Bulls n Bears Daily Market Commentary : 30 August 2018

Fri Aug 31 07:20:54 CAT 2018

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Bulls n Bears Daily Market Commentary : 30 August 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $5,392,643.82 with foreign buys at $768,618.20 and foreign
sales were $3,903,301.76. Total trades were 95.

The All Share index rebounded 1.06 points to settle at 116.24 points.
BRITISH AMERICAN TOBACCO  jumped up $1.0000 to close at $28.0000 DELTA  put
on $0.0449 to end at $2.1952 and  OLD MUTUAL  rose by $0.0382 to $5.3785.
CBZ HOLDINGS  advanced by $0.0100 to trade at $0.1400 and PADENGA  increased
by $0.0024 to end at $0.6575.

Two counters lost ground; CAFCA  shed $0.0500 to close at $0.7000 and RIOZIM
inched down by $0.0009 to trade at $1.3900.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

The Uganda shilling firms slightly on month-end thinning of demand

(Reuters) - The Ugandan shilling firmed slightly on Thursday, underpinned by
ebbing of demand at the end of the month, traders said.

At 1137 GMT commercial banks quoted the shilling at 3,750/3,760, compared to
Wednesday’s close of 3,760/3,770. 

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling held steady against the dollar on Thursday
due to subsiding demand activity from oil and merchant importers, traders
said.  

At 1249 GMT, commercial banks quoted the shilling at 100.55/75 per dollar,
compared with 100.60/80 at Wednesday's close. 

       <mailto:info at bulls.co.zw> 

Asia

Asian stocks bruised by Trump's trade war threats

(Reuters) - Asian shares came under renewed pressure on Friday as a report
U.S. President Donald Trump was preparing to step up a trade war with
Beijing sent Chinese stocks lower and partially erased gains made in this
week’s global rally.

Many emerging market currencies were also frail after Argentina’s peso sank
on Thursday despite the central bank’s interest rate hike.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.8
percent, for monthly drop of 1.6 percent.

The index has underperformed MSCI ACWI, a gauge of the world’s 47 markets,
for four months in a row as Sino-U.S. trade worries hit Chinese shares.

Shanghai composite index dropped 1.1 percent to edge near a 2-year low hit
earlier in the month.

While the official Purchasing Managers’ Index (PMI) on Friday showed growth
in China’s manufacturing sector unexpectedly picked up in August after a
two-month slide, that hardly improved the mood as investors expect more
damages from the trade frictions down the road.

Japan’s Nikkei dropped 0.8 percent.

U.S. S&P500 e-mini futures fell 0.05 percent. On Thursday, the S&P 500 lost
0.44 percent from Wednesday’s record close of 2,914.

Pouring cold water on the rally in global shares that started in the middle
of the month were hostile comments from Trump on trade.

Bloomberg reported that Trump said he was ready to impose more tariffs on
$200 billion worth of goods from China as soon as the public comment period
on the plan ends next week.

Trump also threatened in an interview with Bloomberg on Thursday to withdraw
from the World Trade Organization if “they don’t shape up” — a move that
would further undermine one of the foundations of the modern global trading
system.

In addition, he said the European Union’s proposal to eliminate auto tariffs
is not good enough and called its trade policies “almost as bad as China.”

Those remarks dispelled any positive sentiment following negotiations over
the North American Free Trade Agreement (NAFTA).

The cautious mood helped lift the yen, which rose 0.6 percent on Thursday,
its biggest daily rise in about six weeks. In early Friday trade, it changed
hands at 110.98 per dollar .

The euro traded flat at $1.1665, having shed 0.33 percent in the previous
session.

The common currency has recovered from a 13-1/2-month low of $1.1301 hit in
mid-August but looks set to end the month little changed from end-July.

Emerging market currencies had less luck, with currencies relying on foreign
capital to finance their current account deficit hit the hardest.

The peso, the world’s worst-performing currency this year due to the
country’s poor economic health, fell 10 percent on the day, bringing its
month-to-date losses to 27 percent.

Argentina’s central bank at an emergency meeting on Thursday voted
unanimously to raise its benchmark rate to 60 percent from 45 percent,
however, the unexpected move failed to stabilise the peso.

That knocked down the Brazilian real to near its record low touched in
September 2015. It is down almost 10 percent this month.

The Turkish lira, which has been hit by concerns over President Tayyip
Erdogan’s interference in monetary policy and his diplomatic spats with
Washington, also slipped towards record low marked about two weeks ago.

The lira stood at 6.740 per dollar in early Friday trade, having fallen 11
percent so far this week.

In Asia, the Indonesian rupiah fell to three-year low even as the country’s
central bank said it was “decisively” intervening to support the currency.

The rupiah has lost one percent so far this month.

Oil prices slipped slightly after hitting their highest levels in more than
a month the previous day on growing evidence of disruptions to crude supply
from Iran and Venezuela and after a fall in U.S. inventories.

Brent crude oil dropped 0.3 percent to $77.51 a barrel from Thursday’s
settlement at $77.77. U.S. crude stood down 0.3 percent at $70.04 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold headed for longest monthly losing streak since 2013

Reuters) - Gold inched lower on Friday, as the dollar stayed firm on
expectations of rising interest rates amid lingering Sino-U.S. trade
tensions, and the yellow metal was headed for its fifth straight monthly
decline.

FUNDAMENTALS

* Spot gold was down 0.1 percent at $1,198.66 an ounce at 0029 GMT. Prices
were on track for fifth straight monthly decline, the metal’s longest losing
streak since early 2013. They are down about 2 percent so far this month.

* U.S. gold futures were mostly steady at $1,204 an ounce.

* The dollar index against a basket of six major currencies stood little
changed at 94.709. The index had nudged up 0.1 percent overnight, posting
its first gain in five days.

* The dollar was boosted by data that showed U.S. consumer spending
increased in July.

* Positive data usually makes investors raise bets on a U.S. interest rate
hike.

* The greenback, which also tends to attract safe haven bids in times of
market turmoil and political tensions, drew its latest swell of support as
investors braced for the next round of the U.S.-China trade conflict.

* U.S. President Donald Trump is prepared to quickly ramp up a trade war
with China and has told aides he is ready to impose tariffs on $200 billion
more in Chinese imports as soon as a public comment period on the plan ends
next week, Bloomberg News reported on Thursday.

* Policy and regulatory certainty in South Africa could potentially add 122
billion rand ($8 billion) in capital expenditure to the struggling mining
sector over the next four years, the Minerals Council’s chief executive said
on Thursday.

* Operations have resumed at AngloGold Ashanti’s Siguiri gold mine in Guinea
after a workers strike halted activities for a day, a company vice president
said on Thursday.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.27 percent to 757.81 tonnes on Thursday from
Wednesday.

U.S.-Mexico trade talks may pivot from metals tariffs to quotas

(Reuters) - U.S. trade officials are pressing Mexico and possibly Canada to
accept a quota plan to replace national security tariffs currently in place
on imports of steel and aluminum, people briefed on the negotiations said on
Thursday.

Metals tariffs are not directly part of updating the North American Free
Trade Agreement as negotiators race toward a Friday deadline. The United
States imposed tariffs on metal imports in March, but at the time exempted
Canada and Mexico. It extended the tariffs to both countries in June.

However, all three countries in the NAFTA pact see resolving the issue as
part of a larger move to normalize trade relations in the wake of months of
tit-for-tat tariffs that have raised costs and snarled supply chains for
North American manufacturers and farmers.

The issue is politically fraught since the Trump administration has made
rebuilding U.S. basic metal industries a key promise to voters and views
trade barriers as a tool to achieve that.

Commerce Secretary Wilbur Ross reiterated that view when he traveled to
Kentucky last week for a ceremony marking the restart of an aluminum smelter
owned by Chicago-based Century Aluminum Co. Century credited the new
tariffs, which put duties of 10 percent on aluminum and 25 percent on steel.

Meeting with workers at the factory, Ross said curbs on imports would remain
in place long term.

South Korea in March agreed to revise a trade deal that President Donald
Trump had heavily criticized. Under the revised deal, in return for being
exempted from tariffs, South Korea agreed to a quota that is equal to 70
percent of the annual average Korean steel exports to the United States
between 2015-2017.

Brazil and Argentina also have accepted metals quotas to avoid tariffs.

Any deal on the metals tariffs is not expected until after the three sides
settle on terms for an updated NAFTA agreement.

He said a deal on tariffs with Mexico, and potentially lifting of tariffs on
Canada, is likely to “be announced during the 90-day consultation between
the ‘handshake’ and signature” on a NAFTA revision.

A quota system would keep U.S. metal prices high by limiting supply and lead
to potential shortages. Any push for quotas faces strong opposition in all
three countries.

Domestic metal producers like Century, Nucor Corp., United States Steel
Corp, and ArcelorMittal could benefit. But Stelco Holdings Inc., based in
Canada, would likely suffer.

CANACERO, Mexico’s steel industry association, said on Wednesday that Mexico
should seek exclusion from U.S. tariffs on steel imports before completing
negotiations on a new NAFTA agreement.

Joseph Galimberti, president of the Canadian Steel Producers Association,
took a similar stance: “Canadian steel producers are hopeful that a 232
exclusion for NAFTA countries will be possible as part of a final trilateral
agreement.” Section 232 of the Trade Expansion Act of 1962 allows the
president to impose tariffs on imports deemed a threat to national security.

U.S. importers and manufacturers also want the tariffs to go away but oppose
replacing them with quotas.

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
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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
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
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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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