Ninety One Plc · LSE:N91
Ninety One — Ninety One SA Peter Kent webinar, 30 June 2020
13 slides from Ninety One's conference presentation, June 2020
Slide 1: Searching for yield… … in South Africa?
Ninety One Diversified Income Fund Searching for yield… … in South Africa? Peter Kent June 2020
Slide 2: 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
Slide 3: What a year it has been…
What a year it has been… … as ALBI bounces back from worst month ever SA 10 year bond yield 14 13 13.25% Intraday high, 24 March 2020 12 11 10 9 8 Mar’20 Q1 ‘20 Q2’TD ALBI -9.8% -8.7% 10.4% 7 ILB’s -7.3% -6.9% 4.9% 6 Property -36.6% -48.2% 20.6% Sep 13 Sep 15 Sep 19 May 20 Sep 11 Sep 17 May 16 May 0
Slide 4: Ninety One Diversified Income Fund: Performance
Ninety One Diversified Income Fund Performance Annualised performance in ZAR 8.4% 8.4% 8.4% 8.0% 8.0% 8.0% 7.3% 7.3% 7.2% 7.2% 7.1% 7.1% 7.0% 6.9% 6.7% 5.7% 1 year 3 years 5 years 10 years Diversified Income A Diversified Income H (ASISA) South African IB Money Market STeFI Composite (ALBI 1-3 years
Slide 5: Macro views
Macro views
Slide 6: SARB has come to the party…
SARB has come to the party… Inflation is subdued under most scenarios, allowing for significant cuts 2020 inflation scenarios 15.0% Rand 16.4 17.4 17.9 18.4 18.9 19.4 19.9 20.4 11.0% 22.4 2.1% 2.4% 2.5% 2.7% 2.9% 3.0% 3.2% 3.3% 27.4 2.2% 2.5% 2.7% 2.9% 3.0% 3.2% 3.4% 3.5% 12.0% 32.4 2.4% 2.7% 2.9% 3
Slide 7: How do we forecast activity in this environment?
How do we forecast activity in this environment? Tracking our assumptions against real time data Assumptions underlying our -8% GDP forecast: 60% - 50% economy opens in Level 5 40% - 95% economy opens by mid September - 40% ‘bounceback’ as we open 20% 0% -20% -40% -60% -80% -100% 11 Apr 20 18 Apr 20
Slide 8: Special budget not good…
Special budget not good… … but better than feared Feb Jun budget budget Main budget -368 -710 balance Maturities -65 -67 130.9 87.0 -359.3 2020 Financing -368.0 -366.4 -433 -777 need Rbn -43.1 -202.1 -216.1 -430.5 -495.5 Increase Tbills 48 146 98 -298.5 Local Bonds 338 463 125 -709.6 Foreign Loans 2
Slide 9: The outlook for the rand
The outlook for the rand It’s a battle between current and capital accounts Current account will be improving… … foreign flows won’t 25 75 40000 23 70 30000 21 20000 65 10000 19 0 17 60 -10000 -20000 15 55 -30000 13 -40000 50 Foreign ownership 11 -50000 is now only 32% -60000 9 45 Jul 10 Mar 09 Jul
Slide 10: How to position for income
How to position for income
Slide 11: Searching for yield in South Africa
Searching for yield in South Africa Have our reliable sources of income succumb to risk? SA Bonds: Income vs Capital SA Listed Property: Income vs Capital ALBI Income Return ALBI Capital Return ALBI Total Return ALPI (J803) Income Return 25% 100% ALPI (J803) Price Return 20% ALPI (J803) Total Return
Slide 12: Ninety One Diversified Income Fund: Current positioning
Ninety One Diversified Income Fund Current positioning: Still defensive, measured duration and property increases 100% ‒ No growth, no inflation: SARB will continue Overweight Underweight Current to do what is necessary 75% ‒ Special June budget better than feared: priorities (and funding) have chan
Slide 13: Thank you
Thank you www.ninetyone.com
Ninety One — Ninety One SA Peter Kent webinar, 30 June 2020 on 6ix