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Global shares drop as tensions climb ahead of trade talks

09 October 2019

Global shares drop as tensions climb ahead of trade talks

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Market commentary

SA flag Icon
South Africa

The JSE closed lower on Tuesday, with investors moving to safe havens as hope that the US and China will have successful trade talks this week faded. The All Share fell 0.33%.

US flag Icon
United States

The US government widened its trade blacklist yesterday to include some of China's top artificial intelligence start-ups, punishing Beijing for its treatment of Muslim minorities and ratcheting up tensions ahead of high-level trade talks this week. Just after the JSE closed, the Dow fell 1.06%.

EU flag Icon
Europe

European shares dropped on Tuesday as an escalation in US-China trade tensions and Brexit worries along with disappointing corporate news dented sentiment. After the JSE closed the FTSE 100 was down 0.39%, France’s CAC 40 0.88% and Germany’s DAX 0.81%.

HK flag Icon
Hong Kong

Hong Kong stocks closed higher on Tuesday, tracking gains in mainland China on stimulus hopes, though uncertainties around Sino-US trade talks and worries over protests in the island city curbed gains. The Hang Seng index rose 0.24%.

Japan flag Icon
Japan

Prices for Japanese government bonds (JGB) fell across maturities on Tuesday, taking cues from a rally in Tokyo stocks and overnight losses in US Treasuries. The benchmark 10-year JGB futures fell to 154.95 index points.

Rand Icon
Rand

The rand was stronger on Tuesday morning as investors anticipated some progress in the US-China trade war as the two countries begin negotiations on Thursday. However the currency weakened to R15.27 at 20h00.

Precious metals Icon
Precious metals

Gold prices slipped on Tuesday, weighed down by a firmer dollar ahead of upcoming trade talks between China and the US. At 20h00, an ounce of gold traded at $1 499.83.

Oil Icon
Oil

Oil prices increased on Tuesday as unrest in Iraq and Ecuador raised supply concerns, but worries about US-China trade negotiations capped the market’s gains after US President Donald Trump said a quick deal is unlikely. A barrel of Brent crude traded at $59.03 at 20h00.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 54 532.68 - 0.33 - 0.88 - 3.65 - 3.36 4.03
Gold mining 2 470.16 4.70 2.80 28.71 60.85 137.89
Basic minerals 31 459.09 2.40 1.37 - 2.21 - 5.95 7.15
Industrial index 74 574.37 1.27 - 3.30 - 4.07 - 1.45 4.29
Financial 38 814.10 0.28 1.51 - 4.74 - 4.62 0.12
Fin + Ind 30 7 372.90 0.91 - 1.73 - 4.23 - 2.45 2.95
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) 26 478.02 - 0.36 - 1.08 - 1.05 1.44 2.56
S&P 500 PR (USD) 2 938.79 - 0.45 - 1.20 - 1.24 2.61 3.94
NASDAQ (USD) 7 956.29 - 0.33 - 1.73 - 2.26 0.77 3.29
FT-100 (GBP) 7 197.88 0.59 - 1.03 - 3.46 - 0.93 2.94
Hang Seng (HKD) 25 893.40 0.24 - 2.74 - 7.87 - 11.39 2.40
Nikkei 225 (JPY) 21 587.78 0.99 2.58 1.07 0.25 - 7.19
MSCI World (USD) 6 283.84 - 0.09 - 1.08 - 4.74 1.16 2.03
Frankfurt (EUR) 5 398.24 - 1.05 - 1.82 - 4.57 0.06 0.19
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 502.15 - 0.49 - 0.19 6.20 16.55 25.06
Platinum ($) 875.00 - 1.02 - 6.91 5.17 - 3.63 6.58
Brent Oil ($) 58.35 - 0.03 - 5.18 - 9.15 - 17.05 - 30.67
Rand/USD 15.26 - 0.75 - 3.15 - 9.43 - 9.13 - 2.64
Rand/GBP 18.64 - 0.06 - 2.61 - 6.62 - 1.93 4.32
Rand/EUR 16.73 - 0.63 - 2.55 - 6.40 - 5.95 2.12
ALBI (R) 693.13 - 0.19 0.57 1.49 4.40 14.08
  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. SACCI Business Confidence SEP
  1. US: Fed Chair Powell Speech
  2. US: FOMC Minutes

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 8.03 7.96 8.04 7.97 7.73
PSG Wealth Income FoF D 4.05 8.10 7.62 8.00 8.13 8.18
PSG Wealth Preserver FoF D 1.47 3.61 3.98 5.59 6.02 6.74
PSG Wealth Moderate FoF D - 1.31 0.19 1.67 4.50 4.84 5.84
PSG Wealth Creator FoF D - 5.09 - 2.04 - 0.90 2.95 3.20 3.81
PSG Wealth Global Moderate FF D 8.56 4.46 6.39 7.69 7.39 8.72
PSG Wealth Global Creator FF D 9.11 5.18 11.79 13.87 12.77 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 0.45 2.06 1.46 4.42 3.90 2.45
PSG Wealth Global Creator FoF D 1.86 4.03 6.73 10.59 9.39 7.69
PSG Wealth Global Preserver FoF (USD) D 1.60 4.91 2.37 3.68 5.58 3.71
PSG Wealth Global Flexible FoF (USD) D 0.43 3.41 5.37 8.95 10.07 6.78
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 5.81 9.30 4.59 4.50 9.38 7.55
PSG Wealth Global Flexible FoF (GBP) D 6.16 8.66 7.79 9.53 14.30 11.87
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.59 7.30 7.31 7.42 7.35 7.16
PSG Income A 4.06 8.56 8.25 8.36 8.28 7.95
PSG Diversified Income 3.33 7.00 7.05 7.63 7.81 7.73
PSG Stable A - 1.75 - 1.29 2.54 4.34 5.49 6.01
PSG Balanced A - 6.18 - 10.31 - 2.40 1.46 3.47 4.73
PSG Flexible A - 6.19 - 9.76 - 1.82 2.08 4.38 5.64
PSG SA Equity D - 12.50 - 19.01 - 9.94 - 4.38 - -
PSG Equity A - 10.55 - 16.98 - 6.36 - 0.61 2.10 2.23
PSG Global Flexible FF A - 3.73 - 10.88 - 1.08 4.39 6.45 -
PSG Global Equity FF A - 5.75 - 13.76 - 1.71 4.77 6.83 6.51
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 11.91 - 13.05 - 5.46 1.63 3.10 1.19
PSG Global Equity USD - 13.57 - 15.44 - 5.87 2.10 3.40 0.98
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 3.50 7.35 7.22 7.50 7.51 7.29
PSG Direct Low Equity - 2.06 - 2.35 1.78 3.82 5.00 5.58
PSG Direct Managed - 6.40 - 10.58 - 2.69 1.16 3.23 4.48
PSG Direct Aggressive - 7.12 - 12.40 - 3.26 1.45 3.89 -
PSG Direct Global Managed - 3.95 - 11.28 - 1.53 3.92 5.96 -
PSG Direct Global Aggressive - 5.22 - 13.08 - 1.91 4.16 6.22 -
  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 - 9.70 - 8.59 - 3.92 - 0.30 1.50 -
PSG Wealth SA Property Equity Portfolio - 6.20 - 9.83 - 8.69 - 4.23 - -
PSG Wealth SA Dividend Income Equity Portfolio - 8.40 - 7.35 - 1.07 1.66 - -
PSG Wealth Offshore Equity Portfolio (USD) 2.25 5.11 9.10 12.94 12.51 -
PSG Wealth Managed Volatility Equity Portfolio - 8.03 - 13.21 - 8.16 - 4.99 - -
  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

  • 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%.


company logo

Highlights

  • Our recommendation for HWDN LN is neutral; click here to read the full report on our secure site.
  • The share is trading in line with the market, and as a result, we feel the share price is currently fairly valued, trading at a forward P/E of 15 times, slightly ahead of its longer-term average of 13.66.
  • We believe Howden is a good quality company with attractive operating margins, a high ROE and consistently strong free cash flow generation.


Corporate actions

Date Company Share code Expectation
09 October 2019 Exxaro Resources Limited EXX Cash Dividend
09 October 2019 Exxaro Resources Limited EXX Special Cash Dividend
09 October 2019 Steinhoff International Holdings Limited Preference Shares SHFF Cash Dividend
09 October 2019 Hyprop Investments Limited (REIT) HYP Cash Dividend
09 October 2019 Wilson Bayly Holmes Ovcon Limited WBO Cash Dividend
09 October 2019 AVI Limited AVI Cash Dividend
09 October 2019 Mustel Limited MST Cash Dividend
09 October 2019 Heriot REIT Limited HET Cash Dividend
09 October 2019 Texton Property Fund Limited (REIT) TEX Cash Dividend
09 October 2019 Sasfin Holdings Limited SFN Cash Dividend
09 October 2019 Sasfin Holdings Limited Preference Shares SFNP Cash Dividend
09 October 2019 Metrofile Holdings Limited MFL DVOP
Option 1 - (Cash Dividend) Gross - ZAR0.05Less 20% Tax - ZAR0.01Net ZAR0.04
Option 2 (Capitalisation Shares)Ratio - To be announcedDefault - Option 2 (Capitalisation Shares)
09 October 2019 NEPI Rockcastle Plc NRP DVOP
Option 1 - (Cash Dividend) Gross - TBALess 20% Tax - TBANet - TBA
Option 2 (Scrip Distribution)Ratio - To be announcedDefault - Option 1
09 October 2019 MAS Real Estate Inc MSP Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP4 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP7 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP10 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP13 Cash Dividend
09 October 2019 Ecsponent Limited Class C Preference Share ECSP6 Cash Dividend
09 October 2019 Ecsponent Limited Class C Preference Share ECSP9 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.

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 8.03 7.96 8.04 7.97 7.73
PSG Wealth Income FoF D 4.05 8.10 7.62 8.00 8.13 8.18
PSG Wealth Preserver FoF D 1.47 3.61 3.98 5.59 6.02 6.74
PSG Wealth Moderate FoF D - 1.31 0.19 1.67 4.50 4.84 5.84
PSG Wealth Creator FoF D - 5.09 - 2.04 - 0.90 2.95 3.20 3.81
PSG Wealth Global Moderate FF D 8.56 4.46 6.39 7.69 7.39 8.72
PSG Wealth Global Creator FF D 9.11 5.18 11.79 13.87 12.77 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 0.45 2.06 1.46 4.42 3.90 2.45
PSG Wealth Global Creator FoF D 1.86 4.03 6.73 10.59 9.39 7.69
PSG Wealth Global Preserver FoF (USD) D 1.60 4.91 2.37 3.68 5.58 3.71
PSG Wealth Global Flexible FoF (USD) D 0.43 3.41 5.37 8.95 10.07 6.78
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 5.81 9.30 4.59 4.50 9.38 7.55
PSG Wealth Global Flexible FoF (GBP) D 6.16 8.66 7.79 9.53 14.30 11.87
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.59 7.30 7.31 7.42 7.35 7.16
PSG Income A 4.06 8.56 8.25 8.36 8.28 7.95
PSG Diversified Income 3.33 7.00 7.05 7.63 7.81 7.73
PSG Stable A - 1.75 - 1.29 2.54 4.34 5.49 6.01
PSG Balanced A - 6.18 - 10.31 - 2.40 1.46 3.47 4.73
PSG Flexible A - 6.19 - 9.76 - 1.82 2.08 4.38 5.64
PSG SA Equity D - 12.50 - 19.01 - 9.94 - 4.38 - -
PSG Equity A - 10.55 - 16.98 - 6.36 - 0.61 2.10 2.23
PSG Global Flexible FF A - 3.73 - 10.88 - 1.08 4.39 6.45 -
PSG Global Equity FF A - 5.75 - 13.76 - 1.71 4.77 6.83 6.51
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 11.91 - 13.05 - 5.46 1.63 3.10 1.19
PSG Global Equity USD - 13.57 - 15.44 - 5.87 2.10 3.40 0.98
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 3.50 7.35 7.22 7.50 7.51 7.29
PSG Direct Low Equity - 2.06 - 2.35 1.78 3.82 5.00 5.58
PSG Direct Managed - 6.40 - 10.58 - 2.69 1.16 3.23 4.48
PSG Direct Aggressive - 7.12 - 12.40 - 3.26 1.45 3.89 -
PSG Direct Global Managed - 3.95 - 11.28 - 1.53 3.92 5.96 -
PSG Direct Global Aggressive - 5.22 - 13.08 - 1.91 4.16 6.22 -
  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 - 9.70 - 8.59 - 3.92 - 0.30 1.50 -
PSG Wealth SA Property Equity Portfolio - 6.20 - 9.83 - 8.69 - 4.23 - -
PSG Wealth SA Dividend Income Equity Portfolio - 8.40 - 7.35 - 1.07 1.66 - -
PSG Wealth Offshore Equity Portfolio (USD) 2.25 5.11 9.10 12.94 12.51 -
PSG Wealth Managed Volatility Equity Portfolio - 8.03 - 13.21 - 8.16 - 4.99 - -
  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

  • 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%.


company logo

Highlights

  • Our recommendation for HWDN LN is neutral; click here to read the full report on our secure site.
  • The share is trading in line with the market, and as a result, we feel the share price is currently fairly valued, trading at a forward P/E of 15 times, slightly ahead of its longer-term average of 13.66.
  • We believe Howden is a good quality company with attractive operating margins, a high ROE and consistently strong free cash flow generation.


Corporate actions

Date Company Share code Expectation
09 October 2019 Exxaro Resources Limited EXX Cash Dividend
09 October 2019 Exxaro Resources Limited EXX Special Cash Dividend
09 October 2019 Steinhoff International Holdings Limited Preference Shares SHFF Cash Dividend
09 October 2019 Hyprop Investments Limited (REIT) HYP Cash Dividend
09 October 2019 Wilson Bayly Holmes Ovcon Limited WBO Cash Dividend
09 October 2019 AVI Limited AVI Cash Dividend
09 October 2019 Mustel Limited MST Cash Dividend
09 October 2019 Heriot REIT Limited HET Cash Dividend
09 October 2019 Texton Property Fund Limited (REIT) TEX Cash Dividend
09 October 2019 Sasfin Holdings Limited SFN Cash Dividend
09 October 2019 Sasfin Holdings Limited Preference Shares SFNP Cash Dividend
09 October 2019 Metrofile Holdings Limited MFL DVOP
Option 1 - (Cash Dividend) Gross - ZAR0.05Less 20% Tax - ZAR0.01Net ZAR0.04
Option 2 (Capitalisation Shares)Ratio - To be announcedDefault - Option 2 (Capitalisation Shares)
09 October 2019 NEPI Rockcastle Plc NRP DVOP
Option 1 - (Cash Dividend) Gross - TBALess 20% Tax - TBANet - TBA
Option 2 (Scrip Distribution)Ratio - To be announcedDefault - Option 1
09 October 2019 MAS Real Estate Inc MSP Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP4 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP7 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP10 Cash Dividend
09 October 2019 Ecsponent Limited Class A Preference Share ECSP13 Cash Dividend
09 October 2019 Ecsponent Limited Class C Preference Share ECSP6 Cash Dividend
09 October 2019 Ecsponent Limited Class C Preference Share ECSP9 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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