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COVID-19 second wave dampened sentiment

13 November 2020

COVID-19 second wave dampened sentiment

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The second wave of COVID-19 infections around the world and uncertainties about when the first COVID-19 vaccine would be available dampened risk sentiment on Thursday, which also caused the JSE to close 1% in the red.

US flag Icon
United States

Wall Street opened lower on Thursday as COVID-19 infections in the US continued to rise and investors started to wonder about the roll-out of a possible vaccine.

EU flag Icon
Europe

Several better-than-expected earnings reports did not do much to persuade European investors that the global economy would turnaround quickly, forcing markets on the continent to close in the red.

HK flag Icon
Hong Kong

The Hang Seng dropped by 0.22% on Thursday, after data showed new bank loans in China fell to their lowest level in a year on tightened loan quotas.

Japan flag Icon
Japan

The Nikkei closed up by 0.68% on Thursday boosted by a rally in tech shares in the US overnight.

Rand Icon
Rand

As appetite for riskier assets dampened on Thursday, the local currency weakened slightly to R15.58/$ at 19h30.

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Precious metals

Concerns over the logistics of a possible COVID-19 vaccine boosted the gold price on Thursday, which rose to $1 882.35 an ounce at 19h30.

Oil Icon
Oil

The International Energy Agency (IEA) warned on Thursday that oil demand will likely not benefit from a COVID-19 vaccine until “well into 2021”, yet Brent crude remained strong at $44.06 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 57 031.19 - 1.00 2.70 0.16 14.42 4.03
Gold mining 4 274.34 0.30 - 20.98 - 23.58 - 7.42 82.86
Basic minerals 36 794.66 - 2.50 - 6.75 - 11.83 18.61 14.72
Industrial index 84 178.19 0.62 5.96 5.44 9.75 14.45
Financial 29 072.63 - 2.43 14.29 12.74 20.75 - 25.58
Fin + Ind 30 7 311.87 - 0.24 8.12 7.35 12.55 - 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) 29 080.17 - 1.05 0.96 4.48 23.71 7.47
S&P 500 PR (USD) 3 537.01 - 0.98 0.21 5.09 24.34 16.58
NASDAQ (USD) 11 786.43 2.01 1.84 9.53 28.76 40.56
FT-100 (GBP) 6 338.94 - 0.53 5.93 1.92 7.54 - 10.95
Hang Seng (HKD) 26 169.38 - 0.22 6.24 4.35 11.05 - 0.18
Nikkei 225 (JPY) 25 520.88 0.68 8.35 12.48 26.30 10.66
MSCI World (USD) 7 458.69 - 0.73 1.36 5.32 24.30 12.37
Frankfurt (EUR) 5 719.79 - 1.24 - 0.65 - 0.04 20.64 - 1.74
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 868.00 - 0.44 - 2.70 - 3.30 9.66 28.38
Platinum ($) 873.00 - 1.58 - 1.69 - 6.93 13.82 - 0.57
Brent Oil ($) 43.53 - 0.62 4.34 - 4.18 45.20 - 29.86
Rand/USD 15.65 - 0.06 4.91 9.83 15.13 - 4.85
Rand/GBP 20.53 0.61 3.47 9.63 8.86 - 7.10
Rand/EUR 18.47 - 0.31 4.43 10.24 7.31 - 12.45
ALBI (R) 743.59 - 0.19 4.44 5.42 6.56 8.30
  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. No economic data scheduled for release
  1. EA: Employment change Q3
  2. CH: Vehicle sales OCT

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 2.51 6.26 7.11 7.38 7.57 7.63
PSG Wealth Income FoF D 4.39 5.38 6.63 6.94 7.46 7.54
PSG Wealth Preserver FoF D 6.41 3.89 4.58 3.76 5.53 5.38
PSG Wealth Moderate FoF D 10.28 3.48 3.86 2.04 5.04 4.60
PSG Wealth Creator FoF D 19.79 5.55 4.71 0.82 4.88 4.12
PSG Wealth Global Preserver FF D - 6.39 8.87 10.09 - - -
PSG Wealth Global Moderate FF D - 0.42 13.16 12.70 7.37 8.97 7.22
PSG Wealth Global Flexible FF D 2.17 21.43 17.96 - - -
PSG Wealth Global Creator FF D 7.31 24.14 20.76 14.97 17.13 13.84
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 16.42 7.71 7.84 4.36 6.45 5.07
PSG Wealth Global Creator FoF D 24.23 17.94 15.60 11.74 14.37 11.44
PSG Wealth Global Preserver FoF (USD) D 9.31 2.66 4.59 2.93 3.97 4.49
PSG Wealth Global Flexible FoF (USD) D 18.63 14.96 12.82 9.59 12.17 10.37
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 3.88 0.11 3.49 2.67 2.84 6.43
PSG Wealth Global Flexible FoF (GBP) D 11.20 12.23 11.94 9.17 10.15 12.56
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.11 5.62 6.44 6.73 6.95 7.00
PSG Income A 4.90 9.78 9.05 8.90 8.74 8.57
PSG Diversified Income 6.35 7.98 7.28 7.42 7.71 7.69
PSG Stable A 9.67 - 0.57 - 0.60 1.63 3.43 4.17
PSG Balanced A 16.20 - 3.51 - 5.52 - 2.60 0.79 2.22
PSG Flexible A 17.77 - 8.13 - 7.18 - 4.01 - 0.19 2.15
PSG SA Equity D 28.32 - 10.42 - 13.89 - 9.99 - -
PSG Equity A 19.94 - 8.10 - 10.53 - 7.10 - 2.26 0.67
PSG Global Flexible FF A 6.70 2.89 - 0.97 - 0.40 3.42 -
PSG Global Equity FF A 9.14 - 3.77 - 5.21 - 2.74 2.18 3.65
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 25.41 - 3.04 - 5.45 - 3.30 0.96 2.89
PSG Global Equity USD 26.80 - 8.22 - 8.82 - 5.14 0.08 2.17
  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 13.28 - 3.06 - 4.28 - 3.14 0.48 1.17
PSG Wealth SA Property Equity Portfolio 14.48 - 45.01 - 30.30 - 22.48 - 15.64 -
PSG Wealth Dividend Income Equity Portfolio 12.82 - 15.52 - 10.44 - 5.67 - 1.27 -
PSG Wealth Offshore Equity Portfolio (USD) 16.85 14.04 13.90 12.50 16.08 13.56
  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

  • 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
18 November 2020 AH-Vest Limited AHL Cash Dividend
18 November 2020 Exemplar REITail Limited EXP Cash Dividend
18 November 2020 Investec Australia Property Fund Limited IAP Interest Distribution
18 November 2020 Investec Bank (Mauritius) Limited IMRP7 Cash Dividend
18 November 2020 London Finance and Investment Group Plc LNF Cash Dividend
18 November 2020 MIX Telematics Limited MIX Cash Dividend
18 November 2020 Newfunds Govi ETF Portfolio NFGOVI Cash Distribution
18 November 2020 Spear REIT Limited SEA DRIPOption 1 - (Cash Dividend) Gross - ZAR0.2934465Less 20% Withholding Tax - ZAR0.0586893 Net - ZAR0.2347572Option 2 (Reinvestment)Reinvestment Price - ZAR4.4565535Default - Option 1 (Cash)
18 November 2020 Vivo Energy Plc VVO 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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