Bulls n Bears Daily Market Commentary : 22 August 2018

Wed Aug 22 19:48:25 CAT 2018

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Bulls n Bears Daily Market Commentary : 22 August 2018

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Zimbabwe Stock Exchange Update

Market Turnover $574,741.00 with foreign buys at $291,819.83 and foreign
sales were $59,015.75. Total trades were 39.

The All Share index was marginally down by 0.02 points  to settle at 112.84
points as two counters lost ground. SEEDCO  eased $0.0145 to close at
$2.5800 while OLD MUTUAL  shed $0.0015 to end at $5.2092.

Trading in the positive, CBZ HOLDINGS  put on $0.0025 to $0.1225 while
GETBUCKS  inched up $0.0001 to trade at $0.0331. Ten counters traded at
previous price levels.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Uganda shilling weakens as banks beef up positions

(Reuters) - The Uganda shilling        was weaker on Wednesday as negative
sentiment stirred by political tensions spurred some commercial banks to
beef up their hard currency positions, traders said.

At 0856 GMT commercial banks quoted the shilling at 3,750/3,760, weaker than
Monday's close of 3,740/3,750. Markets were closed on Tuesday in Uganda as
it was a public holiday. 

On Monday widespread protests, stoked by detention and alleged beating of
lawmakers, rocked Uganda's capital Kampala.

South Africa

South Africa's rand firms on dollar weakness; stocks up

(Reuters) - South Africa’s rand firmed on Wednesday driven higher by a
weakening dollar, while stocks firmed across the board tracking the stronger
currency and other emerging markets.

A weaker U.S. dollar, which fell sharply this week after President Donald
Trump criticised the Federal Reserve’s interest rate rises, supported the
rand’s rally.

Benchmark U.S. government debt yields slid to six-week lows on a flight to
safety bid and the dollar weakened further as investors assess how a
conviction and a guilty plea of two former advisers could impact Trump.

At 1616 GMT the rand was 1.35 percent stronger at 14.2175 per dollar.

Even though economists said the central bank was unlikely to act this year,
they expected that rising inflation on the back of higher petrol prices
would translate into rate hikes soon.

Inflation quickened to 5.1 percent year-on-year in July from 4.6 percent in
June, Statistics South Africa said.

The Reserve Bank held its benchmark rate for a fifth meeting in a row in
July, but warned it was ready to tighten policy despite the weak economy in
response to rising rand-driven inflationary pressures and offshore
volatility.

After sliding to a two-year low of 15.70 last week as the Turkish crisis
triggered a broad flight from emerging markets, the rand has regained some
ground, advancing around 8 percent in the last seven days as the greenback’s
rally faltered.

Government bonds also firmed, with the yield on the benchmark 2026 paper
down 5.5 basis points to 8.93 percent.

On the bourse, the All-Share index was 1.64 percent firmer at 58,126 points
while the blue-chip top 40 index rose 1.83 percent to 52,062 points.

Shoprite’s shares were higher by 3.05 percent after falling more than 4
percent on Tuesday on the back of its first annual earnings decline in 19
years.

Market heavy-weight Naspers was 3.80 percent stronger at 3,430 rand. Shares
in Tencent, in which Naspers holds a 31 percent stake, rose 2.5 percent. ($1
= 14.6363 rand)

       <mailto:info at bulls.co.zw> 

America

Dollar, Treasuries yields fall on Trump woes

(Reuters) - Benchmark U.S. government debt yields slid to six-week lows on a
flight to safety bid and the dollar weakened further on Wednesday as
investors assess how a conviction and a guilty plea of two former advisers
impact U.S. President Donald Trump.

A gauge of global equities rose, lifted by higher energy prices and strong
earnings from retailers in a session that marked the longest U.S. bull
market. It came a day after the S&P 500 stock index set an all-time high.

U.S. Treasuries yields also fell as contentious trade talks between U.S. and
Chinese officials were set to resume on Wednesday and as investors looked to
minutes from the Federal Reserve’s August meeting due later in the session.

Trump’s former lawyer, Michael Cohen, pleaded guilty to charges of tax
evasion, bank fraud and campaign finance violations on Tuesday as the
president’s former campaign chairman, Paul Manafort, was convicted on eight
charges.

Cohen would not accept a presidential pardon, his attorney said, and he
wanted no part in what Trump’s former adviser saw as the president’s abuse
of his clemency power.

Cohen also questioned Trump’s loyalty to the United States and saw him as
unfit to hold office, his attorney, Lanny Davis, said in a round of
television interviews.

Equity investors appeared less concerned about Trump as Wall Street marked
what is widely considered a bull market that started in the midst of the
global financial crisis a decade ago that wiped out more than half of the
U.S. stock market’s value.

The benchmark S&P index has more than quadrupled since the lows of March
2009. (Full Story)

Markets are likely to be whipped around in coming months by the outlook for
mid-term U.S. elections in November, the probe of Russian meddling in the
2016 U.S. election and the Fed’s monetary policy, said Phil Orlando, chief
equity strategist at Federated Investors in New York.

With the next earnings season two months away, an information vacuum on
corporate fundamentals could lead stocks to decline 5-8 percent, Orlando
said.

MSCI’s gauge of stocks across the globe gained 0.30 percent and its emerging
market index rose 0.51 percent.

In Europe, the pan-regional FTSEurofirst 300 index closed up a preliminary
0.04 percent.

At midday, the Dow Jones Industrial Average fell 5.87 points, or 0.02
percent, to 25,816.42. The S&P 500 gained 3.94 points, or 0.14 percent, to
2,866.9 and the Nasdaq Composite added 32.15 points, or 0.41 percent, to
7,891.32.

The dollar index fell 0.12 percent, with the euro up 0.19 percent to
$1.1591.

The Japanese yen weakened 0.24 percent versus the greenback at 110.57 per
dollar.

Benchmark U.S. Treasury 10-year notes rose 5/32 in price to yield 2.8279
percent.

Oil hit a two-week high above $74 a barrel as an industry report showing a
sharp drop in U.S. crude inventories and U.S. sanctions on OPEC producer
Iran pointed to tighter supplies.

Brent crude, the international benchmark, rose $1.72 to $74.35 a barrel.
U.S. crude gained $1.79 to $67.63.

Oil also found support from the weaker dollar, which makes oil less
expensive for buyers using other currencies.

The prospect of a drop in oil exports from Iran, the third-largest producer
in the Organization of the Petroleum Exporting Countries - in response to
new U.S. sanctions - was also supporting the market.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold clings to one-week high ahead of Fed minutes

(Reuters) - Gold prices rose to their highest in a over week on Wednesday,
as the dollar eased ahead of minutes from the U.S. Federal Reserve’s August
policy meeting and trade talks between Chinese and U.S. officials.

The Fed minutes are expected to cement market assumptions for two more
interest rate increases this year, which do not bode well for non-interest
yielding bullion, although analysts said this was already largely factored
into the gold price.

Rising interest rates lift the opportunity cost of holding non-yielding
metal while boosting the dollar, in which it is priced.

He said that in the meantime, the weaker dollar would help gold test the key
psychological level of $1,200, lifting it from currently oversold levels.
Gold touched a more than 1-1/2-year low last week.

Spot gold was up 0.1 percent at $1,197.05 an ounce at 1402 GMT, having
touched $1,201.51, its highest since Aug. 13. U.S. gold futures gained 0.4
percent to $1,204 an ounce.

The dollar index against a basket of six major currencies was weaker, having
fallen to a nearly two-week low of 95.08 in the previous session.

U.S. President Donald Trump’s reiteration on Monday of his displeasure with
rising interest rates had weighed on the dollar, ahead of the Fed’s minutes
and its annual economic symposium at Jackson Hole, Wyoming which will begin
on Friday.

Gold has come under pressure this year, sliding more than 12 percent since
hitting a high of $1,365.23 in April amid U.S. interest rate hikes and a
soaring dollar.

Markets also looked ahead to trade talks between Chinese and U.S. officials
expected to begin later on Wednesday in Washington.

Meanwhile, liquidations continued at SPDR Gold Trust, the world’s largest
gold-backed exchange-traded fund. Holdings have fallen about 3.4 million
ounces from a peak in late April.

Net shorts in COMEX gold contracts rose to a record high in the week ending
Aug. 14 at 77,273 contracts, according to data from the U.S. Commodity
Futures Trading Commission.

Gold was consolidating between $1,180 and $1,200 an ounce, said ActivTrades
chief analyst Carlo Alberto De Casa.

Spot silver was 0.2 percent lower at $14.72 an ounce.

Platinum slipped 0.3 percent to $799, while palladium was flat at $917.10.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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
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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