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All eyes on the US-China trade discussions

01 July 2019

All eyes on the US-China trade discussions

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Market commentary

SA flag Icon
South Africa

The local bourse ended the week slightly higher due to strong performances by miners and Naspers, all taking advantage of the US Federal Reserve’s dovish stance. As the closing bell struck, the All Share ended 0.24% higher.

US flag Icon
United States

On Friday, US shares started the day low as investors kept an eye on the G20 summit and awaited the outcome of the negotiations between the US and China that seek to halt the protracted trade war. At 17h30, the Dow Jones was trading 0.10% higher.

EU flag Icon
Europe

European markets recorded the best first-half year results in almost 20 years on Friday, thanks to German shares lifting indexes while investors kept a close eye on the US-Sino trade discussions. At the end of trade, the pan-European STOXX 600 stood at 0.70%.

HK flag Icon
Hong Kong

Asian shares fell on Friday, ahead of the much-anticipated China-US trade discussions to be held on Saturday at the G20 summit. The Hang Seng closed 0.28% down.

Japan flag Icon
Japan

On Friday, Japanese indices closed somewhat down as all eyes were focused on the trade meeting between the US and China, which took place alongside the G20 summit held in Osaka, Japan. At the end of trade, the Nikkei had lost 0.24%.

Rand Icon
Rand

Although some experts believe the rand is undervalued by as much as R2/$, it was heading towards its strongest month since January this year as it awaited economic developments at the G20 summit on Friday. At 17h30, a dollar cost R14.11.

Precious metals Icon
Precious metals

Bullion prices rose over 8% in June, its highest level in about three years, and silver touching its biggest monthly gain since January 2019 in light of the US-China trade dispute. At 17h30, an ounce of spot gold traded at $1 411.28.

Oil Icon
Oil

Although oil prices dropped on Friday, they posted a weekly gain ahead of expected OPEC production cuts and the widely anticipated meeting between the US and China on Saturday. At 17h30, a barrel of Brent crude was trading at $66.52.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 203.84 0.24 4.78 3.92 12.21 4.42
Gold mining 2 010.13 0.38 24.47 29.60 46.59 90.59
Basic minerals 34 116.44 0.48 10.16 2.41 20.88 21.46
Industrial index 77 846.87 0.39 3.76 4.01 11.73 - 3.69
Financial 42 172.19 - 0.35 1.29 5.44 4.96 5.66
Fin + Ind 30 7 794.10 0.15 2.93 4.49 9.37 - 0.74
International markets (Base currency)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Dow Jones (USD) 26 599.96 0.28 7.31 3.21 15.40 12.20
S&P 500 PR (USD) 2 941.76 0.58 7.05 4.30 18.54 10.42
NASDAQ (USD) 8 006.24 0.48 7.51 3.87 21.33 7.78
FT-100 (GBP) 7 425.63 0.31 3.97 3.33 13.14 1.56
Hang Seng (HKD) 28 542.62 - 0.28 6.70 - 0.07 12.76 2.55
Nikkei 225 (JPY) 21 275.92 - 0.24 3.52 0.57 7.50 - 2.56
MSCI World (USD) 6 331.08 0.55 6.59 5.44 16.98 6.33
Frankfurt (EUR) 5 535.26 1.04 5.73 7.57 17.42 0.75
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 402.25 - 0.32 9.42 6.37 10.32 11.57
Platinum ($) 816.00 0.49 2.90 - 3.66 2.77 - 3.55
Brent Oil ($) 66.55 0.09 - 5.08 - 1.89 27.59 - 14.26
Rand/USD 14.08 0.66 3.32 0.90 1.73 - 2.76
Rand/GBP 17.87 0.48 2.92 3.72 2.20 0.57
Rand/EUR 15.96 0.91 1.91 - 0.33 2.97 0.05
ALBI (R) 681.28 0.64 2.23 3.65 7.60 11.45
  1. Some data may be delayed, the above table reflects the latest available information
  2. Performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month


Economic calendar

Local International
  1. SACCI Business Confidence JUN
  2. Total New Vehicle Sales JUN
  1. DE: Markit Manufacturing PMI Final JUN
  2. US: ISM Manufacturing PMI JUN

Source: Reuters, Business Day, Trading Economics


PSG Product Matrix

Fund matrix

PSG Wealth Solutions
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Enhanced Interest D 4.00 8.02 8.01 8.09 7.92 7.58
PSG Wealth Income FoF D 4.56 7.92 7.90 8.23 8.18 8.08
PSG Wealth Preserver FoF D 5.87 5.09 6.08 5.80 6.25 6.81
PSG Wealth Moderate FoF D 7.97 3.33 5.39 5.31 5.15 6.03
PSG Wealth Creator FoF D 9.38 2.94 5.28 6.07 3.29 4.18
PSG Wealth Global Moderate FF D 7.92 5.74 7.68 2.87 5.78 7.74
PSG Wealth Global Creator FF D 17.70 10.40 13.54 9.32 11.75 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 11.02 2.62 3.02 6.60 1.93 1.67
PSG Wealth Global Creator FoF D 20.89 6.80 8.40 13.32 7.60 6.95
PSG Wealth Global Preserver FoF (USD) D 7.59 5.21 2.76 4.96 4.17 3.29
PSG Wealth Global Flexible FoF (USD) D 14.14 7.34 7.15 10.77 7.87 6.32
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 7.13 7.50 3.16 8.70 8.12 7.23
PSG Wealth Global Flexible FoF (GBP) D 14.29 11.21 6.71 14.84 12.04 11.74
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.60 7.28 7.36 7.46 7.28 7.08
PSG Income A 4.22 8.41 8.33 8.51 8.21 7.89
PSG Diversified Income 4.11 6.97 7.48 7.91 7.80 7.67
PSG Stable A 1.48 1.18 4.78 5.76 5.50 6.28
PSG Balanced A - 0.80 - 4.80 1.90 4.50 3.52 5.38
PSG Flexible A - 0.29 - 4.27 2.27 5.26 4.30 6.16
PSG SA Equity D - 6.60 - 11.21 - 2.90 2.89 - -
PSG Equity A - 3.09 - 8.81 - 0.33 4.66 1.28 3.30
PSG Global Flexible FF A 3.05 - 5.12 3.33 3.40 4.67 -
PSG Global Equity FF A 4.07 - 6.80 3.47 4.64 4.47 6.31
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 4.68 - 6.71 - 0.71 7.82 1.34 1.27
PSG Global Equity USD 5.28 - 7.95 - 0.38 9.24 1.13 0.89
PSG Direct Portfolios
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Direct Flexible Income 3.87 7.26 7.42 7.68 7.47 7.23
PSG Direct Low Equity 1.22 0.41 4.16 5.40 5.02 5.87
PSG Direct Managed - 0.90 - 5.09 1.53 4.21 3.25 5.10
PSG Direct Aggressive - 0.56 - 6.06 1.45 4.39 3.25 -
PSG Direct Global Managed 2.82 - 5.55 2.86 2.93 4.19 -
PSG Direct Global Aggressive 3.46 - 6.59 2.96 3.72 4.08 -
  1. The PSG Wealth Solutions are exclusively available through registered PSG planners and/or advisers
  2. The above information reflects the latest available data at time of distribution, as such product performance data reflects T-2 numbers
  3. Performance reported during the first week of each month may be impacted by distributions. Distributions are fully accounted for by the second week of each month
  4. The PSG Best Ideas Portfolios were renamed to the PSG Direct Portfolios in February 2018

Equity portfolio matrix

PSG Wealth House View Portfolios
Portfolio 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth SA Equity Portfolio 3.71 - 0.62 4.04 5.11 - -
PSG Wealth SA Property Equity Portfolio 0.52 - 7.63 - 5.81 - 2.81 - -
PSG Wealth SA Dividend Income Equity Portfolio 4.45 1.78 6.50 7.47 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.68 13.59 12.01 16.00 - -
PSG Wealth Managed Volatility Equity Portfolio 0.53 - 7.65 - 2.94 - - -
  1. The PSG Wealth equity portfolios are exclusively available through registered PSG planners and/or advisers
  2. PSG Wealth equity portfolio performance are shown gross of management fees, but net of brokerage and other trading costs
  3. PSG Wealth SA and Offshore Equity Portfolio Inception date: 30 August 2015
  4. PSG Wealth SA Listed Property Portfolio Inception date: 1 December 2015
  5. PSG Wealth Dividend Income Equity Portfolio Inception date: 29 April 2016
  6. PSG Wealth Managed Volatility Equity Portfolio Inception date: 28 July 2016
  7. PSG Wealth Funds are exclusively available through registered PSG planners and/or advisers


Recent Investment Ideas

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Highlights

  • We recommend an overweight positioning for CAT US; click here to read the full report on our secure site.
  • The company has increased dividends for the past 25 consecutive years (including the GFC of 2008) and it trades at a dividend yield of 2.8%.
  • Dividend growth is targeted to range in the high-single digits in each of the next four years, while management has indicated it will continue to do share buybacks as it is still creating value at this stage.


company logo

Highlights

  • We recommend a neutral positioning for GRT SJ; click here to read the full report on our secure site.
  • Although the current distribution yield of 8.84% is enticing (well ahead of its long-term average and is guided to grow by 4.50% in the current year), locally, property fundamentals are deteriorating.
  • We feel that weak property fundamentals are fairly reflected in the valuation and would recommend a neutral position relative to the benchmark.


company logo

Highlights

  • We recommend an overweight positioning for MMI SJ; click here to read the full report on our secure site.
  • Strong growth was seen in Momentum Life, which constitutes a third of the total earnings, due to management tightening expenses, improving productivity and enhancing the product offering.
  • The improved earnings are likely to support higher dividend payments, which are likely to underpin the share price.


Corporate actions

Date Company Share code Expectation
03 July 2019 Capital Appreciation Limited CTA Cash Dividend
03 July 2019 Famous Brands Limited FBR Cash Dividend
03 July 2019 Netcare Ltd NTC Cash Dividend
03 July 2019 Schroder European Real Estate Investment Trust Plc SCD Cash Dividend
03 July 2019 Stor-Age Property REIT Limited SSS Cash Dividend
  1. The information above is to the best of our knowledge correct at the time of distribution but due to the nature thereof cannot be guaranteed.
  2. This document only contains general information and not the opinion of the distributor.

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Author
author

Adriaan Pask PhD

Chief Investment Officer


At PSG Wealth
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