Bulls n Bears Daily Market Commentary : 11 January 2018

Thu Jan 11 17:14:03 CAT 2018

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Bulls n Bears Daily Market Commentary : 11 January 2018

 <http://www.firstmutualproperties.co.zw/> 

Zimbabwe Stock Exchange Update

Market Turnover $1,042,653.11 with foreign buys at $482,922.09 and foreign
sales were $141,134.20 . Total trades were 61 .

The All Share Index lost 0.37 points to settle at 96.57 points as trading
was dominated with losers. DAIRIBOARD decreased by $0.0240 to close at
$0.1100, SIMBISA shed $0.0222 to $0.4342 while BINDURA eased $0.0096 to end
at $0.0456. PPC went down by $0.0050 to trade at $0.8650, ECONET came off
$0.0013 to close at $0.8900 whilst NICOZ DIAMOND   was $0.0012 weaker at
$0.0385.

Three counters gained ground as OLD MUTUAL  added $0.0095 to close at
$4.8176 while AXIA and DELTA  each put on $0.0001 to trade at $0.1801 and
$1.5551 respectively. 

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya shilling, Zambia kwacha to firm, Ugandan shilling to weaken

(Reuters) - Kenya’s shilling and Zambia’s kwacha are expected to strengthen
against the dollar over the week to next Thursday, while the Ugandan and
Tanzanian shillings are forecast to weaken, traders said.

KENYA

The Kenyan shilling is expected to strengthen due to improved dollar inflows
from remittances and horticulture, while general importer demand is also
seen increasing.

Commercial banks quoted the shilling at 103.15/35 per dollar, the same as
last Thursday’s close.

UGANDA

The Ugandan shilling is expected to weaken and probably go past 3,700 in the
coming days due to demand for dollars from manufacturing and energy
companies and offshore investors selling government securities.

Commercial banks quoted the shilling at 3,655/3,665, weaker than last
Thursday’s close of 3,640/3,650. On Wednesday Bank of Uganda sold an
undisclosed amount of dollars to relieve the downward pressure on the
shilling.

TANZANIA

The Tanzanian shilling is expected to weaken slightly, weighed down by
dollar demand from oil companies and subdued agriculture exports.

Commercial banks quoted the shilling at 2,240/2,245 to the dollar on
Thursday, weaker than 2,239/2,244 a week ago.

GHANA

Ghana’s cedi is expected to remain stable on improving liquidity, helped by
positive market sentiment and targeted central bank support.

The local unit was trading at 4.5490 to the dollar compared with 4.5407 at
last Thursday’s close.

ZAMBIA

The kwacha is expected to strengthen, helped by companies selling dollars to
pay taxes.

Commercial banks quoted the currency of Africa’s second-largest copper
producer at 9.8200 per dollar, up from 10.1000 a week ago.

America

Bonds bounce, stocks struggle, Bitcoin battered

(Reuters) - Worries about a U.S.-led trade war put world stocks at risk of
their first two day loss of the year on Thursday, while bond markets bounced
as China poured cold water on reports that it might stop buying U.S. debt.

Europe’s main bourses dipped in and out of the red and MSCI’s world index
was down 0.2 percent after Asian and emerging market indexes had been pulled
lower by warnings from Canada and Mexico that NAFTA’s days could be
numbered.

Bitcoin also took a major beating, falling as much as 11 percent as South
Korea - one of the crytocurrency’s biggest markets - said it was drawing up
laws to ban trading in it.

Benchmark government bonds bounced though after China’s regulator said a
Bloomberg report that it was considering slowing or halting its U.S. bond
purchases, was possibly “fake news”.

It also helped the dollar to its fourth gain in the last five days against a
basket of top world currencies , having suffered one of its worst years on
record in 2017.

Against the yen, it added 0.4 percent to 111.83, after hitting a six-week
low of 111.27 yen in the previous session when it skidded 1.1 percent, its
largest decline in almost eight months.

U.S. 10-year Treasury yields - which move inverse to prices and are one of
the main drivers of global borrowing costs - pulled back to 2.544 percent
from Wednesday’s ten-month high of 2.597 percent.

Euro zone bond yields eased 1-3 basis points (bps) too, with Germany’s
10-year Bund yield 3 bps off a two-month high at 0.46 percent. GVD/EUR]

The European Central Bank releases the minutes from its December meeting
later in the day but there was also some relief from Japan, another source
of pain for bond markets this week.

The Bank of Japan (BOJ) maintained the amount of its bond purchases on
Thursday. A cut in its buying of longer-dated debt earlier this week had
fanned worries the BOJ may be moving to turn off its stimulus.

CANADIAN DOLLAR, MEXICAN PESO WEAK

Canada’s dollar and Mexico’s peso remained firmly in the doldrums due to
worries about the North American Free Trade Agreement which the two
countries hold with the United States.

Sources in Canada’s government told Reuters on Wednesday that they were
increasingly convinced Donald Trump could announce he is quitting the pact.
Sources in Mexico then said it would also abandon ship if the U.S. did so.

The euro traded at $1.1945, nearly flat on the day, and holding above
Tuesday’s low of $1.1916.

There was more upbeat data for the shared currency though. German economy
grew at the strongest rate in six years last year a preliminary estimate
from the country’s statistics office showed, although it was slightly under
some peoples’ forecasts.

Commodity markets meanwhile were taking something of a breather after a
flying start to the year.

Both Brent and U.S. West Texas Intermediate (WTI) oil price futures were
hovering just off three-year highs at just under $70 and $64 a barrel, while
industrial metals dipped and gold ticked to $1,317.76 after spiking to
nearly four-month highs in the previous session.

Commodities Markets

Gold holds near 4-month high as investors seek to hedge risks

(Reuters) - Gold prices were near their highest in four months on Thursday
as a dip in global stocks and recent gains in commodity prices encouraged
investors to hold bullion as insurance against a stock market correction and
rising inflation. 

Spot gold        was up 0.2 percent at $1,319.77 an ounce at 1301 GMT after
touching $1,326.56 on Wednesday, the highest since Sept. 15.

U.S. gold futures         were 0.1 percent higher at $1,320 an ounce.

Gold has rallied by more than $80 since a low in mid-December, helped by a
weakening of the dollar that has made bullion cheaper for holders of other
currencies.       

It was boosted on Wednesday after a Bloomberg News report that China would
slow or stop U.S. bond purchases pushed the dollar sharply lower against the
yen and raised speculation that China could buy gold.       

The dollar however recouped some losses on Thursday after China's regulator
dismissed the Bloomberg report.             

Gold prices will struggle to rise much further in the short term, said Saxo
Bank analyst Ole Hansen. 

Several factors were supporting prices, including a dip in global stock
markets this week following a spectacular rally.

Oil prices were near three-year highs on Thursday and industrial metals such
as copper and aluminium were close to multi-year peaks, driving up the cost
of goods and services.

Demand for gold in China would also be strong ahead of the Chinese Lunar New
year holiday beginning on Feb. 15, said MKS PAMP trader Alex Thorndike.

On the technical side, fibonacci resistance was at $1,329 and support was at
$1,311.40 with momentum indicators suggesting prices could rise further,
analysts at ScotiaMocatta said in a note. 

Among other precious metals, spot silver        was up 0.3 percent at $16.99
an ounce from a two week low of $16.86 on Wednesday.

Platinum        was 0.8 percent higher at $978.80 an ounce after touching
$979.10, the highest since Sept. 15. 

Palladium        was 0.4 percent lower at $1,079.20, down from a record high
of $1,111.40 on Tuesday.

Nickel retreats from 2-1/2 year high, supply woes underpin

(Reuters) - Nickel fell on Thursday as traders took profits after pushing
the metal to its highest level in 2-1/2 years in the previous session, but
falls were limited by concerns about dwindling stocks and production
outages.

Four nickel mines in the Philippines, a key nickel exporter, remain shut on
environmental grounds, an official said, while Japan’s Sumitomo Corp
suspended output at a mine in Madagascar following a cyclone.

Nickel stocks in Shanghai Futures Exchange warehouses stood at 48,920 tonnes
as of Jan. 5 versus over 90,000 tonnes a year ago. London Metal Exchange
nickel stocks at 368,292 tonnes MNISTX-TOTAL are down from levels above
470,000 tonnes in June 2015, but double levels seen in May 2013.

FUNDAMENTALS

* NICKEL: Benchmark nickel on the London Metal Exchange (LME) was last bid
down 0.5 percent at $12,870 a tonne, having touched $13,200 on Wednesday,
its highest since June 2015.

* POSITIONING: Funds have ramped up bets on higher prices, doubling their
net long position in LME nickel from a low in December to 29,746 contracts
as of Jan. 5. LME-NI-MNET

* PHILIPPINES: “The four mines in Zambales are still not allowed to resume
production,” said Wilfredo Moncano, director of the Philippine Mines and
Geosciences Bureau. “No extraction, no new mining activities.”

* DOLLAR: The dollar recouped some losses after China’s regulator dismissed
a report that the country could halt buying U.S. treasuries, boosting the
greenback following its biggest one-day fall in a month.

* COPPER: Copper traded up 0.1 percent in rings at $7,160 a tonne.

* COLUMN: Copper faces double supply disruption threat in 2018.

* ZINC: Zinc traded up 1.8 percent at $3,395, near a more than decade high
hit earlier this week at $3,400.

* ALUMINIUM: Aluminium traded up 0.4 percent in rings at $2,190 a tonne,
recovering from a low of $2,149.50 on Jan. 9.

“This was a metal that you couldn’t give away 36 hours ago but now it seems
the selling from the index rebalancing is viewed as very digestible,” said
broker Marex Spectron.

* OTHER METALS: Lead was last bid up 0.6 percent at $2,565 while tin traded
up 0.4 percent at $20,150.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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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