Bulls n Bears Daily Market Commentary : 15 February 2018

Thu Feb 15 17:42:31 CAT 2018

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Bulls n Bears Daily Market Commentary : 15 February 2018

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover $12,130,320.92 with foreign buys at nil and foreign sales
were nil. Total trades were 104.

The All Share index shed 0.77 points  to end at 88.76 points as five
counters lost ground. NATFOODS went down by a significant $0.5998 to trade
at $5.4002, BRITISH AMERICAN TOBACCO went down by $0.1500 to close at
$24.2000 as FIRST MUTUAL HOLDINGS was $0.0166 lower at $0.1700. ECONET
eased $0.0100 to $0.6900 while  BARCLAYS dropped by $0.0010 to end at
$0.0440.

However there were no trades in the positive territory while AFDIS , DELTA ,
MEIKLES , PPC and SIMBISA traded unchanged at $1.4500, $1.6200, 0.3050,
$0.8500 and $0.4000 in that sequence. 

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling under pressure amid increased dollar demand

(Reuters) - The Kenyan shilling was under pressure against the dollar on
Thursday, with low overnight borrowing rates in the money markets triggering
increased demand for dollars among banks to meet liquidity thresholds,
traders said.

At 0830 GMT, commercial banks quoted the shilling at  101.10/30 per dollar,
compared with 101.00/20 at Wednesday'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. 

Uganda

Ugandan shilling steady, liquidity removal offers support

(Reuters) - The Ugandan shilling traded stable on Thursday, helped by a
central bank mop-up of excess local currency liquidity via a repurchase
agreement (repo) and two deposit auctions.

At 1050 GMT, commercial banks quoted the shilling at 3,630/3,640, the same
level as Wednesday’s close.

Stocks shrug off bond market angst over inflation

(Reuters) - Stocks and commodities steamed higher on Thursday, suddenly
shrugging off the angst that has burst out in recent weeks over higher
global borrowing costs on the back of rising inflation.

Economists were struggling to explain the shift except for the argument that
historically it’s not unusual for stocks and bond market borrowing costs to
rise in tandem with a rapidly expanding economy.

Some just blamed the weather and time of year. They speculated that
Wednesday’s strong U.S. inflation data that many had predicted could
reignite the rout was probably distorted while Asian bears may be squaring
up positions for Chinese new year.

Whatever the reason though, the animal spirits were back for riskier assets
like stocks.

Big gains for Wall Street and Asia overnight put MSCI’s 47-country world
stocks index back in positive territory for the year and Europe’s main
markets followed with 0.6 - 1 percent gains.

Wall Street futures were also pointing higher but just as big a puzzle as
the sudden rebound in stocks sentiment was the break down in correlation
between rising U.S. bond yields and dollar.

U.S. Treasury yields on benchmark 10-year notes hit a fresh four-year high
of 2.94 percent which also dragged gap to 0.786 percent German Bunds out to
its widest in 10 months.

The dollar tumbled though across the board, including to a 15-month low
against the yen of 106.18 yen as worries about the U.S. government’s
finances seemed to set again after a White House-led spending splurge and
recent corporate tax cuts.

That also marked a drop of 3.8 percent from its early February peak near
110.50 yen, while the euro and pound both climbed back above the $1.25 and
$1.40 thresholds.

VOLATILITY DROPS

Asia’s stocks rally overnight saw Australian shares climb 1.15 percent and
South Korea’s KOSPI added 1.1 percent. Japan’s Nikkei shrugged off the
normal drag of a stronger yen to advanc 1.5 percent following three
successive down day that had taken it to a four-month low.

Volatility shrivelled back too. The VIX index - Wall Street’s “fear gauge”
and a measure of market volatility - fell all the way back to 18, less than
half the 50-point peak touched last week.

The dollar’s weakness also lifted emerging markets and commodities though
there were a number of idiosyncratic stories in play too.

After weeks of frenzied speculation, the resignation of South Africa’s
President Jacob Zuma sent the rand to a 2-1/2-year high of 11.66 and put the
country’s stock market on course for its best day in three years.

In reaction to Zuma’s resignation, Moody‘s, which is about to make a
decision on whether to remove the country last investment grade credit
rating, said it was focused on the new leadership’s response to low growth
and implementing reforms.

Brent crude futures shot up over 1 percent meanwhile to $65.06 per barrel
before losing momentum and trudging back to $63.87.

While the greenback’s woes were a big factor, the moves came after a surge
the previous day triggered by supply data and comments from Saudi Arabia
that major oil producers would prefer tighter markets than end supply cuts
too early.

Metals copper and gold both shone too.

Gold rose to a 10-day top of $1,357 per ounce, while copper - seen as a
sensitive indicator of the health of the global economy - was on track for a
weekly gain of more than 6 percent.

Commodities Markets

Copper climbs as wilting dollar drives base metals gains

(Reuters) - Copper rose on Thursday as the dollar retreated and strong
inflation data prompted a move into hard assets, sparking an early rally
across base metals that also saw zinc hit its highest in a decade and nickel
a near three-year peak.

Copper is on track for its biggest weekly gain since November 2016, up 6.5
percent so far on the back of optimism over global growth and weakness in
the dollar, which benefits assets priced in the U.S. currency.

The dollar slipped sharply on Wednesday after higher than expected inflation
and a weak retail sales report, and extended losses on Thursday to slide
back towards last month’s three-year low.

“It appears that the growing inflation fears ...in the U.S. have sparked
considerable buying interest in metals,” Commerzbank said in a note. “Metals
and commodities in general are seen as a hedge against inflation.”

* COPPER PRICES: London Metal Exchange copper was up 0.2 percent at
$7,174.50 a tonne by 1040 GMT.

* COPPER SUPPLY: Chilean mining company Antofagasta received environmental
approval for a major $1.1 billion revamp of its Los Pelambres copper mine,
the regional government of Coquimbo said on Wednesday.

* ZINC: Zinc hit its highest since July 2007 at $3,595.50 a tonne in early
trade, though it later eased back to $3,556.50, down 0.3 percent.

* ZINC SPREADS: The premium for cash over three-month zinc CMZN0-3 slipped
to $23.50 a tonne from a three-month high of $55.50 at the end of January,
suggesting near-term tightness in the market is easing.

* NICKEL: LME nickel hit its highest since May 2015 and was later up 0.5
percent at $14,165 a tonne. The metal, used in stainless steel, is expected
to be supported by strong Chinese demand, supply tightness, and investment.

* ALUMINIUM STOCKS: LME aluminium stocks MALSTX-TOTAL stocks rose by 31,275
tonnes, adding to Tuesday’s 158,925-tonne increase. Stocks have climbed
187,250 tonnes so far this week, on track for their biggest weekly gain
since May 2009.

* ALUMINIUM PRICES: LME aluminium was up 0.1 percent at $2,178.50 a tonne.

* CHINA HOLIDAY: The Shanghai Futures Exchange is closed from the evening
session on Wednesday until Feb. 22, reducing trading activity and increasing
price volatility.

* OTHER METALS: LME lead was down 0.1 percent at $2,576.50 a tonne, while
tin was 0.5 percent lower at $21,450 a tonne.

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
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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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