Bulls n Bears Daily Market Commentary : 09 August 2018

Thu Aug 9 17:16:29 CAT 2018

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Bulls n Bears Daily Market Commentary : 09 August 2018

 <http://www.fidelitylife.co.zw/> 

Zimbabwe Stock Exchange Update

The All Share index lost 0.80 points  to close at 111.68 points. DELTA
dropped $0.0490 ro close at $2.0000, AXIA  shed $0.0200 to $0.2500 and
RIOZIM  eased $0.0080 to close at $1.4670. Other losses were in AXIA  which
fell by $0.0200 to close at $0.2500 and OK ZIMBABWE  shed $0.0051 to trade
at $0.2349.

The losses were partially offset by gains in BRITISH AMERICAN TOBACCO  which
traded $0.1500 higher at $25.6500, OLD MUTUAL  added $0.0398 to settle at
$5.0891 and TSL  was up $0.0025 to close at $0.4300.  BARCLAYS  gained
$0.0002 to trade at $0.0602.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Uganda shilling a touch stronger on commodity flows, low demand

(Reuters) - The Uganda shilling strengthened slightly on Tuesday, drawing
some support from commodity exporters and low demand from interbank players
and goods importers.

At 1126 GMT commercial banks quoted the shilling at 3,685/3,695, slightly
stronger than Monday’s close 3,690/3,700.

South Africa

South Africa's rand firmer as dollar rally pauses, MTN tops decliners

(Reuters) - South Africa’s rand retreated on Wednesday ahead of a bank
holiday on Thursday, with investors booking profits from the previous
session’s rally and closing positions as the dollar bounced back on the
latest U.S. and China trade war twist.

On the bourse, MTN Group topped the decliners on the Top-40 index after the
continent’s biggest mobile operator reported a 7 percent drop in half-year
profit.

At 1500 GMT the rand was 0.6 percent weaker at 13.4150 per dollar, having
fallen to a session low of 13.4800 after a firm start to the day that saw it
test the 13.20 level before losing steam.

Retaliatory trade tariffs by China lifted the greenback a mild boost,
clearing out remaining rand bulls weary of sharp moves in low liquidity
conditions with Johannesburg Stock Exchange closed on Thursday for the
Women’s Day holiday.

China’s commerce ministry said it would impose additional import tariffs of
25 percent on $16 billion worth of U.S. goods, ranging from oil and steel
products to autos and medical equipment.

The rand has traded below the crucial 13.50 support for the whole week, but
made little progress in breaking the 13.20 resistance, preventing traders
from taking any major positions with the lack of clear momentum in either
direction.

Bonds were flat, with the yield on the benchmark paper due in 2026 unchanged
at 8.69 percent.

In the equities market, the Johannesburg all-share index was slightly up
0.14 percent to 57,786 points, while the top-40 index inched 0.07 percent
higher to 51,615 points.

Following the release of its negative half-year numbers, MTN shares fell
8.11 percent to 104.85 rand.

Construction firm Aveng surged 12.50 percent to 9 cents after its rival
Murray & Roberts withdrew plans for a potential merger with it.

Shares were also driven by announcements that Aveng will go through with its
early bond redemption as soon as possible in order to reduce its debt burden
and improve liquidity.

       <mailto:info at bulls.co.zw> 

America

Rocky U.S. ties shake Russian, Turkish markets

(Reuters) - Russian assets tumbled on Thursday as a new U.S. sanctions move
against Moscow unsettled investors, while rocky relations with Washington -
along with unease about the economy - also sent Turkey’s lira to another
record low.

Washington’s latest sanctions move - over what Moscow called far-fetched
assertions it had deployed a nerve agent in Britain against a former Russian
agent and his daughter - will cover national-security controlled goods,
hitting Russian exports and even Aeroflot flights to Moscow.

The rouble fell around 1 percent to its lowest since August 2016, having
already shed 3.3 percent - its biggest daily loss since April - on
Wednesday. The Russian currency also hit its lowest since May against the
euro.

Moscow’s rouble share index fell 0.7 percent, and dollar-denominated
equities tumbled 2.2 percent to April lows, with Aeroflot losing 7 percent.

Russian dollar bonds fell across the curve, with some issues down around 1.7
cents , while five-year credit default swaps rose to 154 bps, the highest
since mid-June.

Broader Russian markets had already been falling amid heightened concern
about another separate round of sanctions, including those owning Russian
sovereign debt, being tabled by the U.S. Senate over alleged U.S. election
meddling by Moscow.

If this legislation became law and Russia retaliated, Danske Bank estimated
the rouble could hit 72 per dollar, as any major selloff of Russian local
debt, local credit and stocks would amplify outflows from the currency, he
said.

DOUBLE TROUBLE

Turkish assets also continued to sell off hard with the lira down a further
2.8 percent, having fallen almost 7 percent so far this week.

Investors are concerned about a deterioration in relations between Turkey
and the United States over Ankara’s detention of American pastor Andrew
Brunson, with talks in Washington on Wednesday delivering no breakthroughs.

Brunson was jailed for allegedly supporting a group that Ankara blames for
an attempted coup in 2016. He denies the charge.

President Tayyip Erdogan’s tightening grip on monetary policy has also
unnerved investors, with the central bank unable to tame double-digit
inflation.

Turkey’s sovereign dollar bonds continued to slide, with some issues down
over 1 cent, while Turkey’s average bond yield spread over U.S. Treasuries
rose to 462 bps, the highest since April 2009.

SUPPORT FROM CHINA

Weathering the twin sell offs, MSCI’s benchmark emerging equities index rose
0.1 percent.

It was boosted by Chinese bourses bouncing amid talk of government support
for domestic tech companies as Beijing’s trade dispute with the U.S.
escalates.

Chinese blue chips jumped 2.5 percent, the Shanghai Composite 1.9 percent
and Hong Kong 0.9 percent. The yuan firmed 0.2 percent.

Chinese factory price inflation cooled in July amid a slowdown in economic
growth, although economists expect tariffs to add to wider price pressures
in coming months.

The Kazakh tenge fell 1.2 percent to a 30-month low, tracking the rouble
lower.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Aluminium gains as Alcoa strikes, Rusal sanctions stoke supply fears

(Reuters) - Aluminium prices rose strongly for a second day on Thursday,
hitting their highest since late June after a strike at Alcoa alumina
refineries in Australia and warnings of hutdowns by Rusal revived concerns
of supply shortages.

Benchmark aluminium on the London Metal Exchange (LME)         did not trade
in official rings but was bid up 1.4 percent at $2,136 a tonne after rising
3.3 percent on Wednesday.

It hit a 15-week low of $2,000.85 in late July on expectations that the
United States would allow aluminium made by Rusal, the biggest producer
outside China, to keep trading on global markets and trade disputes would
weaken metals demand. 

But with the more than 60-million tonne a year aluminium market expecting a
deficit this year, investors are still wary of output disruptions, said
Societe Generale analyst Robin Bhar.

ALUMINIUM STOCKS: On-warrant stocks of aluminium available to the market in
LME-registered warehouses have fallen to 832,775 tonnes, the lowest since
2007, supporting prices.

MALSTX-TOTAL     SPREAD: However, the discount for cash aluminium over the
three-month contract MAL0-3 this week grew to its biggest since September
last year, signalling that metal is available.

TECHNICALS: Aluminium had hit its 50-day moving average at $2,136 and was
near its 200-day moving average at $2,167. Convincing moves above these
levels could trigger further

buying.  

ALCOA STRIKE: A union said on Wednesday Alcoa        workers had walked out
at plants in Western Australia with capacity equal to around 8 percent of
the global supply of alumina, used to smelt aluminium. Alcoa said it did not
expect any immediate impact on production.                          

RUSAL: Sources close to Russia's Rusal           said the company was
concerned about impending catastrophe if U.S. sanctions on it are not
lifted, with some of its production

halted as early as September.             

CHINA/TRADE WAR: China's stock markets and yuan gained on Thursday, helping
to lift industrial metals, even after China the day before said it was
slapping additional tariffs of 25

percent on $16 billion worth of U.S. imports, the latest step in a worsening
trade dispute. China is the world's biggest metals consumer.

CHINA FACTORIES: China's factory price inflation cooled in July amid a
slowdown in economic growth. Economists expect punitive tariffs on U.S goods
to push price growth higher in

months ahead.             

PRICES: LME copper         traded up 1.6 percent at $6,270 a tonne after
hitting its highest in a week, nickel         traded 0.4 percent higher at
$14,105 a tonne, zinc         gained 1.6

percent to $2,653, lead         did not trade but was bid up 0.8 percent to
$2,154 and tin         traded 0.8 percent higher at $19,560.

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

 <mailto:info at bulls.co.zw> 

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
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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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