The Rand has been one of the strongest EM currencies in the past few weeks, but the strength will be short lived. The Rand has been boosted by a dovish FED, an ECB trying to balance monetary policy and economic growth, and the easing of Trade war fears. But all the positives are fickle and cautious investors should be looking a few steps ahead.
Investors looking to diversify offshore should be using the current strength to their advantage and take funds offshore. Even investors who don’t want to take funds offshore can look at locally listed offshore ETFs or Structured products to gain offshore exposure. Some offer downside protection from losses.
One of my favourite structured products is the Tandem Protect from Old Mutual. The 15th Tranche of the Tandem Protect closes today but a new tranche should open soon.
The 15th tranche offer’s 11.04% compounded return over three years on 50% of your capital and the other half is exposed to an equally weighted index of the S&P and Euro Stoxx 50 with 100% downside protection in Rands. You are guaranteed an 18.45% total return on your funds after 3 years and still have 100% upside participation in the index growth. Minimum investment is R2 million and it’s only open to individuals and trusts due to the tax benefits within the product.
If you’d like further information on structured products or offshore ETFs please don’t hesitate to contact me on email@example.com and I will get back to you.
The week ahead:
- Local Data: Mining Indaba, SACCI Business Confidence (06/02), Gross Reserves, Net Reserves, Electricity Production and Consumption (07/02)
- Results Due: LNF (06/02); HET, MLD, OLG, UPL (07/02); ARH, NET1 (08/02)
- LDT (05/02): CULP, NWL, PGR
- Consolidation LDT (05/02): RPL
Other Economic data releases of interest…
- Tuesday: Retail Sales; RBA Rate Statement (AUS); ISM Non-Manufacturing PMI (USA)
- Wednesday: RBA Gov Lowe Speaks (AUS)
- Thursday: Unemployment Rate (NZL); Fed Chair Powell Speaks (USA); BOE Inflation Report, MPC Official Bank Rate Votes, Monetary Policy Summary (UK)
- Friday: Unemployment Rate (CAN)
Short Term Ideas
- Sasol: Buy below R430, target R460.00 (Longer term profit target in update below)
Long Term Ideas
- Dischem: Buy below R25.50, short term target R29.50 long term target R37.50
- Sasol: Long term buy below R430. Target R550.
- AB InBev: Buy below R1,000 with a target of R1,500
- Richemont: Buy dips below R95. Target R130.00.
- Remgro: A break above R210 is needed to open up R230. Buy below R200.00
- Coronation: Sentiment still negative. Buy dips below R50.00 for a move back to R80
- Shoprite: Sector earnings under pressure. Hold.
- Aspen: Bottoming out. Add below R150.00, keep exposure appropriate.
- Sygnia: Moving in the right direction. Add below R8.
- MTN: Earnings expected to rise at least 20%. Accumulate on below R85.
- Glencore: Buy below R52.50.
- Naspers: Break out imminent, buy below R3,000. Target R3,800
The Tax year closes soon, investors looking to lower their tax liability through retirement savings should contact us for the various options we provide. Email firstname.lastname@example.org for further information with Retirement Savings in the subject line.