Wealth & Investment Management Private Client Asset Management - - PowerPoint PPT Presentation

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Wealth & Investment Management Private Client Asset Management - - PowerPoint PPT Presentation

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Wealth & Investment Management Private Client Asset Management and Private Client Stockbroking Absa Private Bank / JSE Showcase (KZN) 13 May 2014 Absa presentation title Date of presentation 1 Company confidential use only /

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Absa presentation title  Date of presentation Company confidential use only / Unrestricted distribution

Wealth & Investment Management

Private Client Asset Management and Private Client Stockbroking Absa Private Bank / JSE Showcase (KZN) 13 May 2014

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Absa presentation title Date of presentation Company confidential use only / Unrestricted distribution

The Global Economy

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21 79

USA Rest

2013 2014 2015 Growth 1.9 2.2 2.6 Inflation 1.5 1.9 2.1

Forecasts: Barclays Capital Global Economics Weekly (02 May

2014)

2013 2014 2015 Growth

  • 0.4

1.3 1.5 Inflation 1.4 0.7 1.0

15 85

Euro Rest

2013 2014 2015 Growth 1.5 1.0 1.3 Inflation 0.4 2.7 2.3

6 94

Japan Rest

2013 2014 2015 Growth 7.7 7.2 7.4 Inflation 2.6 2.7 3.5

18 82

China Rest

USA CHIN A EUR O JAPAN The Global economy

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Real Gross Domestic Product (GDP) - actual and forecast for selected countries/regions

2011 2012 2013 2014 2015

WORLD

3.8 3.1 3.0 3.3 3.8

  • Developed

1.3 1.2 1.2 1.9 2.1

  • Developing

6.5 5.0 4.8 4.7 5.4

Source: Barclays Capital Global Economics Weekly (02 May 2014)

2011 2012 2013 2014 2015 US 1.8 2.2 1.9 2.2 2.6 Euro 1.5

  • 0.5
  • 0.4

1.3 1.5 UK 1.0 0.2 1.7 2.8 2.5 Japan

  • 0.6

1.9 1.5 1.0 1.3 2011 2012 2013 2014 2015 Brazil 2.7 0.9 2.3 1.9 2.4 Russia 4.3 3.4 1.3 0.7 1.4 India 7.2 5.1 4.6 5.3 6.4 China 9.3 7.8 7.7 7.2 7.4 S Africa 3.5 2.5 1.9 2.0 2.9

Global growth - GDP forecasts

Global growth picking up in 2014… … thanks to the DEVELOPED economies … … rather than the DEVELOPING economies.

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Source: Bloomberg

UK US EU JP

UK, EU, USA and Japanese consumer price inflation

Consumer price inflation (%): 2007 - 2014

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Source: I-Net Bridge

Key central bank interest rates: 2000 - 2014

JP US EU UK

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Interest rates in the developed world

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The South African economy - A challenging year

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Production: Manufacturing & Mining (% y/y): 2011 - 2014

Source: I-Net Bridge Mar: +0.67%

Manufacturing production

Not much help from the weaker rand with production up just 0,67% y/y in March.

Feb: -4.80%

Mining production

Low prices, low demand, higher wages, higher costs, labour unrest - all hurting production which was down 4,8% y/y in February.

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A volatile monthly time series but household consumption growth has slowed

Consumption: Real retail sales (% y/y)

Source: I-Net Bridge

Feb: 2.16%

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Q1: -6

Source: I-Net Bridge

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Q1: 41

FNB/BER Consumer Confidence: 2007 - 2014

Weak household confidence and outlook

  • n the domestic economy.

RMB/BER Business Confidence: 2007 - 2014

Business confidence index well below the neutral 50 level.

Confidence watch

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Modest pickup in 2014 GDP growth

Real GDP growth expectations

Source: SARB Monetary Policy Statement 27 March 2014

SARB expects GDP growth of 2,6% in 2014 and 3,1% in 2015 with risks to the downside. (revised down from 2,8% and 3,3% respectively).

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Rand against the USD: 2009 - 2014

2014: R10.35 - R11.30 range Now below R10.52/$ where we started the year

The Rand

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Barclays forecasts:

BRENT $/b

2011 111 2012 112 2013 109 2014 106 Q1 108 Q2 101 Q3 109 Q4 108 2015 108 Forecasts: Barclays Capital Commodities Weekly 02 May 2014

Brent crude oil prices (per barrel): 2004-2014

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US dollar price has stabilised but the rand-price of oil has moved significantly higher

Source: Bloomberg

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Petrol price (95 octane at the reef) - onwards and upwards

May: 1424c/l

Source: I-Net Bridge

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Month c/l

Jul-13 1323 Jul-12 1082 Jul-11 1009 Jul-10 827 Jul-09 790 Jul-08 1070

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Global food prices: 2011 - 2014

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Source: I-Net Bridge

Higher agricultural prices yet to make their mark on domestic inflation

Wheat (rhs) Maize (rhs) Sugar (lhs)

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Inflation outlook

SARB’s fan chart – the inflation outlook has modestly improved for 2015

SARB expects an average of 6,3% in 2014 and 5,8% in 2015. A peak of 6,6% in Q4 2014, being above the range between Q2 2014 and Q2 2015.

Source: SARB Monetary Policy Statement 27 March 2014

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In a low growth environment with inflation above the upper end of the SARB’s target range it is likely that interest rates will be increased further from their current low levels in

  • 2014. The real kicker to domestic growth will be

a pickup in global growth but SA will need to get its house in order first to reap those benefits.

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2013 2014 2015 Growth 1.9 2.0 2.9 Inflation 5.8 6.6 6.0

1 99

SA Rest

% of global GDP

Forecasts: Barclays Capital Global Economics Weekly (02

May 2014)

South African economic outlook

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The South African financial markets

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Equities, Bonds and Cash performance: YTD May 2014

Equities Cash Bonds

Asset class performance

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The highs and lows of the past six months - significant volatility 2004 - 2014

From 10,000 to 49,000

The Equity market

FTSE/JSE All Share index: November 2013 - May 2014

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FTSE/JSE All-share index price/earnings ratio: 2004 - 2014 (and 10-year mean)

Expensive Cheap Neutral

The Equity market - valuation

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Industrials, Financials and Resources performance: YTD May 2014

Industrials Financials Resources

The Equity market - sectors

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R186 RSA Government Bond (10,5% Dec 2026) Yield: May 2013 - May 2014

Surprise SARB rate hike First talk of Fed QE tapering

The Bond market

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SAPY Listed-property index: May 2013 - May 2014

Listed property - negatively impacted by rate hike but strong recovery off lows

The listed-property market

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SAPY Listed-property index & R186 bond price: Jan 2013 – May 2014

R186 bond price SA property index

Listed-property vs Bonds

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Bespoke portfolios solutions

Bonds Listed Property Equities Cash Pref shares

Individually tailored risk-profiled Private Client Portfolios

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For private clients with more than R1m to invest into a fully managed segregated portfolio (either directly into equities or a tailored blend of the various asset classes.

Portfolio fact sheets on: www.absa.co.za/wim

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NewPlatinum

Our Equity portfolio holdings

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Absa presentation title Date of presentation Company confidential use only / Unrestricted distribution

  • Custodial Services
  • Dematerialisation of shares
  • Corporate actions
  • Trading Services (JSE Equities Market)
  • Online share trading
  • view portfolio and today’s order book
  • place, monitor and cancel orders
  • live prices when trading
  • update account details
  • technical analysis
  • statements and contract notes
  • Brokerage 0.4% of trade value with a minimum of R120
  • Annual admin fee (R800 waived for Exceller clients or if ≥5 trades per year)
  • Portfolio view on internet banking and Absa App

28 Absa Stockbrokers presentation to Absa Private Bank  11 April 2013

Company confidential use only / Unrestricted distribution

www.absastockbrokers.co.za

Absa Stockbrokers

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www.absa.co.za/wim

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Disclaimer: The information contained in this communication does not constitute an offer or solicitation to enter into any transaction, nor does it constitute any recommendation, guidance or proposal to enter into any transaction. The information is provided for illustrative purposes only and is not guaranteed. Past performance is no indication of future performance. While every effort has been made to ensure the accuracy of the above information, Absa Portfolio Managers (Pty) Ltd does not accept any liability or responsibility for any loss, damage or expense incurred in relying on the above information or in the use thereof, nor makes any representation as to the accuracy or completeness of the above information.

Visit: www.absa.co.za/wim or E-mail: ABAMPrivateClients@absa.co.za Absa Portfolio Managers (Pty) Limited trading as Absa Asset Management Private Clients, Registration No: 1954/001116/07, Authorised Financial Services Provider (Licence No. 552)

Thank you