|
PSG daily investment update 20 May 2019
Date: 20 May 2019 Category: Stock Market |
Related Topics |
|
In our continued efforts to give our readers a broad number of views, opinions and information, we continue to provide PSG's daily market updates and add our own daily rant at the end.
|
|
Short summary of PSG's market commentary for 20 May 2019
South Africa
The JSE stumbled on Friday afternoon as market participants continued to express concerns over an escalating trade war between two of the world’s biggest economies, overshadowing positive sentiment brought about by the general elections. Shortly after the closing bell, the All Share lost 0.63%.
United States
American stocks broke a three-day winning streak to trade lower on Friday as trade tensions flared up after China vowed to make good on its promise to impose tariffs on $60 billion worth of US goods which will take effect on 1 June 2019. At 18h30, the Dow futures lost 0.02%.
Europe
The euro came under immense pressure on Friday from overarching concerns about the European parliamentary elections that are scheduled to take place this week, while the British pound plunged to a four-month low on Brexit woes. At 18h20, the pan-European Stoxx 600 lost 0.36%.
Hong Kong
Stocks in Hong Kong plunged to their lowest level in over three months on Friday as the trade war took a turn for the worst after Washington imposed sanctions on Chinese tech company Huawei. At 18h15, the Hang-Seng lost 1.14%.
Japan
A stellar performance by tech shares boosted Japan’s Nikkei on Friday but the Asian currency was on track for a weekly decline amid concerns over an escalating US-China trade war. At 18h10, the Nikkei had gained 0.89%.
Rand
The rand fared worst against major global currencies on Friday afternoon as the infamous US-Sino trade war dragged most emerging markets into negative territory. At 18h30, the rand traded R14.20 against the dollar.
Precious metals
Gold prices recuperated on Friday from an epic day of loss in the previous session amid easing trade tensions. At 17h40, Spot gold was up trading at $1 2786.93 an ounce.
Oil
Supply disruptions in the Middle East continued to boost oil prices on Friday amid declining US crude inventories. At 18h00, a barrel of Brent crude was trading at $72.57.
The JSE stumbled on Friday afternoon as market participants continued to express concerns over an escalating trade war between two of the world’s biggest economies, overshadowing positive sentiment brought about by the general elections. Shortly after the closing bell, the All Share lost 0.63%.
United States
American stocks broke a three-day winning streak to trade lower on Friday as trade tensions flared up after China vowed to make good on its promise to impose tariffs on $60 billion worth of US goods which will take effect on 1 June 2019. At 18h30, the Dow futures lost 0.02%.
Europe
The euro came under immense pressure on Friday from overarching concerns about the European parliamentary elections that are scheduled to take place this week, while the British pound plunged to a four-month low on Brexit woes. At 18h20, the pan-European Stoxx 600 lost 0.36%.
Hong Kong
Stocks in Hong Kong plunged to their lowest level in over three months on Friday as the trade war took a turn for the worst after Washington imposed sanctions on Chinese tech company Huawei. At 18h15, the Hang-Seng lost 1.14%.
Japan
A stellar performance by tech shares boosted Japan’s Nikkei on Friday but the Asian currency was on track for a weekly decline amid concerns over an escalating US-China trade war. At 18h10, the Nikkei had gained 0.89%.
Rand
The rand fared worst against major global currencies on Friday afternoon as the infamous US-Sino trade war dragged most emerging markets into negative territory. At 18h30, the rand traded R14.20 against the dollar.
Precious metals
Gold prices recuperated on Friday from an epic day of loss in the previous session amid easing trade tensions. At 17h40, Spot gold was up trading at $1 2786.93 an ounce.
Oil
Supply disruptions in the Middle East continued to boost oil prices on Friday amid declining US crude inventories. At 18h00, a barrel of Brent crude was trading at $72.57.
Our daily update
Below a short summary from Peregrine Treasury Services Weekly market wrap, covering South African equities.
SOUTH AFRICAN EQUITY
With many local investors having pinned their hopes on another ‘Ramaphoria’ type-of scenario, following the recent national elections, a definitive direction of both SA stocks and the rand alike didn’t seem to come to fruition in any convincing manner this week. An underwhelming interest in the rand and SA equity market was shown over the last few trading days, while it’s fair to say that the US China trade war also put a dampener on the trajectory of our local currency and equity market, following the elections.
Some of the bigger highlights this week were seen coming out of the pharmaceutical sector, namely Dis-Chem and Aspen Pharmacare. Aspen assured that they are on track to meet their 31 May 2019 deadline when it comes to the sale of their New Zealand based infant-formula business. Investor confidence was once again breathed into the stock, assisting the share’s at least 9.00% rise over the course of Wednesday and Thursday.
On Thursday morning, Dis-Chem released their provisional reviewed annual condensed consolidated results for the 12 months ended 28 February 2019. Although the stock’s share price seemed to shudder almost 5.00% downward on the back of the news, the negative sentiment was defused after investors swallowed the fact that the miss in earnings was primarily influenced by unforeseen once-off events, such as strikes and legislation restrictions. In general, Dis-Chem did alright.
Read the full article here
SOUTH AFRICAN EQUITY
With many local investors having pinned their hopes on another ‘Ramaphoria’ type-of scenario, following the recent national elections, a definitive direction of both SA stocks and the rand alike didn’t seem to come to fruition in any convincing manner this week. An underwhelming interest in the rand and SA equity market was shown over the last few trading days, while it’s fair to say that the US China trade war also put a dampener on the trajectory of our local currency and equity market, following the elections.
Some of the bigger highlights this week were seen coming out of the pharmaceutical sector, namely Dis-Chem and Aspen Pharmacare. Aspen assured that they are on track to meet their 31 May 2019 deadline when it comes to the sale of their New Zealand based infant-formula business. Investor confidence was once again breathed into the stock, assisting the share’s at least 9.00% rise over the course of Wednesday and Thursday.
On Thursday morning, Dis-Chem released their provisional reviewed annual condensed consolidated results for the 12 months ended 28 February 2019. Although the stock’s share price seemed to shudder almost 5.00% downward on the back of the news, the negative sentiment was defused after investors swallowed the fact that the miss in earnings was primarily influenced by unforeseen once-off events, such as strikes and legislation restrictions. In general, Dis-Chem did alright.
- Revenue up to R21.4 billion (10% increase)
- Earnings per share and headline earnings per share up 7.40% to 85.4cents. (expected 87 cents)
- National strike cost the company around R75 million
- Retail revenue growth to R19.6 billion (9.70% increase)
- Wholesale revenue growth to R14.5 billion (11.20% increase)
- Comparable store revenue growth only up 3.40%.
Read the full article here
Our JSE All Share index daily performance calendar
Visit our JSE Calendar tracker page for a expanded version of the calendar below
The graphic below provides the daily returns of the JSE All Share Index (J203) on a calendar chart. Provides a great overview of the All share index over the course of the month. It will be updated daily with our daily investment update as received from PSG.
So after 4 consecutive months of positive returns on the JSE All Share Index, the month of May kicked of trading on a positive note. And then Donald Trump striked threatening to raise tariffs on billions worth of goods imported from China. China then announced a set of retaliatory tariffs on US goods. So it looks like the trade war is back into full swing. And added to that it seems like tensions between Iran and the US are escalating too, after alleged sabotage of oil container ships by Iran (in which it is alleged that drones laden with explosives flew into these container ships).
This should force up oil prices which is one thing world markets don't need as it will fuel inflation and slow global economic growth. For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article
This should force up oil prices which is one thing world markets don't need as it will fuel inflation and slow global economic growth. For more on daily market movements see our 2019 Calendar tracker.
But we as South African investors are losing out in Dollar terms. Largely due to continued Rand weakness not only over the short term but over the last couple of years. We continue to advise investors to take money out of South Africa and invest it offshore. Looking for ideas for investments to make? Go read this article