Market and Economic Charts. Retail Fund Management Team Investec Asset Management

Transcription

1 Market and Economic Charts Retail Fund Management Team Investec Asset Management 30 April 2010

2 Looking at Markets Global SA Economics Major Index Performance Major Index Performance Market Drivers Inflation Interest Rates Currency Commodities Page 2

3 Equity Markets

4 Global equities extending their gains from MSCI World Index (in US$) (1198.2) % % 74.0% % 600 Feb-10 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Mar-10 Apr-10 Page 4

5 Strong rebound from the March lows due to optimism of a global economic recovery S&P 500 (in US$) (1186.7) Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 5

6 Strong rebound from March lows due to optimism of a global economic recovery FTSE 100 (in GBP) (5553.3) Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 6

7 Japanese equities remain at significantly higher levels than seen in March Nikkei 225 (in Yen) ( ) Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 7

8 FTSE/JSE Africa All Share more than 150% up in US$ since the beginning of March MSCI World Index (in US$) (461.4) & FTSE/JSE All Share Index (in US$) (733.0) FTSE/JSE Africa All Share US$ Morgan Stanley World Index US$ Page 8

9 A significant recovery in local equities since March The FTSE/JSE All Share Index (in ZAR) ( ) % 57.8% Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 9

10 Domestic equities have a high correlation to the performance of global emerging markets FTSE/JSE All Share Index (in US$) (3879.8) & MSCI Emerging Markets Index (in US$) (1020.0) FTSE/JSE All Share Index (US$) MSCI Emerging Markets Index (US$) Page 10

11 Domestic equities have a high correlation to the performance of commodity prices, especially copper FTSE/JSE All Share Index (in US$) (3879.8) & Copper Price (US$) (7365 / ton) FTSE/JSE All Share Index (US$) Copper Price (US$) Page 11

12 Significant sector rotation from resources to financials since January 2010 SA Equities: sector performances relative to the FTSE/JSE All Share Index Performance relative to the ALSI: Financials: 2.8% Industrials: -0.1% Resources: -1.4% Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 FTSE/JSE All Share Index Financials relative to ALSI Industrials relative to ALSI Resources relative to ALSI Page 12

13 The PE ratio is back above one standard deviation to the average (since 1990) The FTSE/JSE All Share PE ratio (17.5x) Mean: Std Dev: Page 13

14 The market will be looking for a sharp recovery in earnings growth to support current share prices SA earnings growth (% change yoy) (-22.26%) & FTSE/JSE All Share Index ( ) SA Earnings Growth (yoy) FTSE/JSE All Share Index adjusted Page 14

15 Foreigners remain strong net buyers of SA equities in 2010 Foreign net purchases of SA equities in April 2010 (in ZAR) Page 15

16 Economic Developments

17 Leading indicators point to above-trend growth in 2010 Developed market economic expectations (G7 leading indicator 12 month % change, 13.8%) Page 17

18 US manufacturing enjoying a strong recovery with the US ISM remaining above 50 US Institute for Supply Management Index (59.6) Expansionary Contraction Page 18

19 Developed economies inflation rebounding from very low levels Developed market inflation: USA (2.4%), UK (3.0%), Euro (1.5%) USA Inflation Rate % UK Inflation Rate % Europe Inflation Rate % Page 19

20 Developed economies interest rates remain at depressed levels to stimulate growth Developed market short-term interest rates: UK (Clearing bank rate, 0.50%), US (Fed funds rate, 0.25%), EU (repo rate, 1.00%) UK Clearning Banks Base Rate US Fed Funds Rate Euro Zone Repo Rate Page 20

21 Developed market bond yields moving sideways at relatively low levels Developed market 10 year government bond yields: USA (3.7%), UK (3.9%) & Germany (3.0%) USA Government 10 year bond UK Government 10 year bond Germany Government 10 year bond Page 21

22 The US$ has gained ground after 18 months of significant depreciation against the Euro US Euro exchange rate ($1.33 / Euro) Page 22

23 Emerging market bond spreads narrowing on the back of global optimism, but still above levels Emerging market government bond spreads relative to US government bonds (JP Morgan EMBI spread) (265 bps) Page 23

24 Growth expected to accelerate from here on Quarter on Quarter (QoQ) and Year on Year (YoY) % change in GDP 10% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Forecasted figures 10% 0% -10% Mar-82 Mar-84 Mar-86 Mar-88 Mar-90 Mar-92 Mar-94 Mar-96 Mar-98 Mar-00 Mar-02 Mar-04 Mar-06 Mar-08 Mar-10 QoQ YoY Source: Investec Asset Management Page 24

25 SA interest rates expected to remain stable at low levels: headline inflation back within the SARB inflation band SA inflation & repo interest rate 14% CPI 17.5% 13% 16.5% 12% Repo 15.5% 11% 14.5% 10% 13.5% 9% 12.5% 8% 11.5% 7% 10.5% 6% 9.5% 5% 8.5% 4% 7.5% 3% 6.5% Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec-0 Dec Source: Investec Asset Management Page 25

26 SA bond yields rallied on the back of the surprise March 2010 rate cut Yield on government bond R207 (8.57%) Jan- Mar- May- Jul- Sep- Nov- Jan- Mar- May- Jul- Sep- Nov- Jan- Mar- May- Jul- Sep- Nov- Jan- Mar- May- Jul- Sep- Nov- Jan-2010 Mar-2010 Page 26

27 Significant turnaround in domestic equities, fuelled partly by declining domestic interest rates Prime overdraft rate SA (10.0%) & FTSE/JSE All Share rolling 12 month % change (+38.7%) Page 27

28 Rand benefiting from foreign inflows and an improving global outlook as global investors continue to allocate capital towards riskier assets Rand US Dollar exchange rate (R7.4 / US$) Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 28

29 Rand / Euro following a similar pattern Rand Euro exchange rate (R9.8 / Euro) Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 29

30 Rand / Pound following a similar pattern Rand Pound exchange rate (R11.3 / Pound) Dec-06 Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 Page 30

31 Rand remains strong in real terms against all primary trading partners SA Rand real trade weighted index (107.9) Page 31

32 Commodities: Significant recovery after sharp correction The Economist Metals Index (257.7) Page 32

33 US$ Gold price well supported above the $1000 / ounce level US Dollar gold ($ / ounce) Page 33

34 Despite US$ gold breaking above the $1000 / ounce level, rand gold price not yet fully recovered Gold price in SA Rand terms (R / ounce) Page 34

35 The extent of the global recovery will determine further demand for platinum (in US$) Platinum price in US Dollar ($ / ounce) Page 35

36 The extent of the global recovery will determine further demand for platinum (in Rand) Platinum price in SA Rand terms (R / ounce) Page 36

37 Thank you

38 Disclaimer All information and opinions provided are of a general nature and are not intended to address the circumstances of any particular individual or entity. We are not acting and do not purport to act in any way as an advisor or in a fiduciary capacity. No one should act upon such information or opinion without appropriate professional advice after a thorough examination of a particular situation. We endeavour to provide accurate and timely information but we make no representation or warranty, express or implied, with respect to the correctness, accuracy or completeness of the information and opinions. We do not undertake to update, modify or amend the information on a frequent basis or to advise any person if such information subsequently becomes inaccurate. Any representation or opinion i is provided d for information purposes only. Investec Asset Management will not be held liable or responsible for any direct or consequential loss or damage suffered by any party as a result of that party acting on or failing to act on the basis of the information provided by or omitted from this document. This document may not be amended, reproduced, distributed or published without the prior written consent of Investec Asset Management. In the event that specific collective investment schemes in securities (unit trusts) are mentioned please refer to the relevant fact sheet in order to obtain all the necessary information in regard to that unit trust. 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. 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 the company/scheme. Commission and incentives may be paid and if so, would be included in the overall costs. Forward pricing is used. Certain Investec Asset Management funds are offered as long-term insurance policies issued by Investec Assurance Limited, a registered insurer in terms of the Long-term Insurance Act. Investec Asset Management is an authorised financial services provider. Page 38