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This is the Sharenet company blog where we will bring you the latest news and events on the go at Sharenet, together with tips on using our site and our products.

Top Rated

    Java Charts Upgrade!

    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.

    Permalink2008-04-18, 11:37:32, by Marika Email , 5 comments

    Starting Out?

    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...

    Click HERE for more!

    Permalink2008-03-18, 11:15:09, by Marika Email , Leave a comment

    Stock Picks for 2008!

    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.

    Permalink2008-01-09, 11:39:24, by Marika Email , 22 comments

    Stefanutti & Bressan

    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.

    Permalink2008-01-09, 10:20:35, by Marika Email , Leave a comment

    Investment Objectives

    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!

    Permalink2007-11-27, 15:27:12, by Marika Email , 1 comment

    Building A Portfolio

    My Potential Share Portfolio

    African Bank Investments Limited (Abil)

    Focus

    The focus of the group is to underwrite largely unsecured credit risk through the provision of personal loans to the formally employed emerging market.

    Investors’ Opinions

    Ok, so now I’m going to look at the P/E ratio of Abil as it generally indicates what investors think about the company’s future.

    On the Sharenet site I look the share up using the “Quickshare” function. This takes me to a page with quick fundamental analysis of the company. The p/e ratio is 13.02. Now on it’s own this number means nothing so it’s useful to compare it to other companies in the same sector.

    The lower the p/e ratio the better for the company.

    History

    The company first listed on the JSE in 1998 and looking at past income statements they’ve showed good growth since then. What is encouraging to me is that despite the introduction of the National Credit Act in the middle of this year, the company has increased diluted headline earnings per share by 20% and revenue increased by 18.3%.

    Quoted from their reviewed results for the year ending 30 September 2007:

    “In addition, the group’s proactive approach to and early adoption of many of the National Credit Act requirements, resulted in a smooth transition to the new Act on 1 June 2007. This paved the way for the unlocking of the opportunities that the NCA presented, resulting in a strong 4th quarter, with sales of new loans up 53% over the same quarter in 2006. Finally, ABIL launched its offer to acquire 100% of the Ellerines group, affording the group the opportunity to leapfrog its growth and expansion strategy over the next 3 to 5 years.”

    ABIL’s intention is to “entrench its position as the market leader in a larger, more competitive and fast changing unsecured credit market, fuelled by the introduction of the NCA and a growing and transforming economy.”

    Management

    What’s encouraging to note is that directors, management and staff holds 5.92% of shares in the company. This always indicates that the company itself and the people that run it have confidence in themselves.

    The company is headed by the CEO, Leonidas Kirkinis, who has been with the company since 1997

    Forecast

    I read Imara Sp Reid’s report on the group and they had the following to say:

    “Without taking into account Ellerines, our forecast for Abil for the financial years 09/08 headline EPS growth of 15% to 309.7c for a FPE of 11.2x.” They note that “it is well below management’s forecast of advances growth between 30 and 35% due largely to the ongoing polic of reducing interest rates.”

    EPS = Earnings per Share
    FPE = Forward PE

    Broker consensus forecasts (found under “Subscribers” on the Sharenet site)

    Recommendation: BUY

    Online Research

    In an article on Moneyweb (by David Carte – 14 May 2007) the following was said about Abil – “Abil has much still going for it – rising employment and the ability to take a less cautious attitude to lending…” They plan to increase their network to 700 outlets in the next 2 years.

    I also read a very interesting article by Adrian Clayton (Moneyweb: 24 October 2007) where he talks about the pro’s and con’s of Abil’s acquisition of Ellerines. He believes that “the takeover of Ellerines by Abil is a logical transaction that is likely to enhance the value of the combined group over time.”

    Have a look HERE at the company’s latest annual report:

    Conclusion

    I like the sound of this share and their progress on the JSE thus far. They have a sound management team, a high dividend yield and a good growth forecast for the years ahead. The acquisition of Ellerines should boost the company and provide more scope for business in the future.

    This is definitely a share I’m seriously considering adding to my portfolio!

    If anyone has any comments or ideas about this share please feel free to comment!

    Next Time

    I have a look at Stefanutti & Bressan Holdings in my next diary post as a possible addition to my investment portfolio.

    Permalink2007-11-22, 12:30:18, by Marika Email , 2 comments

    Signing Up!

    My Online Trading Adventure

      The first step in setting up an online trading account is to visit Sharenet’s website and have a look at the brokers available on the site. By going to the “Trade” section, you’ll see the selection of 4 brokers and a handy hint is to click on the “Compare Rates” section to see how much initial investment money you need and what brokerage fees each broker charges.

      Because I’m only going to be using the broker to carry out my instructions, I’ll be paying a brokerage fee according to the value of the actual transaction.

      I choose to open an account with Imara SP Reid as they provide comprehensive daily research and tips which should come in handy as I go about choosing shares. I click on “Open an account” and then start the process of filling in the forms that I will eventually send off to Imara.
      By signing up to a broker on the Sharenet site you’ll also gain access to an online trading account. You’ll get sent a username and password which will allow you access to Sharenet’s products and services (live prices, charts etc) and monitor your portfolio whenever you want to.

      THE FORMS

      This is the part I was a little intimidated by as some of the language used on the forms were a bit beyond my (somewhat lacking) financial knowledge. It started off okay as you first have to fill in basic details like your name and email address. The second part involved contact and employment details and addresses etc. Fine, I thought, no problem.

      After I completed this I was taken to a page which detailed the supporting documents (also known as FICA documents) I needed to accompany my mandate (or essentially my application) form. These FICA documents are important and they usually don’t allow you to open an account without these documents.

      *FICA stands for the Financial Intelligence Centre Act and was established in 2001 to curb money laundering and prevent criminals from making money. Because of this, you need to provide proof of your identity and address before you’re able to invest so they can do a background check and ensure that you are who you say you are.

      After printing out the mandate form I had to fill in a few more details, some of which confused me quite a bit. Despite the fact that I had registered earlier as an individual (and not a company or CC), there were still some areas they requested I fill in under the “personal details” section. Things like “Co. Vat No" and “Country of Incorporation” had me stumped for a while until I asked somebody what they meant and was told to just leave them blank.

      Also note that as a private investor I needed to tick the “non-discretionary” circle as I want an “execution only” portfolio not managed by the broker company. They will merely carry out my instructions.

      After initially each page and signing the last, I had to get two witnesses to do the same. Attaching all the necessary documentation together, I’ve placed them in a large envelope and am now on my way to post them to Imara.

      Step one (and probably the easiest part) completed!

      Regards, Marika

    Permalink2007-11-12, 10:47:07, by Marika Email , Leave a comment

    My Online Investment Adventure!

    The tools: R20 000 to invest and an online trading account with Sharenet and Imara S.P. Reid

    The mission: To invest/buy shares in a company listed on the JSE and document my progress and each step of this process

    The goal: To hopefully make some kind of return within a year and show fellow beginner investors that investing isn't the deep dark unknown terrain we believe it to be!

    So there you have it, armed with some cash and the instructions to document my every move on the stock market (from signing up to how I actually go about choosing which shares to buy), I'm about to embark on an investment adventure that aims to expose how easy (or difficult?) investing actually is.

    This online diary will record my every move and will take you through my thought processes and emotions that go hand-in-hand with investing. As a novice in this field, I'm both excited and nervous to discover what all this entails! I only hope that what I learn from this experience will benefit other beginner investors and encourage them to also take the plunge and start investing themselves.

    So (deep breath), wish me luck and join me as I enter the exciting and hopefully not-so turbulent world of investing!!

    Regards, Marika

    Permalink2007-11-08, 15:11:18, by Marika Email , 6 comments

    Invest In Unit Trusts Online!

    Sharenet has teamed up with Equinox, one of South Africa’s leading independent LISPs (Linked Investment Service Providers), giving you the opportunity to buy unit trusts online!

    An LISP makes it easier for you to switch between unit trusts for a much lower fee! You also save because you don’t need to pay the full initial fee (5% to 6%) whenever you switch from one unit trust to another anymore.

    Equinox offers you the opportunity to invest in almost every unit trust and money market fund in the country AND allows you to bypass the investment minimums set by the unit trust companies.

    For more information click HERE...

    Permalink2007-07-11, 15:31:54, by Marika Email , 1 comment

    Sharenet's New Subscription Rates for 2007

    As a result of changes in the JSE's REAL-TIME pricing structure for 2007 and the introduction of differentiation between professional and non-professional users, we are please to announce a number of price reductions for private investors. There are also unfortunately some price increases for professional users. Note that this only affects subscriptions with REAL-TIME prices. Download and delayed price services are NOT affected. In due course when you login you will receive a form to select your classification as either professional or non-professional.


    All rates are monthly ex VAT and will come into effect from 1 Jan 2007. The first debit at these new rates will occur on the last working day
    of December.

    The new rates for non-pro users are as follows:

    LevelOld Rate New Non Pro Rate Comments
    Market Tools
    168.00139.00 
    Market Tools Plus
    242.00212.00 
    Quickstream 371.00 275.00 
    Premium 461.00 379.00 
    Trade 42.40 42.40 See new features
    Trade Plus
    136.00 99.00 See new features

    Professional users:

    Under the new rates schedule we will only be offering our Premium level to professional users at R541. No other real-time pricing levels will be available.

     

    NEW FEATURES FOR TRADE LEVELS

    TRADE PLUS

    • R99 per month (subject to having an active online trading account with us)
    • Full unlimited live prices with same features as Market Tools Plus
    • If you maintain an monthly balance of over R50 000 in your trading account and spend more than R1 000 per month on brokerage (averaged over 3 months) then the following features are also included:

      • Quickstream - streaming live prices to your desktop
      • Consensus forecasts
      • Share searcher
      • Detailed Fundamentals
      • Unit Trust holdings information
      • Unit Trust fundamentals
      • Java technical analysis charts online with historical and 10min tick
      • Enhanced CSV

    TRADE

    Our online trading subscription will now include all of the following:

    • FREE live prices (from live credits balance)
    • Consensus forecasts
    • Quick Fundamentals
    • Stop Loss System
    • Price and SENS alerts via email/SMS
    • Java Technical analysis charting online
    • SIMEX trading simulator
    • Learning Center
    • 35% Course discounts
    • Free access to our seminars in JHB and CT
    • History CSV downloads

     

    A comparision of all our current levels is available here

    LIVE CREDITS FOR TRADE LEVEL:

    The more you trade, the more live prices you may view. If you subscribe to any
    Sharenet live price service then these livecredits are not applicable to you. Livecredits allocated can be viewed in the Trade Admin menu and
    optionally switched to delayed mode in order to conserve points for use when
    actively trading.

    Livecredits will be allocated as follows:

    • 32 Livecredits for every R1000 of total holdings/cash
    • 32 Livecredits for every R1000 traded


    Livecredits will be
    utilised as follows:

    • One real-time price lookup will equal 1 Livecredit
    • One market depth lookup will equal 2 Livecredits


    Example
    calculation:

    • Current cash Balance: R7000 (7x32 points)
    • Total value of share holdings: R29000 (29x32 points)
    • Total value of trades done in the last 3 months: R40 000 (40x32 points)
    • Thus a total of 2432 points would be allocated.


    Each night Sharenet's systems will re-calculate Livecredits
    based on the last 3 months trading and allocate price lookups accordingly. Please note that if the number of Livecredits left is less than
    1, then prices will switch automatically to delayed mode until the next trade is
    done.

     

     

    E&OE

    Permalink2006-11-30, 14:15:56, by admin Email

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