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Profit-taking knocks global shares

12 January 2021

Profit-taking knocks global shares

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The JSE started the week on a positive note as investors focussed on the possibility of further US stimulus plans. However, gains were capped by the announcement that President Cyril Ramaphosa would address the nation about lockdown measures later on Monday night.

US flag Icon
United States

Most US indices started the week lower, “slipping from record levels as investors locked in gains after a stellar vaccine and stimulus-fuelled rally”. At 17h50, the Nasdaq had lost 0.73%.

EU flag Icon
Europe

European shares fell on Monday as COVID-19 worries led to profit-taking by some investors. At 17h40, the STOXX 600 reported a 0.67% drop.

HK flag Icon
Hong Kong

Despite ongoing tension between the US and China, the Hang Seng edged higher on Monday due to bargain hunters raking up Chinese shares “blacklisted by outgoing President Donald Trump”. The Hang Seng ended the day 0.11% higher.

Japan flag Icon
Japan

The Tokyo Stock Exchange was closed for a public holiday.

Rand Icon
Rand

The rand traded lower on Monday as global market fears rose, leading to risk-off trade, due to the increase of COVID-19 infections in the US, Europe and South Africa. At 17h50, the local currency traded at R15.58/$.

Precious metals Icon
Precious metals

A firmer US dollar and higher US Treasury yields on the back of additional fiscal stimulus hopes led to gold easing somewhat on Monday. Spot gold traded at $1 846.80/oz at 17h50 on Monday.

Oil Icon
Oil

Brent crude started the week with a hard blow as a stronger dollar and global lockdown measures weighed heavily on the oil price. At 17h50, Brent crude had fallen by 1.10% to $55.60/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 63 759.93 0.38 7.38 15.83 16.26 14.01
Gold mining 4 003.82 0.99 10.66 - 26.09 - 25.49 46.61
Basic minerals 46 858.04 - 0.23 14.85 19.11 26.00 36.45
Industrial index 87 870.56 1.62 4.10 11.86 10.58 16.45
Financial 30 296.10 - 1.61 2.15 20.78 13.33 - 18.60
Fin + Ind 30 7 630.71 0.72 3.58 14.20 11.35 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) 31 008.69 - 0.29 3.27 9.02 20.17 10.06
S&P 500 PR (USD) 3 799.61 - 0.66 3.85 9.72 20.29 18.49
NASDAQ (USD) 13 201.98 - 1.25 4.98 15.81 26.31 45.89
FT-100 (GBP) 6 798.48 - 1.09 4.00 13.64 13.17 - 7.48
Hang Seng (HKD) 27 908.22 0.11 5.29 15.88 9.26 0.59
Nikkei 225 (JPY) 28 139.03 2.36 6.45 20.31 26.39 23.61
MSCI World (USD) 8 129.98 - 0.84 4.22 11.84 21.61 16.67
Frankfurt (EUR) 6 029.48 - 0.80 6.27 6.78 10.31 3.36
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 849.13 - 0.02 0.77 - 3.38 2.33 19.31
Platinum ($) 1 064.25 - 1.09 2.05 18.66 23.87 7.19
Brent Oil ($) 55.66 - 0.59 11.39 29.89 28.72 - 14.34
Rand/USD 15.59 - 0.67 - 3.89 5.26 6.34 - 8.91
Rand/GBP 21.08 - 1.03 - 5.45 0.89 - 0.82 - 12.95
Rand/EUR 18.93 - 0.52 - 3.73 2.05 0.31 - 18.82
ALBI (R) 755.32 - 0.28 0.34 6.43 8.81 7.91
  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. Manufacturing production NOV
  1. US: JOLTs Job Openings NOV

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 2.17 5.60 6.75 7.17 7.40 7.53
PSG Wealth Income FoF D 4.82 5.84 6.98 6.93 7.40 7.77
PSG Wealth Preserver FoF D 8.11 6.86 7.44 5.17 6.13 6.21
PSG Wealth Moderate FoF D 12.17 8.56 9.30 4.57 6.17 6.55
PSG Wealth Creator FoF D 18.57 11.21 11.33 4.14 6.32 7.86
PSG Wealth Global Preserver FF D - 2.51 12.93 12.28 - - -
PSG Wealth Global Moderate FF D 4.19 19.14 17.80 12.97 10.55 6.71
PSG Wealth Global Flexible FF D 4.24 25.93 23.36 - - -
PSG Wealth Global Creator FF D 7.68 27.47 29.42 20.33 18.57 13.25
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 15.63 11.48 12.81 5.41 7.50 7.81
PSG Wealth Global Creator FoF D 21.36 20.33 24.23 12.42 15.52 14.59
PSG Wealth Global Preserver FoF (USD) D 8.70 4.79 7.10 3.66 4.59 5.80
PSG Wealth Global Flexible FoF (USD) D 16.98 18.79 18.87 10.45 13.41 13.01
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.72 1.49 4.07 3.25 2.78 6.64
PSG Wealth Global Flexible FoF (GBP) D 9.02 15.16 15.62 10.10 10.39 13.80
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.82 4.99 6.10 6.50 6.76 6.89
PSG Income A 4.00 9.42 8.75 8.55 8.60 8.58
PSG Diversified Income 7.27 8.49 7.55 7.19 7.60 7.80
PSG Stable A 13.23 3.72 2.42 2.35 3.99 5.38
PSG Balanced A 22.23 5.40 1.01 - 0.33 2.16 5.10
PSG Flexible A 24.17 1.77 - 0.46 - 1.48 1.17 5.24
PSG SA Equity D 23.55 - 2.41 - 8.72 - 9.11 - -
PSG Equity A 25.89 2.37 - 3.07 - 4.70 - 1.17 5.31
PSG Global Flexible FF A 21.75 20.33 11.61 7.53 7.29 -
PSG Global Equity FF A 25.22 14.05 8.69 4.88 6.28 7.11
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 36.10 11.71 6.72 0.27 4.43 8.80
PSG Global Equity USD 39.75 7.54 4.69 - 1.60 3.87 8.82
  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

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 16.06 5.18 - 0.71 - 2.95 0.52 3.74
PSG Wealth SA Property Equity Portfolio 4.74 - 36.53 - 26.97 - 20.89 - 14.96 - 11.74
PSG Wealth Dividend Income Equity Portfolio 15.55 - 5.15 - 8.48 - 8.28 - 1.66 -
PSG Wealth Offshore Equity Portfolio (USD) 15.90 16.17 19.57 11.67 17.56 16.08
  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 believe Mr Price is well-positioned in the retail sector, being a budget retailer and its high proportion of cash sales in the anticipated deteriorating credit landscape.
  • Earnings recovery will likely be aided by real space growth through the acquisition of Power Fashion.
  • On a P/E basis, the group trades at a slight premium to its historical multiple and a discount to its peers.
  • Mr Price remains our preferred clothing retail counter, but we feel that the share is fairly valued at current levels and maintain our neutral recommendation.
  • For more information about these counters, please contact your PSG Wealth adviser.


company logo

Highlights

  • COVID-19 has accelerated the long-overdue impairments and the disintegration of the relationship between property fundamentals and the premium placed on the counters.
  • As a result, the sector P/NAV is trading at an approximate 50% discount.
  • The market has particularly placed higher discounts on counters with weak balance sheets.
  • However, some companies have held up during this crisis, particularly Equites Property Fund, Sirius Real Estate and Stor-Age Property REIT.
  • For more information about these counters, please contact your PSG Wealth adviser.


company logo

Highlights

  • On a forward P/E basis, the share now trades at 10.6 times, a 22.3% discount to its historical average, and a 41.5% discount to its FactSet peers.
  • The group offers an attractive dividend yield of 5.2%, which, according to management, is sustainable despite possible tax reforms.
  • At current prices, we feel the share is undervalued.
  • For more information about this counter, please contact your PSG Wealth adviser.


Corporate actions

Date Company Share code Expectation
13 January 2021 Deneb Investments Limited DNB Cash Distribution (Capital Reduction)
13 January 2021 Texton Property Fund Limited TEX Tender Offer
13 January 2021 Hospitality Property Fund Limited HPB General Offer
13 January 2021 African Oxygen Limited AFX Special Cash Dividend
13 January 2021 Tiger Brands Limited TBS Special Cash Dividend
13 January 2021 Tiger Brands Limited TBS Cash Dividend
13 January 2021 Astral Foods Limited ARL Cash Dividend
13 January 2021 Quantum Foods Holdings Limited QFH Cash Dividend
13 January 2021 Marshall Monteagle Plc MMP 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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