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Rand breaks below R18

21 May 2020

Rand breaks below R18

Daily Investment Update

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Market commentary

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South Africa

The local bourse closed slightly higher on Wednesday as optimism over a potential coronavirus vaccine faded after a US health news website “questioned the results of the vaccine trial”. At the closing bell, the All Share gained 0.37%.

US flag Icon
United States

Wall street shrugged off doubts cast over the coronavirus vaccine trial results on Wednesday and clung to hopes of a swift economic recovery amid signs of more stimulus for struggling sectors. At 19h00, the Dow gained 1.18%.

EU flag Icon
Europe

European stocks traded near a three-week high on Wednesday, tracking a rally on Wall Street led by a stellar performance by technology giants Facebook and Amazon. At 19h15, the FTSE 100 gained 1.08%.

HK flag Icon
Hong Kong

Chinese shares were flat on Wednesday as investors were cautious ahead of scheduled political meetings where policymakers were set to discuss measures to boost the economy. The Hang Seng Index gained 0.06%.

Japan flag Icon
Japan

Japanese shares traded higher on Wednesday as investors cheered the gradual reopening of the economy in response to a decline in new coronavirus infections. At the close of business, the Nikkei gained 0.79%.

Rand Icon
Rand

The rand strengthened to below R18 on Wednesday as sentiment towards emerging-market currencies improved and amid expectations of a further interest rate cut by the South African Reserve Bank. At 19h30, a dollar traded at R17.94.

Precious metals Icon
Precious metals

Gold prices rose slightly as risk appetite faded on Wednesday after a US health news website cast doubts over the results of Moderna Inc’s coronavirus vaccine trial. An ounce of gold traded at $1 749.05 at 19h40.

Oil Icon
Oil

Oil prices went up on Wednesday on signs of improving demand and falling US crude stockpiles. At 20h00, a barrel of Brent crude traded at $34.19.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 52 142.75 0.37 6.90 - 8.37 - 7.35 - 2.76
Gold mining 4 645.12 - 4.25 17.87 46.42 86.19 245.95
Basic minerals 34 429.30 - 0.54 13.24 - 2.54 4.37 15.51
Industrial index 78 129.89 0.99 5.68 0.09 3.58 6.91
Financial 24 305.10 0.37 - 0.60 - 32.66 - 39.14 - 38.31
Fin + Ind 30 6 602.23 0.83 4.02 - 11.02 - 12.23 - 9.76
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) 24 575.90 1.54 4.16 - 15.39 - 10.57 - 1.94
S&P 500 PR (USD) 2 971.61 1.68 5.46 - 11.44 - 3.44 6.74
NASDAQ (USD) 9 375.78 2.11 9.66 - 3.58 10.52 23.02
FT-100 (GBP) 6 067.16 1.08 4.78 - 17.60 - 15.05 - 13.75
Hang Seng (HKD) 24 399.95 0.06 0.65 - 11.21 - 8.74 - 9.16
Nikkei 225 (JPY) 20 595.15 0.79 4.70 - 11.41 - 9.99 - 1.14
MSCI World (USD) 6 175.83 1.50 5.14 - 13.05 - 7.20 1.18
Frankfurt (EUR) 4 933.81 1.34 5.13 - 17.86 - 14.70 - 6.79
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 750.05 0.85 3.86 8.68 18.59 37.23
Platinum ($) 850.00 5.46 8.83 - 14.66 - 6.80 3.79
Brent Oil ($) 34.65 - 0.46 23.40 - 41.39 - 43.11 - 52.01
Rand/USD 17.99 1.68 5.64 - 18.99 - 22.47 - 24.35
Rand/GBP 21.95 2.16 6.22 - 12.62 - 16.34 - 19.88
Rand/EUR 19.72 1.51 4.64 - 20.83 - 21.80 - 22.66
ALBI (R) 702.88 1.62 5.35 - 1.43 1.74 5.62
  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: Interest Rate Decision
  1. JP: Balance of Trade APR
  2. EA: Markit Manufacturing PMI Flash MAY

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 3.66 7.70 7.83 7.89 7.99 7.83
PSG Wealth Income FoF D 0.89 4.76 6.25 6.77 7.33 7.41
PSG Wealth Preserver FoF D - 2.92 - 0.34 2.12 3.49 3.83 4.72
PSG Wealth Moderate FoF D - 6.99 - 5.04 - 1.34 1.10 2.00 2.80
PSG Wealth Creator FoF D - 11.20 - 9.63 - 5.61 - 1.64 0.72 - 0.05
PSG Wealth Global Moderate FF D 14.19 23.78 17.36 12.42 6.66 9.25
PSG Wealth Global Creator FF D 15.40 28.61 23.06 18.90 12.86 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D - 7.52 - 2.08 - 1.60 0.93 3.07 0.38
PSG Wealth Global Creator FoF D - 4.86 3.12 4.01 7.30 9.50 6.11
PSG Wealth Global Preserver FoF (USD) D - 5.94 - 2.96 - 0.01 0.90 2.77 2.11
PSG Wealth Global Flexible FoF (USD) D - 3.19 2.58 4.05 6.21 8.48 6.19
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 2.53 - 0.70 3.04 2.24 5.87 5.65
PSG Wealth Global Flexible FoF (GBP) D 2.16 6.68 8.87 7.61 12.36 10.24
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.45 7.14 7.21 7.30 7.37 7.23
PSG Income A 4.70 8.78 8.49 8.45 8.60 8.26
PSG Diversified Income 1.46 4.70 5.80 6.53 7.06 7.14
PSG Stable A - 10.29 - 9.94 - 4.23 - 0.27 1.64 2.41
PSG Balanced A - 18.34 - 19.81 - 11.97 - 5.66 - 2.18 - 1.36
PSG Flexible A - 23.20 - 23.83 - 14.17 - 7.21 - 3.17 - 1.78
PSG SA Equity D - 31.26 - 37.70 - 26.14 - 15.64 - -
PSG Equity A - 24.71 - 28.47 - 18.76 - 10.50 - 4.52 - 5.17
PSG Global Flexible FF A - 4.24 - 2.68 - 0.35 1.26 0.71 -
PSG Global Equity FF A - 12.56 - 11.56 - 5.83 - 1.69 - 0.73 1.41
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A - 22.63 - 23.08 - 16.56 - 9.07 - 2.31 - 4.60
PSG Global Equity USD - 27.58 - 28.30 - 20.01 - 10.96 - 3.07 - 6.18
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 3.14 6.62 6.87 7.13 7.41 7.25
PSG Direct Low Equity - 10.17 - 10.00 - 4.60 - 0.67 1.34 2.00
PSG Direct Managed - 19.75 - 21.18 - 12.91 - 6.47 - 2.87 - 1.90
PSG Direct Aggressive - 20.02 - 21.39 - 13.01 - 6.71 - 3.02 -
PSG Direct Global Managed - 4.46 - 3.12 - 0.80 0.80 0.26 -
PSG Direct Global Aggressive - 9.70 - 8.70 - 4.23 - 1.03 - 0.62 -
  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 - 15.58 - 17.70 - 11.97 - 5.61 - 1.87 -
PSG Wealth SA Property Equity Portfolio - 50.05 - 50.60 - 33.84 - 24.02 - 19.23 -
PSG Wealth Growth Income Equity Portfolio - 26.19 - 28.89 - 17.49 - 7.54 - 3.90 -
PSG Wealth Offshore Equity Portfolio (USD) - 2.67 5.83 8.11 10.99 12.34 -
  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

  • We recommend an overweight position in the PSG Wealth House View SA Equity Portfolio. Click here to read the full report on our secure site or log in to myBase.
  • OMU SJ has less than 10% of the unsecured lending market, which provides a significant opportunity to drive future growth.
  • Due to Old Mutual’s size, balance sheet strength, historically low discount to group equity value and the low relative price to group equity value or embedded value compared with peers, we feel that the group will be more resilient to economic challenges in 2020 and offer a better potential for upside relative to peers.


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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.


Corporate actions

Date Company Share code Expectation
27 May 2020 Investec Australia Property Fund Limited IAP Interest Distribution
27 May 2020 Investec Bank (Mauritius) Limited IMRP1 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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