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Sentiment rises on possible US stimulus

25 March 2020

Sentiment rises on possible US stimulus

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

Taking the lead from global markets, the JSE ended Tuesday firmer, boosted by strong performances from industrials, banks, financials and mines. The All Share closed 7.53% higher.

US flag Icon
United States

Wall Street opened high on Tuesday on optimism that Washington was getting closer to completing a $2 trillion economic rescue package. At 19h40, the Dow was 8.80% up.

EU flag Icon
Europe

European shares logged their best trading day since 2008 and almost recovered the past week’s losses. The STOXX 600 closed up 8.40%.

HK flag Icon
Hong Kong

Asian markets rallied on Tuesday in light of the US Federal Reserve planning to roll out “a slew of support measures to ease a global cash crunch”. The Hang Seng Index closed 4.46% in the green.

Japan flag Icon
Japan

Japanese shares recorded its best daily gain in four years, lifted by positive sentiment around increased buying by the Bank of Japan. The Nikkei closed 7.04% higher.

Rand Icon
Rand

The local currency made up some ground on Tuesday but has lost over 26% against the dollar in this year. A dollar traded at R17.53 at 19h50.

Precious metals Icon
Precious metals

Bullion performed well on Tuesday, with palladium gaining over 10% intraday, as South Africa, a major producer, prepared for lockdown. An ounce of gold traded at $1 629.98 at 19h40.

Oil Icon
Oil

Oil prices remained somewhat flat on Tuesday as concerns about demand and the Saudi-Russian price war overshadowed optimism over the possible US economic relief package. At 19h40 a barrel of Brent crude traded at $27.26.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 41 149.35 7.53 -24.52 -27.58 -24.98 -24.04
Gold mining 2 941.40 13.13 -16.07 9.48 25.79 76.12
Basic minerals 23 735.00 12.85 -28.98 -31.50 -23.26 -25.55
Industrial index 63 739.31 5.29 -14.67 -15.61 -15.91 -12.91
Financial 21 990.35 6.15 -37.89 -44.05 -43.32 -42.61
Fin + Ind 30 5 534.87 5.52 -22.57 -25.88 -25.70 -23.59
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) 20 704.91 11.37 -25.77 -26.95 -21.82 -16.81
S&P 500 PR (USD) 2 447.33 9.39 -23.99 -23.69 -16.68 -10.86
NASDAQ (USD) 7 417.86 8.12 -19.47 -16.93 -6.72 -1.90
FT-100 (GBP) 5 446.01 9.05 -23.34 -27.82 -23.79 -20.91
Hang Seng (HKD) 22 663.49 4.46 -15.15 -18.30 -13.12 -19.26
Nikkei 225 (JPY) 18 092.35 7.13 -22.58 -23.89 -17.32 -14.56
MSCI World (USD) 5 124.26 8.78 -25.09 -25.61 -19.49 -15.20
Frankfurt (EUR) 4 312.38 10.98 -25.58 -27.07 -21.18 -14.64
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 599.50 7.03 -4.92 7.29 5.21 22.00
Platinum ($) 679.00 9.87 -30.29 -27.38 -29.05 -20.86
Brent Oil ($) 27.03 0.19 -53.79 -59.29 -58.27 -59.67
Rand/USD 17.58 0.68 -16.62 -24.96 -16.96 -22.72
Rand/GBP 20.74 -0.70 -6.31 -12.38 -11.90 -9.76
Rand/EUR 18.99 0.65 -16.43 -20.62 -15.67 -17.17
ALBI (R) 584.53 0.29 -18.32 -16.32 -15.08 -10.01
  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 Final MAR
  2. UK: Inflation Rate YoY FEB
  3. US: Durable Goods Orders MoM 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 3.80 7.90 7.91 7.97 8.03 7.83
PSG Wealth Income FoF D -0.82 3.30 5.31 6.17 6.98 7.04
PSG Wealth Preserver FoF D -13.12 -10.72 -2.65 0.22 1.25 2.64
PSG Wealth Moderate FoF D -21.09 -20.01 -8.08 -3.59 -2.01 -0.20
PSG Wealth Creator FoF D -29.36 -29.82 -14.93 -8.56 -5.31 -4.04
PSG Wealth Global Moderate FF D -1.68 4.29 12.55 9.19 3.17 6.27
PSG Wealth Global Creator FF D -4.00 4.84 15.91 14.03 8.01 -
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D -18.92 -16.70 -8.82 -3.49 -0.98 -2.26
PSG Wealth Global Creator FoF D -21.99 -18.33 -6.71 0.16 3.05 1.63
PSG Wealth Global Preserver FoF (USD) D -15.17 -12.83 -5.01 -2.44 0.14 -0.02
PSG Wealth Global Flexible FoF (USD) D -17.19 -15.57 -4.60 0.61 3.77 2.82
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D -10.49 -3.84 2.04 -0.45 4.02 3.54
PSG Wealth Global Flexible FoF (GBP) D -11.01 -4.07 4.59 2.78 8.35 6.83
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 3.45 7.18 7.23 7.33 7.38 7.21
PSG Income A 2.39 6.53 7.21 7.63 8.00 7.75
PSG Diversified Income -4.56 -1.19 2.40 4.28 5.43 5.91
PSG Stable A -19.67 -20.40 -9.70 -4.50 -1.29 0.32
PSG Balanced A -30.56 -33.80 -18.95 -11.69 -6.65 -4.27
PSG Flexible A -35.46 -38.09 -21.02 -13.39 -7.70 -4.82
PSG SA Equity D -41.07 -46.80 -32.37 -22.28 - -
PSG Equity A -36.77 -41.85 -25.34 -17.21 -9.30 -8.03
PSG Global Flexible FF A -23.00 -26.07 -6.56 -3.90 -3.83 -
PSG Global Equity FF A -31.02 -34.62 -12.23 -7.39 -5.71 -2.53
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A -35.75 -40.14 -24.39 -14.78 -7.23 -7.59
PSG Global Equity USD -40.77 -45.36 -27.91 -17.09 -8.35 -9.29
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 -0.31 3.25 4.95 5.88 6.50 6.53
PSG Direct Low Equity -19.71 -20.66 -10.07 -4.97 -1.70 -0.11
PSG Direct Managed -31.96 -35.18 -19.83 -12.51 -7.33 -4.83
PSG Direct Aggressive -33.46 -37.04 -19.69 -12.86 -7.60 -
PSG Direct Global Managed -23.18 -26.40 -6.99 -4.34 -4.26 -
PSG Direct Global Aggressive -28.25 -31.82 -10.53 -6.50 -5.42 -
  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 -27.77 -32.04 -19.32 -10.72 -6.66 -
PSG Wealth SA Property Equity Portfolio -54.96 -57.53 -37.63 -27.25 -22.36 -
PSG Wealth SA Dividend Income Equity Portfolio -36.63 -39.36 -26.32 -14.46 - -
PSG Wealth Offshore Equity Portfolio (USD) -21.31 -15.99 -4.12 3.19 5.65 -
  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 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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