Download presentation
Presentation is loading. Please wait.
Published byNancy Banks Modified over 9 years ago
1
Stefan Ampenberger (1908 - 1983), detail from “The Red Sun”, oil on board, Sanlam Art Collection. FIA Meeting 16 October 2012
2
Economic reality
3
IFO world economic climate survey
4
Recent trends/themes
5
Cheap shares became cheaper and relatively expensive shares remained expensive
6
Global laggards cheap and underperforming
8
Global equities sideways but volatile Asset performance driven by risk-off or risk-on
9
Globally: risk-on and risk-off dictating
10
Correlation can remain high for sustained periods
11
All about expectations Policy measures and earnings expectations
12
Earnings expectations – 2012 Source: JP Morgan
13
Where do we invest OPM?
14
Common answer... In assets where the value appreciate
15
US bonds – multi-year bull market Source: I-Net
16
US bonds – multi-year bull market Source: I-Net Global Sovereigns do not provide the right answer
17
Global Equities
18
Pattern
19
Sideways with short cycles Source: I-Net
20
Price
21
Valuation – methodologies differ Source: Case Shiller
22
US equities – valuation from all angles Valuation MetricCurrent Value Long term Ave Avg. Since 1991 Trailing PE16.315.525.3 Normalised PE24.318.029.7 Forward PE15.414.923.7 Forward DY2.34.52.1 ERP4.114.230.99
23
US equities multi-year lows versus bonds Source: Case Shiller
24
US equities multi-year lows versus bonds Source: Case Shiller Preferred Asset class
25
... and property?
26
Expectations look reasonable
27
A local update
28
Macro context
29
SA GDP – trend heading in the wrong direction Source: I-Net
30
Rand weakness – SA unique problems Source: I-Net
31
Pattern
32
JSE All Share – cyclical bull market Source: I-Net
33
Price
34
ALSI valuation, fair but... Source: I-Net, SPI
35
The value dilemma in SA Sector/ShareFY1 Consensus Earnings growth FY1 spot earnings growth Gold sector32%42% Platinum sector23%-51% Sasol-3%37% Anglo American3%-15% Billiton-1%-12% Resource Sector6%-5%
36
Commodity prices – visible response to tough environment Source: I-Net
37
Copper – very muted response Source: I-Net
38
FINDI earnings – lower PMI suggest pressure Source: I-Net
39
Case for positive but subdued returns
40
A few share thoughts
41
Share A – R2 to R155 Source: I-Net
42
MTN – investment case summary 9-Oct-2012 Diversified portfolio of businesses in growing economies Penetration levels are low Attractive dividend yield with an outlook for increased dividend pay-outs Strong balance sheet with R7.7bn as at 30 June 2012 Current price of R151 is a discount to our fair value of R175
43
MTN – diversified portfolio in growing economies
44
MTN – capex and cash profile
45
Share B – a clear winner R5 R162 Source: I-Net
46
Shoprite – a winner but priced accordingly Source: Bloomberg Price to sales ratio
47
Shoprite’s success story Source: Bloomberg
48
Share C – should we forget about this one? Source: I-Net
49
Astral – quality in tough industry Delivering through the cycle returns of circa 30%. Through the cycle intrinsic value R200. Trading around R100 Delivered high quality earnings Good dividend payer historic dividend yield of 7.9%. 10 year average dividend yield is above 6%. Expected 2012FY dividend yield of 6.3% in extremely tough operating environment
50
Astral – look through the cycle The short term results expected to be poor regional oversupply increasing imports from Brazil high input cost inflation FMCG retail sector playing the producers off against each other. Medium term balance likely to return weaker producers out demand catches up with supply possible increase in tariffs on imports input costs pressures moderate
51
Astral – play on “normal” margins
52
Conclusion Tough macro environment No long term alternative – embrace risk Equities likely to move modestly higher – volatile Property remain important building block Volatility a friend rather than enemy of long term investors
Similar presentations
© 2025 SlidePlayer.com. Inc.
All rights reserved.