Tuesday, 12 May 2015 - 20:00
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Seed Weekly - Perspective
Last week I had the privilege of spending 9 days surrounded by positive people riding through the most beautiful places and being helped after the ride by hordes of children with impeccable manners. This wasn’t in some exotic foreign location; I had the privilege to “ride the beloved country”. The hospitality, friendliness, and just the overall positive ambiance was an honour to experience.
As South Africans we tend to call ourselves realists i.e. we always focus on the negative. The huge number of foreigners on the ride kept on reminding us how incredibly lucky we were to be able to live in South Africa. I immediately hear a number of people asking what my experiences last week have to do with a financial advice article and it is quite simple really. One of my tasks as a financial advisor is to help investors with the asset and geographic allocation of their investments. I remember back in 1997 when Chris Ball, the chairman of the 2004 Cape Town Olympic Bid, said that in their projections they were using an exchange rate of R20/$ for their 2004 cost projections, I also remember in 2000 as a financial advisor having most of my clients telling me that South Africa was a basket case, Mandela is sick, the Rand is rubbish and they want to take all their money offshore. If we look at the graph below you can see that for a while the offshore investments outperformed local investments but this success was short lived. Both the South African market and the Rand did incredibly well with the Rand only now reaching the highs/lows (depending on your perspective) of December 2001, but the local asset markets delivering materially more returns (note the log scale used).
I am in no way proposing that you should have no investments offshore and I am also the first one to admit that as a nation we have an incredible knack of scoring “own goals” where Eskom, corruption, government incompetence, Xenophobia, shocking education, and unproductive labour are just a few of the more prominent own goals. What we fail to remember is that very often our currency has very little to do with internal events, be they good or bad. The chart below shows the incredibly high correlation between the ZARUSD and the BRLUSD. One US dollar cost R4.50 in January 1997 and is now hovering around R12, one US dollar cost around BRL1 in January 1997 and is now hovering around BRL3.
Geographic diversification is vital to reducing the risk of any portfolio, so it is important as a South African to have money invested globally. My big concern, however, is that at the moment a number of people appear to be “throwing the baby out with the bath water” in their rush to get all their assets offshore. This reminds me of the period we went through in 2000 and 2001. Investors tend to forget that if they plan on retiring in South Africa, the majority of their investments need to be domiciled in rands. They also tend to forget Ian’s article of a few weeks ago that shows that the local stock market actually benefits from the weaker rand due to the internationalisation of our index.
So, when you look at your investment portfolio, it is imperative to take a step back to get a fresh perspective on the bigger picture.
Kind regards,
Barry Hugo
www.seedinvestments.co.za
info@seedinvestments.co.za
021 914 4966
Tue, 12 May 2015
Top News
Local markets
The JSE All Share fell 0.42% on Tuesday, with gains in gold miners and resources failing to offset losses in other sectors. Full story
South Africa's cash-strapped power utility Eskom, could earn nearly 40 billion rand ($3 billion) if a 25.3 percent tariff increase it has requested is approved, a spokesman said on Tuesday.
Eskom, which is battling the worst power supply shortages in Africa's most advanced economy Full story |
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Greek Prime Minister Alexis Tsipras on Tuesday called on lenders to break an impasse in cash-for-reform talks after Athens had to resort to a temporary expedient to make a crucial payment to the IMF. Full storyU.S. Secretary of State John Kerry said he had "frank" talks about Ukraine, Syria and Iran with Russian President Vladimir Putin on Tuesday and said it was important to keep in contact. Full storySaudi-led air strikes pounded the rebel-held Yemeni capital Sanaa on Tuesday just hours before a five-day humanitarian ceasefire was set to begin. Full story |
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Markets | German bond yields climbed on
Tuesday on optimism that inflation may have bottomed in the euro
zone, generating demand for European currencies, while
volatility. . . Full story | | Gold rose up to 1 percent on
Tuesday as the dollar and European shares suffered from a
sell-off in global bond markets, although. . . Full story | | Hong Kong stocks fell on Tuesday, hurt by
profit-taking in property and financial stocks
following the previous session's rise triggered by
China's weekend. . . Full story | | China stocks rose for the third
consecutive session on Tuesday, with the market maintaining
momentum generated by the central bank's interest rate cut. . . Full story |
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| Japanese shares ended flat on
Tuesday, erasing losses from earlier in the session thanks to
gains in companies reporting rosy outlooks, which helped. . . Full story | | Australian shares closed higher
for the first time in a week on Tuesday as the banking sector
staged a tentative comeback after an. . . Full story | | Global equity markets eased on
Monday on a dip in energy shares and fears a resolution to
Greece's financial woes is not in. . . Full story | | Gold eased on Monday as
the impact of a rebounding dollar, bolstered by persistent
concern about future Greek debt payments, outweighed U.S. data
supporting. . . Full story |
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SA Business | South Africa's credit rating could be downgraded if the government's commitment to fiscal consolidation and stabilising its debt falters, ratings agency. . . Full story | | South African competition authorities will launch an investigation on the retail industry to ascertain that there was sufficient competition, a cabinet. . . Full story | | South African utility Eskom,which has been battling a power supply shortfall, said it would shut off up to 2,000 megawatts of. . . Full story | | South Africa's manufacturing production expanded more than expected by 3.8 percent year-on-year in March after a revised 0.4 percent contraction in. . . Full story |
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| South Africa's Transnet said it will shut down its coal export line over a 10-day period for annual maintenance but this. . . Full story | | India has named private banker
K.V. Kamath as the first head of a new development bank being
set up by the BRICS group. . . Full story | | South African mining minister Ngoako Ramatlhodi said on Tuesday he was concerned with the rate of job cuts at mining firms. . . Full story | | German industrial gases company Linde is seeing good progress at businesses in South Africa and Australia, where it has launched cost. . . Full story |
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| South African government bonds fell sharply on Tuesday, tracking a broader sell-off partly prompted by investors' concerns about the global impact of Greece's debt problems.. . . Full story | | South Africa's Baroka Platinum will offer up to 1.8 billion rand ($150 million) for Atlatsa Resources' stake in the joint venture Bokoni mine, a source with direct knowledge of the matter said Monday.. . . Full story |
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Company News | Cadiz Holdings Ltd hereby advise shareholders that Lulamile Lincoln Xate has been appointed to the board with effect from 12 May. . . Full story | | Shareholders of Barloworld (ôShareholdersö) are referred to the Broad-Based Black Economic Empowerment (ôB-BBEEö) transaction implemented by Barloworld in September 2008 ("the. . . Full story | | Shareholders are advised that the voting results for the annual general meeting (ôAGMö) of Nedbank Group held at the registered offices. . . Full story | | Business Report highlighted that Calgro M3 Holdings maintains its new business venture focusing on the development of private memorial parks would. . . Full story |
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| Shareholders are referred to the cautionary announcement released by the company on SENS on 22 January 2015 and the subsequent renewal of cautionary announcements released on 5 March 2015 and 16. . . Full story | | Coal is pleased to announce that it has reached an agreement (the ôAmendment Agreementö) with Rio Tinto Minerals Development Ltd. (ôRio Tintoö) and Kwezi Mining (Pty) Ltd. (ôKweziö, together with Rio. . . Full story | | In terms of paragraph 3.4(b) of the Johannesburg Stock ExchangeÆs Listings Requirements, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable. . . Full story |
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Company Results | Revenue for the year increased to R932.2 million (2014: R784.9 million). Gross profit raised to R174.9 million (2014: R113 million), operating. . . Full story | | Revenue for the year grew to R7.2 billion (R6.3 billion). Gross profit rose to R987.5 million (R861.1 million). Operating profit increased. . . Full story | | Revenue for the period lowered to USD1.122 billion (2014: USD1.359 billion). Gross profit decreased to USD209 million (2014: USD296 million), operating. . . Full story | | Total revenue for the interim period rose to R592.6 million (R295.7 million). Net operating profit increased to R402.1 million (R191.3 million).. . . Full story |
World Markets (Spot Prices)
Name | Time | RP | Move | % Move | JSE Overall | 17:00 | 53934.41 | -226.64 | -0.42% | JSE Top 40 | 17:00 | 47868.91 | -229.34 | -0.48% | JSE Gold | 17:00 | 1218.45 | .73 | 0.06% | JSE Financial | 17:00 | 45318.90 | -264.12 | -0.58% | JSE Industrial | 17:00 | 75953.86 | -497.25 | -0.65% | JSE Indust 25 | 17:00 | 67509.66 | -480.33 | -0.71% | JSE Resource | 17:00 | 45457.91 | 338.42 | 0.75% | DJ Futures | 19:58 | 18026.00 | -15.00 | -0.08% | DJ Ind | 19:58 | 18074.87 | -30.30 | -0.17% | SP 500 | 19:58 | 2099.78 | -5.55 | -0.26% | Nasdaq | 19:58 | 4980.89 | -12.68 | -0.25% | FTSE 100 | 17:25 | 6944.80 | -85.05 | -1.21% | DAX | 18:08 | 11472.41 | -200.94 | -1.72% | CAC40 | 18:08 | 4974.65 | -53.22 | -1.06% | Nikkei | 08:32 | 19624.84 | 3.93 | 0.02% | Shanghai | 09:28 | 4401.22 | 67.64 | 1.56% | Hang-Seng | 06:28 | 27630.82 | -87.38 | -0.32% | All Ords | 08:37 | 5673.10 | 45.50 | 0.81% | NZSE 50 | 07:48 | 5746.23 | -1.72 | -0.03% |
| | Name | Time | RP | Move | % Move | Gold $ | 19:59 | 1192.60 | 8.89 | 0.75% | Gold R | 19:59 | 14367.01 | 72.82 | 0.51% | Gold R/kg | 19:58 | 462127 | 779 | 0.17% | Silver $ | 19:59 | 16.5370 | .2380 | 1.46% | Platinum $ | 19:59 | 1131.90 | 7.40 | 0.66% | Palladium $ | 19:59 | 784.74 | 6.93 | 0.89% | R186 | 16:55 | 8.15 | .05 | 0.62% | R204 | 16:48 | 7.35 | .07 | 1.03% | R207 | 16:48 | 7.60 | .09 | 1.20% | Brent Crude | 19:58 | 66.69 | 1.78 | 2.74% | Rand / Dollar | 19:59 | 12.0480 | -0.0273 | -0.23% | Rand / Pound | 19:55 | 18.8620 | 0.0716 | 0.38% | Rand / Euro | 19:55 | 13.5223 | 0.0549 | 0.41% | Rand / NZD | 19:59 | 8.8762 | 0.0059 | 0.07% | Rand / AUD | 19:55 | 9.6244 | 0.0884 | 0.93% | Yen / Dollar | 19:59 | 119.9480 | -0.1660 | -0.14% | Euro / Dollar | 19:59 | 0.8910 | -0.0057 | -0.64% | Dollar / Euro | 19:59 | 1.1222 | 0.0071 | 0.63% | Pound / Dollar | 19:55 | 0.6377 | -0.0039 | -0.61% |
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Click here for the Sharenet Spot Price page
The JSE Today
Trading Statistics
Date | Adv. | Decl. | Unch. | Actives | Volume | Value | Trades | Orders |
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12/05/2015 | 162 | 176 | 66 | 404 | 234,440,000 | R18,870,614,846 | 239936 | 1631478 | 11/05/2015 | 201 | 140 | 68 | 409 | 198,761,966 | R17,341,596,486 | 229778 | 519393 | 08/05/2015 | 248 | 108 | 56 | 412 | 207,304,583 | R18,390,252,130 | 264058 | 2160356 | 07/05/2015 | 131 | 249 | 59 | 439 | 298,395,458 | R23,060,448,074 | 304954 | 2211903 | 06/05/2015 | 119 | 260 | 55 | 434 | 290,826,947 | R22,603,867,123 | 309253 | 2156002 |
* Includes all listed instruments on the JSE
Index Summary Index Name | RP | Move | % Move | Top 40 | 47,868.91 | -229.34 | -0.48% | Industrial | 75,953.86 | -497.25 | -0.65% | Mid Cap | 73,609.90 | -123.84 | -0.17% | Small Cap | 61,821.75 | 49.11 | 0.08% | Resource 20 | 45,457.91 | 338.42 | 0.75% | Industrial 25 | 67,509.66 | -480.33 | -0.71% | Financial 15 | 17,272.25 | -137.13 | -0.79% | Financial & Ind. 30 | 72,603.49 | -528.95 | -0.72% | All Share | 53,934.41 | -226.64 | -0.42% | Oil & Gas | 33,692.74 | 84.65 | 0.25% | Mining | 27,424.65 | 197.73 | 0.73% | Gold Mining | 1,218.45 | .73 | 0.06% | Platinum Mining | 32.29 | -.03 | -0.09% | GENERAL MINING | 8,138.02 | 70.69 | 0.88% | Oil & Gas Producers | 18,115.97 | 45.52 | 0.25% | Basic Materials | 25,235.43 | 134.62 | 0.54% | Chemicals | 23,639.07 | 139.55 | 0.59% | Forestry & Paper | 41,142.03 | -527.78 | -1.27% | Industrial Metals | 9,501.51 | 263.38 | 2.85% | Industrials | 45,987.15 | -261.86 | -0.57% | General Industrials | 161.74 | -1.51 | -0.92% | Consumer Goods | 67,415.33 | -633.57 | -0.93% | Automobiles & Parts | 8,371.70 | -63.41 | -0.75% | Household Goods | 526.31 | -2 | -0.40% | Health Care | 10,152.37 | -68.08 | -0.67% | Beverages | 226.82 | -3.06 | -1.33% |
| | Index Name | RP | Move | % Move | Food Producers | 8,807.94 | -18.66 | -0.21% | Personal Goods | 1,055.19 | -8.49 | -0.80% | Consumer Services | 16,209.97 | -124.20 | -0.76% | General Retailers | 84,645.27 | -283.29 | -0.33% | Travel & Leisure | 6,668.78 | 38.92 | 0.59% | Media | 387.63 | -4.53 | -1.16% | Support Services | 2,959.91 | 11.15 | 0.38% | Telecommunications | 11,362.32 | -9.03 | -0.08% | Financials | 45,318.90 | -264.12 | -0.58% | Banks | 81,466.37 | -173.80 | -0.21% | Non-life Insurance | 55,942.13 | -1199.54 | -2.10% | Life Insurance | 43,397.30 | -621.93 | -1.41% | General Financial | 4,341.70 | -34.66 | -0.79% | Technology | 61,641.36 | -502.87 | -0.81% | SHARIAH TOP40 | 3,823.84 | 10 | 0.26% | FTSE/JSE SHARIAH ALL | 4,048.35 | 8 | 0.21% | COAL MINING | 12,455.92 | 172 | 1.40% | FTSE JSE Fledgling | 6,941.21 | 36 | 0.52% | FTSE/JSE Alt X | 1,331.28 | 11 | 0.82% | SA LISTED PROPERTY | 634.48 | | 0.03% | CAPPED PROPERTY | 552.84 | | 0.01% | RESOURCE | 24,891.52 | 179 | 0.73% | DIVIDEND PLUS | 237.53 | 0 | 0.14% | FTSE/JSE RAFI 40 | 10,256.73 | -17 | -0.17% | Capped Top 40 | 25,563.45 | -117 | -0.46% | Capped All Share | 27,356.51 | -115 | -0.42% | JSE TABACO | 8,593.37 | -78 | -0.90% |
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Click here for the Sharenet Index Summary page
Latest Consensus Changes** Code | Company Name | Status | Updated | MTN | MTN GROUP LIMITED | HOLD | 09/05/2015 | SBK | STANDARD BANK GROUP LIMIT... | BUY | 09/05/2015 | SAB | SABMILLER PLC | HOLD | 08/05/2015 | HAR | HARMONY GOLD MINING COMPA... | HOLD | 08/05/2015 | GFI | GOLD FIELDS LIMITED | SELL | 08/05/2015 |
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Results Expected** Expected | Company Name | Fin. Date | 13/05/2015 | ALTRON | February 2015 (Final) | 13/05/2015 | ALTRON PP | February 2015 (Final) | 13/05/2015 | ATLATSA | March 2015 (Q) | 13/05/2015 | CAFCA | March 2015 (Interim) | 13/05/2015 | DATATEC | February 2015 (Final) |
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Recent Dividends** Share Name | Dec-Date | LDT | Pay-Date | Amount | ARROWB | 11/05/15 | 29/05/15 | 08/06/15 | ZAR 0.1870 | ARROWA | 11/05/15 | 29/05/15 | 08/06/15 | ZAR 0.1870 | RAUBEX | 11/05/15 | 29/05/15 | 08/06/15 | ZAR 0.3600 | TRADEHOLD PREF | 08/05/15 | 22/05/15 | 01/06/15 | ZAR 0.1756 | REDEFINE | 07/05/15 | 22/05/15 | 01/06/15 | ZAR 0.3900 |
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Ex Div** Share Name | Dec-Date | LDT | Pay-Date | Amount | NTC PREF | 13/04/15 | 08/05/15 | 18/05/15 | ZAR 3.8052 | ECSP C2 | 22/04/15 | 08/05/15 | 18/05/15 | ZAR 1.0164 | ECSP C | 22/04/15 | 08/05/15 | 18/05/15 | ZAR 1.0164 | ECSP A2 | 22/04/15 | 08/05/15 | 18/05/15 | ZAR 0.7671 | ECSP A | 22/04/15 | 08/05/15 | 18/05/15 | ZAR 0.7671 |
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Upcoming AGMs** Code | Company Name | Date | Status | SGL | Sibanye Gold Ltd. | 12/05/2015 | Confirmed | HIL | Homechoice International P.L.C. | 12/05/2015 | Confirmed | SBV | Sabvest Ltd. | 13/05/2015 | Confirmed | SVN | Sabvest Ltd. | 13/05/2015 | Confirmed | ENX | enX Group Ltd. | 13/05/2015 | Confirmed |
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