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JSE falls amid global market meltdown

17 March 2020

JSE falls amid global market meltdown

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The JSE posted sharp declines on Monday after President Cyril Ramaphosa declared a state of national disaster following the rapid spread of the coronavirus. The All Share closed down by 8.32%.

US flag Icon
United States

Wall Street traded lower on Monday as fears of a recession intensified following a second emergency interest rate cut in less than two weeks by the US Federal Reserve (Fed). At 18h00, the Dow Jones down by 7.65%.

EU flag Icon
Europe

European shares fell to 2012 lows on Monday after stimulus efforts to reduce the economic shock from the coronavirus pandemic failed to calm investors' nerves. At 18h15, the FTSE 100 traded 4.50% lower.

HK flag Icon
Hong Kong

Chinese shares were not exempt from a global slump as poor economic data and a second Fed rate cut worsened fears of a coronavirus-led global recession. The Shanghai Composite Index closed down by 3.40%.

Japan flag Icon
Japan

Japanese shares fell to a near four-year low on Monday in a global sell-off on fears that the Covid-19 pandemic will bring a global recession. The Nikkei lost 2.46%.

Rand Icon
Rand

The rand weakened against the dollar on Monday after Ramaphosa declared a state of national disaster over the country with the number of confirmed cases expected to rise in subsequent weeks. A dollar traded at R16.61 at 18h25.

Precious metals Icon
Precious metals

Gold prices strengthened in early trade on Monday as investors sought safe-haven assets but lost ground soon after the Fed announced a second interest rate cut to cushion the economic blow of the infamous pandemic. An ounce of gold traded at $1 510.47 at 18h30.

Oil Icon
Oil

An emergency rate cut by the Fed failed to lift oil prices on Monday as Brent crude continued to dip below $30 a barrel after the outbreak of Covid-19 threatened demand. At 18h35, a barrel of Brent crude traded at $30.03.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 40 500.23 - 8.32 - 29.58 - 28.10 - 28.91 - 25.12
Gold mining 2 347.60 - 8.31 - 17.71 - 8.97 12.53 49.09
Basic minerals 21 750.50 - 7.57 - 36.88 - 37.67 - 30.26 - 30.06
Industrial index 59 435.86 - 7.42 - 24.99 - 18.92 - 25.25 - 18.35
Financial 26 881.92 - 10.90 - 29.38 - 32.24 - 34.11 - 32.02
Fin + Ind 30 5 599.08 - 8.59 - 26.49 - 23.83 - 28.38 - 23.24
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) 20 188.52 - 12.93 - 31.14 - 28.08 - 24.54 - 19.98
S&P 500 PR (USD) 2 386.13 - 11.98 - 29.27 - 24.87 - 19.63 - 13.77
NASDAQ (USD) 6 904.59 - 12.32 - 28.96 - 21.47 - 14.88 - 9.24
FT-100 (GBP) 5 151.08 - 4.01 - 29.90 - 30.66 - 28.23 - 25.37
Hang Seng (HKD) 23 063.57 - 4.03 - 16.75 - 15.79 - 14.30 - 17.55
Nikkei 225 (JPY) 17 002.04 - 2.46 - 28.17 - 28.84 - 21.91 - 19.05
MSCI World (USD) 5 005.16 - 9.50 - 29.83 - 26.87 - 21.85 - 17.70
Frankfurt (EUR) 3 886.24 - 5.31 - 36.39 - 34.80 - 29.39 - 25.19
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 588.15 - 2.96 0.83 7.99 5.43 21.38
Platinum ($) 713.00 - 10.99 - 26.65 - 23.50 - 25.18 - 14.41
Brent Oil ($) 33.85 1.90 - 39.92 - 48.10 - 43.79 - 49.89
Rand/USD 16.57 - 1.59 - 10.92 - 14.94 - 12.52 - 14.96
Rand/GBP 20.30 - 0.89 - 4.20 - 7.51 - 10.49 - 6.00
Rand/EUR 18.52 - 2.04 - 14.43 - 15.39 - 13.93 - 13.37
ALBI (R) 638.69 - 4.78 - 10.26 - 7.57 - 7.30 - 2.22
  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. No economic data scheduled for release
  1. UK: Unemployment Rate JAN
  2. US: Industrial Production FEB

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 3.74 7.84 7.90 7.97 8.03 7.81
PSG Wealth Income FoF D 1.75 5.91 6.72 7.15 7.71 7.59
PSG Wealth Preserver FoF D - 5.97 - 3.43 0.62 2.66 3.43 4.26
PSG Wealth Moderate FoF D - 12.01 - 10.23 - 4.27 - 0.22 1.04 2.06
PSG Wealth Creator FoF D - 18.68 - 17.93 - 10.52 - 4.03 - 1.20 - 1.14
PSG Wealth Global Moderate FF D - 1.28 3.74 10.31 6.87 3.40 5.38
PSG Wealth Global Creator FF D 0.37 9.27 14.94 12.97 9.24 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 10.66 - 7.46 - 5.31 - 0.07 1.79 0.19
PSG Wealth Global Creator FoF D - 14.62 - 8.60 - 4.48 3.40 5.98 4.16
PSG Wealth Global Preserver FoF (USD) D - 6.39 - 3.46 - 1.15 0.80 2.89 2.14
PSG Wealth Global Flexible FoF (USD) D - 9.56 - 6.07 - 2.26 4.01 6.53 4.92
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 6.07 1.08 2.97 0.70 5.35 4.83
PSG Wealth Global Flexible FoF (GBP) D - 8.74 - 0.08 3.18 3.13 9.29 7.94
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.45 7.18 7.23 7.33 7.38 7.21
PSG Income A 3.36 7.59 7.76 8.09 8.26 7.97
PSG Diversified Income - 0.27 3.55 4.70 6.07 6.75 6.90
PSG Stable A - 11.23 - 11.02 - 5.16 - 0.85 1.74 2.51
PSG Balanced A - 19.96 - 22.03 - 13.39 - 6.83 - 2.26 - 1.18
PSG Flexible A - 23.90 - 24.96 - 14.65 - 7.87 - 2.66 - 1.25
PSG SA Equity D - 26.60 - 31.61 - 24.60 - 14.81 - -
PSG Equity A - 25.46 - 29.27 - 19.71 - 11.63 - 4.08 - 4.40
PSG Global Flexible FF A - 21.11 - 23.43 - 7.26 - 5.03 - 2.50 -
PSG Global Equity FF A - 27.72 - 30.41 - 12.18 - 7.79 - 3.72 - 2.31
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 29.12 - 31.93 - 20.38 - 11.05 - 3.93 - 4.78
PSG Global Equity USD - 33.24 - 36.27 - 23.32 - 12.75 - 4.49 - 5.96
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 1.79 5.56 6.08 6.77 7.12 7.01
PSG Direct Low Equity - 11.51 - 11.48 - 5.73 - 1.40 1.30 2.03
PSG Direct Managed - 21.14 - 23.12 - 14.09 - 7.51 - 2.80 - 1.64
PSG Direct Aggressive - 23.86 - 26.12 - 14.88 - 8.64 - 3.29 -
PSG Direct Global Managed - 21.29 - 23.78 - 7.68 - 5.46 - 2.95 -
PSG Direct Global Aggressive - 25.47 - 28.19 - 10.77 - 7.18 - 3.69 -
  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 - 20.05 - 23.41 - 15.79 - 6.92 - 3.27 -
PSG Wealth SA Property Equity Portfolio - 28.18 - 34.49 - 22.83 - 15.50 - 12.26 -
PSG Wealth SA Dividend Income Equity Portfolio - 22.86 - 24.44 - 17.92 - 7.33 - -
PSG Wealth Offshore Equity Portfolio (USD) - 6.65 0.21 1.83 9.37 10.69 -
  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

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Highlights

  • Our recommendation for BID SJ is Neutral; click here to read the full report on our secure site.
  • Bidcorp is well-diversified and highly cash generative business. It is the largest foodservice distributor outside of the USA, with the largest geographic footprint when compared with its global peers.
  • We do remain cautious given the macroeconomic headwinds taking place at present.
  • We believe Bidcorp is a good-quality company with a stable ROE and a sustainable operating margin, although further margin expansion from this higher base is going to be more difficult.


company logo

Highlights

  • Our recommendation for ANH SJ is overweight; click here to read the full report on our secure site.
  • We believe AB InBev is a good-quality company with an attractive and sustainable operating margin and a reliable cash conversion.
  • Operating margins across the group geographies are well ahead of peers, making further efficiency-enabled outperformance less likely.
  • Despite management believing that acquisitive growth and the extraction of synergies from acquisitions is a core competency of the group, balance sheet flexibility will likely limit such growth.


company logo

Highlights

  • Our recommendation for PFE US is overweight; click here to read the full report on our secure site.
  • The group has been able to protect its gross profit margins despite the challenging trading environment because of its scale and defensive nature.
  • We believe Pfizer is a high-quality company with a high ROE and an attractive and sustainable operating margin.


Corporate actions

Date Company Share code Expectation
18 March 2020 Discovery Limited DSY Cash Dividend
18 March 2020 Liberty Two Degrees Limited L2D Cash Dividend
18 March 2020 Capitec Bank Holdings Limited Non-Redeemable Non-Cumulative Non-Participating Preference Shares CPIP Cash Dividend
18 March 2020 PSG Financial Services Limited Cumulative Non-Redeemable Non-Participating Preference Shares PGFP Cash Dividend
18 March 2020 African Rainbow Minerals Limited ARI Cash Dividend
18 March 2020 Impala Platinum Holdings Limited IMP Cash Dividend
18 March 2020 Distell Group Holdings Limited DGH Cash Dividend
18 March 2020 Imperial Holdings Limited IPL Cash Dividend
18 March 2020 PBT Group Limited PBG Repurchase Offer (Subject to 20% DWT)Gross Offer Rate - ZAR2.15Less 20% DWT - ZAR0.43Net - ZAR1.72Default - No Action
18 March 2020 Attacq Limited ATT Cash Dividend
18 March 2020 Hammerson Plc HMN DRIPOption 1 - (Cash Dividend)PIDGross - ZAR2.9276768Less 20% Foreign Tax - ZAR0.5855354Net - ZAR2.3421414Less 5% SA Tax - ZAR0.1463838Net - ZAR2.1957576Option 2 (Reinvestment)Reinvestment Price - To be announcedDefault - Option 1 (Cash)
18 March 2020 MAS Real Estate Inc MSP 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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