Bulls n Bears Daily Market Commentary : 13 February 2018

Tue Feb 13 16:57:14 CAT 2018

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Bulls n Bears Daily Market Commentary : 13 February 2018

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Zimbabwe Stock Exchange Update

Market Turnover $6,974,602.47 with foreign buys at $480,769.89 and foreign
sales were $1,510,531.25. Total trades were 124.

The All Share index came off 0.13 points  to settle at 89.50 points as
activity increased across the board. BRITISH AMERICAN TOBACCO  led the
losers with a $0.0537 loss to close at $24.4000, AFRISUN  eased $0.088 to
$0.0362 while OK ZIMBABWE dropped by $0.0050 to close at $0.1600. NAMPAK
shed $0.0020 to trade at $0.1700, ECONET  went down by $0.0011 to end at
$0.6989 whilst SEEDCO was $0.0007 weaker at $1.9493.

Gains were seen in FIDELITY LIFE which put on $0.0160 to trade at $0.0960,
PPC  added $0.0056 to $0.8556 while INNSCOR  was up by $0.0052 to end at
$0.8541. MEIKLES  shifted up $0.0050 to $0.3050 and UNIFREIGHT  inched up
$0.0001 to close at $0.0146.

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Global Currencies & Equity Markets

South Africa

South Africa's rand, bonds slide after ANC says no deadline for Zuma exit

(Reuters) - South Africa’s rand weakened on Tuesday after the ruling African
National Congress (ANC) said it had not given President Jacob Zuma a
deadline to accept its decision to “recall” him and resign, leaving a cloud
of uncertainty hanging over his future.

At 1315 GMT the rand was 0.55 percent weaker at 11.9850 per dollar.

Bonds also weakened with the yield on the benchmark 2026 government issue
dup 6 basis points to 8.45 percent.

ANC Secretary-General Ace Magashule said on Tuesday the party would deal
with the issue should Zuma refuse to step down as head of state as ordered
by his party, but admitted the party had not given him a deadline to do so.

The decision to order Zuma’s removal from office followed 13 hours of tense
deliberations and one short face-to-face exchange between Zuma and Cyril
Ramaphosa, the businessman who was elected party chief in December.

The rand’ s fortunes have been closely tied to political outcomes over the
past couple of months, with the currency rallying on any sign of an end to
the corruption scandals and economic decline that have tainted Zuma’s time
in office.

Stocks were firmer, with the Johannesburg bourse’s index of 40 blue-chip
stocks up 1.8 percent to 50,430 points.

Uganda

Ugandan shilling stable despite key rate cut

(Reuters) - The Ugandan shilling remained unchanged on Tuesday, despite a
central bank easing of its monetary policy stance, traders said.

At 1217 GMT, commercial banks quoted the shilling at 3,630/3,640, the same
level as Monday’s close.

The Bank of Uganda cut its policy rate to 9 percent from 9.5 percent earlier
on Tueday, but traders said the local currency remained stable, drawing
support from pending mid-month tax payments.

Japan

Japan eyes tighter leverage cap on forex trading

TOKYO -- Japan's Financial Services Agency is considering lowering the
maximum leverage allowed on foreign exchange trading by individuals as soon
as this spring to curb risk taking.

The agency is studying a proposal to bring the leverage cap from 25-to-1
down to 10-to-1, based on trends in historical market volatility. The change
would increase the margin deposit required for trading the same amount of
currency by 150% and lower the potential for investment gains.

Forex traders use leverage -- in essence, money they do not have -- to
magnify their gains. But it can have the opposite effect when the market
moves against their positions. 

When a forex broker takes a trading order from a customer, it is required to
place an order for the same amount and currency pair with a bank or another
party to ensure it stays neutral with respect to market risk. But in some
cases, these cover transactions are not used as much as they should be, the
FSA has found.

The FSA also plans to raise the required capital adequacy ratio for forex
brokers to deepen their buffers against losses during times of heightened
market volatility. Brokers are now required to maintain a ratio of above
120% or face regulatory action. But the failure of a counterparty on a cover
transaction can trigger a situation in which multiple brokers fall below the
required level.

The agency will set up on Tuesday an expert panel on risks for
over-the-counter retail forex brokers to discuss the proposed changes.

This year marks 20 years since deregulation in April 1998 opened up forex
trading to individuals and businesses at large. Forex trading in Japan
exceeded 5 quadrillion yen ($46 trillion) in 2015 but shrank 17% on the year
last year to around 4.3 quadrillion yen. Retail investors appear to be
turning to cryptocurrencies for their greater volatility.

An executive at a major forex broker voiced concern that the tighter
regulations reduce the appeal of forex trading and lead to a further
decrease in customers.

Commodities Markets

Gold climbs as dollar weakens ahead of U.S. inflation data

(Reuters) - Gold rose for a second day on Tuesday as the dollar slipped in
the face of a recovery in global equities, which dampened appetite for the
U.S. currency as a safe store of value. 

A retreat in the dollar, in which the precious metal is priced, has helped
gold to pull back nearly 2 percent from last week's one-month low of
$1,306.81 an ounce.

Spot gold        was up 0.4 percent at $1,328.44 by 1245 GMT, while U.S.
gold futures        for April delivery were $4.30 an ounce higher at
$1,330.70. 

While bullion is sometimes seen as a haven from risk, it benefited little
last week from the slide in equities as investors moving out of stocks
broadly sought refuge in the

dollar, trumping other drivers.            

Global equities                 were up 0.3 percent on Tuesday, with Asian
shares rising from two-year lows overnight on the back of an extended
rebound among Wall Street stocks

after their biggest weekly drop in two years.             

Shares remained under some pressure in Europe, however, indicating caution
in the market. Investors are now awaiting U.S. January inflation data, due
on Wednesday, for clues on the

next move in financial markets.

Inflation is sometimes seen as gold-positive, because bullion is seen as a
safe store of value at a time when price pressures are rising, but
expectations that the U.S. Federal

Reserve will lift interest rates to fight inflation make the non-yielding
metal less attractive.

Among other precious metals, silver        was up 0.5 percent at $16.63 an
ounce, while platinum        gained 0.6 percent to $976.50.

Palladium        was up 0.8 percent at $992.70. The autocatalyst metal has
slid nearly 14 percent since hitting a record $1,138 in mid-January but
remains at elevated levels on

expectations that the market will remain in deficit for a while yet.

London copper rises for second day on weaker dollar

(Reuters) - London copper prices climbed for  a second session on Tuesday,
bouncing back from two-month lows

hit last week, helped by a weaker dollar tracking a broad recovery in global
equities.

Traders were looking to cover their positions before the Lunar New Year
holiday, wrote Matt France, head of institutional metal sales, Asia, at
brokerage Marex Spectron.

The holiday will see China, the world's top copper consumer, and the
Shanghai Futures Exchange (ShFE) shut down for a week.  

    FUNDAMENTALS

* LME COPPER: Three-month copper on the LME was up 1.4 percent at $6,925 a
tonne at 0726 GMT, extending gains from the previous session, when it ended
up 1.1 percent.

* SHFE COPPER: The most-traded April copper contract on the ShFE rose for
the first time in three days, closing up 1.5 percent at 52,140 yuan
($8,230.47) a tonne.

* U.S. DOLLAR: The dollar index slid by 0.3 percent. 

A weaker dollar makes metals cheaper for holders of other currencies and can
support prices.   

* OTHER METALS: Zinc, nickel and aluminium  made gains of around 1 percent
in London, while recent laggard lead was up by 0.3 percent.

* COPPER: Aurubis AG, Europe's biggest copper smelter, is in advanced
negotiations to sell its flat rolled products unit to German cooper products
company Wieland-Werke AG

as Aurubis looks to expand into other metals besides copper.

* ALUMINIUM: U.S. President Donald Trump will meet with a bipartisan group
of lawmakers on Tuesday to discuss trade matters, as he ponders whether to
takes steps to limit steel and

aluminium imports seen as damaging to U.S. businesses.

* BHP: Australian miner BHP Billiton said on Tuesday it will record a $1.8
billion income tax expense due to cuts in the U.S. Federal corporate income
tax rate.

* COBALT: Makers of electric vehicle batteries will have to keep using
scarce, expensive cobalt in their products for the foreseeable future
despite a push towards higher nickel

compositions, materials technology company Umicore said on Monday.

    MARKETS NEWS    

* Asian stocks pulled further away from two-month lows on Tuesday, lifted by
Wall Street's extended rebound from last week's steep fall, but investors
remained cautious ahead of U.S. inflation data later in the week.

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
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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
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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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