Bulls n Bears Daily Market Commentary : 05 December 2018

Thu Dec 6 08:33:17 CAT 2018

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Bulls n Bears Daily Market Commentary : 05 December 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $768,714.02 with foreign buys at $587,576.72 and foreign
sales were $177,680.00. Total trades were 68.

The All Share index dropped further by 0.05 points   to close at 158.06
points as two counters lost ground.  DELTA   dropped $0.0231 to close at
$3.2500 and  SIMBISA   lost $0.0058 to settle at $0.7400.

Losses were partially offset by gains in NAMPAK  which added $0.0107 to
$0.2520, AMALGAMATED REGIONAL TRADING  gained $0.0098 to end at $0.1098 and
AFRICAN SUN  traded $0.0093 firmer at $0.1000. OLD MUTUAL LIMITED  also
increased by $0.0071 to $8.1673 and MEIKLES  was $0.0050 solid at $0.5521.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand slightly firmer, stocks fall

(Reuters) - South Africa’s rand firmed on Wednesday, regaining some of the
ground it lost overnight as concerns of a recession in the United States
wobbled the dollar.

At 1500 GMT the rand was 0.2 percent firmer at 13.8125 per dollar, having
touched a session-best 13.7275.

The greenback came under renewed pressure on Wednesday as an inversion in
part of the Treasury yield curve caused concern about a possible U.S.
recession.

The rand rallied to a fresh four-month high of 13.5425 on Tuesday after
third quarter growth data showed the economy was out of recession.

The currency however was back on the ropes as parliament approved a report
endorsing a constitutional amendment that would allow land expropriations
without compensation.

Traders said the short-term technical picture was uncertain while
fundamentals would continue to hinge on international events around global
growth and the simmering trade war.

On the bourse, stocks fell with Sanlam among the biggest decliners after the
insurer reported lower 10-month profit.

Sanlam slumped 4 percent to 76.84 rand after the nation’s biggest insurer
said normalised headline earnings were down 10 percent in the ten month to
October.

Overall, traders took their cue from weaker global markets following a sharp
fall on Wall Street overnight, said Vasili Girasis, equities trader at BP
Bernstein.

The All Share index fell 1 percent to 51,697 points and the blue-chip Top 40
index lost by the same margin to 45,674 points.

Banks were also under pressure with Investec skidding 3.3 percent as the
lender started trading without the rights to its next dividend payout.

In fixed income, bonds were weaker, with the yield on the benchmark 2026
paper up 5.5 basis points to 8.975 percent. 

Uganda

Uganda central bank holds main lending rate at 10 pct

(Reuters) - Uganda’s central bank held its benchmark lending rate at 10
percent on Wednesday saying the outlook for inflation had improved.

Policymakers raised rates for the first time in three years in October,
citing concerns about rising inflationary pressures.

Core inflation, which the bank focuses on, edged down to 3.4 percent last
month from 3.5 percent the previous month. The rate was expected to peak at
between 6-6.5 percent in the second half of next year, lower than the
previous forecast, the governor said. 

       <mailto:info at bulls.co.zw> 

America

U.S. stock futures slip, Asia follows after Canada arrests Huawei CFO

(Reuters) - U.S. stock futures and Asian shares tumbled on Thursday after
Canadian authorities arrested a top executive of Chinese tech giant Huawei
for extradition to the United States, feeding fears of a fresh flare-up in
tensions between the two superpowers.

The news came as Washington and Beijing begin three months of negotiations
aimed at de-escalating their bruising trade war, which is adding to
lingering investor jitters over higher U.S. interest rates and other risks
to global economic growth.

S&P500 e-mini futures fell almost 2 percent at one point in thin Asian
morning trade and were last were down 1.3 percent.

The losses in the first few minutes of trading might have been even steeper,
but CME Group’s Chicago Mercantile Exchange implemented a series of
10-second trading halts that helped limit the initial drop.

Japan’s Nikkei slumped 1.8 percent by the midday break, with semi-conductor
related shares leading the losses. Huawei is one of the world’s largest
makers of smartphones and telecommunications network equipment.

MSCI’s ex-Japan Asia-Pacific index fell 1.7 percent . Hong Kong’s Hang Seng
dropped 2.7 percent while Shanghai shares dipped 1.2 percent.

Canadian authorities said they had arrested Huawei’s global chief financial
officer in Vancouver, where she is facing extradition to the United States.

The arrest is related to violations of U.S. sanctions, a person familiar
with the matter said, though officials have so far stayed mum on her
allegations.

The arrest heightened the sense of a major collision between the world’s two
largest economic powers not just over tariffs but also over technological
hegemony.

Britain’s BT Group said it was removing Huawei’s equipment from the core of
its existing 3G and 4G mobile operations. Australia and New Zealand have
also rejected Huawei’s products.

Hong Kong-listed shares of Chinasoft International Ltd shed as much as 13
percent in response to news of the arrest. Huawei is a key client of
Chinasoft.

WORRIES ABOUT SLOWER U.S. GROWTH

Markets had initially brightened after U.S. and Chinese leaders agreed a
temporary trade truce at a meeting on Saturday. But the mood has quickly
soured on scepticism that the two sides can reach a substantive deal on a
host of hugely divisive issues within the tight 90-day time frame set out.

The benchmark Treasury 10-year yield fell 1.8 basis points to 2.903 percent,
near Tuesday’s three-month low of 2.885 percent. U.S. markets were closed on
Wednesday to mark the death of former President George H.W. Bush.

The yield curve remained inverted between two- and five-year zones, with
five-year notes yielding 2.780 percent, below 2.797 percent on two-year
notes.

The inversion is a symptom of a weak economy, said Bryan Whalen, group
managing director of TCW in Los Angeles, noting the U.S. economy has not
been able to achieve sustainable economic growth of more than two percent in
recent years.

Oil prices fell slightly in tepid trading ahead of a meeting by producer
group OPEC that is expected to result in a supply cut aimed at draining a
glut that has pulled down crude prices by 30 percent since October.

A monitoring committee of OPEC and its allies, including Russia, agreed on
the need to cut oil output in 2019, two sources familiar with the
discussions said.

Still, lack of details could suggest such an agreement could be elusive,
some analysts also said.

U.S. West Texas Intermediate (WTI) crude futures were at $52.63 per barrel
at 0248 GMT, down 26 cents, or 0.5 percent, from their last close. Brent
crude oil futures were down 19 cents, or 0.3 percent, at $61.35 per barrel.

In the currency market, the dollar fell 0.4 percent against the yen to
112.78 yen on a risk-averse mood while the Australian dollar shed 0.6
percent to $0.7227.

The yuan eased 0.2 percent to 6.8770 per dollar in offshore trade while the
euro traded flat at $1.1345.

Sterling dipped 0.1 percent to $1.2725 as Prime Minister Theresa May’s
Brexit deal faced fresh criticism from allies and opponents alike. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Congo mining revenues jump 147 pct in first 9 months of 2018

(Reuters) - Democratic Republic of Congo collected $1.21 billion in revenues
from its mining sector over the first nine months of 2018, an increase of
147.4 percent over the same period last year, finance ministry data showed.

Revenues from the hydrocarbons sector rose 1.4 percent over that same period
to $120.11 million, according to the data seen by Reuters on Wednesday.

The two sectors together account for roughly 95 percent of Congo’s export
revenues. Congo is Africa’s leading copper producer and the world’s top
miner of cobalt, which is prized for its use in electric batteries. 

Shanghai copper drops for fourth day as trade worries persist

(Reuters) - Prices of non-ferrous metals extended losses on Thursday, as
worries over weak demand caused by Sino-U.S. trade tensions persisted.

China and the United States agreed to a truce in their months-long trade war
on Saturday, with U.S. President Donald Trump agreeing to refrain from
raising tariffs on Jan. 1.

But he has also warned that the U.S. will revert to tariffs if the two sides
cannot resolve their differences before the stipulated 90 days.

* Three-month copper on the London Metal Exchange fell 0.8 to $6,142 a tonne
by 0132 GMT, extending losses from the previous session.

* The most-traded copper contract for February delivery on the Shanghai
Futures Exchange dipped 0.7 percent to 49,100 yuan ($7,163.07) a tonne.

* Chinese Economy: China’s services sector grew at its quickest pace in five
months in November thanks to an uptick in new orders, a private survey
released on Wednesday showed, although the outlook for businesses over the
next year worsened for the third month.

* Nickel: BHP on Wednesday said it had received approval from the government
of Western Australian to develop a nickel mine in the state that will feed
its Nickel West battery chemicals business.

* Lithium: Albemarle Corp has launched an aggressive lobbying campaign after
Chilean regulators denied its request to boost lithium output, stressing the
company’s importance to Chile’s economy and workers, according to records
reviewed by Reuters.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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

Unity Day

22/12/2018

Christmas Day

25/12/2018

Boxing Day

26/12/2018

New Years’ Day

01/01/2019

 <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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