27
January 2023
JSE higher after smaller SARB rate hike
Adriaan Pask, Chief Investment Officer
PSG Wealth
Market commentary
The local bourse closed up by more than 1% on Thursday after the South African Reserve Bank (SARB) hiked interest rates by 25 basis points (bps), smaller than the 50 bps markets expected. “This marks the 8th consecutive rate hike since policy normalisation started in November 2021, to anchor inflation expectations more firmly around the mid-point of the target band of 3-6% and achieve the inflation target in 2024. The move was driven by the Bank’s assessment that risks to the inflationary outlook remain skewed to the upside. The headline CPI forecast was revised up to 6.90% in 2022 (vs prior estimate of 6.70%), kept unchanged at 5.40% in 2023, and raised to 4.80% in 2024 (vs 4.50%),” Trading Economics reported. However, the rand weakened after the announcement, trading at R17.20/USD at 21h40.
Better-than-expected earnings reports from SEB, Sabadell, Nokia, and German software company SAP, amongst others, helped major European indices close in the green on Thursday. “Elsewhere, the sentiment was lifted by China's reopening, an unexpectedly mild winter, and resilient activity data in the Eurozone,” stated Trading Economics.
Most Asian markets also closed up after increased activity during Chinese New Year celebrations. The Hang Seng closed up by 2.37% after a “swift economic reopening in China with pro-growth policies from Beijing also encouraged traders to enter new positions. Meantime, Lunar New Year travel and checkout data showed a sharp pickup in China's demand, while tourism activity recovered in Hong Kong due to a revival in cross-border travel,” Bloomberg News said. However, the Japanese Nikkei closed slightly down at 0.12% as “economic uncertainties continue(d) to weigh on sentiment.”
Wall Street was also trading higher at 21h30 after an advanced estimate showed that the US economy grew by 2.90% in the last quarter of 2022. US indices were also boosted when “Tesla shares jumped 7.91% after better-than-expected quarterly results and bullish commentary on demand reassured investors that the EV maker could cope with a slowing economy in 2023,” added Reuters.
A barrel of Brent crude traded for $86.13 at 21h40, while an ounce of gold traded at $1 930.66 at the same time.
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Market indicators
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| Date | Index | Current Level | 1 Day Move | 1 Month Move | 6 Month Move | 1 Year Move |
|---|---|---|---|---|---|---|
| 2024-04-24 | ALSI | 73551.12 | 0.26 | 2.16 | 7.72 | -1.22 |
| 2024-04-24 | Basic minerals | 43642.47 | -2.16 | 6.22 | 8.19 | -9.36 |
| 2024-04-24 | Fin + Ind 30 | 9581.02 | 1.57 | 0.97 | 8.66 | 3.08 |
| 2024-04-24 | Financial | 40082.66 | 0.71 | -0.63 | 3.61 | 8.64 |
| 2024-04-24 | Industrial index | 107718.52 | 2.23 | 2.42 | 10.84 | -0.01 |
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Collective investment schemes
Local funds
| ASISA category | Fund name | NAV (Rands) at 23 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| South Africa - Equity - General | PSG Equity Fund Class A | 16.17 | 5.43 | 15.72 | 9.73 | 12.71 |
| PSG Equity Fund Class A | 16.17 | 5.43 | 15.72 | 9.73 | 12.71 | |
| PSG Equity Fund Class E | 16.17 | 4.33 | 15.16 | 9.79 | 8.58 | |
| PSG Equity Fund Class F | 16.22 | 5.91 | 16.25 | 10.23 | 9.55 | |
| PSG SA Equity Class F | 1.50 | 2.14 | 15.97 | 8.69 | 6.79 | |
| PSG Wealth Creator Fund of Funds Class D | 50.90 | 6.61 | 9.40 | 10.37 | 11.86 | |
| South Africa - Multi Asset - Flexible | PSG Flexible Fund Class A | 7.81 | 5.12 | 14.65 | 9.77 | 11.16 |
| PSG Flexible Fund Class A | 7.81 | 5.12 | 14.65 | 9.77 | 11.16 | |
| PSG Flexible Fund Class E | 7.81 | 5.40 | 14.96 | 10.06 | 9.88 | |
| South Africa - Multi Asset - High Equity | PSG Balanced Fund Class A | 95.12 | 4.85 | 13.93 | 10.11 | 12.69 |
| PSG Balanced Fund Class A | 95.12 | 4.85 | 13.93 | 10.11 | 12.69 | |
| PSG Balanced Fund Class E | 95.20 | 5.45 | 14.59 | 10.74 | 9.56 | |
| PSG Wealth Moderate Fund of Funds Class D | 40.21 | 9.93 | 10.12 | 9.17 | 10.72 | |
| South Africa - Multi Asset - Low Equity | PSG Stable Fund Class A | 1.62 | 5.23 | 9.90 | 7.44 | 8.23 |
| PSG Stable Fund Class A | 1.62 | 5.23 | 9.90 | 7.44 | 8.23 | |
| PSG Stable Fund Class E | 1.62 | 5.83 | 10.54 | 8.05 | 7.95 | |
| PSG Wealth Preserver Fund of Funds Class D | 24.40 | 8.61 | 8.68 | 7.73 | 9.01 | |
| South Africa - Multi Asset - Income | PSG Diversified Income Fund Class A | 1.31 | 7.40 | 8.23 | 7.82 | 7.83 |
| PSG Diversified Income Fund Class A | 1.31 | 7.40 | 8.23 | 7.82 | 7.83 | |
| PSG Diversified Income Fund Class E | 1.30 | 8.07 | 8.84 | 8.39 | 8.26 | |
| PSG Wealth Income Fund of Funds Class D | 12.38 | 7.81 | 7.50 | 7.01 | 7.79 | |
| South Africa - Interest Bearing - Short Term | PSG Income Fund Class A | 1.08 | 7.76 | 6.73 | 7.28 | 7.10 |
| PSG Income Fund Class A | 1.08 | 7.76 | 6.73 | 7.28 | 7.10 | |
| PSG Income Fund Class E | 1.07 | 8.07 | 7.04 | 7.59 | 7.76 | |
| PSG Wealth Enhanced Interest Fund of Funds Class D | 1.02 | 8.96 | 6.59 | 6.49 | 6.71 | |
| South Africa - Interest Bearing - Money Market | PSG Money Market Fund Class A | 1.00 | 8.28 | 5.98 | 5.83 | 7.94 |
| PSG Money Market Fund Class A | 1.00 | 8.28 | 5.98 | 5.83 | 7.94 | |
| PSG Money Market Fund Class F | 1.00 | 8.59 | 6.26 | 6.10 | 5.28 | |
| South African - Multi Asset - Low Equity | PSG Investment Management Cautious Fund of Funds Class D | 1.29 | 5.22 | 9.01 | — | 9.62 |
| PSG Investment Management Cautious Fund of Funds Class D | 1.29 | 5.22 | 9.01 | — | 9.62 | |
| South African - Multi Asset - High Equity | PSG Investment Management Growth Fund of Funds Class D | 1.47 | 2.95 | 11.00 | — | 11.35 |
| PSG Investment Management Growth Fund of Funds Class D | 1.47 | 2.95 | 11.00 | — | 11.35 | |
| South African - Multi Asset - Income | PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.13 | 6.96 | 7.34 | — | 7.57 |
| PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.13 | 6.96 | 7.34 | — | 7.57 | |
Performance data on local funds is shown up to the last market close minus 1 day.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Global funds
Through our tried-and tested investment philosophy, we have built competitive global solutions to help clients achieve their investment goals.
The following funds are rand-denominated, but invest internationally:
| ASISA category | Fund name | NAV (Rands) at 23 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| Global - Equity - General | PSG Global Equity Feeder Fund Class A | 4.89 | 13.50 | 18.16 | 13.88 | 13.07 |
| PSG Global Equity Feeder Fund Class A | 4.89 | 13.50 | 18.16 | 13.88 | 13.07 | |
| PSG Global Equity Feeder Fund Class E | 5.06 | 14.16 | 18.84 | 14.44 | 12.79 | |
| PSG Wealth Global Creator Feeder Fund Class D | 4.64 | 31.95 | 14.40 | 16.71 | 15.72 | |
| Global - Multi Asset - Flexible | PSG Global Flexible Feeder Fund Class A | 3.78 | 11.50 | 15.71 | 13.27 | 12.83 |
| PSG Global Flexible Feeder Fund Class A | 3.78 | 11.50 | 15.71 | 13.27 | 12.83 | |
| PSG Global Flexible Feeder Fund Class B | 3.97 | 12.14 | 16.38 | 13.77 | 13.33 | |
| PSG Wealth Global Flexible Feeder Fund Class D | 4.84 | 16.82 | 8.82 | 11.36 | 11.51 | |
| PSG Wealth Global Moderate Feeder Fund Class D | 4.96 | 19.10 | 10.30 | 10.72 | 12.77 | |
| Global - Multi Asset - Low Equity | PSG Wealth Global Preserver Feeder Fund Class D | 1.57 | 15.10 | 9.24 | 8.30 | 7.48 |
| PSG Wealth Global Preserver Feeder Fund Class D | 1.57 | 15.10 | 9.24 | 8.30 | 7.48 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Invest in other currencies
The following funds invest internationally using foreign currency
| ASISA category | Fund name | NAV (Rands) at 22 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| EAA Fund GBP Cautious Allocation | PSG Wealth Global Preserver FoF (GBP) Class D | 2.07 | 6.23 | 2.28 | 2.49 | 5.01 |
| PSG Wealth Global Preserver FoF (GBP) Class D | 2.07 | 6.23 | 2.28 | 2.49 | 5.01 | |
| EAA Fund GBP Flexible Allocation | PSG Wealth Global Flexible FoF (GBP) Class D | 3.71 | 7.61 | 3.14 | 6.39 | 9.38 |
| PSG Wealth Global Flexible FoF (GBP) Class D | 3.71 | 7.61 | 3.14 | 6.39 | 9.38 | |
| EAA Fund Global Flex-Cap Equity | PSG Global Equity Sub-Fund Class A | 2.16 | 6.31 | 8.80 | 8.10 | 5.87 |
| PSG Global Equity Sub-Fund Class A | 2.16 | 6.31 | 8.80 | 8.10 | 5.87 | |
| PSG Global Equity Sub-Fund Class B | 2.23 | 6.92 | 9.42 | 8.72 | 7.09 | |
| EAA Fund Global Large-Cap Blend Equity | PSG Wealth Global Creator Fund of Funds Class D | 2.79 | 23.38 | 5.16 | 10.46 | 9.82 |
| PSG Wealth Global Creator Fund of Funds Class D | 2.79 | 23.38 | 5.16 | 10.46 | 9.82 | |
| EAA Fund USD Cautious Allocation | PSG Wealth Global Preserver FoF (USD) Class D | 1.65 | 7.71 | 0.33 | 2.30 | 3.54 |
| PSG Wealth Global Preserver FoF (USD) Class D | 1.65 | 7.71 | 0.33 | 2.30 | 3.54 | |
| EAA Fund USD Flexible Allocation | PSG Global Flexible Sub-Fund Class A | 18.70 | 4.80 | 6.92 | 7.47 | 5.79 |
| PSG Global Flexible Sub-Fund Class A | 18.70 | 4.80 | 6.92 | 7.47 | 5.79 | |
| PSG Global Flexible Sub-Fund Class B | 19.81 | 5.29 | 7.42 | 8.05 | 6.41 | |
| PSG Investment Management Global Flexible Fund of Funds (Dollar) | 1.54 | 7.92 | -1.45 | 3.38 | 2.65 | |
| PSG Wealth Global Flexible FoF (USD) Class D | 2.97 | 9.46 | 0.13 | 5.54 | 7.87 | |
| EAA Fund USD Moderate Allocation | PSG Wealth Global Moderate Fund of Funds Class D | 1.96 | 11.27 | 1.35 | 4.74 | 5.25 |
| PSG Wealth Global Moderate Fund of Funds Class D | 1.96 | 11.27 | 1.35 | 4.74 | 5.25 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Non-Collective investment schemes
House view equity portfolios
| Fund display name | Performance –As at 2024/04/24 | |||
|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |
| PSG Wealth Income Growth Equity Portfolio | 0.26 | 4.14 | -1.27 | 1.03 |
| PSG Wealth Offshore Equity Portfolio (USD) | 11.10 | 4.44 | 9.99 | 11.70 |
| PSG Wealth SA Equity Portfolio | -5.79 | 1.15 | -0.31 | 2.70 |
| PSG Wealth SA Property Equity Portfolio | 10.08 | 6.79 | -3.12 | -3.41 |
* PSG Wealth equity portfolio performance are shown gross of management fees, but net of brokerage and other trading costs.
The House view portfolios are bespoke solution portfolios and not part of the Collective Investment Schemes’ portfolios.
Recent investment ideas
Spar
- Spar is a wholesale-based retail organisation where the franchisees are the retail operation and Spar provides services and products to these franchise stores. As such, it is an entrepreneurial operation where there is no ‘corporate’-type store. There will be varied performances across stores but the overall driver will be retail food sales in South Africa.
- The growth vector for the company is the offshore stores, primarily in Poland and our thesis has been negatively impacted by the slow turnaround, but it is still in place.
- The investment in SAP, while important and beneficial over the long term has resulted in the dividend being cut in half and will resume in time.
- We maintain our buy recommendation on the counter based on the following premises:
- Economics: Our focus on growth and inflation indicates that the current environment is inflationary growth, however, inflation may have peaked which starts to indicate a maturity in consumer staples exposure.
- Momentum price: Is negative for Spar indicating some further weaknesses ahead.
- Momentum earnings: Moved to a positive 7.5% indicating positive revisions, which is typically good for companies.
- Liquidity: Not an issue.
- Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join
BidCorp full-year results
- Bid Corporation Limited (Bid Corp) released its full-year results, which exceeded expectations.
- We have a hold recommendation with an upside of 1.6%.
- Key drivers around our recommendation, which inform the intrinsic value of R342.7, are:
o 69% of the countries Bid Corp operates in (25% of revenue) haven’t matured; there is ample room for growth.
o The independent client base is growing in the mix, which is margin accretive.
o Covid protocols were less stringent during the second half of the company’s reporting period; a catalyst for next year.
o A strong balance sheet, under-geared, which can support mergers and acquisitions.
o A better entry point would move us to a buy recommendation. - Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join.
Naspers & Prosus
- Naspers is a multinational holding company, headquartered in Cape Town, with interests in online retail, publishing and venture capital investments. Naspers's principal shareholder is its Dutch listed investment subsidiary Prosus, which owns approximately 49% of its parent as part of a cross-ownership structure.
- On 23 November 2022, Naspers and Prosus released half-year results for the period ending 30 September 2022.
- In addition to the results, Prosus also announced that Just Eat Takeaway.com’s shareholders had approved Prosus’s acquisition of the remaining 33.3% stake in iFood.
- Tencent also announced a special dividend of 958 million Meituan shares to shareholders. Prosus will consider these shares as held for sale.
- Highlights from the 1H23 results include the following: o Total economic interest revenue increased by 1% for Naspers and Prosus. Consolidated revenue increased by 14% for Naspers and rose by 18% for Prosus.
- The trading losses continued to widen for both companies from lower Tencent profits and increased losses in the e-commerce portfolio.
- In the prior period, a gain of $12.3 billion was made from the disposal of a 2% stake in Tencent in April 2021. The equivalent gain in the current period was only $2.7 billion, leading to significantly smaller profit for the period ($2.5bn vs $15.8bn previously; -84%).
- HEPS and CHEPS decreased due to lower results from Tencent.
- Prosus has received $2.4 billion in proceeds from the disposal of Avito, the Russian classifieds business. Avito is therefore excluded from continuing operations in the financial results.
- We maintain our hold recommendation on both counters. - Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join: https://www.psg.co.za/wealthonline#in...
Economic Calendar
View the Economic Calendar
Corporate Actions
| Date | Company | Share code | Expectation |
|---|---|---|---|
| 01 February 2023 | Naspers Limited 6 percent Cumulative Preference Shares | NPKP | Cash Dividend |
| 01 February 2023 | Naspers Limited 6.5 percent Cumulative Preference Shares | NPP1 | Cash Dividend |
The information above is to the best of our knowledge correct.
The Corporate Actions are updated weekly.
Fund performance
Collective Investment Schemes in Securities (CIS) are generally medium-term to long-term investments. The value of participatory interests (units) may go down as well as up and past performance is not a guide to future performance. Collective Investment Schemes are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from PSG Collective Investments (RF) Limited. Commission and incentives may be paid, and if so, are included in the overall costs. Forward pricing is used. The Portfolios may be capped at any time in order for them to be managed in accordance with their mandate.
Performance is calculated for the portfolio and individual investor performance may differ as a result thereof. Different classes of participatory interest can apply to these portfolios and are subject to different fees, charges and possibly dividend withholding tax and will thus have differing performances. Annualised performances show longer term performance rescaled over a 12-month period. Individual performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. The portfolio is valued at 15h00 daily. Income distributions are net of any applicable taxes. Investment performance data is for illustrative purposes only. Actual performance figures are available on request. Always refer to the fund fact sheet (Minimum Disclosure Document) for full details, fees and risks of the fund.
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