Bulls n Bears Daily Market Commentary : 16 February 2018

Fri Feb 16 16:06:09 CAT 2018

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Bulls n Bears Daily Market Commentary : 16 February 2018

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Zimbabwe Stock Exchange Update

Market Turnover $4,211,554.29 with foreign buys at $1,764,427.29 and foreign
sales were $1,926,197.63. Total trades were 113.

The All Share index closed the week in the positive territory as activity
continue to rise across the board. INNSCOR   added $0.0233 to close at
$0.9000, PPC  gained $0.0025 to close at $0.8525 while ECONET  was $0.0023
higher at $0.6923. OK ZIMBABWE  went up by $0.0010 to $0.1660 while AFRISUN
inched up $0.0003 to end at $0.0365.

Only two counters lost ground as DELTA  dropped by $0.0073 to trade at
$1.6127 and NATIONAL FOODS  was $0.0002 lower at $5.4000.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand rises further after Ramaphosa sworn in as president

(Reuters) - South Africa’s rand extended recent gains early on Friday, a day
after Cyril Ramaphosa was sworn in as the country’s president, raising hopes
of an end to the corruption scandals and economic decline seen during Jacob
Zuma’s nine years in power.

* At 0612 GMT, the rand traded at 11.5800 versus the dollar, 0.26 percent
stronger than its New York close on Thursday.

* Analysts at NKC Research said they expected the rand to trade in a range
of 11.50/$ - R11.75/$ on Friday.

* Ramaphosa became South Africa’s head of state on Thursday after Zuma
resigned under pressure from Ramaphosa’s allies in the ruling party, the
African National Congress (ANC).

* A former union leader, Ramaphosa has promised to fight corruption and woo
foreign investors. He will deliver a closely watched speech, the state of
the nation address on Friday.

* South African markets rallied strongly on Thursday, with stocks rising as
much as 5 percent and the rand firming to its firmest since early 2015.
Analysts use the phrase “Ramaphosa rally” to refer to the buoyant market
mood since Ramaphosa was elected ANC leader in December.

* Government bonds were also stronger on Friday, with the yield on the
benchmark instrument due in 2026 down 6.5 basis points to 8.165 percent. 

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling held steady against the dollar on Thursday,
supported by horticulture export earnings and remittances sent by citizens
living abroad, traders said. 

At 0835 GMT, commercial banks quoted the shilling at 101.15/35 per dollar,
the same as Thursday's close.

Forex trading up sharply in 2018 as volatility returns

LONDON (Reuters) - Foreign exchange trading volumes have risen sharply since
the start of this year, new data showed on Thursday, as investors ramped up
bets on a weaker dollar and uncertainty about the end of the era of cheap
money stoked volatility.

Foreign exchange volatility has slumped in recent years as record levels of
liquidity provided by central banks calmed markets and left investors with
fewer ways to wring a profit from trading currencies.

But the continued depreciation of the dollar this year, accelerated by the
U.S. Treasury Secretary’s comments welcoming a weaker dollar, as well as
signs that central banks will begin dialling back their stimulus, have fired
up currency markets.

Electronic trading platforms are also reporting a sharp increase in fixed
income trading volumes.

CLS, a major settler of trades in the FX market, said the average daily
traded volume submitted to it had risen to $1.805 trillion in January, up 24
percent from a year earlier and up 15.6 percent from December.

CLS said trading had accelerated further in early February, possibly as the
equity sell-off starting in late January increased volatility even more.

In the first four days of last week, Feb. 5 to Feb. 8, volumes rose by a
further 14 percent over January’s numbers to $2.054 trillion, CLS said.

Currency market swings, however, have been far more measured than in stocks,
with volatility still below long-term average levels.

Thomson Reuters said this week that FX trading volumes on its platforms had
hit a record high in January, the first month following the introduction of
sweeping European regulations, known as MiFID II or Markets in Financial
Instruments Directive II.

Average daily volumes topped $432 billion in January compared with an
average of more than $407 billion, the company said.

The new European rules, designed to increase market transparency, have also
driven electronic fixed income trading volumes.

MarketAxess, one of the bigger platforms, said this month that average daily
trading volumes hit a record $7.3 billion in January, up 22 percent from a
year earlier.

RISING VOL

The uptick in volatility will be welcomed by investment bank trading desks,
which can make more money when prices swing wider but have faced years of
calmer markets.

Still, Jefferies noted that volatility in the world’s most traded currency
pair, the euro/dollar, remains below its long-term average even after the
recent rise.

When stocks tumbled earlier this month, Jefferies said currencies did not
move as much as many had expected, suggesting “positions might not have been
as big as you thought”.

But with central banks expected to accelerate unwinding of their balance
sheets as inflation expectations rise, currency volatility is set to rise.

Commodities Markets

Copper on track for biggest weekly gain in over a year

(Reuters) - Copper edged up on Friday and headed for its biggest weekly gain
in more than a year as the dollar continued to decline, while zinc climbed
on depleting stocks.

Benchmark copper on the London Metal Exchange rose 0.7 percent to $7,235 a
tonne by 1155 GMT. The metal, used in power and construction, is up 7
percent so far this week in its best performance since November 2016.

“The return of risk appetite that we are seeing through a strong rebound in
stock markets, inflation expectations and the weaker dollar has been
supportive for industrials, which are enjoying the investment demand,” Saxo
Bank analyst Ole Hansen said.

DOLLAR: The dollar slipped to a three-year low against a basket of
currencies, headed for its biggest weekly loss in two years, as bearish
factors offset support the U.S. currency could take from rising Treasury
yields.

The U.S. currency has been weighed down by a variety of factors this year,
including concerns that Washington might pursue a weak-dollar strategy and
the perceived erosion of its yield advantage as other countries start to
scale back their easier monetary policy.

A weaker dollar benefits dollar-priced commodities by making them more
affordable for buyers paying with other currencies.

MANUFACTURING: U.S data showed an unexpected dip in industrial production
last month, but analysts said focus was on next week’s round of data.

ZINC STOCKS: Zinc stocks MZN-STOCKS saw an outflow of 2,700 tonnes to
151,650 tonnes, bringing inventories to their lowest since 2008.

PROCESSING FEES: Global zinc miners and smelters failed to reach any
benchmark deal on 2018 processing terms at an industry gathering this week,
and any agreement is likely to be delayed by a month or more as participants
haggle over prospects for growing supply in the second half, two industry
sources said.

ZINC PRICES: LME zinc gained 0.2 percent to $3,578 a tonne, heading for its
biggest weekly rise since August 2017.

PRICES: Aluminium rose 0.7 percent to $2,180, lead added 0.5 percent to
$2,630, tin rose 0.5 percent to $21,685 and nickel fell 1 percent to
$14,005.

Gold heads for biggest weekly rise in nearly two years

(Reuters) - Gold eased from a three-week high on Friday as the dollar index
rebounded from an earlier three-year low, but was still on track for its
biggest weekly gain in nearly two years on the back of weakness in the U.S.
currency and inflation concerns.

The dollar hit its lowest since 2014 in overnight trade and is heading for
its biggest weekly loss in two years as negative sentiment offset any
support the greenback could take from

rising Treasury yields.       

Spot gold        was up 0.1 percent at $1,354.31 an ounce at  1230 GMT, off
an earlier three-week peak of $1,361.76. U.S.April gold futures        were
up $2.30 an ounce at $1,357.60. 

Spot gold has risen 3.2 percent so far this week, putting it on track for
its biggest weekly rise since April 2016. Gold has fared less well in other
currencies, rising 1 percent in euro terms and 1.5 percent in sterling. 

The dollar hit a three-year low versus a currency basket on Friday, hurt by
concerns that Washington might pursue a weak dollar strategy and the
perceived erosion of its yield advantage

as other countries consider tighter monetary policy. 

Data this week showed U.S. producer prices accelerated in  January, while
initial claims for state unemployment benefitsincreased in the week ended
Feb. 10.

On the physical side of the market, demand in Asia was muted  by the Lunar
New Year holiday, closing markets in major consumer China, as well as in
South Korea, Malaysia and Vietnam. 

In India, physical gold was sold at a discount for the first time in three
weeks as demand slumped due to a jump in local rates. Gold in rupee terms
hit a 15-month high of 30,836

rupees on Friday.         

Among other precious metals, silver        was down 0.4 percent at $16.80,
while platinum        was little changed at $1,001.50 after hitting its
highest since Jan. 29 at $1,012.70.

Palladium        was up 1.4 percent at $1,031.50. The metal has risen 5.9
percent so far this week, its best since October. 

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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