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Local market focus shifts to SONA

07 February 2019

Local market focus shifts to SONA

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Market commentary

SA flag Icon
South Africa

The JSE pushed higher on Wednesday, while global markets paused as investors waited for new catalysts. The All Share gained 0.68%.

US flag Icon
United States

Wall Street edged lower on Wednesday as disappointing forecasts from videogame makers pulled the communications sector lower. The Nasdaq was up 0.74% at 19h15.

EU flag Icon
Europe

European shares were lower on Wednesday as weak results from banks and the carmaker Daimler brought an end to the market’s six-day rally. UK Prime Minister Theresa May’s trip to Brussels today may also generate headlines, as she attempts to negotiate further Brexit concessions with the EU.

HK flag Icon
Hong Kong

Mainland Chinese markets are shut for the week for the Lunar New Year holiday.

Japan flag Icon
Japan

Japan’s Nikkei edged up on Wednesday with markets barely reacting to US President Donald Trump’s State of the Union address. The Nikkei share average rose 0.14%.

Rand Icon
Rand

The rand was weaker on Wednesday, with most investors waiting for President Cyril Ramaphosa’s State of the Nation (SONA) address expected today. One dollar cost R13.55 at 19h25.

Precious metals Icon
Precious metals

Gains in gold were capped by a firmer dollar on Wednesday as investors waited for further news on US-China relations after Trump’s speech offered little clarity on the trade front. At 19h30 spot gold traded at $1 313.35 an ounce.

Oil Icon
Oil

Oil prices edged higher on Wednesday, although concerns over the outlook for the global economy capped gains. At 19h30 a barrel of Brent crude traded at $61.98 a barrel.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 54 574.28 0.68 4.65 0.62 - 2.39 - 0.08
Gold mining 1 451.93 0.62 3.17 27.66 36.59 22.61
Basic minerals 30 297.08 0.37 7.22 4.48 8.28 22.34
Industrial index 71 660.25 0.90 3.30 - 1.52 - 9.95 - 10.60
Financial 43 289.26 0.58 4.75 0.98 3.42 3.23
Fin + Ind 30 7 448.14 0.78 3.81 - 0.64 - 5.62 - 6.12
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) 25 388.84 0.68 8.52 0.41 0.95 6.78
S&P 500 PR (USD) 2 731.61 - 0.21 8.03 - 0.32 - 3.19 3.38
NASDAQ (USD) 7 374.89 0.74 9.87 1.29 - 4.73 7.39
FT-100 (GBP) 7 173.09 - 0.06 4.95 2.53 - 4.67 4.75
Hang Seng (HKD) 27 990.21 0.21 9.25 5.84 2.20 - 11.09
Nikkei 225 (JPY) 20 874.06 0.14 6.72 - 5.55 - 6.32 - 1.44
Paris CAC (EUR) 5 079.05 - 0.08 7.25 0.32 - 6.89 0.69
Frankfurt (EUR) 5 198.09 - 0.38 5.17 - 1.39 - 10.11 - 8.62
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 313.35 - 0.05 1.78 6.36 8.36 - 2.33
Platinum ($) 815.00 - 0.61 1.75 - 6.21 - 2.04 - 18.17
Brent Oil ($) 61.98 - 0.85 8.62 - 15.29 - 15.34 - 8.34
Rand/USD 13.55 -1.09 2.87 4.27 8.19 -13.29
Rand/GBP 17.52 -0.90 1.65 5.15 6.91 -4.90
Rand/EUR 15.39 -0.72 3.63 4.17 8.30 -3.86
ALBI (R) 650.39 - 0.21 1.71 5.28 5.08 8.31
  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: Foreign exchange reserves JAN
  1. US: Fed chair Powell speech
  2. EU: ECB economic bulletin
  3. UK: BoE 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 4.00 8.00 8.06 8.06 7.77 7.44
PSG Wealth Income FoF D 3.76 8.00 8.00 8.30 8.02 8.25
PSG Wealth Preserver FoF D 0.41 4.01 5.46 5.67 6.15 7.36
PSG Wealth Moderate FoF D - 2.48 0.29 4.06 5.06 5.02 6.88
PSG Wealth Creator FoF D - 3.62 - 2.94 2.32 5.63 3.16 5.82
PSG Wealth Global Moderate FF D - 2.43 4.98 3.68 0.57 6.04 6.34
PSG Wealth Global Creator FF D - 3.47 6.61 10.01 5.55 11.36 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 2.63 - 3.94 3.84 6.48 1.81 2.52
PSG Wealth Global Creator FoF D - 3.51 - 1.76 10.24 11.74 7.03 7.52
PSG Wealth Global Preserver FoF (USD) D 0.59 0.28 3.41 6.11 3.41 3.72
PSG Wealth Global Flexible FoF (USD) D - 1.38 - 0.20 9.73 11.79 7.32 6.98
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 0.61 5.81 2.68 8.90 6.22 7.05
PSG Wealth Global Flexible FoF (GBP) D - 1.16 5.96 7.40 14.63 9.90 11.23
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.60 7.29 7.42 7.43 7.20 6.96
PSG Income A 4.11 8.16 8.49 8.45 8.00 7.75
PSG Diversified Income 3.03 6.89 7.80 7.92 7.91 7.69
PSG Stable A 0.62 3.30 5.73 7.10 6.86 7.10
PSG Balanced A - 2.55 - 0.78 3.48 6.97 6.03 7.32
PSG Flexible A - 1.83 - 0.45 3.04 8.17 7.04 8.27
PSG SA Equity D - 3.89 - 9.12 - 1.54 8.69 - -
PSG Equity A - 3.64 - 4.75 0.51 9.15 4.57 6.58
PSG Global Flexible FF A - 3.24 3.98 2.92 4.86 7.69 -
PSG Global Equity FF A - 4.13 3.11 4.01 6.77 7.74 7.66
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 2.94 - 4.33 3.50 11.93 3.72 4.16
PSG Global Equity USD - 3.64 - 4.32 4.62 13.83 3.87 4.41
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 3.42 7.10 7.63 7.65 7.39 7.15
PSG Direct Low Equity 0.13 2.57 5.14 6.74 6.40 6.79
PSG Direct Managed - 2.59 - 1.15 2.90 6.79 5.80 7.07
PSG Direct Aggressive - 2.79 - 1.08 1.96 7.46 6.19 -
PSG Direct Global Managed - 3.46 3.51 2.45 4.39 7.20 -
PSG Direct Global Aggressive - 4.02 2.98 3.15 5.59 7.24 -
  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 Equity 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 -4.96 -4.98 1.68 6.12 - -
PSG Wealth SA Property Equity Portfolio -0.16 -1.34 -1.22 -0.75 - -
PSG Wealth SA Dividend Income Equity Portfolio -3.87 -5.47 5.67 - - -
PSG Wealth Offshore Equity Portfolio (USD) 0.39 4.60 15.06 15.24 - -
PSG Wealth Managed Volatility Equity Portfolio -7.84 -10.71 -2.37 - - -
  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 trade ideas

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Highlights

  • On 24 January 2019, the VOW GR share price was EUR 145.5c and our recommendation is up to 0.30%.
  • Sales revenue increased by 2.7% to EUR 174.6 billion between January and September 2018.
  • This increase is due to improvements in volume, mix and the good performance of the financial services division, which were partially offset by exchange rate factors.
  • Operating profit before special items rose slightly to EUR 13.3 billion on the back of volume improvements.
  • Although fair value measurement gains and losses on certain derivatives and a lower capitalisation ratio for development costs had a negative impact, special items related to the diesel issue reduced operating profit.
  • The group’s operating profit was up to EUR 10.9 billion.


company logo

Highlights

  • The share code is CVX NYSE and the recommendation is up to 2.63%.
  • Increased competition from illicit trade, unexpected and significant excise duties, ever-changing litigation, disputed taxes, interest, penalties, and adverse foreign exchange rate movements remain risks.
  • Growth was due to a 6% increase in oil production to 8 634 million barrels oil equivalent per day (MBOED) and an increase in the average West Texas oil price of 31% from an average of $51 per barrel for nine months in 2017 to $67 per barrel in 2018.
  • This translated into an increase in EPS of 80% to $5.79 per share.
  • Dividend per share increased by 4% for the first nine months of 2018 to $3.36 per share.
  • Chevron repurchased shares to the value of $750 million in 2018.


company logo

Highlights

  • The share code is and the recommedation is up to 7.50%.
  • BAT offers a product that has traditionally demonstrated resilience in times of economic uncertainties as it has a strong economic moat and enjoys high brand loyalty.
  • Our research found that BAT remains an excellent company with a well-balanced portfolio of brands that covers all major price points, together with a geographic diversity that mitigates the country-specific risks for shareholders.
  • BAT has recently broadened its brand focus, by investing in Reynalds American Inc (RAI), and gained a material portfolio of reduced risk products.
  • The acquisition resulted in a significant increase in financial gearing.
  • The group’s operations, which includes stable volumes, good margins and consistent healthy cash generation, contribute to our view that gearing is manageable.


Corporate actions

Date Company Share code Expectation
13 February 2019 Ecsponent Ltd Fixed Rate NotesX2 ECSFX2 Interest Payment
13 February 2019 Ecsponent Ltd Fixed Rate NotesX3 ECSFX3 Interest Payment
13 February 2019 Hosken Passenger Logistics & Rail Limited HPR Cash Dividend
13 February 2019 Howden Africa Holdings Limited HWN General Offer
13 February 2019 Kaap Agri Limited KAL Cash Dividend
13 February 2019 Tharisa Plc THA 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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