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 The Sharenet Daily 
Wednesday, 01 June 2016 - 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 - Tactical Asset Allocation ? Enhancing your Experience

My last article was on how our funds/portfolios are structured with different Strategic Asset Allocations (SAAs) for investors with different investment horizons and risk appetites. This week I’ll take a closer look at Tactical Asset Allocation (TAA), i.e. how we adjust the asset allocation away from the SAA in order to improve the fund’s risk/return profile.

While we are comfortable that a fund’s SAA should generate sufficient returns over its recommended time horizon, our research indicates that by systematically applying a valuation based tactical overlay the investment experience (either through reduced risk or increased returns – or both) can be enhanced.

Practically speaking, we believe in mean reversion. This is where cheap and expensive assets will both revert to fair value over time. We therefore look to systematically increase our allocation to cheap assets, while at the same time we reduce our allocation to expensive assets.

For the purposes of this article I’ll show a couple examples of how our valuation models have filtered into the positioning of the Seed Balanced Fund. Firstly, when looking at the allocation to local equities, as Cor showed in his May article, local markets are currently as expensive as they have been for at least the past thirty years. The chart below shows the local market’s valuation at the end of April 2016 (for a refresher on how to read the chart please click through the link above to Cor’s article). Based on this valuation, the allocation to local equities is hovering near the fund’s all-time lows (35% at the end of April versus SAA of 50%). We expect substandard returns from the local equity market and have therefore reduced our exposure to this asset class.

Four years ago the picture was different. The chart below shows the local market’s valuation in April 2012. At this juncture, the fund was slightly overweight to local equities (53% vs SAA of 50%) as the market was offering slightly better value than its long term history suggested. Over the intervening four years we have been gradually reducing the fund’s exposure to local equity as the market became ever more expensive.

The other asset class that is currently at extreme levels when using our valuation techniques is our currency (the Rand). With all the weakness that has been experienced by the Rand in the last few years it is easy to think that it has always been a one way bet, but this is not the case.

At the end of 2010, the Rand had strengthened by more than 50% over the previous two years. From the end of the Global Financial Crisis (GFC) in 2008 the Rand strengthened from over R10/$ to R6.60/$. Investors (particularly those who had taken their money offshore in the panic of 2001) did not want to hear about investing offshore. Remember, this was just after our successful hosting of the football world cup and emerging markets (especially BRICS) were also the flavour of the month in the investment world. The chart below shows the ZAR vs USD and our best estimate of fair value (PPP) at the end of 2010.

It was at the end of 2010 that the Seed Balanced Fund’s allocation to global assets was moved to its maximum mandate limit, and this allocation has been broadly maintained (to much success) over the past 5 years. With the currency blow out in December 2015, and subsequent weakness, the Rand is now trading at levels (vs PPP) rarely seen – the chart below shows the extreme weakness witnessed over the past 5 years.

We continue to favour global assets over local assets, and have therefore retained our global allocation at its mandate limit (25% + 5% Africa) but since the beginning of the year, in a series of transactions, we have implemented zero cost structures that protect half of the global assets from any currency strength, while at the same time allowing the Fund to profit from any weakness up to around R19.50/$.

While we don’t have a crystal ball that will tell us what the return of the ALSI will be in 2016 or where the Rand will end the year vs the US dollar, our research indicates that there’s a good probability that investors in the local market will be disappointed over the next 5 years, and that we shouldn’t be surprised if the Rand strengthens going forward. We have therefore positioned our portfolios in such a way that they are able to capture these expected moves.

Since the launch of the Seed Balanced Fund in 2010 our TAA decisions have consistently added value (both by reducing risk and enhancing returns) and as we develop our TAA process further we expect this to continue.

Kind regards,

Mike Browne

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

Seed is hiring: Visit the Seed Investments and Seed Analytics LinkedIn Profiles to view vacancies.

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Wed, 01 Jun 2016
Top News
South Africa's rand firmed on Wednesday as the dollar pulled back from a recent rally, but traders said the local unit was likely to tread a narrow range as investors await Friday's credit rating review from Standard & Poor's.  Full story

Recent shocks to growth and inflation in South Africa have created much uncertainty, the central bank governor said on Wednesday, adding he could not predict the outcome of a rating review due on Friday.  Full story
Thousands of U.S.-backed fighters opened a major new front in Syria's war, launching an offensive to drive Islamic State out of a swathe of northern Syria it uses as a logistics base, and were reported on Wednesday to be making rapid progress.  Full story
Iraq has delayed its assault on the city of Falluja because of fears for the safety of civilians, Prime Minister Haider al-Abadi said on Wednesday, as his forces halted at the city's edge in the face of ferocious resistance from Islamic State fighters.  Full story
Chancellor Angela Merkel has public commitments that mean she will miss a disputed vote in Germany's parliament on Thursday on a resolution that labels the killings of up to 1.5 million Armenians by Ottoman forces as genocide, a spokeswoman said.  Full story
SA Business
Dozens of miners who took part in a wildcat strike over the weekend at Sibanye Gold's Kroondal platinum mine may get. . .  Full story
South African logistics group Imperial Holdings will buy a British express delivery service for 3.8 billion rand ($242.26 million) to continue. . .  Full story
South Africa's new vehicle sales fell by 10.3 percent year-on-year to 42,907 units in May, data from the trade and industry. . .  Full story
South Africa is on track to consolidate its budget and maintain its monetary policy framework, but it remains to be seen. . .  Full story

South African packaging manufacturer Nampak scrapped its half-year dividend on Wednesday and said it would reduce its property portfolio to cut debt, sending its shares tumbling 10 percent.. . .  Full story
South Africa's central bank is committed to containing inflation, although its current monetary policy tightening cycle is one of the most gradual on record, Governor Lesetja Kganyago said on Wednesday.. . .  Full story
Company News
Shareholders are advised that at the AGM held today, 01 June 2016, ordinary and special resolutions, as specified in the notice. . .  Full story
Shareholders are referred to the groupÆs interim financial results for the six months ended 31 December 2015 which reported an impairment. . .  Full story
This serves as a general communication to Santam shareholders with regards to the business environment for the four month period ended. . .  Full story
Shareholders are advised as follows: Annual Statutory Report AltronÆs shareholders are advised that an annual statutory report of the company for the. . .  Full story

Shareholders are advised that Mr David Woollam has addressed a letter to the Lewis board of directors demanding that Lewis commences. . .  Full story
Old Mutual announced that the sale of Rogge Global Partners to Allianz Global Investors has completed. The consideration for the transaction. . .  Full story
Imperial advised its shareholders that Imperial Mobility International B.V., a wholly owned subsidiary of Imperial, has entered into a conditional agreement,. . .  Full story
Shareholders are advised that Distell takes note of the ruling published by the South African Competition Commission regarding the investment that. . .  Full story
Company Results
Revenue for the year increased to R1.005 billion (2015: R834.8 million). Gross profit rose to R818.7 million (2015: R649.3 million), operating. . .  Full story
Revenue for the year increased to R150.3 million (R128.3 million) whilst gross profit jumped to R125.5 million (R108.7 million). EBITDA decreased. . .  Full story
Sale of diamonds lowered to CAD37.7 million (2015: CAD 56.9 million). Gross loss widened to CAD12.8 million (2015: CAD8.9 million). Loss. . .  Full story
Revenue for the year increased to R243.4 million (2015: R230.2 million). Loss from operating activities came in at R25.3 million (2015:. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0053518.36-386.85-0.72%
JSE Top 4017:0047510.07-464.02-0.97%
JSE Gold17:001956.3145.272.37%
JSE Financial17:0041779.05236.010.57%
JSE Industrial17:0081130.73-510.97-0.63%
JSE Indust 2517:0073450.29-527.80-0.71%
JSE Resource17:0030480.66-868.99-2.77%
DJ Futures19:1217745.00-31.00-0.17%
DJ Ind19:5817754.43-32.77-0.18%
SP 50019:582094.58-2.38-0.11%
FTSE 10017:026197.64-33.15-0.53%
All Ords08:375395.20-52.60-0.97%
NZSE 5009:027022.40-17.01-0.24%
NameTimeRPMove% Move
Gold $19:591211.05-4.04-0.33%
Gold R19:5918935.06-154.11-0.81%
Gold R/kg19:58614847-5551-0.89%
Silver $19:5915.9080-0.0610-0.38%
Platinum $19:59971.22-3.70-0.38%
Palladium $19:58543.30-.48-0.09%
Brent Crude18:5049.710.390.79%
USD / ZAR19:5915.6353-0.0760-0.48%
GBP / ZAR19:5522.4741-0.2584-1.14%
EUR/ ZAR19:5517.4501-0.0428-0.24%
NZD/ ZAR19:5910.66540.03490.33%
AUD / ZAR19:5511.3228-0.0457-0.40%
USD / JPY19:59109.5340-1.1880-1.07%
EUR / USD19:591.11810.00530.47%
GBP / USD19:591.4411-0.0070-0.48%

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 SPANJRD  50015042.86.%8367
2 SILVERB  2803815.70.%85658
3 G_Flash  2002011.11.%170244
4 CROOKES  59504508.18.%5
5 CSG  134108.06.%155787
6 ACCELERAT  648488.00.%5351
7 MRPRICE  1991014607.91.%3286274
8 ENX  188105.62.%72857
9 IMPERIAL  147067065.04.%1224588
10 ARGENT  420205.00.%13750
11 PIKWIK  30431334.57.%446488
12 HARMONY  47992074.51.%1669349
13 Trellidor  480204.35.%39500
14 LIB-HOLD  124065014.21.%1975381
15 JSE  175506503.85.%373722
16 TFG  145295293.78.%995555
17 EFFICIENT  528183.53.%9557
18 COMAIR  300103.45.%157200
19 CLICKS  111363663.40.%1022048
20 GFIELDS  56441823.33.%3046237

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Major Moves Down
SharenameSaleMove% MoveVolume
1 KAYDAV  101-51-33.55.%2000
2 NAMPAK  1791-269-13.06.%7908996
3 ISA  102-12-10.53.%11850
4 EASTPLATS  1200-140-10.45.%8035
5 ALTRON  570-60-9.52.%19221
6 CONDUIT  248-22-8.15.%1429353
7 NIVEUS  2400-200-7.69.%16965
8 ARM   7824-574-6.83.%942092
9 KUMBAIO  7575-524-6.47.%979108
10 ARCMITTAL  821-54-6.17.%1011737
11 STELLAR  196-12-5.77.%132964
12 ANGLO  13199-770-5.51.%3797576
13 BILLITON  17999-982-5.17.%3670536
14 TORRE  264-14-5.04.%197105
15 GLENCORE  2871-147-4.87.%2097042
16 CALGRO  2141-109-4.84.%4385
17 ROCKCASTL  3799-180-4.52.%1171101
18 ASSORE  15305-705-4.40.%69577
19 OCTODEC  2160-93-4.13.%60553
20 BLUETEL  1506-64-4.08.%7294768

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New Highs
SharenameSaleHighMove% MoveVolume
1 SILVERB  2802803815.70.%85658

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New Lows
SharenameSaleLowMove% MoveVolume
1 KAYDAV  101101-51-33.55.%2000
2 PPC  946915-34-3.47.%5401385
3 ADVHLTH  1651510.119620

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Index Summary
Index NameRPMove% Move
Top 4047,510.07-464.02-0.97%
Mid Cap73,203.70549.080.76%
Small Cap59,527.74-113.84-0.19%
Resource 2030,480.66-868.99-2.77%
Industrial 2573,450.29-527.80-0.71%
Financial 1515,232.8394.800.63%
Financial & Ind. 3075,862.65-482.12-0.63%
All Share53,518.36-386.85-0.72%
Oil & Gas 7,
Mining 20,859.00-668.04-3.10%
Gold Mining1,956.3145.272.37%
Platinum Mining23.71.230.98%
GENERAL MINING5,293.65-295.93-5.29%
Oil & Gas Producers 38,689.88.000.00%
Basic Materials 21,468.97-560.83-2.55%
Chemicals 23,748.69-135.23-0.57%
Forestry & Paper 52,384.08-1548.85-2.87%
Industrial Metals 5,625.52-389.14-6.47%
Industrials 44,716.43541.491.23%
General Industrials 170.602.131.26%
Consumer Goods 81,048.14-1015.94-1.24%
Automobiles & Parts 4,694.22-61.14-1.29%
Household Goods634.8120.29%
Health Care 9,450.14-85.22-0.89%
Beverages 326.82-5.09-1.53%
Index NameRPMove% Move
Food Producers 9,125.67122.861.36%
Personal Goods 917.96-9.99-1.08%
Consumer Services 18,749.68-96.03-0.51%
General Retailers 7,719.85190.352.53%
Travel & Leisure 5,782.3395.071.67%
Media 496.10-6.85-1.36%
Support Services 2,069.0029.661.45%
Telecommunications 7,029.09106.991.55%
Financials 41,779.05236.010.57%
Banks 6,394.4094.741.50%
Non-life Insurance 59,721.971510.922.60%
Life Insurance 38,897.67193.870.50%
General Financial 4,593.413.740.08%
Technology 50,260.63-53.58-0.11%
SHARIAH TOP40 3,051.65-37-1.20%
FTSE/JSE SHARIAH ALL3,341.38-28-0.82%
COAL MINING7,744.34-164-2.08%
FTSE JSE Fledgling 6,991.81-43-0.61%
FTSE/JSE Alt X 1,488.5200.03%
SA LISTED PROPERTY 649.637.131.11%
RESOURCE 17,130.05-447-2.55%
DIVIDEND PLUS199.1300.12%
FTSE/JSE RAFI 409,372.84-100-1.06%
Capped Top 4025,156.19-227-0.90%
Capped All Share27,212.70-183-0.67%
JSE TABACO 12,023.82-370-2.98%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
02/06/2016RBADecember 2015 (Final)
02/06/2016TRNSHEXMarch 2016 (Final)
02/06/2016WESCOALMarch 2016 (Final)
03/06/2016ILLOVOMarch 2016 (Final)
03/06/2016MONTAUKMarch 2016 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
CROOKES31/05/1624/06/1604/07/16ZAR 1.1500
CARTRACK31/05/1601/07/1611/07/16ZAR 0.3500
SAFARI31/05/1617/06/1627/06/16ZAR 0.3200
NVEST31/05/1617/06/1627/06/16ZAR 0.0480
AME30/05/1624/06/1604/07/16ZAR 2.5000
Ex Div**
Share NameDec-DateLDTPay-DateAmount
HOMCHOICE13/05/1627/05/1606/06/16ZAR 0.8400
DIPULA A11/05/1627/05/1606/06/16ZAR 0.4824
RAUBEX09/05/1627/05/1606/06/16ZAR 0.4200
DIPULA B11/05/1627/05/1606/06/16ZAR 0.3878
LODESTONE11/05/1627/05/1606/06/16ZAR 0.2604

Upcoming AGMs**
CodeCompany NameDateStatus
SNTSantam Ltd.01/06/2016Unconfirmed
HWNHowden Africa Holdings Ltd.01/06/2016Confirmed
BSRBasil Read Holdings Ltd.02/06/2016Confirmed
MPTMpact Ltd.02/06/2016Confirmed
SCPStellar Capital Partners Ltd.03/06/2016Confirmed

Stock Exchange News Service
01/06/201617:47WINHOLD LIMITED - Unaudited condensed interim consolidated results of the group ...
01/06/201617:36HOWDEN AFRICA HOLDINGS LIMITED - Results of Annual General Meeting
01/06/201617:35ACSION LIMITED - Revised summarised reviewed consolidated financial results for ...
01/06/201617:34ACSION LIMITED - CANCELLATION OF S372168 Summarised reviewed consolidated financ...
01/06/201617:26LABAT AFRICA LIMITED - Further trading statement
01/06/201617:18REX TRUEFORM CLOTHING COMPANY LIMITED - Update in respect of the mandatory and c...
01/06/201617:16AFRICAN AND OVERSEAS ENTERPRISES LD - Update in respect of the mandatory and com...
01/06/201617:15ADVANCED HEALTH LIMITED - Initial trading statement
01/06/201617:15CONDUIT CAPITAL LIMITED - Change to the Board of Directors - Resignation of a Di...
01/06/201617:13HULAMIN LIMITED - Purchase of shares by Hulamin Long Term Incentive Plan 2007
01/06/201617:13TASTE HOLDINGS LIMITED - Exercise of Options and Sale of Shares by a Director
01/06/201617:12HULAMIN LIMITED - Exercise of long term incentive plan awards and subsequent sal...
01/06/201617:05JSE LIMITED - 20160620 June 2016 Quarterly Review ICA
01/06/201616:58REDEFINE PROPERTIES LIMITED - Dealings In Securities By Directors And By An Asso...
01/06/201616:55CARTRACK HOLDINGS LIMITED - Share Incentive Scheme and Dealing in Securities
01/06/201616:46EQSTRA HOLDINGS LIMITED - Trading statement
01/06/201616:45SANTAM LIMITED - Operational update to shareholders following the annual general...
01/06/201616:44STRATCORP LIMITED - Reviewed condensed provisional consolidated financial result...
01/06/201616:30SABMILLER PLC - Change in particulars of director
01/06/201616:10WORKFORCE HOLDINGS LIMITED - Change to the Board of Directors - Resignation of a...
01/06/201616:05OLD MUTUAL PLC - Form 8.3 - Public Opening Position Disclosure Alliance Trust P...
01/06/201616:00PSG GROUP LIMITED - Dealing In Psg Shares By An Associate Of Directors
01/06/201616:00OLD MUTUAL PLC - Form 8.3 - Public Opening Position Disclosure RIT Capital Part...
01/06/201615:35AFRICAN DAWN CAPITAL LIMITED - Provisional consolidated annual financial stateme...
01/06/201615:35OLD MUTUAL PLC - Form 8.3 - Public Opening Position Disclosure - Deutsche Boerse...
01/06/201615:34AFRICAN DAWN CAPITAL LIMITED - CANCELLATION OF S372272 Provisional consolidated ...
01/06/201615:30BRITISH AMERICAN TOBACCO PLC - Voting Rights and Capital
01/06/201615:30HULISANI LIMITED - Cautionary Announcement
01/06/201614:53ZEDER INVESTMENTS LIMITED - Change To The Board Of Directors
01/06/201614:03GREENBAY PROPERTIES LIMITED - Results of accelerated book build
01/06/201613:30FORTRESS INCOME FUND LIMITED - FIFC26 - Full Capital Redemption
01/06/201613:30REDEFINE PROPERTIES LIMITED - Finalisation Of Acquisition Of A Majority Interest...
01/06/201613:30ANGLO AMERICAN PLC - Total voting rights
01/06/201613:05NAMPAK LIMITED - Disposal of properties in Nampak Groups Property Portfolio in a...
01/06/201613:03NAMPAK LIMITED - Unaudited group results and ordinary dividend announcement for ...
01/06/201613:00CLIENTELE LIMITED - Notification in terms of section 122 of the Companies Act, N...
01/06/201612:45IVUZI INVESTMENTS LIMITED - IVA636 - Listing of New Instrument
01/06/201612:35SABMILLER PLC - Form 8 disclosure - Domenic De Lorenzo
01/06/201612:30SABMILLER PLC - Further Form 8 disclosure - Alan Clark
01/06/201612:25SABMILLER PLC - Notification of transactions of directors, persons discharging m...
01/06/201612:20SABMILLER PLC - Form 8 disclosure - Alan Clark
01/06/201612:19CARGO CARRIERS LIMITED - Further Information relating to the dividend declaratio...
01/06/201612:15SABMILLER PLC - Executive Share Award Plan 2008
01/06/201612:00MASSMART HOLDINGS LIMITED - Trading of Massmart ordinary shares on behalf of the...
01/06/201611:59MONEYWEB HOLDINGS LIMITED - Dealings in Securities by a Director
01/06/201611:37REMGRO LIMITED - Remgro Ltd\Capevin Holdings Ltd - Ruling published by the South...
01/06/201611:23ALLIED ELECTRONICS CORPORATION LIMITED - Annual Statutory Report, 2016 Integrate...
01/06/201611:15BALWIN PROPERTIES LIMITED - Update in respect of posting of Waterfall Developmen...
01/06/201611:10MINE RESTORATION INVESTMENTS LIMITED - Update in respect of publication of the f...
01/06/201611:10BLUE TITANIUM CONDUIT (RF) LIMITED - New Credit Rating Agency & Supplement to th...
01/06/201611:05TRELLIDOR HOLDINGS LIMITED - Acquisition Of Business And Renewal Of Cautionary A...
01/06/201611:04TAWANA RESOURCES NL - Notice of shortfall
01/06/201610:55LEWIS GROUP LIMITED - Lewis: Demand received from Mr David Woollam
01/06/201610:06INVESTEC BANK LIMITED - Adjustment Announcement - TOPIBA and TOPIBP
01/06/201610:00LONMIN PLC - Director / PDMR shareholding
01/06/201609:40IMPERIAL HOLDINGS LIMITED - Acquisition by Imperial of Palletways Group Limited
01/06/201609:35GREENBAY PROPERTIES LIMITED - Increase in amount of equity capital raising by ac...
01/06/201609:30OLD MUTUAL PLC - Completes Sale of Rogge
01/06/201609:05SABMILLER PLC - Total Voting Rights and Share Capital
01/06/201609:00SABMILLER PLC - Rule 2.10 announcement
01/06/201609:00ROYAL BAFOKENG PLATINUM LIMITED - Disclosure of Beneficial Interest in Securitie...
01/06/201608:58DISTELL GROUP LIMITED - Ruling published by the South African Competition Commis...
01/06/201608:30BLUE LABEL TELECOMS LIMITED - Renewal of cautionary
01/06/201608:30SUN INTERNATIONAL LIMITED - Merger of the Latin American Assets of SIL with Drea...
01/06/201608:30STEINHOFF INTERNATIONAL HOLDINGS N.V. - Lapse Of The Final Offer And Level Of Ac...
01/06/201608:00PAN AFRICAN RESOURCES PLC - Acceptance of the Jadeite offer
01/06/201607:53RESOURCE GENERATION LIMITED - Board report to shareholders
01/06/201607:30FAMOUS BRANDS LIMITED - Change to the Composition of the Board of Directors App...
01/06/201607:30CSG HOLDINGS LIMITED - Reviewed provisional condensed consolidated results for t...
01/06/201607:30DIPULA INCOME FUND LIMITED - Results of accelerated book build
01/06/201607:05GOLD FIELDS LIMITED - Resignation of director
01/06/201607:05SABMILLER PLC - Competition Commission of South Africa makes recommendation to t...
01/06/201607:05WINHOLD LIMITED - Renewed Cautionary Announcement
01/06/201607:05HWANGE COLLIERY COMPANY LIMITED - Changes to the board
01/06/201607:05STRATCORP LIMITED - Trading Statement

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