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Global markets buoyed by COVID-19 vaccine hopeful

10 November 2020

Global markets buoyed by COVID-19 vaccine hopeful

Daily Investment Update

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THE PSG THINK BIG SERIES

Sign up to attend our next Think Big webinar in which PSG Wealth CIO, Adriaan Pask will be conducting a follow up interview with global economist and multi-asset investment professional Lawrence Hatheway. This time they will discuss the global economy with insights post the US elections.


Market commentary

SA flag Icon
South Africa

The JSE closed 1.63% in the green on Monday, as the election of Joe Biden as US president-elect boosted investor appetite for riskier assets.

US flag Icon
United States

Wall Street hit record highs on Monday after Pfizer and BioNTech announced that their COVID-19 vaccine was 90% successful in preventing the disease during the first successful late-stage clinical trials.

EU flag Icon
Europe

European shares jumped on Monday after phase three trails of drugmakers Pfizer and BioNTech COVID-19 vaccine was shown to be successful, and Biden’s election as US president-elect boosted hopes for a stable US trade policy going forward.

HK flag Icon
Hong Kong

The Hang Seng rose to 1.23% on Monday, as risk sentiment returned to markets after Biden’s victory in the US presidential race improved hopes for better Sino-US relations.

Japan flag Icon
Japan

Japan’s Nikkei jumped by 2.12% on Monday after Democrat Biden was declared US president-elect with hopes for further fiscal stimulus and measures to reduce the spread of COVID-19 boosting sentiment.

Rand Icon
Rand

Biden’s election win sparked investor appetite for riskier assets on Monday, firming the rand to R15/$ at 18h30.

Precious metals Icon
Precious metals

Gold retreated on Monday after Pfizer said its vaccine was more than 90% effective in preventing COVID-19 reducing the safe-haven appeal of the metal.

Oil Icon
Oil

Oil prices rose to $42.19 a barrel on Monday, after Biden clinched the US presidency and buoyed risk appetite, offsetting the worry about the effect on demand from the worsening COVID-19 pandemic.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 57 307.49 1.63 3.88 1.81 13.43 4.12
Gold mining 4 354.85 - 14.82 - 19.67 - 29.62 - 6.49 85.56
Basic minerals 37 121.81 - 0.71 - 5.65 - 11.11 14.99 14.99
Industrial index 86 260.89 1.41 9.47 10.24 14.25 16.91
Financial 27 478.02 7.21 9.14 8.27 8.55 - 29.83
Fin + Ind 30 7 332.68 2.86 9.38 9.72 12.71 - 0.41
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) 29 157.97 2.98 2.09 6.82 21.15 7.76
S&P 500 PR (USD) 3 550.50 1.18 2.21 6.39 22.24 16.94
NASDAQ (USD) 11 895.23 0.06 6.69 7.32 34.94 42.80
FT-100 (GBP) 6 186.29 4.67 2.96 3.40 5.83 - 13.16
Hang Seng (HKD) 26 016.17 1.23 7.95 6.75 10.47 - 2.82
Nikkei 225 (JPY) 24 839.84 2.12 5.19 11.99 24.07 8.29
MSCI World (USD) 7 435.16 1.30 2.28 6.59 22.26 12.09
Frankfurt (EUR) 5 668.00 4.94 0.34 3.32 20.10 - 1.00
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 957.45 0.49 2.36 - 5.05 15.92 33.45
Platinum ($) 904.00 0.33 2.84 - 7.19 20.05 1.12
Brent Oil ($) 39.45 - 3.62 - 7.50 - 12.51 32.74 - 36.10
Rand/USD 15.42 0.68 6.76 12.28 16.70 - 3.51
Rand/GBP 20.32 0.67 5.12 11.19 10.07 - 6.66
Rand/EUR 18.24 1.15 6.29 11.39 8.80 - 11.12
ALBI (R) 749.37 1.74 5.65 5.93 7.15 9.23
  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. Manufacturing production SEP
  1. CH: Inflation rate OCT
  2. UK: Unemployment 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 2.49 6.26 7.12 7.40 7.60 7.64
PSG Wealth Income FoF D 4.23 4.96 6.44 6.77 7.30 7.45
PSG Wealth Preserver FoF D 4.45 0.95 3.48 3.00 5.13 4.83
PSG Wealth Moderate FoF D 6.86 - 1.41 1.98 0.87 4.47 3.70
PSG Wealth Creator FoF D 15.42 - 0.86 2.19 - 0.55 4.46 3.07
PSG Wealth Global Preserver FF D - 8.08 8.58 10.22 - - -
PSG Wealth Global Moderate FF D - 2.12 12.79 13.04 7.60 10.23 7.15
PSG Wealth Global Flexible FF D 1.31 21.33 18.85 - - -
PSG Wealth Global Creator FF D 4.35 22.12 21.05 14.83 18.42 13.42
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 16.31 6.14 7.25 3.75 6.20 4.60
PSG Wealth Global Creator FoF D 24.32 16.42 15.49 11.03 14.39 10.94
PSG Wealth Global Preserver FoF (USD) D 8.79 1.35 4.12 2.44 3.63 4.25
PSG Wealth Global Flexible FoF (USD) D 20.04 14.61 13.34 9.44 12.21 10.28
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 3.77 - 0.90 3.50 2.21 2.54 6.24
PSG Wealth Global Flexible FoF (GBP) D 13.12 12.36 12.68 9.04 10.33 12.56
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.11 5.62 6.44 6.73 6.95 7.00
PSG Income A 5.05 9.74 9.02 8.85 8.68 8.56
PSG Diversified Income 5.89 6.71 6.75 7.04 7.41 7.47
PSG Stable A 5.56 - 6.14 - 2.87 - 0.06 2.32 3.11
PSG Balanced A 8.04 - 12.69 - 9.27 - 5.33 - 0.85 0.36
PSG Flexible A 7.94 - 18.18 - 11.56 - 7.03 - 1.92 - 0.01
PSG SA Equity D 19.06 - 20.72 - 18.09 - 13.04 - -
PSG Equity A 9.29 - 19.09 - 15.14 - 10.33 - 3.67 - 1.84
PSG Global Flexible FF A - 4.85 - 7.62 - 4.79 - 3.30 2.91 -
PSG Global Equity FF A - 4.44 - 15.18 - 9.48 - 6.18 1.33 1.21
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 16.75 - 11.88 - 9.54 - 6.15 - 0.38 0.64
PSG Global Equity USD 16.42 - 17.97 - 13.39 - 8.45 - 1.53 - 0.44
  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 6.27 - 11.25 - 7.81 - 5.44 - 0.89 - 0.42
PSG Wealth SA Property Equity Portfolio - 0.44 - 50.71 - 33.91 - 25.51 - 18.16 -
PSG Wealth Dividend Income Equity Portfolio 2.79 - 24.59 - 14.85 - 8.49 - 3.63 -
PSG Wealth Offshore Equity Portfolio (USD) 15.97 11.41 12.63 11.15 15.69 12.68
  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

  • Although the group is trading at a steep discount to itself and a 47% discount to our SOTP value, we believe that the market has mostly captured risks from UK operations due to Brexit, reinstated lockdowns, and volatility around African businesses.
  • As a result, we recommend an overweight position to investors with a high-risk tolerance only and stress that reversions toward long-term averages remain dependent on a medium-term recovery in profitability and normalisation in property fundamentals.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • The group is currently focussed on numerous initiatives to stabilise its operations, protect liquidity and strengthen its balance sheet.
  • We estimate that the local operations have access to sufficient liquidity to give it the flexibility to restructure its Australian operations.
  • However, the pandemic has resulted in a weak consumer environment, and the restructuring of the Australian operations has no easy solutions.
  • Currently, Woolworths is trading on a forward P/E multiple of 13.2 times relative to its five-year average of 14.3, which we feel fairly values the group.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • On an earnings basis, the group is trading at a forward P/E ratio of 11.5 times, which compares favourably with its long-term average of 13.7 times but trades in line with its historical premium to peers.
  • We feel that this fairly values the group, especially considering the increased pressure on the South African economy as well as the elevated debt levels.
  • Therefore, we maintain our neutral recommendation with regard to this counter.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
11 November 2020 Afrocentric Investment Corporation Limited ACT Cash Dividend
11 November 2020 Allied Electronics Corporation Limited AEL Cash Dividend
11 November 2020 Alviva Holdings Limited AVV Cash Dividend
11 November 2020 Remgro Limited REM 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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