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Rand battles against Eskom special paper

30 October 2019

Rand battles against Eskom special paper

Daily Investment Update

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Market commentary

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South Africa

Tuesday was a flat trading day for the local bourse as investors awaited the outcome of the US Federal Reserve’s (Fed) monetary policy decision as well as the local medium-term budget policy statement (MTBPS) to be delivered by Finance Minister Tito Mboweni later today. At the closing bell, the All Share had lost 0.08%.

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United States

It was a mixed Tuesday for Wall Street as upbeat earnings reports from Pfizer and Merck boosted the market, but disappointing results from Alphabet capped gains.

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Europe

Most European markets were hit on Tuesday by weak earnings reports, which weighed heavily on investor sentiment. It was the first drop in seven sessions. At 18h45 the STOXX 600 was down by 0.18%.

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Hong Kong

Asian indices closed down on Tuesday due to profit taking and warnings that “Hong Kong could record negative growth for the full 2019 year”. At the close of trade, the Shanghai Composite Index was 0.87% in the red.

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Japan

The Nikkei extended gains on Tuesday after US President Donald Trump said on Monday that he expected “to sign a significant part of the trade deal with China ahead of schedule,” boosting investor sentiment. The Nikkei closed up 0.47%.

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Rand

The local currency fought hard on Tuesday after a special paper, released ahead of the MTBPS later today, touched on an Eskom bailout plan of R59 billion. At 18h45, a dollar traded at R14.59.

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Precious metals

Gold prices fell to a one-week low as traders believe there's a 94% chance that the Fed will cut the US interest rate by 25 basis points later this week, boosting risk-on trade. At 18h45, gold traded at $1 488.80 per ounce.

Oil Icon
Oil

The oil price steadied on Tuesday as investors were optimistic that the trade war between the US and China could ease up in the coming month. A barrel of Brent crude traded at $61.81 at 18h45.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 55 716.69 - 0.08 1.12 - 2.60 - 3.33 12.37
Gold mining 2 442.88 - 2.69 6.64 15.36 70.32 110.61
Basic minerals 32 730.21 - 0.08 4.33 1.17 1.92 20.69
Industrial index 73 954.53 - 0.06 - 2.20 - 7.07 - 6.73 11.87
Financial 40 410.86 - 0.12 3.55 1.64 - 3.02 4.34
Fin + Ind 30 7 442.61 - 0.08 - 0.15 - 4.09 - 5.30 9.44
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) 27 071.42 - 0.07 1.04 0.06 3.21 13.46
S&P 500 PR (USD) 3 036.89 - 0.08 2.65 1.03 4.22 17.35
NASDAQ (USD) 8 276.85 - 0.59 4.28 0.07 2.11 18.71
FT-100 (GBP) 7 306.26 - 0.34 - 1.34 - 3.59 0.55 8.85
Hang Seng (HKD) 26 786.76 - 0.39 3.38 - 3.77 - 7.62 11.89
Nikkei 225 (JPY) 22 974.13 0.47 5.01 7.15 4.30 11.07
MSCI World (USD) 6 522.68 0.05 2.69 1.64 3.63 15.27
Frankfurt (EUR) 5 774.06 - 0.02 4.51 4.20 4.96 14.15
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 505.05 0.03 0.59 6.12 17.44 21.76
Platinum ($) 916.00 - 1.29 - 1.40 5.65 2.35 10.10
Brent Oil ($) 61.57 - 0.73 - 0.55 - 2.98 - 14.66 - 20.68
Rand/USD 14.64 -0.45 3.31 -1.87 -0.72 -0.03
Rand/GBP 18.83 -0.55 -1.19 -8.11 0.60 -0.49
Rand/EUR 16.26 -0.57 1.78 -2.46 -0.16 2.34
ALBI (R) 696.94 - 0.30 1.35 2.92 5.08 13.98
  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. Medium-term budget policy statement (MTBPS)
  1. US: GDP Growth Rate Q/Q Adv Q3
  2. EU: Business Confidence OCT
  3. US: Fed Interest Rate Decision

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 3.90 8.02 7.95 8.03 7.97 7.74
PSG Wealth Income FoF D 3.81 8.30 7.68 8.09 8.09 8.19
PSG Wealth Preserver FoF D 0.85 6.26 3.80 5.95 5.73 6.97
PSG Wealth Moderate FoF D - 1.53 5.45 1.47 5.28 4.60 6.38
PSG Wealth Creator FoF D - 4.30 6.19 - 1.08 4.29 3.10 4.76
PSG Wealth Global Moderate FF D 3.98 7.63 3.91 7.09 5.80 9.05
PSG Wealth Global Creator FF D 4.79 14.36 9.58 14.04 11.20 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 2.56 9.10 2.40 5.48 3.90 2.88
PSG Wealth Global Creator FoF D 3.48 15.37 7.98 12.38 0.09 8.30
PSG Wealth Global Preserver FoF (USD) D 2.35 7.23 2.98 3.90 5.06 3.93
PSG Wealth Global Flexible FoF (USD) D 2.69 12.49 6.79 10.59 9.52 7.88
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.69 6.55 3.67 2.76 8.36 6.91
PSG Wealth Global Flexible FoF (GBP) D 3.15 11.25 7.11 8.42 13.08 11.62
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.59 7.30 7.31 7.42 7.35 7.16
PSG Income A 4.03 8.51 8.39 8.41 8.28 7.94
PSG Diversified Income 3.45 7.54 7.31 7.77 7.76 7.81
PSG Stable A - 0.71 1.55 3.11 4.98 5.54 6.38
PSG Balanced A - 4.59 - 5.03 - 1.77 2.47 3.63 5.29
PSG Flexible A - 4.43 - 3.78 - 1.35 2.98 4.82 6.20
PSG SA Equity D - 12.64 - 13.07 - 9.64 - 3.21 - -
PSG Equity A - 9.21 - 9.98 - 6.06 0.55 2.41 2.90
PSG Global Flexible FF A - 3.21 - 5.10 - 2.05 4.59 0.05 -
PSG Global Equity FF A - 4.28 - 6.20 - 2.30 5.26 5.85 7.67
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 4.40 - 2.96 - 2.88 3.42 3.79 2.02
PSG Global Equity USD - 5.34 - 3.83 - 3.01 4.14 4.23 1.90
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 3.53 7.53 7.38 7.57 7.49 7.32
PSG Direct Low Equity - 1.05 0.67 2.30 4.46 5.06 5.93
PSG Direct Managed - 4.77 - 5.14 - 2.11 2.13 3.46 5.04
PSG Direct Aggressive - 5.73 - 6.17 - 3.14 2.28 3.97 -
PSG Direct Global Managed - 3.43 - 5.53 - 2.50 4.12 4.86 -
PSG Direct Global Aggressive - 4.10 - 6.21 - 2.64 4.54 5.19 -
  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 -8.78 -1.59 -2.93 1.06 1.75 -
PSG Wealth SA Property Equity Portfolio - 5.29 - 8.45 - 7.52 - 3.76 - -
PSG Wealth SA Dividend Income Equity Portfolio -7.05 -0.93 0.54 3.49 - -
PSG Wealth Offshore Equity Portfolio (USD) 2.87 14.32 9.72 14.74 12.00 -
PSG Wealth Managed Volatility Equity Portfolio -7.65 -7.87 -7.22 -3.66 - -
  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

  • Our recommendation for INGA AMS is neutral; click here to read the full report on our secure site.
  • The group’s high dividend yield remains attractive and management is committed to maintaining a Return On Equity between 10% and 12%.
  • Adjusted earnings per share were up 3% to 66 cents and the group declared a flat interim dividend of 12 cents.


company logo

Highlights

  • Our recommendation for SPG SJ is overweight; click here to read the full report on our secure site.
  • Management believes that recent contract wins in the consumer-facing operations and the strong African commodities environment, combined with improved operational efficiencies, should support earnings.
  • Trading at a forward P/E of 7.19 times and an implied rump P/E of 6.15 times (i.e. excluding SG Fleet), we feel that the share offers value and would recommend an overweight exposure.


company logo

Highlights

  • Our recommendation for VKE SJ is neutral; click here to read the full report on our secure site.
  • The group declared a year-end dividend of 103.38 cents per share, reflecting a 7.50% growth on the prior year.
  • The group is focussing on strengthening the balance sheet by reducing debt. The group’s see-through LTV ratio is 38.80%.


Corporate actions

Date Company Share code Expectation
30 October 2019 Afrocentric Investment Corporation Limited ACT Cash Dividend
30 October 2019 Barloworld Limited 6 percent Cumulative Preference Shares BAWP Cash Dividend
30 October 2019 Bowler Metcalf Limited BCF Cash Dividend
30 October 2019 Cognition Holdings Limited CGN Cash Dividend
30 October 2019 Comair Limited COM Cash Dividend
30 October 2019 Capitec Bank Holdings Limited CPI Cash Dividend
30 October 2019 Equites Property Fund Limited (REIT) EQU DRIP
Option 1 - (Cash Dividend) Gross - ZAR0.7443284Less 20% DWT - ZAR0.1488657Net - ZAR0.5954627
Option 2 (Reinvestment)Reinvestment Price - To be announced
Default - Option 1 (Cash)
30 October 2019 PSG Konsult Limited KST Cash Dividend
30 October 2019 Newpark REIT Limited NRL Cash Dividend
30 October 2019 Netcare Limited Cumulative, Non -Redeemable, Non-Participating, Non-Convertible Preference Shares NTCP Cash Dividend
30 October 2019 Putprop Limited PPR Cash Dividend
30 October 2019 Raven Property Group Limited RAV Tender Offer
30 October 2019 RCL Foods Limited RCL Cash Dividend
30 October 2019 Rand Merchant Investment Holdings Limited RMI Cash Dividend
30 October 2019 Telemasters Holdings Limited TLM 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


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