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Rand firms against weaker dollar

19 February 2021

Rand firms against weaker dollar

Daily Investment Update

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Market commentary

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South Africa

The JSE struggled for direction on Thursday, tracking mixed Asian markets as investors awaited new catalysts. At the closing bell, the All Share fell 0.80%.

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United States

Tech sector losses and an unforeseen rise in weekly jobless claims weighed on the US stock market on Thursday. At market close, the Nasdaq lost 0.58%.

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Europe

A clutch of disappointing earnings reports overshadowed a rally in mining stocks on Thursday. At 18h30, the pan-European STOXX 600 was down 0.86%.

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Hong Kong

The Hang Seng lost 1.58% as stocks in Hong Kong slipped after signs of policy tightening tainted the appeal of riskier assets.

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Japan

Japanese markets fell on Thursday as investors questioned whether the Nikkei’s rally over the 30 000 mark reflects the real market. The index settled down at 0.19%.

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Rand

Relishing a boost from heightened demand for yields amid global monetary policy easing, the rand strengthened 0.21% against the dollar at the close of business.

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Precious metals

Bullion fell as hopes for an economic rebound raised US Treasury yields. At 18h45, the metal lost 1.07%, trading at $1 775.08 an ounce.

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Oil

Oil prices fell on Thursday despite a sharp drop in US crude inventories, as market participants took profits following days of buying spurred by a cold snap in the largest US energy-producing state. At market close, Brent crude was trading at $62.93 a barrel.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 66 575.45 - 0.80 4.52 16.44 18.03 18.57
Gold mining 3 358.94 - 3.71 - 12.93 - 16.15 - 42.78 15.26
Basic minerals 47 361.15 - 0.68 3.74 26.67 13.27 39.47
Industrial index 94 408.51 - 0.89 5.24 12.76 20.75 21.70
Financial 31 118.55 - 0.79 3.92 7.19 21.03 - 14.57
Fin + Ind 30 8 099.98 - 0.86 4.89 11.25 20.86 9.29
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) 31 493.34 - 0.38 2.42 7.52 14.54 10.14
S&P 500 PR (USD) 3 913.97 - 0.44 4.01 10.12 16.41 18.23
NASDAQ (USD) 13 965.49 - 0.58 7.52 17.58 25.97 44.78
FT-100 (GBP) 6 617.15 - 1.40 - 1.36 4.14 10.11 - 7.50
Hang Seng (HKD) 30 595.27 - 1.58 6.00 15.34 21.46 14.68
Nikkei 225 (JPY) 30 236.09 - 0.19 7.07 17.68 32.24 32.89
MSCI World (USD) 8 355.46 - 0.45 3.39 10.50 17.55 17.61
Frankfurt (EUR) 5 993.92 - 0.16 0.28 5.19 7.80 1.50
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 766.73 - 0.50 - 2.79 - 5.03 - 11.09 12.25
Platinum ($) 1 245.00 - 2.42 17.42 35.65 30.35 29.29
Brent Oil ($) 62.93 - 1.56 16.77 47.06 41.81 11.57
Rand/USD 14.63 0.21 2.18 4.91 15.10 2.80
Rand/GBP 20.42 - 0.59 - 0.02 0.30 10.49 - 5.09
Rand/EUR 17.69 - 0.23 2.60 3.16 13.58 - 8.83
ALBI (R) 769.64 - 0.06 1.79 3.72 8.60 8.75
  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. JP: Inflation Rate JAN
  2. UK: Retail Sales JAN
  3. EA: Current Account 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 FoF D 2.09 5.24 6.56 7.01 7.28 7.45
PSG Wealth Income FoF D 4.12 5.72 6.81 7.08 7.29 7.71
PSG Wealth Preserver FoF D 7.56 7.66 7.43 6.45 6.48 6.55
PSG Wealth Moderate FoF D 12.18 10.62 9.24 6.38 6.74 6.96
PSG Wealth Creator FoF D 20.58 16.39 12.02 6.38 7.18 8.32
PSG Wealth Global Preserver FF D - 8.78 4.31 9.17 - - -
PSG Wealth Global Moderate FF D - 3.88 11.09 14.40 15.13 10.89 7.65
PSG Wealth Global Flexible FF D - 1.88 18.28 19.64 - - -
PSG Wealth Global Creator FF D 0.32 18.81 24.16 23.42 19.02 14.91
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 12.95 12.19 11.60 6.25 7.51 8.48
PSG Wealth Global Creator FoF D USD 18.35 20.13 21.29 13.64 15.30 15.90
PSG Wealth Global Preserver FoF (USD) D 7.52 4.74 6.21 4.40 4.41 6.52
PSG Wealth Global Flexible FoF (USD) D 15.24 19.37 16.98 11.52 12.85 14.65
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.91 - 0.63 2.89 4.21 2.29 6.81
PSG Wealth Global Flexible FoF (GBP) D 9.37 12.73 13.10 11.90 9.73 14.90
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.73 4.65 5.92 6.38 6.67 6.82
PSG Income A 3.66 9.14 8.62 8.37 8.48 8.51
PSG Diversified Income 6.04 9.13 8.12 7.36 7.71 7.91
PSG Stable A 13.22 7.84 4.11 3.14 4.47 5.71
PSG Balanced A 22.97 13.69 3.73 1.41 3.01 5.40
PSG Flexible A 24.41 10.64 1.78 0.48 2.08 5.47
PSG SA Equity D 28.41 11.04 - 5.08 - 8.45 - -
PSG Equity A 26.33 12.57 - 0.26 - 2.72 - 0.55 5.04
PSG Global Flexible FF A 11.56 19.81 9.68 10.66 7.47 -
PSG Global Equity FF A 15.88 16.32 7.20 8.64 6.56 7.97
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 31.46 20.68 6.50 1.88 4.13 8.62
PSG Global Equity USD 36.24 18.55 4.69 0.51 3.59 8.95
  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 14.86 4.95 1.37 - 2.59 1.21 3.52
PSG Wealth SA Property Equity Portfolio 19.20 - 26.46 - 20.99 - 16.64 - 12.88 - 10.41
PSG Wealth Dividend Income Equity Portfolio 13.60 - 5.95 - 7.06 - 8.60 - 1.88 -
PSG Wealth Offshore Equity Portfolio (USD) 15.42 14.69 19.07 13.66 16.77 16.73
  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

  • Apple’s valuation has increased since our last report and seems stretched at current levels, trading at a premium to its peers and its historical average.
  • Although Apple has sound cash generation and a solid balance sheet, we expect it to come under pressure as global demand for iPhone and wearables weaken as markets become increasingly saturated.
  • As the installed base matures, we expect revenue from services to slow while revenue from other product divisions should normalise after the Covid-19 surge.
  • We maintain our underweight recommendation in the counter.
  • For more information about this counter, please contact your PSG Wealth adviser.


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Highlights

  • The balance sheet of LVMH remains strong, which is essential to protect the equity value in the current environment.
  • The group is trading at a forward PE of approximately 25 times, which is 17.6% above its five-year average.
  • Although there is still some uncertainty pertaining to the pandemic, we believe the group is well-positioned for a reopening of the economy if the rollout of vaccines is successful.
  • As a result, we maintain our neutral view on the counter.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • Coronation has a decent record of growing assets under management (AUM) over the past 17 years; however, AUM growth has been subdued over the past seven years, with funds up only 1.14% since September 2014.
  • This shows that the group has been heavily impacted by the subdued local economic environment, which has translated into share price underperformance relative to the benchmark over the past five years (Coronation down 7.7% versus Capped SWIX up 11.1%).
  • Based on the valuations and investment performance, we feel that the share is fairly valued and recommend a neutral exposure to Coronation.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
24 February 2021 Investec Bank (Mauritius) Limited Redeemable Cumulative Non-Participating No Par Value Preference Shares IMRP1 Cash Dividend
24 February 2021 Tharisa Plc THA 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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