Bulls n Bears Daily Market Commentary : 03 December 2018

Tue Dec 4 07:15:38 CAT 2018

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Bulls n Bears Daily Market Commentary : 03 December 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $4,501,655.91 with foreign buys at $630,280.00 and foreign
sales were $823,541.10. Total trades were 145.

The All Share index opened  the week in the positive gaining 0.03 points
to close at 160.43 points. NATFOODS  added $0.2486 to close at $7.0100,
SEEDCO INTERNATIONAL  was $0.0770 stronger at $1.7025 whilst INNSCOR
traded $0.0363 higher at $1.9363. MEIKLES   also increased by $0.0171 to
$0.5471 and PROPLASTICS   put on $0.0105 to end at $0.1905.

The gains were offset by losses in ECONET   which dropped $0.0450 to settle
at $1.7198, LAFARGE  lost $0.0400 to end at $1.4000 and SIMBISA  was $0.0289
down at $0.7211. OLD MUTUAL LIMITED   also decreased by $0.0139 to end at
$8.1603 whilst AFRICAN SUN   traded $0.0024 lower at $0.0976.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand and stocks lifted by U.S.-China trade truce

(Reuters) - South Africa’s rand firmed more than 1 percent against a softer
dollar on Monday, in line with emerging markets and a fall in bond yields,
as a temporary trade truce agreement between U.S. and Chinese leaders
supported demand for riskier assets.

Stocks surged along with global markets on the news that the two countries
agreed to halt additional tariffs on each other.

The rand was trading at 13.7075 per dollar by 1500 GMT, 1.05 percent firmer
than its close on Friday of 13.8500. The currency touched an intraday low of
13.5800.

Government bonds also firmed, with the yield on the benchmark bond due in
2026 falling 3 basis points to 8.910 percent.

The White House said on Saturday that U.S. President Donald Trump and
Chinese President Xi Jinping had agreed to keep the trade war from
escalating by pledging to halt imposition of new tariffs for 90 days, while
continuing to work on a long-lasting agreement in the given period.

On the local front, South Africa’s seasonally adjusted Absa Purchasing
Managers’ Index (PMI) rose for the first time in three months to 49.5 in
November from 42.4 in October, supported by an uptick in new orders and
business activity.

In equities, the All Share index was 3.17 percent higher at 52,270 points
while the blue chip Top 40 index was 3.58 percent firmer at 46,254 points.

Bourse heavyweight Naspers rose 4.54 percent to 2,889 rand while
Petrochemicals group Sasol jumped 6.82 percent to 43.40 rand at the top of
the blue chip index as oil prices were given an additional boost ahead of an
OPEC meeting during which oil supply is expected to be cut.

Uganda

Ugandan shilling steady amid muted banks and importer demand

(Reuters) - The Ugandan shilling was steady on Monday, underpinned by flat
appetite for hard currency both from players in the interbank market and
from merchandise importers, traders said.

       <mailto:info at bulls.co.zw> 

Asia

Asia shares fall as lift from US-China trade truce ends

(Reuters) - Asian shares fell on Tuesday as a relief rally petered out amid
rising doubts over whether China and the United States will be able to
resolve trade differences.

An inverted U.S. yield curve also raised concerns about a possible
recession.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.3 percent
as Chinese equity markets struggled to move out of negative territory.

Chinese blue-chip shares in Shenzhen and Shanghai were slightly weaker, and
the benchmark Shanghai Composite index edged barely higher. Shares in Hong
Kong lost 0.3 percent.

Australia shares gave up 0.8 percent and Seoul’s Kospi fell 0.6 percent,
while Japan’s Nikkei stock index was 1.3 percent lower.

The temporary freeze on further hostilities in the trade war between the
United States and China had sparked a global rally in equity markets on
Monday, pushing MSCI’s all-country world index up 1.3 percent.

But even before the trading day ended, major U.S. indexes pulled back from
intraday highs as investors pondered unresolved issues between the two
countries.

Overnight, the Dow Jones Industrial Average closed 1.13 percent higher, the
S&P 500 gained 1.09 percent and the Nasdaq Composite added 1.51 percent.

Already, there was confusion over when the 90-day period would start. A
White House official said it started on Dec. 1. Earlier, White House
economic adviser Larry Kudlow told reporters it would start on Jan. 1.

Moreover, none of the commitments that U.S. officials said had been given by
China, including reducing its 40 percent tariffs on autos, were agreed to in
writing and specifics had yet to be hammered out.

Adding to worries over the outlook for the global economy, the yield curve
between U.S. three-year and five-year notes, and between two-year and
five-year paper inverted on Monday - the first parts of the Treasury yield
curve to invert since the financial crisis, excluding very short-dated debt.

Analysts expect an inversion of the two-year, 10-year yield curve - seen as
a predictor of a U.S. recession - to follow suit.

On Tuesday, the yield on benchmark 10-year Treasury notes fell to 2.9407
percent compared with its U.S. close of 2.991 percent on Monday. The
two-year yield also fell, but by a narrower margin, touching 2.8028 percent
compared with a U.S. close of 2.833 percent.

That put the spread between 10-year and two-year Treasuries at less than 14
basis points, its flattest level since July 2007.

However, he added that solid U.S. manufacturing data released Monday pointed
to a stronger economic outlook, with new orders a “key driver” in boosting
activity.

In contrast to how Asian equity markets could not sustain Monday’s rally,
oil prices continued to rise after surging 4 percent the day before on the
U.S.-China trade truce, and ahead of a key OPEC meeting expected to lead to
supply cuts.

U.S. crude was 1.2 percent higher at $53.58 per barrel, and Brent crude
futures gained 1.1 percent to $62.35 a barrel.

In the currency market, the dollar index, which tracks the greenback against
a basket of peers, softened 0.2 percent to 96.808.

The dollar was 0.3 percent weaker against the yen, at 113.28, and the euro
gained 0.2 percent to $1.1373.

As the dollar weakened, China’s yuan continued to surge. Since Friday, it
has added more than 1,000 pips against the greenback, reaching 6.8545 on
Tuesday morning. At 0327 GMT, it was trading at 6.8613 to the dollar.

Federal Reserve Chairman Jerome Powell was scheduled to testify on Wednesday
to a congressional Joint Economic Committee, but the hearing was postponed
because of a national day of mourning for U.S. President George H.W. Bush,
who died on Friday.

The dollar came under pressure last week on Powell’s comments that rates
were nearing neutral levels, which markets widely interpreted as signalling
a slowdown in the Fed’s rate-hike cycle.

Spot gold jumped on the weaker dollar, trading up 0.40 percent at $1,235.88
per ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Sudan allows local private sector firms to export gold

(Reuters) - Sudan will allow local private sector firms to export gold,
Prime Minister Moataz Moussa said on Monday, relaxing the central bank’s
grip over exports of the metal as the government tries to shore up the
country’s struggling economy.

The measure is part of efforts to stem smuggling of gold, one of the
country’s main sources of foreign currency.

He said the central bank would take the necessary measures to ensure gold
exports were channeled through the national economy.

The decision applies to local private companies, as foreign gold-mining
companies are already entitled to export.

Under the new regulations, producers will sell foreign currency revenues to
the central bank.

He said the price agreed would be higher than the rate of 47.5 Sudanese
pounds to the dollar that had persisted since October, when the government
effectively devalued the currency by appointing a body comprising bankers
and money changers to set the price on a daily basis.

The exchange body will also set a purchase price for gold to encourage
miners to channel their products through the central bank.

The black market rate is slightly higher at around 55 Sudanese pounds to the
dollar.

Sudan produced around 100 tonnes of gold in 2017, and some 70 percent of
output is estimated to be smuggled abroad as producers try to evade
regulations requiring them to sell it to the central bank in local currency
at a rate far below the black market rate.

Sudan’s economy has been struggling since the south seceded in 2011, taking
with it three-quarters of its oil output.

Apart from gold, Sudan also exports livestock, sesame and Arabic gum. 

Copper prices ease on trade truce doubts

(Reuters) - Copper and most other base metals gave up some of Monday's gains
in early Asian trade on Tuesday, as doubts over whether China and the United
States will be able to resolve their trade row within a 90-day timeframe
came into focus.

Metals prices, weighed down by the trade dispute this year, had bounced on
Monday after Washington and Beijing agreed to hold off on imposing further
tariffs for 90 days.

However, it has since emerged that none of the commitments U.S. officials
said had been given by China, including reducing its 40 percent tariffs on
autos, were agreed to in writing and

specifics have yet to be ironed out.   

    FUNDAMENTALS

* LME COPPER: Three-month copper on the London Metal Exchange slipped 0.5
percent to $6,265 a tonne as of 0152 GMT, after rising 1.6 percent in the
previous session.

* SHFE COPPER: The most-traded January copper contract on the Shanghai
Futures Exchange fell 0.3 percent to 49,850 yuan ($7,245.01) a tonne.

* COPPER PREMIUMS: Premiums for imports of copper into China, the world's
biggest copper consumer, sank to an 18-monthlow on Monday in a sign that
demand for physical metal is waning after a buying spree.

* OTHER METALS: Losses elsewhere in the base metals sector were capped at
0.5 percent, with Shanghai zinc and tin , and London lead and nickel all
edging higher.

* GLENCORE: Glencore has appointed Peter Freyberg to the newly created role
of head of industrial mining, the global trader and miner said, while its
head of copper marketing Telis Mistakidis retires at the end of the year.

* LITHIUM: China's Tianqi Lithium Corp has purchased a 23.77 percent share
in Chilean lithium miner SQM  from Canadian fertilizer giant Nutrien, the
Chilean stock exchange said on Monday, for a total sale price of $4.066
billion.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

GetBucks

AGM

Conference Room 1, Monomotapa Hotel

04/12/2018 (10am )

Innscor

AGM

Royal Harare Golf Club

05/12/2018 (8:15am)

Truworths

AGM

Boardroom, Prospect Park, 808 Seke Road

06/12/2018 (9am)

TSL

EGM

Head Office, 28 Simon Mazorodze Road, Southerton

07/11/2018 (10am )

Cassava shares list on the ZSE

11/12/2018

 <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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