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Vaccine optimism boosts rand

24 November 2020

Vaccine optimism boosts rand

Daily Investment Update

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Market commentary

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South Africa

The JSE closed Monday 0.94% higher after strong half-year financial results from Naspers and optimism about a COVID-19 vaccine boosted risk-on trade.

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United States

Most Wall Street indices opened stronger on Monday on the back of reports that in only a few weeks the first COVID-19 vaccine could be rolled out. At 18h00, the Dow Jones was 0.78% in the green.

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Europe

Main European shares closed lower on Monday as concerns about economic restrictions on the continent to curb further waves of COVID-19 weighed on investor sentiment.

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Hong Kong

The Hang Seng traded flat on Monday at a 0.13% increase and 26 486.20 points; although cyclical stocks performed well on the back of more positive COVID-19 vaccine reports, gains were capped by US-China trade tensions.

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Japan

Japanese markets were closed on Monday for a public holiday.

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Rand

The local currency shrugged off Friday’s ratings losses, strengthening to an almost two-week peak on Monday due to hopes that a COVID-19 vaccine could be rolled out soon.

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Precious metals

Gold prices fell over 2% on Monday, reaching its lowest point in four months, due to “better-than-expected US business activity data and promising COVID-19 vaccine trials”. Gold traded at $1 836.97/oz at 18h00.

Oil Icon
Oil

On Monday, oil climbed 2%, trading at $45.73 a barrel at 18h00, as optimistic COVID-19 vaccine reports increased traders’ hopes that oil demand will rise.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 57 147.31 0.94 3.28 2.83 15.04 3.50
Gold mining 3 732.43 - 5.38 - 21.16 - 32.95 - 14.93 57.13
Basic minerals 37 289.76 0.54 - 1.76 - 7.09 15.76 15.69
Industrial index 84 560.47 1.37 6.61 8.45 13.76 13.44
Financial 28 337.27 0.50 4.56 9.18 17.50 - 27.36
Fin + Ind 30 7 284.94 1.14 6.05 8.64 14.73 - 1.56
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) 29 591.27 1.14 4.66 6.51 22.26 8.66
S&P 500 PR (USD) 3 577.59 0.57 3.41 5.76 22.08 17.19
NASDAQ (USD) 11 854.97 - 0.42 3.04 5.45 26.95 40.31
FT-100 (GBP) 6 333.84 - 0.28 8.34 6.06 7.26 - 10.77
Hang Seng (HKD) 26 486.20 0.13 6.37 6.15 18.58 2.82
Nikkei 225 (JPY) 25 527.37 - 0.41 8.34 12.33 24.94 12.46
MSCI World (USD) 7 573.10 0.28 4.90 6.85 23.79 13.83
Frankfurt (EUR) 5 681.14 - 0.08 3.81 2.84 18.54 - 0.28
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 863.80 - 0.17 - 2.45 - 3.57 7.58 26.68
Platinum ($) 950.00 - 0.11 6.50 4.17 14.60 4.28
Brent Oil ($) 46.06 2.45 10.27 3.86 31.11 - 27.34
Rand/USD 15.38 0.04 5.41 8.53 11.42 - 4.69
Rand/GBP 20.50 - 0.10 3.17 7.15 3.62 - 8.66
Rand/EUR 18.22 0.23 5.30 8.22 4.65 - 12.57
ALBI (R) 744.54 - 0.22 3.20 4.74 6.23 8.24
  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. Leading Business Cycle Indicator m/m SEP
  1. DE: GDP Growth Rate q/q Final Q3
  2. EU: ECB President Lagarde 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 2.40 6.11 7.03 7.35 7.55 7.62
PSG Wealth Income FoF D 4.22 5.27 6.73 6.97 7.38 7.52
PSG Wealth Preserver FoF D 5.72 2.84 5.09 3.80 5.23 5.32
PSG Wealth Moderate FoF D 8.97 1.74 4.89 2.03 4.64 4.57
PSG Wealth Creator FoF D 14.66 2.50 5.49 0.39 4.21 3.94
PSG Wealth Global Preserver FF D - 6.38 7.95 10.45 - - -
PSG Wealth Global Moderate FF D - 0.04 12.48 13.74 8.03 8.52 7.44
PSG Wealth Global Flexible FF D 1.71 19.82 18.92 - - -
PSG Wealth Global Creator FF D 5.30 21.72 22.52 15.42 16.51 13.91
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 16.05 8.34 9.36 4.70 6.74 5.19
PSG Wealth Global Creator FoF D 23.21 17.37 18.51 11.94 14.55 11.51
PSG Wealth Global Preserver FoF (USD) D 9.28 3.24 5.42 3.20 4.33 4.81
PSG Wealth Global Flexible FoF (USD) D 19.05 16.10 14.94 10.01 12.50 10.99
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.66 0.60 3.52 2.86 3.06 6.65
PSG Wealth Global Flexible FoF (GBP) D 9.98 13.31 13.00 9.67 10.50 13.00
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.11 5.62 6.44 6.73 6.95 7.00
PSG Income A 4.74 9.71 9.00 8.87 8.73 8.56
PSG Diversified Income 6.14 7.76 7.34 7.42 7.61 7.67
PSG Stable A 10.83 - 0.93 - 0.18 1.72 3.14 4.22
PSG Balanced A 18.53 - 4.33 - 4.65 - 2.40 0.34 2.33
PSG Flexible A 19.06 - 9.75 - 6.69 - 4.06 - 0.85 2.11
PSG SA Equity D 26.59 - 14.61 - 14.14 - 10.20 - -
PSG Equity A 21.63 - 9.88 - 9.84 - 6.93 - 2.93 0.85
PSG Global Flexible FF A 11.03 5.54 1.85 0.72 3.37 -
PSG Global Equity FF A 14.26 - 0.68 - 2.03 - 1.55 2.22 4.52
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 30.58 2.75 - 1.54 - 2.20 1.93 3.59
PSG Global Equity USD 32.69 - 1.96 - 4.44 - 3.95 1.15 2.97
  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 9.02 - 7.79 - 3.40 - 3.93 - 0.45 0.59
PSG Wealth SA Property Equity Portfolio 7.53 - 47.95 - 30.32 - 23.36 - 16.59 -
PSG Wealth Dividend Income Equity Portfolio 9.03 - 20.03 - 9.81 - 6.99 - 2.46 -
PSG Wealth Offshore Equity Portfolio (USD) 14.75 12.47 15.05 12.00 16.00 13.19
  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

  • There is a high level of uncertainty surrounding the resumption of economies and the impact on tourism in the future.
  • The balance sheet remains strong, which is essential to protect equity value during current events.
  • LVMH is trading at a forward P/E of approximately 36 times, which is nearly 60% above its five-year average.
  • The FCF yield also contracted to 2.6% and is now at a discount to peers compared with its historical 23% premium.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • Microsoft's operations benefitted from changing consumer behaviour, which is accelerating the rate of cloud adoption. However, we feel the group's attractive attributes are fully reflected in the current share price.
  • On an earnings basis, the share is currently trading at an 18% premium to its peers compared with its 10% historical discount over the past five years.
  • Microsoft's diverse and global operations, increasingly interlinked ecosystem, high margin, scalable operations and annuity-type revenue warrant a premium in our opinion.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • The local property sector was already constrained by an oversupply of stock within the retail and office space before the COVID-19 pandemic hit.
  • Although Growthpoint completed an equity issue, they would not necessarily be forced into another one.
  • Growthpoint has multiple listed investments, which could be disposed of at a discount to its market value if needed before another rights issue.
  • While we recognise a difficult valuation cycle ahead, we feel the share offers value trading at a 47% discount to its NAV post the equity issue.
  • For more information about this sector, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
25 November 2020 Afrimat Limited AFT Cash Dividend
25 November 2020 Compagnie Financiere Richemont SA CFR Bonus Issue
25 November 2020 Cartrack Holdings Limited CTK Cash Dividend
25 November 2020 Investec Bank (Mauritius Limited Redeemable Cumulative Non-Participating No Par Value Preference Shares IMRP1 Cash Dividend
25 November 2020 Investec Bank (Mauritius Limited Redeemable Cumulative Non-Participating No Par Value Preference Shares IMRP3 Cash Dividend
25 November 2020 Investec Bank (Mauritius Limited Redeemable Cumulative Non-Participating No Par Value Preference Shares IMRP6 Cash Dividend
25 November 2020 Investec Holdings Limited Preference Shares IVTP Cash Dividend
25 November 2020 Naspers Limited NPN 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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