Keeping the Faith Q1 1990 Q1 1992 Q1 1994 Q1 1996 Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1

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Transcript of Keeping the Faith Q1 1990 Q1 1992 Q1 1994 Q1 1996 Q1 1998 Q1 2000 Q1 2002 Q1 2004 Q1 2006 Q1 2008 Q1

  • 6A Sandown Valley Crescent, Sandown, Sandton, 2196 Proprietary and Confidential. Not for Distribution

    Keeping the Faith

    May 2019

  • Proprietary and Confidential. Not for Distribution

    LONG ONLY

    Domestic Offshore

    HEDGE FUNDS

    Fundogram BUSINESS OVERVIEW

    36ONE BCI Flexible Opportunity Fund Multi-Asset, SA Equity Focus

    36ONE BCI Equity Fund General Equity, SA Equity Focus

    36ONE BCI SA Equity Fund Pure SA Equity Fund

    PPS Managed Fund* Multi-Asset, Reg 28 Complaint

    36ONE SNN QI Hedge Fund 36ONE SNN Retail Hedge Fund Standard Risk, SA Equity Focus, ZAR

    Non FSCA approved USD denominated hedge funds

    Domestic Offshore

    36ONE Global Fund PC USD Denominated, Multi-Asset

    *36ONE has been appointed as the sole investment manager on the PPS Managed Fund

    Segregated mandates of all the above portfolios are available to institutional investors.

  • What you need to know ....?

  • Proprietary and Confidential. Not for Distribution

    Resistance being removed? GLOBAL OUTLOOK

     Late cycle – EPS momentum still up but slowing

    Cheap money here to stay (for now)

    Global liquidity is everything

    Consumption very geared to the wealth effect

    SA – hopefully hit the bottom

    SA – long slow grind ahead – Governance is key

  • Proprietary and Confidential. Not for Distribution

    Late cycle indicators GLOBAL OUTLOOK

  • Proprietary and Confidential. Not for Distribution

    Wage pressures starting to hurt US operating EPS GLOBAL OUTLOOK

    Source: RMB Morgan Stanley Bloomberg

    -$5

    $0

    $5

    $10

    $15

    $20

    $25

    $30

    $35

    $40

    $45

    Q 1

    19 88

    Q 1

    19 90

    Q 1

    19 92

    Q 1

    19 94

    Q 1

    19 96

    Q 1

    19 98

    Q 1

    20 00

    Q 1

    20 02

    Q 1

    20 04

    Q 1

    20 06

    Q 1

    20 08

    Q 1

    20 10

    Q 1

    20 12

    Q 1

    20 14

    Q 1

    20 16

    Q 1

    20 18

    S&P 500 Operating EPS

  • Proprietary and Confidential. Not for Distribution

    S&P 500 Index – Projected earnings slowing - market rerated GLOBAL OUTLOOK

    100

    110

    120

    130

    140

    150

    160

    170

    180

    1 500

    1 700

    1 900

    2 100

    2 300

    2 500

    2 700

    2 900

    3 100 Ap

    r 2 01

    4

    Ju n

    20 14

    Au g

    20 14

    O ct

    2 01

    4

    D ec

    2 01

    4

    Fe b

    20 15

    Ap r 2

    01 5

    Ju n

    20 15

    Au g

    20 15

    O ct

    2 01

    5

    D ec

    2 01

    5

    Fe b

    20 16

    Ap r 2

    01 6

    Ju n

    20 16

    Au g

    20 16

    O ct

    2 01

    6

    D ec

    2 01

    6

    Fe b

    20 17

    Ap r 2

    01 7

    Ju n

    20 17

    Au g

    20 17

    O ct

    2 01

    7

    D ec

    2 01

    7

    Fe b

    20 18

    Ap r 2

    01 8

    Ju n

    20 18

    Au g

    20 18

    O ct

    2 01

    8

    D ec

    2 01

    8

    Fe b

    20 19

    S&P 500 (LHS) Consensus EPS (RHS)

    Source: Bloomberg

  • Proprietary and Confidential. Not for Distribution

    Equity dividend yields still ahead of cash and bonds (barely) GLOBAL OUTLOOK

    Source: RMB Morgan Stanley , Bloomberg

    0%

    1%

    2%

    3%

    4%

    5%

    6%

    7%

    8% Ja

    n- 99

    Ja n-

    00

    Ja n-

    01

    Ja n-

    02

    Ja n-

    03

    Ja n-

    04

    Ja n-

    05

    Ja n-

    06

    Ja n-

    07

    Ja n-

    08

    Ja n-

    09

    Ja n-

    10

    Ja n-

    11

    Ja n-

    12

    Ja n-

    13

    Ja n-

    14

    Ja n-

    15

    Ja n-

    16

    Ja n-

    17

    Ja n-

    18

    Ja n-

    19

    US Fed Fund JPM GBI Global- RY MSCI World- DY

  • Proprietary and Confidential. Not for Distribution

    Probably another leg up if the FED starts cutting rates GLOBAL OUTLOOK

    Source: RMB Morgan Stanley , Bloomberg

    0,0%

    1,0%

    2,0%

    3,0%

    4,0%

    5,0%

    6,0%

    7,0%

    8,0%

    9,0%

    10,0%

    -60%

    -40%

    -20%

    0%

    20%

    40%

    60% Ja

    n- 90

    Ja n-

    92

    Ja n-

    94

    Ja n-

    96

    Ja n-

    98

    Ja n-

    00

    Ja n-

    02

    Ja n-

    04

    Ja n-

    06

    Ja n-

    08

    Ja n-

    10

    Ja n-

    12

    Ja n-

    14

    Ja n-

    16

    Ja n-

    18

    S&P 500 (y/y) Fed Rate (RHS)

  • Proprietary and Confidential. Not for Distribution

    Household debt under control – a big positive for spending – especially in the US GLOBAL OUTLOOK

    Source: RMB Morgan Stanley , Bloomberg

    0%

    20%

    40%

    60%

    80%

    100%

    120%

    Q 1

    19 70

    Q 1

    19 73

    Q 1

    19 76

    Q 1

    19 79

    Q 1

    19 82

    Q 1

    19 85

    Q 1

    19 88

    Q 1

    19 91

    Q 1

    19 94

    Q 1

    19 97

    Q 1

    20 00

    Q 1

    20 03

    Q 1

    20 06

    Q 1

    20 09

    Q 1

    20 12

    Q 1

    20 15

    Q 1

    20 18

    HH Debt to GDP

    EU US Japan

  • Proprietary and Confidential. Not for Distribution

    China – credit stimulus GLOBAL OUTLOOK

    Source: BCA Research

  • Proprietary and Confidential. Not for Distribution

    Chinese Property Cycle GLOBAL OUTLOOK

    Source: CEIC, UBS estimates

  • Proprietary and Confidential. Not for Distribution

    China – pumping credit GLOBAL OUTLOOK

  • Proprietary and Confidential. Not for Distribution

    Shanghai Composite Index GLOBAL OUTLOOK

    230

    240

    250

    260

    270

    280

    290

    1 500

    2 000

    2 500

    3 000

    3 500

    4 000

    4 500

    5 000

    5 500 Ap

    r 2 01

    4

    Ju n

    20 14

    Au g

    20 14

    O ct

    2 01

    4

    D ec

    2 01

    4

    Fe b

    20 15

    Ap r 2

    01 5

    Ju n

    20 15

    Au g

    20 15

    O ct

    2 01

    5

    D ec

    2 01

    5

    Fe b

    20 16

    Ap r 2

    01 6

    Ju n

    20 16

    Au g

    20 16

    O ct

    2 01

    6

    D ec

    2 01

    6

    Fe b

    20 17

    Ap r 2

    01 7

    Ju n

    20 17

    Au g

    20 17

    O ct

    2 01

    7

    D ec

    2 01

    7

    Fe b

    20 18

    Ap r 2

    01 8

    Ju n

    20 18

    Au g

    20 18

    O ct

    2 01

    8

    D ec

    2 01

    8

    Fe b

    20 19

    Shanghai Composite (LHS) Consensus EPS (RHS)

    Source: Bloomberg

  • Proprietary and Confidential. Not for Distribution

    China starting to need cash – could be a big drain on global liquidity GLOBAL OUTLOOK

    Source: RMB Morgan Stanley , Bloomberg

    -4%

    -2%

    0%

    2%

    4%

    6%

    8%

    10%

    12%

    Q 1

    19 90

    Q 1

    19 92

    Q 1

    19 94

    Q 1

    19 96

    Q 1

    19 98

    Q 1

    20 00

    Q 1

    20 02

    Q 1

    20 04

    Q 1

    20 06

    Q 1

    20 08

    Q 1

    20 10

    Q 1

    20 12

    Q 1

    20 14

    Q 1

    20 16

    Q 1

    20 18

    China Current Account Balance as % of GDP

  • Proprietary and Confidential. Not for Distribution

    STOXX Europe 600 Index GLOBAL OUTLOOK

    19

    21

    23

    25

    27

    29

    275

    295

    315

    335

    355

    375

    395

    415

    435 M

    ay 2

    01 4

    Ju l 2

    01 4

    Se p

    20 14

    N ov

    2 01

    4

    Ja n

    20 15

    M ar

    2 01

    5

    M ay

    2 01

    5

    Ju l 2

    01 5

    Se p

    20 15

    N ov

    2 01

    5

    Ja n

    20 16

    M ar

    2 01

    6

    M ay

    2 01

    6

    Ju l 2

    01 6

    Se p

    20 16

    N ov

    2 01

    6

    Ja n

    20 17

    M ar

    2 01

    7

    M ay

    2 01

    7

    Ju l 2

    01 7

    Se p

    20 17

    N ov

    2 01

    7

    Ja n