Bulls n Bears Daily Market Commentary : 28 December 2018

Fri Dec 28 20:19:59 CAT 2018

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Bulls n Bears Daily Market Commentary : 28 December 2018

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Zimbabwe Stock Exchange Update

Market Turnover $4,838,459.05 with foreign buys at $425,852.70 and foreign
sales were $1,923,655.27. Total trades were 99.

The All Share index rebounded strongly on week end after putting on 2.43
points  to close at 146.43 points. Heavyweight counters led the recovery as
the beverage giant DELTA   added $0.2211 to close at $2.8425, INNSCOR
gained $0.1000 to trade at $1.8500 and SEEDCO INTERNATIONAL   put on $0.0300
to close at $1.7500. Other gains were in NATIONAL TYRE SERVICES  which was
$0.0030 stronger at $0.0180 and STARAFRICACORPORATION   which was $0.0010
solid at $0.0140.

Losses were seen in CASSAVA SMARTECH   which retreated by $0.0126 to close
at $1.4337, ECONET  shed $0.0115 to settle at $1.4341 and OLD MUTUAL   which
dropped by a further $0.0091 to $7.9801. FIRST MUTUAL HOLDINGS  went down by
$0.0010 to close at $0.1300 and CBZ  came off $0.0009 to end at $0.1541.

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  Global Currencies & Equity Markets

Egypt

Egypt's central bank holds interest rates

(Reuters) - Egypt’s central bank left its key overnight interest rates
steady on Thursday, keeping the deposit rate at 16.75 percent and the
lending rate at 17.75 percent.

All 13 economists polled by Reuters had expected rates to remain unchanged.

Headline inflation slowed to 15.7 percent in November from 17.7 percent in
October as fruit and vegetable prices declined, after rising for three
consecutive months.

Core inflation, which strips out volatile items such as food, slowed to 7.94
percent in November, its lowest since April 2016, from 8.86 percent in
October.

GDP grew by 5.3 percent in the fiscal year that ended in June 2018, the
highest rate in 10 years.

South Africa

South Africa's rand edges up in light year-end trade

(Reuters) - South Africa’s rand gained on Thursday against a dollar weakened
by lingering concerns about the trade wrangle between United States and
China, while stocks were lower as positive sentiment after an overnight
rally faded.

At 1500 GMT the rand was 0.15 percent firmer at 14.5325 per dollar compared
with a close of 14.5550 overnight.

The currency reached a session best 14.4500 in early trade but lacked
momentum in low-volume trade to push through to technical resistance at
14.40 that traders are eyeing as a catalyst for further gains.

With politics in Washington and the sino-U.S. trade row curbing any large
bets on emerging currencies going into year-end, the dollar was down 0.2
percent on the day.

Reuters reported on Thursday that the Trump administration is considering an
executive order in the new year to declare a national emergency that would
bar U.S. companies from using Huawei and ZTE 000063.SZ products.

South African bonds were firmer, with the yield on benchmark government
paper due in 2026 down 7 basis points to 8.93 percent.

In stocks, the Top-40 index fell 1.32 percent to 45,595 points, while the
broader all-share was down 1.14 percent at 51,489 points.

Financial firm Old Mutual, Bidvest and tech-giant Naspers were the biggest
fallers on the blue-chip index, each down more than 3 percent.

Shares of telecoms giant MTN led the gainers, jumping as much as 8 percent
in its first trading session since it agreed to pay $53 million to settle a
row with Nigeria’s central bank that had threatened to cost it billions.

At the close, MTN shares were 3.32 percent higher at 884.30 rand. 

       <mailto:info at bulls.co.zw> 

World stock markets struggle to finish strong after wild week

(Reuters) - Investors gravitated to safe-haven assets on Friday as worries
about the world economy persisted, cutting short a two-day rebound in U.S.
stocks.

U.S. stocks see-sawed, making it difficult for world equity indexes to end
one of the most brutal December selloffs in memory on a high note.

After fluctuating most of the morning, at midday the Dow Jones Industrial
Average rose 43.89 points, or 0.19 percent, to 23,182.71, the S&P 500 gained
6.85 points, or 0.28 percent, to 2,495.68 and the Nasdaq Composite added
21.03 points, or 0.32 percent, to 6,600.53.

The pan-European FTSEurofirst 300 index rose 1.85 percent and MSCI’s gauge
of stocks across the globe gained 0.58 percent to bring the global benchmark
to a weekly gain over 1 percent.

Markets have swung wildly in a week shortened by the Christmas holiday. But
even a late Santa Claus rally will do little to salve the 8 percent declines
for the MSCI index this month and a year that brought gains for very few
categories of financial assets, from stocks to bonds and commodities.

The dollar index fell 0.1 percent, with the euro up 0.1 percent to $1.1441
and Japanese yen strengthening 0.57 percent versus the greenback at 110.39
per dollar. The greenback is down about 0.9 percent this month.

That has boosted gold, a traditional safe haven whose appeal this year was
hit by a stronger dollar, which makes the metal more expensive to buyers
with other currencies. The metal is perched at six-month highs of $1,279.18
an ounce.

The steady drum beat of disappointing economic data has continued to
reinforce caution, with Japan’s industrial output contracting in November
and retail sales showing sharply.

In Europe, German annual inflation slowed sharply in December, while in the
United States, National Association of Realtors data showed contracts to buy
previously owned homes fell unexpectedly in November, the latest sign of
weakness in the U.S. housing market.

Chris Bailey, a strategist at brokerage Raymond James, said dollar weakness
was good news for non-U.S. assets.

That would be a relief to world markets that largely underperformed the
United States in 2018.

U.S. Treasuries did not see a huge flight-to-safety move. Bonds have been
helped in recent weeks by risk aversion, but also face a glut of supply as
the U.S. government finances its growing deficit.

Short and medium-term bonds were little changed on Friday. The 30-year
Treasury bond last fell 6/32 in price to yield 3.0383 percent, from 3.029
percent late on Thursday.

U.S. crude oil futures managed to lift a bit further off 2-year lows after a
near-40 percent decline this quarter. The Energy Information Administration
reported U.S. crude stocks fell modestly last week.

Brent crude futures fell 3 cents to $52.13 a barrel, a 0.1 percent loss, by
12:28 p.m. EST (1728 GMT). U.S. West Texas Intermediate (WTI) crude futures
rose 54 cents to $45.15 a barrel, a 1.2 percent gain.

In Italy, 10-year yields are set for their biggest monthly drop since July
2015. In the last auction of the year, investors were willing to buy 10-year
government bonds at 2.70 percent, down from 3.24 percent last month.

The auction could be a sign Italy has turned a corner after months of
consternation over fractious talks on its spending plans with the European
Union.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper ekes out first weekly gain in 5 weeks

(Reuters) - Copper inched up on Friday for its first weekly rise in five
weeks as gains on global equity markets rekindled interest in riskier assets
and a weaker dollar made metal cheaper for buyers with other currencies.

Benchmark copper on the London Metal Exchange (LME) closed up 0.2 percent at
$5,997 a tonne and around 0.2 percent higher for the week.

Still, concerns over slowing economic growth in China, the biggest metals
consumer, have left copper down 17 percent over the year as a whole.

But weaker Chinese demand for copper meant prices would likely remain around
current levels through next year, he added.

CHINA ECONOMY: China’s manufacturing sector is expected to have contracted
for the first time in more than two years in December, a poll found.

Data this week showed earnings at Chinese industrial firms in November
dropped for the first time in nearly three years.

U.S.-CHINA TRADE: China and the United States plan face-to-face
consultations on trade in January, the Chinese commerce ministry said.
Worries that trade tariffs will curtail demand for metals have dragged
prices lower this year.

DOLLAR/MARKETS: The dollar has weakened from its recent 18-month high
against a basket of major rivals, easing pressure on metal prices, while
global equities have regained some ground after a sell-off.

INDEX REBALANCING: A rebalancing of asset allocations by benchmark indexes
in early January will see significant buying of aluminium, zinc and Comex
copper, analysts at Citi said in a note.

CHINA TC/RCs: China’s top copper smelters raised their floor treatment and
refining charges for the first quarter of 2019 by 2.2 percent, sources said.
Higher charges indicate a well-supplied copper concentrate market.

CHILE COPPER: Chilean miner Collahuasi - which produced an estimated 545,000
tonnes of copper this year - has applied for an environmental permit to
extend the life of its deposit with an estimated $3.2 billion investment.

ALUMINIUM: LME aluminium ended down 0.4 percent at $1,845 a tonne and down
more than 3 percent this week - the biggest weekly loss since October -
after Russian producer Rusal agreed a deal to remove it from a U.S.
sanctions list and appointed a new chairman.

ALUMINIUM SPREAD: Cash aluminium flipped from a discount to a $11.75 a tonne
premium over the three-month contract CMAL0-3, likely signalling greater
availability of nearby supplies.

OTHER METALS: LME zinc closed down 2.2 percent at $2,440 a tonne, nickel
finished 0.4 percent lower at $10,730, lead gained 1.5 percent to $2,060 and
tin rose 1 percent to $19,495.

Gold holds near 6-month high on softer dollar, tumultuous stocks

BENGALURU, Dec 28 (Reuters) - Gold prices held near six-month highs hit on
Friday, helped by a softer dollar, concerns over slowing economic growth and
wild swings in equities, putting bullion on track for a second straight week
of gains.

Spot gold was up 0.3 percent at $1,279.06 per ounce as of 11:52 a.m EST
(1652 GMT), and up 1.8 percent so far this week.

Earlier it had peaked at $1,282.09, its highest level since June 19. U.S.
gold futures were steady at $1,281.90 per ounce.

The dollar index, a gauge of the U.S. currency’s value against six major
peers, fell 0.1 percent, adding to gold’s appeal by making it cheaper for
holders of other currencies.

There have been wild swings in equities during the final week of 2018, with
the CBOE Volatility Index, Wall Street’s main fear gauge, hitting its
highest level since early February before easing slightly.

Financial markets are expecting U.S. growth to slow next year due to rising
interest rates. A measure of U.S. consumer confidence posted its sharpest
decline in more than three years in December, emphasising the possibility.

A darkening outlook for global economic growth, a simmering trade war
between the United States and China, as well as Brexit-linked uncertainty
may trigger renewed risk aversion and help lift gold prices in 2019, said
Ilya Spivak, a currency strategist at DailyFx.

Gold is often used by investors as a hedge against political and financial
uncertainty.

Both chambers of U.S. Congress convened for only a few minutes late on
Thursday but took no steps to end a partial federal government shutdown
before adjourning until next week.

Among other precious metals, silver rose to a near-five-month high at $15.39
per ounce and was last up 0.5 percent at $15.29. It was on track for its
biggest weekly gain since August 2017, up 4.5 percent so far this week.

Platinum fell 0.8 percent to $789.70 per ounce, while palladium dipped 1.3
percent to $1,258.99. Palladium has gained about 2.4 percent this week.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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
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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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