Bulls n Bears Daily Market Commentary : 14 February 2018

Wed Feb 14 17:13:23 CAT 2018

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Bulls n Bears Daily Market Commentary : 14 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 was marginally up by 0.03 points  to settle at 89.53 points. INNSCOR put on $0.0226 to close at $0.8767, OK ZIMBABWE  was up by $0.0050 to $0.1650 while ECONET   rose by $0.0011 to end at $0.7000. SEEDCO   inched up by $0.0007 to close at $1.9500. 

However, BRITISH AMERICAN TOBACCO  shed $0.0500 to close at $24.3500, SIMBISA  dropped $0.0200 to $0.4000 while NICOZ DIAMOND   was $0.0075 weaker at $0.0310. PPC  decreased by $0.0056 to trade at $0.8500 and ZPI   slipped $0.0005 to $0.0190.

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Global Currencies & Equity Markets

Kenya

Kenya shilling under pressure against the dollar

(Reuters) - The Kenyan shilling fell against the dollar on Wednesday amid ample liquidity in the money markets which sent overnight rates on the interbank market further down, traders said. 

At 0758 GMT, commercial banks quoted the shilling at 101.05/25 per dollar, compared with 100.85/95 at Tuesday's close. 

The weighted average interest rate on the overnight borrowing market slid to 4.4854 percent on Tuesday from 4.6244 percent the previous day. 

South Africa

South African rand firms on talk Zuma will resign, Gupta arrest

(Reuters) - South Africa’s rand firmed on Wednesday on expectations President Jacob Zuma would offer his formal resignation after the ruling African National Congress (ANC) party ordered the 75-year old to step down.

At 0714 GMT, the rand was 0.8 percent firmer at 11.8590 to the dollar.

Zuma is expected to respond on Wednesday to the ANC’s order to step down as head of state, party officials said, after the party gave him no firm deadline to resign.

The presidency told the media on Wednesday to “await official notification” of a briefing by Zuma, amid expectations of his resignation.

Gains were supported after a police unit raided the home of the Gupta family, wealthy friends of Zuma, with local police reporting that one member of the family has been arrested.

The Guptas are accused by the public anti-graft watchdog of using their friendship with Zuma to influence policy and amass wealth. They have denied any wrongdoing.

Bonds were stronger with the yield on the benchmark 2026 government issue down 5.5 basis points to 8.400 percent.

Stocks were firmer, with the Johannesburg bourse’s index of 40 blue-chip stocks up 0.3 percent to 50,540 points, while the All-Share index lifted 0.21 percent to 57,330 points 

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 firms as dollar wilts ahead of U.S. inflation data

(Reuters) - Gold rose for a third day onWednesday, pulling further away from last week's one-month low  as the dollar wilted ahead of U.S. inflation data due later in the day. 

Investors are awaiting clues from the report on the outlook for U.S. monetary policy, which will likely be influenced by the strength of price pressures on the economy. The dollar hit a

15-month low against the yen in early trade.       

That helped buoy gold, which is priced in the U.S. currency. 

Spot gold        was up 0.1 percent at $1,330.96 an ounce at 1030 GMT, while U.S. gold futures        for April delivery were up $2.70 an ounce at $1,333.10.

Gold fell last week as investors selling out of sliding stock markets opted for the dollar as an alternative investment. 

The U.S. currency has since given up two-thirds of its gains for the month, and remains under pressure ahead of the inflation data.

The U.S. inflation report for January, due for release at 1330 GMT, could raise expectations for faster U.S. interest rate hikes if it indicates price pressures are building.            

While inflation can boost demand for bullion as a safe store of value, the positive impact of that may be offset by a rise in interest rates, which makes non-yielding gold less attractive.

European stocks rose ahead of the report, while the dollar eased 0.1 percent against the euro.  

The world's largest gold-backed exchange-traded fund, SPDR Gold Shares      , reported an inflow of nearly 3 tonnes on Tuesday, following their worst weekly fall since July 30. 

On the physical side of the market, gold demand in major consumer China was weak in the run-up to the New Year holiday that will begin on Thursday, dealers said. 

Among other precious metals, silver        was up 0.1 percent at $16.57 an ounce, while palladium        was flat at $985 an ounce. Platinum        was up 0.1 percent at $974.50. 

Jordan's Arab Aluminium Industry FY Profit Rises

(Reuters) - ARAB ALUMINIUM INDUSTRY CO PSC:

* FY NET PROFIT ATTRIBUTABLE TO SHAREHOLDERS 547,786 DINARS VERSUS 490,140 DINARS YEAR AGO‍

* FY NET OPERATING REVENUE 12.6 MILLION DINARS VERSUS 11.9 MILLION DINARS YEAR AGO‍        

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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