.24954.611.51%
Automobiles & Parts 7,133.04-67.94-0.94%
Household Goods443.40-2-0.56%
Health Care 10,965.07-90.22-0.82%
Beverages 215.465.412.58%
Index NameRPMove% Move
Food Producers 9,430.95-153.25-1.60%
Personal Goods 1,015.2411.581.15%
Consumer Services 15,497.2329.010.19%
General Retailers 80,819.09-747.99-0.92%
Travel & Leisure 6,729.04131.561.99%
Media 363.862.140.59%
Support Services 2,838.8251.451.85%
Telecommunications 10,516.96-225.20-2.10%
Financials 43,177.82163.200.38%
Banks 76,059.89-345.13-0.45%
Non-life Insurance 62,529.415196.329.06%
Life Insurance 41,083.08763.951.89%
General Financial 3,930.49-28.78-0.73%
Technology 54,052.169.360.02%
SHARIAH TOP40 3,588.05-46-1.28%
FTSE/JSE SHARIAH ALL3,880.75-44-1.13%
COAL MINING13,819.97-214-1.52%
FTSE JSE Fledgling 6,871.2930.04%
FTSE/JSE Alt X 1,500.9460.39%
RESOURCE 24,376.60-347-1.40%
DIVIDEND PLUS242.28-1-0.29%
FTSE/JSE RAFI 409,939.14-25-0.25%
Capped Top 4024,516.14140.06%
Capped All Share26,430.9120.01%
JSE TABACO 8,355.312543.14%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
11/02/2015ABSABANK-PDecember 2014 (Final)
11/02/2015ASSOREDecember 2014 (Interim)
11/02/2015B-AFRICADecember 2014 (Final)
11/02/2015GROUP 5December 2014 (Interim)
11/02/2015NEPIDecember 2014 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
DELTA09/02/1513/03/1523/03/15ZAR 2.5000
TOWER06/02/1520/02/1502/03/15ZAR 0.4199
TRADEHOLD PREF06/02/1520/02/1502/03/15ZAR 0.0452
DELTA INT05/02/1520/02/1502/03/15USD 0.0663
SHPRT 3RD505/02/1520/02/1502/03/15ZAR 0.0500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ECSP C23/01/1506/02/1516/02/15ZAR 1.0164
ECSP A23/01/1506/02/1516/02/15ZAR 0.7671

Upcoming AGMs**
CodeCompany NameDateStatus
SAPSappi Ltd.11/02/2015Confirmed
NWLNu-World Holdings Ltd.11/02/2015Confirmed
NWNNu-World Holdings Ltd.11/02/2015Confirmed
EOHEOH Holdings Ltd.11/02/2015Confirmed
OCEOceana Group Ltd.12/02/2015Confirmed

Stock Exchange News Service
10/02/201517:20CHEMICAL SPECIALITIES LIMITED - Resignation of Director
10/02/201516:32ROCKCASTLE GLOBAL REAL EST CO LTD - Availability of condensed unaudited consolid...
10/02/201516:30NEW EUROPE PROPERTY INVESTMENTS PLC - Directorate change
10/02/201516:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
10/02/201516:30OLD MUTUAL PLC - Total Voting Rights and Shares in Issue
10/02/201516:22SPANJAARD LIMITED - Dealings in securities by a Director
10/02/201516:15THE FOSCHINI GROUP LIMITED - Director dealing in securities
10/02/201516:00CAMAC ENERGY INCORPORATED - Completes 2D Seismic acquisitions in Kenya
10/02/201515:50ABSA BANK LIMITED - ABN92 - Interest Rate Reset
10/02/201515:34THE STANDARD BANK OF SA LTD - Interest Rate Announcement - CLN364, CLN366, CLN36...
10/02/201515:33NEDBANK LIMITED1 - Disclosure of acquisition of securities
10/02/201515:20HOSKEN CONSOLIDATED INVESTMENTS LTD - Results of General Meeting
10/02/201515:00CLOVER INDUSTRIES LIMITED - Updated trading statement
10/02/201515:00STEINHOFF INTERNATIONAL HOLDINGS LTD - Waiver of mandatory offer
10/02/201514:50ABSA BANK LIMITED - ASN025 - Interest Rate Reset
10/02/201514:41RBA HOLDINGS LIMITED - Notification in terms of section 122(1) of the Companies ...
10/02/201514:30OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
10/02/201514:30SANTAM LIMITED - Trading Statement
10/02/201514:15FAMOUS BRANDS LIMITED - Dealing in Securities by a Director
10/02/201514:10OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
10/02/201514:04HOLDSPORT LIMITED - Sales update for the 5 months ended 31 January 2015
10/02/201514:00SABMILLER PLC - MillerCoors delivers 2.9% underlying net income growth for 2014
10/02/201513:50FORTRESS INCOME FUND LIMITED - Tax treatment of distribution
10/02/201513:49FORTRESS INCOME FUND LIMITED - Condensed unaudited consolidated interim financia...
10/02/201513:45SABMILLER PLC - MillerCoors CEO Tom Long to retire 30 June Board of directors ha...
10/02/201513:22ROCKCASTLE GLOBAL REAL EST CO LTD - Condensed unaudited consolidated interim fin...
10/02/201512:48PUTPROP LIMITED - Finalisation Announcement in Respect of the Putprop Rights Off...
10/02/201511:10DEUTSCHE BANK AG - Deutsche Bank AG - Termination of Listing - TOPDWU
10/02/201511:00DEUTSCHE BANK AG - Wave Listing - TOPDWK, TOPDWL, TOPDWM and TOPDWY
10/02/201510:56INDWA INVESTMENTS LIMITED - INA508 - Full Capital Redemption
10/02/201510:40ARGENT INDUSTRIAL LIMITED - Dealing in Securities by a Director and an Associate...
10/02/201510:16CONSOLIDATED INFRASTRUCTURE GRP LTD - Dealing in securities by a director of a m...
10/02/201510:00THE THEKWINI WAREHOUSING CONDUIT (RF) LIMITED - New Financial Instrument Listing...
10/02/201509:50SAFARI INVESTMENTS (RSA) LTD - Dealing in Securities by an Associate of a Direct...
10/02/201509:43TIGER BRANDS LIMITED - Results of the 70th Annual General Meeting
10/02/201509:31TOYOTA FIN SERVICES (SA) LTD - TFS121 - Full Capital Redemption
10/02/201509:02ANGLO AMERICAN PLC - Notification: Kumba Iron Ore Limited year end results 2014
10/02/201509:00WILSON BAYLY HOLMES-OVCON LIMITED - Trading Statement
10/02/201509:00ACCENTUATE LIMITED - Disclosure of Acquisition of Securities
10/02/201509:00TAWANA RESOURCES NL - Drilling Recommencement on New Zaway Target
10/02/201509:00MONDI LIMITED - Mondi Group: Trading Statement
10/02/201509:00KIBO MINING PLC - PEA Update Imweru Gold Project
10/02/201508:30SUN INTERNATIONAL LIMITED - Trading statement
10/02/201508:22ARROWHEAD PROPERTIES LIMITED - Distribution for the quarter ended 31 December 2...
10/02/201508:19AQUARIUS PLATINUM LIMITED - Aquarius enters agreement to sell Everest mine to No...
10/02/201508:00NORTHAM PLATINUM LIMITED - Northam acquires the Everest Mine and related assets
10/02/201507:30SIBANYE GOLD LIMITED - Sibanye confirms resumption of operations at Beatrix
10/02/201507:30KUMBA IRON ORE LIMITED - Audited preliminary summarised annual results for year ...
10/02/201507:05DRDGOLD LIMITED - R23 million Ergo plant upgrade to increase treatment capacity:...

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