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 The Sharenet Daily 
Wednesday, 13 July 2016 - 20:00
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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
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Seed Weekly - Reviewing our TAA Decisions

My previous articles focused on how Seed constructs our Funds around predetermined Strategic Asset Allocations (SAA) (click here) and then how we seek to add value through our Tactical Asset Allocation (TAA) process (click here). This week I take this line of discussion to its logical conclusion. Has our decision making added to, or detracted from, performance? Essentially how has our TAA process contributed to returns?

At the risk of repeating myself, our investment process seeks to incrementally add value to our Funds, rather than risking the fortunes of the entire Fund on one or two outsized allocations. We believe that we have a process that, over time, will produce more good decisions than bad, and we therefore seek to make as many independent decisions as possible so that the law of averages works in our favour and we generate consistent outperformance. Unfortunately in the real world we aren’t always going to get it right, but it doesn’t stop us from constantly striving for this goal.

Importantly, we have set up systems to analyse the decisions that we have made that allows us to focus our attention where required. The chart below is one of the outputs that we review on a monthly basis. It looks quite busy, but essentially tracks whether the allocation to each asset class has added to (above the 0% line – overweight an outperforming asset class or underweight an underperforming asset class), or detracted from (below the 0% line – overweight an underperforming asset class or underweight an outperforming asset class), the Seed Balanced Fund’s returns on a monthly basis. The total contribution from our TAA is represented by the black dot. This is the granular level at which we make (and then analyse) our asset allocation decisions. The chart tracks the monthly contributions over the past 4 years.

It is evident that on a monthly basis the return drivers are quite random, with big contributors in one month often being large detractors in the following month. On a monthly basis our TAA process has added value just less than 70% of the time. When extending this analysis to a rolling 12 month view we get a better idea of how our TAA adds to the investment performance. The chart below breaks down our TAA decisions over rolling 12 month periods. Essentially our TAA decisions have added between 1% and 4.4% over any rolling 12 month period over the past 4 years.

An obvious detractor over the last couple years has been from our underweight Global Bond allocation. Since the inception of the Seed Balanced Fund we have maintained an underweight allocation to this asset class as our research indicates that investors should expect poor returns over the long term. In order to mitigate this position to a certain extent we have overweight allocations to Global Property and Global Alternative. When viewing the underweight Global Bond in conjunction with the overweight Global Property and Global Alternative allocation, it is evident that, in general, this has been a good decision over time (only mildly detracting from returns over the past 4 rolling 12 month periods). The chart below isolates this TAA decision.

Without going further into the detail I’ll stop this analysis here. Suffice to say that an important part of our investment process is a thorough regular review of the decisions we make. Where they have added to performance we ask whether we should be taking profit or retaining the position. Conversely, where returns have been negatively impacted, we critically assess the investment case again. If the investment case has changed we will not hesitate to cut our losses, but where we are convinced that the investment case has strengthened we are happy to make a higher conviction allocation.

Take care,

Mike Browne

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

Please click here to view our disclaimer. For more information please visit our website.

Wed, 13 Jul 2016
Top News
South Africa's rand backtracked on Wednesday as global demand for risk assets eased and investors held off making major bets ahead of policy decision by the Bank of England.  Full story

Local markets  Full story
South Korea announced on Wednesday the site where a U.S. THAAD anti-missile defence unit will be deployed against North Korea's missile and nuclear threats, a plan that has angered China and prompted a North Korean warning of retaliation.  Full story
China vowed to take all necessary measures to protect its sovereignty over the South China Sea and said it had the right to set up an air defence zone, after rejecting an international tribunal's ruling denying its claims to the energy-rich waters.  Full story
South Sudan's vice president has withdrawn with his troops to outside of Juba but is not planning for war, his spokesman said on Wednesday, as a ceasefire that ended heavy fighting with the president's forces entered its third day.  Full story
SA Business
South African regulators are investigating possible insider trading at Discovery after shares fell sharply the day before a downbeat trading update in February, the insurer said on Wednesday.. . .  Full story
South African retail sales rose more than expected in May to their strongest level in more than two years, signalling the economy may be on the mend after contracting in the first quarter of this year.. . .  Full story

South Africa's government employees pension fund is investing nearly $750 million into lender SA Home Loans as part of plans to provide cheaper mortgages and build more houses in a country with glaring income disparities.. . .  Full story
Company News
RBPlat is in the process of finalising its financial results for the six months ended 30 June 2016. The company advises that it anticipates earnings per share ("EPS") and headline earnings. . .  Full story
Rockwell announced results for the three months ended May 31, 2016. Currency values are presented in Canadian dollars, unless otherwise indicated. Salient features - Gross profit - CAD3.3 million before amortisation and depreciation. . .  Full story
According to Business Report, Finance Minister Pravin Gordhan has relieved Telkom from complying with the Public Finance Management Act (PFMA) with immediate effect. Telkom spokeswoman Jacqui O'Sullivan said the company welcomed. . .  Full story
Company Results
Revenue increased to GBP5.1 million (May 2015: GBP1 million), while total comprehensive income came in at GBP2.9 million (May 2015: GBP457 991). In addition, headline earnings per share per share was higher at GBP2.22pps (May 2015: GBP1.35pps). Outlook The first quarter results are. . .  Full story
Sale of diamonds for the quarter increased to CAD12.1 million (2015: CAD8.3 million), gross profit turned around to CAD1.8 million (2015: loss of CAD.6 million), profit for the period came in at CAD570 000 (2015: loss of CAD5.2 million), while headline. . .  Full story
World Markets (Spot Prices)
NameTimeRPMove% Move
JSE Overall17:0052814.88267.360.51%
JSE Top 4017:0046288.18231.370.50%
JSE Gold17:002728.32-5.97-0.22%
JSE Financial17:0040640.12-50.62-0.12%
JSE Industrial17:0078567.79632.030.81%
JSE Indust 2517:0070781.23602.270.86%
JSE Resource17:0032175.8789.800.28%
DJ Futures19:3218275.007.000.04%
DJ Ind20:0018362.8515.180.08%
SP 50020:002151.42-0.72-0.03%
FTSE 10016:456712.1731.480.47%
All Ords08:475470.3037.100.68%
NZSE 5009:027064.32-15.14-0.21%
NameTimeRPMove% Move
Gold $19:591343.2110.390.78%
Gold R20:0019421.20334.041.75%
Gold R/kg20:0062439240590.65%
Silver $19:5920.34500.19700.98%
Platinum $19:591094.610.000.00%
Palladium $19:59643.0019.003.04%
Brent Crude19:4046.290.040.09%
USD / ZAR19:5914.45880.13860.97%
GBP / ZAR19:5518.98080.04160.22%
EUR/ ZAR19:5516.05470.21181.34%
NZD/ ZAR19:5910.53380.08730.84%
AUD / ZAR19:5511.00700.09180.84%
USD / JPY19:59104.32600.00000.00%
EUR / USD19:591.11080.00000.00%
GBP / USD19:591.3161-0.0085-0.64%

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 ATLATSA  1352421.62.%21000
2 TRADEH  260034815.45.%78876
3 THARISA  1130908.65.%37286
4 BLACKSTAR  859546.71.%7170
5 BELL  1116565.28.%7422
6 BEE-SASOL  3200015004.92.%298
7 ATLEAF  2000854.44.%3500
8 TRANSCAP  1120403.70.%1038745
9 HOWDEN  28001003.70.%120342
10 BRAIT  128004553.69.%2155674
11 EQUITES  1425503.64.%40000
12 MIXTEL  285103.64.%6900
13 ARCMITTAL  890313.61.%585946
14 HCI  120744023.44.%30677
15 SAFARI  775253.33.%17929
16 GRINDROD  1125363.31.%452131
17 EXXARO  82392543.18.%1396268
18 TRUWTHS  86502603.10.%9776938
19 IMPLATS  52361563.07.%3172741
20 NORTHAM  46741383.04.%450909

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Major Moves Down
SharenameSaleMove% MoveVolume
1 RENERGEN  1200-200-14.29.%570
2 DRDGOLD  1080-119-9.92.%2210962
3 DIAMONDCP  117-12-9.30.%12845
4 AMECOR  326-23-6.59.%11351
5 Gaia  850-50-5.56.%2059
6 ASSORE  18150-1050-5.47.%107986
7 ADCORP  1858-95-4.86.%28717
8 SYGNIA  1690-80-4.52.%8422
9 BASREAD  300-14-4.46.%6601
10 KIBO  110-5-4.35.%1600
11 SASFIN  5651-249-4.22.%2254
12 REDEFINE  1128-47-4.00.%11686603
13 CSG  135-5-3.57.%28900
14 SEREIT  2201-79-3.46.%26208
15 NEPI  15600-500-3.11.%593508
16 ADVHLTH  170-5-2.86.%104441
17 DAWN  300-8-2.60.%27939
18 ELBGROUP  1850-49-2.58.%30
19 ENX  190-5-2.56.%60624
20 NAMPAK  2000-50-2.44.%4863132

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New Highs
SharenameSaleHighMove% MoveVolume
1 THARISA  11301300908.65.%37286
2 TSOGO-SUN  28402847531.90.%1120540
3 GFIELDS  840085341501.82.%2138502
4 PIKWIK  36143726340.95.%218912
5 KUMBAIO  1260014050-95-0.75.%1213041
6 CASHBIL  3650137900-378-1.02.%14059

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New Lows
SharenameSaleLowMove% MoveVolume
1 DAWN  300250-8-2.60.%27939

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Index Summary
Index NameRPMove% Move
Top 4046,288.18231.370.50%
Mid Cap77,673.60399.530.52%
Small Cap59,725.04390.640.66%
Resource 2032,175.8789.800.28%
Industrial 2570,781.23602.270.86%
Financial 1514,741.3818.480.13%
Financial & Ind. 3072,905.25481.850.67%
All Share52,814.88267.360.51%
Oil & Gas 7,
Mining 24,399.9171.240.29%
Gold Mining2,728.32-5.97-0.22%
Platinum Mining26.34.522.01%
GENERAL MINING5,827.0213.480.23%
Oil & Gas Producers 38,689.88.000.00%
Basic Materials 22,913.0565.510.29%
Chemicals 20,265.43-120.79-0.59%
Forestry & Paper 47,819.78748.441.59%
Industrial Metals 9,357.30-70.55-0.75%
Industrials 45,325.55189.260.42%
General Industrials 175.63.490.28%
Consumer Goods 74,363.48845.491.15%
Automobiles & Parts 4,381.73-54.34-1.22%
Household Goods585.1920.33%
Health Care 10,260.93-6.47-0.06%
Beverages 285.783.641.29%
Index NameRPMove% Move
Food Producers 9,489.0741.180.44%
Personal Goods 852.7412.881.53%
Consumer Services 18,380.47126.090.69%
General Retailers 7,678.8973.110.96%
Travel & Leisure 6,083.3583.371.39%
Media 484.002.030.42%
Support Services 2,098.11-34.06-1.60%
Telecommunications 7,797.2047.470.61%
Financials 40,640.12-50.62-0.12%
Banks 6,631.00-9.72-0.15%
Non-life Insurance 56,914.52-191.42-0.34%
Life Insurance 37,943.9941.170.11%
General Financial 4,054.2455.951.40%
Technology 50,227.25-72.22-0.14%
SHARIAH TOP40 3,160.2320.05%
FTSE/JSE SHARIAH ALL3,531.7860.18%
COAL MINING10,415.543213.18%
FTSE JSE Fledgling 7,259.01120.17%
FTSE/JSE Alt X 1,478.11201.34%
SA LISTED PROPERTY 652.09-8.66-1.31%
CAPPED PROPERTY 546.96-1.03%
RESOURCE 18,282.28520.29%
DIVIDEND PLUS202.8810.36%
FTSE/JSE RAFI 409,659.27380.40%
Capped Top 4024,680.631120.46%
Capped All Share26,961.171310.49%
JSE TABACO 11,786.521391.19%

Click here for the Sharenet Index Summary page
Latest Consensus Changes**
CodeCompany NameStatusUpdated
Results Expected**
ExpectedCompany NameFin. Date
15/07/2016ANGLDMarch 2016 (Q)
15/07/2016ANGLD-AMarch 2016 (Q)
15/07/2016ANGLD-BMarch 2016 (Q)
15/07/2016ANGLD-EMarch 2016 (Q)
15/07/2016DAWNMarch 2016 (Final)

Recent Dividends**
Share NameDec-DateLDTPay-DateAmount
NAMPAK 6.512/07/1626/07/1601/08/16ZAR 0.0650
NAMPAK 6%P12/07/1626/07/1601/08/16ZAR 0.0600
HUDACO01/07/1608/08/1615/08/16ZAR 1.7000
ILPREF230/06/1619/07/1625/07/16ZAR 14.5978
NICTUS30/06/1619/07/1625/07/16ZAR 0.0300
Ex Div**
Share NameDec-DateLDTPay-DateAmount

Upcoming AGMs**
CodeCompany NameDateStatus
GAMGlobal Asset Management Ltd.13/07/2016Confirmed
ANAAdrenna Property Group Ltd.15/07/2016Confirmed
ADAPAdrenna Property Group Ltd.15/07/2016Confirmed
AELAllied Electronics Corporation Ltd.18/07/2016Confirmed
AENAllied Electronics Corporation Ltd.18/07/2016Confirmed

Stock Exchange News Service
13/07/201617:10NEW EUROPE PROPERTY INVESTMENTS PLC - Results Of The Accelerated Book Build, Iss...
13/07/201617:08JSE LIMITED - Informative Notice 20160720 Datatec Ltd Scrip Dividend
13/07/201617:05JSE LIMITED - Informative Notice 20160720 The Foschini Group Scrip Dividend
13/07/201616:30INVESTEC PLC - Notification of major interest in shares
13/07/201616:16GLOBAL ASSET MANAGEMENT LIMITED - Results of Annual General Meeting ("AGM")
13/07/201616:15OLD MUTUAL PLC - Form 8.3 Disclosure - RPC
13/07/201615:53REBOSIS PROPERTY FUND LIMITED - Update and Amendments to the Proposed Related Pa...
13/07/201615:50OLD MUTUAL PLC - Form 8.3 Disclosure - DB
13/07/201615:35HYPROP INVESTMENTS LIMITED - Tap Issue-HILB06
13/07/201615:00SABMILLER PLC - Notification of major interest in shares
13/07/201614:52BANK OF CHINA LIMITED - New Financial Instrument - BCJ09 and BCJ10
13/07/201614:30INTU PROPERTIES PLC - Notification of Major Interest in Shares
13/07/201614:15PSG KONSULT LIMITED - PSG Konsult Credit Rating Upgraded
13/07/201614:15SOVEREIGN FOOD INVESTMENTS LIMITED - Notice of an acquisition of a beneficial in...
13/07/201613:58ARCELORMITTAL SOUTH AFRICA LIMITED - Resignation of non-executive directors
13/07/201613:40TRANSNET SOC LIMITED - TN25; TN30 Bond Tap Issue
13/07/201612:57BRIKOR LIMITED - Transaction to acquire remaining 69% of Ilangabi Investments 12...
13/07/201612:30IVUZI INVESTMENTS LIMITED - IVA629 - Listing of New Instrument
13/07/201612:22GOODERSON LEISURE CORPORATION LIMITED - Proposed delisting by way of scheme of a...
13/07/201611:58WINHOLD LIMITED - Renewed Cautionary Announcement
13/07/201611:51SOUTH AFRICAN COAL MINING HLDGS LIMITED - Further extension to issue the de-list...
13/07/201611:35STANDARD BANK OF SA LTD - Credit Event Announcement
13/07/201611:35REDEFINE PROPERTIES LIMITED - Results Of The Accelerated Book Build
13/07/201611:34ABSA BANK LIMITED - ACL165 - Partial Redemption
13/07/201611:33STANDARD BANK OF SA LTD - Credit Event Announcement
13/07/201611:30JSE LIMITED - GEN - General - Country Bird Holdings Pty Ltd - Acquisition of Sov...
13/07/201611:15CHROMETCO LIMITED - Cautionary Announcement
13/07/201610:31NEW EUROPE PROPERTY INVESTMENTS PLC - Accelerated Book Build
13/07/201609:56DOLOMITE CAPITAL LIMITED - Credit Event Update - DOL009
13/07/201609:52CASHBUILD LIMITED - Fourth quarter operational update - FY 2016
13/07/201609:50DOLOMITE CAPITAL LIMITED - Credit Event Notice Update - DOL004
13/07/201609:45TAWANA RESOURCES NL - Appointment of CEO
13/07/201609:00SABMILLER PLC - Rule 2.10 announcement
13/07/201609:00ROYAL BAFOKENG PLATINUM LIMITED - Trading statement for the six months ended 30 ...
13/07/201609:00NEWGOLD ISSUER (RF) LIMITED - GLD/ NGNGLD - Listing of additional NewGold Debent...
13/07/201608:32STEINHOFF INTERNATIONAL HOLDINGS N.V. - Recommended Cash Offer For Poundland Gro...
13/07/201608:20REDEFINE PROPERTIES LIMITED - Accelerated Book Build
13/07/201608:00CAPITAL & REGIONAL PLC - Trading Update
13/07/201607:07ROCKWELL DIAMONDS INCORPORATED - Posts Profits On The Back Of Further Operationa...
13/07/201607:05ROCKWELL DIAMONDS INCORPORATED - Unaudited Interim Consolidated Financial Statem...

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