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Increased US-China trade war concerns weigh on markets

13 June 2019

Increased US-China trade war concerns weigh on markets

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Market commentary

SA flag Icon
South Africa

The local bourse was pulled down somewhat on Wednesday by Naspers, which fell 1.10%, and miners; however, positive economic data supported retailers. The All Share closed 0.07% in the red.

US flag Icon
United States

Despite the lower US inflation rate that supported the possible interest rate cuts, US shares were weighed down by US President Donald Trump taking a tougher stance against China in the US-Sino tariff war. At 21h15, the Nasdaq was down 0.36%.

EU flag Icon
Europe

European shares fell on Wednesday due to banks and oil companies performing poorly, soft economic data from China and Washington toughening its stance on the trade talks with China. The STOXX 600 closed 0.30% lower.

HK flag Icon
Hong Kong

Financial markets in Hong Kong came under pressure on Wednesday as thousands of protestors and police clashed regarding a mass demonstration against legislation to extradite citizens to China. The Hang Seng ended 1.94% in the red.

Japan flag Icon
Japan

On Wednesday, Japan’s Nikkei lost Tuesday’s gains as investor fears increased because Trump took a firmer stance in the US-China trade negotiations. The benchmark Nikkei fell by 0.35%.

Rand Icon
Rand

The rand, which was the worst-performing emerging market currency, lost some ground on Wednesday due to rising uncertainty in the global arena. At 21h15, a dollar traded for R14.88.

Precious metals Icon
Precious metals

Bullion prices rose on Wednesday as investors flocked to the safe-haven after concerns around the US-China trade war flared up. At 21h15, an ounce of spot gold traded at $1 332.52.

Oil Icon
Oil

Despite OPEC extending supply cuts, oil prices plummeted on Wednesday due to US stockpiles rising and weaker demand. At 21h15, a barrel of Brent crude traded at $60.64.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 710.55 - 0.07 3.52 6.64 15.59 4.28
Gold mining 1 854.73 5.32 35.81 22.71 46.12 75.81
Basic minerals 33 731.92 1.14 8.24 6.13 25.20 19.61
Industrial index 79 471.96 - 0.54 3.51 7.93 15.15 - 2.23
Financial 42 440.99 - 0.42 - 1.17 4.68 7.59 3.70
Fin + Ind 30 7 919.40 - 0.50 1.92 6.83 12.52 - 0.32
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) 26 004.83 - 0.17 0.52 2.40 7.26 5.14
S&P 500 PR (USD) 2 879.84 - 0.20 0.15 3.69 9.75 5.44
NASDAQ (USD) 7 792.72 - 0.38 - 1.45 2.94 10.41 2.26
FT-100 (GBP) 7 367.62 - 0.42 2.82 4.39 9.71 - 0.11
Hang Seng (HKD) 27 308.46 0.77 - 1.46 - 1.19 9.63 - 7.12
Nikkei 225 (JPY) 21 129.72 - 0.35 - 1.01 - 0.94 - 1.13 - 5.70
MSCI World (USD) 6 198.31 - 0.25 0.63 4.68 9.29 1.46
Frankfurt (EUR) 5 409.09 - 0.33 0.46 5.13 10.85 - 5.66
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 336.65 1.06 3.99 3.06 7.38 2.95
Platinum ($) 817.00 1.74 - 4.78 - 1.92 3.81 - 9.82
Brent Oil ($) 62.29 0.30 - 11.80 - 6.44 3.47 - 18.53
Rand/USD 14.91 - 1.66 - 4.33 - 3.61 - 3.70 - 11.72
Rand/GBP 18.91 - 1.39 - 2.12 - 0.41 - 3.73 - 6.07
Rand/EUR 16.84 - 1.32 - 4.83 - 3.70 - 2.97 - 7.45
ALBI (R) 667.89 - 0.26 - 0.01 2.19 7.98 11.17
  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: Business confidence Q2
  2. ZA: Mining production APR
  3. ZA: Gold production APR
  1. DE: Inflation rate MAY
  2. EU: Industrial production APR
  3. JP: Industrial production MAY (Friday 06h30)

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 3.97 8.05 8.04 8.10 7.90 7.56
PSG Wealth Income FoF D 4.51 7.86 7.88 8.09 8.21 8.09
PSG Wealth Preserver FoF D 6.12 5.53 6.51 5.62 6.55 7.01
PSG Wealth Moderate FoF D 8.27 3.93 6.17 4.90 5.76 6.39
PSG Wealth Creator FoF D 10.15 1.38 5.64 4.81 3.95 4.52
PSG Wealth Global Moderate FF D 9.27 11.74 9.53 3.41 6.24 7.97
PSG Wealth Global Creator FF D 14.60 16.18 15.53 9.89 12.33 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 6.37 - 0.28 2.53 4.51 1.65 1.46
PSG Wealth Global Creator FoF D 12.11 4.13 8.40 11.20 7.44 6.82
PSG Wealth Global Preserver FoF (USD) D 5.79 3.86 2.65 4.44 3.91 3.25
PSG Wealth Global Flexible FoF (USD) D 9.57 5.22 7.15 10.02 7.64 6.30
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 4.22 7.26 2.78 7.50 7.51 6.97
PSG Wealth Global Flexible FoF (GBP) D 8.84 10.13 6.75 13.37 11.44 11.37
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.60 7.28 7.36 7.46 7.28 7.08
PSG Income A 4.25 8.40 8.29 8.49 8.18 7.87
PSG Diversified Income 3.98 7.14 7.52 7.78 7.79 7.65
PSG Stable A 1.21 1.81 5.23 5.60 5.65 6.39
PSG Balanced A - 1.48 - 3.67 2.78 4.19 3.83 5.66
PSG Flexible A - 0.62 - 3.11 3.28 4.93 4.69 6.51
PSG SA Equity D - 5.13 - 10.99 - 1.76 2.69 - -
PSG Equity A - 3.00 - 7.44 1.05 4.41 1.69 3.80
PSG Global Flexible FF A 0.21 - 0.77 4.88 3.11 5.03 -
PSG Global Equity FF A - 0.59 - 3.27 4.85 4.08 4.71 6.43
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 2.08 - 11.42 - 1.48 4.84 0.98 1.02
PSG Global Equity USD - 2.66 - 13.21 - 1.29 6.02 0.70 0.60
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 3.84 7.32 7.41 7.62 7.45 7.21
PSG Direct Low Equity 0.89 1.07 4.64 5.21 5.17 5.99
PSG Direct Managed - 1.48 - 3.96 2.44 3.90 3.57 5.39
PSG Direct Aggressive - 1.28 - 4.15 2.66 4.09 3.64 -
PSG Direct Global Managed - 0.02 - 1.22 4.41 2.64 4.56 -
PSG Direct Global Aggressive - 0.51 - 2.78 4.40 3.26 4.36 -
  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 5.08 - 2.84 4.64 4.08 - -
PSG Wealth SA Property Equity Portfolio - 1.79 - 11.56 - 5.63 - 5.44 - -
PSG Wealth SA Dividend Income Equity Portfolio 7.57 - 1.33 7.39 6.46 - -
PSG Wealth Offshore Equity Portfolio (USD) 8.41 9.91 12.18 14.01 - -
PSG Wealth Managed Volatility Equity Portfolio 0.84 - 8.98 - 1.96 - - -
  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

company logo

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
19 June 2019 Arrowhead Properties Limited (REIT) AWA Cash Dividend
19 June 2019 Barloworld Limited 6 percent Cumulative Preference Shares BAWP Cash Dividend
19 June 2019 Delta Property Fund Limited (REIT) DLT Cash Dividend
19 June 2019 Gaia Infrastructure Capital Limited GAI Cash Dividend
19 June 2019 Hosken Consolidated Investments Ltd HCI Cash Dividend
19 June 2019 Huge Group Limited HUG Cash Dividend
19 June 2019 Invicta Holdings Ltd Preference Shares IVT Cash Dividend
19 June 2019 Life Healthcare Group Holdings Limited LHC Cash Dividend
19 June 2019 Marshall Monteagle Plc MMP Cash Dividend
19 June 2019 Mr Price Group Limited MRP Cash Dividend
19 June 2019 Quantum Foods Holdings Ltd QFH Cash Dividend
19 June 2019 Reunert Limited RLO Cash Dividend
19 June 2019 Sygnia Limited SYG Cash Dividend
19 June 2019 Vukile Property Fund Limited (REIT) VKE Cash Dividend
19 June 2019 Vodacom Group Limited VOD 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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