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Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No. 42996 Traders Forum: Johannesburg Shaun van den.

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Presentation on theme: "Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No. 42996 Traders Forum: Johannesburg Shaun van den."— Presentation transcript:

1 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Traders Forum: Johannesburg Shaun van den Berg Head of Client Education 28 th May 2013 Tiaan Heydenrich (MIFM) Equity & Derivatives Trader

2 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Agenda Technical Market Overview Trading Equity Derivatives – Single Stock Futures (SSF) – Contracts For Difference (CFD) The Stockbroker (Trade Ideas) The Investor (Long-term Investment Opportunities) Open the Floor Upcoming Webinars Summary Conclusion

3 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Technical Market Overview

4 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Introduction: JSE does not mirror the SA economy JSE All Share Index hit a record high (22 May 2013) ( points) – SARB governor Gill Marcus warns of a “flagging economy” – Domestic growth prospects remain “fragile” Continued output disruptions in the mining sector Electricity supply constraints A growing current account deficit (imports > exports) Weak global environment Declining domestic & foreign investor confidence ALSI proxy - Large companies (AGL, BIL, SAB, SOL, BTI & CFR) – Performance have little to do with SA – 50% total market capitalisation Warren Buffett, “If you knew what was going to happen in the economy, you wouldn’t know what was going to happen in the stock market.” Source:

5 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Introduction: SARB governor Gill Marcus MPC kept interest rates unchanged – 5%/ Interest rates may still fall this year to boost economy - Not imminent Threats to inflation outlook – High wage settlements – Rand weakness – Imports are more expensive Inflation forecast to slip to 5.8% (2013), 5.2% (2014) & 5% (2015) – Inside official target range of 3% - 6% Rand’s level not the issue but rather Rand volatility – Local exports more competitive – Narrows SA’s wide trade deficit Economic growth forecast to grow by 2.4% (2013) & 3.5% (2014) – Below forecasts of 2.7% & 3.5% two months ago – GDP 1.9% (Y/Y) – Rand dropped to R9.72 (Four year lows) Source:

6 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No S&P 500 Index Hang Seng & Nikkei Indices DAX Index & FTSE 100 Index Brent Crude Oil Gold $ & Platinum $ Euro / US $ Rand $ JSE Top 40 Index JSE Resources 20 Index & JSE Gold Mining Index JSE FINDI 30 Index Technical Overview

7 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No S & P 500 (Weekly) Bullish Support Resistance Resistance Support Resistance

8 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Hang Seng Index (Weekly) Bullish Support Resistance Resistance

9 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Deutsche Bank MSCI China ETN

10 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Nikkei Index (Weekly) Bullish Support Resistance

11 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Deutsche Bank Japan ETF

12 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No DAX Index (Weekly) Bullish Support Resistance Resistance

13 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No FT 100 Index (Weekly) Bullish Support Resistance Resistance

14 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Brent Crude Oil Bearish Resistance Support Resistance Support Support Resistance Support

15 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Gold $ Bearish Resistance Support Resistance Resistance Support Channel Support Resistance Support Support Resistance Channel

16 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No NewGold ETF Safe Haven Inflation Hedge Printing money - Investor Demand Financing & Expansion - Indirect Costs

17 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Platinum $ Resistance Support Bearish Support Channel

18 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Euro/ USD Resistance USD Strength USD Strength Support

19 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Rand $ ZAR Weakness ZAR Weakness Resistance Channel

20 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No JSE Top 40 Index Bullish Bullish Resistance Resistance Support Support

21 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No JSE Resources 20 Index Support Support Bearish Resistance Resistance Support Channel

22 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Resistance Resistance Support Support JSE Gold Mining Index Bearish

23 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No JSE FINDI 30 Index Bullish Bullish Support Resistance Resistance

24 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Summary: Technical Overview S&P 500 Index - Bullish Hang Seng Index - Bullish Nikkei Index - Bullish DAX Index - Bullish FT 100 Index - Bullish Brent Crude Oil - Bearish Gold $ - Bearish Platinum $ - Bearish USD/ EUR- Strength ZAR/ USD - Weakness JSE Top 40 Index - Bullish JSE Res 20 Index - Bearish JSE Gold Mining Index - Bearish JSE FINDI 30 Index - Bullish

25 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Trading Equity Derivatives - Single Stock Futures (SSF) Roadmap to Wealth Creation / Investor / Trader Matrix / Trading Tools Equity SSF / SSF Trading Costs / Comparable to Equities Hedging using SSF Pro’s & Con’s of Trading SSFs

26 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Knowledge & Experience Risk Profile TimeMoney Financial Objectives Novice? Novice? Advanced? Advanced? Intermediate? Intermediate? Roadmap …to Wealth Creation Investor?Trader? Both?

27 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Investor / Trader Matrix Prudent High Reward / Low Risk Speculative Low Reward / High Risk Aggressive High Reward / High Risk Conservative Low Reward / Low Risk REWARDREWARD High LowHigh Low RISK

28 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Trading Tools Watch List (Top 100 shares) / Fundamentals Top 40 shares / Mid cap shares Mining & Resources / Financials / Industrials Rand-Hedges? Charting Software / Technical Analysis Price charts (Candlesticks) / 50 & 200-day MA Trend lines / Support & Resistance Fibonacci retracement levels Chart Patterns Stochastic & RSI indicators / Volume Indicators Risk & Money Management Stoploss Position Size

29 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Equity SSF Regulated by the JSE A standardised contract – Standard quantity (100 shares) Expiry Date – Expires on the third Thursday of every quarter March, June, September & December. Initial Margin – ± 15% deposit Gearing ± 6 times Variation Margin – Adverse price movement

30 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No SSF Trading Costs Brokerage - Charged at 0.4% (ex VAT) - Value of the transaction. Market Makers Fee – Charged at 0.1% (excluding VAT). – The total brokerage charge is 0.57% (including VAT). Booking Fee - R60 is charged per SSF contract – You pay only for the opening leg of all transactions – Only once per day per SSF contract. – If you buy a Sasol SSF10 times on one day; you only pay R60 once. Rollover Cost – 0.25% of Exposure Interest Payable – Interest paid on the SSF cost value – Determined daily by the market maker – Ruling SAFEX rates. Interest Received – Initial Margin – SAFEX less 2% – Cash balances - Rate linked to the JSE Trustees rate

31 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Comparable to Equities INVESTOR A (Share Trader) INVESTOR B (SSFs Trader) Confident that Sasol shares will increase. She has R which she can invest. Sasol’s share price is R350, therefore she buys 100 shares. 3 months later the price has increased by 10% so she sells her shares to make a R3 500 profit. Her return on her investment is 10%. The initial margin set by the broker is R6 000 which is paid by the buyer. Sasol’s share price is R350, therefore she buys 1 contract. After 3 months the price has increased by 10% & the investor closes out his position & sells out of the Sasol SSF contract. His profit is R3 500 but his return on his investment is 58%.

32 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Dividend Neutral Contracts Dividends expected in any quarter –Priced into SSFs –Includes expected interest to be received on dividend payment. Traders do not receive dividends as a cash payment even though they do benefit from them. Long Trades –N-contract = R100 –Q-contract = R95 plus interest –Plus F-Contract = R5 Short Trades –N-contract = R100 –Q-contract = R95 plus interest –Less F-Contract = R5 DividendR5 SSF Price R95

33 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Naspers R80

34 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Hedging using SSF Equity Position NPN Equity Position NPN SSF Position -5 NPN contracts SSF Position -5 NPN contracts Share Price: -R80 -R80 -R80 -R80 Loss: 500 x R80 = -R Loss: 500 x R80 = -R Profit: 500 x R80 = +R Profit: 500 x R80 = +R40 000

35 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Pro’s & Con’s of Trading SSFs Capital Efficient Low trading costs Hedge your current portfolio Trading Platform – DMA – After hours – Stops AdvantagesDisadvantages Interest Payable Quarterly Rolling Fee Dividend Neutral No voting rights Gearing & Risk

36 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Trading Equity Derivatives - Contracts for Difference (CFD) What are CFDs? Trading Costs CFD versus Equities Trading CFD Pro’s & Con’s of Trading CFDs

37 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No What are CFDs? Contracts for difference (CFDs) are contracts … – Two parties (i.e. client & PSG Online) – Settled at the close of the contract – Difference between opening & closing price. Derivative - It derives its value on an underlying share e.g. ANG, BIL, SOL “Go Long & Short” – Up or down “Long Only” – No Scrip available for shorting Top 100 JSE listed shares Initial Margin – 15% on Top 40 – 17.5% on next 60 Variation Margin – “Top-up” - Adverse price movement

38 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Trading Costs Minimum Cost Value - Each new CFD position opened needs to have a minimum cost value of R – R3 750 (15%) initial margin on a Top 40 shares – R4 375 (17.5%) initial margin for Top shares. Brokerage – Commission is 0.4% (excluding VAT). – Open to negotiate brokerage rates for large, active traders. Interest – Interest is charged on the total value of the open position at SAFEX +2%. – This is usually equal to around Prime -2%. Scrip Lending Fee – A fee of 1.5% per annum is charged for short positions – Charged per day on open positions – Minimum of R250 per position. Financing at competitive rates (CFD) – Current borrowing rate 6.50% (± Prime –2%)

39 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No CFD versus Equities CFD Trade Equity Trade Details Instrument Exposure Brokerage Cost STT & STRATE Price (Cents) Initial Margin 15% % of Exposure Total Costs 14% VAT 500 ABC shares 6000c 6000c R None R R85.92 R37.45R16.80 R136.80R %1.30% R4 500 R5 250 Initial Margin 17.5% R R267.50

40 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Trading CFD Buy 500 AVI 5529c Exposure = R Initial Margin Required = 17.5% x R = R Gearing = 5.71 times = R / R Brokerage = R x 0.4% = R –Equity trade = 0.9% x R = R225.00/ 0.85% x R2 645 = R22.48 = R (Minimum R98) 14% VAT = R34.64 = Total R Interest on Cost: SAFEX rate 4.73% +2% = 6.73% –R x 6.73% = R /365= R5.09 per day Interest on Initial Margin: SAFEX 4.73%-2% = 2.73% –R x 2.73% p.a. = R / 365 = 0.36 cents per day.

41 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Pro’s & Con’s of Trading CFDs Capital Efficient – No fixed quantities (R25 000) Low trading costs No expiry date – No rollover costs – Save the annual 1% expense – Ideal for the Position Trader Hedge your current portfolio? All the benefits – Capital growth & Dividend income Trading Platform – After hours – Stops & DMA Advantages Disadvantages High minimum trade values Scrip lending fees No voting rights Gearing & Risk

42 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Stockbroker Closed Trades Example of a Long Trade #1 (Naspers) Example of a Long Trade #2 (Sasol) Example of a Long Trade #3 (Shoprite) Example of a Short Trade #1 (Aspen) Example of a Short Trade #2 (Aspen) Example of a Short Trade # 3 (Growthpoint)

43 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Stockbroker Sector Focus Fully-funded SSF & CFD accounts Daily Updates Entry, Take Profits, Stops Risk / Reward Ratio Commentary Technical Chart Open Trades

44 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Stockbroker – Closed Trades

45 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Stockbroker – Closed Trades

46 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #1 (Naspers – 11/4 to 22/4) Instrument: CFD & SSF Direction: Buy / Long Entry: 56700c Take Profit: 63000c Stop loss: 53600c Risk/ Reward: 1:2.03 Potential Profit: 6300c per share 11.11% (74.06%)* *15.00% Initial Margin R Capital 2% Risk Capital = R2000 Stop loss = 3100c = R2000/ 3100c Position size = 65 shares 1 SSF contract

47 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #1 (Naspers) Revised Take Profit (TP) = 59500c (63000c) 2800 cps profit 4.93% (32.86%) High = 74500c Potential Profit = cps 31.39% (209.26%)

48 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #2 (Sasol – 22/4 to 9/5) Instrument: CFD & SSF Direction: Buy / Long Entry: 38541c Take Profit: 42275c Stop loss: 36696c Potential Risk: 1845c per share Potential Profit: 3734c per share Risk/ Reward: 1: % (64.53%)* *15.00% Initial Margin R Capital 2% Risk Capital = R2000 Stop loss = 1845c = R2000/ 1845c Position size = 108 shares 1 SSF contract

49 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #2 (Sasol) Revised Take Profit (TP) = 40659c 2118 cps profit 5.49% (36.60%) High = 43277c Potential Profit = 4736 cps 12.28% (81.86%)

50 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #3 (Shoprite – 29/4 to 16/5) Instrument: CFD & SSF Direction: Buy / Long Entry: 17177c Take Profit: 18566c Stop loss: 16600c Potential Risk: 577c per share Potential Profit: 1389c per share Risk/ Reward: 1: % (53.86%)* *15.00% Initial Margin R Capital 2% Risk Capital = R2000 Stop loss = 577c = R2000/ 577c Position size = 347 shares 3 SSF contract

51 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Long Trade #3 (Shoprite) Revised Take Profit (TP) = 18051c 874 cps profit 5.08% (33.86%) High = 18280c Potential Profit = 1103 cps 6.42% (42.80%)

52 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade #1 (Aspen – 20/3 to 5/4) Instrument: SSF only Direction: Sell / Short Entry: 19300c Take Profit: 17800c Stop loss: 19900c Risk/ Reward: 1:2.50 Potential Profit: 1500c per share 7.77% (92.59%)* R Capital 2% Risk Capital = R2000 Stop loss = 600c = R2000/ 600c Position size = 333 shares 3 SSF contracts *15.00% Initial Margin

53 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade #1 (Aspen) Revised TP 18520c 780cps 4.04% (48.14%)* 2013/04/ c 1165c per share 6.03% (71.91%)*

54 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade #2 (Aspen – 13/5 to 15/5) Instrument: SSF only Direction: Sell / Short Entry: 21500c Take Profit: 20700c Stop loss: 21900c Risk/ Reward: 1:2 Potential Profit: 800c per share 3.72% (24.80%)* R Capital 2% Risk Capital = R2000 Stop loss = 400c = R2000/ 400c Position size = 500 shares 5 SSF contracts *15.00% Initial Margin

55 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade #2 (Aspen) 2013/05/15 Stoploss 21900c 400c per share % ( %)* Low = 20830c Potential Profit = 670 cps 3.11% (20.73%)

56 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade # 3 (Growthpoint – 10/5 to 20/5) Instrument: SSF only Direction: Sell / Short Entry: 2982c Take Profit: 2774c Stop loss: 3050c Potential Risk: 68c per share Potential Profit: 208c per share Risk/ Reward: 1: % (46.46%)* R Capital 2% Risk Capital = R2000 Stop loss = 68c = R2000/ 68c Position size = 2941 shares = 30 SSF contracts *15.00% Initial Margin

57 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Example of a Short Trade # 3 (Growthpoint) 2013/05/20 Stoploss 3050c 68c per share % ( %) Low = 2688c Potential Profit = 294 cps 9.85% (65.66%)

58 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Investor Lewis (LEW) Eqstra (EQS) Altech (ALT) Transcap (TCP)

59 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Investor Bi-monthly newsletter One Share Spot Long-term equity investor Positives & Negatives Technical View Recommendation Equity Account 3-year view

60 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Methodology Step 1: Click Research Step 2: Click Search PEG ratio (PE%) is less than or equal to 85% Quality rating (%) is greater than 70%

61 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Methodology

62 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Lewis (LEW) 11 April 2013

63 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Lewis (LEW) (Updated 23 May 2013) Lewis (JSE code: LEW) is a leading retailer in Southern Africa. It sells furniture mainly on credit through 472 Lewis stores, as well as household & electronic goods through 125 Best Home & Electric stores and 13 My Home/Lifestyle Living stores.

64 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Good quality company (70%) with a sound track record. Share offers value trading on a rolling PE ratio of 6.4 times & slight premium NAV (1.2). Attractive dividend yield of 8.1% (DIV/ HEPS = 52%) Group valuation reflects market’s concern regarding the sustainability of its growth due to its over indebted customer base & challenges surrounding blue collar employment. Concerns are adequately reflected in the current share price. Expect trading conditions to remain volatile in the short term. Interest cover 12.7 times. We like Lewis because:

65 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No We are concerned about: The effect of a prolonged difficult consumer environment, higher inflation & rising unemployment on sales & quality of credit book. Debtor costs remains a concern due to customer indebtness with the debtors cost percentage expected to remain above the historic average in the medium term. Competition from more innovative unsecured credit providers. Commoditised furniture market. Group also faces regulatory uncertainty relating to its insurance. In the longer term it will face pressure to reduce the margins of its financial services operation. PSG Online only recommends the Lewis share as a buy to speculative investors.

66 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Lewis (LEW) (Weekly)

67 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Eqstra (EQS) 25 April 2013

68 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Eqstra (EQS) Eqstra operates through four divisions: Contract Mining & Plant Rental, Construction & Mining Equipment, Fleet management & logistics, and the Industrial Equipment division. The group buys capital equipment like Terex rigid & articulated dump trucks, Sleipner excavator transport systems, as well as heavy-duty forklifts & then either sells or leases them, while also adding value & offering maintenance contracts.

69 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The performance of the group’s operations is expected to remain resilient despite difficult economic conditions. All divisions expected to benefit from secure long-term contracts. A more diverse client base than has historically been the case. Good prospects for increased client penetration from contract renewals. Potential to grow value-added product sales & increase product range. Share offers speculative appeal - Trading at 10% discount to NTAV. Offers an attractive historic DY of 4.5%. (DIV/ HEPS = 36%) We like Eqstra because:

70 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No We are concerned about: In order for the group to improve its profits further, it will need to significantly improve its plant utilisation, which is currently dragging down the group’s ROE. Might prove challenging task in current economic environment. The group’s high operating leverage as it is a capital intensive business which places significant pressure on its balance sheet & cash flow. Raises group’s risk profile significantly. Investors need to be mindful of refinancing & liquidity risk. Its high exposure to cyclical sectors. No known short-term catalyst that could spur a rerating. PSG Online only recommends the Eqstra share as a buy to speculative investors.

71 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Eqstra (EQS) (Weekly)

72 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Altech (ALT) 9 May 2013

73 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Altech (ALT) Altech (JSE code: ALT) is a leading South African high-technology group involved in the design, development and convergence of telecommunications equipment, multi-media systems and IT solutions, as well as secure technology solutions. Most people would recognise its Autopage Cellular & Altech Netstar brands. Its Autopage Cellular division contributed the most to revenue, followed by its Altech Multimedia division, which includes the Altech UEC unit which manufactures and supplies set-top boxes, while Altech Netstar contributed 10% to revenue.

74 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Group has a diverse portfolio of businesses, with high levels of recurring income & traditionally strong ROE & cash generation. Management feel that the group will return back to their normal pattern of growth following the disposal of the East and West African operations. Management also believe that they can unlock value from innovation & convergence through the group’s assets, as well as enhance their activity base by further exploiting their intellectual property. Long-term value-added partner agreement with Chinese multinational Huawei Technologies - Largest telecommunications equipment maker in the world. More strategically important than originally anticipated as it now offers IT solutions such as cloud services, unified communications and transmission solutions, network and application security services, data centre networking and storage solutions and IT infrastructure services. Earnings have the potential to show strong growth off the low base, mainly due to the non-recurrence of once-off items. Possible corporate action involving its parent company (Altron). We like Altech because:

75 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No We are concerned about: Although the group’s core operations have remained stable & should continue to report predictable growth - Growth is expected to be slow. Core operations have matured. Its operating margin has been in a declining trend recently. Trading conditions are expected to remain subdued. The group decided not to declare a dividend Altech received an offer from its parent Altron, to acquire the 38.6% of Altech shares that Altron does not already own. Altech shareholders can either elect to receive a cash consideration of R47.50 for every Altech share, or elect to receive all, or part in the form of Altron participating preference shares in the ratio of 2.22 Altron shares per Altech share.

76 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Altech (ALT) (Weekly)

77 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Transcap (TCP) 23 May 2013

78 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Transcap (TCP) Transaction Capital (JSE code: TCP) is listed on the JSE Alt-X. It is an independent group of industry leading companies participating in non-deposit-taking financial services with a focus on Asset Backed Lending, Unsecured Lending, Credit Services and Payment Services in Southern Africa. Bayport, its unsecured lending division contributed 38% to headline earnings, while SA Taxi and Rand Trust, its asset backed lending division contributed 29% to headline earnings.

79 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Earnings growth a result of improved performances delivered by all operating segments, but ROE declined following the equity raised in the previous year. The profitable application of its excess capital is thus essential to drive earnings growth. Although the group expects difficult trading conditions in the second half due to the high level of financially stressed households & client indebtedness - Remain confident of its revenue generation capability & will continue to exercise discipline in cost control & prudence in credit extension. Management anticipates Transaction Capital to deliver continued growth in the second half of the year. We like Transcap because:

80 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No We are concerned about: Softer South African consumer economy in which higher unemployment & increasing food & electricity prices weighed heavily on lower income households. Its higher credit loss ratio because of strong growth in loans and advances in its more risky unsecured lending business of Bayport business. Increasing move towards unsecured lending, which combined with deteriorating consumer affordability adds additional risk to the sustainability of earnings. PSG Online feels that Transcap offers value as it trading at P/NAV of 1.3 times & a rolling PE ratio of 7.7 times but would only recommend the share as a buy to speculative investors.

81 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Transcap (TCP) (Weekly)

82 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No The Investor - Share Picks to be added to The Investor mailing Open DateStockEntry P&L %P&L %Net DividendsNet DividendsPayable SOL % /04/ BCF % /04/ SUI % /03/ HDC % /03/ WBO % /04/ GND % /04/ SFN % /04/ LEW % /07/ EQS % No interim dividend declared ALT %No dividend declared TCP % /06/ %

83 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Summary: Traders Forum Technical Market Overview Understanding the Market - Opportunities Technical Trading Understanding the Tools Trading Equity Derivatives (SSF & CFD) Understanding the Product The Stockbroker (Trade Ideas) Understanding the Trade The Investor (Long-term Investment) Understanding the Investment Opportunities

84 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Upcoming Webinars** Technical Analysis Explained: Point & Figure Charts Date: Wednesday, 29 May 2013 / Time: 13:00 14:00 Investment Strategies: Value and Growth Investing Date: Wednesday, 12 June 2013 / Time: 13:00 14:00 Trading Equity Derivatives: SSF, ALSI & CFD Date: Wednesday, 26 June 2013 / Time: 13:00 14:00 Trading Currency Futures Date: Wednesday, 10 July 2013 / Time: 13:00 14:00 Technical Analysis Explained: Elliot Wave, Cycle Analysis, etc. Date: Wednesday, 24 July 2013 / Time: 13:00 14:00 **Please note: limited to 100 people

85 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Conclusion: The Traders Forum Information session – Open a trading account / Add more funding / Trade and invest Subscribe to tools – The Stockbroker (CFD & SSF traders) – The Investor (Long-term Equity investors) Look out for – Upcoming Webinars Good Luck Happy Trading! Finally, if the JSE is not a mirror for the SA economy …

86 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Finally …. Source:

87 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Contact Us Thank You Shaun van den Berg (011) Tiaan Heydenrich (MIFM) (011)

88 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Open the Floor Questions Comments Trade & Investment Ideas

89 Online Securities Ltd. Is a member of the JSE Ltd. and an authorised Financial Services Provider, FSP No Disclaimer This publication has been issued by PSG Online. It is confidential and issued for the information of clients only. It shall not be reproduced in whole or in part without our permission. The information contained herein has been obtained from sources which and persons whom we believe to be reliable but is not guaranteed for accuracy, completeness or otherwise. Opinions and estimates constitute our judgement as of the date of this material and are subject to change without notice. Past performance is not indicative of future results. This report is provided for informational purposes only. No information contained herein, no opinion expressed and no recommendation made constitutes a representation by us or a solicitation for the purchase of any of the securities mentioned herein and we have no responsibility whatsoever arising here from or in consequence hereof. Securities, financial instruments or strategies mention herein may not be suitable for all investors and investors must make their own investment decisions using their own independent advisers as they believe necessary and based upon their specific financial situations and investment objectives. The employees of PSG Online may from time to time own securities mentioned herein. Analyst Certification The research analyst who prepared this report certifies that the view expressed herein accurately reflect the research analyst’s personal views about the subject security and issuer and that no part of his compensation was, is or will be directly or indirectly related to specific recommendations or views contained in this report.


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