Anthea started her finance career at HSBC, Johannesburg as an equity sales trader whilst completing her MBA at Wits Business School, with her research thesis in Option Pricing Models and their relevance in the South African market. In 2004 she joined Rand Merchant bank on the derivatives sales trading desk where she was instrumental in offering Single Stock Futures to clients and starting the institutional CFD product. Her move to Morgan Stanley, London, in 2007, was to cover the European and US Equity Derivatives client base focusing on emerging markets in Eastern Europe and Africa. After Morgan Stanley, she joined the investment team at the African Development Bank in Tunisia, as a Fixed Income portfolio manager. Her entrepreneurial spirit took her to the south of France for a year and a half to start a property business before returning to South Africa. She started Cartesian Capital in January 2014.
Cartesian BCI Money Market Fund comment - Sep 19
Continued mixed signals around the US-China trade war appeared to drive global market volatility in September in what has been a dizzying month for markets. No sooner were investors encouraged by the announcement that trade talks with China were set to resume on 7 October, before shares turned sharply lower after US President Donald Trump, in a speech before the United Nations, accused China of “the theft of intellectual property and … trade secrets on a grand scale”, while promising that he would “not accept a bad deal.” Reports also emerged that the White House was discussing whether to limit flows from Chinese investors into the US and delisting Chinese companies from US exchanges. Despite this, and a decade-long bull market, the US remained on far firmer footing than most of its peers, and not even House Speaker Nancy Pelosi’s official endorsement of an impeachment inquiry in Trump could stop major US indices from ending the month higher. The SA market declined in September (for a third month running) albeit only slightly, with the FTSE JSE All Share Index down 0.8% MoM (+4.8% YTD). Financials, which had in previous months been the hardest hit sector, rebounded and the Fini-15 jumped 1.9% MoM (- 5.9% YTD) as Capitec (+17.6% MoM) reported strong results in a difficult macro environment, and FirstRand (+3.7% MoM) recorded robust FY19 HEPS. After a strong run in previous months, resources was the worst-performing sector and the Resi-10 declined 2.0% MoM (+5.9% YTD), with large index constituents such as BHP Group, Kumba Iron Ore, Sasol and AngloGold Ashanti falling 0.6%, 4.7%, 14.1% and 17.9% MoM, respectively. The Indi-25 remained under pressure posting a 1.4% MoM decline (+9.4% YTD) as index heavyweights such as Naspers (-2.7%) and Richemont (-5.6%) recorded MoM losses.
Local economic data showed that the country avoided a second recession in two years, with GDP growing by a stronger-thanexpected 3.1% YoY in 2Q19 (Reuters consensus economist forecasts had expected 2.4% growth). In 1Q19, the economy shrank by 3.2%. SA’s headline consumer price infla..on rose by a higher-than-expected 4.3% YoY in August (vs 4.0% in July), with increases in the prices of food and non-alcoholic beverages (+3.9% YoY) the main drivers. Core inflation, which excludes the volatile food, non-alcoholic beverages, petrol and energy categories, advanced slightly at 4.3% YoY (vs 4.2% in July). The latest retail sales numbers showed a 2.0% YoY rise for July vs June’s 2.4% YoY gain. SA also reported an August trade surplus of R6.8bn vs a July trade deficit of R2.9bn. Meanwhile, the SA Reserve Bank’s (SARB) Monetary Policy Committee voted unanimously to keep the repo rate unchanged at 6.5% at its September meeting .
On the commodity front, Brent crude posted its biggest percentage rise on record in the days following the 14 September drone attack on Saudi oil infrastructure. However, supply fears waned towards month-end on news that Saudi is producing 9.9mn-plus barrels a day of crude as it recovers from the attacks. This saw the oil price close September only 0.6% higher (+13.0% YTD). Gold (-3.1% MoM; +14.8% YTD) posted its lowest MoM close in c. 2 months as a strong US dollar headwind drew demand away from the yellow metal. The dollar remained strong and on Monday (30 September) rallied to a 52-week high, weighing on emerging markets (EMs) and gold. Benchmark iron ore prices rose c. 2.2% MoM, while platinum dropped c. 5.0% MoM. The rand strengthened slightly (+0.3% MoM) against the dollar, but is down 5.5% YTD.
The primary performance objective of the portfolio is to obtain as high a level of current income as is consistent with preservation and liquidity. Capital gains will be of an incidental nature. The portfolio will be managed in compliance with prudential guidelines for retirements in South Africa to the extent allowed by the Act.