Bulls n Bears Daily Market Commentary : 12 February 2018

Mon Feb 12 17:16:15 CAT 2018

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Bulls n Bears Daily Market Commentary : 12 February 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $683,686.78 with foreign buys at $305,013.26 and foreign
sales were $118,374.78. Total trades were 50.

The All Share index opened the week lower at 89.63 points after losing 0.42
points . Only three counters lost ground; OLD MUTUAL shed $0.0564 to close
at $5.3000,  DELTA   eased $0.0400 to settle at $1.6200 and OK ZIMBABWE
inched down $0.0005 to end at $0.1650.  

Trading in the positive; INNSCOR gained $0.0070 to close at $0.8489, ZIMRE
HOLDINGS LIMITED rose by $0.0039 to trade at $0.0299 whilst BARCLAYS was
$0.0020 stronger at $0.0450. 

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenya shilling at 19-month high against the dollar

(Reuters) - The Kenyan shilling edged up against the dollar on Monday,
remaining close to its highest level in more than 19 months, mainly due to
portfolio flows and reduced political risk. 

    At 0606 GMT, commercial banks quoted the shilling at 100.70/90 per
dollar, compared with 100.85/101.05 at Friday's close. 

Investors abroad have been putting in their dollars into Kenya's debt market
this year. Traders said the currency was also benefiting from lower
political risk after election last year. On Friday, Fitch revised Kenya's
outlook to stable. 

Uganda

Uganda shilling stable amid slowdown in demand

(Reuters) - The Ugandan shilling was unchanged on Monday amid subdued demand
for hard currency from merchandise importers, traders said.

At 0956 GMT, commercial banks quoted the shilling at 3,630/3,640, the same
as Friday’s close.

World shares attempt bounce after worst week in two years

(Reuters) - World shares climbed half a percent on Monday, attempting to
brush off fresh rises in global bond yields while equity futures also
pointed to a firmer session on Wall Street which suffered its worst week in
two years.

A higher Friday close for New York stocks following a week of “vol” induced
selling, lifted markets in Asia and Europe, helping MSCI’s all-country index
rise off four-month lows , while European shares firmed 1.4 percent after
touching six-month troughs last week.

Wall Street’s equity volatility gauge, the VIX - the spike in which had
kicked off the ructions - was at 26.5 percent, easing off Friday’s 29
percent close.

While the index had rocketed to 50 at the height of last week’s turmoil,
current levels are well above the long-term average around 11 percent, in a
sign that investors’ nerves are still jangling.

The continued move-up in bond yields is reinforcing the fear of more
volatility ahead. Ten-year Treasury yields hit new four-year highs around
2.90 percent, while German yields, the benchmark for Europe, hovered just
below 0.8 percent, the 2-1/2-year high touched last week .

Given solid world economic growth, Lewis said the falls were more likely a
wobble than a full-blown correction to the nine-year long equity bull market
as bond investors priced in an improved economic outlook.

U.S. equity futures rose 1 percent .

Data from the U.S. Commodity Futures Trading Commission showed equity funds
had cut long positions in S&P 500 futures, reducing exposure to a market
which has fallen about 8 percent from Jan. 26 record highs.

INFLATION, DOLLAR

While equity markets attempt to recover, the question is whether they can
withstand another sharp move up in bond yields - something will be put to
the test by economic data this week.

In China, banks extended a record amount of new yuan loans in January,
blowing past expectations, which is likely to support growth not only in
China but underpin liquidity globally.

Analysts forecast U.S. consumer price inflation, to be released on
Wednesday, to have slowed to 1.9 percent in January from a year earlier,
while the core measure is seen ticking down to 1.7 percent.

Given it was fears of faster inflation - and more aggressive rate rises -
that triggered the global rout in the first place, an above-forecast figure
could well spark a fresh selloff in stocks and bonds.

Central bankers have not exhibited much concern over the equity rout,
indicating they intend to push on with plans to tighten monetary policy this
year.

On currency markets, traders had cut net short positions in the dollar last
week, CFTC data showed, but speculators returned on Monday to short the
dollar, pushing it 0.2 percent lower versus a basket of currencies.

Societe Generale said the risk bounce was being countered by the steeper
U.S. bond curve but the soft dollar showed the former currently had the
upper hand.

The gap between short- and long-dated U.S. yields is at the widest in more
than three months - the so-called curve steepening which indicates higher
inflation expectations and economic activity.

The euro rose around 0.2 percent, after losing 1.8 percent last week, while
the yen eased off five-month highs hit last week amid the flight to
safe-havens.

Sterling meanwhile inched higher, off last week’s three-week lows but
Britain’s shaky economy and rocky Brexit process kept it fragile.

Monday’s more cheerful market mood also lifted commodities, with Brent crude
futures rising two percent after last week’s 9 percent fall, copper bouncing
off two-month lows and gold up 0.2 percent, well off five-week troughs.

Commodities Markets

Gold rises, but gains capped before U.S. price data

(Reuters) - Gold prices rose on Monday as the dollar steadied, but gains are
expected to be muted ahead of inflation data from the United States later
this week that could mean U.S. interest rates rise faster than expected. 

Spot gold        was up 0.2 percent at $1,318.54 an ounce at 1329 GMT. It
has fallen more than 3 percent since hitting a 17-month peak at $1,366.07 in
January. U.S. gold futures        

rose 0.4 percent to $1,320.70 an ounce.

Worries about inflation in the United States surfaced after data this month
showed jobs growth surged and wages rose, bolstering expectations that the
U.S. labour market would hit

full employment this year.             

U.S. inflation data for January is due on Wednesday and the U.S. Federal
Reserve next meets on March 20-21.             

A lower U.S. currency makes dollar-denominated gold cheaper  for holders of
other currencies, potentially boosting demand.

The dollar was steady against a basket of six major currencies as a bounce
in equity markets ended a strong run for the greenback, used by investors as
a safe place to park assets

in times of financial market volatility.       

Hedge funds and money managers slashed their net long position in COMEX gold
for the first time in eight weeks in the week to Feb. 6, and cut it in
silver, U.S. Commodity Futures

Trading Commission data showed on Friday.        

Gold faces strong resistance at the 100-day moving average around $1,345. A
break of support at $1,300 could see the market trying to test the 21-day
moving average at around $1,275.

Silver        gained 0.3 percent to $16.38 an ounce,

platinum        slipped 0.5 percent to $959.99 an ounce and

palladium        was up 0.8 percent at $982.50 an oun

Weaker dollar bumps copper up from two-month low

(Reuters) - Copper prices rose on Monday from a two-month low last week,
helped by a weaker dollar and more stable global markets that encouraged a
return to riskier assets.

A weaker dollar makes metals cheaper for users of other currencies and can
spur demand.

Industrial metals prices have fallen this year but remain near multi-year
highs.

COPPER: Benchmark three-month copper on the London Metal Exchange did not
trade in official rings but was bid up 1.2 percent at $6,834 a tonne after
touching $6,733 on Friday, the lowest since Dec. 14.

TECHNICALS: Copper was struggling to rise above its 100-day moving average
at $6,892 a tonne. Fibonacci resistance was at $6,897 and copper prices were
likely to fall further, Reuters technical analyst Wang Tao said.

POSITIONING: Speculators’ net long position in LME copper has fallen to the
lowest since May and in Comex copper has more than halved since the start of
the year, putting pressure on prices. LME-CA-MNET

STRIKES: Fears of labour strikes this year had helped push copper higher.
But early wage deals at two copper mines may be a signpost for further
agreements with mine workers.

STOCKS: Inventories in LME-registered warehouses fell slightly but remain
near the highest in a year after rising from 200,000 tonnes in mid-January
to more than 330,000 tonnes, suggesting plentiful supply. MCUSTX-TOTAL

GLOBAL MARKETS: World shares staggered higher after their worst week in two
years, attempting to brush off fresh rises in global bond yields. Oil prices
also rose for the first time in seven trading sessions.

U.S. DEMAND: President Donald Trump will roll out an infrastructure plan on
Monday that could fuel demand for metals but already faces significant
hurdles in Congress.

CHINA LOANS: Banks in China, the world’s biggest consumer of metals,
extended a record 2.9 trillion yuan ($458.3 billion) in new yuan loans in
January, blowing past expectations as policymakers aim to sustain solid
economic growth.

CHINA HOLIDAY: The Shanghai Futures Exchange will close from the evening of
Feb. 14 for Lunar New Year celebrations.

OTHER METALS: LME aluminium traded up 0.3 percent at $2,129 a tonne, zinc
was bid 0.4 percent higher at $3,400, nickel traded up 0.2 percent at
$12,995, lead was bid down 1 percent at $2,510 and tin was bid 0.5 percent
higher at $21,130.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Robert Mugabe National Youth Day

21 Feb 2018

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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