Pre­ferred en­try point

Finweek English Edition - - INVESTMENT - SI­MON BROWN

THIS IS THE newly listed plat­inum ETF from Absa that has been storm­ing ahead as it ben­e­fit­ted from the weaker rand (the ETF is rand de­nom­i­nated so both the dol­lar plat­inum price and rand/$ ex­change rate drive the price).

We have pre­vi­ously sug­gested this as a ‘Buy’ and the re­turn has been great, but we’re shift­ing to a ‘Hold’ (bor­ing, I know, but im­por­tant). The rand seems to have over-ex­tended it­self and in the short term we’re un­likely to see fur­ther weak­ness (if you are bear­ish on the rand then NEWUSD is the pre­ferred in­stru­ment). Rand strength will take some shine off the ETF and cou­pled with this is a dol­lar plat­inum price that is not re­act­ing much to strike threats and re­duced pro­duc­tion. The net re­sult is likely to be a f lat to weaker NGPLT and hence a ‘Hold’. Ba­si­cally, a ‘Hold’ means if you have it for the longer term do noth­ing and if you are in­ter­ested in buy­ing wait for a lower price, then it will once again be a ‘Buy’.

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