Bulls n Bears Daily Market Commentary : 16 August 2018

Fri Aug 17 06:17:29 CAT 2018

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Bulls n Bears Daily Market Commentary : 16 August 2018

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Zimbabwe Stock Exchange Update

Market Turnover $550,344.09 with foreign buys at $299,015.69 and foreign
sales were $15,245.30. Total trades were 76.

The All Share index went up further by 0.34 points  to close at 112.22
points. BRITISH AMERICAN TOBACCO  led the movers with a $0.6291 gain to
close at $26.2291 ,  PADENGA   added $0.0405 to close at $0.6500 and OLD
MUTUAL  increased further by $0.0364 to close at $5.1430. TSL also moved up
by $0.0105 to close at $0.4405 and  DELTA was $0.0052 higher at $2.0125.

Gains were offset by losses in INNSCOR  which shed $0.0209 to close at
$1.3801 , ECONET  lost $0.0033 to settle at $1.199 and OK ZIMBABWE  closed
at $0.2345 after losing $0.0005. SIMBISA  also dropped $0.0001 to close at
$0.4750.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand surrenders gains as economy concerns weigh

(Reuters) - South Africa’s rand surrendered its earlier gains in late trade
on Thursday due to lingering concerns over the economy, while a rebound in
market heavyweight Naspers brought some relief on the bourse.

The rand had earlier in the session gained more than 1 percent as emerging
markets bounced back on news that a Chinese delegation will travel to the
United States in August for trade talks.

The prospect of the world’s two biggest economic powers stepping back from a
looming trade war boosted investor sentiment after a worrying week for
emerging markets in the wake of a currency slump in Turkey.

But the gains were erased in late afternoon trade, then reversed in the
evening. At 1645 GMT, the rand traded 1.15 percent weaker at 14.73 versus
the dollar.

The currency had slid more than 2 percent on Wednesday after ratings agency
Moody’s warned that the pace of South Africa’s fiscal consolidation had
slowed and retail sales data disappointed, underlining the fragility of the
economy.

The rand is down around 3 percent this week, also hit by investors’ move to
dump assets seen as risky in the wake of the Turkish lira’s plunge. The lira
has weakened around 34 percent against the dollar this year.

The rand, one of the most-traded emerging market currencies, is highly
susceptible to swings in sentiment on global markets.

Government bonds firmed, with the yield on the benchmark government bond
maturing in 2026 down 2.5 basis points at 8.995 percent.

On the equities market, indexes rose, helped by a number of solid earnings
reports and the rebound of market heavyweight Naspers from the previous
session’s low following internet giant Tencent’s results. Naspers stock rose
2.79 percent to 3,146 rand.

The Johannesburg All-share index closed 1.65 percent stronger at 56,562
points, while the blue-chip top 40 index climbed 1.8 percent to 50,506
points.

Exxaro Resources Ltd was the second biggest gainer on the All-share index
after reporting an 8 percent jump in half-year profit. It surged 7.99
percent to 140 rand.

Standard Bank closed 1.59 percent higher after posting a 5 percent increase
in half-year profit. 

Egypt

Egypt central bank keeps overnight interest rates steady

(Reuters) - Egypt’s central bank left its main interest rates unchanged on
Thursday, as expected, with its deposit rate at 16.75 percent and the
overnight lending rate at 17.75 percent, it said in a statement. 

       <mailto:info at bulls.co.zw> 

Asia

Asian shares gain on U.S.-China trade talks, lira recovers

(Reuters) - Asian shares won a modest reprieve on Friday after China and the
United States agreed to hold their first trade talks since June next week
and as the Turkish lira extended gains from its record low earlier this
week.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.4
percent, a day after it hit its lowest level in a year. Japan’s Nikkei
advanced 0.5 percent.

In U.S. markets on Thursday, the Dow Jones Industrial Average rose 1.58
percent and the S&P 500 gained 0.79 percent.

MSCI’s index of world stocks rose 0.63 percent on Thursday, the biggest gain
in a month.

News that a Chinese delegation led by Vice Minister of Commerce Wang Shouwen
will meet U.S. representatives helped to improve the mood.

But the impact could be short-lived as such lower-level talks alone are
unlikely to resolve the trade dispute. White House Economic adviser Larry
Kudlow warned Beijing not to underestimate President Donald Trump’s resolve
in pushing for changes in China’s economic policies.

Indeed, Chinese share markets were hardly impressed by the news.

The Shanghai composite index rose 0.16 percent in early Friday trade after
ending down 0.66 percent at 2,705.19 on Thursday, just 0.03 point above a
2-1/2 year closing low set on Aug. 6.

That also weighed on MSCI emerging markets index, which closed at 13-month
low on Thursday.

Their weakness stemmed also from falls in their currencies after the Turkish
lira plunged this month on concerns about diplomatic rifts between Ankara
and Washington.

In the currency market, the lira bounced back to 5.815 per dollar, up almost
25 percent from its record low of 7.2400 hit early on Monday, despite
threats of more sanctions from Washington.

It gained some support from the announcement late on Wednesday of a Qatari
pledge to invest $15 billion in Turkey.

The offshore Chinese yuan weakened slightly after a 1.2 percent climb on
Thursday, the biggest daily gain since January 2017 following the trade
talks news.

The yuan last stood at 6.8794 per dollar, down 0.25 percent on the day but
still off Wednesday’s 19-month low of 6.9587.

The euro, which has been affected by concerns about European banks’ exposure
to Turkey, traded at $1.1375, almost flat on the day and off 13-1/2-month
low of $1.1301 on Wednesday.

The yen changed hands flat at 110.97 per dollar.

The pound rose 0.12 percent on Thursday after 10 straight days of falls
though concerns about a hard Brexit continued to undermine the sterling.

Oil prices were on the defensive, on a weakening outlook for crude demand
despite their gains on Thursday thanks in part to a recovery in global
shares.

Brent crude oil futures fetched $71.36 a barrel, down 0.1 percent in Asia on
Friday after a 0.69 percent rise the previous day. They are on course to log
the seventh straight week of losses.

U.S. crude futures stood at $65.43 a barrel, down 0.05 percent.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper eases after rally, set for biggest weekly loss since early July

(Reuters) - London copper prices ticked lower on Friday, shedding last
session's gains which were triggered by reports of Washington-Beijing trade
talks and a recovery in Turkey's currency.

FUNDAMENTALS

* The benchmark copper on the LME         was down 0.3 percent at $5,920.50
a tonne, as of 0141 GMT, after climbing more than 2 percent in the last
session, while most-traded

contract on the Shanghai Futures Exchange          added 0.3 percent to
47,870 yuan ($6,965.34) a tonne.

* LME copper lost 4.5 percent this week, and is poised for its biggest
weekly decline since the beginning of July.  

China and the United States will hold lower-level trade talks this month,
the two governments said on Thursday, offering hope that they might resolve
an escalating tariff war that

threatens to engulf all trade between the world's two largest economies.

* China is the world's biggest metals consumer and a tradewar between
Washington and Beijing had raised concerns about global economic growth.

* The dollar was little changed against other major currencies on Friday
after nudging away from 13-1/2-month highs amid easing risk aversion and as
investors awaited the next

developments in the U.S.-China trade saga.

* China almost quadrupled the value of fixed-assetinvestment projects
approved in July from the previous month as   Beijing looks to accelerate
infrastructure spending to stabilizethe cooling economy.

* Copper prices could face pressure as concerns ease over supplies from the
world's biggest mine. The first workers to review a proposed labour pact at
the world's largest copper

mine, Chile's Escondida, are in favour of signing the new contract, union
spokesman Carlos Allende said on Thursday.

Gold inches up, but set for biggest weekly fall in 15 months

(Reuters) - Gold prices edged higher in early trade on Friday as dollar held
steady, but the metal remained on track to post its biggest weekly decline
since May 2017.

FUNDAMENTALS

* Spot gold rose 0.3 percent at $1,177.38 an ounce, as of 0047 GMT. In the
previous session, the metal hit a 19-month low at $1,159.96.

* The metal was down 2.8 percent for the week and set to record a sixth
consecutive weekly decline.

* U.S. gold futures were unchanged at $1,184 an ounce.

* The dollar was little changed against other major currencies on Friday
after nudging away from 13-1/2-month highs amid easing risk aversion and as
investors awaited the next developments in the U.S.-China trade saga.

* China and the United States will hold lower-level trade talks this month,
the two governments said on Thursday, offering hope that they might resolve
an escalating tariff war that threatens to engulf all trade between the
world’s two largest economies.

* The United States warned Turkey on Thursday to expect more economic
sanctions unless it hands over detained American pastor Andrew Brunson, as
relations between the two countries took a further turn for the worse.

* Finance Minister Berat Albayrak assured international investors on
Thursday that Turkey would emerge stronger from its currency crisis,
insisting its banks were healthy and signalling it could ride out a dispute
with the United States.

* U.S. President Donald Trump praised the strength of the U.S. dollar on
Thursday after the greenback reached a 14-month high against a broad basket
of other currencies a day earlier.

* Federal Reserve Chairman Jerome Powell is scheduled to speak next Friday,
Aug. 24, at the annual global central bank conference in Jackson Hole,
Wyoming, the Fed said on Thursday.

* U.S. homebuilding rebounded less than expected from a nine-month low in
July, suggesting the housing market was likely to tread water for the rest
of this year against the backdrop of rising construction costs and labor
shortages.

* Business confidence among Japanese manufacturers was at its highest in
seven months in August thanks to a firm global economy, a Reuters poll
showed on Friday, but the service sector’s mood hit its lowest since 2016,
casting doubt on the robustness of domestic demand. DATA AHEAD (GMT)

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

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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
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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
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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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