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Chinese virus jitters sour risk-on trade

24 January 2020

Chinese virus jitters sour risk-on trade

Daily Investment Update

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Market commentary

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South Africa

On Thursday, the JSE tracked global market losses as investors feared the economic impact of the Chinese virus outbreak. The JSE lost 1.77% on the day.

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United States

Wall Street opened lower on Thursday as rising concerns about the coronavirus outbreak in China and the economic effect thereof weighed market sentiment down. At 18h50, the Dow Jones was 0.37% lower.

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Europe

European indices recorded losses for a fourth consecutive session on Thursday due to increasing fears of how the fallout of the Chinese virus outbreak might affect global economic growth. The STOXX 600 Index fell 0.71% for the day.

HK flag Icon
Hong Kong

On Thursday, Asian markets plummeted as investors rushed to sell off stocks before Asian markets closed for the Lunar New Year and Chinese authorities locked down three cities, halted transport and more to try to contain the spreading virus. At the end of trade, the Hang Seng lost 1.52%.

Japan flag Icon
Japan

Japanese shares dropped on Thursday due to investor concerns ahead of some corporate releases of commodity and cyclical stocks. The Japanese index closed 0.98% weaker.

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Rand

Yesterday the local currency ate into Wednesday’s gains as world markets dropped on coronavirus fears. At 18h50, the rand traded R14.38 to the US dollar.

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Precious metals

Concerns about the impact of the coronavirus on the global economy, investors turned to gold on Thursday, boosting prices. An ounce of gold cost $1 560.84 at 18h50.

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Oil

Despite US inventories releasing lower stockpile figures, oil prices still dropped on Thursday due to concerns that the virus outbreak in China could limit demand. At 18h50, a barrel of Brent crude traded for $61.67.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 56 894.67 - 1.77 - 0.28 2.74 - 0.63 9.18
Gold mining 2 780.37 - 0.26 7.82 10.13 33.47 106.94
Basic minerals 34 921.46 - 2.62 0.14 8.91 6.24 26.22
Industrial index 76 759.91 - 1.71 1.41 3.55 - 2.04 8.52
Financial 38 050.39 - 0.80 - 3.78 - 5.38 - 6.01 - 5.98
Fin + Ind 30 7 459.08 - 1.39 - 0.46 0.26 - 3.41 3.37
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) 29 160.09 - 0.07 2.23 9.32 7.92 21.56
S&P 500 PR (USD) 3 325.54 0.12 3.28 11.22 11.74 28.58
NASDAQ (USD) 9 383.77 0.14 5.18 16.09 14.99 35.12
FT-100 (GBP) 7 507.67 - 0.85 - 1.39 4.07 1.44 14.81
Hang Seng (HKD) 27 909.12 - 1.52 0.01 5.20 - 0.88 7.10
Nikkei 225 (JPY) 23 795.44 - 0.98 0.06 5.36 11.15 18.01
MSCI World (USD) 7 053.11 - 0.17 2.45 9.32 9.77 23.90
Frankfurt (EUR) 5 971.84 - 0.94 0.66 4.61 7.19 20.93
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 554.05 - 0.26 4.72 4.00 9.63 20.95
Platinum ($) 1 004.00 0.50 8.89 12.18 18.96 26.93
Brent Oil ($) 63.21 - 2.14 - 4.43 5.88 - 0.08 2.78
Rand/USD 14.37 - 0.28 - 0.87 1.70 - 1.99 - 3.88
Rand/GBP 18.87 - 0.25 - 1.67 - 0.67 - 7.53 - 4.29
Rand/EUR 15.89 0.03 - 0.57 1.98 - 1.10 - 0.82
ALBI (R) 702.99 - 0.22 0.81 0.98 2.01 10.28
  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. DE: Ifo Business Climate JAN
  2. US: New Home Sales DEC

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 3.86 7.92 7.98 8.01 8.03 7.79
PSG Wealth Income FoF D 3.43 8.03 7.59 7.92 8.31 8.00
PSG Wealth Preserver FoF D 3.32 7.37 4.58 6.02 6.40 6.60
PSG Wealth Moderate FoF D 3.90 8.72 2.66 5.49 6.68 6.23
PSG Wealth Creator FoF D 4.60 8.96 0.11 4.51 7.64 5.05
PSG Wealth Global Moderate FF D 10.30 17.35 11.65 8.64 4.87 8.78
PSG Wealth Global Creator FF D 15.44 31.14 18.89 17.07 11.71 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 6.55 13.66 2.25 6.60 7.99 3.81
PSG Wealth Global Creator FoF D 11.51 26.67 8.60 14.85 14.81 10.22
PSG Wealth Global Preserver FoF (USD) D 3.56 8.98 3.28 4.70 7.16 4.26
PSG Wealth Global Flexible FoF (USD) D 8.57 17.77 6.31 12.04 13.69 9.12
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D - 0.43 7.65 5.24 3.23 8.43 6.14
PSG Wealth Global Flexible FoF (GBP) D 3.31 16.09 8.50 9.10 14.85 10.88
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.52 7.23 7.27 7.36 7.37 7.19
PSG Income A 3.74 8.05 8.05 8.32 8.38 7.97
PSG Diversified Income 2.69 6.69 6.49 7.34 7.67 7.65
PSG Stable A 1.47 0.87 1.51 4.15 6.05 5.81
PSG Balanced A 0.44 - 4.13 - 3.32 1.07 5.37 4.40
PSG Flexible A 0.32 - 3.94 - 3.27 0.96 6.47 5.25
PSG SA Equity D - 7.42 - 17.90 - 13.95 - 6.60 - -
PSG Equity A - 1.32 - 9.87 - 8.51 - 2.46 6.64 2.17
PSG Global Flexible FF A 6.32 3.11 2.88 3.35 5.14 -
PSG Global Equity FF A 6.59 2.48 1.62 3.77 6.40 6.95
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 2.85 0.72 - 5.74 1.62 8.78 2.42
PSG Global Equity USD 2.94 0.25 - 6.82 2.03 9.86 2.36
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 3.09 6.97 6.89 7.36 7.52 7.28
PSG Direct Low Equity 1.24 0.33 0.86 3.58 5.72 5.37
PSG Direct Managed 0.18 - 4.51 - 3.74 0.59 5.17 4.14
PSG Direct Aggressive 0.88 - 4.58 - 3.85 0.14 5.93 -
PSG Direct Global Managed 6.08 2.64 2.41 2.88 4.66 -
PSG Direct Global Aggressive 6.25 2.25 1.63 3.15 5.46 -
  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 - 2.53 - 3.94 - 5.17 0.21 5.40 -
PSG Wealth SA Property Equity Portfolio - 6.46 - 9.88 - 10.90 - 5.40 - 2.76 -
PSG Wealth SA Dividend Income Equity Portfolio - 5.84 - 7.72 - 7.41 0.61 - -
PSG Wealth Offshore Equity Portfolio (USD) 12.19 24.53 9.24 17.23 16.26 -
PSG Wealth Managed Volatility Equity Portfolio - 3.05 - 8.71 - 9.26 - 3.70 - -
  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 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.


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Highlights

  • Our recommendation for MCG SJ is overweight; click here to read the full report on our secure site.
  • Having only listed on the JSE in February 2019, MultiChoice has already seen its shares grow by approximately 17% to R125.
  • At these levels, and trading at a forward P/E of 15 times, we believe that MultiChoice is still undervalued and is well-positioned to benefit from mass-market growth in both South and Southern Africa.


company logo

Highlights

  • Our recommendation for SOL SJ is underweight; click here to read the full report on our secure site.
  • Sasol is currently facing an increased risk profile through the decline in chemical product prices, a severely constrained balance sheet and slowing global economic backdrop.
  • The group’s chemicals business is also facing growing competition from additional ethylene capacity/supply into the market.


Corporate actions

Date Company Share code Expectation
29 January 2020 African Equity Empowerment Investments Limited AEE Cash Dividend
29 January 2020 Accelerate Property Fund Limited APF Cash Dividend
29 January 2020 Pioneer Food Group Limited PFG Cash Dividend
29 January 2020 Peregrine Holdings Limited PGR 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


At PSG Wealth
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