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Rand down on Fitch comments

29 June 2020

Rand down on Fitch comments

Daily Investment Update

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Market commentary

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South Africa

The JSE fell for the third consecutive day on Friday with banks and financials leading losses. The All Share closed down 0.49% and the Top 40 0.51%.

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United States

After reaching new COVID-19 daily infections and the Federal Reserve Bank capped shareholder payouts, Wall Street opened down on Friday. At 17h40, the Dow Jones had decreased by 2.12%.

EU flag Icon
Europe

European markets closed in the red on Friday as investor concerns about the global economy’s recovery rate rose in light of the surge of COVID-19 infections, particularly in the US. At the close of business, the STOXX 600 Index reported a loss of 0.39%.

HK flag Icon
Hong Kong

Hong Kong markets were closed for a public holiday.

Japan flag Icon
Japan

Tracking overnight Wall Street gains, Japanese shares bounced back from an over one-week low in the previous session to end the week in the green. The Nikkei closed up 1.13%.

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Rand

The local currency took a knock on Friday after Fitch Ratings said it does not foresee SA reaching stabilised debt levels within the next four years as Finance Minister Tito Mboweni had mentioned in the supplementary budget on Wednesday. At 17h40, the rand traded R17.32/$, R21.36/£ and R19.42/€.

Precious metals Icon
Precious metals

Gold made up ground on Friday as the COVID-19 infection rate in the US continued to rise. An ounce of gold cost $1 763.40 at 17h40.

Oil Icon
Oil

Oil prices dipped on Friday due to an increase in US stockpiles and output, while demand concerns remained in light of the Chinese and US COVID-19 infection spikes. At 17h40, a barrel of Brent crude traded at $40.39.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 53 648.05 - 0.49 6.08 20.05 - 4.69 - 4.93
Gold mining 4 698.64 0.16 15.22 30.20 74.94 139.77
Basic minerals 35 947.03 - 0.59 10.09 37.57 3.89 10.00
Industrial index 78 787.56 0.07 4.61 15.60 4.88 2.85
Financial 25 752.53 - 1.85 2.95 5.80 - 32.32 - 35.60
Fin + Ind 30 6 742.59 - 0.44 4.16 12.82 - 8.53 - 11.12
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) 25 015.55 - 2.84 0.30 11.62 - 11.52 - 3.38
S&P 500 PR (USD) 3 009.05 - 2.42 0.73 14.98 - 6.20 5.34
NASDAQ (USD) 9 757.22 - 2.59 4.54 25.44 8.69 24.63
FT-100 (GBP) 6 159.30 0.20 1.66 6.26 - 17.99 - 13.77
Hang Seng (HKD) 24 549.99 - 0.93 5.98 6.35 - 10.46 - 10.23
Nikkei 225 (JPY) 22 512.08 1.13 5.83 21.72 - 4.81 8.96
MSCI World (USD) 6 377.24 - 1.65 2.15 15.61 - 7.75 1.69
Frankfurt (EUR) 5 263.64 - 0.73 5.08 20.88 - 9.11 - 1.27
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 762.10 0.20 2.28 8.76 18.19 25.26
Platinum ($) 802.00 - 0.62 - 4.18 9.86 - 14.22 - 0.37
Brent Oil ($) 41.05 1.84 15.54 49.87 - 38.91 - 36.89
Rand/USD 17.32 - 1.06 0.71 3.54 - 23.63 - 22.19
Rand/GBP 21.42 - 0.56 0.80 3.30 - 15.92 - 19.28
Rand/EUR 19.47 - 1.25 - 0.27 1.57 - 24.22 - 20.85
ALBI (R) 703.99 0.30 - 0.66 13.38 0.73 4.45
  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. EU: Business confidence JUN
  2. JP: Unemployment rate MAY (Tuesday 01h30)
  3. CN: NBS Manufacturing PMI JUN (Tuesday 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 3.50 7.41 7.73 7.83 7.92 7.81
PSG Wealth Income FoF D 1.43 5.06 6.39 6.93 7.40 7.54
PSG Wealth Preserver FoF D - 0.62 1.46 3.18 4.65 4.60 5.32
PSG Wealth Moderate FoF D - 3.59 - 1.45 0.79 3.31 3.32 3.91
PSG Wealth Creator FoF D - 8.49 - 6.50 - 2.09 1.51 2.11 1.46
PSG Wealth Global Moderate FF D 16.15 21.29 14.32 12.77 7.46 9.20
PSG Wealth Global Creator FF D 19.88 30.05 20.93 19.88 14.83 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 5.25 - 0.19 1.11 2.04 4.16 1.50
PSG Wealth Global Creator FoF D - 3.73 5.70 6.10 7.86 10.63 7.31
PSG Wealth Global Preserver FoF (USD) D - 4.05 - 1.12 1.98 1.47 3.41 3.09
PSG Wealth Global Flexible FoF (USD) D - 1.14 5.38 5.96 6.77 9.51 7.46
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 1.37 - 0.10 3.94 1.94 6.41 6.41
PSG Wealth Global Flexible FoF (GBP) D 3.21 7.88 9.29 7.22 13.11 11.25
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.34 6.98 7.13 7.23 7.33 7.22
PSG Income A 5.51 9.46 8.92 8.70 8.75 8.45
PSG Diversified Income 1.89 5.01 5.85 6.62 7.09 7.21
PSG Stable A - 8.08 - 6.92 - 3.19 0.75 2.17 2.89
PSG Balanced A - 14.23 - 14.34 - 9.87 - 3.64 - 1.02 - 0.27
PSG Flexible A - 19.33 - 19.52 - 12.27 - 5.26 - 1.98 - 0.84
PSG SA Equity D - 24.15 - 27.91 - 20.17 - 11.75 - -
PSG Equity A - 20.42 - 22.47 - 15.96 - 7.93 - 3.47 - 3.92
PSG Global Flexible FF A - 0.35 0.17 - 1.79 3.11 1.91 -
PSG Global Equity FF A - 8.46 - 7.76 - 6.69 0.46 0.57 2.35
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 19.26 - 17.60 - 12.96 - 6.85 - 0.03 - 2.92
PSG Global Equity USD - 24.24 - 22.64 - 16.25 - 8.60 - 0.66 - 4.30
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 3.71 7.06 7.10 7.29 7.50 7.37
PSG Direct Low Equity - 7.78 - 6.80 - 3.47 0.42 1.93 2.55
PSG Direct Managed - 15.71 - 16.03 - 10.87 - 4.48 - 1.71 - 0.86
PSG Direct Aggressive - 16.01 - 16.80 - 11.49 - 4.60 - 1.88 -
PSG Direct Global Managed - 0.58 - 0.28 - 2.24 2.65 1.44 -
PSG Direct Global Aggressive - 5.68 - 5.25 - 5.29 1.01 0.63 -
  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 - 11.23 - 15.20 - 8.13 - 2.31 - 0.97 -
PSG Wealth SA Property Equity Portfolio - 39.91 - 41.78 - 27.62 - 20.19 - 15.52 -
PSG Wealth Income Growth Equity Portfolio - 21.57 - 25.85 - 13.66 - 5.23 - 2.69 -
PSG Wealth Offshore Equity Portfolio (USD) - 4.34 5.66 9.88 10.47 13.44 -
  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 for both Naspers and Prosus. Click here to read the full report on our secure site or log in to myBase.
  • Despite the regulatory and political risks that come with investing in Chinese stocks, we acknowledge that, to a large extent, Prosus and Naspers provide an alternative risk and reward profile due to the exposure to structural growth trends, which are not available through alternative local counters.
  • Naspers and Prosus trade at discounts of 23% and 13% respectively.
  • Given that management is determined to reduce the discounts over time, we suspect there will eventually be large value unlock for shareholders.
  • The share price for both Naspers and Prosus moves with a fairly high correlation to the USD/ZAR exchange rate.


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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.


company logo

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.


Corporate actions

Date Company Share code Expectation
01 July 2020 Yeboyethu Limited YYLBEE Cash Dividend
01 July 2020 Liberty Holdings Limited Cumulative Preference Shares LBHP Cash Dividend
01 July 2020 Sygnia Limited SYG Cash Dividend
01 July 2020 Invicta Holdings Limited Preference Shares IVTP 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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