16
April 2024
Markets lower on escalating tensions between Israel and Iran
Adriaan Pask, Chief Investment Officer
PSG Wealth
Market commentary
The FTSE/JSE All Share Index (ALSI) fell more than 1% on Monday, alongside global peers, as investors closely monitored escalating tensions between Israel and Iran. Iran's launch of drones and missiles at Israel on Saturday night, marking the first direct attack on Israel from Iranian territory, sparked concerns. While most strikes were intercepted, there remained apprehension about potential Israeli retaliation, according to Bloomberg. If Israel were to retaliate, it could signify the most significant escalation of geographical tensions in the region since the outbreak of the Israel-Hamas war in October 2023. The mounting geopolitical threats resulted in the price of Brent crude oil reaching its highest level since October on Friday, reaching $92.14 a barrel. At 17h30 local time on Monday, Brent Crude was slightly weaker at $89.56 a barrel, having reached an intraday high of $90.62. The geopolitical tension, combined with recent US inflation reports from last week, added another layer of concern regarding persistent inflation, which has impacted the market and the outlook for interest rates.
The Nikkei fell by 0.74% to finish at 39 233 points on Monday, erasing gains from the previous session, with caution prevailing in the market following Iran's large-scale drone and missile attack. The US expressed the need to prevent a broader war in the Middle East, however, market sentiment remained cautious due to concerns of a potential response from the Israeli government. The Hang Seng also retreated on Monday, falling 0.81%.
Stocks in the US reversed earlier gains and were trading lower on Monday afternoon. The Dow was down by over 200 points, the S&P 500 fell by 1.10%, and the Nasdaq slipped by 1.60%, hitting a 7-week low. Investors were reacting to March's retail sales data, which showed a greater increase than expected, suggesting that interest rates might remain stable for longer.
The DAX 40 index in Frankfurt closed 0.40% higher on Monday afternoon. Investors responded positively to remarks made by several European Central Bank (ECB) policymakers. ECB official Simkus stated that the central bank could reduce borrowing costs more than three times this year, emphasising that such reductions should not be delayed if the Fed postpones its own cuts.
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Market indicators
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| Date | Index | Current Level | 1 Day Move | 1 Month Move | 6 Month Move | 1 Year Move |
|---|---|---|---|---|---|---|
| 2024-04-29 | ALSI | 75370.99 | 1.40 | 3.29 | 9.96 | 0.32 |
| 2024-04-29 | Basic minerals | 45310.40 | 0.61 | 10.54 | 12.23 | -5.52 |
| 2024-04-29 | Fin + Ind 30 | 9701.52 | 1.65 | 1.20 | 10.44 | 3.83 |
| 2024-04-29 | Financial | 39695.51 | 2.09 | 0.63 | 6.20 | 9.47 |
| 2024-04-29 | Industrial index | 110596.95 | 1.35 | 1.96 | 11.87 | 0.65 |
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Collective investment schemes
Local funds
| ASISA category | Fund name | NAV (Rands) at 26 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| South Africa - Equity - General | PSG Equity Fund Class A | 16.30 | 5.43 | 15.72 | 9.73 | 12.71 |
| PSG Equity Fund Class A | 16.30 | 5.43 | 15.72 | 9.73 | 12.71 | |
| PSG Equity Fund Class E | 16.29 | 4.33 | 15.16 | 9.79 | 8.58 | |
| PSG Equity Fund Class F | 16.35 | 5.91 | 16.25 | 10.23 | 9.55 | |
| PSG SA Equity Class F | 1.52 | 2.14 | 15.97 | 8.69 | 6.79 | |
| PSG Wealth Creator Fund of Funds Class D | 51.28 | 6.61 | 9.40 | 10.37 | 11.86 | |
| South Africa - Multi Asset - Flexible | PSG Flexible Fund Class A | 7.83 | 5.12 | 14.65 | 9.77 | 11.16 |
| PSG Flexible Fund Class A | 7.83 | 5.12 | 14.65 | 9.77 | 11.16 | |
| PSG Flexible Fund Class E | 7.84 | 5.40 | 14.96 | 10.06 | 9.88 | |
| South Africa - Multi Asset - High Equity | PSG Balanced Fund Class A | 94.92 | 4.85 | 13.93 | 10.11 | 12.69 |
| PSG Balanced Fund Class A | 94.92 | 4.85 | 13.93 | 10.11 | 12.69 | |
| PSG Balanced Fund Class E | 95.00 | 5.45 | 14.59 | 10.74 | 9.56 | |
| PSG Wealth Moderate Fund of Funds Class D | 40.36 | 9.93 | 10.12 | 9.17 | 10.72 | |
| South Africa - Multi Asset - Low Equity | PSG Stable Fund Class A | 1.62 | 5.23 | 9.90 | 7.44 | 8.23 |
| PSG Stable Fund Class A | 1.62 | 5.23 | 9.90 | 7.44 | 8.23 | |
| PSG Stable Fund Class E | 1.62 | 5.83 | 10.54 | 8.05 | 7.95 | |
| PSG Wealth Preserver Fund of Funds Class D | 24.44 | 8.61 | 8.68 | 7.73 | 9.01 | |
| South Africa - Multi Asset - Income | PSG Diversified Income Fund Class A | 1.31 | 7.40 | 8.23 | 7.82 | 7.83 |
| PSG Diversified Income Fund Class A | 1.31 | 7.40 | 8.23 | 7.82 | 7.83 | |
| PSG Diversified Income Fund Class E | 1.31 | 8.07 | 8.84 | 8.39 | 8.26 | |
| PSG Wealth Income Fund of Funds Class D | 12.38 | 7.81 | 7.50 | 7.01 | 7.79 | |
| South Africa - Interest Bearing - Short Term | PSG Income Fund Class A | 1.08 | 7.76 | 6.73 | 7.28 | 7.10 |
| PSG Income Fund Class A | 1.08 | 7.76 | 6.73 | 7.28 | 7.10 | |
| PSG Income Fund Class E | 1.08 | 8.07 | 7.04 | 7.59 | 7.76 | |
| PSG Wealth Enhanced Interest Fund of Funds Class D | 1.02 | 8.96 | 6.59 | 6.49 | 6.71 | |
| South Africa - Interest Bearing - Money Market | PSG Money Market Fund Class A | 1.00 | 8.28 | 5.98 | 5.83 | 7.94 |
| PSG Money Market Fund Class A | 1.00 | 8.28 | 5.98 | 5.83 | 7.94 | |
| PSG Money Market Fund Class F | 1.00 | 8.59 | 6.26 | 6.10 | 5.28 | |
| South African - Multi Asset - Low Equity | PSG Investment Management Cautious Fund of Funds Class D | 1.29 | 5.22 | 9.01 | — | 9.62 |
| PSG Investment Management Cautious Fund of Funds Class D | 1.29 | 5.22 | 9.01 | — | 9.62 | |
| South African - Multi Asset - High Equity | PSG Investment Management Growth Fund of Funds Class D | 1.47 | 2.95 | 11.00 | — | 11.35 |
| PSG Investment Management Growth Fund of Funds Class D | 1.47 | 2.95 | 11.00 | — | 11.35 | |
| South African - Multi Asset - Income | PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.13 | 6.96 | 7.34 | — | 7.57 |
| PSG Investment Management Multi-Asset Income Fund of Funds Class D | 1.13 | 6.96 | 7.34 | — | 7.57 | |
Performance data on local funds is shown up to the last market close minus 1 day.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Global funds
Through our tried-and tested investment philosophy, we have built competitive global solutions to help clients achieve their investment goals.
The following funds are rand-denominated, but invest internationally:
| ASISA category | Fund name | NAV (Rands) at 26 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| Global - Equity - General | PSG Global Equity Feeder Fund Class A | 4.84 | 13.50 | 18.16 | 13.88 | 13.07 |
| PSG Global Equity Feeder Fund Class A | 4.84 | 13.50 | 18.16 | 13.88 | 13.07 | |
| PSG Global Equity Feeder Fund Class E | 5.01 | 14.16 | 18.84 | 14.44 | 12.79 | |
| PSG Wealth Global Creator Feeder Fund Class D | 4.57 | 31.95 | 14.40 | 16.71 | 15.72 | |
| Global - Multi Asset - Flexible | PSG Global Flexible Feeder Fund Class A | 3.75 | 11.50 | 15.71 | 13.27 | 12.83 |
| PSG Global Flexible Feeder Fund Class A | 3.75 | 11.50 | 15.71 | 13.27 | 12.83 | |
| PSG Global Flexible Feeder Fund Class B | 3.94 | 12.14 | 16.38 | 13.77 | 13.33 | |
| PSG Wealth Global Flexible Feeder Fund Class D | 4.77 | 16.82 | 8.82 | 11.36 | 11.51 | |
| PSG Wealth Global Moderate Feeder Fund Class D | 4.88 | 19.10 | 10.30 | 10.72 | 12.77 | |
| Global - Multi Asset - Low Equity | PSG Wealth Global Preserver Feeder Fund Class D | 1.54 | 15.10 | 9.24 | 8.30 | 7.48 |
| PSG Wealth Global Preserver Feeder Fund Class D | 1.54 | 15.10 | 9.24 | 8.30 | 7.48 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Invest in other currencies
The following funds invest internationally using foreign currency
| ASISA category | Fund name | NAV (Rands) at 25 Apr 2024 | Performance –As at 2024/03/31 | |||
|---|---|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |||
| EAA Fund GBP Cautious Allocation | PSG Wealth Global Preserver FoF (GBP) Class D | 2.04 | 6.23 | 2.28 | 2.49 | 5.01 |
| PSG Wealth Global Preserver FoF (GBP) Class D | 2.04 | 6.23 | 2.28 | 2.49 | 5.01 | |
| EAA Fund GBP Flexible Allocation | PSG Wealth Global Flexible FoF (GBP) Class D | 3.69 | 7.61 | 3.14 | 6.39 | 9.38 |
| PSG Wealth Global Flexible FoF (GBP) Class D | 3.69 | 7.61 | 3.14 | 6.39 | 9.38 | |
| EAA Fund Global Flex-Cap Equity | PSG Global Equity Sub-Fund Class A | 2.18 | 6.31 | 8.80 | 8.10 | 5.87 |
| PSG Global Equity Sub-Fund Class A | 2.18 | 6.31 | 8.80 | 8.10 | 5.87 | |
| PSG Global Equity Sub-Fund Class B | 2.25 | 6.92 | 9.42 | 8.72 | 7.09 | |
| EAA Fund Global Large-Cap Blend Equity | PSG Wealth Global Creator Fund of Funds Class D | 2.80 | 23.38 | 5.16 | 10.46 | 9.82 |
| PSG Wealth Global Creator Fund of Funds Class D | 2.80 | 23.38 | 5.16 | 10.46 | 9.82 | |
| EAA Fund USD Cautious Allocation | PSG Wealth Global Preserver FoF (USD) Class D | 1.65 | 7.71 | 0.33 | 2.30 | 3.54 |
| PSG Wealth Global Preserver FoF (USD) Class D | 1.65 | 7.71 | 0.33 | 2.30 | 3.54 | |
| EAA Fund USD Flexible Allocation | PSG Global Flexible Sub-Fund Class A | 18.91 | 4.80 | 6.92 | 7.47 | 5.79 |
| PSG Global Flexible Sub-Fund Class A | 18.91 | 4.80 | 6.92 | 7.47 | 5.79 | |
| PSG Global Flexible Sub-Fund Class B | 20.03 | 5.29 | 7.42 | 8.05 | 6.41 | |
| PSG Investment Management Global Flexible Fund of Funds (Dollar) | 1.55 | 7.92 | -1.45 | 3.38 | 2.65 | |
| PSG Wealth Global Flexible FoF (USD) Class D | 2.99 | 9.46 | 0.13 | 5.54 | 7.87 | |
| EAA Fund USD Moderate Allocation | PSG Wealth Global Moderate Fund of Funds Class D | 1.97 | 11.27 | 1.35 | 4.74 | 5.25 |
| PSG Wealth Global Moderate Fund of Funds Class D | 1.97 | 11.27 | 1.35 | 4.74 | 5.25 | |
Performance data on offshore funds is shown up to the last market close minus 2 days.
Some data may be delayed, the above table reflects the latest information available from Morningstar.
Please note 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.
Non-Collective investment schemes
House view equity portfolios
| Fund display name | Performance –As at 2024/04/29 | |||
|---|---|---|---|---|
| 1 year % | 3 year % | 5 year % | Inception % | |
| PSG Wealth Income Growth Equity Portfolio | 2.14 | 4.72 | -0.56 | 1.36 |
| PSG Wealth Offshore Equity Portfolio (USD) | 11.13 | 4.03 | 9.73 | 11.53 |
| PSG Wealth SA Equity Portfolio | -4.55 | 1.60 | 0.28 | 2.91 |
| PSG Wealth SA Property Equity Portfolio | 11.00 | 7.53 | -2.54 | -3.18 |
* PSG Wealth equity portfolio performance are shown gross of management fees, but net of brokerage and other trading costs.
The House view portfolios are bespoke solution portfolios and not part of the Collective Investment Schemes’ portfolios.
Recent investment ideas
Impala Platinum
n this report, we discuss the latest results released by Implala Platinum and provide our view on platinum group metals.
We include an updated valuation for Impala and stress test various assumptions to show valuation asymmetry that is skewed upwards. Impala Platinum released its interim results for the six months ended 31 December 2031 in early March 2024. The results, which contained the maiden interim inclusion of Impala Bafokeng, were characterised by the following:
- Refined production increased by 19% to 1.75moz.
- Revenue decreased by 25% driven by a materially lower PGM basket price.
- Earnings per share decreased by 89% to R1.80. o Rand weakened by 8% to R18.75 against the dollar.
- Implats has net cash of R5.2 billion (after the RBPlat acquisition).
- Implats had 16 fatalities during 1H24.
Our research supports a hold recommendation.
Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join. <https://www.psg.co.za/wealthonline#investment-research>
FirstRand
On 29 February 2024, FirstRand released its half-year results for 2024. Highlights from the results were as follows:
1. Headline earnings were up by 6%, with revenue (+9%) rising in line with operating costs (+9%).
2. Net interest income increased by 13%.
a. Growth in core lending advances of 11% is the main driver of higher net interest income. Growth spread across segments with RMB corporate and investment banking being the largest contributor.
b. Net interest margin slightly increased from 4.38% to 4.47% benefitting less from higher interest rates due to FirstRand’s asset-liability management strategy which should also protect the margin when interest rates decrease.
Our research supports a buy recommendation.
Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join. <https://www.psg.co.za/wealthonline#investment-research>
Shoprite
On 5 March 2024, Shoprite released its half-year results for year end 30 June 2024.
1. Total sales grew by 13.9% y/y to R121 billion and a like-for-like increase of 6.5%.
2. Gross profit grew by 14.7% to R28.6 billion. Gross profit margin increased slightly from 23.4% to 23.6% y/y.
3. A market share growth of R4 billion and 56 months of uninterrupted market share gains took the total market share to approximately 35%.
4. R500m load shedding costs, putting it on an annual run rate of R1bn, slightly down from R1.3bn in FY23.
Our research supports a hold recommendation.
Please join us on Thursday at 11h30 for our Microsoft Teams Q&A sessions. Click here to join. <https://www.psg.co.za/wealthonline#investment-research>
Economic Calendar
View the Economic Calendar
Corporate Actions
| Date | Company | Share code | Expectation |
|---|---|---|---|
| 17 April 2024 | ABSA Bank Limited Non-Cumulative Non-Redeemable Preference Shares | ABSP | Cash Dividend |
| 17 April 2024 | ADvTech Limited | ADH | Cash Dividend |
| 17 April 2024 | AVI Limited | AVI | Cash Dividend |
| 17 April 2024 | Ca sales Holdings Limited | CAA | Cash Dividend |
| 17 April 2024 | Coronation Fund Managers Limited | CML | Odd-Lot Offer |
| 17 April 2024 | Coronation Fund Managers Limited | CML | Repurchase Offer |
| 17 April 2024 | Coronation Fund Managers Limited | CML | Repurchase Offer |
| 17 April 2024 | Discovery Limited | DSY | Cash Dividend |
| 17 April 2024 | Heriot REIT Limited | HET | Cash Dividend |
| 17 April 2024 | MC Mining Limited | MCZ | Tender Offer |
| 17 April 2024 | Momentum Metropolitan Holdings Limited | MTM | Cash Dividend |
| 17 April 2024 | MTN Group Limited | MTN | Cash Dividend |
| 17 April 2024 | Old Mutual Limited | OMU | Cash Dividend |
| 17 April 2024 | Quilter Plc | QLT | Cash Dividend |
| 17 April 2024 | Remgro Limited | REM | Cash Dividend |
| 17 April 2024 | SA Corporate Real Estate Fund | SAC | Cash Dividend |
| 17 April 2024 | Sabvest Capital Limited | SBP | Cash Dividend |
| 17 April 2024 | Stadio Holdings Limited | SDO | Cash Dividend |
| 17 April 2024 | South Ocean Holdings Limited | SOH | Cash Dividend |
| 17 April 2024 | Thugela Resources Limited | TGA | Cash Dividend |
| 17 April 2024 | Telemasters Holdings Limited | TLM | Cash Dividend |
| 17 April 2024 | Anchor Group Pty Ltd | UAUG | Tender Offer |
| 19 April 2024 | Discovery Limited | DSY | Cash Dividend |
The information above is to the best of our knowledge correct.
The Corporate Actions are updated weekly.
Fund performance
Collective Investment Schemes in Securities (CIS) are generally medium-term to long-term investments. The value of participatory interests (units) may go down as well as up and past performance is not a guide to future performance. Collective Investment Schemes are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from PSG Collective Investments (RF) Limited. Commission and incentives may be paid, and if so, are included in the overall costs. Forward pricing is used. The Portfolios may be capped at any time in order for them to be managed in accordance with their mandate.
Performance is calculated for the portfolio and individual investor performance may differ as a result thereof. Different classes of participatory interest can apply to these portfolios and are subject to different fees, charges and possibly dividend withholding tax and will thus have differing performances. Annualised performances show longer term performance rescaled over a 12-month period. Individual performance may differ as a result of initial fees, the actual investment date, the date of reinvestment and dividend withholding tax. The portfolio is valued at 15h00 daily. Income distributions are net of any applicable taxes. Investment performance data is for illustrative purposes only. Actual performance figures are available on request. Always refer to the fund fact sheet (Minimum Disclosure Document) for full details, fees and risks of the fund.
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