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Rand hedges save the day

05 June 2019

Rand hedges save the day

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Market commentary

SA flag Icon
South Africa

Weak GDP results shocked investors, but the JSE still closed up on Tuesday thanks to strong performances by miners and companies with large offshore earnings. At the closing bell, the All Share rose 0.38%.

US flag Icon
United States

US shares started Tuesday in the green as investors were optimistic about possible interest rate cuts by the US Federal Reserve (Fed) later in the day. Shortly after the JSE closed, the Nasdaq was up 1.91%.

EU flag Icon
Europe

European markets enjoyed gains on Tuesday, boosted by auto-makers and auto suppliers that reached their highest point in over two months. The STOXX 600 closed 0.59% higher.

HK flag Icon
Hong Kong

On Tuesday, Asian markets recorded negative performances for yet another day due to the escalating tit-for-tat trade dispute between China and the US as well as the Chinese economy losing momentum. The Shanghai Composite Index ended the day 0.96% in the red.

Japan flag Icon
Japan

Mixed trade due to SoftBank and trade tensions were offset by manufacturing gains which led to the Nikkei closing flat on Tuesday. At the end of trade, the Nikkei was 0.01% down.

Rand Icon
Rand

The 3.20% contraction in GDP (its biggest drop since 2009’s financial crisis) hit the rand hard on Tuesday as it fell by 2.10% intraday. At 18h40, the rand traded at R14.76 against the dollar.

Precious metals Icon
Precious metals

Speculations on Tuesday that the Feb might be forced to cut US interest rates to offset trade war strains pushed investors to search for safe investments, which led to gold prices reaching a near three-month high. At 18h40, an ounce of spot gold cost $1 323.86.

Oil Icon
Oil

On Tuesday, oil slipped to its lowest point since January on the back of indications that a slower global economy is hurting demand and as Russia’s biggest oil producer opposed OPEC’s extended rate cuts. At 18h40, a barrel of Brent crude traded at $62.86.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 56 500.38 0.38 - 4.70 1.88 9.94 0.91
Gold mining 1 733.67 3.60 23.42 13.91 53.93 72.99
Basic minerals 31 779.87 2.06 - 2.76 0.01 21.62 18.21
Industrial index 76 977.22 0.77 - 5.24 3.63 9.26 - 4.59
Financial 41 239.13 - 2.11 - 5.62 0.49 0.98 - 2.92
Fin + Ind 30 7 678.78 - 0.19 - 5.36 2.57 6.36 - 4.05
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) 25 332.18 2.06 - 4.05 - 1.29 2.40 4.48
S&P 500 PR (USD) 2 803.27 2.15 - 4.61 0.88 4.90 4.11
NASDAQ (USD) 7 527.12 2.65 - 7.66 - 0.39 5.74 0.03
FT-100 (GBP) 7 214.29 0.41 - 1.72 2.55 5.15 - 2.62
Hang Seng (HKD) 26 761.52 - 0.49 - 10.05 - 6.44 - 0.32 - 10.28
Nikkei 225 (JPY) 20 408.54 - 0.01 - 8.31 - 5.72 - 6.38 - 7.29
MSCI World (USD) 6 031.30 1.60 - 4.31 0.49 4.21 - 0.14
Frankfurt (EUR) 5 343.62 1.51 - 3.56 3.27 5.61 - 6.26
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 323.60 0.73 4.22 2.81 6.81 2.24
Platinum ($) 821.00 3.01 - 3.75 - 2.84 1.86 - 8.88
Brent Oil ($) 61.97 1.13 - 12.53 - 5.63 - 0.18 - 17.69
Rand/USD 14.64 -1.26 -1.05 -2.63 -4.21 -16.36
Rand/GBP 18.59 -1.55 2.16 1.05 -3.69 -11.08
Rand/EUR 16.48 -1.33 -1.66 -2.23 -3.16 -12.08
ALBI (R) 666.31 - 0.58 0.57 2.70 5.71 7.78

  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: Standard Bank PMI May
  2. ZA: SACCI business confidence May
  1. US: ISM non-manufacturing PMI May
  2. EU: Retail sales Apr

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 3.96 8.00 8.01 8.08 7.88 7.54
PSG Wealth Income FoF D 4.28 7.72 7.75 8.08 8.15 8.07
PSG Wealth Preserver FoF D 4.04 4.68 5.50 4.96 6.09 6.78
PSG Wealth Moderate FoF D 4.18 2.39 4.36 3.61 4.93 5.99
PSG Wealth Creator FoF D 4.01 - 1.41 2.92 2.74 2.82 3.91
PSG Wealth Global Moderate FF D 7.24 11.75 7.77 1.75 5.26 7.37
PSG Wealth Global Creator FF D 10.16 16.76 13.61 7.90 11.04 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 0.85 - 1.94 1.18 3.61 0.92 1.15
PSG Wealth Global Creator FoF D 2.68 2.00 6.02 9.60 6.22 6.09
PSG Wealth Global Preserver FoF (USD) D 3.37 2.96 2.11 4.33 3.23 3.02
PSG Wealth Global Flexible FoF (USD) D 3.53 4.47 5.57 9.34 6.55 5.73
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 3.81 6.74 2.91 7.56 6.68 6.83
PSG Wealth Global Flexible FoF (GBP) D 4.50 9.65 5.70 12.88 10.10 10.88
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.97 6.63 7.04 7.24 7.12 6.95
PSG Income A 4.16 8.34 8.26 8.51 8.17 7.86
PSG Diversified Income 3.24 6.70 7.31 7.67 7.74 7.61
PSG Stable A - 0.86 0.77 4.54 5.15 5.52 6.31
PSG Balanced A - 4.84 - 4.82 1.76 3.32 3.58 5.54
PSG Flexible A - 4.24 - 4.75 1.96 3.78 4.33 6.29
PSG SA Equity D - 7.73 - 13.73 - 2.32 2.12 - -
PSG Equity A - 7.18 - 9.46 - 0.40 3.22 1.27 3.70
PSG Global Flexible FF A - 3.67 0.22 2.87 1.16 4.21 -
PSG Global Equity FF A - 5.45 - 2.03 2.82 2.10 3.88 5.77
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 10.01 - 12.59 - 2.99 3.72 0.30 0.63
PSG Global Equity USD - 11.70 - 14.39 - 2.96 4.77 - 0.08 0.19
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 3.46 7.05 7.28 7.57 7.40 7.18
PSG Direct Low Equity - 1.24 0.11 3.96 4.73 5.02 5.91
PSG Direct Managed - 4.90 - 5.23 1.35 2.96 3.30 5.25
PSG Direct Aggressive - 5.11 - 5.35 1.17 2.76 3.17 -
PSG Direct Global Managed - 3.88 - 0.24 2.41 0.70 3.73 -
PSG Direct Global Aggressive - 5.00 - 1.64 2.38 1.30 3.53 -

  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 0.22 -5.85 2.15 1.80 - -
PSG Wealth SA Property Equity Portfolio -1.73 -12.17 -5.12 -5.77 - -
PSG Wealth SA Dividend Income Equity Portfolio 2.21 -4.16 5.33 4.88 - -
PSG Wealth Offshore Equity Portfolio (USD) -0.06 6.17 9.21 11.96 - -
PSG Wealth Managed Volatility Equity Portfolio -1.51 -10.82 -3.30 - - -

  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

  • We recommend a neutral positioning for GRT SJ; click here to read the full report on our secure site.
  • Although the current distribution yield of 8.84% is enticing (well ahead of its long-term average and is guided to grow by 4.50% in the current year), locally, property fundamentals are deteriorating.
  • We feel that weak property fundamentals are fairly reflected in the valuation and would recommend a neutral position relative to the benchmark.


company logo

Highlights

  • We recommend an overweight positioning for MMI SJ; click here to read the full report on our secure site.
  • Strong growth was seen in Momentum Life, which constitutes a third of the total earnings, due to management tightening expenses, improving productivity and enhancing the product offering.
  • The improved earnings are likely to support higher dividend payments, which are likely to underpin the share price.


company logo

Highlights

  • We recommend an underweight positioning for HEIA NA; click here to read the full report on our secure site.
  • New product innovations such as low and non-alcoholic extensions to the Heineken brand is a growth prospect, although the threat of it cannibalising other brands within the portfolio is present.
  • We believe the share is fully valued at current levels, trading at a forward P/E of 20.83 times, one standard deviation away from its average forward P/E of 19.47 times.


Corporate actions

Date Company Share code Expectation
05 June 2019 AECI Limited 5.5 percent Cumulative Preference Shares AFEP Cash Distribution
05 June 2019 Astral Foods Limited ARL Cash Dividend
05 June 2019 Barloworld Limited BAW Cash Dividend
05 June 2019 Coronation Fund Managers Limited CML Cash Dividend
05 June 2019 FirstRand Bank Limited Dollar Custodial CERTS DCCUSD Interest Payment
05 June 2019 Dis-Chem harmacies Limited DCP Cash Dividend
05 June 2019 Gemgrow Properties Limited "A" GPA Cash Dividend
05 June 2019 Gemgrow Properties Limited "B" GPB Cash Dividend
05 June 2019 Indluplace Properties Limited ILU Cash Dividend
05 June 2019 Investec Limited Non-Redeemable Non-Cumulative Non-Participating Preference Shares INLP Cash Dividend
05 June 2019 Investec Plc Non-Redeemable Non-Cumulative Non-Participating Preference Shares INPP Cash Dividend
05 June 2019 Kaap Agri Limited KAL Cash Dividend
05 June 2019 Oasis Crescent Property Fund (REIT) OAS DRIP
Option 1 - (Cash Dividend) Gross - ZAR0.57445479Less 20% DWT - ZAR0.114890958Net - ZAR0.459563832
Option 2 (Reinvestment) Reinvestment Price - ZAR21.98
Default - Option 2 (Reinvestment)
05 June 2019 Pick n' Pay Stores Limited PIK Cash Dividend
05 June 2019 RDI REIT Plc RPL Cash Dividend
05 June 2019 Spear REIT Limited SEA Cash Dividend
05 June 2019 The Spar Group Limited SPP Cash Dividend
05 June 2019 Transaction Capital Limited TCP Cash Dividend
05 June 2019 Tharisa Plc THA Cash Dividend
05 June 2019 Wilderness Holdings Ltd WIL Voluntary Offer

  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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