Investors appeared reluctant to invest in risky assets while US politicians squabbled over a new budget in Washington. South African equities finished 0.5% lower, while the bond market gained 1.2%.

Fountainhead Property Fund produced another set of disappointing results, exacerbated by the payment of R12 million to advisors as a result of the Growthpoint and Redefine proposals. On a like-for-like basis, distributions for the 11 months ended 31 August 2013 declined by 2.3% and management's guidance for 2014 was lower than expected, given the significant once-off costs in the base. Management are guiding for distribution growth of between 6.25% and 7.25% next year.

Despite the poor operating results and outlook, Fountainhead's share price has performed well due to Redefine's offer to acquire a further 250 million units in exchange for Hyprop units.

Fairvest Property Holdings and Vukile Property Fund announced jointly that Fairvest had acquired a portfolio of properties from Vukile, to be settled by the issue of new Fairvest units to Vukile. As a result of the transaction, Vukile would own a 31.7% strategic stake in Fairvest, allowing the company to capitalise on Fairvest's ability to drive higher distribution growth in a smaller, actively managed portfolio, while Fairvest would gain access to Vukile's deal flow.

The yield gap between listed property and bonds narrowed last week, as bond yields declined and listed property yields remained unchanged. The current yield gap is now less than 30 basis points and, as a result, listed property, with a growing income stream, offers significantly more value than the bond market.

Top 5 performers last week

Bottom 5 performers last week

Source: Grindrod Asset Management