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Market heavyweights strain JSE

23 February 2021

Market heavyweights strain JSE

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

Following a decline in Naspers and Prosus shares, the JSE ended lower on Monday. At the closing bell, the All Share lost 0.15%.

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United States

Rising US Treasury yields and the possibility of a hike in inflation prompted valuation concerns, bringing down the Nasdaq 2.46%.

EU flag Icon
Europe

European stocks were mostly down amid prospects of higher inflation, following a surge in commodity prices. At the close of business, the FTSE 100 lost 0.14%.

HK flag Icon
Hong Kong

Concerns over stretched valuations and risks of policy tightening in China weighed on Hong Kong shares on Monday. The Hang Seng ended 1.06% lower.

Japan flag Icon
Japan

The Nikkei rose 0.46% while the broader Topix gained 0.49% as recovery hopes lifted cheap cyclical stocks.

Rand Icon
Rand

The rand weakened ahead of the national budget speech as market participants waited to see how far government has come in narrowing the budget deficit. At 18h00 it traded R14.67/$.

Precious metals Icon
Precious metals

Bullion rose as support from a weaker dollar overshadowed pressure from rising US Treasury yields.

Oil Icon
Oil

Oil prices gained close to 4% on Monday as US production slowly returned after the Texas freeze. At 18h30, Brent crude traded at $64.23 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 67 362.82 -0.15 5.28 19.29 21.52 20.77
Gold mining 3 456.63 1.97 -9.90 -12.31 -37.86 2.90
Basic minerals 48 724.49 0.81 7.51 31.39 21.41 40.30
Industrial index 94 626.38 -1.05 3.32 13.87 21.82 23.69
Financial 31 281.66 0.42 6.24 11.39 21.01 -11.52
Fin + Ind 30 8 124.95 -0.66 4.08 13.24 21.64 11.77
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) 31 521.69 0.09 1.89 8.25 13.99 11.16
S&P 500 PR (USD) 3 876.50 -0.77 1.05 9.39 15.03 18.22
NASDAQ (USD) 13 874.46 0.07 5.21 16.73 24.93 42.53
FT-100 (GBP) 6 612.24 -0.18 -1.05 4.61 11.26 -7.96
Hang Seng (HKD) 30 319.83 -1.06 2.96 14.67 21.56 14.57
Nikkei 225 (JPY) 30 156.03 0.46 5.33 18.29 32.64 31.44
MSCI World (USD) 8 311.92 -0.65 1.27 10.06 17.27 17.87
Frankfurt (EUR) 6 021.01 -0.31 0.55 6.19 9.29 2.73
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 812.47 0.15 -2.96 -3.65 -6.94 10.11
Platinum ($) 1 270.48 -0.43 15.53 33.75 39.47 29.40
Brent Oil ($) 66.30 1.62 12.54 42.33 38.66 6.41
Rand/USD 14.64 0.65 2.30 3.66 13.22 2.85
Rand/GBP 20.60 0.30 -0.16 -1.47 7.57 -5.62
Rand/EUR 17.82 0.27 2.36 1.55 10.76 -9.22
ALBI (R) 756.54 -0.85 -0.80 1.39 6.45 5.68
  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. ZA: Unemployment Rate Q4
  1. UK: Unemployment Rate DEC
  2. EU: Inflation Rate Final JAN

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 2.06 5.18 6.53 7.01 7.28 7.45
PSG Wealth Income FoF D 4.05 5.55 6.70 6.99 7.25 7.69
PSG Wealth Preserver FoF D 7.19 7.15 6.89 6.17 6.30 6.47
PSG Wealth Moderate FoF D 11.64 10.14 8.40 6.06 6.50 6.88
PSG Wealth Creator FoF D 20.28 15.85 11.34 6.31 7.02 8.48
PSG Wealth Global Preserver FF D -8.57 3.33 8.24 - - -
PSG Wealth Global Moderate FF D -4.45 9.89 12.99 14.49 10.50 7.22
PSG Wealth Global Flexible FF D -2.74 17.08 18.23 - - -
PSG Wealth Global Creator FF D -0.19 17.27 22.56 22.52 18.61 14.49
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 12.61 12.14 11.23 6.18 7.45 8.36
PSG Wealth Global Creator FoF D USD 17.14 19.75 20.53 13.47 15.17 15.69
PSG Wealth Global Preserver FoF (USD) D 7.34 4.75 6.05 4.37 4.39 6.16
PSG Wealth Global Flexible FoF (USD) D 14.37 19.29 16.36 11.38 12.76 13.98
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.16 -2.05 2.86 3.83 2.03 6.08
PSG Wealth Global Flexible FoF (GBP) D 7.72 10.58 12.41 11.07 9.33 13.67
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.73 4.65 5.92 6.38 6.67 6.82
PSG Income A 3.59 9.03 8.54 8.33 8.46 8.49
PSG Diversified Income 5.70 8.80 7.87 7.17 7.61 7.83
PSG Stable A 12.25 7.53 3.63 2.78 4.24 5.54
PSG Balanced A 21.01 13.22 2.86 0.80 2.58 5.05
PSG Flexible A 22.07 10.52 1.01 -0.14 1.65 5.16
PSG SA Equity D 24.23 12.09 -5.26 -8.94 - -
PSG Equity A 23.88 12.73 -0.89 -3.31 -0.96 4.69
PSG Global Flexible FF A 10.11 17.94 7.45 9.57 6.71 -
PSG Global Equity FF A 14.48 14.56 4.86 7.48 5.76 7.05
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 32.05 21.58 6.20 1.96 4.14 8.80
PSG Global Equity USD 37.03 19.53 4.37 0.58 3.58 9.11
  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 15.17 6.07 1.40 - 2.27 1.26 4.13
PSG Wealth SA Property Equity Portfolio 22.57 - 26.13 - 21.55 - 16.87 - 13.03 - 10.33
PSG Wealth Dividend Income Equity Portfolio 12.68 - 5.55 - 7.11 - 8.58 - 1.91 -
PSG Wealth Offshore Equity Portfolio (USD) 13.73 13.05 18.35 13.36 16.47 16.67
  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 believe BTI could consistently grow earnings over the long-term despite volume declines in the combustible segment.
  • We feel that medium-term earnings is likely to be supported by lower investments in NGP's as the product matures and improves profitability as it ramps up.
  • Regardless of a growth outlook that mirrors the broader staple market, the group is trading at a significant discount to staple counters.
  • On a forward PE basis, the group is trading at a 38.0% discount to its long-term average of 12.6 times and a 35.9% discount to its FactSet peers.
  • For more information about this counter, please contact your PSG Wealth adviser.


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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.


company logo

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.


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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