Bulls n Bears Daily Market Commentary : 27 February 2018

Tue Feb 27 17:18:26 CAT 2018

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Bulls n Bears Daily Market Commentary : 27 February 2018

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Zimbabwe Stock Exchange Update

Market Turnover $8,491,697.14 with foreign buys at $1,314,916.71 and foreign
sales were $438,770.61. Total trades were 129.

The All Share index was marginally lower at 87.84 points following a 0.01
points decrease. DELTA came off $0.0137 to close at $1.5763, FIDELITY LIFE
shed $0.0100 to $0.0800 while INNSCOR lost $0.0025 to end at $0.9200. CBZ
HOLDINGS was down by $0.0017 to settle at $0.1020 and ECONET inched down
$0.0002 to close at $0.6805.

However,  OLD MUTUAL gained $0.0540 to trade at $5.2540, SEEDCO rose by
$0.0498 to $1.9506 whilst AFDIS added $0.0300 to end at $1.4800. MASIMBA put
on $0.0038 to close at $0.0600 and PPC was $0.0015 higher at $0.8706.

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Global Currencies & Equity Markets

Uganda

Ugandan shilling stable as coffee exports offer support

(Reuters) - The Ugandan shilling        was little changed on Tuesday with a
combination of inflows from coffee exporters and lower demand for dollars
supporting the local currency.

At 0834 GMT, commercial banks quoted the shilling at 3,640/3,650, compared
to Monday's close of 3,642/3,652.

South Africa

S.Africa's rand falls 1 percent on profit-taking after cabinet bounce

(Reuters) - South Africa’s rand weakened as much as one percent on Tuesday
after investors took profits from a recent rally that took it to new
three-year highs overnight when new president Cyril Ramaphosa changed the
finance minister in a cabinet reshuffle.

At 1230 GMT the rand was 0.67 weaker at 11.6325 per dollar, recovering
slightly after hitting a session-low 11.67, with investor focus switching to
the first U.S. congressional testimony by new Federal Reserve Chairman
Jerome Powell later in the session.

Some analysts attributed the rand’s weakness to concerns over why Ramaphosa
retained ministers who are Zuma allies.

The rand had rallied in the run-up to the reshuffle that saw Ramaphosa
reappoint Nhlanhla Nene as finance minister, but failed to hold below
11.5100, a key technical level that could unlock further gains.

The reshuffle saw Ramaphosa add new faces and remove some ministers allied
to Jacob Zuma, further fuelling investor hopes of economic reform and a
clamp down on the corruption that Zuma was accused of. Zuma has denied any
wrongdoing.

Nene said on Tuesday his predecessor’s budget last week might not prevent
further credit ratings downgrades, with Moody’s due to make decision at the
end of March.

Ramaphosa said he had not compromised by keeping Zuma allies in government
departments, but some analysts disagreed.

The rand slide was in-line with other emerging currencies as the greenback
bounced back, while demand for risk currencies was also cooled by higher
U.S. Treasury yields and the growing prospect of interest rate hikes by the
Federal Reserve.

Bonds were weaker, with the yield on the benchmark paper due in 2026 up 7
basis points at 8.08 percent.

Stocks rose, with the Top-40 index on the Johannesburg Stock Exchange up 0.4
percent at 52,073 points and the broader All-Share index up 0.3 percent at
59,041 points.

Banking shares, which are seen as a barometer of political and economic
sentiment, out-performed the broader market, with the index, up 1.3 percent.

Africa’s biggest retailer Shoprite’s shares rose more than 3 percent after
saying it would expand to Kenya.

America

Dollar eases ahead of Powell's testimony

(Reuters) - The dollar eased on Tuesday, with the focus on a slew of
economic data this week and Federal Reserve Chairman Jerome Powell’s
testimony, which could determine whether the U.S. currency’s recovery from a
three-year low has more room to run.

The dollar’s index against a basket of six major currencies fell 0.1 percent
to 89.760. The greenback, however, is still 1.7 percent above a three-year
trough near 88.25 set on Feb. 16.

The focus this week is Powell’s first congressional testimony, at a time
when investors are nervous over the pace of U.S. monetary tightening after
years of stimulus. Powell will testify on the central bank’s semi-annual
report on monetary policy and the economy on Tuesday, before the U.S. House
of Representatives’ Financial Services Committee.

Powell will probably sound optimistic on the economic outlook, but stress
patience in assessing whether inflation will head higher, said Roy Teo,
investment strategist for LGT Bank in Singapore.

Teo added that this is especially the case given the prevailing market
expectations for the Fed’s preferred inflation measure, the core personal
consumption expenditures (PCE) price index, due on Thursday.

Economists polled by Reuters expect the core PCE to increase 1.5 percent
year-on-year in January, which would be the same as December’s pace and
still some way off from the Fed’s 2 percent target.

If that turns out to be the case, the hurdle for the Fed to upgrade its
projections for the number of interest rate hikes this year at its policy
meeting in March, will be relatively high, LGT Bank’s Teo said.

This week is crammed with U.S. economic data on consumer confidence, revised
fourth-quarter growth, manufacturing and personal income and spending.

Against the yen, the dollar slipped 0.1 percent to 106.86 yen, but was still
1.2 percent above a 15-month low of 105.545 yen set on Feb. 16.

The euro edged up 0.1 percent to $1.2328, with investors seen cautious about
taking big positions this week ahead of political events in Europe.

Italians vote in a national election on Sunday, while the leading political
parties in Germany will decide on a coalition deal that could secure Angela
Merkel a fourth term as chancellor.

Euro zone inflation data due later this week further added to a nervous
outlook for euro trading.

On Monday, European Central Bank President Mario Draghi spoke before the
European Parliament and struck an optimistic tone about the euro zone
economy. He said, however, that inflation has yet to show more convincing
signs of a sustained upward adjustment.      

Commodities Markets

Abramovich seeks London court approval to sell Norilsk Nickel stake

(Reuters) - Chelsea soccer club owner Roman Abramovich’s Cyprus-based
Crispian on Tuesday sought a London court’s permission to sell 2 percent of
Norilsk Nickel to billionaire Vladimir Potanin, a move aluminium producer
Rusal is trying to block.

Potanin offered to buy a 4 percent stake in Nornickel from Abramovich for
$1.5 billion. However, Rusal, which also owns a stake in the mining group,
is seeking a court injunction to block the deal.

Potanin’s Cyprus-based Whiteleave exercised its right to buy 2 percent of
Nornickel last week, requiring the shares to be handed over on Feb. 28,
Crispian’s lawyer, Daniel Jowell, said.

An earlier agreement involving Potanin and Rusal, which is controlled by
businessman Oleg Deripaska and holds 27.8 percent of Nornickel, allowed them
to share Abramovich’s stake on a pro rata basis if they both wanted to buy
it.

The latest ownership dispute revives a long-running battle for control of
Nornickel between Potanin, who owns a 30.4 percent stake in the miner, and
Deripaska.

Abramovich and his partners hold a 6.3 percent stake in Nornickel, of which
4.2 percent is owned via Crispian.

Crispian, which previously agreed not to transfer its shares in Nornickel
until the hearing is over, asked the London court on Tuesday to release it
from the undertaking to freeze the deal until the next hearing, which is
expected on March 8-9.

Crispian is worried that if it cannot transfer the shares, Whiteleave will
walk away. Crispian estimates potential losses from a failure of the whole
deal at $271-821 million.

A lawyer for Whiteleave also asked the London court to allow the 2 percent
share sale to proceed, but with a commitment not to sell on these shares or
accept any dividends on them before a court decision and to return them to
Crispian if the court finds in Rusal’s favour. 

Copper edges up ahead of Fed testimony

(Reuters) - Copper rose on Tuesday as the dollar steadied ahead of incoming
Federal Reserve Chair Jerome Powell’s debut testimony before Congress, while
aluminium ticked up on signs of tightness in near-term supply.

Powell’s testimony, due to take place at 1500 GMT, will be closely watched
for clues on the outlook for U.S. monetary policy, with many investors
nervous about the Fed’s policy normalisation following years of stimulus.

London copper has held above the $7,000 a tonne mark since Feb. 14 and edged
up on Monday on the back of strong import data from top metals consumer
China.

ICBC Standard Bank said in a note on Tuesday that it still sees a positive
fundamental outlook for base metals, forecasting across the board deficits
in 2018 and through to 2020.

* COPPER PRICES: London Metal Exchange copper was untraded in official
midday rings, but was last bid down 0.6 percent at $7,065 a tonne.

* COPPER SPREADS: The discount for cash over three-month copper CMCU0-3
contracted to its narrowest in six weeks on Tuesday at $32.25, from $42.25 a
week ago.

* COPPER TECHNICALS: A break below $7,079 in LME copper could establish a
bearish target at $7,003.50, Reuters technical analyst Wang Tao said.

* ALUMINIUM PRICES: LME aluminium was up 0.5 percent at $2,148 a tonne in
official trading.

* ALUMINIUM SPREADS: Nearby aluminium spreads are under intense pressure,
reflecting tightness in short-dated supply. The cost to roll aluminium for a
day CMALT-O hit its highest since late 2016 on Monday at $11 and remains
highly elevated at $10 a tonne.

* ALUMINIUM STOCKS: On-warrant aluminium stocks, or those not earmarked for
delivery, in London Metal Exchange warehouses MALSTX-TOTAL fell by 23,425
tonnes to 1,085,175 tonnes, exchange data showed, pulling back from a recent
11-month high.

* OTHER METALS: LME zinc was down 0.3 percent at $3,520 a tonne in official
trading, though the other base metals were untraded in official rings. Lead
was last bid 0.1 percent lower at $2,578 a tonne, tin was up 0.1 percent at
$21,640 and nickel was down 0.2 percent at $13,900 a tonne.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Powerspeed

AGM

Boardroom, Gate 1, Powerspeed Complex, Corner Cripps Road and Kelvin Road
North, Graniteside

01 Mar 2018 11am

Proplastics

final dividend of 0.26c record date

02 Mar 2018

Simbisa Brands Limited

EGM

SAZ Building Northend Close, Northridge Park, Borrowdale

09 Mar 2018 8:15am

CFI

AGM

Farm & City Boardroom, 1st Floor, Farm & City Complex, 1 Wayne Street

12 Mar 2018 11am

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
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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
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
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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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