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Trump recovery reports boost global markets

06 October 2020

Trump recovery reports boost global markets

Daily Investment Update

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Market commentary

SA flag Icon
South Africa

The local market performed stronger on Monday, moved by positive health reports about US President Donald Trump and talks of new US fiscal stimulus plans. The All Share closed up by 0.56%.

US flag Icon
United States

Wall Street opened stronger on Monday because of reports stating that Trump’s health improved enough that he could be released from hospital on Monday. The Nasdaq reported an increase of 1.88% at 18h50.

EU flag Icon
Europe

European markets reached a two-week high at the start of the week due to uplifting news around Trump’s health, a possible US stimulus package, and an array of deal-making activities. The European STOXX 600 stood 0.81% higher at 18h50.

HK flag Icon
Hong Kong

The Hang Seng ended 1.32% in the green on Monday on the back of reports that Trump’s health improved.

Japan flag Icon
Japan

The Nikkei gained 1.23% on Monday, thanks to news that Trump might be sent home as well as increased trade in, among other value firms, railway companies.

Rand Icon
Rand

The rand had a good start to the week as it extended gains for the sixth session in a row. At 18h50, the local currency traded at R16.56/$.

Precious metals Icon
Precious metals

Gold rose about 1% on Monday, boosted by a softer dollar and the possibility of further US economic stimulus plans. Spot gold had risen to $1 916.41/oz by 18h50.

Oil Icon
Oil

Oil prices jumped on Monday as positive news related to Trump’s health lifted investor sentiment, and the escalated oil worker strike in Norway led to the closure of six oil and gas fields. A barrel of Brent crude traded at $41.28 at 18h50.


Market indicators

Local markets (R)
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
ALSI 54 524.05 0.56 1.52 0.86 23.75 3.96
Gold mining 5 156.69 0.93 - 2.49 4.71 61.62 120.89
Basic minerals 38 163.48 0.78 - 2.11 7.55 46.21 28.94
Industrial index 78 008.83 1.04 2.76 - 2.72 14.28 7.69
Financial 25 801.80 - 1.17 6.23 - 1.97 13.65 - 30.27
Fin + Ind 30 6 697.10 0.44 3.66 - 2.52 14.13 - 6.04
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) 28 148.64 1.70 0.16 9.57 35.25 8.47
S&P 500 PR (USD) 3 408.63 1.81 - 0.42 9.36 38.21 17.68
NASDAQ (USD) 11 332.49 2.32 0.23 11.24 54.36 43.33
FT-100 (GBP) 5 942.94 0.69 2.58 - 2.56 11.59 - 14.09
Hang Seng (HKD) 23 767.78 1.32 - 3.50 - 5.50 4.94 - 4.84
Nikkei 225 (JPY) 23 312.14 1.23 - 0.33 4.65 30.24 7.83
MSCI World (USD) 7 136.25 1.75 0.30 8.37 36.39 13.46
Frankfurt (EUR) 5 552.34 1.10 - 0.11 2.40 34.67 6.79
Other markets
Index Current level 1 Day move 1 Month move 3 Month move 6 Month move 1 Year move
Gold ($) 1 899.65 - 0.35 - 1.96 7.04 18.01 25.85
Platinum ($) 881.00 - 1.45 - 2.65 8.50 22.53 - 0.34
Brent Oil ($) 41.29 5.14 - 3.21 - 3.53 21.05 - 29.26
Rand/USD 16.52 - 0.47 0.41 3.72 9.13 - 9.61
Rand/GBP 21.46 - 0.86 2.23 0.41 4.71 - 15.50
Rand/EUR 19.48 - 0.98 0.78 - 0.66 1.37 - 17.70
ALBI (R) 708.18 - 0.26 - 1.05 1.94 13.91 2.00
  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. EU: ECB President Lagarde Speech
  2. US: Balance of trade AUG

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 2.71 6.59 7.30 7.51 7.69 7.69
PSG Wealth Income FoF D 5.38 4.78 6.34 6.66 7.18 7.44
PSG Wealth Preserver FoF D 10.06 1.80 2.67 3.51 4.61 5.28
PSG Wealth Moderate FoF D 14.98 0.86 0.35 1.86 3.46 4.33
PSG Wealth Creator FoF D 25.75 1.48 - 0.93 0.47 2.35 3.40
PSG Wealth Global Preserver FF D 0.76 10.45 10.86 - - -
PSG Wealth Global Moderate FF D 8.26 15.39 11.40 10.44 9.71 8.97
PSG Wealth Global Flexible FF D 11.86 24.61 16.19 - - -
PSG Wealth Global Creator FF D 17.46 25.94 17.38 18.08 17.19 15.65
PSG Wealth Solutions ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Moderate FoF D 20.73 6.69 3.53 3.06 4.76 4.95
PSG Wealth Global Creator FoF D 35.46 17.58 9.38 10.26 12.10 11.52
PSG Wealth Global Preserver FoF (USD) D 12.03 1.10 2.58 2.00 2.83 4.62
PSG Wealth Global Flexible FoF (USD) D 26.22 15.00 8.14 8.73 10.38 11.01
PSG Wealth Solutions (£)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Wealth Global Preserver FoF (GBP) D 8.36 - 3.04 2.23 2.43 2.76 6.74
PSG Wealth Global Flexible FoF (GBP) D 21.12 9.81 8.34 9.29 10.09 13.37
PSG Asset Management
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Money Market A 2.03 5.62 6.45 6.74 6.97 7.00
PSG Income A 5.66 9.43 8.91 8.59 8.62 8.50
PSG Diversified Income 8.05 6.01 6.30 6.67 7.20 7.42
PSG Stable A 11.30 - 5.00 - 3.34 0.11 2.03 3.54
PSG Balanced A 18.73 - 9.25 - 9.86 - 4.34 - 1.12 1.30
PSG Flexible A 20.21 - 13.92 - 11.63 - 5.58 - 1.94 0.99
PSG SA Equity D 29.65 - 16.81 - 17.84 - 11.83 - -
PSG Equity A 23.37 - 14.30 - 15.26 - 8.48 - 3.80 - 0.45
PSG Global Flexible FF A 15.44 - 1.42 - 4.87 0.03 3.45 -
PSG Global Equity FF A 18.43 - 8.64 - 9.90 - 2.74 1.87 4.15
PSG Asset Management ($)
Fund 6 Month move 1 Year move 2 Year move 3 Year move 4 Year move 5 Year move
PSG Global Flexible USD A 30.69 - 7.96 - 11.16 - 6.23 - 0.94 1.79
PSG Global Equity USD 32.37 - 13.42 - 15.09 - 8.36 - 2.08 0.96
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 5.89 7.27 7.19 7.19 7.43 7.45
PSG Direct Low Equity 12.10 - 4.28 - 3.48 - 0.11 1.84 3.32
PSG Direct Managed 18.83 - 10.83 - 10.70 - 5.08 - 1.77 0.77
PSG Direct Aggressive 19.86 - 11.74 - 11.56 - 5.53 - 1.67 -
PSG Direct Global Managed 15.17 - 1.87 - 5.30 - 0.42 2.98 -
PSG Direct Global Aggressive 17.06 - 6.38 - 8.44 - 2.13 2.02 -
  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 11.56 - 5.71 - 8.45 - 4.24 - 1.78 0.37
PSG Wealth SA Property Equity Portfolio 1.29 - 47.40 - 31.11 - 24.25 - 17.70 -
PSG Wealth Income Growth Equity Portfolio 10.37 - 18.85 - 14.60 - 7.24 - 3.99 -
PSG Wealth Offshore Equity Portfolio (USD) 24.50 15.26 9.00 11.35 13.62 13.70
  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

  • We recommend an overweight position for N91 LN, Click here to read the full report on our secure site or log in to myBase.
  • Sixty per cent of group earnings comes from outside of SA, providing protection against idiosyncratic risks but does expose investors to exchange rate translation risks.
  • On a P/E basis, we estimate that the group is trading slightly ahead of its European peers and at a slight discount to Schroders, the only peer with a similar emerging market (EM) presence.
  • The group is trading at the lower end of its European peers in terms of market capital to assets under management (AUM).
  • Given its historically strong net client cash flow (NCCF), we feel the current valuation multiples do not fully capture the fundamentals of the group.


company logo

Highlights

  • We recommend an underweight position for BAM US, Click here to read the full report on our secure site or log in to myBase.
  • The group’s plan to significantly develop retail property and land comes at a time where the real estate sector has seen significant downside following the spread of COVID-19 as businesses are forced to close their doors and people to stay inside.
  • Real estate constitutes about 25% of our intrinsic value and around 35% of group operating income; thus, a slowdown in real estate will have a material impact on earnings for the group.
  • The current price appears undervalued; however, we feel that that the near-term downside risks from COVID-19 on the real estate operations outweigh any potential near-term rerating towards the implied value per share.


company logo

Highlights

  • We recommend a neutral position for both Naspers and Prosus. Click here to read the full report on our secure site or log in to myBase.
  • Despite the regulatory and political risks that come with investing in Chinese stocks, we acknowledge that, to a large extent, Prosus and Naspers provide an alternative risk and reward profile due to the exposure to structural growth trends, which are not available through alternative local counters.
  • Naspers and Prosus trade at discounts of 23% and 13% respectively.
  • Given that management is determined to reduce the discounts over time, we suspect there will eventually be large value unlock for shareholders.
  • The share price for both Naspers and Prosus moves with a fairly high correlation to the USD/ZAR exchange rate.


Corporate actions

Date Company Share code Expectation
07 October 2020 Anchor Group Limited ACG Cash Dividend
07 October 2020 Mustek Limited MST Cash Dividend
07 October 2020 SA Corporate Real Estate Fund SAC Cash Dividend
07 October 2020 Schroder European Real Estate Investment Trust Plc SCD Cash Dividend
07 October 2020 Zarclear Holdings Limited ZCL General Offer
  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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