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Global shares pull back as second wave concerns rise

19 June 2020

Global shares pull back as second wave concerns rise

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The All Share closed slightly lower on Thursday as fears of a second wave of COVID-19 infections in China and the US fanned investor sentiment. The All Share closed down by 0.16%.

US flag Icon
United States

Wall Street opened lower on Thursday as infections in parts of the US threatened to upend bets of a swift economic recovery, with data showing weekly jobless claims remained elevated. The Dow Jones traded 0.10% in the red at 17h40.

EU flag Icon
Europe

European shares retreated on Thursday as a spike in COVID-19 cases in China and some US states triggered fears of a second wave of infections. The pan-European STOXX 600 Index fell 0.30%.

HK flag Icon
Hong Kong

Hong Kong shares recovered most of their earlier losses to end flat, helped by Beijing’s pledge for more reforms and liquidity to boost the world’s second-largest economy. The Hang Seng closed down by 0.02%.

Japan flag Icon
Japan

Japanese shares closed lower on Thursday as increasing cases of the novel coronavirus across the US and China raised concerns about a swift recovery in the global economy. The Nikkei fell 0.45%.

Rand Icon
Rand

The rand was weaker on Thursday as hopes of recovering economies were offset by fears of a second wave of coronavirus infections. The rand has now lost more than 18% of its value against the dollar in 2020. At 17h45, a dollar cost R17.50.

Precious metals Icon
Precious metals

Gold prices were steady on Thursday, with the metal caught between a strengthening US dollar and a pullback in global equities, as worries over new coronavirus cases delaying economic recovery weighed on markets.

Oil Icon
Oil

Oil prices were broadly stable on Thursday as Brent erased losses ahead of a meeting of OPEC members and their allies against the backdrop of demand concerns over new COVID-19 cases in China and elsewhere.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 53 941.22 - 0.16 5.01 40.99 - 5.03 - 4.66
Gold mining 4 068.51 - 0.12 - 15.49 50.10 59.41 125.08
Basic minerals 35 139.14 - 0.54 2.21 66.24 0.46 9.38
Industrial index 79 412.66 0.82 3.61 36.29 5.82 2.05
Financial 27 100.06 - 2.05 14.79 20.17 - 30.50 - 32.08
Fin + Ind 30 6 875.31 0.03 6.42 31.42 - 7.50 - 10.26
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) 26 080.10 - 0.15 6.32 31.86 - 6.53 0.97
S&P 500 PR (USD) 3 115.34 0.06 5.66 30.57 - 1.40 8.90
NASDAQ (USD) 9 943.05 0.33 7.78 42.62 13.21 26.31
FT-100 (GBP) 6 224.07 - 0.46 3.08 23.08 - 16.07 - 13.17
Hang Seng (HKD) 24 464.94 - 0.02 3.20 10.70 - 11.11 - 8.19
Nikkei 225 (JPY) 22 355.46 - 0.45 11.04 34.90 - 5.50 9.00
MSCI World (USD) 6 548.07 - 0.10 7.23 32.42 - 4.17 4.80
Frankfurt (EUR) 5 376.27 - 0.81 11.06 45.49 - 7.11 - 0.41
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 717.30 - 0.64 - 1.01 16.64 16.16 28.81
Platinum ($) 817.00 0.12 0.12 25.31 - 12.15 2.38
Brent Oil ($) 40.71 - 0.61 25.26 41.70 - 38.41 - 33.20
Rand/USD 17.46 - 1.58 4.55 1.38 - 22.78 - 22.05
Rand/GBP 21.70 - 0.55 3.26 - 5.09 - 17.15 - 19.63
Rand/EUR 19.58 - 1.18 2.19 - 3.04 - 23.84 - 21.47
ALBI (R) 693.37 0.40 - 0.21 11.98 0.12 3.30
  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. SACCI Business confidence MAY
  1. UK: Retail sales MAY
  2. US: Fed chair Powell speech

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 3.56 7.52 7.76 7.84 7.93 7.82
PSG Wealth Income FoF D 1.40 5.09 6.35 6.92 7.34 7.54
PSG Wealth Preserver FoF D - 0.78 1.24 2.95 4.76 4.64 5.37
PSG Wealth Moderate FoF D - 3.57 - 1.58 0.50 3.57 3.47 4.10
PSG Wealth Creator FoF D - 8.56 - 5.85 - 2.86 1.88 2.37 1.81
PSG Wealth Global Moderate FF D 13.47 17.65 13.83 12.38 7.56 8.61
PSG Wealth Global Creator FF D 16.15 24.68 19.48 19.01 14.53 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 4.45 2.02 0.86 2.28 4.28 1.77
PSG Wealth Global Creator FoF D - 1.32 9.67 6.33 8.67 11.33 7.92
PSG Wealth Global Preserver FoF (USD) D - 3.26 0.28 2.07 1.77 3.63 3.15
PSG Wealth Global Flexible FoF (USD) D 0.23 7.91 5.87 7.23 9.93 7.58
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 0.35 - 0.24 3.70 2.11 5.70 6.10
PSG Wealth Global Flexible FoF (GBP) D 4.96 8.22 9.01 7.37 12.51 10.95
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.34 6.98 7.13 7.23 7.33 7.22
PSG Income A 5.38 9.43 8.89 8.66 8.70 8.42
PSG Diversified Income 1.76 4.86 5.88 6.60 7.06 7.19
PSG Stable A - 6.70 - 5.92 - 2.51 1.29 2.64 3.22
PSG Balanced A - 12.32 - 12.81 - 8.92 - 2.82 - 0.24 0.32
PSG Flexible A - 16.93 - 17.45 - 11.23 - 4.28 - 1.07 - 0.14
PSG SA Equity D - 21.73 - 26.51 - 19.76 - 11.14 - -
PSG Equity A - 17.88 - 20.63 - 15.14 - 7.02 - 2.39 - 3.18
PSG Global Flexible FF A 0.68 0.79 - 0.72 3.63 3.38 -
PSG Global Equity FF A - 6.42 - 6.01 - 5.32 1.27 2.44 2.80
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 16.16 - 13.55 - 12.35 - 5.80 0.16 - 2.11
PSG Global Equity USD - 20.67 - 18.09 - 15.52 - 7.33 - 0.32 - 3.32
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 3.59 6.99 7.10 7.26 7.46 7.35
PSG Direct Low Equity - 6.51 - 5.85 - 2.82 0.94 2.38 2.87
PSG Direct Managed - 13.67 - 14.36 - 9.90 - 3.61 - 0.90 - 0.25
PSG Direct Aggressive - 13.80 - 15.05 - 10.50 - 3.73 - 0.81 -
PSG Direct Global Managed 0.45 0.33 - 1.17 3.16 2.91 -
PSG Direct Global Aggressive - 3.99 - 3.90 - 4.03 1.71 2.35 -
  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 - 9.24 - 13.06 - 8.39 - 1.38 - 0.33 -
PSG Wealth SA Property Equity Portfolio - 38.76 - 39.89 - 27.66 - 19.33 - 15.42 -
PSG Wealth Income Growth Equity Portfolio - 19.23 - 23.03 - 13.36 - 3.97 - 1.87 -
PSG Wealth Offshore Equity Portfolio (USD) - 2.53 8.08 9.61 11.15 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 a neutral position in the PSG Wealth House View SA Equity Portfolio. Click here to read the full report on our secure site or log in to myBase.
  • CFR SJ is trading at a forward P/E of approximately 31 times, which is above its five-year average and its 10-year average of approximately 21 times and 19 times, respectively; it is largely in line with its peers.
  • Despite the COVID-19 headwinds, Richemont is well-positioned, with a strong brand momentum. It continuously shows broad-based and strong top-line growth, attractive operating margins and robust cash generation.


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Highlights

  • We recommend an overweight position in the PSG Wealth House View SA Equity Portfolio. Click here to read the full report on our secure site or log in to myBase.
  • OMU SJ has less than 10% of the unsecured lending market, which provides a significant opportunity to drive future growth.
  • Due to Old Mutual’s size, balance sheet strength, historically low discount to group equity value and the low relative price to group equity value or embedded value compared with peers, we feel that the group will be more resilient to economic challenges in 2020 and offer a better potential for upside relative to peers.


company logo

Highlights

  • Our recommendation for BID SJ is Neutral; click here to read the full report on our secure site.
  • Bidcorp is well-diversified and highly cash generative business. It is the largest foodservice distributor outside of the USA, with the largest geographic footprint when compared with its global peers.
  • We do remain cautious given the macroeconomic headwinds taking place at present.
  • We believe Bidcorp is a good-quality company with a stable ROE and a sustainable operating margin, although further margin expansion from this higher base is going to be more difficult.


Corporate actions

Date Company Share code Expectation
24 June 2020 African Phoenix Investments Limited AXL Repurchase Offer
24 June 2020 FirstRand Bank Limited Dollar Custodial Certificate DCCUS2 Interest Payment
24 June 2020 Investec Bank (Mauritius) Limited IMRP4 Cash Dividend
24 June 2020 RMB Holdings Limited RMH Unbundling
24 June 2020 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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Author
author

Adriaan Pask PhD

Chief Investment Officer


At PSG Wealth
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