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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 inputs in at the end.
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Short summary of PSG's market commentary for 25 June 2019
South Africa
The local market started the week slow, weighed down by banks, retailers and investor fears that the US-Sino war could escalate further before improving. Shortly after the closing bell, the All Share stood 0.31% in the red.
United States
US shares opened slightly higher on Monday due to a good performance by technology shares and as investors waited for the tariff meeting between the US and China to be held later this week at the G20 Summit. At 19h00, the Nasdaq was trading 0.04% lower.
Europe
European markets were pulled down on Monday after the release of car manufacturer Daimler’s profit warning and poor German economic data. At the end of trade, the pan-European STOXX 600 had lost 0.25%..
Hong Kong
Asian shares inched up on Monday as investors nervously awaited the outcome of the meeting between Presidents Donald Trump and Xi Jinping regarding the trade war to be held in the coming week. At the close of business, the Shanghai was up 0.21%.
Japan
Although Japanese markets edged up on Monday, most investors remained on the sidelines ahead of the trade-war meeting between Trump and Jinping later this week. At the closing bell, the Nikkei had gained 0.13%.
Rand
The local currency lost some ground on Monday as investors doubted that the US-China trade war will come to an end soon and were concerned over the US threatening to impose sanctions on Iran after the latter shot down a US drone last week. At 19h00, the rand traded R14.37 against the dollar.
Precious metals
Gold prices soared at the start of the week, reaching an almost six-year high, boosted by banks leaning towards a dovish stance and the rising tensions between Iran and the US. At 19h00, spot gold traded at $1 414.70 an ounce.
Oil
On Monday, oil prices fell around 1% as worries about crude demands and conflict between the US and Iran pulled the price down. At 19h00, a barrel of Brent crude was trading at $64.59
The local market started the week slow, weighed down by banks, retailers and investor fears that the US-Sino war could escalate further before improving. Shortly after the closing bell, the All Share stood 0.31% in the red.
United States
US shares opened slightly higher on Monday due to a good performance by technology shares and as investors waited for the tariff meeting between the US and China to be held later this week at the G20 Summit. At 19h00, the Nasdaq was trading 0.04% lower.
Europe
European markets were pulled down on Monday after the release of car manufacturer Daimler’s profit warning and poor German economic data. At the end of trade, the pan-European STOXX 600 had lost 0.25%..
Hong Kong
Asian shares inched up on Monday as investors nervously awaited the outcome of the meeting between Presidents Donald Trump and Xi Jinping regarding the trade war to be held in the coming week. At the close of business, the Shanghai was up 0.21%.
Japan
Although Japanese markets edged up on Monday, most investors remained on the sidelines ahead of the trade-war meeting between Trump and Jinping later this week. At the closing bell, the Nikkei had gained 0.13%.
Rand
The local currency lost some ground on Monday as investors doubted that the US-China trade war will come to an end soon and were concerned over the US threatening to impose sanctions on Iran after the latter shot down a US drone last week. At 19h00, the rand traded R14.37 against the dollar.
Precious metals
Gold prices soared at the start of the week, reaching an almost six-year high, boosted by banks leaning towards a dovish stance and the rising tensions between Iran and the US. At 19h00, spot gold traded at $1 414.70 an ounce.
Oil
On Monday, oil prices fell around 1% as worries about crude demands and conflict between the US and Iran pulled the price down. At 19h00, a barrel of Brent crude was trading at $64.59
Our daily update
We finally got round to covering Starbuck (SBUX) latest financial results. Below an extract from the full financial review
Well with their ever expanding number of retail outlets, their continued growth in China and Asia pacific and their already strong footprint in the USA and Europe on cannot help but be tempted to buy SBUX shares purely based on their global presence and their expanding presence across the globe. We cannot help but think continued growth for SBUX in future will come from buying out a few of the smaller competitors. We do see consolidation coming in the space they operate in. Their share buy back program will provide and has already provide future value for shareholders as future earnings and dividends are divided among fever shares (see above where we discuss the increase in net earnings per share while total earnings remained relatively flat for the group). With additional share buy backs this benefit will be amplified. With all things considered regarding their expansion plans, their share buy back program that is in full force and their current financial position, which includes a PE ratio around 40 and a dividend yield of around 1.7% our valuation models places a value of $76.96 on SBUX shares. We therefore belief the company shares are currently overvalued.
Read the Starbucks Financial Review here
Well with their ever expanding number of retail outlets, their continued growth in China and Asia pacific and their already strong footprint in the USA and Europe on cannot help but be tempted to buy SBUX shares purely based on their global presence and their expanding presence across the globe. We cannot help but think continued growth for SBUX in future will come from buying out a few of the smaller competitors. We do see consolidation coming in the space they operate in. Their share buy back program will provide and has already provide future value for shareholders as future earnings and dividends are divided among fever shares (see above where we discuss the increase in net earnings per share while total earnings remained relatively flat for the group). With additional share buy backs this benefit will be amplified. With all things considered regarding their expansion plans, their share buy back program that is in full force and their current financial position, which includes a PE ratio around 40 and a dividend yield of around 1.7% our valuation models places a value of $76.96 on SBUX shares. We therefore belief the company shares are currently overvalued.
Read the Starbucks Financial Review 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 four very positive months on the markets the month of May bucked the trend and saw half the gains made during the first four months of the year on the JSE wiped out in one month. JSE All share index as a whole is up 5.52% so far in June 2019. Reversing the severe losses on the markets in May 2019. And the South African Rand (ZAR) has made a strong come back in recent weeks.
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
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