Global markets are riding a rising tide of positivity from; hawkish FOMC meeting minutes, US Fed Chair Powell indicating US economy is strong and a positive US and Mexico trade deal.
Investors shouldn’t fear new record highs because historical market data indicates it’s a bullish signal. When a new all-time high is achieved, there is a 90% chance of achieving a new all-time high in the four months that follow. And the Dow is on average 32% higher, five years after a fresh all-time high.
Our market is being driven higher by Naspers, at the AGM a focus was placed on unlocking value in the “Rump assets”. Traders are speculating share buybacks are on the cards.
The week ahead:
- Local Data: Money Supply, Private Sector Credit, PPI, SA Budget (30/08); Trade Balance (31/08)
- Results Due: CSB, MDI, RNG, RCL, SHG (28/08); AIP, BAU, GRT, MUR, NRP, NT1 (29/08); AVL, ASR, MST, OLG, RSG, SNT, TOR (30/08); BEL, CAT, GND, HYP, OMU, SCP (31/08)
- LDT (28/08): AFE, CCO, HMN, LHB, MRF, MTN, RNI, SCD, ASHWGB, ASHGEQ, and NEWGBP, NEWUSD (Special Dividends)
Other Economic data releases of interest…
- Tuesday: CPI (JPN)
- Wednesday: Prelim GDP, Crude Oil Inventories (USA)
- Thursday: ANZ Business Confidence (NZL); Private Capital Expenditure (AUS); GDP (CAN)
- Friday: CPI Flash Estimate (EU), Chicago PMI (USA)
Movers and Shakers
| Biggest Gainers / Losers (sorted for the week) | 24 August 2018 | ||||||
| Close | 1 d% | 1 w% | 20d% | 60d% | YTD% | 1 Y% | |
| Naspers | 3 538.06 | 2.8 | 11.3 | 5.4 | 8.2 | 10.3 | 17.5 |
| Bidvest | 208.88 | 0.7 | 10.5 | 10.9 | -0.3 | 4.3 | 19.0 |
| Aspen | 285.63 | 1.3 | 9.4 | 13.8 | 10.5 | 11.8 | 0.6 |
| Mr Price | 241.17 | 1.6 | 9.1 | 5.9 | -5.4 | 5.5 | 29.0 |
| GRINDROD | 8.85 | 2.0 | 8.1 | 12.0 | -34.4 | -5.8 | -32.4 |
| RMBH | 81.20 | 1.7 | 7.8 | 1.4 | 5.5 | 9.9 | 19.5 |
| NEPIRock | 134.30 | 1.0 | 7.8 | 14.1 | 6.6 | 12.3 | -27.0 |
| Tongaat | 79.41 | 0.4 | -3.9 | -1.5 | 0.6 | 1.0 | -33.7 |
| Hammerson | 88.19 | -0.9 | -4.0 | 0.7 | -4.4 | -6.8 | – |
| ABINBEV | 1 405.17 | 0.0 | -4.2 | 5.1 | 15.7 | 5.3 | – |
| Santova | 3.98 | -2.0 | -5.2 | 3.9 | 16.0 | 10.6 | 24.4 |
| Fortress B | 15.90 | -1.9 | -5.4 | 11.2 | -3.2 | 7.9 | -59.1 |
| Hulamin | 4.77 | -0.6 | -5.5 | 3.7 | -2.7 | -5.0 | -21.8 |
| BATS | 721.22 | -2.9 | -8.5 | 1.6 | 13.2 | 5.5 | -11.3 |
One to Buy
Buy Tandem Protect by Old Mutual
Old Mutual’s Tandem Protect has gained significant popularity. It has just opened it’s eleventh tranche to investors.
We’ve mentioned previously that we like the two-pronged structure that comprises a cash component and an equity component.
The cash component (50%) provides a guaranteed return of 10.92% compounded annually net of fees for three years where after it pays out. This provides interim liquidity without any penalties applicable.
The other 50% is invested in an equally weighted fund of American and European shares (778 shares in total). You benefit from currency depreciation and are guaranteed to receive your capital back at the very least. You have absolutely no risk of loss. You get the full uncapped return of the index at maturity. If the Rand weakens 10% and the fund goes up 20%, you will make 30% total return, but it could be significantly more than that on this equity component.
Minimum Investment is R2 million and only individuals and Trusts may invest in this endowment. Closes 21 September 2018
Short Term Ideas
- GFI: Buy Long above R35.25 for a move back above R40. Target it R43.75 with stop loss of R32.55.
Long Term Ideas
- FSR: Up 10%. Increase target price to R76.50. Raise stop loss to R67.50. Hold
- Discovery: Up 16.67%. Hold
- Coronation: Buy below R60.00 for a move back to R80
- Dischem: Up 14.4%, raise target to R37.50. Hold
- Shoprite: A break above R231, opens a run to R250. Hold.
- Aspen: Breaking out of trading range, Approaching R300. Open gain 16.2%. Hold
- Sygnia: Support building above R10.00. Add
- Merafe: Accumulate below R1.55. Big Dividend LDT 28 August.
- Jubilee: Speculative buy below R0.50.
- MTN: Accumulate for long term below R110.00. LDT 28 August
- Glencore: Open gain 20%. Hold
- Wescoal: Long term buy. Dividend of 6.22c received. Add below R1.80
- Naspers: Strong bounce after sell-off. Up 26% on position. Buy dips below R3200.
Retirement Solutions
Do you have an RA policy? Are you nearing retirement? Do you know how your investments are performing? Are you still paying high fees on your long-term savings?
Prodigy is a leading provider of new generation investment solutions for pre and post retirement. Typically, we can reduce your fees by 60% or more!!
To ensure you have the best solution contact Gavin McCarter to set up a free review. Tel: 011 065 9316, Email: gavin@prodigyam.co.za
