This document summarizes Robby P's upcoming webinar on trading the South African stock market and the Stock Alert service. The webinar will feature an interview with Michael Porter, who will discuss sum of the parts trades, core holdings, and how to profit from dividend strips. Robby P will leave time at the end for questions about short-term share trading and the Stock Alert service.

1. My second Stock Alert webinar
From the desk of Robby P, Vunani Private Clients
Tonight join me, Robby P, Private Client Trader at Vunani Private Clients, I will be talking to Michael Porter who often contributes
fundamental trades to Stock Alert.
You will recall his recent BVT break-up trade.
We will cover
• Sum of part trades
• His core holdings
• How and when to divi strip
I will leave some time at the end to answer all of your questions related to trading the short-term share market and the Stock Alert
service.

2. EA Trading service

3. • EA is short for Enhanced Alpha, a classic hedge fund trading approach for retail CFD accounts.
• The strategy is a mix of:
– Long/Short trades on. We will actively be either Net long or Net short, depending what our view is on current market conditions.
• This is to eliminate extreme volatility on accounts.
What is my EA trading service?

4. Local equities,
Index, ETFs & CFDs
offshore equities &
CFDs
offshore indices &
commodities (CFDs)
Forex (CFDs on
major currency
pairs)
Current holdings

5. Sum of the Parts Trading
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6. What is SOTP?
• Sum of the Parts analysis ( SOTP ), or break up analysis, is a method of valuation of a
holding company. The essence of the method is to determine what divisions would be
worth if the holding company is broken up and spun off or acquired by another company.
• I will be covering two holding companies, and how to trade them by knowing what the
SOTP value is.

7. PSG Group is an investment holding company consisting of underlying investments that
operate across different industries.
4 of its biggest investments, is listed as separate entities on the JSE which compromises
around 84% of PSG value. Thus the discount/premium to it underlying holdings can be
calculated.
PSG Group

8. Asset/Liability Shares ( m) Share price ( R ) Value ( Rm ) % of total
Capitec 35.5 557.01 19773.855 44.69%
Curro 207.9 36.22 7530.138 17.02%
PSG Konsult 790.8 7 5535.6 12.51%
Zeder 526.2 6.45 3393.99 7.67%
PSG Private Equity 1393 3.15%
Dipeo ( prev.Thembeka) 597 1.35%
PSG Corporate (incl. PSG Capital ) 1672 3.78%
Other Assets ( cash and pref investments ) 4350 9.83%
Total Assets 44245.583 100.00%
Perpetual pref funding 17.4 78 -1347
Other Debt -959
Total SOTP value 41939.583
Shares in issue ( net of treasury shares ) ( m ) 215
SOTP value per share ( R ) 195.07
PSG Group share price ( R ) 177.3
Discount/Premium -9.11%
PSG SOTP Calculation

9. Local equities,
Index, ETFs & CFDs
offshore equities &
CFDs
offshore indices &
commodities (CFDs)
Forex (CFDs on
major currency
pairs)
PSG discount/premium
SOTP trading

10. • Current discount is around 9%.
• A fair average discount is usually around between 9-15%.
• So if this discount deviates a fair amount from the average, a trade opportunity is possible.
• You can do a pairs trade on PSG/ underlying holdings.
For example Long PSG/ Short CPI,COH,KST,ZED.
• Or trade PSG individually.
For example if the discount is 25%, you can long the stock back to fair discount.
We shorted PSG at R197.50 ( Discount was 2.14% ) and bought back the share yesterday
at R183.00 ( Discount was 9.14%)
PSG SOTP the trade

11. • This is not as exciting and as frequent as the PSG trade, but does provide a opportunity
non the less.
• RMB Holdings (RMH ) is a holding company with its sole investment being 34% of First
National Bank ( FSR ).
• By doing a calculation we can determine what the discount is.
• I have then taken the discount over the last year, and plotted it on a simple diagram to get
an idea what the average discount is.
• As soon as this discount deviates from the average, you can trade this.
• For example if the discount moves to 0 ( or a slight premium ), you can short RMH and
Long FSR till the discount moves back to around 6-8%.
RMH/FSR pairs trade

12. Local equities,
Index, ETFs & CFDs
offshore equities &
CFDs
offshore indices &
commodities (CFDs)
Forex (CFDs on
major currency
pairs)
Company Shares on issue Share Price Market cap
FSR 5,609,488,001.00 42.55 238,683,714,442.55 81,295,673,139.13
RMH 1,411,703,218.00 52.85 74,608,515,071.30 74,608,515,071.30
(6,687,158,067.83)
Discount/Premium: -8.23%
RMH/FSR SOTP calculation

13. Local equities,
Index, ETFs & CFDs
offshore equities &
CFDs
offshore indices &
commodities (CFDs)
Forex (CFDs on
major currency
pairs)
RMH/FSR discount plot

14. How&whento
tradeaDivistrip
14

15. 3 Dates to remember when doing a dividend strip:
• LDT: This is the last day to trade in the stock in order to qualify for the dividend. This is usually on a Friday
• Ex Date: If you hold the stock on this day you qualify for the Dividend. This is usually on a Monday
• Pay date: This is when you will receive the cash payment for the dividend amount. This is usually the next Monday.
Lets take for example Famous Brands is paying a dividend of R2.15 next week. In order to qualify for this dividend you will need to
purchase the stock before or on Friday the 1st of July 2016 ( LDT date ). Ex date will be the Monday the 4th of July, and all
shareholders that came into the day with stock will qualify for the dividend. The following week on the Monday 11th July you will
receive the cash payment of R2.15 per share.
• As a rule of thumb traders will buy up the share on the Friday, and the market will price in the dividend amount in the share price.
This is where the trading opportunity arises as the maket sometimes prices in more/less than what the dividend amount is.
• Remember that if you are short on the stock ( short selling ) you will need to pay in the divi amount.
• We notify clients each week on what stocks is LDT the Friday, and what stock is worth trading for the dividend.
Trading a Divi strip

16. Profit from Stock Alert
Copy trade
Do it yourself
Phone and email