The Weekly Focus. A Market and Economic Update 12 June 2017

Transcription

1 The Weekly Focus A Market and Economic Update 12 June 2017

2 Contents Newsflash...3 Market Comment... 3 Other Commentators... 4 Economic Update...6 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 In what has been a volatile year so far for our troubled local markets, the All Bond Index has once again taken over as the leading asset class so far in Market Comment In the three weeks since my last Weekly Focus commentary, the offshore stock markets in dollars have moved a little higher, with the MSCI World Index +0.9% and the MSCI Emerging Markets Index +1.5%, both hitting 2017 highs very recently. However, the JSE has gone south quite sharply. Firstly, the elastic was stretched after its decent run and secondly last week s revelation that the economy is in recession hurt certain sectors acutely, because earnings are so important for share prices. A weaker economy may well lead to weaker-than-forecast earnings for those companies that derive the bulk of their sales and profits from our economy. Obviously those companies earning more of their profits offshore should do better. Thirdly, Moodys assessment of our ratings on Friday was quite negative. They not only downgraded both the international and local debt ratings to just one above junk, which was expected, but they also maintained the negative outlook because of the poor political and economic situation in our country. This implies that unless things improve quite noticeably, the next step is another downgrade to below investment grade. Kevin Lings believes that we have perhaps about months to change the situation positively, otherwise down we go. Fourthly, the rand has ironically gained about +2.6% against the dollar during the past 3 weeks, following the emerging market trend, which always hurts the ALSI 40 and ALSI indices because of all the big rand hedges that dominate these indices. Over the past 3 weeks, the ALSI 40 Index is down -5.6%, the ALSI is down -5.1% back at March levels, the Industrial Index is -5.6%, the Financials -4.4%, Mining is down -6.2% to where it was last May/June and Resources -6.3% (recently hit a new low in 2017 and is currently -4.9% in 2017), Sasol is down -9.3% on the weaker oil price (-8%) and the stronger rand (+2.6%). Meanwhile the SA bond market has surprised many by strengthening (yields have fallen), considering the potential danger for this market if we are downgraded to junk in a year or so by both Moodys and S&P. The 10-year yield has declined from 8.61% to 8.45%, closer to its low of the year (high price, low yield), partly because of the stronger rand and global demand for yield and partly because of declining inflation and a weak local economy, which enhances the view that interest rates may be lowered quite soon in SA. So in what has been a volatile year so far for our troubled local markets, the All Bond Index has once again taken over as the leading asset class so far in 2017, knocking the ALSI off its recent perch (see graph below). The biggest share on the JSE, namely Naspers, was at one stage +40% in 2017, but has lately corrected by -8.5%, partly on the back of a correction that started on Friday with the big IT shares in the US and continued in the East this morning, with Tencent down over - 2%.

4 Source: I-Net Bridge The ALBI is now at +5.75% for 2017, then the ALSI at +4.4%, Cash at +3.4% and lastly SA Listed Property at +3.2%. It appears that Property continues to be dogged by its high foreign content of close to 40% because it usually follows bonds quite closely, as well as by the weak consumer/retail sales numbers. The ALSI has tumbled sharply from a total return of +9% on 23 rd May to the current +4.4%. A lot will depend on the next set of results from companies, for the period to end June. Most of these results should be available in August. Will they be on target versus expectations, or not? The JSE looked like it could be starting to break out of its 3-year sideways trend a few weeks ago, but has now been knocked back into that trend. Markets don t like uncertainty and the latest news on the economy and on Moody s negative outlook add to the uncertainty about earnings. Of course, the advantage is that it does create some buying opportunities for the patient investor. For example, Firstrand is trading at an historic dividend yield of 5% and Standard Bank of 5.4%. Both the JSE Mid-Cap Index (-10.6%) and the JSE Small Cap Index (-8.7%) have taken big knocks over the last 3 months, reflecting concerns no doubt about SA Inc. earnings. These indices both hit record highs in 2016; the Small Cap Index hit a new record high in March 2017 before this downturn. So once again the local equity and balanced funds will be looking poor as far as returns go, aggravated by the stronger rand. On the offshore front, one has to consider the possibility that the fall in the US IT shares on Friday could be the start of a May to September/October correction, depending to some extent on whether the anti-trump vitriol in Washington gathers steam or not. It does seem to be a toxic political environment at this time, with many out to nail Trump. Other Commentators US Market Analyst, Elaine Garzarelli Garza thinks that the US stock market has priced in the prospects of Trump s tax stimulus. The stimulus would affect real GDP, interest rates, company earnings and employment. There is a risk that if the current political turmoil in the US (anti-trump) escalates to a crisis, then the likelihood of tax stimulus or other reforms being implemented would significantly decline, negatively affecting shares. The US dollar has continued to decline and is down -4.7% year-to-date. This is positive for commodity prices, exports and for companies with high levels of foreign exposure.

5 Garza s quants model reading declined to 71% from 73% last week as the sentiment indicator declined: the number of bullish investment advisors rose to 55.8% from 50.9%, causing a downgrade to bearish of this contrarian indicator, because a high level of bullishness is negative for shares. The S&P 500 Index is now +5% above fair value, but can often rise to % above fair value when the quants model is as high as it currently is. Currently the S&P 500 Index is +9.3% in 2017, excluding dividends. The best sector remains the IT sector with +17.2%, followed by Health Care with +12.6%, then Consumer Discretionary with +11.5% and Utilities with +10.1%. Energy remains the worst with -12%. Interestingly Financials are only +4.1%, while Materials are +9.9%, a lot better than our Mining Index. BCA Research The market s balancing act continues. The current economic and interest rate environment supports BCA s one year view of preferring shares to bonds. However, stretched valuations, the mixed margin environment and a solid profit backdrop for US equities will be tested again this week as the Fed meets. US equities are still attractively priced relative to competing assets like government and corporate bonds. The forward earnings yield for US shares is still over 2% higher than the corporate bond yield after inflation, i.e. the real corporate bond yield. Historically though, stretched valuations, e.g. high PE ratios, is not a good market timing tool. BCA does not see a sustained pullback in shares in the near future, unless the economy suddenly weakens. But a peak in profit margins for US companies, expected in 2018, could be a justification to scale back overweight positions in shares, because a key for shares is profitability. If profits begin to slip, then shares typically follow. Even then, though, falling profit margins does not always mean declining earnings growth. All-in-all, BCA says stay long global equities on a 12-month horizon, with a slight preference for developed over emerging markets. They still favour higher-beta markets like Europe and Japan, but currency hedged. BCA still believes that better-than-expected US economic growth later in 2017 will lead to higher interest rates (than expected) and therefore a stronger US dollar. They also expect solid Chinese growth to support commodity prices. There are various signs pointing to solid growth, including excavator sales which are up +120% year-on-year. Railway freight traffic is up about +12% year-on-year and electricity output is up +18%, the highest growth rate in seven years! They expect oil prices to rise later in 2017 due to robust demand growth for crude oil and continued OPEC discipline and despite rising US production. Paul Hansen Director: Retail Investing

6 Economic Update 1. SA economy falls into recession in Q with a GDP decline of -0.7%. The core of SA economy, retail, manufacturing and finance extremely weak more than offsetting better mining and agriculture. 2. SA manufacturing recorded a very welcome improvement in April 2017, but output remained more than 4% below the level of production achieved in April last year. 3. Moody's downgraded South Africa's sovereign credit rating one notch to Baa3, and maintained the negative outlook. The rating is now on the lowest level of investment grade. 4. US household wealth recorded another record high in Q of almost $95 trillion, but are asset prices over-valued? Growth in household debt remains very modest and can be easily financed. 5. Nigeria s trade balance improved further in Q1 2017, which should help to ease some of the foreign currency liquidity constraints. 1. In the first quarter of 2017, SA GDP declined by a substantial -0.7%q/q, annualised (seasonally adjusted). This compares with a decline of -0.3%q/q in the final quarter of The South African economy is now in a technical recession. The last time SA was in recession was The latest GDP performance was well below market expectations, which was for an increase of 1.0%q/q (STANLIB 0.4%q/q), although some analysts expected growth more than 1%. Over the past year, SA GDP rose by a mere 1.0% and has averaged growth of only 0.7% over the past four quarters. The weaker than expected GDP performance during Q was broad-based and included sharp declines in manufacturing activity (-3.7%q/q), the trade sector (retail sales) - 5.9%q/q and business services (finance) 1.2%q/q. This is the first decline in the business services (finance) sector since the second quarter of These declines were aggravated by a fall-off in transport/communication (-1.6%q/q), as well as construction (- 1.3%q/q). In fact, with the exception of agricultural production and mining activity, every other major sector of the economy declined in the quarter. The South African has clearly weakened very appreciably in early 2017, which has important and adverse implications for unemployment, tax revenue collection, equity market valuations, and the credit rating outlook. The weakness should, however, encourage the Reserve Bank to cut interest rates. More positively, there was a welcome improvement in the mining sector (+12.8%q/q) during Q1 2017, albeit off a relatively low base. The sector contributed 0.9 percentage points to the quarterly growth rate. This was also a distinct recovery in the agricultural sector (+22.2%q/q) supported by the vastly improved summer agricultural season (especially the maize crop), which added 0.4 percentage points. In other words, the mining and agricultural sectors added a combined 1.3 percentage points to SA growth. This also means that the SA economy declined by a full 2 percentage points in the quarter if mining and agricultural are excluded. At its core, the South African is now extremely weak and clearly lacking both business and consumer confidence. The latest GDP growth data confirms that the South African economy has lost significant momentum in recent years and has now officially fallen into recession. The economy has been hurt by a broad-based slowdown in most sectors of the economy for a variety of reasons, but ultimately the weakness reflects a massive and sustained deterioration in both business and consumer confidence aggravated by the recent credit rating downgrades, and ongoing political upheavals. This is despite an improved global economic backdrop. It is especially concerning that since the global financial market crisis in 2009, the rate of economic growth in South African has not managed to gain momentum and has not been robust enough to lead to widespread job creation in the private sector. This is despite government debt almost doubling since There has to now be a real risk that South African tax revenue collection under-performs even more, putting the fiscal authorities under significant pressure.

7 For 2016 as a whole, GDP growth was estimated at a mere 0.3%. This is down from a modest 1.3% in 2016, 1.7% in 2014 and 2.5% in For 2017, we expect growth of around 0.6%, helped by the current turnaround in agricultural activity, some pick-up in commodity prices and meaningfully lower consumer inflation. The 2017 estimate has been revised down from a prior estimate of 0.9%. Given that the core of the South African economy (retail, manufacturing, finance) is now extremely weak, it would appear that South Africa is going to struggle to lift its growth rate meaningfully back up to 2.0% over the next two years. This means SA will continue to face the risk of further credit rating downgrades unless there is a concerted and coordinated effort by policy officials to help lift domestic economic activity, starting with business confidence. Without a pick-up in economic growth, the fiscal authorities are going to find it increasingly difficult to meet their tax revenue projections, which will start to create significant additional social, political and economic pressures. 2. In April 2017, SA manufacturing production rose by a very welcome 2.3%m/m, after declining in each of the preceding three months (monthly data is seasonally adjusted). The market was expecting production to decline by a further -0.2%m/m. Despite the monthly increase in output, manufacturing output is still -4.1% below the level recorded in April Furthermore, the volume of manufacturing (seasonally adjusted) is still far below the level that was achieved prior to the global financial market crisis. Overall, the sector remains in recession. The increase in production during April 2017 of +2.3%m/m was largely due to a 4.8%m/m jump if food production as well as 4.9%m/m rise in vehicle output. There was also a 4.7%m/m improvement in the printing industry and a 3.3% increase in chemical production. These increase were partially offset by very sharp decline in cement production (- 7.2%m/m), and a 12.2%m/m plunge in clothing output. Unfortunately, the manufacturing data remains extremely volatile month-to-month, making it difficult to identify any useful trends over shorter periods. During 2010, SA manufacturing activity grew by 4.7%y/y, which was obviously a vast improvement on the 13.5%y/y decline recorded in In 2011, production averaged a more modest rise of 2.8%, with the sector experiencing significant disruptions due to strike activity. For 2012, manufacturing growth averaged a mere 2.3%, which is somewhat understandable given the weakness in the global economy and the extensive mining strikes. In 2013, activity rose by an average of only 1.4%y/y, which is really more stagnation than expansion, with the motor industry heavily disrupted by labour unrest. In 2014, South Africa s manufacturing production increased by a very disappointing 0.2%y/y. This was despite the Rand/Dollar weakening by 30% over the preceding three years. Clearly the sector was plagued by periodic electricity outages. In 2015 as a whole, South Africa s manufacturing sector averaged growth of -0.04% for the year as a whole which was the worst annual performance since the 2009 recession, and signalled that the sector experienced stagnation or a low intensity recession. This trend continued in 2016 with growth of 0.8% and has under-performed further in early 2017, entering a recession at the end of Clearly South Africa s manufacturing sector is struggling to gain any meaningful traction and has been one of South Africa s most disappointing economic sectors since the global financial market crisis. This is despite various policy initiatives to boost the sector, as well as a relatively weak exchange rate. Hopefully, the improvement in agricultural production (helped by the better summer rain in the maize planting areas) together with some pick-up in mining activity (helped by somewhat higher international commodity prices and a modest pick-up in global demand), will combine to provide some support to the sector over the coming months; off a relatively low base. 3. On 9 June 2017, Moody's Investors Service decided to downgrade South Africa's sovereign credit rating one notch from Baa2 to Baa3. Furthermore, the rating was assigned a negative outlook. SA s rating is now on the lowest level of investment grade, and clearly at risk of slipping into junk status. The long-term domestic credit rating was also downgraded one notch to Baa3, and assigned a negative outlook.

8 The decision by Moody s to downgrade South Africa s sovereign credit rating one notch was largely expected by market participants. Moody s has had South Africa on a negative credit outlook since 15 December 2015, and put the country on credit watch on 3 April Overall, the statement issued by Moody s raised a number of important concerns, most especially the negative impact of recent political events on confidence, economic growth and government finances. According to Moody s, the key drivers for the latest downgrade are: The weakening of South Africa's institutional framework. For example, the abrupt March 2017 Cabinet reshuffle illustrates an erosion of institutional strength. Reduced growth prospects reflecting policy uncertainty and slower progress with structural reforms. In particular, uncertainty over policy priorities has damaged investor confidence. The continued erosion of fiscal strength due to rising public debt and contingent liabilities. In particular, lower than expected growth will further delay the stabilisation of South Africa's debt-to-gdp ratio, while pressures to raise public wages will again rise in the next fiscal year as the end of the current three-year agreement will open room for new negotiations. Underperformance on tax revenue collection is another risk. The decision to keep South Africa s credit rating on a negative outlook reflects the continued downside risks for growth and fiscal consolidation associated with the political outlook. According to Moody s, South Africa maintains a number of credit rating strengths, namely: Deep domestic financial markets A well-capitalised banking sector A well-developed macroeconomic framework Low foreign currency debt. Adherence to the Constitution, and the rule of law continue to be the key pillars of strength. South Africa's institutions, on balance, are still stronger than those of emerging market peers. The outlook for SA s credit rating from Moody s will depend on the government's success in safeguarding South Africa's institutional, economic and fiscal strength. In particular, further delays in implementing growth enhancing reforms could result in SA being downgraded, or if liquidity pressures begin to re-emerge at state-owned enterprises that require pronounced government intervention. Conversely, a decline in the value of government guarantees to state-owned enterprises would be credit positive. Moody s remains the only major credit rating agency to assign South Africa an investment grade rating for both its long-tern foreign debt as well as its long-term domestic debt. Overall, the tone of Moody s credit assessment of South Africa s has, understandably, changed significantly over the past year. The rating agency is clearly concerned that recent political developments will lead to a continued lack of investment confidence in the country, which will result in sustained low growth, leading to a further deterioration of government s fiscal position. In other words, unless government is able to meaningfully encourage private sector investment, which leads to higher economic growth and an improvement in government finances, Moody s will be forced to downgrade South Africa to below investment grade. Such a move would have very significant implications for South Africa s ability to attract sufficient foreign investment - cost effectively - and on a sustained basis. Without sustained foreign investment that is cots effective the country will perpetually struggle to achieve the growth rates needed to meaningfully reduce the level of unemployment and address the rising levels of social discord. 4. The US Federal Reserve released the Q update of the US household balance yesterday. In the first quarter of 2017 US household net wealth rose by a very substantial $2.35 trillion quarter-on-quarter and is up a massive $7.26 trillion over the past year to another record high of $ trillion.

9 During the quarter, the increase in net wealth was largely boosted by another solid increase in value of financial assets, although there was also a further increase in the value of residential property. The value of US household assets are a remarkable $41 trillion above the post-crisis level, while household debt has only recently gone back to a record high. Household debt servicing costs remained very manageable relative to its long-term average. Overall, this remains an extremely impressive balance sheet, but it is important to recognise the risks associated with the current ratio of household wealth to disposable income, which has now increased to a record high. In the first quarter of 2017, the value of US household assets amounted to a staggering $ trillion. This is a substantial $7.76 trillion up since the beginning of 2016 and a phenomenal $41 trillion up from the low in Most of the gain over the past few years has been due to a rise in the value of financial assets, which are at a record high of $77 trillion. However, housing asset values have also risen noticeably over the same period, especially in more recent quarters. As a point of reference, the value of US household assets fell by almost $13 trillion during the global financial market crisis. In the first quarter of 2017, the level of US total household debt was recorded at $15.15 trillion; comprising mostly home mortgages (65% of total). In the past quarter, household debt has risen by only $35 billion and by $499 billion in the past year. The growth in household debt since the global financial market crisis has been relatively modest, although the overall level of household is finally back to a record high. Importantly, during the past few years, the growth is household disposable income has easily exceeded the growth in household debt. This has meant that the ratio of US household debt to personal disposable income has fallen from a peak of 135% in Q to 105.7% currently. While this ratio would still be considered high by historical standards, it is meaningfully below the peak. Debt servicing costs has also been contained, dropping from over 13% of disposable income in early 2008 to below 10% currently. The current level of household debt servicing costs remains very manageable by historical standards. As a result of the strong rise in asset values, the net worth of US households rose to another record high of $ trillion in Q1 2017; an increase of $7.26 trillion relative to the first quarter of Household net wealth has risen by an impressive $40.0 trillion since the low in Q Furthermore, US personal savings are reasonably steady at about 5% of disposable income, which is well above the level of savings that prevailed prior to the financial market crisis. Overall, the US household sector is in great financial shape, and has made remarkable progress since the global financial market crisis. Unsurprisingly, US consumer confidence is back above the level that prevailed before the financial crisis in 2008/2009. While the US household balance sheet is extremely robust by historical and international standards, it has to be a concern that US net wealth represents another record high 661% of household disposable income. The current ratio is well above the long-term average of around 500%, which dates back to The previous two occasions when the ratio of household wealth to disposable income exceeded 600% have both been associated with financial market bubbles, namely the Tech-bubble in 2001/2002 and sub-prime housing bubble in 2008/2009. In other words, there is a strong argument to suggest that US wealth has, once-again, risen far faster than the income needed to support the economy. This would be one signal to suggest that the market has formed another bubble. Alternatively, it can be argued that the US equity market valuation is increasingly supported by global sources of income and that the equity market is a lot less reliant on the domestic economy clearly there is some merit to both arguments. Overall, the US balance sheet has recovered impressively since the financial market crisis in 2008/2009. The US household sector is now the wealthiest they have ever been; boosted by the equity market and increasingly by the housing market. The rise in household wealth should continue to support consumer confidence and household consumption, although US income and wealth distribution remains extremely uneven.

10 On the whole, the US consumer has got capacity to significantly increase spending (including the use of debt), and with employment and confidence back above the pre-crisis level, household consumption should still prove resilient in The main concern is the over-valuation of US household assets (ie equity prices) in relation to the underlying level of household income. A significant late-cycle correction in the US equity market (in excess of 25% down) would certainly undermine the current strength of the household sector s balance sheet. 5. Nigeria s trade surplus improved further to NGN719.4 billion in the first quarter of 2017, up from NGN billion in the fourth quarter of The Nigerian trade balance was in deficit for most of 2016, mainly as a result of the lower oil price and disruptions to oil production. Oil production has been disrupted by militant attacks on the oil pipelines in the Niger delta. Oil comprises around 80% of Nigeria s total exports even though it is only 8.5% of total economic output (GDP). The improvement in the trade surplus should boost Nigeria s foreign currency holdings as well as support the currency. The country has been plagued by foreign exchange shortages that disrupted economic activity. Although foreign exchange liquidity issues are likely to remains a concern over the coming, they are not as severe as in 2015 and 2016, which should slowly start to encourage an uplift economic activity. The Nigerian economy is expected to emerge from recession as soon as the second quarter of this year, with the economy gaining further momentum in the second half of 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: 7.04% Effective: 7.28% 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 09 June 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: 8.11% 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 09 June 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: 8.62% STANLIB Extra Income Fund Effective Yield: 8.22% STANLIB Flexible Income Fund Effective Yield: 7.85% STANLIB Multi-Manager Absolute Income Fund Effective Yield: 6.36% 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 09 June 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.: HX 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