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JSE ends higher on improved retail trade

15 October 2020

JSE ends higher on improved retail trade

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The local bourse edged higher following the release of data that showed the contraction in retail sales for August softened to 4.20% y/y, from the 8.60% recorded in the previous month. The All Share gained 0.62%.

US flag Icon
United States

US stocks fell following a choppy session on Wednesday as investors digested a range of quarterly earnings reports from the financial sector. At 19h15, the Nasdaq lost 0.59%.

EU flag Icon
Europe

European stocks continued their decline on Wednesday as second wave jitters, political uncertainty and the rush to find a suitable vaccine weighed on sentiment. At 19h20, the FTSE 100 lost 0.58%.

HK flag Icon
Hong Kong

Stocks in Hong Kong traded higher on Wednesday after Chinese President Xi Jinping called for the protection of entrepreneurs and property rights, boosting investor confidence. The Hang Seng China Enterprises index gained 0.43% for the day.

Japan flag Icon
Japan

At 19h45, the benchmark Nikkei share average went up by 0.11% although gains were trimmed by the uncertainty surrounding more US stimulus aid and concerns over how long it’ll take to find a vaccine.

Rand Icon
Rand

At 19h50, the rand strengthened to R16.54/$, R19.43/€ and R21.53/£ after the 5-month long contraction in local retail sales softened in August.

Precious metals Icon
Precious metals

Gold prices rose on Wednesday as US political uncertainty, a weakened greenback and a slowing global economy lifted the metal’s appeal. At 20h00, spot gold traded at $1 902.42/oz.

Oil Icon
Oil

Oil prices were little changed on Wednesday as buyers were concerned that fuel demand will remain under pressure amid a second wave of infections in Europe. Brent crude traded at $43.13 a barrel at 20h00.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 55 394.23 0.62 - 1.37 0.57 12.54 3.21
Gold mining 5 456.80 3.32 - 6.86 0.60 29.48 127.20
Basic minerals 39 482.47 1.47 - 3.20 4.60 27.78 28.69
Industrial index 79 693.83 0.26 0.90 0.81 9.70 8.68
Financial 24 766.72 - 0.36 - 3.81 - 8.17 - 5.63 - 34.90
Fin + Ind 30 6 731.58 0.10 - 0.34 - 1.64 5.34 - 7.23
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) 28 514.00 - 0.58 1.92 7.60 20.44 9.01
S&P 500 PR (USD) 3 488.67 - 0.65 3.23 9.56 23.68 19.87
NASDAQ (USD) 11 768.73 - 0.80 6.49 12.43 38.80 47.63
FT-100 (GBP) 5 935.06 - 0.58 - 1.41 - 3.11 4.24 - 14.99
Hang Seng (HKD) 24 667.09 0.09 0.28 - 2.60 3.94 - 3.96
Nikkei 225 (JPY) 23 626.73 0.11 0.89 5.27 21.23 10.52
MSCI World (USD) 7 286.85 - 0.42 2.53 8.46 23.27 14.67
Frankfurt (EUR) 5 638.70 0.07 - 1.26 2.60 21.80 4.34
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 896.45 - 1.27 - 2.36 5.46 10.53 26.92
Platinum ($) 876.00 0.57 - 6.81 6.44 14.06 - 1.68
Brent Oil ($) 42.45 1.75 6.58 - 0.63 33.74 - 29.85
Rand/USD 16.57 - 0.65 0.32 0.93 11.88 - 11.12
Rand/GBP 21.56 - 1.37 - 0.85 - 2.61 8.10 - 13.39
Rand/EUR 19.47 - 0.71 1.53 - 2.24 4.75 - 18.36
ALBI (R) 712.50 0.01 - 0.46 2.47 8.06 2.63
  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. CN: Inflation Rate SEP
  2. US: Continuing Jobless Claims 03/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 2.72 6.51 7.26 7.47 7.65 7.68
PSG Wealth Income FoF D 4.88 4.87 6.49 6.64 7.23 7.47
PSG Wealth Preserver FoF D 8.37 2.68 3.78 3.59 4.87 5.27
PSG Wealth Moderate FoF D 11.99 1.89 2.44 1.85 3.99 4.22
PSG Wealth Creator FoF D 19.82 1.78 1.89 0.28 3.41 3.29
PSG Wealth Global Preserver FF D 2.67 14.43 11.65 - - -
PSG Wealth Global Moderate FF D 9.76 21.08 13.92 11.54 9.65 9.02
PSG Wealth Global Flexible FF D 13.83 30.77 20.06 - - -
PSG Wealth Global Creator FF D 20.76 34.53 22.38 19.36 17.65 15.96
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 17.14 8.06 6.62 3.67 5.80 4.71
PSG Wealth Global Creator FoF D 28.78 20.95 15.40 11.22 13.71 11.50
PSG Wealth Global Preserver FoF (USD) D 9.65 1.90 3.96 2.35 3.31 4.48
PSG Wealth Global Flexible FoF (USD) D 22.62 16.89 13.12 9.31 11.51 11.01
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 6.48 - 0.30 4.06 2.77 2.24 6.72
PSG Wealth Global Flexible FoF (GBP) D 18.16 14.60 13.65 9.67 9.75 13.47
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.33 5.93 6.61 6.85 7.05 7.06
PSG Income A 5.62 9.51 8.99 8.60 8.67 8.52
PSG Diversified Income 7.11 6.11 6.65 6.70 7.31 7.45
PSG Stable A 8.46 - 4.05 - 2.12 0.28 2.37 3.53
PSG Balanced A 13.47 - 8.04 - 7.94 - 4.16 - 0.57 1.18
PSG Flexible A 14.66 - 12.91 - 9.90 - 5.46 - 1.46 0.92
PSG SA Equity D 21.63 - 18.45 - 16.70 - 12.79 - -
PSG Equity A 16.63 - 13.60 - 13.40 - 8.67 - 3.40 - 0.91
PSG Global Flexible FF A 13.76 7.97 - 0.96 2.17 4.02 -
PSG Global Equity FF A 14.91 0.88 - 5.50 - 0.52 2.57 4.27
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 18.90 - 6.75 - 8.28 - 5.39 0.35 1.55
PSG Global Equity USD 18.31 - 12.40 - 12.01 - 7.51 - 0.76 0.61
  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 7.00 - 8.01 - 6.79 - 5.27 - 1.35 - 0.44
PSG Wealth SA Property Equity Portfolio - 14.24 - 50.80 - 33.38 - 26.18 - 18.47 -
PSG Wealth Dividend Income Equity Portfolio 1.36 - 22.20 - 13.47 - 8.71 - 3.76 -
PSG Wealth Offshore Equity Portfolio (USD) 22.14 16.69 13.89 11.95 15.34 13.55
  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 an overweight position for N91 LN, Click here to read the full report on our secure site or log in to myBase.
  • Sixty per cent of group earnings comes from outside of SA, providing protection against idiosyncratic risks but does expose investors to exchange rate translation risks.
  • On a P/E basis, we estimate that the group is trading slightly ahead of its European peers and at a slight discount to Schroders, the only peer with a similar emerging market (EM) presence.
  • The group is trading at the lower end of its European peers in terms of market capital to assets under management (AUM).
  • Given its historically strong net client cash flow (NCCF), we feel the current valuation multiples do not fully capture the fundamentals of the group.


company logo

Highlights

  • We recommend an underweight position for BAM US, Click here to read the full report on our secure site or log in to myBase.
  • The group’s plan to significantly develop retail property and land comes at a time where the real estate sector has seen significant downside following the spread of COVID-19 as businesses are forced to close their doors and people to stay inside.
  • Real estate constitutes about 25% of our intrinsic value and around 35% of group operating income; thus, a slowdown in real estate will have a material impact on earnings for the group.
  • The current price appears undervalued; however, we feel that that the near-term downside risks from COVID-19 on the real estate operations outweigh any potential near-term rerating towards the implied value per share.


company logo

Highlights

  • We recommend a neutral position for both Naspers and Prosus. Click here to read the full report on our secure site or log in to myBase.
  • Despite the regulatory and political risks that come with investing in Chinese stocks, we acknowledge that, to a large extent, Prosus and Naspers provide an alternative risk and reward profile due to the exposure to structural growth trends, which are not available through alternative local counters.
  • Naspers and Prosus trade at discounts of 23% and 13% respectively.
  • Given that management is determined to reduce the discounts over time, we suspect there will eventually be large value unlock for shareholders.
  • The share price for both Naspers and Prosus moves with a fairly high correlation to the USD/ZAR exchange rate.


Corporate actions

Date Company Share code Expectation
21 October 2020 Bowler Metcalf Limited BCF Cash Dividend
21 October 2020 Fairvest Property Holdings Limited (REIT) FVT Cash Dividend
21 October 2020 Heroit REIT Limited HET Cash Dividend
21 October 2020 Investec Bank Limited Redeemable Non-Participating Preference Shares IBRP1 Cash Dividend
21 October 2020 Investec Bank (Mauritius) Limited IMRP5 Cash Dividend
21 October 2020 Prosus N.V. PRX CASH DIVIDEND WITH OPTIONOption 1 - (Cash Dividend) Gross - TBALess DWT - TBANet - TBAOption 2 (Capital Repayment)Gross - TBADefault - Option 1 (Cash Dividend)
21 October 2020 Telemasters Holdings Limited TLM Cash Dividend
21 October 2020 Zarclear Holdings Limited ZCL General Offer
  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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