Bulls n Bears Daily Market Commentary : 08 August 2018

Wed Aug 8 18:36:04 CAT 2018

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Bulls n Bears Daily Market Commentary : 08 August 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,966,111.15 with foreign buys at $269,039.20 and foreign
sales were $1,064,197.00. Total trades were 64.

The All Share index shed 0.82 points to settle at 112.48 points. DELTA eased
$0.0323 to close at $2.0490, ECONET  lost $0.0306 to end at $1.2000 and
MASIMBA  came off $0.0052 to trade at $0.0398. INNSCOR  was $0.0024 to close
at $1.4200.

Losses were countered by gains in AXIA  which added $0.0196 to settle at
$0.2700, OLD MUTUAL  rose by $0.0168 to close at $5.0493 and CBZ HOLDINGS
went up by $0.0024 to $0.1100. PADENGA  was marginally up by $0.0004 to
close at $0.6000.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling firm on tight liquidity

(Reuters) - The Kenyan shilling was firm on Wednesday due to thin demand and
tight liquidity in the money market increasing interbank demand for the
local currency, traders said.

At 1100 GMT, commercial banks quoted the shilling at 100.40/50 per dollar,
compared with 100.50/70 at Tuesday's close. 

Uganda

Uganda shilling steady, expected to gain as banks sell off dollars

(Reuters) - The Ugandan shilling        was steady on Wednesday and was
expected to gain ground, helped by commercial banks selling off excess
dollars, traders said. 

At 0815 GMT, commercial banks quoted the shilling at 3,680/3,690, stronger
than Tuesday's close of 3,685/3,695.  

Asia

Asian shares rise for 4th day on earnings, China stimulus hopes

(Reuters) - Asian shares extended their recovery into a fourth day on
Wednesday, buoyed by strong U.S. earnings and expectations that Beijing will
ramp up fiscal stimulus to cushion the impact of its worsening trade dispute
with Washington.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.3
percent, led by Taiwan , while Japan’s Nikkei ticked up 0.4 percent.

Bucking the trend were Chinese shares , which slipped about 0.4 percent
after the United States said it would begin collecting 25 percent tariffs on
an additional $16 billion worth of Chinese goods this month, the second leg
of its first China-targetted tariffs on $50 billion goods.

News that the fresh duties will go into effect from Aug. 23 overshadowed
strong Chinese trade data, which showed exports rose more than expected in
July despite U.S. tariffs imposed early last month. Imports also rose more
than forecast, suggesting its domestic demand remains resilient despite
trade war fears.

But losses in China markets were tempered by signs Beijing is unveiling
further measures to support growth, such as increasing infrastructure
spending and tweaking its monetary policy stance.

On Wall Street, the S&P 500 rose 0.28 percent to 2,858, which is just 14
points, or about 0.5 percent, below its record high marked in January.

A strong second-quarter earnings season has fuelled optimism about U.S.
economic strength. S&P 500 firms saw a 23.5 percent rise in their April-June
profits, according to Thomson Reuters data.

Against this backdrop, the CBOE volatility index, a measure of investors’
expectation on U.S. share price volatilities and often viewed as a gauge of
anxiety in financial markets, fell to a seven-month low of 10.93.

Tesla jumped 11 percent after Chief Executive Elon Musk said he was
considering taking the electric car maker private.

CURRENCIES

In the foreign exchange market, major currencies kept to tight ranges. The
euro was at $1.1599, off Monday’s five-week low of $1.1530.

The yen stood little changed at 111.38 per dollar while worries about a hard
Brexit kept the sterling at $1.2938 , just above its 11-month trough of
$1.2920 set on Monday.

The Chinese yuan was little changed, keeping some distance from its 15-month
lows hit last week as the central bank on Friday took steps to curb bets
against the currency by raising the cost for investors to short the yuan.

But pressure on the Chinese currency remained strong.

The Turkish lira, the biggest mover in recent days, kept some distance from
Monday’s record low, trading at 5.2600 per dollar, versus Monday’s low of
5.425,

Still, it is down almost 7 percent so far this month on deepening concerns
about a rift with the United States and on President Tayyip Erdogan’s
influence over the central bank.

Oil prices held firm after U.S. sanctions on Iranian goods went into effect,
intensifying concerns that sanctions on Iranian oil, expected in November,
could cause supply shortages.

Brent futures stood at $74.65 a barrel, flat on the day but maintaining
gains of about 2 percent so far this week. U.S. West Texas Intermediate
(WTI) crude futures traded at $69.25 per barrel, up 0.1 percent on the day
for a gain of 1.1 percent this week.

Commodities Markets

Gold steady, dollar headwinds on the radar

(Reuters) - Gold prices steadied on Wednesday, but expectations of a higher
dollar due to rising U.S. interest rates and strong demand for U.S. Treasury
bonds seen as a refuge from trade tensions are expected to weigh.

Spot gold was down 0.1 percent at $1,209.91 an ounce at 1341 GMT compared
with $1,204 hit last week, its lowest since March 2017. Prices are down more
than 10 percent since April. U.S. gold futures were flat at $1,218.30.

A higher U.S. currency makes dollar-denominated gold more expensive for
holders of other currencies, which potentially would subdue demand. This
relationship is used by funds to generate buy and sell signals from
numerical models.

The latest salvo on the trade front came from the United States, which said
on Tuesday it would begin collecting tariffs on another $16 billion in
Chinese goods on Aug. 23.

The final tariff list targeting 279 import product lines brings to about $50
billion in goods that now face a 25 percent tariff that U.S. President
Donald Trump has imposed on Chinese imports in an escalating trade war.

The U.S. Federal Reserve is expected to increase interest rates twice more
this year and three times next year. The next policy meeting is in
September.

Higher U.S. interest rates raise the opportunity cost of holding gold, which
earns nothing and costs money to store and insure.

On the technical front, first support comes in at $1,200, followed by
$1,195, near the low seen in March 2017. Resistance is at the 21-day moving
average currently sitting at $1,225.

Lack of investor interest can be seen in the holdings of SPDR Gold Trust,
the world’s largest gold-backed exchange-traded fund, which at 25,319,951.65
ounces on Tuesday are at their lowest since August 2017.

Silver rose 0.4 percent to $15.39 an ounce, platinum gained 0.1 percent to
$826.8 and palladium ceded 1.1 percent to $895.7. 

Copper dips as U.S. prepares more tariffs on Chinese goods

(Reuters) - Copper edged lower on Wednesday as the United States geared up
to begin collecting tariffs on a further $16 billion of Chinese goods later
this month but a weaker dollar stemmed losses.

Benchmark copper on the London Metal Exchange slipped 0.1 percent to $6,168
per tonne by 1538 GMT.

The metal used in power and construction rose 0.6 percent in previous
session on short-covering and optimism that China will prop up its economy
with stimulus measures.

The news overshadowed data showing exports from top metals consumer China
surged more than expected in July despite U.S. duties.

CHINA COPPER: China’s imports of copper concentrate rose to an all-time high
last month as Chinese smelters ramped up purchases to feed their growing
capacity and take advantage of high processing charges.

CHINA ALUMINIUM: China’s aluminium exports rose to their second-highest
level on record in July, as a weaker yuan and a still-favourable price
arbitrage to international markets outweighed the imposition of U.S. import
tariffs and growing trade tensions.

ALUMINIUM JUMPS: Aluminium jumped more than 3 percent to a two-week high of
$2,113.50 per tonne, in a flurry of activity in afternoon trade.

DOLLAR: A weaker greenback makes dollar-denominated commodities cheaper for
non-U.S. firms, a relationship used by funds to generate buy and sell
signals.

ESCONDIDA: The union at Chile’s Escondida copper mine, the world’s largest,
said BHP must alter its negotiating strategy and improve its contract offer
during the final phase of talks if it hoped to avoid a strike.

ALUMINIUM STOCKS: On-warrant stocks of aluminium available to the market in
LME-registered warehouses touched their lowest since August 2007 at 833,075
tonnes. MALSTX-TOTAL

Stocks monitored by the Shanghai Futures Exchange are down 8 percent to
905,924 tonnes from this year’s peak but still up over 20 percent in 2018.

ALCOA WALKOUT: Alcoa workers in Western Australia have walked out
indefinitely over an enterprise agreement dispute with the aluminium maker,
the Australian Workers’ Union said.

OTHER METALS: Lead fell 0.6 percent to $2,137, tin was down 0.6 percent at
$19,465, zinc gained 0.5 percent to $2,612.50, nickel was up 1 percent to
$13,985.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

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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