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Global markets rally on US-China trade optimism

02 July 2019

Global markets rally on US-China trade optimism

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Market commentary

SA flag Icon
South Africa

 The local bourse benefitted from easing trade tensions between the US and China, closing 0.46% in the green on Monday.

US flag Icon
United States

US stocks climbed on Monday, fuelled by gains in technology stocks on optimism for progress in US-China trade talks and signs of a likely reprieve for Chinese telecom company Huawei. At 20h30, the Nasdaq was up by 0.73%.

EU flag Icon
Europe

European shares surged on Monday, led by trade-sensitive technology stocks after the US and China agreed to restart trade negotiations. At 20h30, the DAX was up by 0.99%.

HK flag Icon
Hong Kong

US President Donald Trump’s decision to allow US firms to sell “high tech” products to Huawei led Asian investors to snap up shares in suppliers to the Chinese smartphone maker on Monday. The Shanghai Index traded 2.22% in the green at 20h30.

Japan flag Icon
Japan

The Nikkei jumped over 2% yesterday as risk sentiment improved after the US and China agreed to restart trade talks, while tech shares also got a lift on an easing of restrictions on Huawei. The Nikkei share average ended up 2.13%.

Rand Icon
Rand

The rand was slightly weaker against the dollar on Monday afternoon, giving up earlier gains, as markets continued to digest a ceasefire in the US-China trade war. At 20h30, a dollar traded at R14.14.

Precious metals Icon
Precious metals

Gold prices fell on Monday as the dollar rallied after the US and China agreed to restart trade talks, boosting investor appetite for riskier assets. At 20h30, an ounce of spot gold traded at $1 384.34.

Oil Icon
Oil

Oil prices rose over $2 a barrel on Monday as Opec and its allies looked on track to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week. A barrel of Brent crude traded at $65.76 at 20h30.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 58 472.52 0.46 5.27 3.22 12.73 4.90
Gold mining 1 896.76 - 5.64 17.45 26.07 38.32 79.84
Basic minerals 33 979.22 - 0.40 9.72 1.40 20.39 20.98
Industrial index 78 693.70 1.09 4.89 4.27 12.95 - 2.64
Financial 42 240.19 0.16 1.45 3.15 5.13 5.83
Fin + Ind 30 7 854.92 0.78 3.73 3.90 10.22 0.04
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) 26 717.43 0.44 7.79 2.36 15.91 12.69
S&P 500 PR (USD) 2 964.33 0.77 7.87 3.90 19.45 11.27
NASDAQ (USD) 8 091.16 1.06 8.65 3.64 22.61 8.92
FT-100 (GBP) 7 497.50 0.97 4.97 3.79 14.24 2.54
Hang Seng (HKD) 28 542.62 - 0.28 6.70 - 0.07 12.76 2.55
Nikkei 225 (JPY) 21 729.97 2.13 5.72 1.27 9.79 - 0.48
MSCI World (USD) 6 371.52 0.64 7.27 3.15 17.73 7.01
Frankfurt (EUR) 5 589.98 0.99 6.78 7.19 18.59 1.75
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 413.20 0.78 9.04 9.45 10.26 13.01
Platinum ($) 833.00 2.08 5.04 - 1.77 4.91 - 1.54
Brent Oil ($) 66.55 0.00 3.19 - 2.69 23.70 - 16.23
Rand/USD 14.15 - 0.49 4.57 0.22 2.70 - 3.07
Rand/GBP 17.87 0.01 4.41 4.05 2.17 1.22
Rand/EUR 15.96 0.03 3.27 - 0.28 3.51 0.23
ALBI (R) 680.36 - 0.18 2.06 2.59 7.43 11.27

  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. UK: Housing prices JUN
  2. EA: PPI MAY
  3. US: IBD/TIPP Economic Optimism JUL

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 3.96 8.02 8.01 8.08 7.92 7.58
PSG Wealth Income FoF D 4.59 7.95 7.97 8.20 8.21 8.11
PSG Wealth Preserver FoF D 5.85 4.88 6.17 5.82 6.27 6.84
PSG Wealth Moderate FoF D 7.49 2.95 5.45 5.21 5.17 6.05
PSG Wealth Creator FoF D 7.97 2.77 5.33 5.44 3.32 4.21
PSG Wealth Global Moderate FF D 9.17 4.82 7.69 4.27 5.78 7.75
PSG Wealth Global Creator FF D 18.97 9.09 13.44 10.92 11.71 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 10.15 3.29 3.13 6.71 2.00 1.72
PSG Wealth Global Creator FoF D 20.14 8.06 8.82 13.71 7.73 7.06
PSG Wealth Global Preserver FoF (USD) D 7.35 5.53 2.92 5.01 4.20 3.31
PSG Wealth Global Flexible FoF (USD) D 13.30 8.22 7.52 10.92 7.99 6.40
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 7.17 7.42 3.65 8.71 8.13 7.23
PSG Wealth Global Flexible FoF (GBP) D 13.69 11.45 7.43 14.97 12.14 11.82
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.60 7.28 7.36 7.46 7.28 7.08
PSG Income A 4.19 8.41 8.35 8.47 8.22 7.89
PSG Diversified Income 4.13 7.07 7.58 7.91 7.84 7.70
PSG Stable A 1.75 1.48 5.02 5.83 5.62 6.38
PSG Balanced A - 0.45 - 4.41 2.19 4.53 3.69 5.51
PSG Flexible A - 0.31 - 3.67 2.47 5.18 4.45 6.28
PSG SA Equity D - 6.63 - 10.36 - 2.70 2.26 - -
PSG Equity A - 3.03 - 7.99 - 0.07 4.53 1.46 3.45
PSG Global Flexible FF A 2.83 - 4.92 3.49 4.91 4.79 -
PSG Global Equity FF A 3.50 - 6.46 3.70 6.27 4.60 6.42
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 4.30 - 6.24 - 0.91 7.38 1.42 1.34
PSG Global Equity USD 4.87 - 7.42 - 0.61 8.77 1.24 0.97
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 3.87 7.30 7.46 7.66 7.49 7.24
PSG Direct Low Equity 1.46 0.69 4.39 5.45 5.13 5.96
PSG Direct Managed - 0.64 - 4.66 1.80 4.22 3.41 5.23
PSG Direct Aggressive - 0.60 - 5.49 1.65 4.62 3.40 -
PSG Direct Global Managed 2.60 - 5.35 3.02 4.44 4.31 -
PSG Direct Global Aggressive 3.02 - 6.31 3.16 5.29 4.20 -

  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 1.78 - 3.57 3.73 3.34 - -
PSG Wealth SA Property Equity Portfolio - 0.87 - 9.58 - 5.94 - 3.83 - -
PSG Wealth SA Dividend Income Equity Portfolio 1.58 - 1.46 6.21 5.73 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.10 13.20 12.49 14.38 - -
PSG Wealth Managed Volatility Equity Portfolio - 1.41 - 9.33 - 3.10 - - -

  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 positioning for CAT US; click here to read the full report on our secure site.
  • The company has increased dividends for the past 25 consecutive years (including the GFC of 2008) and it trades at a dividend yield of 2.8%.
  • Dividend growth is targeted to range in the high-single digits in each of the next four years, while management has indicated it will continue to do share buybacks as it is still creating value at this stage.


company logo

Highlights

  • We recommend a neutral positioning for GRT SJ; click here to read the full report on our secure site.
  • Although the current distribution yield of 8.84% is enticing (well ahead of its long-term average and is guided to grow by 4.50% in the current year), locally, property fundamentals are deteriorating.
  • We feel that weak property fundamentals are fairly reflected in the valuation and would recommend a neutral position relative to the benchmark.


company logo

Highlights

  • We recommend an overweight positioning for MMI SJ; click here to read the full report on our secure site.
  • Strong growth was seen in Momentum Life, which constitutes a third of the total earnings, due to management tightening expenses, improving productivity and enhancing the product offering.
  • The improved earnings are likely to support higher dividend payments, which are likely to underpin the share price.


Corporate actions

Date Company Share code Expectation
03 July 2019 Capital Appreciation Limited CTA Cash Dividend
03 July 2019 Famous Brands Limited FBR Cash Dividend
03 July 2019 Netcare Ltd NTC Cash Dividend
03 July 2019 Schroder European Real Estate Investment Trust Plc SCD Cash Dividend
03 July 2019 Stor-Age Property REIT Limited SSS 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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