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JSE lower in anticipation of Fed rate move

10 July 2019

JSE lower in anticipation of Fed rate move

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Market commentary

SA flag Icon
South Africa

The JSE closed lower on Tuesday, in line with global financial markets as investors anticipated new catalysts from the US Federal Reserve (Fed), heightening the pressure placed on global risk assets. Shortly after the closing bell, the All Share was down 1.33%.

US flag Icon
United States

US stock futures took a dive on Tuesday as investors expressed concerns over a severe blow to earnings as a by-product of the protracted US-Sino trade dispute. At 18h00, the Dow was trading 0.28% in the red.

EU flag Icon
Europe

European financial markets tracked a broad-based selloff in Asian and American markets on Tuesday as expectations waned for an interest rate cut by the Fed. At 18h10, the FTSE 100 Index had lost 0.17%.

HK flag Icon
Hong Kong

Shares in Hong Kong continued on a downward spiral for the fourth consecutive day on Tuesday, in line with most global markets, as expectations of an aggressive rate cut by the Fed slowly diminished. At 18h15, the Hang Seng lost 0.94%.

Japan flag Icon
Japan

Japan’s Nikkei recorded marginal gains on Tuesday but the broader market took a knock as Apple Inc and the overall technology sector stumbled following a brokerage downgrade. At the closing bell, the Nikkei gained 0.14%.

Rand Icon
Rand

The rand held steady against major global currencies on Tuesday as investors await new catalysts from the Fed and its stance on interest rates moving forward. At 18h20, the rand traded R14.14 against the dollar.

Precious metals Icon
Precious metals

Gold prices fell to a one-week low on Tuesday as the greenback held steady ahead of the Fed’s speech later today. At 18h25, spot gold was up trading at $1 396.28 an ounce.

Oil Icon
Oil

Supply disruptions and mounting tensions in the Middle East lifted oil prices on Tuesday while the US-China trade spat continued to weigh heavily on the global economy. At 18h30, a barrel of Brent crude was trading at $64.84.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 56 963.80 - 1.33 - 1.79 - 0.89 8.76 1.12
Gold mining 1 968.01 - 0.56 7.15 22.34 42.80 83.77
Basic minerals 32 826.16 - 1.33 - 0.95 - 4.84 15.36 17.45
Industrial index 77 066.67 - 1.26 - 2.35 1.09 9.43 - 5.52
Financial 41 090.04 - 1.48 - 1.56 - 0.37 1.35 0.09
Fin + Ind 30 7 675.54 - 1.33 - 2.10 0.61 6.62 - 3.73
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) 26 783.49 - 0.07 3.21 3.06 13.53 10.67
S&P 500 PR (USD) 2 979.63 0.15 3.86 4.05 16.45 9.20
NASDAQ (USD) 8 141.73 0.54 5.24 3.22 17.68 6.13
FT-100 (GBP) 7 536.47 - 0.17 2.99 2.69 11.88 2.41
Hang Seng (HKD) 28 116.28 - 0.76 5.16 - 4.80 8.92 1.52
Nikkei 225 (JPY) 21 565.15 0.14 3.50 - 0.86 6.76 - 0.11
MSCI World (USD) 6 377.82 - 0.03 3.27 - 0.37 13.76 4.98
Frankfurt (EUR) 5 599.86 - 0.85 3.25 4.94 14.17 - 0.86
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 387.90 - 1.21 4.02 6.61 8.32 9.92
Platinum ($) 808.00 - 0.62 0.62 - 10.62 - 1.82 - 5.72
Brent Oil ($) 64.16 0.08 1.37 - 9.13 4.43 - 17.82
Rand/USD 14.19 0.05 5.21 - 1.84 - 2.57 - 5.79
Rand/GBP 17.67 0.53 7.15 3.22 - 0.06 0.47
Rand/EUR 15.90 0.14 6.08 - 1.19 0.29 - 0.96
ALBI (R) 685.62 0.01 3.55 3.19 7.16 10.43

  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. No economic data scheduled for release
  1. CN: Inflation Rate JUN
  2. UK: Manufacturing Production MAY

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 3.90 8.03 8.00 8.08 7.91 7.58
PSG Wealth Income FoF D 4.62 7.85 8.04 8.16 8.22 8.12
PSG Wealth Preserver FoF D 5.68 4.68 6.04 5.90 6.45 6.74
PSG Wealth Moderate FoF D 7.54 2.45 5.30 5.38 5.68 5.92
PSG Wealth Creator FoF D 7.69 0.91 4.79 5.31 4.07 3.82
PSG Wealth Global Moderate FF D 10.03 8.29 6.94 5.14 6.07 7.66
PSG Wealth Global Creator FF D 20.02 14.36 13.61 11.96 12.40 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 8.32 2.78 3.77 5.83 2.94 1.78
PSG Wealth Global Creator FoF D 17.74 8.34 10.27 12.78 9.02 7.22
PSG Wealth Global Preserver FoF (USD) D 6.46 5.50 3.29 4.35 4.54 3.33
PSG Wealth Global Flexible FoF (USD) D 12.05 7.67 8.42 11.16 8.60 6.36
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 7.58 9.62 4.43 5.09 8.65 7.56
PSG Wealth Global Flexible FoF (GBP) D 14.36 13.85 9.37 11.61 13.05 12.21
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.58 7.30 7.35 7.45 7.30 7.10
PSG Income A 4.15 8.33 8.42 8.43 8.22 7.88
PSG Diversified Income 3.97 6.93 7.73 7.93 7.89 7.72
PSG Stable A 0.91 1.16 4.94 5.86 5.84 6.33
PSG Balanced A - 1.84 - 4.64 1.84 4.56 4.19 5.40
PSG Flexible A - 1.76 - 4.17 1.88 5.12 4.89 6.11
PSG SA Equity D - 9.12 - 13.30 - 3.86 1.50 - -
PSG Equity A - 5.08 - 8.91 - 0.96 4.14 2.26 3.06
PSG Global Flexible FF A 1.84 - 1.77 2.34 5.32 5.44 -
PSG Global Equity FF A 1.88 - 3.07 2.64 6.58 5.49 6.30
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 0.70 - 6.75 - 0.40 6.31 2.78 1.42
PSG Global Equity USD 0.71 - 7.84 - 0.03 7.58 2.81 1.08
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 3.79 7.21 7.55 7.65 7.51 7.25
PSG Direct Low Equity 0.62 0.43 4.28 5.48 5.38 5.91
PSG Direct Managed - 2.04 - 4.95 1.39 4.23 3.90 5.10
PSG Direct Aggressive - 2.12 - 5.33 0.86 4.54 3.99 -
PSG Direct Global Managed 1.61 - 2.22 1.87 4.84 4.96 -
PSG Direct Global Aggressive 1.64 - 3.02 2.07 5.64 5.00 -

  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 0.87 - 4.51 3.30 4.00 - -
PSG Wealth SA Property Equity Portfolio - 0.68 - 10.10 - 5.79 - 2.52 - -
PSG Wealth SA Dividend Income Equity Portfolio 1.01 - 3.24 5.66 5.98 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.46 12.48 12.92 14.53 - -
PSG Wealth Managed Volatility Equity Portfolio - 1.46 - 9.63 - 3.09 - - -

  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
10 July 2019 African Media Entertainment Limited AME Cash Dividend
10 July 2019 African and Overseas Enter[rises Limited 6% Cumulative Participating Preference Shares AOVP Cash Dividend
10 July 2019 Ecsponent Limited Class A Preference Share ECSP1 Cash Dividend
10 July 2019 Ecsponent Limited Class A Preference Share ECSP10 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP12 Cash Dividend
10 July 2019 Ecsponent Limited Class A Preference Share ECSP13 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP15 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP18 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP21 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP24 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP3 Cash Dividend
10 July 2019 Ecsponent Limited Class A Preference Share ECSP4 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP6 Cash Dividend
10 July 2019 Ecsponent Limited Class A Preference Share ECSP7 Cash Dividend
10 July 2019 Ecsponent Limited Class C Preference Share ECSP9 Cash Dividend
10 July 2019 Insimbi Industrial Holdings Limited ISB Cash Dividend
10 July 2019 Rex Trueform Clothing Company Limited 6% Cumulative Preference Shares RTOP Cash Dividend
10 July 2019 Safari Investments RSA Limited SAR Cash Dividend
10 July 2019 Sirius Real Estate Limited SRE DVOP
Option 1 - (Cash Dividend) Gross - ZAR0.29384Less 20% DWT - ZAR0.058768Net - ZAR0.235072
Option 2 (Shares)Ratio - 1 new share for every 40.58584 shares held
Default - Option 1 (Cash Dividend)
12 July 2019 Wilderness Holdings Limited Unlisted 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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