Sharenet Blog

We have responded to the many calls from our clients to establish a CFD offering that offers excellent service, reliability and competitive rates.

We have delivered. Welcome to the next generation of trading

We can proudly say that SharenetCFDs is the premier choice. Not only is it built on Sharenet’s ethos and foundations of transparency, customer service and IT excellence, but also capitalises on international expertise, partnering with IG Markets in the UK.

The platform is incredibly easy to use, is lightening quick and incorporates technical analysis tools and advanced charting in real time.

For more information visit www.sharenetcfds.co.za

To all Sharenet users:

We have taken into account the many calls for 12 month high and low information to be re-instituted.

As a result we have develeoped a page that now gives that same information and more, adding 7 days, 14 days, 21 days, 1,2,3,6 months and 1,2,3,5 year intervals.

If there is any other information you would like to see added to this section, please don't hesitate to suggest improvements.

Find this page by clicking "Share Performance" in the left navigation menu when on any Quickshare page. "Share Performance" can be found under the heading, "Data" and is the third item down.

Yours sincerely
The Sharenet team

Dear Client

Every year, the JSE reviews their pricing and as of 1 January 2010, they will be instituting an increase. Due to these and other rising costs, Sharenet wishes to announce that with effect from 1 January 2010 all our rates will be increasing by 8%.

At Sharenet, we continually strive to maintain excellence in our service and to enhance our product offerings, adding more data and features where we can. We welcome any and all suggestions which could help us improve our service to our clients. These suggestions can be sent to support@sharenet.co.za

Thank you for your continued support and business.

The Sharenet team

For those that would like to access some of our more popular pages on your mobile phone, we have made sharenet.mobi available.

The sharenet.mobi service has the latest sens news, spot prices and Quickshare available.

Simple type sharenet.mobi into the browser on your cell phone.

If this does not work, then your phone is possibly not able to display HTML pages, in which case you can use our SMS service.

For more details please see http://www.sharenet.co.za/v3/mobile.php

Due to an increase in royalty charges from the JSE and other cost increases, Sharenet wishes to announce that with effect from 1 Jan 2009 all our rates will be increasing by 12%.

The rates that we have now were last changed in January 2007, when we were able to give private investors some decreased rates due reductions in JSE royalties for private users.

We continue to enhance our product offerings, adding more data and features. We welcome any suggetions which can be sent to support@sharenet.co.za

The Java Chart facility, available to all subscribers, has recently been upgraded. We are also currently upgrading the “Intra-day” version and once completed, we will notify all our members.

Once logged in, simply click the “Graphs & Charts” link situated in the side menu, to the left of your browser or, in your address bar enter in the following URL address: www.sharenet.co.za/charts
A page should then load up with a heading that reads, “Java Technical Analysis Charts Plus”.

I am pleased to report that the following improvements have now been made to this link:

1- When using the “Find a Share Code” option, simply clicking on a name that was found will load it up in your chart. Of course this new feature makes finding and loading shares so much easier. On dial up connections (56K modems), this may take a few seconds.

2- Please note, that an option has been made available which allows the user to save the chart image as a “png” file. To do this simply scroll down to the bottom of the page and click on the “Save as Image” button. The graph currently under view will then be saved. This file can then be emailed or even used in an office document.

3- Furthermore, printing of the chart can now also be done immediately by simply selecting the print icon which is the last icon on the bottom left.

4- In respect to “Preferences” and “Studies”, the option to both save and load has now been added to Studies as well. Remember, “Preferences” relate to the system as a whole, while “Studies” relate to individual shares.

So, for example, you can now set different moving averages for each share, save your studies and then on your next visit simply load your settings and the program will remember the different moving averages for each and every share as you saved them.

5- You may also have noticed that the default indicators are now set to RSI and MACD, this change was made due to the fact that these indicators are the most widely used.

6- Also included in the list of improvements is a drop down menu situated next to the scrolling buttons on the top of the toolbar that allows the user to alter the period from which the data is taken. The default is set to 6 months, but by simply clicking one of the options in the drop down menu, data for 1 month (1m), 3 months (3m), 1 year (1y), 2years (2y), 3 years (3y), 5 years (5y), 10 years (10y) and a final option of “All” can now be selected.

Extra enhancements include:
• New indicators: Elder-ray Bear Power, Elder-ray Bull Power, Pivot Points and DMA (Displaced Moving Average)
• Support for multiple exponential average lines
• Extended Fibonacci Retracements
• Easy drawing of trend channels and parallel lines

Finally, please note that by right clicking on the chart itself, a menu pops up which also displays several options worth familiarizing oneself with.

I hope that all these improvements enhance your Sharenet experience and if there are any other tools you would like to see added, please do not hesitate to let us know.

Are you new to trading and don't have a clue where to start? We've come to your aid with our handy guide to online trading with Sharenet and the JSE!

From signing up with a broker to explaining the ins-and-outs of trading online, we've got all your questions covered...

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A new year signals a new beginning! Last year's market conditions can best be described as tumultuous but investors were still able to make a reasonable return. What does 2008 hold for us? Most analysts predict a tougher year ahead but if you make smart choices based on the quality of the company you're investing in, you can't go wrong!

Here are my stock picks for 2008 (some already form a part of my online portfolio which I will continue discussing next week):

1. African Bank Investments Limited - ABIL
2. Stefanutti & Bressan - S&B
3. Famous Brands - Fambrands
4. Vox Telecom - VOX
5. SABMiller - SAB

Let me know what you think of my choices and submit your own top 5 stock picks for 2008. We'll publish them on this blog and at the end of the year we'll review our readers' choices and see who performed the best in 2008!

Email your stock picks to editor@marketviews.co.za.

Company Profile: Stefanutti & Bressan

BACKGROUND

Stefanutti & Bressan have been operating in the civil engineering and building construction sector for 36 years.

Their spectrum of work ranges from "construction of industrial and petrochemical plants, cooling towers for power stations, mine infrastructure, dams, roads, bridges, water and effluent treatment plants, township infrastructure and industrial and commercial works to piling and geotechnical services."

As you can see, the company has a broad range of interests and this is primarily what attracted me to the company in the first place.

They listed on the JSE on 3 August 2007 and after opening at R15.20, the groups' shares are now trading around R21.45 (at time of press)- an increase of about 40%.

PROSPECTS

The demand for roads and railways, ports and reliable energy and telecommunication services is on the up and up. Stefanutti & Bressan have seen a niche in this sector and continue to thrive from their involvement in it.

The company's order book stands at around R2.3 billion for the 2008 financial year.

As mentioned in the groups' prospectus, the listing on the JSE "facilitates Stefanutti & Bressan's continued participation in this growth. It raises the profile of the group, assists in retaining and attracting key staff and provides access to capital with which to fund both organic and acquisitive growth."

ACQUISITIONS

To date, the company has purchased 80.3% of Skelton & Plummer from the company's executive directors, management and shared black empowerment partner Mowana Investments.

They have also purchased 51% of Civil & Coastal. The acquisition agreement provides for the group to increase their shareholding to 100% within three to five years of the effective date.

MANAGEMENT

Chairman: Biagino Stefanutti
CEO: Willem Meyburgh
Financial Director: Dermot Gregory Quinn

Management holds 42.3% in shares, highly indicative of the faith they have in their own company.

FINANCIAL INFORMATION

The company expects excellent results in 2008, with earnings per share looking to increase from the 34.2 reported in Feb 2007 to 83.2 in Feb 2008.

In November this year, the company reported headline earnings per share of 42.3 cents, up from 2006's 30.9 cents/share.

Regarding dividends, the company only plans to start paying a final dividend in the financial year ending February 2009. Thereafter the company will pay dividends bi-annually (an interim and final dividend).

To read more about the company click ">HERE.

RESEARCH

A report by Imara Sp Reid had the following to say about the company's prospects: "With an order book of R2.3bn for the 2008 financial year the company is projecting an increase in heps of 35% to 83.2c (2007: 61.7c excluding BEE costs). This would put the company on a 6 month FPE of 26x which is at the upper end of its larger peers' ratings."

The company's CEO, Willie Meyburgh, had the following to say in an article in Engineering News: "The construction industry offers many lucrative opportunities over the next few years, especially in harbour development, commodities, and the energy sector." He also mentions that further acquisitions are on the table for the company in the coming years.

They also plan to establish a training school for their workers by the end of the year (2007). "To start with, the school will take on between 20 and 30 workers who will receive job-specific training for the industry, this includes plastering, bricklaying and form work skills. The training programmes would include basic training, on-site practical training, and refresher courses." (Engineering News, 3 August)

It is refreshing to see a company being pro-active when it comes to their employees and improving their individual skills contributes to the company's growth and good skills.

CONCLUSION

I see a good future for this company and with strong fundamentals backing it up, it's definitely a company I want to invest in.

Let's take a step backwards for a bit and talk about investment objectives and strategy. It's all good and well choosing shares because they "look good" but if you don't have a clear idea in your head about why you're actually investing you're going to come short!

It's like anything in life - if you don't set yourself goals how can you expect to achieve them? The same goes for investing - having a clear definition of how and why you're investing means you're already half-way towards achieving your goals.

What kind of risk-taker are you?

This is an important question to answer before you go about setting your investment goals. Realising how much risk you can handle can determine what kind of investor you'll be and what type of shares you'll invest in.

If you enjoy taking risks then you'll probably end up being an investor who chooses high-risk companies that could potentially give you high returns. Active traders are usually those that enjoy taking risks on their portfolio. Sometimes the risk pays off, other times it doesn't.

If you don't enjoy taking risks and prefer to invest in a stable company with a solid history then you're likely to be a long term investor. You'll try and avoid risk by investing in companies that over time gives you returns greater than or equal to the market.

I definitely fall into the latter category and would rather invest in a good company with a guaranteed track record. That being said, I think my age dictates that I can afford to take a bit of risk (this will be explained when I discuss my next possible investment choice).

That's another point to keep in mind. Your investment objective will rely heavily on where you are in your life. If you're in your twenties and are just starting out in the working world it's ok to take some risks when it comes to investing as you don't have that much to lose. On the other hand, if you're nearing retirement and are looking for a way to maximise your upcoming pension fund (or other investment), you're going to be less likely to take unnecessary risks.

Diversifying your portfolio

Another important factor when you go about choosing shares is to DIVERSIFY. This basically means that you should choose companies in different sectors/industries so that you spread your risk evenly.

This is a vital step in ensuring that you become a successful investor. Having a balanced portfolio means you'll never have sleepless nights if the market decides to have a bad day/year.

How does this work? Well say you decide to buy shares in just the financial sector. If this sector goes through a bad patch then you'll obviously suffer losses in your portfolio. If, however, you buy some shares in the financial sector, some shares in the retail sector and some shares in the construction sector - if the financial sector goes through a bad patch you won't have to stress too much because there will probably be gains in the other sectors and this will balance your losses out.

This will also reduce the risk in your portfolio.

Invest in sound companies

Behind every share is a company so when you're setting out to buy some shares don't forget that you're actually investing in the company itself.

To find out what makes companies exceptional and worth investing in take a look at this ARTICLE written by AJ Cilliers in Marketviews.

Referring to the JSE Course I found the following questions very useful when looking at which companies to invest in:

1. Does the company have an excellent market-leading product or service which competitors cannot match or even compete with?

2. Does the company have an excellent management team in place or has there recently been a change in management for the better? Select companies where management has a large stake in the company - they are more likely to have an entrepreneurial approach to decision making.

3. Is the company producing excellent operating margins, which may be indicative of a market leader, or is it merely following a tried and tested formula, resulting in diminishing operating margins year on year?

*The operating margin is a good measurement of management's efficiency. It compares the quality of a company's operations to its competitors. If a company has a higher operating margin than their competitors then they tend to have lower fixed costs and a better gross margin - giving management more flexibility in determining prices. This helps companies in tough economic times.

(Definition: About.com)

4. Is the company paying out a consistent dividend stream without having to increase debt levels or raise new capital by way of rights issues etc?

Don't just buy a company because its cheap. Great companies will perform consistently well year in and year out - despite the economy they operate in.

Conclusion

I hope by now you have a pretty good idea about what type of investor you are and what strategy you'll follow. Personally, I'm a stickler for research so will undoubtably read as much as I can about a company I'm interested in investing in. Asking around for advice can also help but remember that you'll just be getting opinions - it's up to you to determine whether your choice is a good one or not.

Next time I'm going to focus on what kind of research you should be doing while you go about choosing shares. Happy hunting!