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Fading virus worries lift markets

13 February 2020

Fading virus worries lift markets

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

Local markets recorded gains for the second day in a row, marking Wednesday its best day in a week, as investors grew optimistic that the coronavirus will soon peak. The Top 40 rose 1.56% for the day.

US flag Icon
United States

The S&P 500 and Dow Jones indices reached all-time highs just after opening on Wednesday morning on the back of optimism that the Chinese virus is slowing. At 21h00, the Dow Jones grew 0.79% stronger.

EU flag Icon
Europe

European indices reached new heights on Wednesday thanks to a rally in luxury shares and positivity about the slowing virus outbreak in China. The pan-European index closed up 0.63%.

HK flag Icon
Hong Kong

The Hang Seng extended gains on Wednesday as the slowing pace of the coronavirus eased concerns around the epidemic’s effect on the global economy. At the close of trade, the Hang Seng Index was up 0.87%.

Japan flag Icon
Japan

Heavyweight SoftBank Group Corp boosted the Japanese benchmark index on Wednesday “after a US federal judge approved a merger between its US wireless unit Sprint Corp and T-Mobile US Inc”. The Nikkei closed up 0.74%.

Rand Icon
Rand

The local currency took a knock on Wednesday, after the release of poor SA economic data weighed it down. At 21h00, the rand traded R14.86 to the dollar.

Precious metals Icon
Precious metals

Bullion prices flattened on Wednesday as “a drop in the number of new coronavirus cases comforted markets that the epidemic’s effects could be contained”. Spot gold traded at $1 567.14/oz by 21h00.

Oil Icon
Oil

Investor optimism that the oil demand in the world’s second-largest economy will start to recover boosted the oil price by about 3% on Wednesday. Brent crude traded at $56.36 a barrel at 21h00.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 57 744.13 1.34 0.50 2.73 6.17 10.72
Gold mining 2 708.52 - 1.25 - 1.93 14.67 6.91 82.66
Basic minerals 34 878.01 2.25 - 2.04 4.89 11.03 20.89
Industrial index 79 248.42 0.93 3.46 6.47 3.74 14.00
Financial 38 146.47 1.01 - 1.74 - 6.06 5.64 - 5.34
Fin + Ind 30 7 623.08 0.96 1.62 1.83 4.13 7.00
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) 29 551.42 0.94 2.66 7.30 15.36 18.99
S&P 500 PR (USD) 3 379.45 0.65 3.62 9.82 18.33 25.58
NASDAQ (USD) 9 638.94 0.11 5.08 14.17 21.74 33.31
FT-100 (GBP) 7 534.37 0.48 - 0.65 2.84 5.89 10.54
Hang Seng (HKD) 27 823.66 0.87 - 2.81 2.92 8.96 2.37
Nikkei 225 (JPY) 23 861.21 0.74 0.05 1.63 16.50 16.81
MSCI World (USD) 7 141.14 0.57 2.48 7.59 15.85 21.38
Frankfurt (EUR) 6 116.31 0.89 1.98 3.51 17.72 23.58
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 566.75 - 0.06 1.16 7.68 4.31 19.45
Platinum ($) 966.00 0.10 - 0.72 10.02 12.98 22.43
Brent Oil ($) 54.01 1.39 - 16.88 - 13.14 - 7.72 - 12.19
Rand/USD 14.91 - 0.81 - 3.62 - 0.79 2.36 - 6.12
Rand/GBP 19.31 - 0.75 - 3.28 - 1.34 - 4.02 - 6.84
Rand/EUR 16.20 - 0.40 - 1.13 0.65 4.31 - 2.27
ALBI (R) 709.10 0.10 1.28 3.27 5.59 10.28
  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 DEC
  2. Mining production DEC
  3. 2020 State of the Nation Address
  1. CN: FDI (YTD) YoY JAN
  2. US: Inflation rate 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 3.82 7.87 7.92 7.97 8.01 7.79
PSG Wealth Income FoF D 3.69 7.83 7.84 7.84 8.25 7.97
PSG Wealth Preserver FoF D 3.83 7.40 6.18 5.92 6.49 6.36
PSG Wealth Moderate FoF D 4.87 8.33 5.14 5.16 6.62 5.55
PSG Wealth Creator FoF D 6.20 7.42 3.06 3.50 7.30 3.81
PSG Wealth Global Moderate FF D 6.33 20.66 15.25 10.02 6.39 8.52
PSG Wealth Global Creator FF D 13.52 33.52 23.37 18.37 13.44 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 7.89 11.86 4.64 6.10 8.38 3.68
PSG Wealth Global Creator FoF D 13.89 23.88 12.79 14.04 15.67 9.99
PSG Wealth Global Preserver FoF (USD) D 4.47 7.95 4.66 4.49 6.90 4.26
PSG Wealth Global Flexible FoF (USD) D 10.33 15.82 9.97 11.26 13.38 8.91
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 1.03 7.03 6.75 3.76 8.78 6.45
PSG Wealth Global Flexible FoF (GBP) D 2.92 15.47 12.58 9.55 15.47 11.06
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.50 7.20 7.25 7.35 7.38 7.20
PSG Income A 3.93 8.06 8.10 8.29 8.35 8.01
PSG Diversified Income 3.48 6.86 6.81 7.26 7.67 7.59
PSG Stable A 2.14 0.86 2.07 3.64 5.76 5.35
PSG Balanced A 0.84 - 4.51 - 2.51 0.13 4.72 3.39
PSG Flexible A - 0.12 - 4.74 - 2.41 - 0.22 5.63 4.05
PSG SA Equity D - 6.51 - 19.01 - 14.33 - 8.58 - -
PSG Equity A - 1.25 - 10.25 - 7.25 - 4.07 5.12 0.86
PSG Global Flexible FF A 2.14 3.83 5.71 3.38 5.44 -
PSG Global Equity FF A 2.55 2.40 4.81 3.41 6.52 5.84
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 5.73 - 2.85 - 3.95 0.21 8.35 1.97
PSG Global Equity USD 6.26 - 3.94 - 4.60 0.36 9.42 1.84
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 3.48 7.03 7.04 7.31 7.50 7.28
PSG Direct Low Equity 1.87 0.26 1.43 3.04 5.41 4.85
PSG Direct Managed 0.37 - 5.00 - 2.92 - 0.41 4.47 3.09
PSG Direct Aggressive - 0.17 - 4.96 - 2.48 - 0.91 5.14 -
PSG Direct Global Managed 1.91 3.35 5.23 2.91 4.96 -
PSG Direct Global Aggressive 2.17 2.46 4.68 2.94 5.64 -
  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 2.14 - 1.85 - 3.70 - 0.54 4.98 -
PSG Wealth SA Property Equity Portfolio - 5.29 - 16.24 - 10.90 - 7.05 - 4.57 -
PSG Wealth SA Dividend Income Equity Portfolio - 0.15 - 6.51 - 7.24 - 0.21 - -
PSG Wealth Offshore Equity Portfolio (USD) 14.79 23.28 13.67 17.03 17.48 -
PSG Wealth Managed Volatility Equity Portfolio - 0.08 - 7.36 - 9.14 - 5.04 - -
  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
19 February 2020 Hudaco Industries Limited HDC Cash Dividend
19 February 2020 Firstrand Bank Limited Non-Cumulative Variable Rate Non-Redeemable B Preference Shares FSRP Cash Dividend
19 February 2020 Mix Telematics Limited MIX Cash Dividend
19 February 2020 Investec Bank (Mauritius) Limited IMRP3 Cash Dividend
19 February 2020 Investec Bank (Mauritius) Limited IMRP6 Cash Dividend
19 February 2020 Investec Bank (Mauritius) Limited IMRP7 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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