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Renewed lockdowns weigh on global markets

25 March 2021

Renewed lockdowns weigh on global markets

Daily Investment Update

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Market commentary

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South Africa

The JSE fell on Wednesday as increasing numbers of virus infections in Europe, coupled with slow vaccine rollout programmes, sparked concerns over a delay in the global economic recovery.

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United States

Wall Street opened firmer after multinational tech giant Intel announced its plans to spend $20 billion on new chip plants but markets soon reversed course as concerns about the cost of infrastructure spending and possible tax increases to fund the $1.9 trillion relief bill took centre stage.

EU flag Icon
Europe

European stocks fell on Wednesday as reinforced lockdown restriction across the continent and slow Covid-19 vaccine rollout programmes weighed on sentiment. At the close of business, the FTSE 100 lost 0.25%.

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Hong Kong

Apprehensions over possible inflation rate hikes and policy tightening weighed on the Hong Kong stock market on Wednesday with the Hang Seng reaching its lowest in two months at 27 918.14 points.

Japan flag Icon
Japan

The Nikkei ended Wednesday 2.04% lower with energy counters leading the decline as oil prices continued to fall amid new lockdown restrictions across Europe.

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Rand

The rand weakened against major global currencies on Wednesday as the world braced for a third wave of Covid-19 infections. At 19h30, the local currency traded at R14.98/$, R20.41/£ and R17.70/€.

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Precious metals

Spot gold traded at $1 733.90 an ounce at 19h30 on Wednesday as higher US Treasury yields and a firmer dollar continued to weigh on demand.

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Oil

Brent crude jumped over 6% trading at $64.34 a barrel at 19h45 on Wednesday “after a ship ran aground in the Suez Canal, raising supply concerns”.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 65 257.09 - 0.09 - 0.47 11.41 21.91 63.50
Gold mining 3 732.98 0.82 12.17 - 2.33 - 29.04 63.95
Basic minerals 46 774.85 0.83 - 0.41 16.40 24.77 105.49
Industrial index 92 143.98 - 0.71 0.17 12.15 18.52 46.89
Financial 30 366.93 - 1.50 - 2.61 0.10 25.33 43.98
Fin + Ind 30 7 909.75 - 0.45 - 0.52 8.75 20.37 46.25
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) 32 420.06 - 0.01 1.64 7.87 22.10 60.00
S&P 500 PR (USD) 3 889.14 - 0.55 - 0.79 5.42 20.74 61.65
NASDAQ (USD) 12 961.89 - 2.01 - 4.62 1.39 21.88 76.14
FT-100 (GBP) 6 712.89 0.20 1.50 4.18 17.10 26.98
Hang Seng (HKD) 27 918.14 - 2.02 - 5.76 6.14 20.35 27.00
Nikkei 225 (JPY) 28 405.52 - 2.03 - 4.23 6.70 24.02 59.99
MSCI World (USD) 8 262.24 - 0.74 - 1.11 4.39 21.09 61.24
Frankfurt (EUR) 6 301.81 - 0.35 4.54 7.53 15.90 50.61
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 734.05 - 0.30 - 4.05 - 7.40 - 6.31 8.41
Platinum ($) 1 172.53 - 0.04 - 6.25 16.77 41.12 74.37
Brent Oil ($) 63.51 - 1.40 - 7.01 18.73 45.54 124.90
Rand/USD 14.94 - 0.28 - 2.05 - 2.52 12.48 14.99
Rand/GBP 20.47 - 0.13 0.66 - 3.48 6.13 1.31
Rand/EUR 17.66 - 0.07 0.85 0.92 11.07 6.99
ALBI (R) 745.72 - 0.43 - 3.29 - 1.79 5.13 27.58
  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: PPI FEB
  1. US: GDP Growth Rate Final Q4
  2. JP: Foreign Bond Investment 20/MAR

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 1.98 4.85 6.37 6.88 7.18 7.39
PSG Wealth Income FoF D 3.33 10.05 6.29 6.64 6.96 7.45
PSG Wealth Preserver FoF D 8.16 28.33 6.15 6.15 6.17 5.81
PSG Wealth Moderate FoF D 14.71 47.38 7.38 6.79 6.61 5.85
PSG Wealth Creator FoF D 26.13 81.91 10.93 8.27 7.61 7.11
PSG Wealth Global Preserver FF D - 6.51 5.65 7.27 12.68 - -
PSG Wealth Global Moderate FF D - 1.57 19.47 11.61 14.81 11.67 6.24
PSG Wealth Global Flexible FF D - 0.90 23.47 15.89 - - -
PSG Wealth Global Creator FF D 4.73 38.70 20.56 23.05 19.75 13.55
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 13.03 44.79 9.81 6.37 6.81 6.84
PSG Wealth Global Creator FoF D USD 18.73 71.21 18.23 14.21 14.52 14.07
PSG Wealth Global Preserver FoF (USD) D 7.47 27.15 5.28 4.69 4.24 5.04
PSG Wealth Global Flexible FoF (USD) D 12.65 52.97 13.64 11.66 11.72 12.15
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 1.32 10.92 3.28 4.92 2.28 5.36
PSG Wealth Global Flexible FoF (GBP) D 4.73 29.30 11.37 12.25 8.85 12.25
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.63 4.36 5.77 6.27 6.58 6.77
PSG Income A 2.63 9.70 8.10 8.04 8.15 8.34
PSG Diversified Income 4.69 16.30 7.19 6.83 7.16 7.52
PSG Stable A 14.23 35.14 3.68 3.28 4.15 5.11
PSG Balanced A 27.24 65.02 4.46 2.71 3.24 4.61
PSG Flexible A 29.58 70.26 2.60 2.01 2.54 4.32
PSG SA Equity D 30.62 77.14 - 3.00 - 6.80 - -
PSG Equity A 31.97 75.81 1.04 - 0.70 - 0.08 3.53
PSG Global Flexible FF A 24.79 64.38 10.18 12.78 9.89 -
PSG Global Equity FF A 31.88 78.92 8.08 11.27 9.17 7.17
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 41.28 98.18 7.77 3.63 4.72 7.66
PSG Global Equity USD 49.27 113.61 6.50 2.81 4.37 8.04
  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 16.43 45.39 - 0.57 - 1.82 0.87 2.00
PSG Wealth SA Property Equity Portfolio 37.23 50.53 - 19.93 - 16.30 - 12.71 - 11.33
PSG Wealth Dividend Income Equity Portfolio 17.90 44.23 - 6.44 - 7.83 - 2.52 -
PSG Wealth Offshore Equity Portfolio (USD) 19.45 65.66 18.17 15.18 16.25 15.67
  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 can consistently grow earnings over the long-term despite volume declines in the combustible segment.
  • We feel that medium-term earnings are likely to be supported by continuous investments in next generation products as these mature and improve profitability.
  • Regardless of a growth outlook that mirrors the broader staple market, the group is trading at a significant discount to staple counters.
  • Thus, we maintain an overweight position for the counter.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • On a PB basis, the group is currently trading at an 8.6% discount to its peers.
  • The group's balance sheet is strong relative to other real estate companies, as seen in the very comfortable LTV ratio of 20.5%, which is well below its covenant of 40%.
  • We feel the group is well-positioned, given the effect of the pandemic on the real estate sector.
  • Liberty's discount to its five-year historical average has improved since it released 1H20 results; it now trades at a 16.8% discount to its historical average.
  • Accordingly, we maintain our neutral guidance for portfolios with a property only mandate.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • We estimate that the local operations have access to sufficient liquidity to give the group the flexibility to restructure its Australian operations.
  • Additionally, the Australian properties' sale has eliminated the cross guarantee between DJ and CRG, giving it more flexibility.
  • But the pandemic has resulted in a weak consumer environment, and the Australian operation's restructuring has no easy solutions.
  • We feel that the share is fairly valued at current levels and would recommend a neutral portfolio positioning.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
30 March 2021 FirstRand Limited FSR Cash Dividend
30 March 2021 Metrofile Holdings Limited MFL Cash Dividend
30 March 2021 Putprop Limited PPR Cash Dividend
30 March 2021 Royal Bafokeng Platinum Limited RBP Cash Dividend
30 March 2021 South Ocean Holdings Limited SOH Cash Dividend
30 March 2021 Trellidor Holdings Limited TRL Cash Dividend
31 March 2021 Hammerson plc HMN DVOPOption 1 - (Cash Dividend) PID Gross Rate - TBA Less 20% UK Tax - TBA Net - TBAOption 2 (Enhanced Scrip Dividend Alternative) Ratio - TBADefault - Option 1 (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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