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Oil prices remain volatile

23 March 2020

Oil prices remain volatile

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

The JSE closed firmer on Friday as investors grew optimistic that stimulus measures from key central banks will be able to soften the economic impact of the coronavirus on the global economy. The All Share closed up by 6.08%.

US flag Icon
United States

Wall Street’s main indices made loses on Friday in what is still the market’s worst month in three decades amid a coronavirus-fuelled market rout. At 18h00 the Dow and S&P 500 were down by 4.55% and 4.34% respectively.

EU flag Icon
Europe

European shares traded higher on Friday as fears over the rapid progression of Covid-19 across the globe eased, following another round of monetary stimulus in the region. At 18h15, the FTSE 100 traded 3.70% higher.

HK flag Icon
Hong Kong

Encouraged by wider gains in other markets, Hong Kong stocks traded higher on Friday as investors cheered signs of additional stimulus measures to blunt the hit from Covid-19. The Hang Seng Index closed 5.05% in the green.

Japan flag Icon
Japan

The Nikkei share benchmark sagged on Friday as investor fears about the economic fallout from the coronavirus pandemic overshadowed the European Central Bank’s (ECB) latest pledge of monetary stimulus. The Nikkei closed 1.04% lower.

Rand Icon
Rand

The rand recorded its worst week in three years on Friday as anxiety about the coronavirus spurred a sell-off in global markets over the past week. A dollar traded at R17.55 at 18h40.

Precious metals Icon
Precious metals

Gold prices inched up on Friday as safe-haven buying offset a rush for cash amid fears of a coronavirus-led global recession. An ounce of gold traded at $1 498.52 at 18h45.

Oil Icon
Oil

Oil prices struggled for direction on Friday after President Donald Trump mentioned that he may intervene in the price war between Saudi Arabia and Russia in due course. At 19h00 a barrel of Brent crude traded at $27.47.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 40 272.00 6.08 -29.85 -29.30 -27.60 -25.71
Gold mining 2 499.46 7.27 -21.21 -3.91 11.35 57.97
Basic minerals 21 713.32 7.78 -38.62 -37.36 -30.36 -31.80
Industrial index 62 785.01 5.04 -19.93 -17.11 -18.74 -13.99
Financial 23 227.16 6.59 -37.67 -41.17 -40.80 -39.96
Fin + Ind 30 5 559.82 5.48 -25.97 -25.80 -26.57 -23.36
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) 19 173.98 -4.55 -34.21 -32.21 -27.95 -23.69
S&P 500 PR (USD) 2 304.92 -4.32 -31.53 -28.09 -22.20 -16.74
NASDAQ (USD) 6 879.52 -3.78 -29.37 -22.72 -14.81 -10.04
FT-100 (GBP) 5 190.78 0.76 -29.68 -30.69 -27.89 -25.42
Hang Seng (HKD) 22 805.07 5.05 -17.06 -17.81 -13.08 -19.33
Nikkei 225 (JPY) 16 552.83 -1.04 -29.21 -30.47 -24.17 -21.61
MSCI World (USD) 4 854.30 -2.56 -31.65 -29.46 -24.27 -20.31
Frankfurt (EUR) 3 969.36 3.70 -34.65 -32.96 -28.39 -23.05
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 480.70 -1.68 -8.00 0.43 -1.18 13.17
Platinum ($) 628.00 3.46 -36.95 -32.55 -33.54 -26.89
Brent Oil ($) 28.47 14.43 -51.84 -57.21 -55.79 -57.89
Rand/USD 17.71 -1.98 -17.47 -25.87 -18.94 -24.63
Rand/GBP 20.65 -2.02 -5.87 -11.91 -11.28 -10.69
Rand/EUR 19.00 -1.73 -16.50 -20.69 -16.08 -17.57
ALBI (R) 603.88 0.03 -15.64 -13.32 -12.24 -6.98
  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. EA: Consumer Confidence MAR
  2. US: Chicago Fed National Activity Index 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 7.91 7.98 8.03 7.82
PSG Wealth Income FoF D -0.44 3.51 5.49 6.34 7.05 7.12
PSG Wealth Preserver FoF D -12.05 -10.45 -2.83 0.36 1.41 2.81
PSG Wealth Moderate FoF D -20.29 -20.28 -8.98 -3.71 -2.02 -0.08
PSG Wealth Creator FoF D -29.52 -31.36 -16.54 -9.12 -5.78 -4.10
PSG Wealth Global Moderate FF D -1.90 2.01 9.34 7.60 2.94 5.61
PSG Wealth Global Creator FF D -3.59 3.59 12.55 12.52 8.06 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D -17.88 -15.86 -8.86 -3.13 -0.68 -1.72
PSG Wealth Global Creator FoF D -20.42 -16.02 -7.07 0.70 3.75 2.39
PSG Wealth Global Preserver FoF (USD) D -13.83 -11.61 -4.84 -2.04 0.52 0.28
PSG Wealth Global Flexible FoF (USD) D -16.00 -13.55 -5.27 1.13 4.28 3.21
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D -8.73 -2.08 1.97 -0.21 4.42 3.86
PSG Wealth Global Flexible FoF (GBP) D -9.31 -1.30 3.60 2.91 8.87 7.23
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.45 7.18 7.23 7.33 7.38 7.21
PSG Income A 2.83 6.98 7.49 7.87 8.12 7.85
PSG Diversified Income -3.34 0.08 3.10 4.82 5.78 6.19
PSG Stable A -18.93 -19.59 -9.33 -4.11 -0.98 0.58
PSG Balanced A -31.71 -34.67 -19.83 -12.14 -6.86 -4.41
PSG Flexible A -36.25 -38.71 -21.75 -13.68 -7.69 -4.85
PSG SA Equity D -40.14 -45.57 -31.52 -21.48 - -
PSG Equity A -37.46 -42.39 -26.14 -17.49 -9.39 -7.97
PSG Global Flexible FF A -26.33 -29.94 -10.89 -6.53 -5.05 -
PSG Global Equity FF A -34.31 -38.23 -16.71 -10.18 -7.00 -3.71
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A -36.34 -40.62 -24.92 -14.92 -7.32 -7.31
PSG Global Equity USD -41.34 -45.84 -28.52 -17.26 -8.45 -8.96
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 0.37 3.95 5.35 6.20 6.69 6.69
PSG Direct Low Equity -19.35 -20.19 -9.93 -4.74 -1.49 0.07
PSG Direct Managed -33.02 -35.99 -20.67 -12.92 -7.49 -4.95
PSG Direct Aggressive -34.74 -38.27 -21.13 -13.61 -7.88 -
PSG Direct Global Managed -26.50 -30.26 -11.29 -6.96 -5.48 -
PSG Direct Global Aggressive -31.54 -35.50 -14.93 -9.22 -6.67 -
  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 - 28.78 - 33.31 - 19.79 - 11.01 - 7.21 -
PSG Wealth SA Property Equity Portfolio - 50.69 - 53.53 - 36.13 - 25.17 - 20.48 -
PSG Wealth SA Dividend Income Equity Portfolio - 35.15 - 37.83 - 24.78 - 13.28 - -
PSG Wealth Offshore Equity Portfolio (USD) - 14.73 - 9.57 - 1.87 5.89 7.92 -
  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
25 March 2020 Astoria Investments Limited ARA Cash Dividend
25 March 2020 Astoria Investments Limited ARA Cash Distribution
25 March 2020 Bid Corporation Limited BID Cash Dividend
25 March 2020 British American Tobacco Plc BTI Cash Dividend
25 March 2020 The Bidvest Group Limited BVT Cash Dividend
25 March 2020 Cashbuild Limited CSB Cash Dividend
25 March 2020 Fortress REIT Limited "A" Ordinary Shares FFA UnbundlingOption 1 (Cash applicable to shareholders holding less than 1000 shares)Gross - ZAR0.7767Less 20% SA Tax - ZAR0.15534Net - ZAR0.62136Option 2 (Shares applicable to shareholders holding 1000 or more shares)Ratio - 1 Resilient REIT Limited share (RES - ISIN ZAE000209557) in addition to every 67.84 FFA shares held
25 March 2020 Fortress REIT Limited "B" Ordinary Shares FFB UnbundlingOption 1 (Cash applicable to shareholders holding less than 1000 shares)Gross - ZAR0.7484Less 20% SA Tax - ZAR0.14968Net - ZAR0.59872Option 2 (Shares applicable to shareholders holding 1000 or more shares)Ratio - 1 Resilient REIT Limited share (RES - ISIN ZAE000209557) in addition to every 70.4 FFB shares held
25 March 2020 Grindrod Limited GND Cash Dividend
25 March 2020 Grindrod Limited Cumulative Non-Redeemabl Non-Participating Non-Convertible Preference Shares GNDP Cash Dividend
25 March 2020 JSE Limited JSE Cash Dividend
25 March 2020 JSE Limited JSE Special Cash Dividend
25 March 2020 Motus Holdings Limited MTH Cash Dividend
25 March 2020 Momentum Metropolitan Holdings Limited MTM Cash Dividend
25 March 2020 Schroder European Real Estate Investment Trust Plc SCD Cash Dividend
25 March 2020 Steinhoff International Holdings Limited Preference Shares SHFF Cash Dividend
25 March 2020 Santam Limited SNT 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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