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Rand hurt by Mboweni’s dire medium budget

31 October 2019

Rand hurt by Mboweni’s dire medium budget

Daily Investment Update

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Market commentary

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South Africa

Although Finance Minister Tito Mboweni painted a dire picture of South Africa’s financial future on Wednesday in his medium-term budget policy statement (MTBPS), the mining sector’s strong performance boosted the local bourse. At the closing bell, the All Share had gained 0.28%.

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United States

Wall Street opened flat on Wednesday due to investors waiting for the US Federal Reserve (Fed) to announce whether it will cut interest rates by 25 basis points, as widely expected. At 19h20, the Dow Jones was 0.08% up.

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Europe

Wednesday was a flat trading day for European markets as investors awaited the Fed’s decision regarding US interest rates. Although banks dipped around 2%, household goods offset losses by adding 1.50%. At 19h20, the STOXX 600 was up by 0.08%.

HK flag Icon
Hong Kong

Asian indices extended losses into Wednesday as reports from the White House stated that a US-China trade deal might not be reached in time to be signed in Chile next month as expected. At the close of trade, the Hang Seng Index was 0.44% in the red.

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Japan

Japanese markets pulled back on Wednesday as investors awaited the Fed’s interest rate announcement and as they, once again, saw conflicting reports regarding the US-China trade war deal. The Nikkei closed down 0.57%.

Rand Icon
Rand

On Wednesday, shortly after Mboweni delivered his MTBPS, the rand fell by 2.50%. However, it made up some ground towards the end of business, strengthening to below R15/$. At 19h20, a dollar traded at R14.98.

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Precious metals

Although range-bound, bullion prices rose on Wednesday while investors waited for more clarity around the Fed’s upcoming interest rate statements. At 19h20, gold traded at $1 494.14 per ounce.

Oil Icon
Oil

Oil prices fell on Wednesday on the back of reports of growing US inventories as well as renewed concerns around the US-China trade dispute, damaging global oil demand. A barrel of Brent crude traded at $60.87 at 19h20.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 55 872.60 0.28 2.13 - 0.96 - 2.82 13.95
Gold mining 2 595.18 6.23 15.15 20.85 81.50 122.88
Basic minerals 33 117.73 1.18 6.08 3.53 3.81 23.95
Industrial index 74 541.49 0.79 - 0.96 - 5.11 - 5.81 14.45
Financial 39 763.83 - 1.53 3.35 1.93 - 4.65 2.77
Fin + Ind 30 7 435.64 - 0.07 0.57 - 2.74 - 5.28 10.42
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) 27 186.69 0.43 1.11 0.57 3.50 11.96
S&P 500 PR (USD) 3 046.77 0.33 2.47 1.62 4.46 15.91
NASDAQ (USD) 8 303.98 0.34 3.85 0.64 3.14 17.24
FT-100 (GBP) 7 330.78 0.34 - 0.77 - 2.76 1.19 9.07
Hang Seng (HKD) 26 667.71 - 0.44 2.38 - 4.33 - 7.43 12.42
Nikkei 225 (JPY) 22 843.12 - 0.57 5.00 6.08 3.71 8.79
MSCI World (USD) 6 537.39 0.23 2.71 1.93 3.71 14.28
Frankfurt (EUR) 5 760.94 - 0.23 3.88 6.28 4.59 14.38
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 490.15 - 0.17 0.17 4.32 15.95 22.14
Platinum ($) 921.00 0.55 - 0.43 4.54 2.56 10.56
Brent Oil ($) 60.61 - 1.59 - 0.28 - 6.35 - 16.74 - 20.16
Rand/USD 14.96 - 2.19 1.26 - 2.17 - 3.28 - 2.15
Rand/GBP 19.34 - 2.72 - 3.93 - 9.19 - 1.78 - 3.96
Rand/EUR 16.70 - 2.72 - 1.23 - 3.02 - 3.04 - 0.59
ALBI (R) 686.05 - 1.56 - 0.08 1.30 3.60 12.55
  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. PPI SEP
  2. Balance of trade SEP
  1. EU: GDP Growth Rate Flash Q3
  2. US: Personal Spending MoM SEP
  3. CN: Caixin Manufacturing PMI OCT

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 3.92 8.04 7.98 8.04 7.98 7.74
PSG Wealth Income FoF D 3.80 8.25 7.71 8.11 8.09 8.19
PSG Wealth Preserver FoF D 0.99 6.32 3.84 5.98 5.64 6.94
PSG Wealth Moderate FoF D - 1.39 5.50 1.50 5.31 4.52 6.29
PSG Wealth Creator FoF D - 4.14 5.20 - 1.13 4.26 3.19 4.51
PSG Wealth Global Moderate FF D 4.87 10.40 4.30 7.36 5.49 9.17
PSG Wealth Global Creator FF D 5.82 16.73 10.08 14.39 10.95 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 2.38 9.09 2.45 5.51 3.98 2.82
PSG Wealth Global Creator FoF D 3.40 15.94 8.18 12.51 9.23 8.20
PSG Wealth Global Preserver FoF (USD) D 2.26 7.15 2.97 3.89 4.94 3.92
PSG Wealth Global Flexible FoF (USD) D 2.65 13.10 6.87 10.65 9.17 7.91
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.64 6.34 3.68 2.76 8.04 6.91
PSG Wealth Global Flexible FoF (GBP) D 3.19 11.76 7.21 8.50 12.38 11.67
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.59 7.30 7.31 7.42 7.35 7.16
PSG Income A 3.97 8.39 8.39 8.41 8.28 7.94
PSG Diversified Income 3.39 7.41 7.32 7.78 7.73 7.79
PSG Stable A - 0.56 1.59 3.18 5.03 5.47 6.35
PSG Balanced A - 4.22 - 4.80 - 1.64 2.56 3.54 5.22
PSG Flexible A - 4.04 - 3.81 - 1.20 3.08 4.66 6.12
PSG SA Equity D - 11.95 - 14.06 - 9.57 - 3.16 - -
PSG Equity A - 8.62 - 10.13 - 5.90 0.67 2.31 2.77
PSG Global Flexible FF A - 2.42 - 2.10 - 1.57 4.93 4.89 -
PSG Global Equity FF A - 3.46 - 3.08 - 1.78 5.63 5.37 7.64
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 4.23 - 3.49 - 2.87 3.43 3.99 1.97
PSG Global Equity USD - 5.11 - 4.42 - 2.98 4.15 4.46 1.85
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 3.48 7.42 7.39 7.58 7.48 7.31
PSG Direct Low Equity - 0.89 0.72 2.38 4.51 4.98 5.90
PSG Direct Managed - 4.40 - 4.98 - 1.98 2.23 3.35 4.97
PSG Direct Aggressive - 5.21 - 5.62 - 2.92 2.43 3.76 -
PSG Direct Global Managed - 2.64 - 2.55 - 2.02 4.46 4.41 -
PSG Direct Global Aggressive - 3.29 - 3.15 - 2.14 4.90 4.72 -
  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 - 8.51 - 3.11 - 2.88 1.10 2.01 -
PSG Wealth SA Property Equity Portfolio - 5.44 - 8.64 - 7.97 - 3.44 - -
PSG Wealth SA Dividend Income Equity Portfolio - 6.83 - 3.13 0.56 3.50 - -
PSG Wealth Offshore Equity Portfolio (USD) 2.33 14.59 9.61 14.66 11.66 -
PSG Wealth Managed Volatility Equity Portfolio - 7.83 - 8.91 - 7.25 - 3.68 - -
  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
06 November 2019 Atlantic Leaf Prperties Limited ALP Cash Dividend
06 November 2019 Ecsponent Limited Class A Preference Share ECSP10 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP12 Cash Dividend
06 November 2019 Ecsponent Limited Class A Preference Share ECSP13 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP15 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP18 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP21 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP24 Cash Dividend
06 November 2019 Ecsponent Limited Class A Preference Share ECSP4 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP6 Cash Dividend
06 November 2019 Ecsponent Limited Class A Preference Share ECSP7 Cash Dividend
06 November 2019 Ecsponent Limited Class C Preference Share ECSP9 Cash Dividend
06 November 2019 London Finance Investment Group Plc LNF Cash Dividend
06 November 2019 PSG Group Limited PSG Cash Dividend
06 November 2019 Spear REIT Limited SEA Cash Dividend
06 November 2019 Trencor Limited TRE Odd-Lot Offer
Option 1 - Sell Odd Lot holdings (less than 100 shares) at the Offer Price:Gross - TBALess 20% SA Tax - TBANet - TBA
Option 2 - Retain Odd lot holdings Default - Option 1
06 November 2019 Trencor Limited TRE Specific Repurchase Offer
Option 1 - Sell Specific Offer Shares (holdings from 100 to 635 shares) at the Offer Price:Gross - TBALess 20% SA Tax - TBANet - TBA
Option 2 - No Action Default - Opton 2
  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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