Bulls n Bears Daily Market Commentary : 18 December 2018

Wed Dec 19 07:08:29 CAT 2018

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Bulls n Bears Daily Market Commentary : 18 December 2018

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Zimbabwe Stock Exchange Update

Market Turnover $8,013,365.19 with foreign buys at $2,634,384.00 and foreign
sales were $2,166,423.04. Total trades were 194.

The All Share index shed 1.48 points to end at 147.79 points. The decrease
was on the back of losses in heavy weight counters which include BRITISH
AMERICAN TOBACCO which lost $2.0000 to trade at $33.0000, INNSCOR   dropped
$0.0500 to trade at $1.8500 and PADENGA eased $0.0461 to settle at $0.8539.
Other losers included OK ZIMBABWE  which fell $0.0270 to $0.2564 and ECONET
which traded $0.0265 lower at $1.4574.

On the upside, MEIKLES added $0.0400 to close at $0.5500, CBZ HOLDINGS
traded $0.0042 higher at $0.1546 whilst HIPPO VALLEY ESTATES and NAMPAK both
gained $0.0030 to close at $1.7155 and $0.2550 respectively. TSL was up
$0.0025 to trade at $0.6025 and OLD MUTUAL LIMITED was marginally up by
$0.0013 to close at $8.2113.

CORPORATE NEWS

CASSAVA SMARTECH ZIMBABWE LIMITED  listed today at a debut price of  $1.4928
following a demerger from ECONET WIRELESS ZIMBABWE LIMITED and operates
separately and independently from EWZL.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand stronger as dollar slides, stocks down

(Reuters) - South Africa’s rand firmed on Tuesday, helped by a fragile
dollar as markets counted down to a crucial U.S. Federal Reserve meeting
amid speculation it will soon hit the pause button to its monetary
tightening cycle.

Stocks fell, dragged by losses in one of the country’s largest banks,
Nedbank, after reports of a regulatory investigation into its West African
associate Ecobank.

At 1511 GMT, the rand traded at 14.2925 per dollar, 0.7 percent stronger
than its previous close. The currency hit an intraday best of 14.2450
earlier in the session.

The dollar index was down 0.16 percent, as some investors speculated growth
worries could prompt the U.S. Fed to slow the pace of interest rate hikes
after this week’s meeting.

Government bonds also gained, with the yield on the benchmark instrument due
in 2026 down 9 basis points to 9.115 percent.

On the bourse, the Top-40 index fell 0.68 percent to 45,217 while the
broader all-share edged 0.64 percent lower to 51,231.

Nedbank shares ended 2.18 percent lower, trimming losses after sliding more
than 4 percent earlier after a South African newspaper report that Nigeria’s
accountancy regulator had begun a probe into its West African associate
Ecobank.

Nedbank, which is one of South Africa’s four largest lenders, holds a 21
percent stake in the Togo-based lender.

Among gainers, Gold Fields rose 1.89 percent to 47 rand after the gold miner
said a strike at its sole domestic mine had ended. 

Kenya

Kenya grants Standard Investment Bank online forex trading licence

(Reuters) - Kenya’s Capital Markets Authority said on Tuesday it had granted
a licence to Standard Investment Bank to engage in online foreign exchange
trading business.

The bank is the second company in Kenya to receive an online forex trading
licence after EGM Securities Limited was granted one in February this year.

In October, the regulator had warned Kenyans against online foreign exchange
trading through unlicensed entities, saying they could risk losing their
investments.

Paul Muthaura, CEO of the Capital Markets Authority, said at the time he had
observed several individuals and entities carrying on or purporting to carry
on the business of an online foreign exchange broker or a money manager
without the relevant licence.

The regulator said Standard Investment Bank had been given a money manager
licence that would allow it to chose and manage investments prudently for
its online forex trading clients and develop appropriate investment
strategy.

       <mailto:info at bulls.co.zw> 

Asia

Asia tenses for Fed call, oil slide boosts bonds

(Reuters) - Asian share markets played second string to bonds on Wednesday
as a spectacular fall in the price of oil spurred speculation the U.S.
Federal Reserve might be done with tightening after its policy meeting later
in the session.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.4
percent, while Shanghai blue chips were flat.

Japan’s Nikkei steadied after an early dip and E-Mini futures for the S&P
500 added 0.4 percent.

Oil had stolen the show as a supply glut saw Brent shed almost 6 percent
overnight. U.S. crude was last down another 13 cents at $46.11 a barrel,
while Brent recouped just 4 cents to $56.30.

Brent’s 35 percent plunge since October is sending a disinflationary pulse
through the world at a time when trade and economic activity are already
cooling.

That has only added to pressure on the Fed to abandon its commitment to yet
more hikes.

U.S. President Donald Trump on Tuesday warned the central bank not to “make
yet another mistake”, while a Wall Street Journal editorial called for a
pause.

So far, the futures market is sticking with a two-in-three chance of a rate
increase on Wednesday.

He also expects the median Fed forecast, or dot plots, to drop to two rate
rises for next year, from the three projected back in September. The market
is well ahead of that and pricing in less than one rise in 2019.

Talk of a dovish turn helped Wall Street steady and the Dow ended Tuesday up
0.35 percent. The S&P 500 edged up 0.01 percent and the Nasdaq 0.45 percent.

BOND BONANZA

Stocks were left in the dust by bonds as 10-year Treasury yields hit their
lowest since August at 2.799 percent , testing a major chart level at 2.80
percent.

Yields on two-year U.S. notes touched a three-month trough of 2.629 percent,
a massive turnaround from November’s 2.977 percent peak. Yields in Japan and
Australia also reached multi-month lows.

Reasons for the rally were easy to find. The latest survey of fund managers
globally from BofA Merrill Lynch showed the third biggest decline in
inflation expectations on record, while just over half expected the world
economy to slow next year.

Investors rushed into bonds, with the largest ever one-month rotation into
fixed-income assets, while cutting equities.

The steep drop in Treasury yields undermined one of the U.S. dollar’s major
props and pulled its index back to 96.921 , from a recent top of 97.711.

The dollar fell to 112.46 yen, from a 113.70 high last week, while the euro
nudged up to $1.1379 from a $1.1266 low.

In commodity markets, gold held near its recent five-month peak as the
dollar eased and the threat of higher interest rates waned. Spot gold stood
at $1,248.85 per ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Stocks dip ahead of Fed news; oil prices drop

(Reuters) - Global equity markets dipped on Tuesday as nervous investors
awaited indications whether the Federal Reserve will be able to raise
interest rates much further amid turbulent markets and a weakening outlook
for the global economy.

Energy stocks weighed on the U.S. market as oil price declines deepened.

Steep drops in equity markets over the last two months have sapped investor
confidence, spurring fund managers to predict global growth to weaken over
the next 12 months, the worst outlook in a decade, Bank of America Merrill
Lynch’s December investor survey showed.

MSCI’s world stock index fell 0.3 percent. The index is down 10 percent this
year and is set for its worst year in a decade.

U.S. stocks eked out modest gains amid volatile trading as investors weighed
strong tech earnings against concerns about global growth.

The Dow Jones Industrial Average rose 82.66 points, or 0.35 percent, to
23,675.64, the S&P 500 gained 0.22 points, or 0.01 percent, to 2,546.16 and
the Nasdaq Composite added 30.18 points, or 0.45 percent, to 6,783.91.

The Dow had been up by more than 250 points in midday trading.

The benchmark S&P 500 index began the trading session almost 8 percent lower
for December.

A speech by Chinese President Xi Jinping, which investors had hoped could
lift morale, had little impact after he offered no specific support measures
for the economy. Chinese shares fell over 1 percent . Japan’s Nikkei lost
1.8 percent.

Adding to the gloomy mood, the German Ifo economic institute’s business
climate index fell for the fourth month in a row to its lowest level in more
than two years and Japan’s government revised down its economic growth
forecasts.

On Monday, U.S. President Donald Trump and his top trade adviser stepped up
their criticism of the Fed’s monetary tightening, raising investor anxiety.

Benchmark 10-year notes last rose 9/32 in price to yield 2.8264 percent,
from 2.857 percent late on Monday.

U.S. crude futures settled down 7.3 percent while Brent settled down 5.6
percent, weakening for a third consecutive session on reports of swelling
inventories and forecasts of record U.S. and Russian output.

The dollar extended its declines against major currencies ahead of the Fed
meeting. The dollar index, tracking it against six major peers, fell 0.03
percent, with the euro up 0.14 percent to $1.1362.

Shanghai base metals slide as Fed decision eyed

(Reuters) - Shanghai copper hit a three-month low overnight and led base
metals sharply lower on Wednesday, as investors concerned about global
economic growth waited to see whether the U.S. Federal Reserve would raise
interest rates for a fourth time this year.

Higher interest rates tend to push commodity prices lower, because they mean
higher borrowing costs, which can reduce economic activity and consumption.

    FUNDAMENTALS

* SHFE COPPER: The most-traded February copper contract on the Shanghai
Futures Exchange fell by 1.6 percent to 48,220 yuan ($6,994.08) a tonne as
of 0201 GMT, having slid as

much as 2 percent overnight to 48,010 yuan, the lowest since Sept. 18.

* LME COPPER: Three-month copper on the London Metal Exchange rose 0.5
percent to $6,002 a tonne as the dollar index weakened. It also hit a
three-month low on Tuesday and closed 2.5 percent lower.

* COLUMN: Hedge funds give up on indecisive "Doctor" copper: Andy Home.

* SENTIMENT: Investor outlooks have deteriorated to their most pessimistic
in a decade, Bank of America Merrill Lynch's December investor survey showed
on Tuesday.

* OTHER METALS: Nickel and zinc each lostn more than 1 percent in a broad
Shanghai metals sell-off.

* GLENCORE: Glencore-controlled Katanga Mining Ltd  is paying more than $22
million to settle Canadian allegations of inadequate historical disclosures
of its finances and activities in the Democratic Republic of Congo.

* FREEPORT: Indonesian miner PT Inalum expects to finalise this week a $3.85
billion deal to take majority control of the local subsidiary of mining
giant Freeport McMoRan Inc once environmental and other issues are resolved.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Unity Day

22/12/2018

Christmas Day

25/12/2018

Boxing Day

26/12/2018

New Years’ Day

01/01/2019

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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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