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 The Sharenet Daily 
Tuesday, 27 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 - Investment Horizon

When investing, it is imperative to match your investment strategy with your investment horizon. Investors who are able to accurately match these two (and who can refrain from acting on emotion in the interim) will increase the probability of their investment experience matching their investment goals.

For the purpose of this report, I have used the local stock market (ALSI) since 1960 (i.e. just over 55 years) to display how an investor’s experience would range depending on their starting point and investment horizon.

Interestingly, ‘investors’ (more like speculators) with a one day horizon will only generate a positive return just over 50% of the time, which means that the odds of success aren’t very high! As investors take a longer horizon, their probability of success increases and the variability of their returns decreases. In the below analysis I have loosely defined ‘success’ as a positive return. Inflation and dividend reinvestment haven’t been taken into account as their long term history is not readily available. These factors would influence the end result, but the broad concept would remain unchanged.

The chart below displays the historic probability of generating a positive return over various time periods on the ALSI. Simplistically, based on this chart, one should have an investment horizon of at least 3 years in order to be confident of generating a positive return ‘most’ of the time (i.e. nearly 90% of the time).

While the above chart shows how often one would generate positive and negative returns, it does not quantify the range of investment returns received. For investment periods of 1 year and longer I have looked at the possible range of annual returns an investor would have received in the chart below.

Naturally, the variability in returns reduces as one’s investment horizon increases. Here it is interesting to note that while a 3 year investment horizon would have generated a positive return 88% of the time, an investor that got their timing wrong would have experienced a return of -18% pa over the 3 year period! From the above chart it would seem wise to have an investment horizon of at least 5 years when investing into local equities.

By overlaying a simple valuation metric (market PE ratio) for an investor with a 5 year investment horizon, the return experience can be greatly enhanced. By investing when the market was cheap (lowest 25% of PE observations) an investor was not only able to improve their average return by 8% per annum but also greatly improve their ‘worst case scenario’. Likewise, investors who invested when the market was expensive (high PE) both lowered their average return and increased the probability of generating a negative return. The chart below shows the investor experience over the entire period, low PE, normal PE, and high PE scenarios.

At Seed we view investing as a process of continuously improving the probability of generating satisfactory returns. We therefore ensure that there is a match between the assets and investment horizons of our various Funds. We further attempt to improve our probability of success by taking valuations into account in our investment process. In this regard, with the ALSI PE a shade under 20, our multi asset unit trusts (Seed Flexible and Seed Absolute Return) currently have extremely low weightings to local equity (relative to their long term averages).

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, 27 Oct 2015
Top News
Revenue increased to R2.2 billion (R2.1 million). Net operating income jumped to R133.6 million (R111.2 million). Total profit attributable to equity holders shot up 23.1% to R92.5 million (R75.2 million). In addition, headline earnings per share increased by 22.1% to 428.6cents per share (3  Full story

Local markets The JSE All Share ended 0.70% lower on Tuesday, with 2.94% losses in resource shares leading the downward slide.  Full story
The body of the first Russian serviceman confirmed dead in four weeks of air strikes in Syria was delivered on Tuesday to his parents, who said they were not convinced by the military's account that their 19-year-old son had hanged himself.  Full story
The Taliban encouraged aid groups to help victims of the massive earthquake in northern Afghanistan and Pakistan as rescuers struggled to form a clear picture of the damage caused by the disaster as the death toll passed 300.  Full story
A hospital in north Yemen run by medical aid group Medecins Sans Frontieres (MSF) was bombed in Saudi-led air strikes, wrecking the facility and lightly wounding two staff members, the group said on Tuesday.  Full story
Global equity markets retreated on Tuesday as investors showed restraint in advance of earnings from Apple and a U.S. Federal Reserve policy statement, while crude prices slumped to multi-week lows on worries about oversupply.. . .  Full story
SA Business
South African maize farmers intend to plant 2.55 million hectares of the staple grain in the 2016 season, its lowest level since 2011 due to drought, the country's Crop Estimates Committee. . .  Full story
South Africa has launched an association for young, mainly black entrepreneurs to boost the processing and manufacturing of rough diamonds, the mines ministry said on Tuesday.. . .  Full story
South Africa's rand was slightly weaker against the dollar on Tuesday, trailing its emerging market peers as ongoing student protests against the high cost of university education highlight the myriad of. . .  Full story

For many people, suggestions that meat may cause cancer are a case of doctors spoiling the party; in South Africa, where cooking it. . .  Full story
South African furniture retailer Lewis Group will pay 67.1 million rand ($4.91 million) to customers it had mistakenly sold loan insurance,. . .  Full story
South Africa's unemployment rate rose to 25.5 percent of the labour force in the third quarter of the year from 25. . .  Full story
South Africa's cash-strapped national oil and gas company, PetroSA, is looking to sell up to 49 percent equity stakes in around. . .  Full story
Company News
In terms of the Listings Requirements of JSE Limited, companies are required to publish a trading statement as soon as they. . .  Full story
Lewis is refunding R44.1 million to a group of its customers for the cost of loss of employment insurance mistakenly sold. . .  Full story
Lewis Group is refunding R44.1 million to a group of its customers for the cost of loss of employment insurance mistakenly. . .  Full story
Shareholders are referred to the cautionary announcements dated 31 July and 14 September 2015 regarding the potential combination of Barclays Bank. . .  Full story

In terms of the provisions of section 45(5) of the Companies Act, 2008 (Act 71 of 2008), as amended (˘Companies Act÷), and pursuant to the special resolution passed at the annual general meeting of the Company held on 7 November 2014. . .  Full story
Shareholders are advised that Mr MEE Sassoon has been appointed as an executive director to the Company with effect from 23 October 2015, while Mr MG Lane, following his promotion to Acting Chief Risk Officer has resigned as alternate director with. . .  Full story
Company Results
Revenue for the year lowered to NGN424.7 billion (NGN449.9 billion). Gross profit rose to NGN69.2 billion (NGN59.3 billion). Operating loss was. . .  Full story
Revenue for the quarter was NGN33.0 billion. Gross profit came in at NGN13.4 billion). Operating loss was NGN4.0 billion. Loss attributable. . .  Full story
Revenue for the year was higher at NGN60.3 billion (NGN55.7 billion). Gross profit dived to NGN23.7 billion (NGN40.8 billion). Operating loss. . .  Full story
Revenue for the interim period increased to R587.2 million (2014: R480.2 million), profit from operations rose to R433.5 million (2014: R324.5. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0053770.29-380.41-0.70%
JSE Top 4017:0048231.26-338.00-0.70%
JSE Gold17:001102.449.190.84%
JSE Financial17:0045506.35-172.60-0.38%
JSE Industrial16:5080058.79-515.17-0.64%
JSE Indust 2517:0072254.47-264.12-0.36%
JSE Resource17:0034385.35-1040.79-2.94%
DJ Futures19:5817501.00-30.00-0.17%
DJ Ind19:5817559.81-63.24-0.36%
SP 50019:582060.11-11.07-0.53%
FTSE 10017:266390.22-26.80-0.42%
All Ords07:415384.60-1.70-0.03%
NZSE 5006:506001.0230.350.51%
NameTimeRPMove% Move
Gold $19:591166.293.510.30%
Gold R19:5815944.8899.160.63%
Gold R/kg19:5851259337400.73%
Silver $20:0015.8500.01100.07%
Platinum $19:59986.68-6.82-0.69%
Palladium $19:59678.40-.60-0.09%
Brent Crude16:1846.69-1.30-2.71%
USD / ZAR19:5813.67050.04380.32%
GBP / ZAR19:5520.8842-0.0152-0.07%
EUR/ ZAR19:5515.08910.01890.13%
NZD/ ZAR19:589.26930.03450.37%
AUD / ZAR19:559.8422-0.0381-0.39%
USD / JPY20:00120.3700-0.6560-0.54%
EUR / USD20:001.1037-0.0015-0.14%
GBP / USD20:001.5304-0.0043-0.28%

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 LONFIN  80019933.11.%4660
2 INDEQTY  980859.50.%
3 ADRENNA  140118.53.%
4 SABVEST-N  30002007.14.%
5 STEFSTOCK  490316.75.%573006
6 SILVERB  210115.53.%
7 CLIENTELE  1770653.81.%5081
8 ANSYS  11543.60.%201175
9 SIBANYE  2461823.45.%3131634
10 MRHLD  1112373.44.%2205232
11 DRDGOLD  23373.10.%2510410
12 HARMONY  1056313.02.%672559
13 CASHBIL  329909192.87.%18243
14 PAN-AF  18252.82.%2887308
15 SEARDEL  12032.56.%220000
16 EQSTRA  25462.42.%293955
17 ATT  2233522.38.%601316
18 PALLINGHT  510102.00.%54496
19 REINET  3121521.69.%2768989
20 EMIRA  1860311.69.%2270573

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Major Moves Down
SharenameSaleMove% MoveVolume
1 KUMBAIO  6550-797-10.85.%1337354
2 TREMATON  355-37-9.44.%35500
3 LONMIN  540-42-7.22.%492709
4 CARGO  1400-100-6.67.%2800
5 ASSORE  8499-591-6.50.%75887
6 RARE  245-15-5.77.%1540
7 ANGLO  11708-692-5.58.%4583381
8 NORTHAM  3002-167-5.27.%509735
9 BLACKSTAR  1040-54-4.94.%102789
10 ARM   5770-280-4.63.%691730
11 ERIN  5298-247-4.45.%134
12 MTN  15998-702-4.20.%29865770
13 PPC  1733-76-4.20.%789657
14 CHOPPIES  545-20-3.54.%38735
15 BELL  850-30-3.41.%1787
16 EXXARO  5835-205-3.39.%527611
17 GLENCORE  2374-81-3.30.%2988710
18 BARWORLD  7808-240-2.98.%621194
19 MASSMART  12130-369-2.95.%216057
20 SHOPRIT  14900-446-2.91.%1719896

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New Highs
SharenameSaleHighMove% MoveVolume
1 LONFIN  80080019933.11.%4660
2 INDEQTY  9800859.50.%
3 AFRIMAT  23300301.30.%28764
4 BLUETEL  11951203151.27.%824862
5 AEEI  365041.11.%6420
6 NASPERSN  20775020789822501.09.%852426
7 RESILIENT  1220012299-1-0.01.%872097
8 BATS  7986180660-245-0.31.%319348

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New Lows
SharenameSaleLowMove% MoveVolume
1 KUMBAIO  65506503-797-10.85.%1337354
2 RARE  24531-15-5.77.%1540
3 MTN  1599815771-702-4.20.%29865770
4 VALUE  300299-4-1.32.%193926
5 DAWN  464464-4-0.85.%46500
6 NOVUS  130012700.1390

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Index Summary
Index NameRPMove% Move
Top 4048,231.26-338.00-0.70%
Mid Cap69,090.30-622.44-0.89%
Small Cap59,288.82-35.97-0.06%
Resource 2034,385.35-1040.79-2.94%
Industrial 2572,254.47-264.12-0.36%
Financial 1516,950.34-60.10-0.35%
Financial & Ind. 3076,400.37-266.15-0.35%
All Share53,770.29-380.41-0.70%
Oil & Gas 9,735.34.000.00%
Mining 20,467.66-614.09-2.91%
Gold Mining1,102.449.190.84%
Platinum Mining19.25-.40-2.04%
GENERAL MINING6,047.67-223.31-3.56%
Oil & Gas Producers 52,345.13.000.00%
Basic Materials 20,767.61-467.66-2.20%
Chemicals 21,880.57-321.80-1.45%
Forestry & Paper 51,067.50117.800.23%
Industrial Metals 4,661.48-344.56-6.88%
Industrials 45,989.63-311.29-0.67%
General Industrials 169.03-1.05-0.62%
Consumer Goods 78,129.37-97.08-0.12%
Automobiles & Parts 6,849.9945.290.67%
Household Goods588.9010.25%
Health Care 9,725.81-91.08-0.93%
Beverages 279.70-.27-0.10%
Index NameRPMove% Move
Food Producers 9,315.12-118.41-1.26%
Personal Goods 1,158.57.600.05%
Consumer Services 17,719.5756.830.32%
General Retailers 8,244.54-71.99-0.87%
Travel & Leisure 5,970.65-47.88-0.80%
Media 452.644.891.09%
Support Services 2,816.67-24.56-0.86%
Telecommunications 8,438.62-307.20-3.51%
Financials 45,506.35-172.60-0.38%
Banks 7,494.63-37.41-0.50%
Non-life Insurance 56,455.12-714.63-1.25%
Life Insurance 42,173.51-278.65-0.66%
General Financial 4,914.11-47.95-0.97%
Technology 59,623.69-76.48-0.13%
SHARIAH TOP40 3,226.67-74-2.23%
FTSE/JSE SHARIAH ALL3,462.19-67-1.90%
COAL MINING7,376.47-259-3.39%
FTSE JSE Fledgling 6,692.42-24-0.35%
FTSE/JSE Alt X 1,537.15-17-1.10%
RESOURCE 18,588.60-557-2.91%
DIVIDEND PLUS204.57-3-1.62%
FTSE/JSE RAFI 409,346.50-126-1.33%
Capped Top 4025,599.37-195-0.76%
Capped All Share27,269.51-193-0.70%
JSE TABACO 10,204.83-31-0.31%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
28/10/2015ACSIONAugust 2015 (Interim)
28/10/2015IMBALIEAugust 2015 (Interim)
28/10/2015NET1UEPSSeptember 2015 (Q)
28/10/2015NET1UEPSPSeptember 2015 (Q)
28/10/2015NET1UEPSPPSeptember 2015 (Q)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
DELPROP26/10/1513/11/1523/11/15ZAR 0.4289
ECSP C23/10/1506/11/1516/11/15ZAR 1.0356
FRONTIER23/10/1506/11/1516/11/15GBP 0.0305
ECSP A23/10/1506/11/1516/11/15ZAR 0.7671
ECSP C223/10/1506/11/1516/11/15ZAR 1.0356
Ex Div**
Share NameDec-DateLDTPay-DateAmount
NTC PREF01/10/1523/10/1502/11/15ZAR 3.8651
EOH16/09/1523/10/1502/11/15ZAR 1.5000
PHUMELELA02/10/1523/10/1502/11/15ZAR 0.6000
BOWCALF29/09/1523/10/1502/11/15ZAR 0.2300
BARWORLD6%P05/10/1523/10/1502/11/15ZAR 0.0600

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

Stock Exchange News Service
27/10/201517:45ASCENSION PROPERTIES LIMITED - Audited condensed consolidated financial results ...
27/10/201517:45ASCENSION PROPERTIES LIMITED - Dividend: Tax treatment and salient dates
27/10/201517:39HULAMIN LIMITED - Dealings in securities by director
27/10/201517:37HULAMIN LIMITED - Dealings in securities by directors and company secretary
27/10/201517:25PINNACLE HOLDINGS LIMITED - Interest Payment Date announcement - PTH01
27/10/201517:08HULAMIN LIMITED - Purchase of shares by Hulamin Long Term Incentive Plan 2007 a...
27/10/201517:05JSE LIMITED - Index Change Advice - 20151030 ZCI Ltd Deletion
27/10/201517:05CARGO CARRIERS LIMITED - Summarised unaudited interim financial statements for t...
27/10/201517:05JSE LIMITED - Index Change Advice - 20151027 FTSE JSE Ground Rules Update
27/10/201517:00NU-WORLD HOLDINGS LIMITED - Audited condensed consolidated year end results and ...
27/10/201517:00TRUWORTHS INTERNATIONAL LIMITED - Renewal of cautionary announcement: potential ...
27/10/201517:00EQSTRA HOLDINGS LIMITED - Acquisition of securities by Peregrine Capital (Pty) L...
27/10/201515:35MACQUARIE BANK LIMITED - ZAR 10 000 000 000 Inward Listed Structured Note Progra...
27/10/201515:15CONDUIT CAPITAL LIMITED - Notification in terms of section 122(3) of the Compani...
27/10/201515:05AVENG LIMITED - Results of Annual General Meeting
27/10/201515:00CAPITAL & REGIONAL PLC - Holding in company
27/10/201514:57BHP BILLITON PLC - Director Declaration
27/10/201514:56PSV HOLDINGS LIMITED - Trading statement
27/10/201514:50OLD MUTUAL PLC - Form 8.3 Disclosure
27/10/201514:49ADAPT IT HOLDINGS LIMITED - Dealings in securities by a director of a major subs...
27/10/201514:45OLD MUTUAL PLC - Form 8.3 Disclosure
27/10/201514:45SILVERBRIDGE HOLDINGS LIMITED - Results of the Annual General Meeting
27/10/201514:15REDEFINE PROPERTIES LIMITED - Interest Rate Reset: RDFC25
27/10/201513:30OLD MUTUAL PLC - Form 8.3 Disclosure
27/10/201513:30LEWIS GROUP LIMITED - Refunds R67.1 million to insurance customers - LEW01
27/10/201513:21THE STANDARD BANK OF SA LTD - New Financial Instrument Listing Announcement - CL...
27/10/201512:25FIRSTRAND BANK LIMITED - FRC234 - Listing of New Instrument
27/10/201511:56SYNTHESIS FUNDING LIMITED - New Financial Instrument Listing - SY1268
27/10/201511:54DISCOVERY LIMITED - Dealings in securities by a director of the company
27/10/201511:45LEWIS GROUP LIMITED - Refunds R67.1 million To Insurance Customers
27/10/201511:34TORRE INDUSTRIES LIMITED - Disclosure of acquisitions and disposals of securitie...
27/10/201510:50VUNANI LIMITED - Dealing in securities by a director of a major subsidiary
27/10/201510:45PRECINCT FUNDING 1 (RF) LIMITED - SENS Notice - Interest rate reset - 27 Oct 201...
27/10/201510:18OANDO PLC - Q3 2015 Management Accounts
27/10/201510:00A E C I LIMITED - Presentation: Food Additives and Ingredients growth pillar
27/10/201509:56BARCLAYS AFRICA GROUP LIMITED - Renewal of cautionary
27/10/201509:55STELLAR CAPITAL PARTNERS LIMITED - Disclosure of changes in securities in terms ...
27/10/201509:45DISTELL GROUP LIMITED - Dealings in securities by a director of a major subsidia...
27/10/201509:35ADAPT IT HOLDINGS LIMITED - Notice in terms of Section 45(5) of the Companies Ac...
27/10/201509:26FIRSTRAND BANK LIMITED - Listing of Krugerrand Custodial Certificates - KCCGLD
27/10/201509:00AQUARIUS PLATINUM LIMITED - Production and Financial Results to 30 September 201...
27/10/201508:45BLUE GRANITE INVEST NO 2 (PTY) LIMITED - Quarterly investor report - BG22A2
27/10/201508:30SASFIN HOLDINGS LIMITED - Changes to the Board

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