The Weekly Focus. A Market and Economic Update 28 August 2017

Transcription

1 The Weekly Focus A Market and Economic Update 28 August 2017

2 Contents Newsflash...3 Market Comment... 3 Other Commentators... 5 Economic Update...7 Rates STANLIB Money Market Fund STANLIB Enhanced Yield Fund STANLIB Income Fund STANLIB Extra Income Fund STANLIB Flexible Income Fund STANLIB Multi-Manager Absolute Income Fund... 11

3 Newsflash The JSE ALSI had broken out to a record high in early August, then pulled back for a few weeks to catch its breath, before powering up to a new high last week. Market Comment The JSE ALSI had broken out to a record high in early August, then pulled back for a few weeks to catch its breath, before powering up to a new high last week. This follows almost two-and-a-half years of broadly sideways movements, as noted on the chart below. That is quite a long period of consolidation, implying that the index could go quite a bit higher over the next 3-12 months or so. It is interesting that the index managed a new record despite the rand hitting almost 13 to the dollar, although admittedly it is against a very weak dollar. The rand is up +4.7% versus the dollar in 2017, but down -7.7% versus the rebounding euro and -0.7% versus the virtually static pound. So there is still a rand-hedge element in the market. Source: IRESS The ALSI rose by +2.4% in the past week and is now +13% total return in 2017 (+19.5% in dollars, can you believe it, way higher than the US market). The ALSI in dollar terms is at a 3 year high. The ALSI 40 Index has a total return in 2017 of +16.2%, so +3.2% better than the ALSI, mostly because Naspers (+46% in 2017 excluding dividends), Richemont (+29% excluding dividends) and Anglos (+17%) are bigger in the ALSI 40 Index. Also the JSE Mid-Cap Index is only +1% so far in 2017, despite rising by +9% in the past 2 months, while the JSE Small-Cap Index is -2.5% in These have held the All Share Index back so far this year. The SA Listed Property Index fell by -1.8% last week to be +4.6% (total return) in 2017, while the All Bond Index is +6.5% and cash +4.7%. While Naspers, Richemont and Anglos have played a major role in the SA equity returns so far in 2017, especially Naspers, we are seeing some other shares perk up, with Imperial gaining +13.3% last week, Exxaro +11.4% and African Rainbow Minerals +11.4%. Also Shoprite is +9.9% in the past week, at a new all-time record high, after trending broadly sideways for 4.7 years. Standard Bank is +11.4% in 2017 at its highest level in over 2 years and just 8 rand short of its previous record high. Firstrand is +20% in the past 2 months, trading at its previous record high from May 2015.

4 Capitec is +27% so far in 2017 at another record high, while over the past 2 months Kumba is +48% and Assore is +47.4% (both climbing after sharp corrections). We re seeing some possible early recoveries, by no means confirmed, in some of the absolute dogs of the past many years, such as Impala Platinum, now trading at the same level as 17 years ago in rands and Grindrod, now trading at the same level as 11 years ago, possibly MTN and Sun International too. It s a difficult decision because our economy is so poor and consumer spending is struggling. Look at Woolies share price, now down almost -40% from its record high two years ago and trading at the same price as five years ago. Very often, but not always, a stock market recovery can be an early sign (a leading indicator) that the economy and company earnings will also start recovering within six months or so, as occurred in Of course, I think the scepticism out there in SA about this stock market rally remains very high, which is of course a very healthy sign that it is likely to continue. When your market has gone up and down many, many times over 2.7 years, without making any progress and during a mighty global bull market, it is natural to expect that pattern to continue, especially when both the economy and the politics are so bad. Meanwhile, despite rand strength against the dollar, the JSE Mining Index has jumped a very impressive +29.4% over just the past two months to its highest level since February. It had peaked in early February, before tumbling by -26.4% by 20 th June. Since then the Chinese economy has surprised on the upside, as has the global economy in general and the mighty fall in the dollar (-7.1% versus the euro in just the past 2 months) has spurred the prices of many of the dollar-priced metals, including iron ore, copper, aluminium, zinc, gold, platinum, palladium and rhodium. The dollar is now down -13.4% versus the euro in 2017 to a 2.5 year low. Since 13 th June the iron ore dollar price is up a phenomenal +47% (following a big tumble). Since 20 th June (i.e. 2 months ago) the copper dollar price is up +18.3%. So far in 2017, the palladium price is +37.8% in dollars, the rhodium price is +43% in dollars and the platinum price is up just +8.6%, but could be about to make another run at the $1,000 level. The price of aluminium is +12.6% in the past 2 months, while the price of zinc is +20%. On the offshore front, the MSCI Emerging Markets Index is at another 2017 high, +25.9% in dollars in 2017 (excluding dividends), obviously helped by both emerging market currency strength against the weak dollar and by mining share rises, after big improvements in declared profits and dividends. Below we show a chart of the MSCI Emerging Markets Index, in dollars, which is showing signs of breaking its 10-year old down-trend, from its peak in late In fact the index is still trading at the same level as in If the dollar continues to weaken, which currently looks quite possible, judging by the chart of the euro to the dollar, then commodity prices may continue to rise more, which would be good for many emerging markets, like ours, Brazil, Russia and others. Source: IRESS

5 The biggest contributor by far to the MSCI Emerging Markets Index in 2017 has been the MSCI China Index, which is approximately 28% of the EM index. The MSCI China Index is up +38.7% so far in 2017, an absolutely extraordinary climb in just 8 months, admittedly coming from a very low base. The MSCI World Index peaked 3 weeks ago at a record high and is down -1.4% since then. It is up +11% in dollar terms so far in 2017, excluding dividends, but is down -2% in euro terms, back at December levels. The S&P 500 Index is up +9.5% in dollars, excluding dividends in 2017, while the MSCI USA Index is +9.3%. The best sector remains the IT sector with +19.3%, then Health Care +14.7%. Energy/oilrelated remains the worst at -16.2%. Real Estate is now +6.7%. The MSCI Europe (including the UK) Index is +16% in dollar terms. The MSCI Japan Index is +10.5% in dollars in It has trended sideways for the past 3 months. The EPRA NAREIT global listed property index is +4.4% so far in 2017 in dollars. The US markets are in their final summer week this week, with investors and managers due back from next week. It will be interesting to see what happens once the volumes return to the market. Other Commentators US Market Analyst, Elaine Garzarelli A large amount of money is being put to work and that has good implications for both the economy and the stock market. Most recently, Blackstone is exploring an IPO of Gates Global for $9bn and a Chinese SUV manufacturer is interested in acquiring Jeep for $24bn. Garza expects the Fed to reduce its $4.5tn balance sheet from its 21st September meeting and raise the federal funds rate in mid-december. The dollar remains weak, which is good for multinational earnings of US companies. Garza s proprietary stock market quants model remains bullish at a reading of 85.5% (out of a maximum of 100%). There has been some uncertainty recently as market participants question if Trump s proposed tax cuts will happen and there are fears of a government shutdown once the debt ceiling is reached. Garza believes share market corrections should be limited to 4-7% and recommends buying on dips. The number of bullish US investment advisors declined for the 4 th consecutive week to 48%. This is very interesting, because the bulls are now at the lowest level since BEFORE the election, when they were at 41.7%. A reading below 39% is bullish. Investors have been selling out of US mutual funds quite heavily of late. The 2 nd quarter earnings season is almost complete. It was better than expected. Garza expects S&P 500 earnings of 146 for 2018 (+14% year-on-year). Based on this and her PE model, which indicates a fair PE (price to earnings ratio) of 18, fair value for the S&P 500 is 2,628, indicating a -7% undervaluation at this point. So this valuation indicator is ranked bullish in her quants model. The 45 major economies in the world are growing in synch partly due to stimulus from their central banks. Strengthening world demand and the lower dollar have boosted US exports and stronger domestic demand (mostly for capital goods) has strengthened import growth. Garza expects both to rise over the next two years.

6 She continues to see signs that the US economy is accelerating. Revenue at Walmart has been strong, the leading economic indicators are rising, consumer comfort is up and company earnings are accelerating. The composite purchasing managers index (PMI) for August jumped to 56%, a 27-month high with a sharp increase in service sector business activity in August. Garza remains overweight in the IT sector (24% versus 22.8% for the S&P 500 Index), in Health Care (15.6% versus 14.4%) and in Financials (16.9% versus 14.5%), amongst a few other sectors. NOTE: I worked in the US for 9 years, mostly for stockbroker Shearson/American Express and became acquainted with Elaine Garzarelli s work in the early 1980 s, when she was the toprated quantitative analyst in Wall Street, working for Shearson. She opened her own business in the 1990 s and her quants model has remained intact, with a few minor adjustments, all these years. Over the years, I have found her work to be the most accurate of any of the forecasters out there. It is pure unemotional quants (number crunching) work, with a model that is based on the relationships through history, between the economy, interest rates and the market. She is in her late 50 s now, so still a youngster, relatively speaking, and a very seasoned one too. BCA Research Japanese shares are cheap and company profits are rebounding nicely. Japanese shares are trading at a 16% discount to the MSCI World Index, based on forecasts of forward earnings. Unusually for Japan, both earnings and dividend growth have been strong, averaging +19% and +9% respectively over the last 5 years. BCA recommends staying overweight Japanese shares, but with the yen hedged against the dollar. BCA expects the dollar to gain strongly against the euro and many other currencies in 2018 as unemployment falls further. BCA still thinks the US government will come up with a tax deal, cutting taxes and a prolonged debt ceiling battle or government shutdown is unlikely. Earnings matter more than politics for the stock market. While government shutdowns have occurred in the past, the debt ceiling has never been breached. At the end of the day, the debt ceiling will always be raised, because the government could not stand the public pressure. The worst case for the market would be a two-week shutdown between 1 st October and 15 th October. Odds of such a scenario are probably around 25%. BCA doesn t expect a shutdown to have any lasting impact on the economy, although it could help cause a stock market correction. BCA is sticking to its view that a Fed-led recession will start in Paul Hansen Director: Retail Investing

7 Economic Update 1. SA CPI slowed to 4.6% y/y in July mostly as a result of the petrol price decrease increasing the chances of an interest rate cut 2. South African manufacturing activity has been disappointing in recent years, but the performance has not been as one dimensional as the headline data would suggest 3. US house prices have risen by 45% since the low during the financial crisis, but remain 4% below the all-time record high. The growth in housing activity has, however, slowed in recent months 4. Equity investors drive increase in Nigeria capital flows 5. The highlights for the economic week ahead 28 August to 1 September The SA CPI inflation rate declined substantially y/y by -0.5% in July, to 4.6%, from 5.1% in June. This is the lowest inflation has been since October The decline in inflation was mainly due to the significant 69c/l decrease in the petrol price at the beginning of July compared with an increase in the petrol price for the same period last year. On its own, the reduction in petrol and diesel prices reduced the overall CPI inflation rate by -0.3%. There was a further downward easing on inflation which came from the reduction in the municipal cost of electricity, from 7.4% to 2.1%, which accounted for almost all of the remaining -0.2% fall in inflation. Reassuringly, based on the continuing relative strength of the Rand, there were also decreases in the inflation rates of several other goods and services, as suggested by the decline in the core inflation rate, which excludes food, fuel and electricity. Core inflation declined by -0.1%, from 4.8% in June, to 4.7% in July, which is the lowest this number has been since January Overall, the substantial decline in inflation so close to the middle end of the inflation target may be seen as a good reason to reduce the repo rate a little further. Interestingly, a new three-year wage agreement on increases in the metal workers industry is also a positive development towards an interest rate reduction. Although the fact that fuel prices rallied again in August and is likely to increase again by a further 60c/l in September based on the current under recovery in the fuel price for the month may cancel out this benefit and could see inflation increasing again in the next month or two. 2. South Africa s manufacturing sector has massively under-performed many other emerging economies, but assessing performance is more complex and nuanced than the headline data would suggest. According to data provided by Netherlands Bureau for Economic Policy Analysis, world industrial production is at a record high, having risen by 22% over the past 10 years. This equates to an average annual growth rate of around 2%. Importantly, this performance includes the impact of the global financial market crisis, which led to a 12.8% decline in global manufacturing over a period of only 12 months. Stated differently, since the global financial market crisis ended in 2010, world industrial production has risen by an impressive annual average of 3.5%, rising by 3.6% over the past year to May 2017, which is the most recent data point. A breakdown of global industrial production by region reveals that the improvement in output over the past ten years has been largely driven by emerging markets as opposed to developed economies. In fact, since the beginning of 2007, emerging market industrial production has risen by a total of almost 60% versus almost zero growth in advanced economies.

8 Although the major economies in the Euro-area and the United have all experienced a reasonable recovery in manufacturing output in recent years, industrial production in Japan has declined significantly over the past ten years, having experienced a return to recession conditions from the middle of 2014 through to the middle of Within the emerging market group of countries, two regions of the world have dominated the pick-up in production, namely emerging Asia (China, India, South Korea, Indonesia etc.), with growth of an amazing 143% over ten years as well as Central and Eastern Europe with growth of almost 25%. Unfortunately, other regions have, on balance, been somewhat disappointing, especially Latin America (highlighted by the recent economic difficulties in Brazil and Argentina), and Africa (dominated by the weakness in South Africa). South Africa s manufacturing production has essentially stagnated over the past ten years. This lack of growth in manufacturing has become much more evident in the past three to four years and has occurred despite a clear intention by policy officials to stimulate the manufacturing sector and despite significant currency weakness. In fact, the Rand has weakened by a substantial 46% against the US Dollar over the past ten year, which is equivalent to a depreciation of 6% a year. Under these circumstances it cannot be argued that South African manufacturing activity simply needs an exchange rate that weakens continuously, in real terms, in order to be competitive. The competitiveness of industry is linked to a wide range of factors including product development, innovation, management expertise, skills development, and productivity. Customers don t simply buy the cheapest product on the market. Quality, design, availability and customer service all play a significant role. Domestically, the manufacturing sector is comprised of ten major sub-sectors. The largest being food and beverages (25% of overall manufacturing), followed by the chemical sector (24%), and iron and steel (19%). At the other end of scale, the clothing and textile sector comprises a mere 3% of total manufacturing, while the manufacture of electrical machinery is only 1.6%. Each of these ten major manufacturing sectors are comprised of a number of additional sub-sectors, which means that in total South Africa s manufacturing sector is divided into more than 40 distinct industries, each with its own performance characteristics. Remarkably, while the manufacturing sector (in total) has exhibited no growth in output since 2007, there is a very wide dispersion in performance at a sub-industry level. This dispersion is illustrated by the performance gap between the beverage sector, which has grown by an impressive 37.5% over the past 10 years, and the clothing sector, which has declined by a shocking -35.7% over the same period. Clearly, South Africa s beverage sector has managed to maintain its share of the domestic market over decades, while growing exports into the rest of Africa as well as parts of Europe and elsewhere. In contrast, the textile and clothing sector have been plagued by a sustained and dramatic increase in imports, despite very high import duties. Other notable high performance manufacturing sectors have included communication equipment with growth of a remarkable 45.8% over the past ten years food processing (+37%), dairy products (+20.1%), and basic chemicals (+17.7%). Unfortunately, these positive growth stories have been more than offset by sharp declines in other key industrial sectors such as publishing (-35.9%), iron and steel (-29.6%), cement (-25.3%), printing (- 19.3%) and furniture (-15.6%). There are many reasons why this divergence in manufacturing performance has occurred. For example, while the entire sector has experienced a significant increase in import competition over the past 20 years, as the country reduced import duties and systematically re-integrated back into the world economy, each sub-industry handled the increased competition differently.

9 Some sectors were late in recognising the threat from off-shore products, losing significant market share within a relatively short period, while other industries responded by becoming more innovative, cost-conscious, and adjusting their process of manufacture in order to improve productivity. Other dynamics, besides increased import competition, have also impacted South African manufacturing in recent years. These include prolonged labour unrest, changes in key legislation, a lack of critical infrastructural development, and the rising cost of electricity and transport. Each sub-manufacturing industry within South Africa has adapted somewhat differently to these developments, with varying degrees of success. The revealed comparative advantage demonstrated by a number of South Africa s manufacturing industries, coupled with the persistent under-performance of other industries could be used by policy officials to guide the nature and extent of their support for local industry, and how best to formulate industrial policy. In that regard, a key question policy officials would be trying to answer is should the government support those sectors that are struggling to survive despite their apparent lack of competitiveness, or should policy efforts be focused on trying to further encourage and enhance the sectors that are currently outperforming, turning already strong industries into great world-class industries? Alternatively, a significant volume of international research into the effectiveness of industrial policy has concluded that governments are notoriously inept at selecting winning industries, and that industrial support should not try to target selected industries, but rather create an environment that is supportive off all business sectors. Irrespective of the policy approach adopted by South Africa, it is clear that South African business confidence has deteriorated significantly in recent years, which is in sharp contrast to global trends. Under current circumstances it is critical that the key building blocks for business success, which are evident in all prosperous economies such as supportive infrastructure, policy certainty, and adherence to the rule of law, are strengthened for the benefit of everyone. 3. In May 2017, US house prices, as measured by the Case Shiller Composite 20 Index, rose by a modest 0.1%m/m (seasonally adjusted), and have risen in 60 out of the last 63 months. Over the past year, house prices are up a respectable 5.7%y/y and are up 45% since the low in early Overall, prices remain a modest 4% below their all-time high, which was recorded in April 2006, and should be back into record territory before the end of As mentioned a couple of months ago, in some cities house prices are already well above pre-crisis highs (for example Boston, Dallas, Portland, Charlotte, Seattle and Denver), while in other cities prices remain relatively subdued (for example Las Vegas, Tampa, Phoenix and Miami). Amongst the twenty largest twenty US cities surveyed, eight have average house prices back at record levels. A broad range of data suggests that although US housing activity is continuing to recover, the pace of recovery remains somewhat unconvincing and certainly extremely modest compared with the frenzy of US housing activity prior to the global financial market crisis. This more subdued pace of housing activity is reflected in the level of home ownership. In the thirty years from 1965 to 1995 US home ownership rates (percentage of households that owned their own home) averaged a relatively stable 64%. It then increased fairly rapidly to a peak of almost 70% just prior to the global financial market crisis. This improvement, while political very appealing, proved to be unsustainable (since it was not based on sound measures of affordability) and US ownership levels now appear to have stabilised back down at around 64% - see chart attached. There has also been some moderation in the pace of new home sales as well as housing starts. This might reflect the fact the housing has systematically become less affordable, especially over the past year, as well as the still relatively modest increase in salaries and household incomes.

10 Overall, while housing activity has not added much to the overall US GDP growth in recent quarters, the improvement in housing activity and house prices since 2012 has also not led to creation of another housing bubble. Importantly, though, the ongoing recovery in the US housing market, albeit at a modest pace, is a key factor in helping to confirm the sustainability of the current US economic recovery. In other words, a meaningful pull-back in housing activity and house prices would create a worrying signal that perhaps the US economy is starting to lose momentum. 4. Capital inflows into Nigeria increased to $1.79 billion in the second quarter of This was more than the $908 million recorded in the first quarter of 2017 and the $1.04 billion recorded in the second quarter of Most of the inflows were from portfolio investments which showed a significant improvement. Portfolio inflows were recorded at $770.5 million which was 145% higher than the first quarter 2017 and 128% higher than the second quarter of Most of the flows were recorded in equities, which constituted $614.1 million of portfolio flows, the highest figure since The flows increased by a factor of seven after the NAFEX window was introduced in April. This was reflected in the returns of the all share index that rose by an impressive 20% (USD; 38% NGN) year-to-date. The next highest flows were in money market at $98.6 million followed by bonds at $57.9 million. Foreign Direct Investment also showed a notable improvement at $274.4 million, which is 30% higher than the previous quarter and 49% higher than the second quarter of The figure was almost entirely driven by purchases of direct stakes into Nigerian entities. Most of the capital flows came from the United Kingdom followed by the United States accounting for $338 million and $85 million respectively for the month of June. Flows from South Africa amounted to $39 million in the same period. The opening of the NAFEX window and subsequent convergence of some of the Naira rates has given foreign investors some clarity in terms of Naira entry and exit points. However the system is still seems opaque as it looks to be somewhat managed by the central bank. This is whilst the official exchange rate is still at NGN305/$. Most of the market does not trade at the official rate. Investor confidence is starting to return, although still well below historical highs. With oil prices and production being significantly better than last year s low base, 2017 is likely to produce descent returns for investors. The outlook is somewhat murkier from 2018 onwards with only modest economic growth expected. 5. The highlights for the week ahead are likely to be: US Unemployment on Friday - the last employment report was encouraging with more than jobs created in the month and no real sign that the pace of job growth will slow. SA Petrol Price also on Friday - the daily under-recovery on the SA petrol price is currently around 60c/l which suggests that there will be an increase in the price of petrol in September, negatively impacting the current favourable outlook for SA inflation and interest rates. Please follow our regular economic updates on Kevin Lings, Laura Jones & Kganya Kgare (STANLIB Economics Team)

11 Rates These rates are expressed in nominal and effective terms and should be used for indication purposes ONLY. STANLIB Money Market Fund Nominal: 6.91% Effective: 7.13% STANLIB is required to quote an effective rate which is based upon a seven-day rolling average yield for Money Market Portfolios. The above quoted yield is calculated using an annualised seven-day rolling average as at 25 August This seven- day rolling average yield may marginally differ from the actual daily distribution and should not be used for interest calculation purposes. We however, are most happy to supply you with the daily distribution rate on request, one day in arrears. The price of each participatory interest (unit) is aimed at a constant value. The total return to the investor is primarily made up of interest received but, may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. STANLIB Enhanced Yield Fund Effective Yield: 7.79% STANLIB is required to quote a current yield for Income Portfolios. This is an effective yield. The above quoted yield will vary from day to day and is a current yield as at 25 August The net (after fees) yield on the portfolio will be published daily in the major newspapers together with the all-in NAV price (includes the accrual for dividends and interest). This yield is a snapshot yield that reflects the weighted average running yield of all the underlying holdings of the portfolio. Monthly distributions will consist of dividends and interest. Interest will also be exempt from tax to the extent that investors are able to make use of the applicable interest exemption as currently allowed by the Income Tax Act. The portfolio s underlying investments will determine the split between dividends and interest. STANLIB Income Fund Effective Yield: 8.55% STANLIB Extra Income Fund Effective Yield: 8.07% STANLIB Flexible Income Fund Effective Yield: 7.72% STANLIB Multi-Manager Absolute Income Fund Effective Yield: 5.95% Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. A schedule of fees and charges and maximum commissions is available on request from the company/scheme. CIS can engage in borrowing and scrip lending. Commission and incentives may be paid and if so, would be included in the overall costs. The above quoted yield will vary from day to day and is a current yield as at 25 August For the STANLIB Extra Income Fund, Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down.

12 Disclaimer The price of each unit of a domestic money market portfolio is aimed at a constant value. The total return to the investor is primarily made up of interest received but, may also include any gain or loss made on any particular instrument. In most cases this will merely have the effect of increasing or decreasing the daily yield, but in an extreme case it can have the effect of reducing the capital value of the portfolio. Collective Investment Schemes in Securities (CIS) are generally medium to long term investments. The value of participatory interests may go down as well as up and past performance is not necessarily a guide to the future. An investment in the participations of a CIS in securities is not the same as a deposit with a banking institution. CIS are traded at ruling prices and can engage in borrowing and scrip lending. A schedule of fees and charges and maximum commissions is available on request from STANLIB Collective Investments (Pty) Ltd (the Manager). Commission and incentives may be paid and if so, would be included in the overall costs. A fund of funds is a portfolio that invests in portfolios of collective investment schemes, which levy their own charges, which could result in a higher fee structure for these portfolios. Forward pricing is used. Fluctuations or movements in exchange rates may cause the value of underlying international investments to go up or down. TER is the annualised percent of the average Net Asset Value of the portfolio incurred as charges, levies and fees. A higher TER ratio does not necessarily imply a poor return, nor does a low TER imply a good return. The current TER cannot be regarded as an indication of future TERs. Portfolios are valued on a daily basis at 15h00. Investments and repurchases will receive the price of the same day if received prior to 15h00. Liberty is a full member of the Association for Savings and Investments of South Africa. The Manager is a member of the Liberty Group of Companies. As neither STANLIB Wealth Management (Pty) Limited nor its representatives did a full needs analysis in respect of a particular investor, the investor understands that there may be limitations on the appropriateness of any information in this document with regard to the investor s unique objectives, financial situation and particular needs. The information and content of this document are intended to be for information purposes only and STANLIB does not guarantee the suitability or potential value of any information contained herein. STANLIB Wealth Management (Pty) Limited does not expressly or by implication propose that the products or services offered in this document are appropriate to the particular investment objectives or needs of any existing or prospective client. Potential investors are advised to seek independent advice from an authorized financial adviser in this regard. STANLIB Wealth Management (Pty) Limited is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 37 of 2002 (Licence No. 26/10/590). Compliance No.: 88HX15 17 Melrose Boulevard, Melrose Arch, 2196 P O Box 202, Melrose Arch, 2076 T: (SA Only) T: +27 (0) E: contact@stanlib.com Website: STANLIB Wealth Management (Pty) Limited Reg. No. 1996/005412/07 Authorised FSP in terms of the FAIS Act, 2002 (Licence No. 26/10/590) STANLIB Collective Investments (Pty) Limited Reg. No. 1969/003468/07