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Markets muted on economic concerns

27 November 2020

Markets muted on economic concerns

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

On Thursday the All Share closed 0.31% higher on the back of a positive trading update from FirstRand, indicating that payroll activity has reached pre-COVID-19 levels once again.

US flag Icon
United States

US markets closed due to a public holiday.

EU flag Icon
Europe

European shares were flat on Thursday as the UK’s bleak growth forecasts and Germany extending lockdown measures fuelled fears around the economic impact of COVID-19. The STOXX 600 ended the day 0.12% lower.

HK flag Icon
Hong Kong

The Hang Seng traded 0.56% higher on Thursday, lifted by energy, IT and financial share as well as COVID-19 vaccine optimism.

Japan flag Icon
Japan

Despite concerns about the rising number of COVID-19 infections and consequent restrictions, the Nikkei closed up 0.91% on Thursday, reaching its highest level in over 29 years.

Rand Icon
Rand

The local currency weakened slightly on Thursday as investors assessed South Africa’s fragile economic fundamentals, but losses were capped by a weaker greenback. At 17h55 the rand traded at R15.22/$, R20.30/£ and R18.12/€.

Precious metals Icon
Precious metals

Gold rose slightly on Thursday due to a weaker dollar and as the growing number of US infections rose investor expectations of possible fiscal support. Gold traded at $1 809.25/oz at 17h55.

Oil Icon
Oil

Oil fell to $47.87 a barrel on Thursday at 17h33, down almost 2%, due to an increase in supply.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 57 923.69 0.31 5.58 3.10 15.60 6.27
Gold mining 3 641.38 2.42 - 23.30 - 34.85 - 10.39 57.99
Basic minerals 38 056.69 0.56 1.10 - 4.39 18.39 17.11
Industrial index 84 789.20 0.25 7.64 5.90 13.27 15.26
Financial 29 191.27 0.03 9.10 11.44 17.09 - 22.38
Fin + Ind 30 7 358.56 0.19 8.04 7.37 14.29 1.62
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) 29 872.47 - 0.58 5.66 6.28 23.42 8.93
S&P 500 PR (USD) 3 629.65 - 0.16 4.92 5.84 23.87 18.01
NASDAQ (USD) 12 094.40 0.48 4.84 5.69 30.24 41.39
FT-100 (GBP) 6 362.93 - 0.44 10.22 5.87 6.52 - 11.21
Hang Seng (HKD) 26 819.45 0.56 7.71 5.88 17.56 2.88
Nikkei 225 (JPY) 26 537.31 0.91 12.98 14.71 25.75 15.78
MSCI World (USD) 7 702.49 0.02 8.50 6.26 23.38 14.71
Frankfurt (EUR) 5 750.33 - 0.02 9.11 0.73 15.49 0.38
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 814.85 0.35 - 4.56 - 5.40 5.35 24.51
Platinum ($) 963.00 - 0.10 8.08 4.45 15.05 7.12
Brent Oil ($) 47.80 - 1.67 18.14 4.73 32.15 - 25.63
Rand/USD 15.20 - 0.06 6.14 8.32 12.84 - 2.96
Rand/GBP 20.32 - 0.05 3.79 8.11 5.89 - 6.48
Rand/EUR 18.12 - 0.04 5.02 8.17 6.68 - 11.53
ALBI (R) 747.48 0.19 3.55 5.31 5.48 9.36
  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 date scheduled for release.
  1. EU: Consumer Confidence Final NOV
  2. JP: Retail Sales OCT (Monday 01h50)
  3. CN: NBS Manufacturing PMI NOV (Monday 03h00)

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 2.37 6.10 7.02 7.33 7.53 7.61
PSG Wealth Income FoF D 4.22 5.51 6.80 7.03 7.43 7.53
PSG Wealth Preserver FoF D 7.03 3.89 5.78 3.94 5.49 5.38
PSG Wealth Moderate FoF D 11.92 3.59 6.17 2.33 5.08 4.80
PSG Wealth Creator FoF D 20.56 4.76 7.43 0.74 4.57 4.31
PSG Wealth Global Preserver FF D - 5.07 8.50 11.53 - - -
PSG Wealth Global Moderate FF D 1.74 13.30 15.13 7.84 8.99 7.25
PSG Wealth Global Flexible FF D 3.10 20.71 20.46 - - -
PSG Wealth Global Creator FF D 6.47 22.24 24.51 15.06 16.81 13.61
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 17.61 9.01 9.83 4.67 6.86 5.42
PSG Wealth Global Creator FoF D 24.31 19.05 19.38 12.01 14.74 11.82
PSG Wealth Global Preserver FoF (USD) D 9.81 3.83 5.77 3.33 4.45 4.95
PSG Wealth Global Flexible FoF (USD) D 19.85 16.59 15.54 9.97 12.59 11.11
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.16 0.39 3.60 2.95 3.03 6.66
PSG Wealth Global Flexible FoF (GBP) D 9.35 12.66 13.03 9.58 10.25 12.95
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.11 5.62 6.44 6.73 6.95 7.00
PSG Income A 4.60 9.68 8.94 8.85 8.71 8.55
PSG Diversified Income 6.18 8.13 7.39 7.46 7.65 7.67
PSG Stable A 12.87 0.81 0.79 2.10 3.50 4.46
PSG Balanced A 23.75 - 1.10 - 2.67 - 1.61 0.98 2.88
PSG Flexible A 25.90 - 6.23 - 4.53 - 3.20 - 0.21 2.76
PSG SA Equity D 33.77 - 10.51 - 11.96 - 9.53 - -
PSG Equity A 29.22 - 6.30 - 7.37 - 6.08 - 2.42 1.57
PSG Global Flexible FF A 19.50 10.60 5.31 2.02 4.77 -
PSG Global Equity FF A 24.04 4.94 1.82 - 0.05 3.80 5.44
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 38.32 5.12 0.18 - 0.97 2.80 4.60
PSG Global Equity USD 41.91 0.80 - 2.45 - 2.50 2.18 4.15
  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 14.07 - 5.06 - 2.38 - 3.44 - 0.21 1.15
PSG Wealth SA Property Equity Portfolio 12.44 - 43.86 - 27.64 - 21.52 - 15.10 -
PSG Wealth Dividend Income Equity Portfolio 12.76 - 16.79 - 8.62 - 6.84 - 2.26 -
PSG Wealth Offshore Equity Portfolio (USD) 17.90 13.34 16.32 12.26 16.38 13.67
  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

company logo

Highlights

  • COVID-19 has accelerated the long-overdue impairments and the disintegration of the relationship between property fundamentals and the premium placed on the counters.
  • As a result, the sector P/NAV is trading at an approximate 50% discount.
  • The market has particularly placed higher discounts on counters with weak balance sheets.
  • However, some companies have held up during this crisis, particularly Equites Property Fund, Sirius Real Estate and Stor-Age Property REIT.
  • For more information about these counters, please contact your PSG Wealth adviser.


company logo

Highlights

  • On a forward P/E basis, the share now trades at 10.6 times, a 22.3% discount to its historical average, and a 41.5% discount to its FactSet peers.
  • The group offers an attractive dividend yield of 5.2%, which, according to management, is sustainable despite possible tax reforms.
  • At current prices, we feel the share is undervalued.
  • For more information about this counter, please contact your PSG Wealth adviser.


company logo

Highlights

  • The balance sheet is strong and is reinforced by the company’s robust cash position.
  • The group currently offers a free cash flow yield of 4.2% with free cash expected to compound by high-single digits over the next four years.
  • Given the advances observed from some of the new technologies that the group is exposed to, we believe that the expected growth could be conservative.
  • We feel that the current valuation is fair, especially considering the elevated valuations elsewhere in the information technology sector.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
02 December 2020 Growthpoint Properties Limited GRT DRIPOption 1 - (Cash Dividend) Gross - ZAR0.40Less 20% Withholding Tax - ZAR0.08 Net - ZAR0.32Option 2 (Reinvestment)Reinvestment Price - To be announcedDefault - Option 1 (Cash)
02 December 2020 Growthpoint Properties Limited Turbo Share Instalment GRTSTA Cash Dividend
02 December 2020 Impala Platinum Holdings Limited Convertible Bonds IMCB22 Interest Payment
02 December 2020 ISA Holdings Limited ISA Cash Dividend
02 December 2020 Oasis Crescent Property Fund Limited OAS DRIPOption 1 - (Cash Dividend) Gross - ZAR0.438019292Less 20% Withholding Tax - ZAR0.087603859Net - ZAR0.350415433Option 2 (Reinvestment)Reinvestment Price - ZAR21.86Default - Option 2 (Re-Invest)
02 December 2020 Pan African Resources Plc PAN Cash Dividend
02 December 2020 Pick n' Pay Stores Limited PIK Cash Dividend (Interim)
02 December 2020 Pick n' Pay Stores Limited PIK Cash Dividend (Final)
02 December 2020 Raubex Group Limited RBX Cash Dividend
02 December 2020 RDI REIT Plc RPL Cash Dividend
02 December 2020 Sabvest Capital Limited SBP Cash Dividend
02 December 2020 Stor-Age Property REIT Limited SSS DRIPOption 1 - (Cash Dividend) Gross - ZAR0.52Less 20% Withholding Tax - ZAR0.104Net - ZAR0.416Option 2 (Reinvestment)Reinvestment Price - To be announcedDefault - Option 1 (Cash dividend)
02 December 2020 Tradehold Limited TDH Cash Dividend
02 December 2020 Vodaphone 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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