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All eyes on Biden’s spending plans

01 April 2021

All eyes on Biden’s spending plans

Daily Investment Update

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Market commentary

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South Africa

The ALSI reported a loss of 1.20% at the closing bell on Wednesday, as investors shifted focus to the US stimulus spending plans while remaining cautious about US bond yields.

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United States

Wall Street opened Wednesday on a high note as sentiment was lifted by robust performance from the tech sector and possible developments around US President Joe Biden’s stimulus spending plan.

EU flag Icon
Europe

Most European markets traded flat on Wednesday, with the pan-European STOXX 600 being hard-hit, following Deliveroo’s 30% tumble after its London debut. The STOXX 600 closed down 0.24%.

HK flag Icon
Hong Kong

At the close of trade on Wednesday, the Hang Seng had lost 0.72% weighed down by several disappointing earnings reports and poor performances from the property and materials sectors.

Japan flag Icon
Japan

The Nikkei ended the day 0.86% in the red as investors pulled out of the financial sector after “the fallout from the margin calls that brought down New York-based hedge fund Archegos Capital”.

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Rand

The rand continued its winning streak on Wednesday, strengthening against most major currencies. At 17h30, the local currency stood at R14.76/$, R20.35/£ and R17.32/€.

Precious metals Icon
Precious metals

Although gold made up some losses on Wednesday due to a weaker dollar, the metal headed for its worst quarter in four years. At 17h30, spot gold traded $1 70457/oz.

Oil Icon
Oil

Oil slipped on Wednesday after OPEC+ lowered its 2021 demand forecasts fuelling market recovery concerns; however, it was offset by lower US inventories. Brent crude traded at $64.49 per barrel at 17h30.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 66 485.29 - 1.20 1.58 13.14 24.18 53.98
Gold mining 3 732.98 0.82 12.17 - 2.33 - 29.04 63.95
Basic minerals 48 030.31 - 0.33 1.31 18.62 28.32 92.20
Industrial index 93 180.85 - 1.47 1.86 12.95 21.29 38.17
Financial 31 243.47 - 2.23 1.73 3.84 24.13 37.81
Fin + Ind 30 8 028.12 - 1.63 1.77 10.29 22.00 38.05
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) 32 981.55 - 0.26 6.78 8.29 19.91 53.78
S&P 500 PR (USD) 3 972.89 0.36 4.38 6.17 19.07 56.35
NASDAQ (USD) 13 246.87 1.54 0.48 2.95 19.04 73.40
FT-100 (GBP) 6 713.63 - 0.86 4.16 4.97 16.37 21.91
Hang Seng (HKD) 28 378.35 - 0.70 - 1.76 4.55 21.53 23.93
Nikkei 225 (JPY) 29 178.80 - 0.86 1.35 7.02 26.87 56.68
MSCI World (USD) 8 402.62 0.24 3.33 4.92 19.57 54.03
Frankfurt (EUR) 6 473.46 0.00 8.86 9.40 17.61 51.05
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 711.39 0.22 - 3.88 - 9.63 - 9.91 4.45
Platinum ($) 1 185.42 - 0.17 - 2.89 15.78 34.63 62.38
Brent Oil ($) 63.54 - 0.94 - 3.01 24.93 56.63 181.81
Rand/USD 14.80 0.88 0.93 - 1.64 11.51 17.35
Rand/GBP 20.39 0.50 2.23 - 2.38 5.10 8.04
Rand/EUR 17.35 0.74 3.92 2.92 11.37 12.11
ALBI (R) 745.75 0.51 - 2.54 - 1.74 4.86 16.96
  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. ABSA Manufacturing PMI MAR
  2. Total New Vehicle Sales MAR
  1. EU: Markit Manufacturing PMI Final MAR
  2. UK: Markit/CIPS Manufacturing PMI Final MAR
  3. US: ISM Manufacturing PMI MAR

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 FoF D 1.99 4.82 6.32 6.87 7.17 7.37
PSG Wealth Income FoF D 3.53 9.58 6.26 6.65 6.99 7.45
PSG Wealth Preserver FoF D 9.21 23.75 6.53 6.40 6.28 6.06
PSG Wealth Moderate FoF D 16.11 37.55 8.07 7.31 6.78 6.22
PSG Wealth Creator FoF D 28.23 65.01 12.11 9.20 8.09 7.60
PSG Wealth Global Preserver FF D - 3.99 0.99 7.62 13.23 - -
PSG Wealth Global Moderate FF D 0.31 11.68 12.05 15.06 10.88 7.12
PSG Wealth Global Flexible FF D - 0.10 14.43 16.10 - - -
PSG Wealth Global Creator FF D 4.71 25.52 21.07 23.82 18.85 14.38
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 12.25 32.79 10.03 6.39 6.78 6.79
PSG Wealth Global Creator FoF D USD 17.32 53.17 18.90 14.55 14.37 13.89
PSG Wealth Global Preserver FoF (USD) D 7.70 19.56 5.31 4.68 4.24 4.95
PSG Wealth Global Flexible FoF (USD) D 11.50 38.61 14.21 11.75 11.60 11.84
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.71 10.55 2.80 4.77 2.29 5.16
PSG Wealth Global Flexible FoF (GBP) D 5.22 25.96 11.45 12.45 8.69 11.88
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.33 4.36 5.45 6.05 6.58 6.77
PSG Income A 2.61 8.79 8.07 8.02 8.16 8.31
PSG Diversified Income 4.92 14.95 7.21 6.88 7.24 7.55
PSG Stable A 15.27 31.53 4.09 3.49 4.38 5.30
PSG Balanced A 28.31 55.77 5.08 3.02 3.48 4.89
PSG Flexible A 31.38 60.97 3.53 2.52 2.99 4.77
PSG SA Equity D 31.02 73.91 - 1.78 - 5.97 - -
PSG Equity A 33.49 66.86 2.01 - 0.12 0.44 4.05
PSG Global Flexible FF A 25.88 45.90 10.29 12.51 8.81 -
PSG Global Equity FF A 33.20 56.82 8.32 11.07 8.04 7.88
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 41.57 78.63 8.30 3.96 4.84 7.68
PSG Global Equity USD 49.63 89.97 7.05 3.14 4.46 8.09
  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

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 19.27 37.72 0.61 - 0.62 1.53 2.64
PSG Wealth SA Property Equity Portfolio 36.04 41.64 - 18.51 - 15.74 - 11.83 - 10.66
PSG Wealth Dividend Income Equity Portfolio 19.89 37.71 - 5.10 - 6.44 - 1.34 -
PSG Wealth Offshore Equity Portfolio (USD) 17.30 43.85 18.15 14.51 16.43 15.51
  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

company logo

Highlights

  • We believe the group is a good quality company with attractive and sustainable operating margins and reliable cash conversion.
  • On a forward P/E basis, the group is trading at an 18.4% discount to its long-term average of 17.9 times and a 20.2% premium to its FactSet peers.
  • We feel this is attractive, given the low double-digit earnings growth expected over the medium term, which is ahead of most consumer staple counters trading as much richer valuations.
  • We maintain the overweight portfolio positioning.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • Diageo is a high-quality company with a strong portfolio of brands, a global footprint and structural growth tailwinds as it focuses on the premiumisation of its brands.
  • As such, the medium-term outlook for organic revenue growth remains positive.
  • However, in lieu of the Covid-19 lockdown disruptions, it will take time for the on-premise market to be fully operational.
  • We feel this is justified given the quality of its operations and its attractive growth; thus, we reaffirm the current overweight portfolio positioning.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • We believe BTI can consistently grow earnings over the long-term despite volume declines in the combustible segment.
  • We feel that medium-term earnings are likely to be supported by continuous investments in next generation products as these mature and improve profitability.
  • Regardless of a growth outlook that mirrors the broader staple market, the group is trading at a significant discount to staple counters.
  • Thus, we maintain an overweight position for the counter.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
07 April 2021 AECI Limited AFE Cash Dividend
07 April 2021 Fairvest Property Holdings Limited (REIT) FVT DRIPOption 1 - (Cash Dividend) Gross - ZAR0.1059Less 20% DWT - ZAR0.02118Net - ZAR0.08472Option 2 (Reinvestment)Reinvestment Price - ZAR1.85082Default - Option 1 (Cash)
07 April 2021 Libstar Holdings Limited LBR Cash Dividend
07 April 2021 Mondi Plc MNP DRIPOption 1 - (Cash Dividend) Gross - ZAR7.3432845Less 20% DWT - ZAR1.4686569Net - ZAR5.8746276Option 2 (Reinvestment)Reinvestment Price - To be announcedDefault - Option 1 (Cash)
07 April 2021 Quilter Plc QLT Cash Dividend
07 April 2021 Rand Merchant Investment Holdings Limited RMI Cash Dividend
07 April 2021 Standard Bank Limited 6.5% First Cumulative Preference Shares SBKP Cash Dividend
07 April 2021 Standard Bank Limited Non-Redeemable, Non-Cumulative, Non-Participating Second Preference Shares SBPP Cash Dividend
07 April 2021 Sea Harvest Group Limited SHG Cash Dividend
07 April 2021 Shoprite Holdings Limited SHP Cash Dividend
07 April 2021 Sanlam Limited SLM 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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