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JSE rebounds on renewed optimism

18 March 2020

JSE rebounds on renewed optimism

Daily Investment Update

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We encourage a sober approach and robust investment process

Markets are extremely volatile in light of the uncertainty caused by the COVID-19 outbreak. We remind all our clients that sound decision-making requires a sober approach and robust investment process. Our recent Special Report highlights that markets suffer setbacks more often than investors may think.


Market commentary

SA flag Icon
South Africa

On Tuesday, the JSE staged a mild recovery as optimism returned to the markets and investors remained hopeful that governments would be successful in cushioning the economic fallout from the coronavirus. The All Share closed up by 2.67%.

US flag Icon
United States

Wall Street opened higher on Tuesday, recuperating from the previous session’s rout, the biggest since 1987, after the US Federal Reserve (Fed) said it would relaunch financial crisis-era purchases of short-term corporate debt to boost markets. At 18h00, the Dow Jones up by 3.26%.

EU flag Icon
Europe

European shares struggled for direction on Tuesday as global economic damage from Covid-19 kept financial markets on edge but investors remained hopeful that governments will respond with fiscal measures enough to cushion the fallout. At 18h15, the FTSE 100 traded 2.35% higher.

HK flag Icon
Hong Kong

Hong Kong stocks rose for the first time in four days on Tuesday following an encouraging performance by the financial and technology sectors. The Hang Seng Index closed up by 0.87%.

Japan flag Icon
Japan

Japanese shares somewhat rebounded on Tuesday thanks to the support from public pension funds lending and stimulus measures by the Bank of Japan (BoJ). The Nikkei gained 0.06%.

Rand Icon
Rand

The rand was the best-performing currency among emerging-market currencies on Tuesday after treasury yields fell following an interest rate cut by the Fed. A dollar traded at R16.61 at 18h30.

Precious metals Icon
Precious metals

Gold prices dipped on Tuesday as investors opted to sell equities and keep their money in cash out of the fear of a global recession driven by the coronavirus. An ounce of gold traded at $1 529.81 at 18h45.

Oil Icon
Oil

Oil prices fell on Tuesday as the coronavirus pandemic continued to affect demand, while Saudi Arabia raised output as it competes with Russia for market share. At 18h50, a barrel of Brent crude traded at $29.53.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 41 579.58 2.67 - 28.11 - 26.93 - 25.79 - 23.12
Gold mining 2 839.90 20.97 - 1.35 10.16 32.02 80.35
Basic minerals 23 089.54 6.16 - 33.76 - 34.52 - 25.53 - 25.75
Industrial index 61 029.13 2.68 - 23.27 - 17.98 - 21.81 - 16.16
Financial 26 556.42 - 1.21 - 30.36 - 33.16 - 33.30 - 32.85
Fin + Ind 30 5 677.61 1.40 - 25.69 - 23.53 - 25.88 - 22.16
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) 21 237.38 5.20 - 27.57 - 24.43 - 20.72 - 15.83
S&P 500 PR (USD) 2 529.19 6.00 - 25.02 - 20.39 - 15.03 - 8.60
NASDAQ (USD) 7 334.78 6.23 - 24.53 - 16.66 - 9.94 - 3.58
FT-100 (GBP) 5 294.90 2.79 - 28.18 - 28.78 - 26.22 - 23.29
Hang Seng (HKD) 23 263.73 0.87 - 16.46 - 16.08 - 12.51 - 16.84
Nikkei 225 (JPY) 17 011.53 0.06 - 27.63 - 29.14 - 21.91 - 19.00
MSCI World (USD) 5 211.46 4.12 - 26.92 - 23.83 - 18.85 - 14.31
Frankfurt (EUR) 3 973.66 2.25 - 35.15 - 32.73 - 27.75 - 23.50
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 472.35 - 2.15 - 6.83 - 0.41 - 1.80 13.03
Platinum ($) 641.00 - 10.10 - 33.78 - 31.08 - 31.22 - 23.05
Brent Oil ($) 30.05 - 11.23 - 47.58 - 54.01 - 56.46 - 55.26
Rand/USD 16.60 - 0.21 - 11.69 - 16.08 - 12.45 - 15.06
Rand/GBP 20.11 0.95 - 3.71 - 7.45 - 8.51 - 4.94
Rand/EUR 18.32 1.09 - 13.69 - 15.08 - 12.18 - 11.87
ALBI (R) 639.32 0.10 - 9.86 - 7.58 - 6.95 - 2.14
  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. ZA: Inflation Rate FEB
  1. EA: Inflation Rate Final FEB
  2. JP: Balance of Trade 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 3.77 7.83 7.88 7.96 8.01 7.81
PSG Wealth Income FoF D 0.84 4.93 6.30 6.79 7.42 7.39
PSG Wealth Preserver FoF D - 9.87 - 7.49 - 1.20 1.39 2.06 3.40
PSG Wealth Moderate FoF D - 18.03 - 16.54 - 7.08 - 2.46 - 1.08 0.67
PSG Wealth Creator FoF D - 28.41 - 27.98 - 15.22 - 8.16 - 4.61 - 3.44
PSG Wealth Global Moderate FF D 1.68 6.68 12.19 9.47 2.69 6.39
PSG Wealth Global Creator FF D - 2.68 5.15 13.81 13.51 6.91 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 14.38 - 11.89 - 7.26 - 1.81 0.65 - 0.77
PSG Wealth Global Creator FoF D - 13.75 - 8.62 - 3.59 3.38 6.10 4.26
PSG Wealth Global Preserver FoF (USD) D - 8.58 - 6.16 - 2.17 - 0.14 2.25 1.63
PSG Wealth Global Flexible FoF (USD) D - 12.05 - 9.40 - 3.32 2.71 5.69 4.26
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 7.84 - 0.56 2.23 0.14 4.88 4.45
PSG Wealth Global Flexible FoF (GBP) D - 10.73 - 2.24 2.66 2.34 8.67 7.45
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.45 7.18 7.23 7.33 7.38 7.21
PSG Income A 3.00 7.20 7.56 7.92 8.18 7.89
PSG Diversified Income - 2.05 1.54 3.81 5.31 6.15 6.51
PSG Stable A - 15.16 - 15.20 - 7.01 - 2.45 0.33 1.64
PSG Balanced A - 26.45 - 28.58 - 16.39 - 9.56 - 4.68 - 2.72
PSG Flexible A - 30.92 - 32.20 - 18.04 - 10.90 - 5.32 - 3.01
PSG SA Equity D - 36.29 - 40.58 - 28.97 - 19.28 - -
PSG Equity A - 32.87 - 36.54 - 22.90 - 14.93 - 6.84 - 6.11
PSG Global Flexible FF A - 19.02 - 20.83 - 5.37 - 2.62 - 3.28 -
PSG Global Equity FF A - 25.51 - 27.69 - 10.07 - 5.32 - 4.43 - 0.93
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 34.79 - 37.85 - 23.52 - 13.84 - 5.87 - 6.60
PSG Global Equity USD - 39.74 - 42.91 - 26.97 - 16.06 - 6.86 - 8.13
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 0.94 4.61 5.65 6.40 6.86 6.82
PSG Direct Low Equity - 15.68 - 15.87 - 7.66 - 3.10 - 0.18 1.11
PSG Direct Managed - 27.75 - 29.82 - 17.18 - 10.31 - 5.27 - 3.23
PSG Direct Aggressive - 29.24 - 31.47 - 17.22 - 10.68 - 5.59 -
PSG Direct Global Managed - 19.20 - 21.19 - 5.80 - 3.06 - 3.72 -
PSG Direct Global Aggressive - 23.31 - 25.53 - 8.75 - 4.74 - 4.42 -
  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 - 27.05 - 29.22 - 17.95 - 9.62 - 5.29 -
PSG Wealth SA Property Equity Portfolio - 38.70 - 42.46 - 27.67 - 19.66 - 15.41 -
PSG Wealth SA Dividend Income Equity Portfolio - 31.00 - 32.00 - 21.34 - 10.71 - -
PSG Wealth Offshore Equity Portfolio (USD) - 14.21 - 9.49 - 2.65 5.77 8.62 -
  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 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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