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Gold surged on US rate cut optimism

31 July 2019

Gold surged on US rate cut optimism

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Market commentary

SA flag Icon
South Africa

The JSE endured a choppy session on Tuesday as a strong showing from Tencent and the overall mining sector boosted the market, but investors remained cautious ahead of the US-China trade talks and key interest rate decisions. Shortly after the closing bell, the All Share was down by 1.37%.

US flag Icon
United States

US markets declined on Tuesday as investors remained cautious ahead of the Federal Reserve’s (Fed) interest rates decision later today, which overshadowed the positive sentiment that pushed indexes to record highs in the previous week. At 18h00, the S&P 500 was trading at 0.37% in the red.

EU flag Icon
Europe

European markets struggled for direction on Tuesday after sentiment was dampened by the release of poor forecasts from German conglomerates, Bayer and Lufthansa. At 18h10, the FTSE 100 was 0.52% in the red.

HK flag Icon
Hong Kong

Shares in Hong Kong traded higher on Tuesday ahead of the infamous US-China trade negotiations, while most market participants remained optimistic that the world’s largest economy will trim interest rates to counter slowing global growth. At 18h15, the Hang Seng gained 0.17%.

Japan flag Icon
Japan

Japanese markets closed higher on Tuesday supported by an upsurge in technology stocks, as investors set their sights on a potential economic recovery on the horizon. At the closing bell, the Nikkei had gained 0.43%.

Rand Icon
Rand

The rand weakened against major global currencies on Tuesday, amid a rand asset sell-off that was sparked by Eskom woes and increasing fears that the UK is headed for a no-deal exit from the EU. At 18h20, the rand traded R14.10 against the dollar.

Precious metals Icon
Precious metals

Gold prices firmed on Tuesday as investors waited for direction from the Fed’s two-day monetary policy meeting where is it expected to cut interest rates by at least 25 basis points. At 18h30, spot gold was trading in the green at $1 428.18 an ounce.

Oil Icon
Oil

Oil prices recorded a fourth consecutive day of gains on Tuesday supported by the resumption of the US-China trade negotiations and on optimism that the Fed will announce an interest rate cut later today. At 18h35, a barrel of Brent crude was trading at $64.18.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 57 241.55 - 1.37 - 1.59 - 1.88 7.46 3.23
Gold mining 2 151.66 1.41 7.04 50.18 46.54 104.39
Basic minerals 32 720.63 - 1.12 - 4.09 0.27 10.99 19.70
Industrial index 79 139.39 - 1.29 1.71 - 0.74 12.97 - 0.67
Financial 39 804.10 - 1.81 - 5.46 - 6.45 - 5.66 - 3.68
Fin + Ind 30 7 735.36 - 1.45 - 0.67 - 2.62 6.30 - 1.63
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) 27 198.02 - 0.09 2.37 2.92 10.05 10.03
S&P 500 PR (USD) 3 013.18 - 0.25 2.55 2.80 13.54 9.71
NASDAQ (USD) 8 273.61 - 0.23 3.38 2.48 15.82 9.63
FT-100 (GBP) 7 646.77 - 0.52 3.05 4.06 12.94 3.73
Hang Seng (HKD) 28 146.50 0.14 - 0.99 - 3.24 4.38 1.46
Nikkei 225 (JPY) 21 709.31 0.43 2.04 - 2.23 6.80 - 1.64
MSCI World (USD) 6 408.32 - 0.41 1.22 - 6.45 10.84 4.61
Frankfurt (EUR) 5 422.95 - 2.18 - 2.03 - 1.59 8.64 - 5.09
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 418.95 0.05 0.41 10.67 8.45 16.39
Platinum ($) 881.00 1.61 7.97 - 1.89 7.97 6.92
Brent Oil ($) 63.71 0.39 - 4.27 - 11.56 3.90 - 14.24
Rand/USD 14.19 -0.28 -0.78 1.65 -6.71 -7.74
Rand/GBP 17.25 -0.25 3.50 8.40 0.96 0.22
Rand/EUR 15.83 -0.40 0.87 2.12 -4.04 -2.63
ALBI (R) 677.28 0.02 - 0.63 2.27 5.14 8.25

  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: Balance of Trade JUN
  1. CN: NBS Manufacturing PMI JUL
  2. EA: GDP Growth Rate Flash Q2

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 3.91 8.05 7.99 8.07 7.93 7.60
PSG Wealth Income FoF D 4.15 7.93 7.82 7.99 8.11 8.06
PSG Wealth Preserver FoF D 3.97 4.56 5.35 5.60 6.24 6.76
PSG Wealth Moderate FoF D 4.95 2.27 4.08 4.70 5.47 5.95
PSG Wealth Creator FoF D 3.71 0.58 2.65 3.89 4.15 3.65
PSG Wealth Global Moderate FF D 11.06 9.36 7.51 5.72 6.23 7.99
PSG Wealth Global Creator FF D 18.78 13.98 14.16 12.45 12.35 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 6.47 1.52 2.90 5.05 2.79 1.81
PSG Wealth Global Creator FoF D 14.53 6.17 9.42 11.75 8.60 7.45
PSG Wealth Global Preserver FoF (USD) D 4.94 4.62 2.94 3.73 4.41 3.24
PSG Wealth Global Flexible FoF (USD) D 8.69 4.48 6.91 9.75 8.15 6.16
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 10.68 9.74 5.67 5.64 8.95 7.77
PSG Wealth Global Flexible FoF (GBP) D 16.36 11.89 9.81 11.51 13.21 12.36
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.58 7.30 7.35 7.23 7.30 7.10
PSG Income A 4.05 8.24 8.25 8.37 8.23 7.89
PSG Diversified Income 3.41 6.33 7.25 7.62 7.76 7.63
PSG Stable A - 0.95 - 0.34 3.71 4.86 5.46 5.97
PSG Balanced A - 4.43 - 6.61 0.05 2.87 3.66 4.86
PSG Flexible A - 4.35 - 5.44 0.34 3.38 4.51 5.63
PSG SA Equity D - 13.15 - 14.84 - 6.45 - 1.22 - -
PSG Equity A - 8.79 - 10.99 - 3.26 1.57 1.89 2.15
PSG Global Flexible FF A 0.90 - 1.33 2.01 4.90 5.29 -
PSG Global Equity FF A 0.18 - 3.27 2.04 5.72 5.36 6.16
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 4.04 - 8.64 - 2.44 4.35 2.09 0.83
PSG Global Equity USD - 4.75 - 10.19 - 2.34 5.23 2.08 0.47
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 6.94 7.29 7.48 7.46 7.22
PSG Direct Low Equity - 1.17 - 1.03 3.06 4.45 5.01 5.56
PSG Direct Managed - 4.63 - 6.74 - 0.33 2.53 3.40 4.58
PSG Direct Aggressive - 4.71 - 6.49 - 0.64 2.85 3.65 -
PSG Direct Global Managed 0.67 - 1.78 1.55 4.42 4.81 -
PSG Direct Global Aggressive 0.22 - 2.99 1.58 4.94 4.86 -

  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 -2.52 -5.34 0.65 2.42 - -
PSG Wealth SA Property Equity Portfolio -7.61 -7.40 -6.86 -4.40 - -
PSG Wealth SA Dividend Income Equity Portfolio -4.85 -6.25 2.76 3.61 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.20 9.27 12.29 13.47 - -
PSG Wealth Managed Volatility Equity Portfolio -5.95 -10.24 -4.01 -2.72 - -

  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 HMN SJ is underweight; click here to read the full report on our secure site.
  • Hammerson’s direct property portfolio is not diversified across sectors as the portfolio consists of retail assets only. However, it is diversified geographically with flagship destinations in the UK, France and Ireland.
  • The group’s dividend yield is trading above its long-term average and is well above the yield offered by its peers.


company logo

Highlights

  • Our recommendation for ITU SJ is underweight; click here to read the full report on our secure site.
  • Intu’s direct property portfolio is undiversified across sectors as the portfolio consists of retail assets only and, geographically, the majority of the portfolio is held in the UK.
  • In 2018, the demand for prime shopping centres has significantly fallen due to the uncertainty of Brexit, the structural change in retail and the higher-than-normal level of administrations, and company-voluntary arrangements.


company logo

Highlights

  • Our recommendation for MND SJ is overweight; click here to read the full report on our secure site.
  • Mondi has shown robust operating performance and strong cost control.
  • Although macroeconomic uncertainties remain due to Brexit and the stability of the Eurozone, the group is focused on delivering accretive growth through its strong brand and good structural growth drivers.


Corporate actions

Date Company Share code Expectation
31 July 2019 Finbond Group Limited FGL DVOP
Option 1 - (Cash Dividend) Gross - ZAR0.0155Less 20% Tax - ZAR0.0031Net ZAR0.0124
Option 2 (Capitalisation Shares)Ratio - 0.42922 new shares for every 100 held
Default - Option 1 (Cash Dividend)
31 July 2019 Nampak Limited 6 percent Cumulative Preference Shares NPKP Cash Dividend
31 July 2019 Nampak Limited 6.5 percent Cumulative Preference Shares NPP1 Cash Dividend
31 July 2019 Peregrine Holdings Limited PGR 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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