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Persisting coronavirus concerns increase economic slowdown fears

11 February 2020

Persisting coronavirus concerns increase economic slowdown fears

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The JSE started the week slow, tracking global markets, due to continuous coronavirus concerns weighing on risk sentiment. The All Share weakened 0.75% for the day.

US flag Icon
United States

Analysts’ projections that Apple Inc will lose quarterly smartphone sales in China because of production suspension and retail closures due to the virus outbreak led to Wall Street opening lower on Monday. At 19h30, the Nasdaq stood 0.52% stronger.

EU flag Icon
Europe

The STOXX 600 leaned marginally higher on Monday as gains in the construction sector were offset by losses in oil and gas shares. The pan-European index closed up 0.07%.

HK flag Icon
Hong Kong

The rising death toll of the coronavirus dragged down Hang Seng shares on Monday as investors feared a global economic slowdown. At the close of trade, the Hang Seng Index was down 0.82%.

Japan flag Icon
Japan

Despite strong US employment data released on Friday, Japanese shares took a knock on Monday, weighed down by the coronavirus fears and disappointing corporate earnings. The Nikkei closed down 0.60%.

Rand Icon
Rand

The local currency made up some ground against the dollar on Monday as investors waited for key South African economic data to be released. At 19h30, the rand traded R15.02 to the dollar.

Precious metals Icon
Precious metals

Although gold prices reached its highest point in the week on Monday, gains were capped by the strong performance of the US dollar. Spot gold traded at $1 575.58/oz by 19h30.

Oil Icon
Oil

Since its January peak, the oil price has lost 20%. The latest hit being weaker demand from China in light of the virus outbreak. Brent crude traded at $53.98 a barrel at 19h30.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 56 847.74 - 0.75 - 1.06 0.75 4.21 10.47
Gold mining 2 802.46 - 1.44 1.47 18.17 17.07 92.21
Basic minerals 33 965.48 - 1.19 - 4.61 1.48 9.66 18.91
Industrial index 78 309.82 - 0.49 2.24 4.88 1.76 14.99
Financial 37 789.96 - 0.69 - 2.66 - 7.14 3.31 - 5.87
Fin + Ind 30 7 539.32 - 0.56 0.50 0.43 2.06 7.38
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) 29 276.82 0.62 1.71 6.34 12.67 19.39
S&P 500 PR (USD) 3 352.09 0.75 2.78 8.88 15.98 26.26
NASDAQ (USD) 9 520.51 - 0.51 5.05 13.16 21.75 32.07
FT-100 (GBP) 7 446.88 - 0.27 - 1.82 1.72 4.26 10.21
Hang Seng (HKD) 27 241.34 - 0.59 - 4.85 - 1.33 6.21 1.03
Nikkei 225 (JPY) 23 685.98 - 0.60 - 0.68 1.44 15.65 18.98
MSCI World (USD) 7 076.75 0.35 1.56 6.69 13.87 21.76
Frankfurt (EUR) 6 002.43 - 0.15 0.08 2.01 15.39 23.72
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 574.05 0.37 1.63 7.31 4.69 20.06
Platinum ($) 970.00 0.10 - 0.31 8.50 12.40 22.01
Brent Oil ($) 54.93 - 0.63 - 20.29 - 11.03 - 6.80 - 12.38
Rand/USD 14.96 0.25 - 5.29 - 0.17 2.67 - 9.89
Rand/GBP 19.32 0.18 - 4.01 - 0.67 - 4.25 - 9.78
Rand/EUR 16.32 0.69 - 3.46 0.79 4.73 - 5.90
ALBI (R) 706.12 - 0.39 0.91 2.90 4.48 8.45
  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. Unemployment rate 4Q19
  2. Manufacturing production DEC
  1. UK: Claimant Count Change JAN
  2. DE: ZEW Economic Sentiment Index FEB
  3. JPN: Balance of Trade JAN

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 3.81 7.90 7.93 7.99 8.03 7.80
PSG Wealth Income FoF D 3.70 7.84 7.88 7.94 8.21 8.01
PSG Wealth Preserver FoF D 4.37 7.53 6.21 6.20 6.22 6.53
PSG Wealth Moderate FoF D 5.80 8.47 5.05 5.60 6.00 5.84
PSG Wealth Creator FoF D 7.33 7.41 2.61 4.02 6.07 4.05
PSG Wealth Global Moderate FF D 7.82 21.82 16.05 10.13 6.10 9.57
PSG Wealth Global Creator FF D 14.57 34.01 24.56 18.43 12.86 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 8.36 11.07 3.52 6.09 7.51 3.54
PSG Wealth Global Creator FoF D 15.91 22.37 10.83 14.13 14.38 9.90
PSG Wealth Global Preserver FoF (USD) D 4.74 7.64 4.08 4.78 6.47 4.23
PSG Wealth Global Flexible FoF (USD) D 10.65 14.27 8.17 11.47 12.59 8.82
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 0.03 7.76 6.54 4.28 8.56 6.48
PSG Wealth Global Flexible FoF (GBP) D 4.38 14.70 11.30 10.13 14.92 11.05
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.50 7.20 7.25 7.35 7.38 7.20
PSG Income A 3.87 8.05 8.06 8.31 8.35 8.01
PSG Diversified Income 3.55 6.78 6.82 7.40 7.64 7.67
PSG Stable A 2.82 1.01 2.29 4.08 5.57 5.63
PSG Balanced A 1.99 - 4.27 - 2.13 0.83 4.13 3.84
PSG Flexible A 1.33 - 4.36 - 1.99 0.53 4.97 4.58
PSG SA Equity D - 5.06 - 18.62 - 13.89 - 7.56 - -
PSG Equity A 0.48 - 9.83 - 6.83 - 3.10 4.09 1.37
PSG Global Flexible FF A 5.22 4.93 7.17 4.01 5.40 -
PSG Global Equity FF A 5.97 3.39 6.27 4.18 6.46 7.16
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 6.48 - 4.39 - 4.16 0.56 7.48 2.02
PSG Global Equity USD 7.02 - 5.64 - 4.81 0.81 8.48 1.89
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 3.47 7.00 7.02 7.38 7.49 7.30
PSG Direct Low Equity 2.54 0.39 1.65 3.49 5.16 5.14
PSG Direct Managed 1.59 - 4.72 - 2.54 0.30 3.86 3.55
PSG Direct Aggressive 1.70 - 4.42 - 1.87 - 0.12 4.51 -
PSG Direct Global Managed 4.97 4.46 6.68 3.54 4.92 -
PSG Direct Global Aggressive 5.45 3.49 6.13 3.65 5.59 -
  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 2.57 - 2.47 - 4.20 0.09 3.72 -
PSG Wealth SA Property Equity Portfolio - 3.99 - 15.55 - 10.17 - 5.96 - 4.66 -
PSG Wealth SA Dividend Income Equity Portfolio 0.47 - 7.26 - 7.76 0.69 - -
PSG Wealth Offshore Equity Portfolio (USD) 15.40 22.53 12.09 17.07 16.62 -
PSG Wealth Managed Volatility Equity Portfolio 0.75 - 7.45 - 9.48 - 4.32 - -
  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 BID SJ is Neutral; click here to read the full report on our secure site.
  • Bidcorp is well-diversified and highly cash generative business. It is the largest foodservice distributor outside of the USA, with the largest geographic footprint when compared with its global peers.
  • We do remain cautious given the macroeconomic headwinds taking place at present.
  • We believe Bidcorp is a good-quality company with a stable ROE and a sustainable operating margin, although further margin expansion from this higher base is going to be more difficult.


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Highlights

  • Our recommendation for ANH SJ is overweight; click here to read the full report on our secure site.
  • We believe AB InBev is a good-quality company with an attractive and sustainable operating margin and a reliable cash conversion.
  • Operating margins across the group geographies are well ahead of peers, making further efficiency-enabled outperformance less likely.
  • Despite management believing that acquisitive growth and the extraction of synergies from acquisitions is a core competency of the group, balance sheet flexibility will likely limit such growth.


company logo

Highlights

  • Our recommendation for PFE US is overweight; click here to read the full report on our secure site.
  • The group has been able to protect its gross profit margins despite the challenging trading environment because of its scale and defensive nature.
  • We believe Pfizer is a high-quality company with a high ROE and an attractive and sustainable operating margin.


Corporate actions

Date Company Share code Expectation
12 February 2020 Kaap Agri Limited KAL Cash Dividend
12 February 2020 Nampak Limited 6.5 percent Cumulative Preference Shares NPP1 Cash Dividend
12 February 2020 Namk Limited 6 percent Cumulative Preference Shares NPKP Cash Dividend
12 February 2020 Tharisa Plc THA 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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