Simon Shares

• Woolies (JSE code: WHL) offering script of cash for dividend. Default is cash, I'm taking new shares.
• Standard Bank (JSE code: SBK) trading update looks great, HEPS some 30% higher. But what of the R1,6bn write down for lost aluminium in China the previous year? The stock initially popped 8% higher but traded red by late morning.

Budget 2016, Simon's thoughts

• Budget is R1.46tn vs R1.45tn in the October MTBPS.
• Deficit R139bn, which we have to borrow and that cost is increasing as R186 government bond is 9.8% from 9.3%.
• Budget deficit will fall from 3.2% in the 2016/2017 year to 2.4% in 2018/2019
• Capital Gains Tax (CGT) gets increased from 33.3% or marginal rate to 40% while the amount of tax free CGT every year goes from R30k to R40k.
  • No change to Dividend Withholding Tax (DWT) or Securities Transfer Tax (STT).
• Lots of small tax increases and some new ones;
  • Increased; fuel levy, bag levy, sin taxes, transfer duty on +R10m properties, etc.
  • New; sugar tax, globe tax and tyre tax.
• Social grants on the up, R11.5bn over next three years.
• Fiscal drag coupled with increased inflation and interest rates going to hurt consumers.
• 150,000 TFSA accounts opened and R1bn deposited. But no changes to the limits.
• Was it enough taxing and enough slashing to avoid a downgrade later this year?
• Bottom line, can he stop the junk status looming over SA?

We Get Mail

• Marcia
  • Are you selling your Woolies after the results?
• Stef
  • I see the PLD and PLT ETFs have 'partial delisting'. What's this about? Should I worry if I hold them?

JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares

• Minister Gordhan delivers his budget speech next Wednesday, what can we expect in terms of new or higher taxes? STT, DWT and CGT?
• Remember, remember. The end of February is end of the tax year and you have until then to fill in your R30k limit for TFSA. If you already have hit your limit new year starts on 1 March 2016. We have recommended portfolio and my picks here.
• Anglo America (JSE code: AGL) announced their restructuring. The big, but not unsurprising was the exiting of Kumba Iron Ore (JSE code: KIO). But how? They could just unbundle to shareholders, or try sell it. Latter will not be easy and former would put serious pressure on the KIO share price if the almost 70% AGL holds hit the market.
• ARB Holdings (JSE code: ARB) remains ungeared with R190,9m net cash on hand. I first discovered this company in about 2008 when they had some R300m. They've been spending it very very cautiously, too cautiously?
• Discovery (JSE code: DSY) update has spooked the market. We've seen this before.
• Latest Boot Camp Video, trading the news flow is online and next month we're looking at FX and index trading and again we'll include some trading systems. You can book here.

Garth McKenzie TradersCorner.co.za

Ketef (via Twitter) asks "Simon from experience-have you made more money trading short term compared to longer term? Any correlation btn timeframe & profits?"

The answer is more than just about returns. It is about sleeping well at night, time required to manage the trades and experience in the market. There is no get rich quick here, but a well balanced portfolio of money split between trading and investing can boost returns while we learn and sleep well.

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JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares

• Grindrod (JSE code: GND) just hit multi-year lows trading just above 900c with a net asset value (NAV) of over 2200c. Don't fight the trend, especially on cyclical stocks.
• RBA (JSE code: RBA) went bust on Tuesday. Of the three; RBA, Seakay and Calgro M3 (JSE code: CGR) only Calgro M3 remains. Lesson is simple. Go back five years, Calgro M3 was by far the best of the three, always buy the winners.
• Volatility, lots of it. Welcome to bear markets, they move fast and trading them is tough, very tough.

Eugene Chemaly - Afrifocus Securities

• Chris asks "how does one protect cash?".
  • Preference shares are debt instruments issued by banks and others that pay set dividends linked to the prime rate.
  • Typically trade at discount to their cash levels and have no market makers meaning capital loss is possible. In an ideal world they would offer no gain or loss, but reality is different.
  • New Basel 3 rules may see preference shares phased out by the issuers (via repurchase) and there is a risk that the budget speech will see an increase in the dividend withholding tax rate (currently 15%).
  • PREFTX is the Exchange Traded Fund (ETF) or individual ones liked by Afrifocus are; Discovery and the three form Investec.

We Get Mail

• Thando
  • Jean Pierre Verster mentions that hedge funds will be available to us mini-me retail investors this year. What was that about?
• Sandra
  • What will the TFSA be increased for next year?
• Chris
  • How does one protect cash? 

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JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.

Simon Shares

• Where's the party?
• Review: Superforecasting: The Art and Science of Prediction by Philip E. Tetlock & Dan Gardner
• Great Davos 2016 report back presentation with Nicky Newton-King (JSE CEO) and Bronwyn Nielsen (CNBC Africa). Next week Thursday we have another JSE Power Hour on Tax Free Savings Accounts (TFSA).

Clive Butkow GroTech

A Venture Capital company one can invest into and receive a tax break thanks to the SARS section 12J clause. They then invest into disruptive internet based companies with the strategy buy, build, flip.

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JSE – The JSE is a registered trademark of the JSE Limited.

JSEDirect is an independent broadcast and is not endorsed or affiliated with, nor has it been authorised, or otherwise approved by JSE Limited. The views expressed in this programme are solely those of the presenter, and do not necessarily reflect the views of JSE Limited.