- The document discusses trends in global economic growth, including a shift from synchronized to more desynchronized growth across countries. It notes steady but uneven growth across regions. - Issues like trade tensions and political uncertainty are increasing risks and may slow growth. Monetary policy normalization also poses challenges to liquidity. - Technology is having structural disinflationary impacts and market dynamics that favor certain companies, posing risks and opportunities for investors. Valuations have increased significantly for leading technology firms.

1. Mark Lovett
Head of Investments
August 2018

2. Synchronised vs
desynchronised
global growth

3. 3
Global synchronised growth
Steady growth
0
5
10
15
20
25
0
500
1000
1500
2000
2500
1/1/2016 1/1/2017 1/1/2018
MXWO Index (R2) VIX Index (R1)
0
0,5
1
1,5
2
2,5
3
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-172016 2017
US
0
0,5
1
1,5
2
2,5
3
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
2016 2017
Europe
5,8
5,9
6
6,1
6,2
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
2016 2017
Asia (Ex-Japan)
Benign inflation
Low Volatility
Strong returns from
financial assets

4. 4
More desynchronised growth?
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 May-18
China USA Europe Japan
US, Euro-area, Japan, China PMI manufacturing

5. • Economics vs politics
• Underlying momentum in economic growth
is positive
• Tax reform – Sugar rush to growth
• Political disruption
o Trade imbalances
o Commodity, automotive and technology
sectors targeted
o Tariff intervention
• Risk that uncertainty precipitates slowdown
US economic trends

6. EUROPE SLOWDOWN IN
ECONOMIC GROWTH
CLEARLY EVIDENT
Rest of the world trends
6
GOVERNMENT COUNTERS
TRADE INDUCED
SLOWDOWN IN CHINA
REST OF ASIA
GROWTH RATES
UNDER PRESSURE
• Export orientated economies
• Nationalism creating political
uncertainty
• ECB continues with QE
• Draghi reappointment
uncertainty
• Export growth moderation
• State enterprises with global
ambition targeted by US tariff
• Stimulus activities initiated
• Taiwan
• Japan

7. 7
Monetary policy – The liquidity conundrum
• Global inflationary pressures muted
• US inflationary pressures picking up; vacancies at record low
• US unemployment < 4%; historically would have driven higher wage growth
• Interest rate policy matters for economy and liquidity flows
Average since 1987 is 1.1%
US Treasury 10Y- 2Y spread, % yield
-1,0
-0,5
0,0
0,5
1,0
1,5
2,0
2,5
3,0
3,5
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0
1
2
3
4
5
6
7
8
0,0
1,0
2,0
3,0
4,0
5,0
6,0
2013
2014
2015
2016
2017
2018
Job openings (rhs)
Wage growth (lhs)
%y/y Million

8. Global valuations

9. Global equity valuation
• Earnings growth continues
to push forward
• Sideways movement in
equity markets given some
valuation cushion
• US market expansion
relative to history less so for
rest of the world
9
8
10
12
14
16
18
20
80
90
100
110
120
130
140
2011 2012 2013 2014 2015 2016 2017 2018
MSCI All Countries
Historic Earnings (LHS) Forward PE (RHS)

10. 10
Global equity super cycle
1957-1961
1962-1966
1966-1968
1970-1973
1974-1980
1982-1987
1987-1990
1990-2000
2002-2007
Median
2009-Jul18
0%
20%
40%
60%
80%
100%
120%
140%
-50% 0% 50% 100% 150% 200% 250%
12mTrailingEPSchange
Historic PE change

11. • Amazon has been the poster child of deflationary
pressure in the retail sector
• Technology driving disruptive strategies across a
large number of segment of the economy
• AI/Big data developments enhancing the
opportunity for the genuine disruption
• Significant funding for new technology (proven
and unproven) available and is being deployed
• Tangible effect on existing business model
• Winners and losers
Technology – A structural
disinflationary impact

12. 12
Technology – A market dynamic
Data source: Bloomberg
-
200
400
600
800
1 000
1 200
1 400
1 600
-
200
400
600
800
1 000
1 200
1 400
1 600
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
S&P500 Index S&P500 Index ex-FANG's FANG's
-
200
400
600
800
1 000
1 200
1 400
1 600
-
200
400
600
800
1 000
1 200
1 400
1 600
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
S&P500 Index NASDAQ Index
PAST PRESENT
S&P Index NASDAQ Index
CAGR 17% 33%
S&P 500 Index S&P 500 Index ex- FANG’s FANG’s
CAGR 15% 13% 34%

13. 13
Technology - Valuation
Data source: Bloomberg
PAST
NASDAQ 100 Stocks
in March 2000
Mkt Cap ($'bn)
Jul-18
PE
Mar-00
Change final 18mths
before peak
Price EPS
MICROSOFT CORP 829 164 63,24 93% 92%
CISCO SYSTEMS 203 635 222,48 400% 11%
INTEL CORP 227 322 53,63 208% 39%
ORACLE CORP 193 763 141,93 704% 66%
IBM 133 292 31,48 84% 21%
DELL INC 16 436 78,17 64% 66%
QUALCOMM INC 96 565 148,57 2392% 268%
APPLIED MATERIAL 49 878 93,78 647% -16%
ADOBE SYS INC 124 428 65,87 542% 80%
INTUIT INC 53 237 116,60 250% 55%
MEDIAN 128 860 85,98 325% 61%
PRESENT
NASDAQ 100 Stocks
in July 2018
Mkt Cap ($'bn)
Jul-18
PE
Jul-18
Change past 18mths
Price EPS
APPLE INC 934 319 18,53 57% 20%
AMAZON.COM INC 865 721 180,62 116% 84%
ALPHABET INC-A 851 740 31,33 50% 37%
MICROSOFT CORP 829 164 28,51 64% 31%
FACEBOOK INC-A 500 095 23,96 33% 84%
INTEL CORP 227 322 13,66 31% 36%
CISCO SYSTEMS 203 635 19,49 37% 2%
NVIDIA CORP 148 924 43,15 125% 87%
NETFLIX INC 147 115 148,53 140% 199%
ADOBE SYS INC 124 428 56,18 115% 51%
MEDIAN 363 709 29,92 60% 44%

14. Thank You

15. Legal Disclaimer
Information and Content
The information and content (collectively 'information') provided herein are provided by STANLIB Asset Management
(“STANLIBAM”) as general information for information purposes only. STANLIB does not guarantee the suitability or potential
value of any information or particular investment source. Any information herein is not intended nor does it constitute financial,
tax, legal, investment, or other advice. Before making any decision or taking any action regarding your finances, you should
consult a qualified Financial Adviser. Nothing contained herein constitutes a solicitation, recommendation, endorsement or
offer by STANLIBAM.
Copyright
The information provided herein are the possession of STANLIBAM and are protected by copyright and intellectual property
laws. The information may not be reproduced or distributed without the explicit consent of STANLIBAM.
Disclaimer
STANLIB has taken care to ensure that all information provided herein is true and accurate. STANLIB will therefore not be held
responsible for any inaccuracies in the information herein. STANLIBAM shall not be responsible and disclaims all loss, liability
or expense of any nature whatsoever which may be attributable (directly, indirectly or consequentially) to the use of the
information provided.
STANLIB Asset Management Limited
Registration No: 1969/002753/07. A Financial Services Provider licensed under the Financial Advisory and Intermediary
Services Act, 37 of 2002. FSP license No: 719.
15