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SARB unexpectedly cuts repo rate

17 January 2020

SARB unexpectedly cuts repo rate

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The JSE gained slightly after the Reserve Bank cut its repo rate by 25 bps on Thursday. The JSE closed 0.26% higher.

US flag Icon
United States

Wall Street hit record highs on Thursday, with the S&P 500 crossing the 3 300 mark for the first time, as upbeat earnings from Morgan Stanley and a tech rally added to optimism from an initial US-China trade deal. At 19h30, the Nasdaq traded 0.63% higher.

EU flag Icon
Europe

European shares rose on Thursday after the US and China signed the Phase 1 trade deal, giving some relief to markets that have been roiled by the 18-month standoff between the world’s two-largest economies. The CAC40 closed up by 0.11%.

HK flag Icon
Hong Kong

Chinese stocks fell on Thursday after Beijing and Washington signed a Phase 1 deal to defuse their trade war, with financial markets taking on a cautious tone as many thorny issues remained unresolved. The Shanghai Composite Index closed down 0.52%.

Japan flag Icon
Japan

Japanese shares were little changed on Thursday after the US and China signed an interim deal to defuse their 18-month long trade war, with factory automation machinery makers under pressure on soft industry data. The Nikkei added 0.07%.

Rand Icon
Rand

The rand extended losses on Thursday as investors pondered a widely unexpected 25 basis point repo rate cut by the Reserve Bank. Shortly after the announcement, the rand erased earlier gains and now looks on track for its third consecutive week of losses.

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Precious metals

Gold prices edged lower on Thursday, as optimism over a preliminary trade deal between the US and China increased risk appetite, although concerns about tariffs and unresolved core issues remained.

Oil Icon
Oil

Oil prices rose on Thursday after the US and China signed an eagerly awaited Phase 1 trade deal, giving some relief to markets, but gains were capped as the International Energy Agency (IEA) said it expected oil production to outstrip demand.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 217.43 0.26 2.69 4.13 2.12 11.98
Gold mining 2 745.84 1.35 5.77 12.43 38.54 109.03
Basic minerals 35 797.07 1.22 0.76 11.41 10.45 31.47
Industrial index 78 276.37 - 0.20 6.60 3.57 0.24 10.53
Financial 39 096.60 - 0.06 - 1.64 - 2.87 - 3.91 - 3.75
Fin + Ind 30 7 626.56 - 0.15 3.56 1.22 - 1.17 5.47
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) 29 297.64 0.92 3.82 9.16 8.48 23.99
S&P 500 PR (USD) 3 316.81 0.84 4.07 11.49 11.51 29.35
NASDAQ (USD) 9 258.70 0.08 6.05 13.92 12.71 33.25
FT-100 (GBP) 7 609.81 - 0.39 1.35 6.88 2.54 16.09
Hang Seng (HKD) 28 883.04 0.38 5.00 8.47 2.03 11.27
Nikkei 225 (JPY) 23 933.13 0.07 0.09 6.69 12.24 19.57
MSCI World (USD) 7 010.90 0.15 3.22 9.26 8.89 24.22
Frankfurt (EUR) 5 990.13 - 0.02 0.16 5.99 8.03 22.85
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 551.90 0.45 5.53 3.82 9.58 20.36
Platinum ($) 1 033.00 3.51 10.84 16.72 22.54 29.13
Brent Oil ($) 64.00 - 0.76 - 1.87 8.95 - 3.73 5.54
Rand/USD 14.41 - 0.22 0.00 2.31 - 4.07 - 5.15
Rand/GBP 18.84 - 0.38 0.21 1.06 - 8.49 - 6.82
Rand/EUR 16.05 - 0.03 0.02 2.55 - 2.87 - 2.82
ALBI (R) 698.50 - 0.02 1.09 0.66 1.74 9.12
  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. China: GDP growth rate Q4
  2. UK: Retail sales DEC
  3. EU: Inflation rate DEC

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 3.85 7.90 7.97 8.00 8.02 7.78
PSG Wealth Income FoF D 3.45 8.13 7.56 7.87 8.26 8.04
PSG Wealth Preserver FoF D 3.51 8.08 4.68 6.01 6.15 6.76
PSG Wealth Moderate FoF D 4.49 10.35 3.05 5.55 6.46 6.54
PSG Wealth Creator FoF D 5.95 10.95 0.94 4.71 7.76 5.60
PSG Wealth Global Moderate FF D 9.65 18.59 10.82 8.70 3.64 8.92
PSG Wealth Global Creator FF D 13.54 33.10 17.86 16.87 10.20 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 5.83 14.07 2.28 6.39 7.70 4.08
PSG Wealth Global Creator FoF D 9.58 28.32 8.70 14.31 14.36 10.30
PSG Wealth Global Preserver FoF (USD) D 3.29 9.30 3.21 4.62 6.62 4.32
PSG Wealth Global Flexible FoF (USD) D 7.45 19.64 6.59 11.88 12.83 9.06
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 0.05 7.04 5.08 3.20 8.38 6.42
PSG Wealth Global Flexible FoF (GBP) D 3.35 17.70 8.55 8.94 14.62 11.29
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.52 7.23 7.27 7.36 7.37 7.19
PSG Income A 3.72 8.05 8.08 8.28 8.38 7.96
PSG Diversified Income 2.67 6.65 6.55 7.25 7.61 7.68
PSG Stable A 1.52 1.43 1.89 4.16 5.91 6.07
PSG Balanced A 1.06 - 2.60 - 2.66 1.29 5.36 4.98
PSG Flexible A 1.78 - 1.71 - 2.63 1.33 6.57 5.96
PSG SA Equity D - 4.53 - 14.74 - 12.13 - 5.79 - -
PSG Equity A - 0.30 - 7.42 - 7.68 - 1.98 6.75 3.27
PSG Global Flexible FF A 5.84 5.27 2.37 3.75 3.61 -
PSG Global Equity FF A 6.16 5.20 1.24 4.24 4.75 7.42
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 2.51 1.79 - 5.42 1.74 8.73 3.07
PSG Global Equity USD 2.66 1.59 - 6.37 2.21 9.85 3.12
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 3.07 6.95 6.93 7.31 7.50 7.28
PSG Direct Low Equity 1.41 1.00 1.25 3.61 5.63 5.66
PSG Direct Managed 1.01 - 2.82 - 3.09 0.84 5.18 4.75
PSG Direct Aggressive 1.82 - 2.31 - 3.39 0.54 5.68 -
PSG Direct Global Managed 5.60 4.79 1.91 3.28 3.14 -
PSG Direct Global Aggressive 5.80 4.75 1.20 3.59 3.86 -
  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 - 1.22 - 2.92 - 3.68 0.22 6.28 -
PSG Wealth SA Property Equity Portfolio - 4.31 - 5.94 - 9.90 - 5.03 - 2.62 -
PSG Wealth SA Dividend Income Equity Portfolio - 3.56 - 5.85 - 5.04 0.83 - -
PSG Wealth Offshore Equity Portfolio (USD) 10.12 23.85 9.73 16.67 16.50 -
PSG Wealth Managed Volatility Equity Portfolio - 1.43 - 5.85 - 7.76 - 3.22 - -
  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 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.


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Highlights

  • Our recommendation for MCG SJ is overweight; click here to read the full report on our secure site.
  • Having only listed on the JSE in February 2019, MultiChoice has already seen its shares grow by approximately 17% to R125.
  • At these levels, and trading at a forward P/E of 15 times, we believe that MultiChoice is still undervalued and is well-positioned to benefit from mass-market growth in both South and Southern Africa.


company logo

Highlights

  • Our recommendation for SOL SJ is underweight; click here to read the full report on our secure site.
  • Sasol is currently facing an increased risk profile through the decline in chemical product prices, a severely constrained balance sheet and slowing global economic backdrop.
  • The group’s chemicals business is also facing growing competition from additional ethylene capacity/supply into the market.
  1. 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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