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Political Shenanigans pushes Rand to the back foot - one to buy and one to sell

by , 14 November 2017
Political Shenanigans pushes Rand to the back foot - one to buy and one to sell
President Zuma is trying to curry favour with supporters by investigating solutions to the “free” education agenda. The cost of this “free” education is an almost certain downgrade and the resignation of Michael Sachs. The Rand responded by weakening 20c yesterday.

We've been cautioning investors, to have an appropriate amount of their investable assets exposed to offshore investments. Depending on the size, it's ideal to use your discretionary allowance of R1 million before 31 December as it's the simplest way.

Prodigy can assist you through its Treasury Solutions offering, which makes it quick and easy for you to use your Investment allowance. Contact Prodigy for more.

On the offshore front, things continue to improve, we're bullish on Europe as it's growing off a low base and gaining momentum.

ECB president Mario Draghi defended the Eurozone's easy monetary policy last week, amid forecasts the EU will see stronger growth for the full year of 2017 at 2.2% from the previous forecast of a 1.7% figure.

Today we have the FED, ECB, BOE and BOJ heads participating in a panel discussion at an ECB Conference. The discussion is “At the heart of policy: challenges and opportunities of central bank communication”. Investors will look for any queues in interpreting current policy stances.

Read: Over the last year a handful of people have exploited this secret to secure returns like 2,420%, 964% and 99,198%* - Find out how you can use it too…

Last week’s movers and shakers…
  • Best Performers: ASR 10.3%, MRP 8.6%, ANG 8.3%, HAR 7.2%, DRD 5% and SGL 4.3%
  • Worst Performers: TSX -15.3%, SNH -9.4%, MUR -8.6%, MPT -7.2%, AFE -6.4% and S32 -5.4%
Resources and Gold stocks, in particular, led the JSE higher last week as the Rand lost ground.
One to Buy
Prodigy’s Global Portfolio – Invest in Global Brands
The performance of our offshore investment portfolio for the year to date is pleasing with a return of 17,8% in USD (outperforming the MSCI world index by 6,4%).
Providing a simple solution with stable performance has been our goal and we are pleased it has delivered.
One to Sell
Satrix Financial – Sell
The Satrix Finiancials ETF is near the top of its trading range around R16. Over the past 20 months it’s only managed to close above this figure 9 times, none of them occurred in 2017. Due to the downside risk on the back of a weaker Rand, we believe now is an appropriate time to sell this ETF if you hold it in your portfolio.
Sell the STXFini above R15.75 and reduce your risk to further currency weakness. 
Shorter Term Ideas
  • Imperial: Position closed, stop loss breached on intraday volatility. Trend still bearish.
  • First Rand: Increase stop loss from R50.75 to R52.25 to reduce risk. Hold
  • PSG: Stop loss remains at R255 to lock in 9.09% gain. 
Long Term Ideas      
  • Sygnia: Buy dips below R11.00
  • PPC: Buy dips below R7.00.
  • Santova: Buy below R3.30.
  • Implats: Maintain stop loss at R38.75 to lock in a 19.23% gain. Hold
  • Sibanye: Increase stop loss to R19 for a 20.63% gain. Hold
  • Merafe: Consolidating, up 11.61%. Hold
  • Steinhoff: Hit by more bad news. Hold.
  • Jubilee: Nicely in the money. Hold.
  • African Rainbow: Open gain just less than 30%. Hold.      
  • MTN: Range bound, buy below R122.50.
  • Glencore: 29.5% open gain and consolidating. Hold
  • Wescoal: Long term buy. Add below R2.15
  • Naspers: Up over 50% and consolidating. Hold
  • Richemont: Position closed for 25% gain, will look to re-enter below R120.00
Have you used your 2017 Investment Allowance?
All your offshore investments allowances expire at the end of 2017. Prodigy can invest your funds securely offshore. Please contact my colleague Gavin McCarter without delay before you miss out. gavin@prodigyam.co.za

Political Shenanigans pushes Rand to the back foot - one to buy and one to sell
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