An african ETF in our Watchlist – 09/03/2018

Short Term strategy: Positive (90/100) / trend (=)

Long Term strategy:  Positive (95/100) / trend (=)

We include in our Watchlist the PAF ETF (Africa) proposed by Lyxor which is listed on Euronext in Euro and aims to replicate the SGI Pan Africa Index which aims to reflect the performance of listed companies in Africa or whose most of the activity is in Africa. Composed of 30 stocks, this index is exposed equally in three geographical areas: North Africa, Sub-Saharan Africa and South Africa. PAF bears a 0.85% fee with AUM of € 67 million. Replication is indirect and there is a dividend capitalization policy.

  • PAF is naturally correlated with macroeconomics, and especially with commodity prices and interest rates. The rise in commodities (oil included) as well as the decline of the dollar due to a lower tension on rates in recent days are powerful catalysts for PAF, which is also very exposed to South Africa whose index is currently in full swing because of the current political renewal.
  • The short-term technical setup is favorable, while prices have returned above the main weekly averages 13E / 26E) which remain upward. At the same time the oscillators are flat and the graphic structure forms a triangle whose exit seems imminent. The continuation of the rise is our preferred scenario.

 

Lyxor PAF : weekly data