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Tech stocks lift Wall Street as reports brighten hopes of trade deal

10 October 2019

Tech stocks lift Wall Street as reports brighten hopes of trade deal

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Market commentary

SA flag Icon
South Africa

The JSE closed lower on Wednesday as investors waited for the start of trade negotiations between the US and China today. The local bourse closed 0.35% in the red.

US flag Icon
United States

Wall Street rose for the first time in three sessions on Wednesday with technology stocks providing a boost, as a report that China was open to a partial trade deal soothed investor nerves ahead of high-level talks today. Shortly after the JSE closed, the Dow was up 0.45%.

EU flag Icon
Europe

German shares logged their best day in six weeks on Wednesday, leading the charge among European shares, as sentiment lifted by signs of progress in the US-China trade relations. Shortly after the JSE closed, Germany’s DAX 30 was up by 0.97%.

HK flag Icon
Hong Kong

Shares in China and Hong Kong fell yesterday as escalating trade and political tensions between Beijing and Washington a day ahead of high-level negotiations soured risk sentiment. The Hang Seng Index fell 0.81%.

Japan flag Icon
Japan

Japanese shares fell on Wednesday as US-China tensions dimmed hopes for a deal in high-level trade talks this week and soured the mood of investors. The Nikkei share average fell 0.61%.

Rand Icon
Rand

The rand appeared to ignore trade-war jitters yesterday as the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) improved to its highest level in three months. At 19h30, a dollar traded at R15.17.

Precious metals Icon
Precious metals

Gold prices were steady on Wednesday as markets waited for clues on monetary easing by the US Federal Reserve. At 19h30, an ounce of spot gold traded at $1 507.55.

Oil Icon
Oil

Oil rose yesterday after media reports that China was open to agreeing on a partial trade deal with the US, while Turkey’s military operation in northern Syria also supported prices as it could affect regional oil production. A barrel of Brent crude traded at $58.85.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 54 339.47 - 0.35 - 1.35 - 3.17 - 4.04 3.83
Gold mining 2 583.52 2.72 13.19 31.53 60.91 143.65
Basic minerals 31 540.77 0.26 2.09 - 1.72 - 6.48 7.69
Industrial index 73 835.32 - 0.62 - 4.09 - 3.45 - 2.39 4.26
Financial 38 349.45 - 0.22 0.29 - 4.69 - 5.05 - 1.26
Fin + Ind 30 7 294.38 - 0.48 - 2.65 - 3.80 - 3.21 2.45
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) 26 346.01 0.71 - 1.72 - 1.03 1.99 2.11
S&P 500 PR (USD) 2 919.40 0.94 - 1.82 - 1.53 2.45 3.44
NASDAQ (USD) 7 903.74 1.02 - 2.19 - 2.66 0.47 3.28
FT-100 (GBP) 7 166.50 0.33 - 0.83 - 3.67 - 1.08 3.64
Hang Seng (HKD) 25 682.81 - 0.81 - 3.54 - 7.92 - 12.34 1.69
Nikkei 225 (JPY) 21 456.38 - 0.61 1.38 0.31 - 0.55 - 6.52
MSCI World (USD) 6 243.38 0.65 - 1.70 - 4.69 0.80 1.97
Frankfurt (EUR) 5 396.83 1.04 - 1.08 - 2.75 2.06 0.98
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 500.00 - 0.14 - 0.33 6.77 15.64 25.54
Platinum ($) 887.00 0.68 - 6.34 9.78 - 1.88 8.17
Brent Oil ($) 58.24 - 0.19 - 5.36 - 9.16 - 18.09 - 30.59
Rand/USD 15.13 0.83 - 2.52 - 8.54 - 8.48 - 3.97
Rand/GBP 18.51 0.70 - 1.56 - 5.83 - 1.29 3.38
Rand/EUR 16.63 0.62 - 1.96 - 5.79 - 5.38 0.73
ALBI (R) 690.12 - 0.43 0.11 0.66 4.10 13.89
  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. Gold Production AUG
  2. Mining Production AUG
  3. Manufacturing Production AUG
  1. UK: GDP AUG
  2. UK: Balance of Trade AUG
  3. US: Inflation Rate SEP

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 3.96 8.08 7.99 8.06 7.98 7.74
PSG Wealth Income FoF D 4.02 8.01 7.62 8.01 8.12 8.18
PSG Wealth Preserver FoF D 1.63 3.80 4.08 5.66 6.01 6.80
PSG Wealth Moderate FoF D - 1.10 0.66 1.82 4.60 4.85 5.95
PSG Wealth Creator FoF D - 4.79 - 1.10 - 0.72 3.07 3.27 3.94
PSG Wealth Global Moderate FF D 8.93 4.74 6.87 8.01 7.31 9.04
PSG Wealth Global Creator FF D 10.48 6.74 12.72 14.49 13.05 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 0.15 1.86 1.19 4.23 3.60 2.34
PSG Wealth Global Creator FoF D 0.97 4.30 6.42 10.37 9.17 7.71
PSG Wealth Global Preserver FoF (USD) D 1.33 4.76 2.27 3.61 5.03 3.67
PSG Wealth Global Flexible FoF (USD) D - 0.31 3.71 5.19 8.83 9.21 6.71
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 6.48 9.69 4.82 4.65 9.19 7.64
PSG Wealth Global Flexible FoF (GBP) D 6.43 10.11 8.02 9.68 13.82 11.96
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.59 7.30 7.31 7.42 7.35 7.16
PSG Income A 4.00 8.51 8.25 8.36 8.27 7.94
PSG Diversified Income 3.25 6.90 7.02 7.61 7.78 7.75
PSG Stable A - 1.60 - 1.17 2.56 4.35 5.48 6.13
PSG Balanced A - 5.86 - 9.99 - 2.31 1.52 3.49 4.96
PSG Flexible A - 5.76 - 9.19 - 1.67 2.18 4.47 5.92
PSG SA Equity D - 11.87 - 18.13 - 9.78 - 4.26 - -
PSG Equity A - 9.93 - 16.21 - 6.14 - 0.46 2.29 2.61
PSG Global Flexible FF A - 4.37 - 10.99 - 0.74 4.63 6.07 -
PSG Global Equity FF A - 6.52 - 13.79 - 1.39 5.00 6.38 6.97
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 12.56 - 14.08 - 5.91 1.30 2.63 0.88
PSG Global Equity USD - 14.21 - 16.59 - 6.36 1.74 2.89 0.65
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 3.44 7.29 7.20 7.49 7.50 7.29
PSG Direct Low Equity - 1.91 - 2.22 1.81 3.85 4.99 5.70
PSG Direct Managed - 6.05 - 10.19 - 2.59 1.23 3.27 4.72
PSG Direct Aggressive - 6.85 - 11.91 - 3.06 1.59 3.91 -
PSG Direct Global Managed - 4.59 - 11.40 - 1.20 4.15 5.58 -
PSG Direct Global Aggressive - 5.94 - 13.15 - 1.59 4.39 5.79 -
  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 - 9.92 - 8.49 - 4.02 - 0.37 1.40 -
PSG Wealth SA Property Equity Portfolio - 6.08 - 10.54 - 8.77 - 4.29 - -
PSG Wealth SA Dividend Income Equity Portfolio - 8.44 - 7.52 - 1.24 1.55 - -
PSG Wealth Offshore Equity Portfolio (USD) 0.77 4.16 8.41 12.46 12.09 -
PSG Wealth Managed Volatility Equity Portfolio - 7.48 - 13.19 - 8.16 - 4.99 - -
  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

  • Our recommendation for SPG SJ is overweight; click here to read the full report on our secure site.
  • Management believes that recent contract wins in the consumer-facing operations and the strong African commodities environment, combined with improved operational efficiencies, should support earnings.
  • Trading at a forward P/E of 7.19 times and an implied rump P/E of 6.15 times (i.e. excluding SG Fleet), we feel that the share offers value and would recommend an overweight exposure.


company logo

Highlights

  • Our recommendation for VKE SJ is neutral; click here to read the full report on our secure site.
  • The group declared a year-end dividend of 103.38 cents per share, reflecting a 7.50% growth on the prior year.
  • The group is focussing on strengthening the balance sheet by reducing debt. The group’s see-through LTV ratio is 38.80%.


company logo

Highlights

  • Our recommendation for HWDN LN is neutral; click here to read the full report on our secure site.
  • The share is trading in line with the market, and as a result, we feel the share price is currently fairly valued, trading at a forward P/E of 15 times, slightly ahead of its longer-term average of 13.66.
  • We believe Howden is a good quality company with attractive operating margins, a high ROE and consistently strong free cash flow generation.


Corporate actions

Date Company Share code Expectation
14 October 2019 South African Reserve Bank SRB Cash Dividend
16 October 2019 Grit Real Estate Income Fund Limited GTR Cash Dividend
16 October 2019 Investec Bank Limited Redeemable Non-Participating Preference Shares IBRP1 Cash Dividend
16 October 2019 Investec Bank (Mauritius) Limited IMRP2 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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