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JSE hits best level in two years

18 December 2020

JSE hits best level in two years

Daily Investment Update

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SPECIAL ANNOUNCEMENT

Please note that this is the last edition of the Daily Investment Update for the year and we would like to take this opportunity to thank you for your continued support throughout 2020. We wish you a happy festive season. The next edition will be distributed on 12 January 2021.


Market commentary

SA flag Icon
South Africa

The JSE surged to its best level in over two years on Thursday amid progress in fiscal stimulus talks in the US. At market close, the All Share rose 1.79%.

US flag Icon
United States

Increased optimism over a COVID-19 stimulus bill boosted US markets at the opening bell on Thursday. At 19h15, the Nasdaq rose 0.68%.

EU flag Icon
Europe

Stocks rose on Thursday as growing hopes of a Brexit deal, a COVID-19 stimulus bill in the US and a vaccine rollout plan in Europe lifted sentiment. At 19h20, the DAX gained 0.75%.

HK flag Icon
Hong Kong

Prospects of additional US fiscal support and the US Federal Reserve’s (Fed) pledge to keep interest rates near zero, boded well for the Hong Kong stock market. The Hang Seng ended the day 0.82% higher.

Japan flag Icon
Japan

At the close of business, the Nikkei share average rose 0.18%, tracking a global wave of optimism around a $900 billion COVID-19 aid bill but gains were capped by the increasing numbers of infections country-wide.

Rand Icon
Rand

The rand strengthened to R14.66/$, R19.89/£ and R17.97/€ at the close of business, tracking firmer global markets.

Precious metals Icon
Precious metals

Spot gold traded 0.57% higher on Thursday as “a combination of an additional stimulus package, along with additional bond buying and asset purchases from the Fed bode well for investor sentiment”.

Oil Icon
Oil

Growing Asian demand and a weakened dollar environment pushed oil prices to a nine-month high on Thursday. At 19h30, Brent crude rose 0.86%.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 60 544.30 1.79 6.34 10.44 13.33 8.65
Gold mining 3 893.02 5.54 - 5.75 - 28.14 - 4.02 51.70
Basic minerals 42 082.48 3.04 12.88 6.35 21.01 21.55
Industrial index 84 869.67 1.27 1.93 10.04 8.74 15.66
Financial 30 636.41 0.72 5.84 20.43 11.45 - 19.74
Fin + Ind 30 7 463.96 1.11 3.02 12.81 9.51 2.68
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) 30 303.37 0.49 2.02 9.16 17.29 9.68
S&P 500 PR (USD) 3 722.48 0.58 3.28 11.33 20.56 18.76
NASDAQ (USD) 12 658.19 0.50 6.24 14.76 28.41 44.90
FT-100 (GBP) 6 551.06 - 0.30 3.20 9.01 6.49 - 10.02
Hang Seng (HKD) 26 678.38 0.82 1.07 9.81 11.08 - 1.10
Nikkei 225 (JPY) 26 806.67 0.18 3.05 15.68 20.32 13.59
MSCI World (USD) 7 960.25 0.77 4.66 12.60 21.45 16.34
Frankfurt (EUR) 5 912.91 0.75 4.06 3.48 10.38 2.86
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 871.95 0.57 - 0.71 - 3.31 9.01 26.62
Platinum ($) 1 050.00 0.19 13.39 10.41 28.68 12.90
Brent Oil ($) 51.08 0.63 16.57 20.99 24.71 - 21.82
Rand/USD 14.70 0.56 4.50 9.74 15.84 - 2.74
Rand/GBP 19.87 0.66 2.61 5.79 8.43 - 6.20
Rand/EUR 17.99 0.45 1.50 6.89 8.13 - 13.02
ALBI (R) 759.56 0.55 2.60 5.40 9.98 9.80
  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. JP: BoJ Interest Rate Decision
  2. UK: Retail sales 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 2.25 5.87 6.89 7.25 7.46 7.57
PSG Wealth Income FoF D 4.58 6.09 7.17 7.18 7.55 7.89
PSG Wealth Preserver FoF D 6.31 5.23 6.40 4.75 5.75 6.07
PSG Wealth Moderate FoF D 9.95 5.37 7.09 3.77 5.46 5.95
PSG Wealth Creator FoF D 18.14 6.58 8.60 3.42 5.32 6.49
PSG Wealth Global Preserver FF D - 6.13 8.90 9.12 - - -
PSG Wealth Global Moderate FF D - 0.04 13.82 13.14 9.15 8.68 6.50
PSG Wealth Global Flexible FF D 1.77 21.13 17.96 - - -
PSG Wealth Global Creator FF D 6.19 23.36 22.53 16.54 16.50 13.01
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 14.41 9.25 11.25 5.19 7.02 6.30
PSG Wealth Global Creator FoF D 21.10 18.52 20.87 12.52 14.88 12.73
PSG Wealth Global Preserver FoF (USD) D 7.34 3.84 6.53 3.63 4.54 5.41
PSG Wealth Global Flexible FoF (USD) D 16.84 16.28 16.45 10.49 12.71 11.73
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 2.01 2.47 3.33 3.05 3.00 6.96
PSG Wealth Global Flexible FoF (GBP) D 9.47 15.41 13.09 10.00 10.34 13.40
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 1.91 5.30 6.28 6.62 6.86 6.95
PSG Income A 4.73 9.80 8.99 8.85 8.73 8.64
PSG Diversified Income 6.65 8.58 7.86 7.58 7.72 7.84
PSG Stable A 10.30 2.19 1.98 2.58 3.77 5.09
PSG Balanced A 17.26 1.45 - 0.57 - 0.51 1.51 4.25
PSG Flexible A 17.89 - 3.48 - 2.78 - 2.00 0.14 4.11
PSG SA Equity D 20.48 - 6.33 - 9.76 - 7.81 - -
PSG Equity A 19.83 - 3.11 - 5.34 - 4.71 - 2.00 3.97
PSG Global Flexible FF A 11.61 12.21 5.18 3.07 4.48 -
PSG Global Equity FF A 13.79 6.13 1.93 0.63 3.41 5.48
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 27.66 7.34 4.09 - 0.33 3.37 6.36
PSG Global Equity USD 29.04 2.75 1.63 - 2.20 2.68 6.05
  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 9.29 - 3.15 - 1.98 - 1.96 0.36 3.03
PSG Wealth SA Property Equity Portfolio 6.79 - 35.97 - 21.32 - 19.35 - 12.70 - 10.54
PSG Wealth Dividend Income Equity Portfolio 7.78 - 14.17 - 7.85 - 6.85 - 1.76 -
PSG Wealth Offshore Equity Portfolio (USD) 17.86 14.28 18.20 12.56 16.73 14.37
  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 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
22 December 2020 Arrowhead Properties Limited AHA Interim Cash Dividend
22 December 2020 Arrowhead Properties Limited AHA Final Cash Dividend
22 December 2020 Arrowhead Properties Limited AHB Interim Cash Dividend
22 December 2020 Arrowhead Properties Limited AHB Final Cash Dividend
22 December 2020 Capital Appreciation Limited CTA Cash Dividend
22 December 2020 Firstrand Limited 2Y Dollar Custodial Certificate DCCUS2 Interest Payment
22 December 2020 Mahube Infrastructure Limited MHB Cash Dividend
22 December 2020 Sibanye-Stillwater Limited SSW Odd-lot Offer (Shareholders holding less than 100 shares)Option 1 (Sell Entitlement) (Subject to 20% DWT)Gross Offer Price - ZAR57.23039Less 20% DWT - ZAR11.44608Net - ZAR45.78431Option 2 (Retain Odd-lot holding)Default - Option 1 (Sell Entitlement)
22 December 2020 Sibanye-Stillwater Limited SSW Specific Repurhase Offer (Shareholders holding from 100 to 400 shares)Option 1 (Tender shares) (Subject to 20% DWT)Gross Offer Price - ZAR57.23039Less 20% DWT - ZAR11.44608Net - ZAR45.78431Option 2 (Default) - No Action
  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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