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Averted US-Mexico tariff increase boosts the rand

11 June 2019

Averted US-Mexico tariff increase boosts the rand

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Market commentary

SA flag Icon
South Africa

The JSE closed higher with other global equity markets on Monday, boosted by weekend news that the US will not impose tariffs on Mexico over the lack of security at their mutual border. The All Share closed 0.66% in the green.

US flag Icon
United States

Wall Street opened higher on Monday, after the US abandoned its plans to impose tariffs on Mexican goods. Shortly after the JSE closed, the Dow was up by 0.64%.

EU flag Icon
Europe

Strong Chinese export data and the US-Mexico no tariffs pronouncement bolstered European markets on Monday, automobile shares also got a lift after signals that Fiat-Chrysler and Renault could revive their merger. Shortly after the JSE closed, the FTSE 100 had gained 0.59% and the CAC 40 0.25%.

HK flag Icon
Hong Kong

Hong Kong shares tracked global markets on Monday after the US abandoned plans to impose tariffs on Mexico and as global investors hoped for lower US interest rates on the back of lacklustre jobs data. The Hang Seng index ended up 2.27%.

Japan flag Icon
Japan

The Nikkei rose on Monday, led by automakers after US President Donald Trump withdrew a threat to impose tariffs on Mexican imports. The benchmark Nikkei rose 1.20%.

Rand Icon
Rand

The rand was also boosted by buoyant global markets after the US and Mexico averted a 5% tariff on Mexican imports, and as expectations grew that the US Fed might cut interest rates. At 18h50, a dollar traded at R14.82.

Precious metals Icon
Precious metals

Gold retreated on Monday after an agreement late last week between the US and Mexico to avert a tariff war curbed safe-haven demand for the metal. At 18h50 an ounce of spot gold traded at $1 327.32.

Oil Icon
Oil

Oil prices rose on Monday after Saudi Arabia said Opec and Russia should keep supplies restricted at current levels. At 18h50, a barrel of Brent crude traded at $63.51.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 481.05 0.66 3.09 6.60 17.81 3.82
Gold mining 1 767.57 - 3.77 29.43 14.45 41.96 67.54
Basic minerals 32 905.32 - 0.71 5.59 3.84 25.23 16.30
Industrial index 79 828.24 0.87 3.93 9.27 18.51 - 1.66
Financial 42 502.35 1.72 - 1.06 4.39 9.70 3.66
Fin + Ind 30 7 947.01 1.14 2.24 7.61 15.44 0.06
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) 26 062.68 0.30 0.75 3.05 7.95 5.39
S&P 500 PR (USD) 2 886.73 0.47 0.38 5.77 10.57 5.99
NASDAQ (USD) 7 823.17 1.05 - 1.07 5.90 12.06 3.44
FT-100 (GBP) 7 375.54 0.59 2.93 5.19 12.42 0.29
Hang Seng (HKD) 27 578.64 2.29 - 2.21 - 0.99 8.87 - 7.52
Nikkei 225 (JPY) 21 134.42 1.20 - 0.98 1.34 0.68 - 4.92
MSCI World (USD) 6 201.08 0.41 0.67 4.39 10.63 1.88
Frankfurt (EUR) 5 377.74 0.77 - 0.39 4.58 11.65 - 5.98
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 328.60 - 0.43 3.36 2.67 6.56 2.26
Platinum ($) 799.00 - 0.50 - 6.88 - 2.56 1.52 - 11.02
Brent Oil ($) 62.29 - 1.58 - 11.80 - 5.25 3.87 - 18.53
Rand/USD 14.78 1.25 - 3.16 - 2.77 - 4.65 - 13.16
Rand/GBP 18.75 1.49 - 0.55 0.43 - 5.21 - 7.01
Rand/EUR 16.73 1.19 - 3.96 - 3.06 - 4.19 - 8.59
ALBI (R) 664.71 0.39 - 0.43 1.75 7.38 10.31
  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. ZA: Manufacturing production APR
  1. UK: Unemployment rate APR
  2. US: 3-year note action

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 8.00 8.02 8.09 7.90 7.56
PSG Wealth Income FoF D 4.41 7.68 7.82 8.09 8.19 8.09
PSG Wealth Preserver FoF D 5.59 5.16 6.27 5.55 6.41 7.03
PSG Wealth Moderate FoF D 7.25 3.26 5.71 4.57 5.52 6.41
PSG Wealth Creator FoF D 8.89 - 0.02 4.96 3.82 3.70 4.45
PSG Wealth Global Moderate FF D 10.51 15.25 10.03 4.37 5.92 8.64
PSG Wealth Global Creator FF D 14.43 19.77 15.75 10.80 11.66 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 4.85 - 0.90 2.10 3.98 1.59 1.36
PSG Wealth Global Creator FoF D 8.82 2.69 7.45 10.41 7.19 6.56
PSG Wealth Global Preserver FoF (USD) D 5.07 3.57 2.59 4.61 3.66 3.19
PSG Wealth Global Flexible FoF (USD) D 7.43 4.39 6.59 9.99 7.19 6.10
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 4.75 7.03 3.16 7.61 7.14 6.88
PSG Wealth Global Flexible FoF (GBP) D 7.54 9.59 6.35 13.25 10.81 11.12
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.60 7.28 7.36 7.46 7.28 7.08
PSG Income A 4.22 8.24 8.25 8.49 8.18 7.86
PSG Diversified Income 3.59 6.64 7.38 7.71 7.76 7.64
PSG Stable A 0.39 1.12 5.04 5.46 5.66 6.47
PSG Balanced A - 2.66 - 4.39 2.62 3.88 3.88 5.83
PSG Flexible A - 1.58 - 3.81 3.04 4.53 4.74 6.69
PSG SA Equity D - 6.47 - 13.30 - 2.06 1.75 - -
PSG Equity A - 4.25 - 8.50 0.72 3.81 1.81 4.05
PSG Global Flexible FF A 0.57 2.08 5.69 3.91 5.12 -
PSG Global Equity FF A - 0.67 - 0.67 5.66 4.84 4.84 7.07
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 4.52 - 12.70 - 2.10 3.88 1.03 0.71
PSG Global Equity USD - 5.31 - 14.59 - 1.93 4.96 0.73 0.27
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 3.69 7.05 7.34 7.60 7.44 7.20
PSG Direct Low Equity 0.06 0.41 4.46 5.05 5.18 6.07
PSG Direct Managed - 2.61 - 4.68 2.26 3.57 3.63 5.56
PSG Direct Aggressive - 2.05 - 4.23 2.62 3.88 3.72 -
PSG Direct Global Managed 0.34 1.62 5.21 3.44 4.64 -
PSG Direct Global Aggressive - 0.43 - 0.10 5.20 4.03 4.48 -
  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 3.68 - 4.32 3.95 3.23 - -
PSG Wealth SA Property Equity Portfolio 4.46 - 5.80 - 2.43 - 3.54 - -
PSG Wealth SA Dividend Income Equity Portfolio 5.50 - 2.74 6.68 5.79 - -
PSG Wealth Offshore Equity Portfolio (USD) 8.06 9.34 11.92 13.37 - -
PSG Wealth Managed Volatility Equity Portfolio 0.92 - 9.11 - 1.88 - - -
  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 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.


company logo

Highlights

  • We recommend an underweight positioning for HEIA NA; click here to read the full report on our secure site.
  • New product innovations such as low and non-alcoholic extensions to the Heineken brand is a growth prospect, although the threat of it cannibalising other brands within the portfolio is present.
  • We believe the share is fully valued at current levels, trading at a forward P/E of 20.83 times, one standard deviation away from its average forward P/E of 19.47 times.


Corporate actions

Date Company Share code Expectation
12 June 2019 Afrimat Limited AFT Cash Dividend
12 June 2019 Balwin Properties Limited BWN Cash Dividend
12 June 2019 Combined Motor Holdings Limited CMH Cash Dividend
12 June 2019 Cartrack Holdings Limited CTK Cash Dividend
12 June 2019 CastleView Property Fund Ltd (REIT) CVW Cash Dividend
12 June 2019 Dipula Income Fund Limited "A" Shares DIA Cash Dividend
12 June 2019 Dipula Income Fund Limited "B" Shares DIB Cash Dividend
12 June 2019 eMedia Holdings Limited EMH Cash Dividend
12 June 2019 eMedia Holdings Limited "N" Ordinary Shares EMN Cash Dividend
12 June 2019 Exemplar REITail Limited (REIT) EXP Cash Dividend
12 June 2019 Hospitality Property Fund Ltd (REIT) HPB Cash Dividend
12 June 2019 Hosken Passenger Logistics& Rail Ltd HPR Cash Dividend
12 June 2019 Investec Property Fund Limited (REIT) IPF DRIP
Option 1 - (Cash Dividend) Gross - ZAR0.7350878Less 20% DWT - ZAR0.14701756Net - ZAR0.58807024
Option 2 (Reinvestment)Reinvestment Price - To be announced
Default - Option 2 (Cash Dividend))
12 June 2019 MediClinic International Plc MEI Cash Dividend
12 June 2019 Newpark REIT Ltd NRL Cash Dividend
12 June 2019 Nvest Financial Holdings Ltd NVE Cash Dividend
12 June 2019 Tradehold Limited TDH DRIP
Option 1 - (Cash Dividend) Gross - ZAR0.55Less 20% DWT - ZAR0.11Net - ZAR0.44
Option 2 (Reinvestment)Reinvestment Price - To be announced
Default - Option 1
12 June 2019 Tsogo Sun Holdings Ltd TSH Cash Dividend
12 June 2019 Wilderness Holdings Ltd WIL Voluntary Offer
12 June 2019 Telkom SA Limited TKG 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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