Bulls n Bears Daily Market Commentary : 06 December 2018

Thu Dec 6 22:26:59 CAT 2018

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Bulls n Bears Daily Market Commentary : 06 December 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $3,824,628.13 with foreign buys at $2,672,260.20 and foreign
sales were $1,368,250.00. Total trades were 138.

The All Share index lost another 0.76 points  to close at 157.30 points in a
session dominated with losers. ECONET   dropped $0.0294 to close at $1.5709,
INNSCOR   went down by $0.0273 to $1.8727 and SEEDCO   was $0.0175 down at
$1.9800. AFRICAN SUN   also decreased by $0.0060 to settle at $0.0940 and
AMALGAMATED REGIONAL TRADING   traded $0.0018 lower at $0.1080.

There were no counters trading in the positive as NMB  , PADENGA   and FIRST
MUTUAL PROPERTIES   traded unchanged at $0.2400, $0.9450 and $0.0708
respectively.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.African rand slides as current account deficit widens, Eskom woes weigh

(Reuters) - South Africa’s rand weakened more than 2 percent on Thursday and
bonds fell after the current account deficit widened in the third quarter
and power firm Eskom said it was considering restructuring its debt, dimming
investor appetite for the currency.

Stocks touched six-week lows, tracking world markets which slumped on
revived fears of a flare-up in U.S.-China tensions following the arrest of a
top executive of Chinese tech giant Huawei.

The rand was trading at 14.1825 per dollar by 1620 GMT, 2.4 percent weaker.
It earlier reached a session-worst 14.2050 after closing at 13.8500
overnight.

Sentiment towards the currency was initially hit by general risk off trade
that weighed down most emerging currencies as worries about the impact of
the U.S.-China trade war on global growth continued to ripple through
markets.

Data showing the current account deficit widened to 3.5 percent of gross
domestic product in the third quarter, and a warning by Eskom that it may
restructure its debt quickened the rand’s slide to its weakest since Nov.
16.

Ratings firm Fitch on Thursday kept South Africa sub-investment grade credit
rating steady at subinvestment and maintained its stable outlook, but warned
that low growth and the rising debt of state-owned firms posed a risk.

Government bonds were also weaker, with the yield on the benchmark bond due
in 2026 rising 9 basis points to 9.065 percent.

In equities, the All Share index was 1.75 percent lower at 50,806 points.
The blue-chip Top 40 index was down 1.9 percent at 44,778 points.

Embattled retailer Steinhoff slumped 10 percent to 1.60 rand after it
reported that it delayed publishing its 2017 and 2018 financial statements,
citing delays to a forensic investigation.

Group Five plunged to a 26 percent to 25 cents after its client in demanded
$60.5 million compensation relating to the unfinished Kpone power plant in
Ghana. 

Zambian kwacha seen firm, Ugandan shilling weak

(Reuters) - The Zambian currency is likely to firm in the coming week as
companies sell dollars to pay salaries and other month-end dues, while
Ghana’s cedi is seen flat on expected offshore inflows.

ZAMBIA

The kwacha is likely to firm in the coming week due to increased supply of
dollars from companies preparing to pay salaries and other month-end
obligations.

At 0922 GMT on Thursday, commercial banks quoted the currency of Africa’s
second-largest copper producer at 11.8000 per dollar from a close of 12.0000
a week ago.

UGANDA

The Ugandan shilling is seen trading with a bias towards the weaker side as
some banks pick up hard currency to cover short positions as they prepare to
close their books for the year.

At 1010 GMT, commercial banks quoted the shilling at 3,730/3,740 against the
dollar, compared with last Thursday’s close of 3,720/3,730.

TANZANIA

The Tanzanian shilling is expecting to hold steady, with an anticipated
central bank sell-off of dollars helping ease tightness in the supply of
hard currency.

Commercial banks quoted the local currency at 2,305/2,350 against the dollar
on Thursday, unchanged from last Thursday’s close.

KENYA

The Kenyan shilling is seen stable in the coming week, supported by tight
local currency liquidity in the money market and inflows from diaspora
remittances.

Commercial banks quoted the shilling at 102.55/75 per dollar on Thursday,
compared with 102.40/60 at last Thursday’s close.

GHANA

Ghana’s cedi is seen flat next week on expected offshore inflows for a
two-year bond issuance on Thursday, which could offset greenback demand by
businesses stocking up for Christmas, analysts said.

The cedi has been under pressure in recent weeks as corporate and commerce
operators seek more dollars for their end-of-year imports. It was trading at
4.99 to the greenback mid-morning Thursday, compared with 4.95 a week ago.

       <mailto:info at bulls.co.zw> 

America

Shares spiral on arrest of China executive; oil sinks as output decision
delayed

(Reuters) - Stock markets around world tumbled on Thursday as the arrest of
a top Chinese technology executive cast further shadows on U.S.-China trade
relations, while oil prices sank on fears of smaller-than-expected output
cuts.

The arrest of smartphone maker Huawei Technologies Co.’s Chief Financial
Officer Meng Wanzhouof in Canada for extradition to the United States came
as Washington and Beijing prepared for key talks aimed at resolving a bitter
trade spat.

The Dow Jones Industrial Average fell 679.46 points, or 2.71 percent, to
24,347.61, the S&P 500 lost 67.8 points, or 2.51 percent, to 2,632.26 and
the Nasdaq Composite dropped 139.83 points, or 1.95 percent, to 7,018.60.

MSCI’s gauge of stocks across the globe shed 2.53 percent, while the
pan-European STOXX 600 index lost 3.31 percent.

Emerging market stocks lost 2.76 percent. MSCI’s broadest index of
Asia-Pacific shares outside Japan closed 2.28 percent lower, while Japan’s
Nikkei lost 1.91 percent.

Canadian authorities late on Wednesday said they had arrested Meng, also the
daughter of Huawei’s founder, on Dec. 1, the same day that U.S. President
Donald Trump and Chinese leader Xi Jinping met at the G20 summit in
Argentina.

The world’s two economic superpowers had agreed on a 90-day trade truce
period to hammer out a more permanent agreement, which sent global stock
markets soaring on Monday. Equities reversed course the next day as
uncertainty grew that the U.S. and China could, in fact, find common ground.

China’s foreign ministry said neither Canada nor the United States had
clarified the reason for the arrest, but a source earlier told Reuters it
was related to violations of U.S. sanctions.

Earlier this week, shorter-dated yields rose above medium yields for the
first time since early 2008, which fanned fears about a U.S. recession in
the coming months and also sent Wall Street shares sliding.

U.S. Treasury yields tumbled on Thursday with 10-year yields hitting
three-month lows as worries about U.S.-China trade and Brexit spurred
safe-haven bids.

Additionally, traders scaled back expectations on the number of rate hikes
the Federal Reserve would implement amid weakening economic data and market
volatility.

U.S. jobs data is due on Friday. If the figures show any serious weakness,
markets are likely to react, said Shuji Shirota, HSBC’s head of macro
economic strategy.

The U.S. dollar weakened against major peers as Treasury yields slipped and
traders scaled back rate hike expectations.

The euro was 0.39 percent higher against the dollar at $1.1388.

Also pulling down equity markets were oil prices.

Oil fell more than 4 percent in choppy trading after OPEC ended a key
meeting having made no decision on crude output, as it prepared to debate
the matter with other exporters the next day.

An OPEC delegate said the organisation had agreed a tentative deal to cut
oil output but had not yet come up with a final figure.

U.S. crude sank 4.65 percent to $50.43 per barrel and Brent was last at
$58.86, down 4.39 percent on the day.

The two have lost 30 percent in value this quarter alone, but this week’s
OPEC meeting could bring more surprises.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Metals tumble as arrest of Huawei executive revives trade fears

(Reuters) - Most industrial metals prices fell on Thursday and copper hit a
three-week low after the arrest of a top Chinese executive in Canada
dampened hopes for a resolution to the U.S.-China trade conflict.

The arrest of tech giant Huawei’s finance chief for extradition to the
United States cast doubt over a 90-day trade truce struck on Saturday
between the U.S. and Chinese presidents, Donald Trump and Xi Jinping.

It sent global stock markets sharply lower, and hit metals because investors
fear tariffs will curtail China’s demand for commodities.

Benchmark copper on the London Metal Exchange (LME) ended 1.7 percent down
at $6,070 a tonne after touching its lowest since Nov. 14 at $6,068.

The Huawei arrest had combined with a plunge in oil prices to turn investors
negative on metals, said Capital Economics analyst Ross Strachan.

Healthy supply-demand fundamentals, however, meant copper was unlikely to
fall much further, he added, predicting a price of $6,250 a tonne at the end
of 2019.

CHINA EXPORTS: China’s economy is showing signs of cooling, with export
growth expected to have slowed in November.

TRADE DISPUTE: Despite the Huawei arrest, China expressed confidence in
striking a trade deal with the United States within their 90-day ceasefire
period.

OIL: Oil fell more than 4 percent in choppy trading after OPEC and allied
exporting countries ended a meeting without announcing a decision to cut
crude output, and prepared to debate the matter the next day.

GERMAN EXPORTS: Strong foreign demand drove an unexpected rise in German
industrial orders in October.

COPPER TECHNICALS: Copper has fallen below its 50- and 100-day moving
averages, worsening its technical picture.

COPPER STOCKS: In a sign of tight supplies that should support prices,
headline stocks of copper in LME-registered warehouses fell to 124,950
tonnes, down from almost 400,000 tonnes in March and the lowest since 2008.
MCUSTX-TOTAL

SPREAD: The premium for cash copper over the three-month contract rose to
$9.50 from zero on Wednesday, suggesting less availability of nearby metal,
but it is still down from $44 in late November. MCU0-3

RUSAL: The top Democrat on the Senate Foreign Relations Committee urged the
Trump administration not to waive or remove sanctions on Russian billionaire
Oleg Deripaska or companies, including aluminium producer Rusal, that he
controls.

OTHER METALS: LME aluminium closed 1.7 percent down at $1,936 a tonne, zinc
ended down 1 percent at $2,593, nickel fell 3.3 percent to $10,850, tin
finished 1.3 percent lower at $18,925 and lead eeked out a meagre gain of
0.1 percent to $1,984.

Newmont says 2019 gold production at mid-point of previous outlook

(Reuters) - Newmont Mining Corp on Thursday updated its five-year production
outlook and said it expects gold production for 2019 to be in the midpoint
of its previous forecast.

The Colorado-based miner sees 2019 output at 5.2 million ounces of gold,
from an earlier forecast range of 4.9 million ounces to 5.4 million ounces.

The company expects production in 2019 to be driven by its recently
completed Subika Underground project in Ghana. The project received an
environmental permit to build and operate in March 2017.

The gold miner said its 2019 North America production will be hurt by
depletion of Silverstar ore at Carlin mine and lower gold production at
Phoenix mine in Nevada. North America production is estimated to be 37
percent of total production in the next year, the company said.

Newmont’s all-in sustaining cost (AISC) of producing an ounce of gold in
2019, a closely-watched industry benchmark, is now projected at $935,
compared with an earlier estimated range of $870 to $970 per ounce.

Analysts at RBC Dominion Securities said the five-year production outlook is
modestly lower than expected, but the AISC was in-line with estimates.

Newmont reported lower third-quarter profit and revenue in October compared
to year-ago period, hurt by a drop in bullion and copper prices.

Spot gold fell about 9 percent from a peak in April when gold was trading at
around $1,365 per ounce as the U.S.-China trade conflict unfolded against a
backdrop of higher U.S. interest rates, denting gold’s appeal.

Shares of the company fell by 2 pct to $32.97. 

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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