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 The Sharenet Daily 
Tuesday, 22 September 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 - Currency Valuation

We have written many reports on the local currency, as it is an emotive topic that is on the lips of many clients and investors. With the allocation to global assets becoming an ever more important consideration in constructing a properly diversified portfolio, and dramatically relaxed exchange controls that effectively mean that most South Africans aren’t limited in their ability to take assets offshore, it is important not to allocate assets offshore in a haphazard way.

We see the valuation of the currency as part of the decision to taking assets offshore. The other key consideration is the valuation of the assets that are being invested into (i.e. global equity, global property, global bonds, etc).

South Africans have seen a consistent devaluation of the rand over the past four and a bit years and the question is, “how much further can it go?” My mother always taught me that ‘can’ is a very loaded word, and it is with this mind-set that we make our decisions. Theoretically the rand could go to R100/$ (US dollar), and I’m sure that as long as we have higher inflation than the US it will go to that level at some point in the (distant) future! For the purposes of our investment decision making process, however, we typically take a 5 year view and look at a range of probable outcomes.

Going back more than 30 years we have constructed a model, below, that indicates the ‘fair value’ (solid black line) of the rand vs the US dollar using the Purchasing Power Parity (PPP) method (as described in previous reports). Around this fair value we show the actual exchange rate (solid blue line) as well as range of what we consider to be ‘normal’. With the rand recently briefly hitting R14/$ earlier this month, we have now breached what would be considered a normal variation from fair value.

According to this model, fair value to the US dollar is currently R10.36. With South Africa facing structural headwinds, we don’t think that the rand will trade at fair value any time soon, but also agree that investors shouldn’t expect consistent continued depreciation in excess of 5% pa (current inflation differential).

A blow out of 2001 proportions would see the rand trading at over R20/$ in April 2016! As can be seen from the above chart this would require an extremely frightful set of circumstances – but wouldn’t be unprecedented. Should we see the rand strengthening as it did from early 2009 (tail end of the Global Financial Crisis) to early 2011 we’d expect it to trade below R9/$ towards the end of 2017. Naturally these two scenarios are extremely different, but are the bounds within which we operate (rather than worrying what would happen if the rand weakened to R100/$).

Practically, in our local Multi Asset Funds (Seed Flexible and Seed Absolute Return Funds), we have maintained our global allocation near 25%, the Reg 28 (pension fund guidelines) limits. One of the reasons for this decision is that our research indicates that an optimal strategic allocation for investors (saving for retirement in South Africa) to global assets is around 30% – 40%. In this context 25% remains underweight so we’d need global assets (and global currencies versus the rand) to have a much poorer outlook before significantly reducing this allocation. Notwithstanding the above, we will look to use significant further rand weakness to hedge out some of the global currency while retaining exposure to the underlying global equities that are offering much better prospects than local assets.

Take care,

Mike Browne

Tel +27 21 914 4966
Fax +27 21 914 4912
Email info@seedinvestments.co.za

Seed is hiring: Visit the Seed Analytics LinkedIn profile to view vacancies.


Tue, 22 Sep 2015
Top News
South Africa's rand slipped more than 1.5 percent against a firmer greenback on Tuesday, extending its losses to a 1-1/2 week trough as expectations of a rate hike in the United States soured risk sentiment.  Full story

South Africa is considering building an oil refinery that will process Iranian crude to bolster its petrol supply and reduce its dependence on foreign companies, a government official said on Tuesday.  Full story
The European Union approved a plan on Tuesday to share out 120,000 refugees across its 28 states, overriding vehement opposition from four ex-communist eastern nations.  Full story
Pope Francis ended his Cuba trip on Tuesday and headed to the United States with a message of reconciliation for the former Cold War foes while avoiding controversy on the U.S. trade embargo or human rights on the Communist-run island.  Full story
Militant Islamist groups are not believed to be using the refugee influx into Europe to smuggle in militants who could carry out attacks, the head of Denmark's country's intelligence service (PET) said on Tuesday.  Full story
Falling commodities prices and worries about China's economy pulled stocks sharply lower on Tuesday, while bond yields declined and the dollar rose to. . .  Full story
Gold fell 1 percent on Tuesday as renewed expectations that the Federal Reserve will raise interest rates for the first time in nearly. . .  Full story
Hong Kong stocks ended modestly higher on Tuesday, buoyed by improved sentiment in global markets while investors focused on an upcoming meeting. . .  Full story
China stocks rebounded for the second day on Tuesday, in a further sign of improving investor sentiment that may help the market gradually. . .  Full story

Gold retreated from the previous session's near three-week high on Monday as strength in stocks and the dollar dampened a rally fueled by. . .  Full story
Hong Kong stocks sagged on Monday, weighed down by broad weakness in markets amid lingering worries about global economic growth.. . .  Full story
China stocks rose on Monday, supported by demand for more speculative small-cap shares, but trading remained thin as investors waited for more clues. . .  Full story
Stocks on major markets slipped on Friday and bond prices rose, pushing yields sharply lower, after the U.S. Federal Reserve on Thursday clung. . .  Full story
SA Business
South African private education group Curro Holdings has acquired its first school outside its home market, the company said on Tuesday, signalling it wants to expand into the rest of the. . .  Full story
South Africa's rand slipped more than one percent to a one-week low against the dollar as revived bets of a rate hike by the end of 2015 in the United States. . .  Full story
Strikes cost South Africa 6 billion rand ($453 million) in wages in 2014, lower than the previous year despite a record five-month strike in the mining sector, a report published by. . .  Full story

A company formed by genome pioneer Craig Venter will offer clients of a South Africa-based insurance company whole exome sequencing - sequencing all protein-making genes in the human genome - at a price that marks yet another dramatic decline in the cost of gene sequencing, the two companies said on Tuesday.. . .  Full story
Company News
The board of directors announces the resignation of David AndrT, as a director of Orion, with effect from 22 September 2015.. . .  Full story
Company Results
Revenue increased to R1.1 billion (R1 billion). Gross profit rose to R251.3 million (R223.5 million) and operating profit before interest increased. . .  Full story
Revenue for the year lowered to R80.9 million (R83.8 million). Results from operating activities rose to R11.0 million (R8.3 million). Profit. . .  Full story
Revenue for the period increased to R510.3 million (2014: R481.1 million). Gross profit rose to R76.5 million (2014: R68.5 million), net. . .  Full story
Gross revenue for the year jumped to R1.313 billion (2014: R876.9 million), profit for the year attributable to owners of the. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0049853.09-884.05-1.74%
JSE Top 4017:0044523.72-856.20-1.89%
JSE Gold17:00961.64-13.44-1.38%
JSE Financial17:0042809.76-371.92-0.86%
JSE Industrial17:0073262.55-1125.67-1.51%
JSE Indust 2517:0065569.53-1068.77-1.60%
JSE Resource17:0033841.24-1633.47-4.60%
DJ Futures19:4816137.00-319.00-1.94%
DJ Ind19:5816251.03-259.16-1.57%
SP 50019:581932.36-34.61-1.76%
FTSE 10016:545955.31-153.40-2.51%
All Ords08:355130.8034.400.67%
NZSE 5007:485696.7913.270.23%
NameTimeRPMove% Move
Gold $19:591125.76-7.46-0.66%
Gold R19:5815403.03147.710.97%
Gold R/kg19:5849512745760.93%
Silver $19:5914.7750-.3990-2.63%
Platinum $19:59935.91-30.59-3.17%
Palladium $19:58610.80-2.20-0.36%
Brent Crude19:4848.22.751.58%
USD / ZAR19:5913.67940.21691.61%
GBP / ZAR19:5520.98560.12840.62%
EUR/ ZAR19:5515.21350.14300.95%
NZD/ ZAR19:588.61320.10621.25%
AUD / ZAR19:559.68900.07990.83%
USD / JPY19:59119.9840-0.5360-0.44%
EUR / USD19:591.1122-0.0066-0.59%
GBP / USD19:591.5366-0.0140-0.90%

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 RBA  1151818.56.%600
2 TRADEH  22581436.76.%15007
3 PHUMELELA  19501206.56.%2100
4 HOLDSPORT  58492995.39.%282138
5 DAWN  550285.36.%21000
6 SUPRGR-N  555254.72.%187972
7 GRANPRADE  555254.72.%15624
8 VALUE  340154.62.%51971
9 NOVUS  1400503.70.%83046
10 DRDGOLD  18963.28.%1197758
11 ADCORP  2900702.47.%227446
12 PPC  1950452.36.%2147463
13 CALGRO  1990402.05.%18428
14 NVEST  25052.04.%6734
15 SA-CORP  515101.98.%3675715
16 MASSMART  110152121.96.%448795
17 HCI  141542541.83.%90110
18 FORTRESSB  3143531.72.%34494
19 ALTRON  690101.47.%300505
20 VODACOM  141471971.41.%2095348

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Major Moves Down
SharenameSaleMove% MoveVolume
1 ASCEN_A  325-200-38.10.%1570
2 RARE  201-49-19.60.%300
3 HARMONY  915-143-13.52.%4817097
4 ARCMITTAL  850-128-13.09.%1500676
5 KUMBAIO  8631-1193-12.14.%1353144
6 GLENCORE  2255-245-9.80.%24042948
7 LONMIN  397-37-8.53.%1832387
8 ANGLOPLAT  26670-2416-8.31.%425218
9 ARM   6258-542-7.97.%711097
10 NORTHAM  3050-240-7.29.%1061348
11 WILDRNESS  419-31-6.89.%6703
12 ANGLO  13645-980-6.70.%6489165
13 NUWORLD  2650-150-5.36.%60328
14 RBPLAT  2879-161-5.30.%462662
15 NIVEUS  2500-135-5.12.%55414
16 EXXARO  6050-276-4.36.%767695
17 BILLITON  21622-950-4.21.%2330911
18 IMPLATS  4311-189-4.20.%2576657
19 CHOPPIES  594-26-4.19.%281530
20 KIBO  115-5-4.17.%12368

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New Highs
SharenameSaleHighMove% MoveVolume
1 TRADEH  225822581436.76.%15007
2 HOLDSPORT  584959902995.39.%282138
3 CONDUIT  305315-9-2.87.%117396

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New Lows
SharenameSaleLowMove% MoveVolume
1 GLENCORE  22552116-245-9.80.%24042948
2 LONMIN  397390-37-8.53.%1832387
3 ANGLO  1364513436-980-6.70.%6489165
4 RBPLAT  28792770-161-5.30.%462662
5 EXXARO  60505876-276-4.36.%767695
6 GROUP-5  20002000-79-3.80.%53553
7 BARWORLD  80508050-154-1.88.%1672949
8 HOWDEN  26502650-50-1.85.%151346
9 ASSORE  73007150-100-1.35.%300663
10 SUNINT  92009137-90-0.97.%124668
11 NAMPAK  27742747-26-0.93.%2548137
12 AVENG  396388-3-0.75.%2132749
13 ASPEN  3078630575-139-0.45.%1406246
14 TRENCOR  52005075-10-0.19.%148198
15 RANGOLD  1851750.3200

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Index Summary
Index NameRPMove% Move
Top 4044,523.72-856.20-1.89%
Mid Cap65,392.92-681.24-1.03%
Small Cap57,091.83-353.45-0.62%
Resource 2033,841.24-1633.47-4.60%
Industrial 2565,569.53-1068.77-1.60%
Financial 1515,932.28-178.25-1.11%
Financial & Ind. 3069,853.10-1062.92-1.50%
All Share49,853.09-884.05-1.74%
Oil & Gas 8,253.88-211.63-2.50%
Mining 20,077.04-975.20-4.63%
Gold Mining961.64-13.44-1.38%
Platinum Mining19.34-1.29-6.25%
GENERAL MINING6,022.36-313.08-4.94%
Oil & Gas Producers 44,379.56-1137.94-2.50%
Basic Materials 19,924.47-768.90-3.72%
Chemicals 20,540.19-245.01-1.18%
Forestry & Paper 45,155.76-1157.13-2.50%
Industrial Metals 5,339.45-613.96-10.31%
Industrials 43,036.85-236.17-0.55%
General Industrials 155.32-.98-0.63%
Consumer Goods 70,838.91-1242.31-1.72%
Automobiles & Parts 6,883.95-22.65-0.33%
Household Goods560.0710.20%
Health Care 9,044.93-129.62-1.41%
Beverages 250.70-6.01-2.34%
Index NameRPMove% Move
Food Producers 8,633.64-35.66-0.41%
Personal Goods 1,039.21-16.78-1.59%
Consumer Services 15,321.99-301.23-1.93%
General Retailers 7,915.63-32.11-0.40%
Travel & Leisure 5,738.60-40.39-0.70%
Media 367.97-10.71-2.83%
Support Services 3,031.9829.881.00%
Telecommunications 8,951.59-2.30-0.03%
Financials 42,809.76-371.92-0.86%
Banks 7,296.18-19.84-0.27%
Non-life Insurance 57,935.41-252.67-0.43%
Life Insurance 37,983.27-805.46-2.08%
General Financial 4,494.81-61.20-1.34%
Technology 65,782.55-44.99-0.07%
SHARIAH TOP40 3,170.52-77-2.36%
FTSE/JSE SHARIAH ALL3,384.57-76-2.20%
COAL MINING7,648.26-349-4.36%
FTSE JSE Fledgling 6,602.99-18-0.27%
FTSE/JSE Alt X 1,505.25-5-0.32%
CAPPED PROPERTY 570.67-0.05%
RESOURCE 18,232.34-885-4.63%
DIVIDEND PLUS196.87-3-1.38%
FTSE/JSE RAFI 408,884.99-189-2.09%
Capped Top 4023,725.55-448-1.85%
Capped All Share25,286.64-448-1.74%
JSE TABACO 9,318.66-234-2.45%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
23/09/2015BLACKSTARJune 2015 (Interim)
23/09/2015BOWCALFJune 2015 (Final)
23/09/2015COGNITIONJune 2015 (Final)
23/09/2015IPSAMarch 2015 (Final)
23/09/2015KIBOJune 2015 (Interim)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
SILVERB21/09/1509/10/1519/10/15ZAR 0.0500
SVF18/09/1525/09/1509/10/15ZAR 0.5703
REMGRO17/09/1506/11/1516/11/15ZAR 2.5900
SVFB17/09/1525/09/1509/10/15ZAR 2.5625
PUTPROP16/09/1509/10/1519/10/15ZAR 0.1500
Ex Div**
Share NameDec-DateLDTPay-DateAmount
SHOPCONV03/09/1517/09/1505/10/15ZAR 325.0000
BIDVEST31/08/1517/09/1528/09/15ZAR 4.8300
IMPERIAL25/08/1517/09/1528/09/15ZAR 4.4500
ASTRAPAKP03/09/1517/09/1528/09/15ZAR 4.1407
PSGFIN PREF31/08/1517/09/1528/09/15ZAR 3.9079

Upcoming AGMs**
CodeCompany NameDateStatus
BSSBSI Steel Ltd.22/09/2015Confirmed
RDIRockwell Diamonds Inc.23/09/2015Confirmed

Stock Exchange News Service
22/09/201517:00GROWTHPOINT PROPERTIES LIMITED - Dealings in Securities by a Director
22/09/201516:45REDEFINE PROPERTIES LIMITED - Interest rate reset: RDFB03
22/09/201516:45ANGLO AMERICAN PLC - Notification of major interests in shares
22/09/201516:30NETCARE LIMITED - Change in sponsor
22/09/201516:25SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX SWIX TOP 40 Port...
22/09/201516:15SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX RESI Portfolio -...
22/09/201516:15OLD MUTUAL PLC - Form 8.3 - Public Opening Position Disclosure
22/09/201516:00SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the Satrix 40 Portfolio - S...
22/09/201516:00THE THEKWINI WAREHOUSING CONDUIT (RF) LIMITED - New Financial Instrument Listing...
22/09/201516:00THE THEKWINI WAREHOUSING CONDUIT (RF) LIMITED - New Financial Instrument Listing...
22/09/201516:00SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX INDI Portfolio -...
22/09/201516:00SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX FINI Portfolio -...
22/09/201516:00SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX Dividend Plus Po...
22/09/201516:00CHOPPIES ENTERPRISES LIMITED - Results for the 12 months to June 2015
22/09/201516:00SATRIX COLLECTIVE INVESTMENT SCHEME - Rebalancing of the SATRIX RAFI 40 Portfoli...
22/09/201516:00THE THEKWINI WAREHOUSING CONDUIT (RF) LIMITED - New Financial Instrument Listing...
22/09/201515:40OLD MUTUAL PLC - Form 8.3 - Public Opening Position Disclosure
22/09/201515:30INGUZA INVESTMENTS (RF) LIMITED - ING115-6 Partial Capital redemption
22/09/201515:24ORION REAL ESTATE LIMITED - Resignation of Director
22/09/201515:00ACCELERATE PROPERTY FUND LTD - Dealings in securities by directors
22/09/201514:49INVESTEC BANK LTD - Annual Finacial Statements for Financial Year End 2015
22/09/201514:10GOLD FIELDS LIMITED - Dealings in securities
22/09/201513:40THE NITRO SECURITISATION 5 ISSUER TRUST - N5A16 - Partial Capital Redemption
22/09/201513:00COAL OF AFRICA LIMITED - Holdings in Company
22/09/201512:55LODESTONE REIT LIMITED - Acquisition of the Yarona Shopping Centre
22/09/201512:30CURRO HOLDINGS LIMITED - Voluntary announcement: Curro to acquire Windhoek Gymna...
22/09/201512:10NICTUS BEPERK - Dealings in securities by directors
22/09/201512:10ANGLO AMERICAN SA FINANCE LTD - Interest Rate Reset Announcement - AA04
22/09/201511:40ABSA CAPITAL - New Financial Instrument Listing - LPECA1
22/09/201511:40SOUTH32 LIMITED - Temco anti-dumping investigation
22/09/201511:35STANDARD BANK OF SOUTH AFRICA LD - SCIB: Notice of Expiry of Standard Bank Warra...
22/09/201511:09THE STANDARD BANK OF SA LTD - New Financial Instrument Listing Announcement - CL...
22/09/201511:08AFROCENTRIC INVESTMENT CORP LIMITED - Summary of audited final results and divid...
22/09/201511:07STELLAR CAPITAL PARTNERS LIMITED - Announcement regarding the potential disposal...
22/09/201511:00SACOIL HOLDINGS LIMITED - Disclosure of the Acquisition and Disposal of Securiti...
22/09/201511:00BRITISH AMERICAN TOBACCO PLC - British American Tobacco reinforces commitment to...
22/09/201510:30ROYAL BAFOKENG PLATINUM LIMITED - Disclosure of Beneficial Interest in Securitie...
22/09/201510:15ATLANTIC LEAF PROPERTIES LIMITED - Placement of 17 235 741 new Atlantic Leaf sha...
22/09/201510:00BETTABETA CIS - Index rebalance announcement - BGREEN
22/09/201510:00BETTABETA CIS - Index rebalance announcement - BBET40
22/09/201509:55MULTI-ISSUER PROGRAMME 4 (RF) LIMITED - Availability of underlying entity financ...
22/09/201509:15REDEFINE PROPERTIES LIMITED - Dealings in securities by a director of Redefine
22/09/201509:10PIONEER FOOD GROUP LIMITED - Acceptance Of Allocated Phantom Share Rights In Ter...
22/09/201509:05NEW GOLD ISSUER LIMITED - Additional Listing of NewGold Debentures
22/09/201509:00SABMILLER PLC - Rule 2.10 announcement
22/09/201509:00NEW GOLD ISSUER LIMITED - Additional Listing of NewGold Debentures
22/09/201508:48BHP BILLITON PLC - Global Debt Investor Marketing Announcement
22/09/201508:45SOUTH32 LIMITED - Mineral Resources and Ore Reserves update
22/09/201508:00SACOVEN PLC - TR-1 Notification of major interest in shares
22/09/201507:15ATTACQ LIMITED - Summarised provisional consolidated financial statements for th...
22/09/201507:05GOLIATH GOLD MINING LIMITED - Joint Firm Intention Announcement and Withdrawal o...

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