Fund Managers' Companion
Positioning for Rate Cuts
Deanne GordonAC
(27-21) 712-0875
deanne.gordon@jpmorgan.com
J.P. Morgan Equities Ltd.
See page 101 for analyst certification and important disclosures, including non-US analyst disclosures.
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• J.P. Morgan’s SA Economics Team forecasts relatively aggressive
further short rate cuts of 300bp in 2009 (after 150bp of easing since
December). We believe that this should pave the way for a rerating of
SA domestic stocks and while we are mostly relatively defensively
positioned given the grim global and domestic recessionary backdrop,
we recommend adding to interest-rate sensitive exposure.
• We recommend OW Telcos, Health Care, General Retail, Banks and
have recently added Gold.
• Our top stocks picks include Absa, FirstRand, Woolworths, Massmart,
AngloGold and Harmony.
• Rand exchange rate volatility remains the biggest foreign
impediment in our view, while earnings disappointments on the
Resources front are likely to be the order of the day in the near term. We
do, however, expect an earlier domestic SA earnings recovery versus the
rest of EM given that much bad news has been priced into domestic SA
earnings over a longer period and considering the earlier and more severe
onset of monetary tightening in SA since mid-2006 (500bp of rate hikes).

Table of Contents
Table of Contents .....................................................................3
Executive summary..................................................................5
Economic charts.......................................................................7
Currency charts........................................................................9
Upgrades.................................................................................11
Downgrades............................................................................12
Indices forecast growth .........................................................13
Deviations from consensus...................................................14
Equity recommendations.......................................................16
Recommendations — Monitored universe.................................................................17
Guide to company summaries....................................................................................17
Abil (ABL).................................................................................................................18
Absa (ASA) ...............................................................................................................19
AC Towers (ATR) .....................................................................................................20
Adcock (AIP).............................................................................................................21
Altech (ALT) .............................................................................................................22
Altron (ATN) .............................................................................................................23
AngloGold Ashanti (ANG)........................................................................................24
AngloPlat (AMS).......................................................................................................25
Aquarius (AQP) .........................................................................................................26
Aspen (APN)..............................................................................................................27
Astral (ARL) ..............................................................................................................28
AVI (AVI) .................................................................................................................29
Brait (BAT)................................................................................................................30
City Lodge (CLH)......................................................................................................31
Coronation (CML) .....................................................................................................32
Country Bird (CBH) ..................................................................................................33
Datatec (DTC)............................................................................................................34
DRDGold (DRD).......................................................................................................35
EastPlats (EPS) ..........................................................................................................36
Fambrands (FBR) ......................................................................................................37
FirstRand (FSR).........................................................................................................38
Foschini (FOS)...........................................................................................................39
Gold Fields (GFI).......................................................................................................40
Goldreef (GDF)..........................................................................................................41
Harmony (HAR) ........................................................................................................42
Illovo (ILV)................................................................................................................43
Implats (IMP).............................................................................................................44
Inv plc (INP) ..............................................................................................................45
JD Group (JDG).........................................................................................................46
Lewis (LEW) .............................................................................................................47

Libhold (LBH) ...........................................................................................................48
Lonmin (LON)...........................................................................................................49
Massmart (MSM).......................................................................................................50
Mediclinic (MDC) .....................................................................................................51
Mr Price (MPC) .........................................................................................................52
MTN (MTN) ..............................................................................................................53
Naspers (NPN)...........................................................................................................54
Nedbank (NED) .........................................................................................................55
Netcare (NTC) ...........................................................................................................56
New Clicks (NCL).....................................................................................................57
Northam (NHM) ........................................................................................................58
Old Mutual (OML) ....................................................................................................59
Pick ‘n Pay (PIK).......................................................................................................60
Rainbow (RBW) ........................................................................................................61
Reunert (RLO) ...........................................................................................................62
Richemont (CFR).......................................................................................................63
RMBH (RMH)...........................................................................................................64
SABMiller (SAB) ......................................................................................................65
Sanlam (SLM)............................................................................................................66
Sasol (SOL) ...............................................................................................................67
Shoprite (SHP)...........................................................................................................68
Sovfood (SOV) ..........................................................................................................69
Spar (SPP)..................................................................................................................70
Spurcorp (SUR) .........................................................................................................71
Stanbank (SBK) .........................................................................................................72
Sun International (SUI)..............................................................................................73
Telkom (TKG) ...........................................................................................................74
Tigerbrands (TBS) .....................................................................................................75
Tongaat (TON) ..........................................................................................................76
Truworths (TRU) .......................................................................................................77
Woolworths (WHL)...................................................................................................78
First Bank (FIRSTBANNL LN) ................................................................................80
GTB (GUARANTYNL NL)......................................................................................81
Intercontinental (INTERCON NL) ............................................................................82
Oceanic (OCEANIC NL)...........................................................................................83
UBA (UBA NL).........................................................................................................84
Union Bank (UBN NL)..............................................................................................85
Zenith (ZENITHBANL NL)......................................................................................86
Zain (ZAIN.KW) .......................................................................................................87
Share prices and forecast ratings.........................................89
Ratings — Equity indices and yields ....................................92
Constituents of FTSE/JSE Africa indices.............................93
SA snapshot ...........................................................................95
Key reference data .................................................................97