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 The Sharenet Daily 
Tuesday, 07 July 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 - Local vs Global

It’s an age old question, “Should I invest locally, or abroad?"

While this appears to be a fairly straightforward question, it is one that can be attacked from various angles. As a general case, Seed would typically have at least a small allocation to both, because the diversification benefits obtained by investing across geographies greatly enhances an investor’s expected risk adjusted returns. What we continuously grapple with is the relative weighting to each of these geographies (bearing in mind that ‘global’ in itself is made up of a multitude of regions) when considering an investor’s specific requirements.

Let’s start with the local market. Over the course of the past few years we have often written about the composition of the local market and how it is no longer just exposed to the local economy (it now has greater exposure to foreign economies). It has changed dramatically over the years. Everyone knows that South Africa relies less on resources now than it did in the past, but the chart below taken from BCA’s latest Quarterly Report was quite eye opening.

In the space of 7 short years the composition of the local market (using the MSCI index – which is comprised of only those companies with a primary listing in South Africa, i.e. excluding British American Tobacco, SABMiller, Glencore, Richemont, BHPBilliton, Anglo American, etc) has changed from being dominated by materials (primarily resource companies) to one that is dominated by consumer discretionary companies (Naspers, Steinhoff, etc).

When looking at the composition of the more commonly referenced ALSI in the chart below – a similar trend can be seen. As a result, a lot of historical analysis on the local ‘market’ has to be discounted to a certain extent.

A conclusion from these charts is that the South African market is no longer a good proxy for South African company earnings. Also, the broad composition of any index can and does often change quite dramatically over time. While resources were once of major importance for any local investor, they are now less important than consumer services, financials, and consumer goods! Equally, indices around the world are often not representative of the country’s underlying economy. Investors should therefore be wary of blindly investing into ‘market’ indices.

Another important determinant of where one should invest is valuations. In this regard BCA also look at various valuation measures. The chart below shows how global markets are currently approaching expensive territory while local markets, despite the recent correction, are also still very expensive when applying Seed’s various valuation measures.

Again, the definition of ‘global equity’ is very broad and will incorporate regions that are more expensive and cheaper than the average shown above. With global equities closer to being ‘expensive’ than ‘fair’ or ‘inexpensive’ it is fair enough to ask why our Funds are typically overweight global equity. The short answer (backed up by other, independent, research) is that most other assets are also expensive, and that equities at least offer the patient investor an opportunity to participate in a growing income stream.

Markets have evolved to such an extent that investors can no longer just ‘look at the box’ when making investments. At the bear minimum they need to ‘look inside the box’ to ensure that they are, in fact, exposing themselves to their desired risk drivers. Professional managers allocate significant human resources to fully understand these dynamics, and then construct portfolios that blend and diversify the various risks on offer to generate superior risk adjusted returns.

Take care,

Mike Browne

Tel 021 914 4966
Fax 021 914 4912
Email info@seedinvestments.co.za

Seed is hiring: Click through to our LinkedIn page to see available vacancies


Tue, 07 Jul 2015
Top News
Local markets Resouce shares fell 3.89% on Tuesday, leading losses across the board on the JSE. The All Share ended 2.69% lower.  Full story

South Africa's rand slipped over one percent to 12.5130 versus the greenback on Tuesday, its weakest in over three weeks as the dollar rose sharply, buoyed by a euro laid low by the worsening Greek crisis.  Full story
Greek officials said on Tuesday they had submitted credit proposals to euro zone partners based on those it put forward last week, rejecting suggestions that Athens had not put forward new proposals for a euro summit.  Full story
Afghan President Ashraf Ghani said on Tuesday he had sent a delegation to Pakistan to meet Taliban representatives, his first acknowledgement of official talks with insurgents who are fighting to topple the government in Kabul.  Full story
Greek Prime Minister Alexis Tsipras launched a desperate bid to win fresh aid from sceptical creditors at an emergency euro zone summit on Tuesday, before his country's banks run out of money.  Full story
Global equity markets fell on Tuesday and the euro hit a five-week low against the dollar as euro zone leaders held an emergency. . .  Full story
Gold fell to a near four-month low on Tuesday as the dollar climbed ahead of an emergency euro zone summit on Greece with. . .  Full story
Hong Kong stocks fell on Tuesday, dragged down by a slumping mainland market, as well as bearish global markets amid fears that the. . .  Full story
China's main stock indexes slumped over 5 percent at one point on Tuesday but ended the session down less than 2 percent, aided. . .  Full story

Japan's Nikkei share average rebounded on Tuesday as bargain hunters stepped in a day after Greek angst triggered a sharp fall, but uncertainty. . .  Full story
Australian shares rebounded 1.7 percent on Tuesday on broad-based gains following two-losing sessions, as investors sought to buy stocks cheapened by the debt crisis. . .  Full story
Gold eked out small gains on Monday in a rare spurt of safe-haven buying after Greek voters rejected terms of a bailout package,. . .  Full story
Equity markets around the world fell on Monday and U.S. oil prices tumbled 7 percent after Greece overwhelmingly voted against conditions for a. . .  Full story
SA Business
China's central bank has signed an agreement with the South African central bank to clear yuan transactions in the country, the People's Bank of China said in a statement on Tuesday.. . .  Full story
South Africa's net gold and foreign exchange reserves ticked slightly higher to $41.59 billion in June from $41.519 billion in May, data from the Reserve Bank showed on Tuesday.. . .  Full story

South African shares fell almost 3 percent to six-month lows on Tuesday, knocked by a combination of Greece's problems and skidding commodity prices.. . .  Full story
Cupric Canyon Capital, a private equity firm backed by a unit of Barclays Plc, will spend $200 million to bring its. . .  Full story
South Africa's business confidence fell 2.3 index points in June to its lowest in more than 16 years, a survey showed. . .  Full story
South Africa's rand traded near the previous session's three week lows on Tuesday, taking its cue from weak markets in major commodity importer. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0049997.79-1383.43-2.69%
JSE Top 4017:0044377.00-1355.42-2.96%
JSE Gold17:001020.52-4.91-0.48%
JSE Financial17:0042544.54-1069.24-2.45%
JSE Industrial17:0072355.73-1877.17-2.53%
JSE Indust 2517:0064338.92-1743.34-2.64%
JSE Resource17:0036822.94-1490.23-3.89%
DJ Futures19:4817551.00-76.00-0.43%
DJ Ind19:5817662.43-21.15-0.12%
SP 50019:582068.01-0.75-0.04%
FTSE 10016:306464.54-71.14-1.09%
All Ords08:425564.00100.701.84%
NZSE 5008:485803.1726.550.46%
NameTimeRPMove% Move
Gold $19:591154.49-15.65-1.34%
Gold R19:5814403.95-67.56-0.47%
Gold R/kg19:58463265-197-0.04%
Silver $19:5915.0150-.7100-4.52%
Platinum $19:591040.41-18.59-1.76%
Palladium $19:59645.75-33.75-4.97%
Brent Crude19:4856.65-5.42-8.73%
USD / ZAR19:5912.47540.10740.87%
GBP / ZAR19:5519.2279-0.0428-0.22%
EUR/ ZAR19:5513.6747-0.0062-0.05%
NZD/ ZAR19:588.29850.04630.56%
AUD / ZAR19:559.2733-0.0102-0.11%
USD / JPY19:59122.4050-0.1540-0.13%
EUR / USD19:591.0965-0.0090-0.82%
GBP / USD19:591.5444-0.0158-1.01%

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 DELRAND  250223825.93.%30
2 MONTAUK  105017019.32.%7044
3 AEEI  2643113.30.%72451
4 TORRE  470368.29.%649609
5 HOMCHOICE  37502557.30.%1000
6 TASTE  450204.65.%125374
7 ASCEN_A  570254.59.%60
8 CADIZ  11854.42.%817944
9 TRUSTCO  438184.29.%363198
10 ILIAD  890354.09.%113379
11 INTEWASTE  11043.77.%154168
12 NIVEUS  2899993.54.%84173
13 GFIELDS  40481333.40.%2628552
14 ILLOVO  1627472.97.%952070
15 RESILIENT  98202702.83.%749363
16 CALGRO  2060542.69.%30932
17 Cognition  20042.04.%7658
18 HYPROP  122752251.87.%1462986
19 GROUP-5  2670471.79.%48273
20 CHOPPIES  580101.75.%3676390

Click here for more Major Moves...
Major Moves Down
SharenameSaleMove% MoveVolume
1 AF-OVER  726-474-39.50.%23
2 DELTA  200-50-20.00.%153694
3 WILDRNESS  680-70-9.33.%90808
4 CONDUIT  217-22-9.21.%11037
5 CAPITEC  42500-3601-7.81.%1111439
6 PSG  18249-1502-7.60.%522155
7 GLENCORE  4467-333-6.94.%2771139
8 TRENCOR  6112-438-6.69.%1369322
9 PETMIN  126-9-6.67.%201853
10 KUMBAIO  12150-850-6.54.%1223095
11 LONMIN  1932-133-6.44.%859239
12 SILVERB  160-10-5.88.%350
13 ANGLO  16162-959-5.60.%3704019
14 SASOL  40337-2363-5.53.%2394177
15 BELL  851-49-5.44.%969
16 HUDACO  12300-700-5.38.%199414
17 ALARIS  200-11-5.21.%1786
18 ALEXANDER  845-45-5.06.%1289110
19 DENEB  190-10-5.00.%56
20 EQSTRA  267-14-4.98.%2471511

Click here for more Major Moves...

New Highs
SharenameSaleHighMove% MoveVolume
1 MONTAUK  1050199917019.32.%7044
2 EOH  1620116850-49-0.30.%492930
3 MPACT  46004775-29-0.63.%657082

Click here for more Major Moves...
New Lows
SharenameSaleLowMove% MoveVolume
1 AF-OVER  726726-474-39.50.%23
2 DELTA  200200-50-20.00.%153694
3 KUMBAIO  1215011745-850-6.54.%1223095
4 LONMIN  19321920-133-6.44.%859239
5 ANGLO  1616216101-959-5.60.%3704019
6 PAN-AF  172172-8-4.44.%696771
7 ANGLOPLAT  2541124746-989-3.75.%400314
8 ARM   75327445-293-3.74.%583273
9 TSOGO-SUN  23692341-78-3.19.%1335301
10 RBPLAT  42004155-130-3.00.%201198
11 HULAMIN  595528-17-2.78.%1009983
12 GRINDROD  13141314-36-2.67.%1419243
13 CML  79007900-202-2.49.%978226
14 EXXARO  77767775-174-2.19.%1519667

Click here for more Major Moves...

Index Summary
Index NameRPMove% Move
Top 4044,377.00-1355.42-2.96%
Mid Cap67,662.65-1029.03-1.50%
Small Cap59,058.95-354.45-0.60%
Resource 2036,822.94-1490.23-3.89%
Industrial 2564,338.92-1743.34-2.64%
Financial 1516,038.50-505.91-3.06%
Financial & Ind. 3068,932.07-1930.00-2.72%
All Share49,997.79-1383.43-2.69%
Oil & Gas 88,887.8914391.3719.32%
Mining 22,143.59-897.05-3.89%
Gold Mining1,020.52-4.91-0.48%
Platinum Mining24.49-.96-3.77%
GENERAL MINING6,582.00-301.54-4.38%
Oil & Gas Producers 47,793.387737.9819.32%
Basic Materials 21,269.42-833.07-3.77%
Chemicals 20,959.10-1083.65-4.92%
Forestry & Paper 42,828.81-408.56-0.94%
Industrial Metals 7,085.81-364.26-4.89%
Industrials 43,717.81-882.90-1.98%
General Industrials 155.22-3.15-1.99%
Consumer Goods 63,766.88-1160.77-1.79%
Automobiles & Parts 7,864.46-47.56-0.60%
Household Goods499.41-18-3.55%
Health Care 9,536.09-232.41-2.38%
Beverages 215.59-2.15-0.99%
Index NameRPMove% Move
Food Producers 8,400.88-292.27-3.36%
Personal Goods 969.50-19.67-1.99%
Consumer Services 15,922.32-493.82-3.01%
General Retailers 81,837.53-2797.42-3.31%
Travel & Leisure 6,003.34-80.86-1.33%
Media 385.25-11.78-2.97%
Support Services 3,421.79-3.80-0.11%
Telecommunications 10,594.81-420.11-3.81%
Financials 42,544.54-1069.24-2.45%
Banks 74,546.73-3081.07-3.97%
Non-life Insurance 55,638.41-255.22-0.46%
Life Insurance 39,091.05-1268.94-3.14%
General Financial 4,397.47-116.70-2.59%
Technology 63,746.83-598.45-0.93%
SHARIAH TOP40 3,370.97-139-3.97%
FTSE/JSE SHARIAH ALL3,596.88-131-3.51%
COAL MINING9,830.23-220-2.19%
FTSE JSE Fledgling 6,704.18-27-0.40%
FTSE/JSE Alt X 1,307.78-12-0.89%
RESOURCE 20,108.76-813-3.88%
DIVIDEND PLUS211.53-6-2.95%
FTSE/JSE RAFI 409,193.92-309-3.25%
Capped Top 4023,674.23-730-2.99%
Capped All Share25,359.79-702-2.69%
JSE TABACO 8,539.19-112-1.30%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
08/07/2015SACOVENMarch 2015 (Final)
09/07/2015STELLARFebruary 2015 (Interim)
14/07/2015ZCIMarch 2015 (Final)
15/07/2015ROCKWELLMay 2015 (Q)
15/07/2015SIBANYEJune 2015 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ILRPREF130/06/1517/07/1527/07/15ZAR 12.8930
AMECOR30/06/1517/07/1527/07/15ZAR 0.0800
NICTUS30/06/1517/07/1527/07/15ZAR 0.0300
ARGENT30/06/1525/09/1505/10/15ZAR 0.0900
ILPREF230/06/1517/07/1527/07/15ZAR 13.8847
Ex Div**
Share NameDec-DateLDTPay-DateAmount
AME04/06/1503/07/1513/07/15ZAR 2.5000
FAMBRANDS25/05/1503/07/1513/07/15ZAR 2.0000
CROOKES02/06/1503/07/1513/07/15ZAR 0.8500
TASTE26/05/1503/07/1513/07/15ZAR 0.0650
STENPROP11/06/1503/07/1516/07/15EUR 0.0420

Upcoming AGMs**
CodeCompany NameDateStatus
STPStenprop Ltd.10/07/2015Unconfirmed

Stock Exchange News Service
07/07/201516:45DEUTSCHE BANK AG - Termination of Listing - TOPDWN
07/07/201516:15WOOLWORTHS HOLDINGS LIMITED - Dealings in securities by directors and the group ...
07/07/201516:12EQSTRA HOLDINGS LIMITED - Acquisition of securities by Midbrook Lane (Pty) Ltd, ...
07/07/201516:00TSOGO SUN HOLDINGS LIMITED - Disclosure of beneficial interests in Tsogo Sun sec...
07/07/201515:32FIRSTRAND BANK LIMITED - FRC108-Partial Redemption Correction
07/07/201515:00SIRIUS REAL ESTATE LIMITED - Allotment of Scrip Dividend
07/07/201514:52OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
07/07/201514:35OLD MUTUAL PLC - Public Opening Position Disclosure/Dealing Disclosure by a Pers...
07/07/201513:12HULAMIN LIMITED - Revised trading statement
07/07/201513:05AMALGAMATED ELECTRONIC CORP LTD - Dealings in Securities by Director and Company...
07/07/201513:00ERIN ENERGY CORPORATION - Erin Energy Provides Production and Operations Update
07/07/201513:00INDWA INVESTMENTS LIMITED - INA529 - Full Capital Redemption
07/07/201512:30WILDERNESS HOLDINGS LIMITED - Withdrawal of cautionary announcement dated 2 July...
07/07/201512:29OANDO PLC - Correction: Changes to the board
07/07/201512:28OANDO PLC - CANCELLATION OF S359687 Changes to the board
07/07/201511:56COMBINED MOTOR HOLDINGS LIMITED - Dealings in securities by director
07/07/201510:05COMMISSIONER STREET NO 4 LIMITED - Amendment: Availability of AFS for Commission...
07/07/201510:03COMMISSIONER STREET NO 1 (PTY) LTD - Amendment-Availability of AFS for Commissio...
07/07/201509:15COMMISSIONER STREET NO 7 (RF) LTD - Commissioner Street No.7-Availability of Ann...
07/07/201509:11Commissioner Street No. 5 Limited - Commissioner Street No.5 (RF) Ltd-Availabili...
07/07/201507:10FIRSTRAND BANK LIMITED - FRB16 and FRB17 - New Instruments Listing
07/07/201507:05BHP BILLITON PLC - Demerger of South32 Completion of the Sale Facility
07/07/201507:05SAPPI LIMITED - Borregaard (Norway) and Sappi (South Africa) announce 20,000 ton...

Click here for more SENS news