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 The Sharenet Daily 
Thursday, 22 October 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 - CPI in Investment Benchmarking

It is easy to determine that investing is important, but with all the choices available, it becomes a more arduous task deciding how or with who to invest. A simplistic way of solving this problem is to look for a product that “performs very well” thereby protecting and growing your wealth. Trying to determine what performs well requires comparisons and such comparisons require an appropriate benchmark. Typically, a good investment benchmark should be unambiguous (specific with a stipulated way of measurement that is quantifiable) and investable (thus replicable or trackable). The fact that a good benchmark is investable would naturally exclude the Consumer Price Index (CPI) as benchmark. Why is it then that we commonly come across CPI benchmarks? What is the case for CPI benchmarks?

CPI Inflation is an important concept that investors need to be cognisant of. CPI is a monthly data set of price changes in goods and services purchased by consumers. Due to inflation, R100 in your pocket 25 years ago, is now worth roughly R16 because of the erosion effect of inflation on purchasing power. Put differently, for you to be able to buy the same amount of goods that you bought with R100 twenty-five years ago, you would need to have R601 in your pocket today, a compounded growth rate of roughly 7.2% per annum. It is in light of this that your investment at the very least, should maintain the purchasing power of its assets. Therefore, it becomes important to track investment performance against a CPI target, making that a break-even level of performance.

The chart above depicts the performance of the average equity manager as represented by the sector average of the ASISA SA Equity General category relative to the All Share Index and SA CPI. As can be seen, the average equity manager moves in line with the index as expected with periods of outperformance and underperformance. It makes sense to use the index in this case to benchmark the performance of the equity manager, where you would expect skill to be the determining factor for outperformance. However, there are also periods where the average manager and the index do not do as well as inflation. As an investor, it is important to know that whilst your investment may be beating its respective benchmark, is it also maintaining the purchasing power of the assets.

Consider a 5 year investment period from 2007 to 2012. The markets were depressed during the global financial crisis. The average equity manager closely tracked the performance of the FTSE/JSE All Share Index, whilst the Multi-Asset High Equity category which is expected to offer better capital protection did slightly better. However, it can be noted that over the same period, an investment at the rate of inflation would have done much better. This suggests that an investment can do better than its benchmark whilst the purchasing power of its assets is actually being eroded, which is why it’s important to look at CPI. In addition, it is important to focus on long term investing, because with sufficient time, good investments tend to recover and eventually outperform the CPI target as per historical numbers.

Using CPI as a target allows an investor to determine whether their investments are at a minimum, maintaining their purchasing power. Equally, this target emphasizes investment diversification of its assets as with the multi-asset portfolios which offer better capital protection. Diversification contributes towards inflationary risk protection. Therefore, incorporating an inflation target objective is deemed appropriate when defining investment objectives holistically.

While past performance is not an indication of future returns, our rigorous investment process combined with investment experience allows us to make prudent investment decisions in order to protect against the negative impacts of inflation.

Kind Regards,

Tawanda Mushore

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.


Thu, 22 Oct 2015
Top News
Local markets On Thursday, the JSE All Share finished 0.56% higher, led by 1.72% gains in gold miners and 1.32% advances in resource shares.  Full story

South Africa's rand firmed 1 percent against dollar to 13.3950 on Thursday, recovering some of its losses from the previous session when investors pulled back after finance minister Nhlanhla Nene cut this year's growth forecast. "The rand was a bit oversold after yesterday," said R  Full story
A masked man killed a teacher and a boy and wounded two others in a Swedish school on Thursday, stabbing them as he walked from classroom to classroom before being fatally wounded by police marksmen, officers said.  Full story
U.S. Secretary of State John Kerry on Thursday voiced cautious hope there may be a way to defuse Israeli-Palestinian violence that has killed nearly 60 people this month.  Full story
At least 20 Houthi militia fighters were killed in heavy clashes in Yemen's third-largest city Taiz on Thursday, a day after they pounded it with rockets, forces loyal to the government said.  Full story
SA Business
The South African central bank's inflation target of 3-6 percent target will be breached twice in 2016 with a worsening long-term outlook, Governor Lesetja Kganyago said on Thursday.. . .  Full story
South Africa's rand hovered near the previous day's week lows against the dollar on Thursday and was likely to stay under pressure after the Finance Minister painted a dim picture of. . .  Full story
South African riot police fired stun grenades on Wednesday at hundreds of protesting students who stormed the parliament precinct in Cape Town to try to disrupt the reading of Finance Minister. . .  Full story

South African President Jacob Zuma will meet student leaders and university authorities on Friday to discuss planned hikes in tuition fees that have provoked. . .  Full story
The line between government finance and the politics of the street in South Africa has seldom been as thin as this. . .  Full story
South African retailer Clicks Group on Thursday reported a 16.8 percent rise in full-year profit, despite sluggish economic growth in Africa's. . .  Full story
MTN Group, Africa's largest mobile phone operator, reported a slowdown in quarterly subscriber growth on Thursday, squeezed by stiff competition and. . .  Full story

The South African central bank's inflation target of 3-6 percent target will be breached twice in 2016 amid a worsening long-term. . .  Full story
South Africa's National Union of Mineworkers (NUM) has signed a three-year wage deal with bullion producer Sibanye Gold for increases of. . .  Full story
South Africa's biggest fast-food restaurant chain Famous Brands said on Thursday half-year profit rose 14 percent as consumers opted to eat. . .  Full story
The U.S. State Department expressed concern on Wednesday over reports that South African riot police had fired stun grenades at. . .  Full story
Company News
Shareholders are advised that the CompanyÆs integrated annual report, incorporating the audited annual financial statements for the year ended 31 May. . .  Full story
In compliance with paragraph 3.59(c) of the Listings Requirements of the JSE Ltd., shareholders are hereby notified of the following change. . .  Full story
Shareholders are advised that, at the annual general meeting of Value held on 21 October 2015, all resolutions as set out. . .  Full story
The board of Stefanutti Stocks provided shareholders with a trading update of the GroupÆs results for the six months ended 31. . .  Full story

In terms of section 45(5) of the Companies Act, notice is hereby provided to shareholders that, by virtue of the authority. . .  Full story
Kumba released its production and sales report for the quarter ended 30 September 2015. Throughout this report, production and sales volumes. . .  Full story
Amplats releases their production report for the third quarter ended 30 September 2015. Anglo American Platinum remains committed to zero harm and. . .  Full story
Anglo released their production report for the third quarter ended 30 September 2015. Highlights include: - Q3 2015 production increased by 2% (on. . .  Full story
Company Results
Revenue for the interim period increased to USD3.286 billion (2014: USD2.984 billion), while gross profit lowered to USD430.2 million (2014: USD446.2. . .  Full story
Turnover lowered to R758.1 million (R897.8 million). Gross profit decreased to R97.3 million (R120.4 million). Operating profit also dropped to R18.6. . .  Full story
Revenue for the interim period came in at R5.5 billion (R5.5 billion). Gross profit rose to R813.0 million (R729.3 million). Operating. . .  Full story
Revenue for the interim period increased to R7.8 billion (2014: R6.4 billion), gross profit rose to R1.2 billion (2014: R1 billion). . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0053293.97296.000.56%
JSE Top 4017:0047814.72220.130.46%
JSE Gold17:001055.4717.841.72%
JSE Financial17:0044835.44193.600.43%
JSE Industrial17:0079366.47374.640.47%
JSE Indust 2517:0071428.40251.430.35%
JSE Resource17:0034856.04454.941.32%
DJ Futures19:4217389.00333.001.95%
DJ Ind19:5817448.77280.161.63%
SP 50019:582049.8730.931.53%
FTSE 10016:396376.4228.000.44%
All Ords07:385299.6013.100.25%
NZSE 5007:285923.605.340.09%
NameTimeRPMove% Move
Gold $20:001165.70-1.02-0.09%
Gold R19:5915630.9515630.950.00%
Gold R/kg19:58502621-3825-0.76%
Silver $20:0015.8410.14700.94%
Platinum $19:591010.417.610.76%
Palladium $20:00684.5612.561.87%
Brent Crude16:4248.64-.07-0.14%
USD / ZAR20:0013.4077-0.0935-0.69%
GBP / ZAR19:5520.6022-0.1864-0.90%
EUR/ ZAR19:5514.9089-0.4051-2.65%
NZD/ ZAR19:599.07849.07840.00%
AUD / ZAR19:559.6545-0.0894-0.92%
USD / JPY20:00120.60100.66600.56%
EUR / USD19:591.1122-0.0217-1.91%
GBP / USD20:001.5392-0.0023-0.15%

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The JSE Today

Trading Statistics
* Includes all listed instruments on the JSE
Major Moves Up
SharenameSaleMove% MoveVolume
1 ANSYS  1061111.58.%581462
2 CLICKS  103007627.99.%1836900
3 CURRO  41903057.85.%63013
4 DELTAINT  16201006.58.%57910
5 GLENCORE  24341486.47.%3494359
6 NIVEUS  26501506.00.%12475
7 BEE-SASOL  3375017505.47.%354
8 ANGLOPLAT  2739714015.39.%329099
9 ENX  220104.76.%846801
10 PRESCIENT  11554.55.%406884
11 EFFICIENT  470204.44.%171177
12 CSG  16574.43.%70218
13 MRHLD  1088454.31.%1975959
14 MASSMART  123084984.22.%184368
15 SIRIUS  817324.08.%1538575
16 SOUTH32  1469553.89.%1943349
17 SABVEST  34951153.40.%350
18 NET1UEPS  244008003.39.%3161
19 PICKNPAY  67182093.21.%1449737
20 FAMBRANDS  131003893.06.%93413

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Major Moves Down
SharenameSaleMove% MoveVolume
1 RENERGEN  1250-230-15.54.%300
2 BRIMST-N  1200-150-11.11.%13591
3 ALTRON  701-49-6.53.%22102
4 TRNPACO  2000-130-6.10.%6892
5 KUMBAIO  7528-477-5.96.%1725091
6 AVENG  345-21-5.74.%2647748
7 ARCMITTAL  900-50-5.26.%927313
8 GRANPRADE  512-28-5.19.%42306
9 ADCORP  2510-130-4.92.%151736
10 DRDGOLD  226-11-4.64.%2152239
11 TRNSHEX  280-10-3.45.%22273
12 CADIZ  170-5-2.86.%99833
13 CHOPPIES  550-15-2.65.%31358
14 HUGE  380-10-2.56.%5019
15 EXXARO  5848-141-2.35.%1181049
16 ADAPTIT  1100-25-2.22.%256376
17 PINNACLE  1260-28-2.17.%450562
18 AFRO-C  465-10-2.11.%189314
19 HOSP-A  1195-24-1.97.%316724
20 AMECOR  250-5-1.96.%40000

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New Highs
SharenameSaleHighMove% MoveVolume
1 ANSYS  1061501111.58.%581462
2 CLICKS  10300106017627.99.%1836900
3 CURRO  419041903057.85.%63013
4 PSG  25200257505822.36.%361975
5 RESILIENT  12194122482051.71.%850652
6 BLUETEL  11681182181.57.%606712
7 CIL  35803580401.13.%78572
8 INT HOTEL  23502350251.08.%34
9 INTUPROP  73007333320.44.%1547122
10 STENPROP  2390250050.21.%197780
11 BATS  7907980500-253-0.32.%524521

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New Lows
SharenameSaleLowMove% MoveVolume
1 ADCORP  25102459-130-4.92.%151736

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Index Summary
Index NameRPMove% Move
Top 4047,814.72220.130.46%
Mid Cap68,374.56860.361.27%
Small Cap58,756.58197.090.34%
Resource 2034,856.04454.941.32%
Industrial 2571,428.40251.430.35%
Financial 1516,713.9156.660.34%
Financial & Ind. 3075,512.63232.590.31%
All Share53,293.97296.000.56%
Oil & Gas 9,320.53.000.00%
Mining 20,760.33265.801.30%
Gold Mining1,055.4717.841.72%
Platinum Mining20.21.341.71%
GENERAL MINING6,172.9075.791.24%
Oil & Gas Producers 50,
Basic Materials 20,787.63166.340.81%
Chemicals 21,345.359.200.04%
Forestry & Paper 49,725.55-76.50-0.15%
Industrial Metals 5,081.08-222.55-4.20%
Industrials 45,112.21-42.51-0.09%
General Industrials 164.77-.59-0.36%
Consumer Goods 76,968.98-245.29-0.32%
Automobiles & Parts 6,363.1345.290.72%
Household Goods578.5320.31%
Health Care 9,541.6485.890.91%
Beverages 275.81-4.67-1.67%
Index NameRPMove% Move
Food Producers 9,228.17137.901.52%
Personal Goods 1,137.4910.890.97%
Consumer Services 17,123.20267.031.58%
General Retailers 8,149.76179.482.25%
Travel & Leisure 5,928.4080.051.37%
Media 431.965.461.28%
Support Services 2,872.05-28.95-1.00%
Telecommunications 9,487.35194.522.09%
Financials 44,835.44193.600.43%
Banks 7,456.6339.070.53%
Non-life Insurance 56,774.15-906.04-1.57%
Life Insurance 41,305.35-77.56-0.19%
General Financial 4,775.8729.310.62%
Technology 59,858.27-549.45-0.91%
SHARIAH TOP40 3,301.40341.05%
FTSE/JSE SHARIAH ALL3,519.54351.02%
COAL MINING7,392.90-178-2.35%
FTSE JSE Fledgling 6,667.33-15-0.22%
FTSE/JSE Alt X 1,557.99130.87%
RESOURCE 18,853.772411.30%
DIVIDEND PLUS204.2220.74%
FTSE/JSE RAFI 409,363.01370.40%
Capped Top 4025,407.971210.48%
Capped All Share27,029.141500.56%
JSE TABACO 10,104.91-32-0.32%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
23/10/2015AQUARIUSSeptember 2015 (Q)
23/10/2015AQUARIUSCVTSeptember 2015 (Q)
27/10/2015FAMBRANDSAugust 2015 (Interim)
27/10/2015OANDOJune 2015 (Interim)
27/10/2015SVFJune 2015 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
ADCORP21/10/1527/11/1507/12/15ZAR 0.6000
VALUE21/10/1508/01/1618/01/16ZAR 0.0500
DATATEC21/10/1520/11/1530/11/15ZAR 1.0500
CMH21/10/1504/12/1514/12/15ZAR 0.4650
EQUITES15/10/1530/10/1509/11/15ZAR 0.1639
Ex Div**
Share NameDec-DateLDTPay-DateAmount
ILPREF230/09/1516/10/1526/10/15ZAR 13.2937
ILRPREF130/09/1516/10/1526/10/15ZAR 13.2937
CAPITEC29/09/1516/10/1526/10/15ZAR 3.7500
ELBGROUP23/09/1516/10/1526/10/15ZAR 0.6700
RCL01/09/1516/10/1526/10/15ZAR 0.2200

Upcoming AGMs**
CodeCompany NameDateStatus
SVBSilverBridge Holdings Ltd.27/10/2015Confirmed
AEGCBAveng Ltd.27/10/2015Confirmed
AEGAveng Ltd.27/10/2015Confirmed
DSTDistell Group Ltd.28/10/2015Confirmed
HCIHosken Consolidated Investments Ltd.29/10/2015Confirmed

Stock Exchange News Service
22/10/201517:33SHOPRITE HOLDINGS LIMITED - Dealings in securities by a non-executive director
22/10/201517:21JSE LIMITED - Index Change Advice - 20151027 IPSA Group Deletion
22/10/201517:05ONELOGIX GROUP LIMITED - No change statement and notice of annual general meetin...
22/10/201517:00PINNACLE HOLDINGS LIMITED - Change in function of a Director and change in compo...
22/10/201516:34PURPLE GROUP LIMITED - Trading statement
22/10/201515:54ELB GROUP LIMITED - Dealing in securities by a director of a major subsidiary
22/10/201515:52VALUE GROUP LIMITED - Results of Annual General Meeting
22/10/201515:45STEFANUTTI STOCKS HOLDINGS LIMITED - Trading Statement for the six months ended ...
22/10/201515:35REMGRO LIMITED - Dealing in securities by associate of a director
22/10/201515:00COGNITION HOLDINGS LIMITED - Acquisition of remaining 60.30% of BMi Research Pro...
22/10/201514:20ESOR LIMITED - Trading Statement
22/10/201514:10SANTOVA LIMITED - Renewal of existing cautionary announcement
22/10/201514:02BETTABETA CIS - Distribution announcement - BBET40 correction
22/10/201514:01BETTABETA CIS - CANCELLATION OF S363777 Distribution announcement - BBET40
22/10/201514:01OLD MUTUAL LIFE ASSURANCE CO SA LIMITED - Optional Redemption of OML01 Notes
22/10/201514:00NEW FRONTIER PROPERTIES LIMITED - Conversion To Reit Status, Amendment Of Consti...
22/10/201513:15ASCENDIS HEALTH LIMITED - Dealings in securities by directors
22/10/201513:00BLUE TITANIUM CONDUIT (RF) LIMITED - New Financial Instrument Listing Announceme...
22/10/201512:45OLD MUTUAL PLC - Form 8.3 Disclosure
22/10/201512:40PEREGRINE HOLDINGS LIMITED - Trp121: Notification Of A Disposal Of Beneficial In...
22/10/201512:25IVUZI INVESTMENTS LIMITED - IVA545 - Full Capital Redemption
22/10/201512:20DISTELL GROUP LIMITED - Dealings in securities by a director of a major subsidia...
22/10/201512:00GOODERSON LEISURE CORPORATION LIMITED - Unaudited Condensed Interim Results For ...
22/10/201511:55BHP BILLITON PLC - BHP Billiton Plc 2015 AGM Presentation
22/10/201511:54BHP BILLITON PLC - BHP Billiton Plc 2015 AGM Speeches
22/10/201510:18STELLAR CAPITAL PARTNERS LIMITED - Rights issue declaration announcement
22/10/201510:18STELLAR CAPITAL PARTNERS LIMITED - Announcement in respect of a proposed R1 bill...
22/10/201510:06MTN GROUP LIMITED - Quarterly update for the period ended 30 September 2015
22/10/201510:00ASPEN PHARMACARE HOLDINGS LIMITED - Dealing in Aspen securities by a director of...
22/10/201510:00SABMILLER PLC - Change in particulars of director
22/10/201509:35ADVANCED HEALTH LIMITED - Results of Annual General Meeting
22/10/201509:08REUNERT LIMITED - Amendments to the trust deed of the Rebatona Educational Trust
22/10/201509:00NEW GOLD ISSUER LIMITED - NGPLD-Partial De-listing of NewGold Palladium Debentur...
22/10/201508:59DISCOVERY LIMITED - Dealing in securities by a director of the company
22/10/201508:45GROWTHPOINT PROPERTIES LIMITED - Notice to shareholders in terms of Section 45(5...
22/10/201508:05SOUTH32 LIMITED - Quarterly Report September 2015
22/10/201508:00CLICKS GROUP LIMITED - Preliminary reviewed condensed consolidated results for t...
22/10/201508:00TISO BLACKSTAR GROUP SE - Finalisation Announcement - Acquisition of 51.0% inter...
22/10/201508:00ANGLO AMERICAN PLC - Anglo American plc Production Report for the third quarter ...
22/10/201508:00KUMBA IRON ORE LIMITED - Kumba Iron Ore Limited production and sales report for ...
22/10/201508:00STANDARD BANK GROUP LIMITED - Financial information provided to Industrial and C...
22/10/201508:00ANGLO AMERICAN PLAT LIMITED - Production report for the third quarter ended 30 S...
22/10/201507:05FAMOUS BRANDS LIMITED - Unaudited condensed consolidated interim financial resul...

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