Ninety One Plc · LSE:N91
Ninety One — Investor Presentation (April 2020)
24 slides from Ninety One's investor presentation, Apr 16, 2020
Slide 1: Live Ninety One webinar: Insights & outlook from our portfolio managers
Live Ninety One webinar Insights & outlook from our portfolio managers April 2020
Slide 2: SA equities – opportunity or risk?
SA equities – opportunity or risk? Equity Fund Hannes Van Den Berg 16 April 2020
Slide 3: Ninety One Equity Fund Performance (R Inc)
Ninety One Equity Fund Performance Annualised performance in ZAR 10% Equity R Inc Comparison Index** (ASISA) South African EQ General 5% 0% -5% -10% -15% -20% -25% 1 year 3 years p.a. 5 years p.a. 10 years p.a. Equity R Inc -15.4% -2.0% -0.2% 8.5% Comparison Index** -20.7% -3.7% -1.1% 7.2% Active re
Slide 4: Ninety One Equity Fund Performance (A Inc)
Ninety One Equity Fund Performance Annualised performance in ZAR 10% Equity A Inc Comparison Index** (ASISA) South African EQ General 5% 0% -5% -10% -15% -20% -25% 1 year 3 years p.a. 5 years p.a. 10 years p.a. Equity A Inc -15.8% -2.1% -0.7% 8.3% Comparison Index** -20.7% -3.7% -1.1% 7.2% Active re
Slide 5: Mapping the coronavirus outbreak
Mapping the coronavirus outbreak From global synchronized growth to lockdown Coronavirus cases per million people We can divide all countries in four categories: ‒ Under control: Rate of infection in China has fallen rapidly, pointing to stabilization and recovery in the region. Hong Kong with daily
Slide 6: Structural impact of the virus
Structural impact of the virus Similar to 9/11, it will change the way we think and live Longer-term thoughts post Covid-19: ‒ Social distancing will largely fade, people are social animals. Expect more online everything, greater aversion to crowded places ‒ Personal vs. public transportation ‒ The
Slide 7: Looks like a buying opportunity?
Looks like a buying opportunity? The FTSE/JSE All Share Index JSE All Share 12-month forward PE multiple in single digits! 65000 20 60000 18 55000 50000 16 45000 14 7 year low 40000 12 35000 10 30000 8 25000 6 20000 4 Mar-2 0 Mar-11 Mar-12 Mar-18 Mar-13 Mar-14 Mar-17 Mar-10 Mar-15 Mar-16 Mar-19 Dec-
Slide 8: But be careful – significant uncertainty remains
But be careful – significant uncertainty remains 8
Slide 9: Expect deep negative growth in the first half of the year
Expect deep negative growth in the first half of the year Eurozone PMI indicates an economic crash Expect a plunge in US GDP in Q1 & Q2 Source: Gavekal Research, March 2020 9
Slide 10: 2020: Global data is going to look very bad
2020: Global data is going to look very bad A war between tough macro, weak company results and global stimulus Source: IMF, April 2020 10
Slide 11: Shock or recession?
Shock or recession? Growth will recover to trend toward the fourth quarter Global industrial production versus trend Global real GDP growth expectations resetting The unknown pathway in terms of infections and deaths has stymied economic activity and, with it, longer-term investment decisions Source
Slide 12: A much more rapid monetary response than the GFC experience
A much more rapid monetary response than the GFC experience Pace of Federal Reserve balance sheet expansion Summary of key stimulus measures to date (% of GDP) $3,000,000 $2,767,367 Monetary $2,500,000 17.2% Fiscal 8.2% $2,000,000 40.5% 21.2% $1,500,000 33.1% $1,000,000 $1,001,065 15.2% $500,000 4.7
Slide 13: Trade weighted nominal exchange rate
The rand has behaved as one would expect under such circumstances USD-ZAR exchange rate Trade weighted ZAR vs terms of trade 19 35 120 18.0124 18 17 30 16 100 Trade weighted nominal exchange rate 15 14 25 13 80 12 Terms of trade 11 20 10 60 Jan-20 Mar-18 Mar-19 May-18 May-19 Jul-19 Nov-19 Mar-20 Jan
Slide 14: South Africa key Macroeconomic Drivers
South Africa key Macroeconomic Drivers We were vulnerable going into the crisis and lockdown GDP growth year on year – production side Household consumption breakdown Phase 1: Lockdown, “flatten the curve” Phase 2: Gradual unlock of the economy and schools Phase 3: How does the landscape look post t
Slide 15: Oil price overview – YTD, impact and outlook
Oil price overview – YTD, impact and outlook Not all crude created equal Source: Ninety One, Bloomberg, 3 April 2020 15
Slide 16: Earnings revisions profile across industries
Earnings revisions profile across industries Resources have a robust profile, while defensives and banks offer opportunities Average earnings revisions by sector Average earnings revisions of the general and (Jan 2019 = 100) platinum miners (Jan 2019 = 100) 110 750 105 650 100 550 95 450 90 350 85 2
Slide 17: There are investment opportunities even in these conditions
There are investment opportunities even in these conditions SA retailer performance year to date Defensive & foreign earners vs Capped SWIX 120 120 110 110 100 100 90 90 80 80 70 70 60 60 50 President declares national 50 state of disaster 40 40 07-Jan-20 04-Feb-20 21-Jan-20 28-Jan-20 14-Jan-20 11-F
Slide 18: There are investment opportunities even in these conditions: Tencent
There are investment opportunities even in these conditions Tencent: China Entertainment industry Weekly time spent on Tencent games within top 50 Music subs revenue YoY accelerating Source: MorganStanley 18
Slide 19: Ninety One Equity Fund Top ten holdings
Ninety One Equity Fund Top ten holdings as at 31 March 2020 SA holdings % of fund Foreign holdings % of fund Naspers 12.1 Microsoft 1.7 Prosus 4.9 Amazon 1.2 British American Tobacco 4.2 Alphabet 1.1 BHP 3.7 Samsung 1.0 Anglo American 3.3 Telepresence 0.9 FirstRand Bank 3.0 Chemed 0.7 Sanlam 2.6 Uni
Slide 20: Risk management of macroeconomic sensitivities
Risk management of macroeconomic sensitivities Ensure no large unintended embedded macro risks Active returns vs Capped SWIX for various macro outcomes ALSI up 10% 0.4% 0.1% Emerging markets up 10% 0.9% 0.2% World equity Market up 10% 0.4% 0.1% Rand Strengthens 10% vs USD 0.8% 0.0% Dollar strengthen
Slide 21: Stress testing palladium and Rhodium deficit outlook
Stress testing palladium and Rhodium deficit outlook There remains an underpin to the commodity prices in this new world outlook Palladium surplus/(deficit) in 2020 3E PGM surplus/(deficit) in 2020 X-axis: Change in SA supply (% growth YoY) X-axis: Change in SA supply (% growth YoY) Y-axis: Change i
Slide 22: Outlook
Outlook Market looks attractive on anything more than a 12-month view ‒ Global monetary policy is maximum stimulus “all in.” No liquidity crisis, markets functioning ‒ How long will the coming severe 2020 recession be? ‒ US is a big worry: peak virus cases only expected mid/late April 2020 ‒ Global
Slide 23: Thank you
Thank you www.ninetyone.com
Slide 24: Important information
Important information 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 i