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Investors focussed on Mboweni budget this week

22 June 2020

Investors focussed on Mboweni budget this week

Daily Investment Update

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Market commentary

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South Africa

The JSE closed firmer on Friday as good news regarding trade between China and the US, and the start of stimulus talks in Europe, helped lift markets. The All Share firmed by 0.52%.

US flag Icon
United States

Wall Street’s main indexes slipped into the red in volatile trading on Friday as a report said Apple Inc would shut some of its US stores again in Arizona, Florida, North Carolina and South Carolina due to a spike in COVID-19 cases.

EU flag Icon
Europe

European shares closed higher on Friday, with defensive plays leading gains as investors remained hopeful that a massive stimulus package will soon be passed even though EU leaders made little progress in negotiations. The STOXX 600 Index ended the week higher, recovering about 36% from its March lows.

HK flag Icon
Hong Kong

Hong Kong stocks firmed on Friday to conclude the week higher, as Beijing reassured investors of fresh reforms and ample financial liquidity to bolster its economy and capital markets. The Hang Seng closed up by 0.73%.

Japan flag Icon
Japan

The Nikkei rose by 0.55% on Friday, propped up by hopes of an economic recovery after the government lifted its domestic travel curbs that were imposed to halt the spread of the COVID-19 pandemic.

Rand Icon
Rand

The rand was firmer on Friday as local investors fixed their eyes on finance minister Tito Mboweni’s supplementary budget expected this Wednesday (24 June). The rand reached a best intra-day level of R17.26/$.

Precious metals Icon
Precious metals

Gold gained on Friday as a rise in COVID-19 cases raised concerns over a second wave in the US and China which could compel governments to implement another lockdown.

Oil Icon
Oil

Oil rose to above $42 a barrel on Friday, after oil cartel OPEC and its allies promised to meet supply cuts and signs of 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 54 224.40 0.52 4.41 44.13 - 4.19 - 4.12
Gold mining 4 384.06 7.76 - 9.60 88.22 68.86 143.05
Basic minerals 35 651.56 1.46 3.00 77.22 2.31 11.73
Industrial index 79 356.74 - 0.07 2.60 33.38 5.75 2.21
Financial 27 230.98 0.48 12.51 29.09 - 29.47 - 32.47
Fin + Ind 30 6 880.78 0.08 5.12 32.16 - 7.10 - 10.36
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) 25 871.46 - 0.77 7.20 29.60 - 7.70 0.05
S&P 500 PR (USD) 3 097.74 - 0.55 6.18 29.24 - 2.38 7.99
NASDAQ (USD) 9 946.12 0.04 8.40 39.46 12.49 25.83
FT-100 (GBP) 6 292.60 1.10 5.02 22.68 - 15.52 - 11.75
Hang Seng (HKD) 24 643.89 0.73 1.88 14.50 - 10.19 - 9.85
Nikkei 225 (JPY) 22 478.79 0.55 10.01 37.06 - 4.70 7.73
MSCI World (USD) 6 529.28 - 0.29 7.31 31.06 - 4.75 3.98
Frankfurt (EUR) 5 379.83 0.40 11.34 43.21 - 6.67 0.18
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 728.55 - 0.24 - 0.39 16.74 17.24 28.77
Platinum ($) 805.00 - 1.47 - 0.12 32.62 - 13.16 0.63
Brent Oil ($) 41.51 1.97 19.25 66.84 - 37.27 - 33.20
Rand/USD 17.32 0.80 1.46 2.14 - 21.55 - 20.81
Rand/GBP 21.46 1.10 - 0.23 - 4.23 - 15.67 - 17.85
Rand/EUR 19.41 0.89 - 1.38 - 1.53 - 22.87 - 19.83
ALBI (R) 699.42 0.87 1.12 15.09 0.70 3.56
  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. CH: Loan prime rate 1-yr and 5-yr
  2. EA: Consumer confidence flash JUN

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 3.53 7.53 7.77 7.86 7.94 7.82
PSG Wealth Income FoF D 1.46 5.07 6.41 6.95 7.36 7.54
PSG Wealth Preserver FoF D - 0.60 1.72 3.25 4.84 4.70 5.43
PSG Wealth Moderate FoF D - 3.54 - 0.96 0.93 3.63 3.51 4.16
PSG Wealth Creator FoF D - 9.21 - 6.06 - 2.49 1.75 2.27 1.78
PSG Wealth Global Moderate FF D 15.65 21.11 14.55 12.96 7.98 9.38
PSG Wealth Global Creator FF D 19.26 29.91 20.62 20.05 15.29 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 4.48 1.46 0.95 2.26 4.27 1.68
PSG Wealth Global Creator FoF D - 1.35 8.95 6.43 8.63 11.29 7.83
PSG Wealth Global Preserver FoF (USD) D - 3.39 - 0.20 2.07 1.72 3.60 3.25
PSG Wealth Global Flexible FoF (USD) D - 0.06 7.25 5.83 7.17 9.88 7.63
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 0.03 0.03 3.98 2.32 5.87 6.76
PSG Wealth Global Flexible FoF (GBP) D 5.36 8.56 9.33 7.67 12.74 11.69
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.34 6.98 7.13 7.23 7.33 7.22
PSG Income A 5.41 9.37 8.90 8.68 8.72 8.43
PSG Diversified Income 1.77 4.85 5.93 6.62 7.07 7.21
PSG Stable A - 7.00 - 5.98 - 2.48 1.23 2.59 3.22
PSG Balanced A - 12.65 - 12.80 - 8.81 - 2.90 - 0.31 0.30
PSG Flexible A - 17.44 - 17.55 - 11.10 - 4.42 - 1.18 - 0.19
PSG SA Equity D - 22.90 - 27.04 - 19.77 - 11.45 - -
PSG Equity A - 18.52 - 20.67 - 14.97 - 7.20 - 2.53 - 3.29
PSG Global Flexible FF A 2.31 3.09 - 0.26 3.88 3.57 -
PSG Global Equity FF A - 5.01 - 3.95 - 4.90 1.46 2.58 3.38
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 16.98 - 14.73 - 12.24 - 5.84 0.13 - 2.38
PSG Global Equity USD - 21.57 - 19.42 - 15.42 - 7.40 - 0.37 - 3.62
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 3.61 6.95 7.12 7.27 7.47 7.36
PSG Direct Low Equity - 6.76 - 5.88 - 2.78 0.88 2.34 2.87
PSG Direct Managed - 14.05 - 14.38 - 9.79 - 3.71 - 0.97 - 0.27
PSG Direct Aggressive - 13.98 - 14.72 - 10.30 - 3.81 - 0.86 -
PSG Direct Global Managed 2.08 2.62 - 0.71 3.41 3.09 -
PSG Direct Global Aggressive - 2.50 - 1.76 - 3.60 1.92 2.50 -
  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 - 10.75 - 14.40 - 8.60 - 1.63 - 0.51 -
PSG Wealth SA Property Equity Portfolio - 38.52 - 40.30 - 26.99 - 19.20 - 15.32 -
PSG Wealth Income Growth Equity Portfolio - 21.06 - 24.51 - 13.00 - 4.30 - 2.12 -
PSG Wealth Offshore Equity Portfolio (USD) - 2.60 7.15 9.49 11.04 13.46 -
  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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