moneyworx shaun van den berg 25 january 2011. international outlook brent crude oil gold-$...

MoneyWorx

Shaun van den Berg

25 January 2011

International Outlook• Brent Crude Oil• Gold-$• Platinum-$• USTN 5-year Bond• US$ versus Euro & GBP• JPY versus US$• DJ Industrial Average • S & P 500 Index• Nikkei Index• Hang Seng Index• DAX Index• CAC 40 Index • FTSE Index

Local OutlookGold RandPlatinum RandRand vs US $ & EuroJSE Overall IndexTop 40 IndexMid Cap & Small Cap Index Alt-X IndexGold Mining IndexPlatinum Mining IndexResource 20 IndexFinancial 15 IndexIndustrial 25 IndexSummary Conclusion

Technical Market Overview

Economic Indicators

• Brent Crude Oil• Gold-$• Platinum-$• US$ versus Euro • US$ versus GBP• JPY versus US$

Brent Crude Oil (Weekly)

Still BullishStill Bullish

Brent Crude Oil

Still BullishStill Bullish

Gold-$ (Weekly)

SupportSupport

SupportSupport

SupportSupport

BullishBullish

Gold-$

SupportSupport

ResistanceResistance SupportSupport

ResistanceResistance


BullishBullish

Platinum-$ (Weekly)

BullishBullish

Broken SupportBroken Support SupportSupport

SupportSupport



SupportSupportSupportSupport

SupportSupport

BullishBullish

Platinum-$

SupportSupport

SupportSupport




SupportSupport

BullishBullish

US$ vs Euro (Weekly)

$ Strength / Euro Weakness$ Strength / Euro Weakness

$ Weakness / Euro Strength$ Weakness / Euro Strength


US$ strengthUS$ strength

SupportSupport

US$ vs Euro$ Weakness / Euro Strength$ Weakness / Euro Strength

$ Strength / Euro Weakness$ Strength / Euro Weakness

SupportSupport

SupportSupport


US$ weaknessUS$ weakness

US$ vs GBP (Weekly)

$ Strength / GBP Weakness$ Strength / GBP Weakness

$ Weakness / GBP Strength$ Weakness / GBP Strength

US$ strengthUS$ strength

SupportSupport


SupportSupport

US$ vs GBP

$ Strength / GBP Weakness$ Strength / GBP Weakness

$ Weakness / GBP Strength$ Weakness / GBP Strength

SupportSupport


US$ weaknessUS$ weakness

JPY vs US$ (Weekly)

JPY Strength / $ WeaknessJPY Strength / $ Weakness

JPY strength JPY strength

JPY Weakness/ $ StrengthJPY Weakness/ $ Strength

SupportSupport

ResistanceResistanceSupportSupport

JPY vs US$

JPY Weakness/ $ StrengthJPY Weakness/ $ Strength

JPY Strength / $ WeaknessJPY Strength / $ Weakness

ResistanceResistanceSupportSupport

ResistanceResistance JPY strength JPY strength

What can we learn? • Bullish Brent Crude oil price Bullish Brent Crude oil price

– Demand?Demand?

– Speculating on economic recovery?Speculating on economic recovery?

• US DollarUS Dollar

– Stronger against Euro (Weekly)/ Weaker (Daily)Stronger against Euro (Weekly)/ Weaker (Daily)

– Stronger against GBP (Weekly)/ Weaker (Daily)Stronger against GBP (Weekly)/ Weaker (Daily)

– Weaker against JPY (Weekly)/ Weaker (Daily)Weaker against JPY (Weekly)/ Weaker (Daily)

• Precious Metals Precious Metals

– Bullish gold $ (25-year high)Bullish gold $ (25-year high)

– Bullish platinum $Bullish platinum $

International Markets

• DJ Industrial Average • S & P 500 Index• Nikkei Index• Hang Seng Index• DAX Index• CAC 40 Index • FTSE Index

DJ Industrial Average (Weekly)

SupportSupport

SupportSupport

BullishBullish


DJ Industrial Average

SupportSupport

BullishBullish


SupportSupport

SupportSupport

S&P 500 Index (Weekly)

BullishBullish

SupportSupport


S&P 500 Index

BullishBullish

SupportSupport


SupportSupport

SupportSupport

S&P 500 Index

OverboughtOverbought



Nikkei Index (Weekly)


BullishBullish


Nikkei Index


BullishBullish

SupportSupport

SupportSupport


SupportSupport

Hang Seng Index (Weekly)

BullishBullish


SupportSupport

SupportSupport

Hang Seng Index

BullishBullish


SupportSupport

SupportSupport

SupportSupport

DAX Index (Weekly)

BullishBullish



Rising Wedge?Rising Wedge?


DAX Index

BullishBullish


SupportSupport

SupportSupport

SupportSupport


CAC 40 Index (Weekly)

BullishBullish


SupportSupport

SupportSupport

CAC 40 Index

BullishBullish


SupportSupport


FTSE 100 Index (Weekly)

BullishBullish


SupportSupport

SupportSupport



FTSE 100 Index

BullishBullish


SupportSupport

SupportSupport


What can we learn? • US Markets (DJIA / S&P 500) US Markets (DJIA / S&P 500)

– Bullish (Broken above resistance)Bullish (Broken above resistance)– Overbought (Sustainable?)Overbought (Sustainable?)

• Asian Markets Asian Markets – Nikkei Index: Bullish / OverboughtNikkei Index: Bullish / Overbought– Hang Seng Index: Bullish / OverboughtHang Seng Index: Bullish / Overbought

• European MarketsEuropean Markets– DAX Index: Bullish DAX Index: Bullish (Rising Wedge on Weekly Chart)(Rising Wedge on Weekly Chart)

– CAC 40 Index: Bullish CAC 40 Index: Bullish (Overbought/ Nearing resistance)(Overbought/ Nearing resistance)

– FT100 Index: Bullish FT100 Index: Bullish (Testing resistance on weekly charts) (Testing resistance on weekly charts)

Local Market

• Gold Rand• Platinum Rand• Rand vs US $• Rand vs Euro• Rand vs GBP

• JSE Overall Index• Top 40 Index• Mid Cap Index• Small Cap Index • Alt-X Index

• Gold Mining Index• Platinum Mining Index• Resource 20 Index• Financial 15 Index• Industrial 25 Index

Gold Rand

SupportSupport

SupportSupport

BullishBullish


SupportSupport

Platinum Rand

BullishBullish



SupportSupport

SupportSupport

Rand vs US $

Rand Strength / $ Weakness Rand Strength / $ Weakness

Rand StrengthRand Strength

Rand Weakness/ Euro StrengthRand Weakness/ Euro Strength

Broken SupportBroken Support ResistanceResistance


Rand vs Euro

Rand Strength / Euro WeaknessRand Strength / Euro Weakness

Rand Weakness/ Euro StrengthRand Weakness/ Euro Strength

Rand turning WeakerRand turning Weaker

SupportSupport Broken SupportBroken Support


Rand vs GBP

Rand Weakness/ GBP StrengthRand Weakness/ GBP Strength

Rand Strength/ GBP WeaknessRand Strength/ GBP Weakness

SupportSupport

Rand WeaknessRand Weakness


SupportSupport

What can we learn?

• Gold Rand Gold Rand – Bullish / Testing Resistance Bullish / Testing Resistance

• Platinum RandPlatinum Rand– Bullish/ Testing Resistance/ Triple TopBullish/ Testing Resistance/ Triple Top

• Rand strength in longer-term vs USDRand strength in longer-term vs USD– Broken Support trend linesBroken Support trend lines

• Rand turning weaker vs EUR & GBP Rand turning weaker vs EUR & GBP – Broken Support trend linesBroken Support trend lines

• Rand Hedge Shares?Rand Hedge Shares?• Opportunities?Opportunities?

Market Indicators

• JSE Overall IndexJSE Overall Index• Top 40 IndexTop 40 Index• Mid Cap Mid Cap • Small CapSmall Cap• Alt-X IndexAlt-X Index

• Gold Mining Index Gold Mining Index • Platinum MiningPlatinum Mining• Resource 20 IndexResource 20 Index• Financial 15 IndexFinancial 15 Index• Industrial 25 IndexIndustrial 25 Index

JSE Overall Index (Weekly)

SupportSupport


BullishBullish

JSE Overall Index

BullishBullish

SupportSupport

Tested Resistance Tested Resistance


SupportSupport

Broken SupportBroken Support

Top 40 Index

BullishBullish



SupportSupport

SupportSupport


Top 40 Index

Bearish DivergenceBearish Divergence

Overbought/ Bearish DivergenceOverbought/ Bearish Divergence

Top 40 Index

Market OutperformingMarket Outperforming


SupportSupport

Mid Cap IndexMid Cap Index

SupportSupport

Bullish / OversoldBullish / Oversold

Mid Cap IndexMid Cap Index

Market UnderperformingMarket Underperforming

Small Cap Index


Bullish but turningBullish but turning


Small Cap Index

Market PerformingMarket Performing


Alt-X Index

SupportSupportBullish / Market UnderperformingBullish / Market Underperforming



What can we learn? • JSE Overall Index JSE Overall Index

– Double-Top (Weekly)Double-Top (Weekly)– Bullish but turningBullish but turning– Tested ResistanceTested Resistance– Broken SupportBroken Support

• Top 40 Index Top 40 Index – Bullish but turningBullish but turning– Broken SupportBroken Support– OverboughtOverbought– Bearish Divergence Bearish Divergence – Outperforming Outperforming

• Mid Cap Index Mid Cap Index – Bullish / OversoldBullish / Oversold– Underperforming Underperforming

• Small Cap IndexSmall Cap Index– Bullish but turningBullish but turning– Broken SupportBroken Support– Bearish DivergenceBearish Divergence

• Alt-X IndexAlt-X Index– Bullish/Broken SupportBullish/Broken Support– Underperforming Underperforming

Market Indicators

• JSE Overall IndexJSE Overall Index• Top 40 IndexTop 40 Index• Mid Cap Mid Cap • Small CapSmall Cap• Alt-X IndexAlt-X Index

• Gold Mining Index Gold Mining Index • Platinum MiningPlatinum Mining• Resource 20 IndexResource 20 Index• Financial 15 IndexFinancial 15 Index• Industrial 25 IndexIndustrial 25 Index

Gold Mining Index



SupportSupport


Bearish but turning / Oversold / UnderperformingBearish but turning / Oversold / Underperforming

Gold Shares - Anglogold

SupportSupport


BearishBearish

Gold Shares - Anglogold

OversoldOversold

Volume Volume DistributionDistribution

MarketMarketUnderperformUnderperform

BearishBearish

Gold Shares - Harmony

BearishBearish

SupportSupport



Gold Shares - Harmony

Market Market UnderperformUnderperform

Volume Volume AccumulationAccumulation

OversoldOversold

BearishBearish

Gold Shares – Gold Fields

BullishBullish


SupportSupport


Testing SupportTesting Support

Gold Shares – Gold Fields

Market Market PerformPerform


OversoldOversold

BullishBullish

Platinum Mining Index



Bearish but turning / Overbought / UnderperformingBearish but turning / Overbought / Underperforming

Platinum Shares -Angloplats Platinum Shares -Angloplats

BullishBullish


SupportSupport


Platinum Shares -Angloplats Platinum Shares -Angloplats




BullishBullish

Platinum Shares - Implats

Bullish but turningBullish but turning

ResistanceResistance ResistanceResistance

SupportSupport


Platinum Shares - Implats

Market Market OutperformOutperform



BullishBullish

Resources 20 IndexResources 20 Index

Bullish/ Testing Support / Overbought / OutperformingBullish/ Testing Support / Overbought / Outperforming



Resource Shares - Anglo

BullishBullish



SupportSupport

Resource Shares - Anglo




BullishBullish


Resource Shares – BHP Billiton




SupportSupport


BullishBullish

Resource Shares – BHP Billiton




BullishBullish


Resource Shares - Sasol

Resistance/ Support Resistance/ Support



SupportSupport

BullishBullish

SupportSupport

Resource Shares - Sasol



VolumeVolume Accumulation Accumulation

BullishBullish

Resource Shares - ArcmittalArcmittal

BullishBullish

SupportSupport



Resource Shares - ArcmittalArcmittal

Neutral VolumeNeutral Volume



BullishBullish

BullishBullish

Resource Shares - ExxaroExxaro

Broken ResistanceBroken Resistance




SupportSupport

BullishBullish

Summary – Mining & Resources

• Gold Mining IndexGold Mining Index– BullishBullish– Testing SupportTesting Support– UnderperformUnderperform

• Platinum MiningPlatinum Mining– BearishBearish but turning but turning– Testing Support Testing Support – OverboughtOverbought– UnderperformingUnderperforming

• Resource 20 Index Resource 20 Index – Bullish Bullish – Testing Support Testing Support – OverboughtOverbought– Bearish Bearish

DivergenceDivergence– Market Market

OutperformOutperform

Financial 15 Index

Bullish/ Testing Support / Overbought / UnderperformingBullish/ Testing Support / Overbought / Underperforming



Banking Index

Bullish/ Overbought / UnderperformingBullish/ Overbought / Underperforming


SupportSupport

Bank Shares - ABSA


VolumeVolumeDistributionDistribution

(Bearish Divergence)(Bearish Divergence)


BullishBullish

SupportSupport

BullishBullish


Bank Shares – Firstrand

OverboughtOverboughtVolumeVolume

Accumulation AccumulationSupportSupport

BullishBullish



Bullish (Just!)Bullish (Just!)

Bank Shares – Stanbank


VolumeVolume Accumulation AccumulationBearishBearish



SupportSupport

BearishBearish

Bank Shares – Nedbank


VolumeVolume Distribution Distribution


SupportSupport


BearishBearish

BearishBearish

Life Assurance Index

Bullish/ Overbought / UnderperformingBullish/ Overbought / Underperforming

Life Assurance - Sanlam

SupportSupport

Market Market PerformPerform



BullishBullish



BullishBullish

Life Assurance– Old Mutual

SupportSupport




BullishBullish

BullishBullish

Testing ResistanceTesting Resistance

Real Estate - Growthpoint


SupportSupport

OversoldOversold




BullishBullish

BullishBullish

Real Estate - RedefineReal Estate - Redefine

SupportSupport

OversoldOversold



BullishBullish ResistanceResistance

Bullish (Just!)Bullish (Just!)

Industrial 25 IndexIndustrial 25 Index

Bullish/ Overbought / Market PerformingBullish/ Overbought / Market Performing

Up ChannelUp Channel

Industrial Shares – MTN Group


OversoldOversold



BullishBullish

BullishBullish


Industrial Shares – BATS

OversoldOversold




BullishBullish

Tested SupportTested Support

BullishBullish

Industrial Shares – SAB Miller

SupportSupport




SupportSupport

BullishBullish

BullishBullish

Industrial Shares – Industrial Shares – RichemontRichemont

SupportSupport

OversoldOversold



SupportSupport


BullishBullish

Summary – Financial & Industrial

• Financial 15 IndexFinancial 15 Index– BullishBullish– Testing SupportTesting Support– Overbought Overbought – UnderperformingUnderperforming

• Banking SharesBanking Shares– BullishBullish– OverboughtOverbought– UnderperformingUnderperforming

• Life Assurance SharesLife Assurance Shares– BullishBullish– OverboughtOverbought– UnderperformingUnderperforming

• Real Estate SharesReal Estate Shares– Bullish but turningBullish but turning– UnderperformingUnderperforming

• Industrial 25 IndexIndustrial 25 Index– BullishBullish– Up ChannelUp Channel– OverboughtOverbought– Market PerformingMarket Performing

Shorting Opportunities?

Investment Opportunity?

Share Recommendations

• Participants were asked to provide 3 share recommendations & the reasons why they like them

• Thank you very much to those that contributed.

Andrew P. recommndations

Andrew’s 3 share recommendations are:

• Blue Label Telekom - Cash generative, strong balance sheet, paid maiden dividend, groth potential, Microsoft has a stake.

• ABIL - Good dividends, strong management team, Elerines should start contributing.

• Telkom - Cheap, unloved, serious infrastructure, worth a punt at current levels

Callie’s recommendation

METAIR (MTA)

Industry: Consumer Goods / Super Sector: Automobiles & Parts• The motor industry is one of the important industries in SA and is only now coming out of the

slump

• Lots of money are invested in production facilities by the motor industry and then following them closely is the motor component industry

• Local demand is picking up and exports will be up 30% up by the end of this year according to industry spokesmen

• Last year this industry got through the difficult strikes but new long term contracts have been signed and hopefully labour unrest is not a factor over the next 3 years

• Compare Metair to other listed companies like KAP etc. then Metair is by far the first choice.

• I believe that within 12 months the price will be up 25% as it has traded previously above R15, with a P/E above 10X. The P/E at present is about 6X and need to be rerated by the investor public

• The cash flow and balance sheet improved significantly and if they can go back to the 3.5% dividend yield of the past an investment in Metair will render his owner close to 30% this year.

• The company has solid management at its subsidiaries in place and strong ties with Japanese partners both through technology and partnership agreements. The company was awarded the TOP Company in the country by the Sunday Times “Top100” twice in the past.

Callie’s recommendations

METAIR (MTA) Continued

• The asset base has been cleaned out a year ago, the balance sheet has been strengthened and the group is now well placed to take advantage of the future with many export contracts in hand and in the offing as well as OE customers with solid export contracts and promises for more. The group also has a cash cow in FNB Batteries This is a real defensive company through good and bad times and over the years well established in the aftermarket with solid supply contracts to the top OE s’

• The current weakening of the rand will work wonders on both the local as well as the export side. Locally they will have an advantage against foreign suppliers and thus be in a better position to price to local OEM’s

• The group is constantly on the look-out for good acquisitions and if they have the opportunity to buy downstream into the steel chains, which forms maybe 50% of their material cost, it will put them in a total different leaque. At present there are a few jewels in the offing at cheap, very cheap prices.

• None of its properties are bonded and the market values must be around R300 million more than book value. This will surely supplement the NAV especially when sold and leased back from an insurance company with the resulting tax benefits. Every plant owns its properties.

• The share is not very liquid but enough volume for me to live off

• Technically it does not shoot the lights out as indicated in the graphs but given the above I will buy METAIR now.


Metorex (MTX)

Industry: Basic Materials / Super Sector: Basic Resources

Sector: Industrial Metals & Mining / Sub-Sector: Nonferrous Metals

P/ E 694.9

Dividend yield 0.0%• This young mining group has interests in copper and cobalt in the DRC. It sold it interest in

Kromdraai/Limpopo which produced fluorspar

• The management of the company is solid and there management style impresses me. When you are pressed for cash - redefine your business for the future, sell of the non-core business at the time, use the cash to redeem debt, invest in future core business and get on with it. With the sale of Kromdraai they have actually sold the jewel of the group (Kromdraai) at the time, but it did not form part of their future vision.

• Read this report and you will come to the conclusion that these fundamentals are better than Gold: London Metal Exchange copper rose to a record high of $9 447 a tonne when trade resumed after the Christmas break, during which U.S. futures rallied to a top fuelled by a weaker dollar and worries about supply from Chile.

• Metal prices are expected to follow their own fundamentals during 2011, as emerging market economies drive ahead and demand recovers in developed nations, pushing copper above $11 000 a tonne, Goldman Sachs forecast this month.


Metorex (MTX) Continued

• The demand for quality copper exceed its production in the short to long term future. The quality of copper at the DRC mine is of high standard. Other copper mine’s quality is dropping. METOREX has employed the latest technology with their investments last year in DRC. The mine is not as deep as some of the older mines in the world.

• The balance sheet has been strengthened after the sale of Kromdraai and interest bearing debt has been reduced substantially.

• This company has a bright future but it does not go without risk, Compare its growth with Canadian platinum producer EASTPLATS to appreciate the phenominal growth that such a small mining company can achieve. It does not have the problems like Buaba with their BaPedi Nation’s preferential right that was only discovered in December last year, with the result the share price dropping through the bottom.

• Technically there’s no buy signal yet, as indicated by attached graphs, but can be forthcoming as soon as results are published

Callie’s recommendationsMetorex (MTX) Continued

BUSINESSREPORT (January 19 2011 at 12:59pm)

• Junior miner Metorex (MTX) said on Wednesday that, during the six months ending in December 2010, its copper production increased by 5% to 26,358 tons, while its cobalt production increased by 26% to 2,021 tons.

• Metorex CEO Terence Goodlace said the increase in production came despite previously reported transformer challenges at Ruashi which adversely affected copper and cobalt production.

• “The current market for copper remains positive and prices remain buoyant,” he said.

• Metorex operates the Ruashi copper and cobalt mine near Lubumbashi of the DRC, an underground copper mine at Kitwe/Zambiaas well as Sable Zinc near Kabwe/Zambia. The operation includes a modern solvent extraction electrowinning plant and acid plant. It purchases third-party ores and produces copper cathode and cobalt concentrate. Metorex also has three prospective base-metal growth projects located in the DRC and operates the Consolidated Murchison underground antimony and gold mine situated Gravelotte.

Deon B. recommnedations

HUDACO

• The company trades at a P/E of 11 which is much lower than the current market average.

• It has a dividend yield of 4.2%.

• The improvement in the motor and mining industries would help the company to improve results.

• They are also a big importer; therefore the strong rand keep costs down.

STEINHOFF

• The company trades at a p/e of 9 which is much lower than the current market average.

• The improvement in consumer spending; local and Europe; would help the company to improve results.

• Operating margins and cash flows are good.

ABIL

• The company trades at a p/e of 14 which is much lower than the current market average.

• It has a dividend yield of 4.9%.

• The improvement in consumer spending would help the company to improve results.

• Dad debts would also reduce.

• The furniture business is also improving.

Derick B. recommendations

Woolies (WHL) - Newest trading update indicates HEPS up 24% to 27%, low debt and future growth from buying back it`s franchise stores. It has been oversold and could recover soon.

MR-Price (MPC) - Pure technical call, it had a head and shoulder pattern with neck line at 6400 with high at 7000, having a 600 difference, so target should be at 5800. It has reached 5760 and is over sold and seems to have lost downward momentum.

Martin S. recommendationsI look at the share closing price, MACD, Obs and VPT graphs.

Share: Anglogold Ashanti Limited Share Price: Moving up. Like you say higher highs and higher lows. MACD: Below the line moving up and has crossed trigger line. Obs: Still in overbought territory. Moving up and crossed moving average. VPT: Above moving average. Time will tell if it continues upward trend. Position: Long (Position taken)

Share: Aspen Share Price: Moving up. MACD: Below line moving up and crossed trigger line. Obs: In overbought territory but moving up and crossed moving average. VPT: Moving up and above moving average. Position: Long (Position taken)

Martin S. recommendations

• Share: Exxaro Resources Limited Share Price: Moving down. MACD: Above line moving down and crossed trigger line. Obs: In overbought territory moving down and crossed moving average. VPT: Moving down and below moving average.

Position: Short (Position not taken)

Interesting would be to look at Bidvest. The indicators to me look like the share should be dropping but it is just not happening.

Nick C. recommendations

• Panaf : Gold share. The trend is still going up.It is a low cost producer.

• SABMiller (SAB): strong management , diversified territory, rand edge

• Investec PLC (INP) The share has potential to double in value

Peter M. reccomendations

• Metorex - I like because of the demand for copper in the long term and copper price increasing, trend up, indicators have not given a buy signal yet.

• Exxaro the price of coal to increase due to the floods in Austrialia, long term trend is up. Overbought at the moment will wait for indicators to give buy signal.

• BATS hold long term, defensive stock and paying fairly good dividends

Pierre N. recommendations

• Adcorp (ADR) - Undervalued for long term as current price is being negatively impacted by proposed ban on labour broker (I dont believe they can ban LB totally). Has good DY7.5%

• Standbank (SBK) - Bad news is out of the way. Quality company that is undervalued. Minimal bottomside risk. For long term. DY3.6%

Rob R. recommendations

• My share suggestions are Cipla which have a long way to go to reach their potential given their facilities and Indian connection.

• Discovery which is underpriced given their returns over the last five years and their expansion into other areas such as insurance.

Conclusion• MoneyWorx

– Presentation will be emailed

– On the Forum

• Market is Bullish but Overbought

– Shorting Opportunities?

• Good Luck & Happy Trading!

Thank YouThank [email protected]

(011) 996 5200(011) 996 5200

mailto:[email protected]

moneyworx shaun van den berg 25 january 2011. international outlook brent crude oil gold-$...

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