After a turbulent 2018, emerging markets are finding favour amongst investors looking for value with strong upside potential.
This is on the back of a few major themes that should play out:
1. A dovish FED that is expected to only hike rates once in 2019,
2. EU monetary policy that will remain accommodative,
3. Chinese stimulus to avoid a “hard landing”,
4. Glo... ››› more
Most investors are losing patience with the JSE as returns have been non-existent.
The JSE All-Share index is back in it's previous trading range - which is pretty much 2014 levels.
The problem with investors losing patience and selling, is they do it at precisely the wrong time.
The Magellan fund managed by Peter Lynch achieved a remarkable 29% annualised return between 1977 to 1990 b... ››› more
The JSE is at the whim of global sentiment. And one thing every investor should remember is sentiment drives prices, but company values change much slower.
This provides investors with opportunities to accumulate mispriced shares at much lower prices than they previously did or could.
As the market takes a leg lower, investors should look to accumulate quality companies on the cheap.
... ››› more
In 1954, 24-year-old Warren Buffett received a phone call that would ultimately change his life.
The person on the other line offered Buffett a job in New York City and he accepted without asking about the salary.
It was arguably the smartest - and most profitable - decision he ever made.
That's because Buffett knew the man who had just employed him. A man he studied under at Columbia Uni... ››› more
While October was the month we had Black Tuesday in 1929, Black Monday in 1987 and a big sell off in October 2008 post Lehman's collapse, it generally ends the month up.
Over the past 100 years the Dow and S&P have ended positive 62% of the time with an average gain of 0.4% but with heightened vola... ››› more
The JSE has remained buoyant after falling due to the ANC's EWC announcement last week. It's been range bound since breaking above its previous consolidation phase.
A rally into year-end is still on the cards thanks to several JSE heavy weights earning significant offshore revenue.
Stronger global growth and a rand that is facing headwinds into next year's elections should see earnings inc... ››› more
Trump dialled down his trade war antagonism by pushing for less tariffs with Europe. This saw investors focus on other data which provided support for riskier assets like the Rand.
Last week we had a positive BRICs summit, the ECB held interest rates steady, US advance GDP came out at 4.1% from 2.2% previously, and China indicated a willingness to ease monetary policy further to support domesti... ››› more
The rand has bucked the emerging market currency trend by strengthening 7.6% year to date. The Brazilian Real, Indian Ruppee and Turkish Lira have all weakened over 7%. The Turkish Central bank surprised the market with its 3% interest rate hike last week.
We should see an increase in market and currency volatility leading into Friday's US employment data, which is expected to stay near the 1... ››› more
As earnings season winds down, the market is taking cues from geopolitics and the weekly macro-economic data that comes out.
The biggest boost the markets will receive is from America and China, agreeing to put aside international trade differences to work on a wider agreement. This is very positive and will be a tail wind for markets to rally higher. Add this to the bullish phase global marke... ››› more
Global markets remain robust with no clear signs of a downturn as volatility slowly declines. Investors are buying even the smallest dip, which has seen the market remain in a bullish phase this past week.
On the currency front, we could see gradual rand weakness over the coming months due to the global interest rates rising.
A Federal Reserve member stated:
"Interest rates ... ››› more
Global markets are being held up by strong first quarter earnings releases and US data from last week that signals US inflation is being controlled.
Over 80% of the S&P 500 has released Q1 results and 78% of them have exceeded expectations. If the trend continues it will be the highest proportion of “beats” in almost 10 years.
This earnings growth is keeping valuations in check, the S&... ››› more
The market has remained robust as Trump shifted most of his focus away from a potential trade war with China to Syria.
This helped the market bump higher as it tries to break above its 200-day moving average. The market remains in a bullish phase, while a sustained break above the 200-day moving average around 50,800 could see the market take another rally towards its 2018 high.
Long term ... ››› more
The market sold off strongly last week Wednesday, but only in the morning. This was an opportunity for the market to reset, find a bottom and allow buyers with fresh capital to come in.
The ALSI future came within a couple points of its 200-week moving average, a level which it has bounced from strongly, since 2014.
It's seen a peak to pull back over 14%, that's a healthy correction and cur... ››› more
Global markets typically have a good run in April before the “Sell in May and Go Away” period, but the spike in volatility in February and March has shaken investors. With global markets down year to date, we should see investors buy this dip and a potential run up in April that will make up for 2018's rocky first quarter.
The below graph shows the S&P 500's average monthly return for the ... ››› more
Late Friday night Moody's released its rating for South Africa and reaffirmed its sovereign debt rating at investment grade.
It even improved its outlook from negative to stable, but stated policy ineffectiveness could “… undermine confidence, growth and social cohesion, with inevitable consequences for the country’s balance sheet”.
The Monetary Policy Committee is expected... ››› more
The RMB/BER Business confidence index for 2018 Q1, rose sharply to 45, the highest level since 2015. A level above 50 is considered positive, but it's a move in the right direction.
As mentioned last week, improvements in investor, business and consumer confidence is the tail wind behind improving economic growth.
There are a few obstacles that could come in the way of increasing growth li... ››› more
Economic data for January showed some positive signs, but sentiment took another hit after parliament voted to change the constitution regarding land rights. Despite assurances that this should be done on unused land, without affecting food security and focus on the development of new agricultural zones, it introduces another hurdle for new investment.
The market is concerned that it's another... ››› more
In the earlier parts of my beginner's guide to investing in cryptos, I covered some general rules for investing in cryptos and the different types of cryptos.
Today, we get to the fun part.
In part three of my beginners guide to investing in cyptos, I'll briefly explain how to structure your crypto portfolio.
But more importantly, I’ll take you through all the steps to buying crypto... ››› more
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 max... ››› more
Last week, the market saw a strong bounce following Zuma's 'sudden' resignation after re-iterating he "hasn't found someone that can tell him what he has done wrong”.
Traders started to take profit on Friday, which will see the markets trend lower before the budget speech this week.
This sell off could be one of the last dips before a broader rally as President Ramaphosa tries to invig... ››› more
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