Bulls n Bears Daily Market Commentary : 12 April 2018

Thu Apr 12 16:07:50 CAT 2018

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Bulls n Bears Daily Market Commentary : 12 April 2018

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Zimbabwe Stock Exchange Update

Market Turnover $3,134,713.14 with foreign buys at $1,315472.00 and foreign
sales were nil. Total trades were 89.

The All Share index rose by 0.99 points to settle at 89.43 points as most
heavyweight counters gained ground. ECONET led the movers with a $0.0588 to
trade at $0.7711, DELTA added $0.0433 to close at $1.6684 and PPC  went up
by $0.0375 to $1.0000.  MEIKLES  increased by $0.0171 to end at $0.2900,
INNSCOR  gained $0.0050 to trade at $0.9750 whilst DAIRIBOARD  and SIMBISA
both put on $0.0025 to settle at $0.1225 and $0.3700. 

However, BRITISH AMERICAN TOBACCO shed a significant $3.0000 to close at
$17.0000 while PADENGA   eased $0.0050 to $0.4100.

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Global Currencies & Equity Markets

Zambian and Tanzanian currencies seen on back foot, Kenya's firm

(Reuters) - The Zambian and Tanzanian currencies are expected to trade on
the back foot against the dollar in the coming week, while Kenya’s is likely
to firm.

ZAMBIA

The kwacha is likely to remain under pressure against the dollar next week
because of negative sentiment including market speculation that Zambia may
have understated its foreign debt.

At 1000 GMT on Thursday commercial banks quoted the currency of Africa’s
second-largest copper producer at 9.4800 against the dollar, down from
9.3800 a week ago.

On Tuesday the World Bank cut Zambia’s economic growth forecasts for 2018
and next year because of the expected impact of poor rains.

TANZANIA

The Tanzanian shilling is expected to remain on the back foot in the coming
days, pressured by low foreign exchange supplies.

Commercial banks quoted the shilling at 2,262/2,267 to the dollar on
Thursday, compared with 2,260/2,265 a week ago. “The shilling will likely
continue to be under pressure next week and it could weaken slightly due to
a slowdown in inflows of dollars amidst demand for the U.S. currency from
importers,” a CRDB Bank trader said.

KENYA

The Kenyan shilling could strengthen on increased inflows from the
agricultural sector amid withheld demand from dollar buyers eyeing a better
price, traders said.

Commercial banks quoted the shilling at 100.80/101.00 to the dollar,
compared with 101.00/20 at last Thursday’s close.

UGANDA

The Ugandan shilling is seen trading in a stable position because of reduced
demand for dollars from foreign-owned firms that had been looking for hard
currency to pay 2017 dividends.

At 1006 GMT commercial banks quoted the shilling at 3,690/3,700, the same
level as last Thursday’s close.

GHANA

The cedi is seen stable next week on offshore inflows for the settlement of
a fresh seven-year domestic bond on April 16, analysts said.

The local currency has been under pressure since the beginning of the month
but it appreciated marginally this week on increased offshore inflows. It
was trading at 4.4350 on Thursday, compared with 4.4450 a week ago.

There is likely to be an uptick in dollar demand, but this is could be
neutralised by the bond settlement and auxiliary inflows from offshore, said
currency trader Raphael Adubila. 

China

Stocks gain as Xi calms U.S.-China trade fears; rouble tanks

LONDON, April 10 (Reuters) - Global equity markets rallied and the Japanese
yen fell on Tuesday as Chinese President Xi Jinping’s promise to cut import
tariffs eased investor concerns about an escalating U.S.-China trade row.

Russian assets extended Monday’s slide as investors digested the new round
of U.S. sanctions targeting the country’s tycoons. The rouble plunged more
than 4 percent against the dollar to its lowest since late-2016.

Speaking at the Boao Forum for Asia in Hainan province, Xi vowed to open
China’s economy further, protect intellectual property of foreign firms and
he criticised a “Cold War mentality” as obsolete, in his first public
comments since the trade dispute with U.S. President Donald Trump’s
administration erupted.

Xi’s comments prompted a largely positive reaction in financial markets,
which have been rattled over the past week on fears the tit-for-tat
U.S.-China tariffs will escalate into a full-scale trade war that would
threaten global growth.

European markets followed Asia with solid gains. Germany’s DAX rose 0.8
percent, France’s CAC 40 0.51 percent and Britain’s FTSE 100 0.59 percent.

The U.S. S&P 500 E-mini futures gained 1.15 percent, suggesting U.S. shares
would open positively.

The MSCI World Index rose 0.34 percent.

Oil markets rose sharply on hopes that the trade dispute may be resolved
without greater damage to the global economy. Brent crude futures climbed
more 2 percent to $70.12.

After trading flat for most of the day, the euro surged when European
Central Bank policymaker Ewald Nowotny told Reuters that the central bank
could stagger the process of raising euro zone interest rates by first
lifting its sub-zero deposit rate back toward positive territory.

The euro rose 0.4 percent to $1.2378 and left the dollar down across most
major currencies aside from the Japanese yen.

The yen, which traditionally rises in times of market stress, fell versus
both the dollar and euro. The dollar rose to as high as 107.245 before
giving up some of those gains.

Safe haven bond prices including 10-year Treasuries initially dropped as
risk appetite recovered.

Gold rose 0.2 percent.

The Australian dollar, which has fallen in recent weeks because of the
economy’s exposure to global trade flows, gained against the dollar, as did
Asian currencies including the Chinese yuan

“Xi explicitly did not continue the trade war rhetoric so this is going to
be risk-friendly and the market will be relieved,” said Kit Juckes, a macro
strategist at Societe Generale.

RUSSIAN FALLS

Russian financial markets sold off sharply.

The rouble tumbled 4.2 percent, bringing its losses against the dollar since
last Friday to around 10 percent.

Rouble-denominated shares rose 0.8 percent, bouncing off multi-month lows
hit on Monday when the Moscow bourse dropped 8.3 percent

The shares of Rusal, the aluminium giant, which, with its boss Oleg
Deripaska, was highlighted prominently in the sanctions, fell a further 7.5
percent in Hong Kong after slumping 50 percent on Monday.

Its dollar bonds maturing 2022 were trading at record lows around 52 cents,
having lost half their value since the sanctions were announced.

The MSCI Emerging markets index was up 0.63 percent as other larger markets
outside of Russia rallied.

For Reuters Live Markets blog on European and UK stock markets open a news
window on Reuters Eikon by pressing F9 and type in ‘Live Markets’ in the
search bar

Commodities Markets

Aluminium slides on profit-taking, surging inventories

(Reuters) - Aluminium slipped on Thursday as funds took profits on long
positions following recent gains and after data showed surging stocks in
warehouses approved by the London Metal Exchange.

Benchmark aluminium was down 1.8 percent at $2,210 a tonne in official
trading rings after hitting a 11-week peak at $2,277.50 a tonne on Wednesday
on worries about shortages after the United States imposed sanctions on
Russia’s Rusal.

Aluminium prices have risen more than 10 percent since the sanctions were
announced.

The LME will suspend Rusal’s aluminium from April 17, but metal already in
warehouses before sanctions will be unaffected.

However, banks and traders will not want to risk holding any Rusal aluminium
they already have in case of secondary sanctions and will deliver it to
warehouses approved by the LME, used as a market of last resort, sources
say.

DOLLAR: A higher U.S. currency makes dollar-denominated commodities more
expensive for holders of other currencies, which could undermine demand as
funds use the relationship to trade on buy and sell signals from numerical
models.

STOCKS: Inventories of aluminium in LME warehouses jumped 94,450 tonnes or
7.5 percent to 1,345,225 tonnes MALSTX-TOTAL, their highest since July last
year. The bulk of the metal arrived at LME Dutch warehouses in Vlissingen
and Rotterdam.

PREMIUM: Traders said the premium for nearby aluminium over the three-month
contract CMAL0-3 at above $8 a tonne would also attract metal to the
exchange.

CHINA: Aluminium prices are also under pressure from record high stocks of
nearly one million tonnes in warehouses monitored by the Shanghai Futures
Exchange.

SRB: Zinc prices were bid down 4 percent at $3,112 a tonne from an earlier
four-month low at $3,098. They came under pressure from talk that China’s
State Reserve Bureau had been selling zinc stockpiles. The SRB did not reply
to requests for comment.

NICKEL: Worries that Norilsk Nickel could face sanctions also boosted nickel
prices this week. They were bid down 1.6 percent $13,645 a tonne compared
with a four-week high of $13,900 hit on Wednesday.

PRICES: Copper was down 2.3 percent at $6,788 a tonne in official trading
rings, lead fell 3.2 percent to $2,332 and tin lost 0.6 percent to $20,875.

Gold falls from 11-week high on stronger dollar, profit-taking

(Reuters) - Gold slipped from an 11-weekhigh on Thursday as the dollar
gained and investors booked profits, but rising tensions over military
escalation in Syria prevented further losses.

Snapping a four-day winning streak, spot gold        fell 0.8 percent to
$1,341.50 an ounce by 1226 GMT. U.S. gold futures fell 0.8 percent to
$1,349.20.

The dollar index        gained 0.3 percent, dragging down  commodities
priced in the U.S. currency. 

Underpinning bullion was news that British ministers planned to gather on
Thursday to discuss whether to join the United States and France in possible
military action in Syria that

could bring direct confrontation between Western and Russian forces.

U.S. President Donald Trump on Wednesday warned Russia of imminent military
action in Syria over a suspected gas attack, declaring that missiles "will
be coming" and lambasting Moscow

for standing by Syrian President Bashar al-Assad.             

Gold is often used as a store of value during times of financial or
political uncertainty, generally gaining along with assets such as the
Japanese yen and U.S. Treasuries.    

Also supporting gold were lingering worries about a trade war between China
and the United States. 

The U.S. economy was displaying signs of strength, minutes  from the last
Federal Reserve meeting showed on Wednesday, increasing the likelihood of
higher interest rates.             

A tightening in U.S. monetary policy dents the investment appeal of gold
because the metal pays no interest.

Among other precious metals, silver        fell 0.5 percent to $16.54 an
ounce after hitting its highest in nearly two months at $16.87 in the
previous session.

Platinum        was flat at $926.80 and palladium        fell 1.3 percent to
$948.50. 

Palladium, however, has surged by more than 6 percent this week on concerns
that supply from top producer Russia could be hurt by sanctions imposed by
the United States.             

U.S. sanctions were likely an initial trigger for a price rally, UBS said in
a note, but the expected recovery in palladium was still supported by strong
fundamentals.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Zimbabwe

Independence Day

Zimbabwe

18/04/2018

Workers’ Day

01/05/2018

Africa Day

25/05/2018

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

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