The Traders Forum

1. The Traders Forum Tuesday, 29 January 2013

2. Agenda • Introduction • CFD versus Equities • Upcoming Webinars • The Stockbroker (Technical analysis) • Trade Ideas • Technical Market Overview • The Investor (Fundamental analysis) • Long-term Investment Opportunities • Open the Floor • Summary & Conclusion

3. CFD versus Equities Equity Trade Details CFD Trade 500 ABC shares 500 ABC shares Instrument 6000c Price (Cents) 6000c R30 000 R30 000 Exposure Initial Margin 15% R30 000 R4 500 Initial Margin 17.5% R5 250 R30 000 Brokerage Cost R120.00 R267.50 R37.45 14% VAT R16.80 R85.92 STT & STRATE None R390.87 Total Costs R136.80 1.30% % of Exposure 0.46%

4. Upcoming Webinars • Conquering Technical Analysis • Date: 2013/02/13 • Time: 13:00 14:00 Topics Covered: • What is Technical Analysis? • Simplex vs Complex Charts • Psychology of trading • Breakout strategy • Chart set ups • Trading plan • The Stockbroker report • Fundamentals for Value Investing • Date: 2013/02/20 • Time: 13:00 14:00 • Date: 2013/02/21 • Time: 18:00 19:00 Topics Covered: • Macro vs Micro effects on the market • Financial Ratio’s • JSE Equity trade ideas • The Investor newsletter

5. The Stockbroker Technicals & Trade Ideas

6. The Stockbroker

7. Quote: Trading Wisdom Professional traders focus on limiting risk and protecting capital. Amateur traders focus on how much money they can make on each trade. Professionals always take money away from amateurs. Stay relaxed. Place trade and set stop loss. If you get stopped out, who really cares? You are doing your job. You are actively protecting your capital. Professional traders actively take small losses. Amateurs resort to hope and sometimes prayer to save their trade. Jacques Magliolo: “Become your own Stockbroker”

8. Trade Ideas • Truworths (TRU) • Mr Price (MPC) • Tigerbrands (TBS)

9. Truworths (TRU) (25.01.2013) Potential Profit = 1200c 11.54% (76.93%) Instrument: CFD / SSF Direction: Buy / Long Entry: 10400c Take Profit: 11600c Stop loss: 10000c Risk / Reward 400c / 1200c = 1: 3

10. Truworths (TRU)

11. Mr Price (MPC) (28.01.2013) Potential Profit = 2000c 16% (91.43%) Instrument: CFD / SSF Direction: Buy / Long Entry: 12500c Take Profit: 14500c Stop loss: 11980c Risk / Reward 520c / 2000c = 1: 385

12. Mr Price (MPC)

13. Tigerbrands (TBS)(29.01.2013) Potential Profit = 3300c 10.89% (72.60%) Instrument: CFD / SSF Direction: Buy / Long Entry: 30300c Take Profit: 33500c Stop loss: 29100c Risk / Reward 1200c / 3300c = 1: 2.75

14. Tigerbrands (TBS)

15. Summary: The Stockbroker • Simple Trend Analysis • Price Action / Support & Resistance • Overbought / Oversold levels • TBS • TRU • MPC • Subscribe today!

16. Technical Market Overview

17. S & P 500 Index Bearish Divergence? Resistance Support Bullish

18. DAX Index Bullish

19. Brent Oil Resistance Resistance Resistance Support Support Bullish

20. Gold $ Resistance Channel Support Resistance Resistance Support Support Resistance Bearish

21. Rand $ Channel Support Triangle Resistance ZAR Weakness

22. JSE Top 40 Index Resistance Support Channel Bullish

23. JSE Gold Mining Index Resistance Support Bearish

24. JSE Banks Resistance Support Resistance Bullish

25. JSE Food Support Resistance Bullish

26. Summary: Technical Overview • JSE Top 40 Index • Bullish • Broken above channel • JSE Gold Mining • Bearish • Testing support • JSE Banks • Bullish • Overbought • JSE Food • Bullish / Oversold • Testing support • S&P 500 Index • Bullish • Testing resistance • Dax Index • Bullish • Overbought • Brent Crude Oil • Bullish • Gold $ • Bearish / Down channel • Rand $ • Bearish / Up channel

27. The Investor Fundamentals & Long-term Share picks

28. The Investor Positives & Negatives Bi-monthly newsletter One Share Spot Long-term equity investor

29. Methodology Step 2: Click Search Step 1: Click Research PEG ratio (PE%) is less than or equal to 85% Quality rating (%) is greater than 70%

30. Methodology

31. Share Picks • Sasol (SOL) • Bowcalf (BCF) • Sunint (SUI)

32. Sasol (SOL)

33. Sasol (SOL)

34. Positives We like Sasol because: • Its 100% Quality Rating, which is a combined measure of a number of financial ratios of a company. PSG Online considers a company with a quality rating above 70 as a good quality company. • The company has a strong cash flow. • It has excellent operating margins of over 23.3%. • It has return on equity (ROE) is 23%. • The group has managed to contain costs and successfully deleveraged its balance sheet, giving it ample room for future growth. • It is trading at 1.7 times its NAV. • The share price is underpinned by an attractive dividend yield of 4.7%.

35. Negatives We are concerned about: • Sasol’s vulnerability to a number of external factors beyond management’s control, such as oil price and exchange rate movements. • The possible impairment of its share in the Arya Sasol Polymer plant, which it would have to divest of, given the continued uncertainty over sanctions relating to Iran’s nuclear fuel program and the devaluation of the country’s currency. • Exposure to Europe currently experiencing weaker demand, which would hit Sasol’s profitability. • The level of gearing is likely to return to the group’s targeted range of 20% to 40% in the medium term as its large capital intensive growth program and gas acquisition strategy gains momentum.

36. Sasol (SOL)

37. Bowcalf (BCF)

38. Bowcalf (BCF)

39. Positives We like Bowcalfbecause: • A weaker exchange rate will provide more relief from imports. • We expect an improved contribution from the Gauteng bottling plant in the medium-term. • Historically, it has strong cash generation. • Bowcalfhas an ungeared balance sheet. • Operating margins could possibly return back to the long-term average, which will affect earnings positively. • It has return on equity (ROE) has upside potential from the current 14.0% • The share offers value as it is trading at a historic P/E ratio of 10.7 times. • The share is trading at a 40% premium of its NAV of 535cps. • It offers an attractive dividend yield of 4.8% assisted by its high dividend pay-out ratio.

40. Negatives We are concerned about: • The possibility of a lower than anticipated uptake at the Gauteng bottling plant. • Bowcalf’svulnerability to repeated exposure to a number of external factors, including the supply of CO2 to their filling operations and industry- wide labour disruptions within the plastics divisions. • Continued above- inflation growth in operating costs (i.e. electricity and labour costs)

41. Bowcalf (BCF)

42. Sunint (SUI)

43. Sunint (SUI)

44. Positives We like Sunint because: • It has an attractive portfolio of operations spread across all the economic centres in South Africa. • The group is establishing a foothold in other emerging countries such as Chile. • Sunint boasts a solid track record with good margins and exceptionally high return on equity (ROE%). • It has strong cash generation. • Sunint is considered a defensive share due to its nature of its operations. • The share is trading on a rolling P/E ratio of 15.5 times, which we consider as fair value. • Moat – There are limited casino licenses. • Sun International recently announced that it is considering a new casino licence in Panama.

45. Negatives We are concerned about: • The exclusivity of the Western Cape licence (Grandwest) as there is speculation that one of the other Western Cape licences may relocate to the Cape Town metropole. • The over-capacity in the hotel industry as it is likely to result in a lack of pricing power,and low occupancy rates. • The high level of gearing, its low interest cover, as well as the regulatory environment.

46. Sunint (SUI)

47. Summary: The Investor • Fundamental Analysis • Methodology • Value & Quality • Sasol (SOL) - BUY recommendation • 6/12/2012 = 37100c • 28/01/2013 = 37966c (+2.33%) • Bowcalf (BCF) - BUY recommendation • 17/01/2013 = 775c • 28/01/2013 = 775c • Sunint (SUI) - HOLD recommendation • 28/01/2013 = 9870c

48. Open the Floor

49. Trencor (TRE)

50. Trencor (TRE)