Daily Solutions – 19 February 2018

By Alexander Forbes Investments on Feb 19, 2018 in Daily Solutions

JOHANNESBURG – The JSE closed weaker on Friday, with losses led by property stocks and general retailers, as the market euphoria from Thursday dimmed slightly ahead of President Cyril Ramaphosa’s state of the nation address (sona) in the evening. The all share experienced its biggest intra-day rally in more than three years on Thursday, following Ramaphosa’s election as head of state. Volumes on Friday reached an extremely high R61bn, from R36bn on Thursday, with a great deal of this passing through the property sector, where shares in the Resilient stable were sold off heavily for a third straight session. Resilient issued a statement on the day, saying it had initiated an independent review into the cross-shareholding structure of the group, led by former auditor-general Shauket Fakie. Resilient lost 10% on the day, and has now relinquished 49% in 2018. A slight drop in the local currency helped rand hedges, notably Anheuser-Busch InBev, while Naspers was weaker in choppy trade. Platinum shares received some support from a higher metal price, which had risen 0.55% to $1,006.60 an ounce by the JSE’s close. Gold shares lifted as the price of the metal headed for its biggest weekly advance since April 2016 on rising US inflation and the recent slump in the dollar.

US MARKETS – Stocks closed slightly higher on Friday, extending their winning streak to six days in a row, and posted strong weekly gains. But the major averages ended off their session highs after news broke that special counsel Robert Mueller indicted 13 Russian nationals and three Russian entities for allegedly interfering with the 2016 U.S. presidential election. The market soon stabilized after Deputy Attorney General Rod Rosenstein emphasized in a press conference that these indictments had no allegations of willing support to the Russians by Americans. “The nature of the scheme was that the defendants took extraordinary steps to make it appear that they were ordinary American political activists,” he said. “One of the key points is there’s no finding that this actually affected the election results,” said Art Hogan, chief market strategist at B. Riley FBR.

EUROPEAN MARKETS – The pan-European Stoxx 600 closed provisionally up almost 1.1 percent, with almost all sectors and major bourses in positive territory. Vopak was the top performer Friday after its latest figures beat market expectations. The Dutch oil and chemical company said full-year results were lifted by a stronger-than-anticipated performance in the final three months of the year. Its shares were 13.7 percent higher. Swedish defence firm Saab posted worse-than-expected earnings, sending shares down almost 1 percent. The Stockholm-based firm said fourth-quarter operating earnings fell to 882 million Swedish crowns ($111 million) during the final three months of 2017. That was down from 960 million Swedish crowns in the same quarter a year earlier. Looking at individual stocks, German insurer Allianz reported a 22 percent fall in net profit in the fourth quarter of 2017.

ASIAN MARKETS – Asian equities ended mixed on the last day of the week, but trading in the region was subdued with many markets shut for the Lunar New Year holiday. Gains on Wall Street provided an initial bounce to regional markets. Major U.S. indexes extended their winning streak to five days on Thursday, with the Dow and S&P 500 breaking above their 50-day moving averages as bond yields hit fresh multiyear highs. On the U.S. data front, jobless claims increased by 7,000 to a seasonally adjusted 230,000, rebounding from a near 45-year low. The producer price index, meanwhile, rose 0.4 percent in January, in line with expectations. Japan’s benchmark Nikkei rallied 1.19 percent, notching a weekly gain of 1.58 percent.

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Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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