The market likes “The Cyril Shuffle”

The market likes “The Cyril Shuffle”

President Ramaphosa announced a late-night cabinet reshuffle that has seen some key Ministry replacements, notably the return of Nhlanhla Nene to the finance ministry and Pravin Gordhan as Public Enterprises Minster.   

 

One of the most important legislative changes made in the past week was the increase in offshore allocation in Regulation 28. African focused investments are now limited to a maximum of 10% from 5% and offshore investments increased to 30% from 25%. 

 

It’s important to review your retirement savings and make adjustments that suits your personal situation. For a free retirement review, please contact Prodigy. 

 

The week ahead: 

  • Local economic data releases: PPI (28/02) 
  • Results Expected: AFE, ATT, AEG, BRT, TOR, WBO (27/02); CSB, GAM, GRT, MUR, SAC, SBV, SCP (28/02); ANH, ASC, BGA, FVT, IMP, SNT (1/03); HYP, LBH, MND, MNP, NED (02/03) 
  • LDT 27/02: CULP, GTR, HET, HDC, ITE, RES, TWR, EXX (Special Dividend of R12.55) 

Last week’s movers and shakers… 

Best Performers: AVV 11.6%, MSM 9.3%, BID 7.7%, RMH 7.1%, REM 6.4% 

Worst Performers: PAN -24.7%, SGL -16.1%, FFB -14.9%, IPL -10.9%, RES -10.2% 

 

Other Economic data releases of interest… 

  • Tuesday: Fed Chair Powell Testifies, CB Consumer Confidence (USA); ANZ Business Confidence (NZL) 
  • Wednesday: Prelim GDP, Crude Oil Inventories (USA); PPI (SA); Private Capital Expenditure (AUS) 
  • Thursday: Manufacturing PMI (UK); Fed Chair Powell Testifies, ISM Manufacturing PMI (USA) 
  • Friday: Prime Minister May Speaks, Construction PMI, BOE Gov Carney Speaks (UK); GDP (CAN) 

One to Buy 

 

USD/ZAR – All the good news already priced in! 

 

The Rand has strengthened more than 20% since November and its finding resistance at R11.55. For short term traders, going long at these levels for a move back to R12.00 offers a good return for the risk faced. 

 

Go Long the USD/ZAR at R12.6250, Take Profit R11.9250, Stop loss R11.4500 

 

 

 

Losers to Sell 

One more day of this tax year, you should consider netting off any losers against winners to reduce capital gains.  

 

This will allow you to re-base your purchase prices higher on the stocks you still want to hold onto going forward. Remember the first R40,000 of capital gains is exempt and you can roll over capital loses to following tax years. 

 

Long Term Ideas 

  • Sasol: A break above R412.50 is needed. Buy below R400.  
  • Aspen: Moving up, buy dips below R260. 
  • Sygnia: Add below R12.50. 
  • PPC: Moving in the right direction, up over 10%. Hold 
  • Santova:  Buy below R3.00.  
  • Merafe: Accumulate below R1.55. 
  • Jubilee: Under pressure. Hold. 
  • MTN: Buy Dips below R122.50 
  • Glencore: Diversified Commodity exposure. Hold 
  • Wescoal: Long term buy. Add below R1.80 
  • Naspers: Buy dips below R3,300, while ensuring you aren’t over-exposed.  

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