Bulls n Bears Daily Market Commentary : 25 January 2018

Thu Jan 25 15:14:57 CAT 2018

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Bulls n Bears Daily Market Commentary : 25 January 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $1,662,814.69 with foreign buys at $903,262.51 and foreign
sales were $332,621.96. Total trades were 53 .

The All Share Index rebounded by 0.27 points   to close at 91.47 points.
MEIKLES   gained a significant $0.0350 to close at $0.3500, DELTA  improved
by $0.0323 to end at $1.6511 while PPC   was up by $0.0014 to settle at
$0.8014. INNSCOR   added $0.0006 to $0.8031, AXIA    rose by $0.0004 to
$0.1805 whilst ECONET   inched up by $0.0001 to close at $0.7001.

However, BRITISH AMERICAN TOBACCO  went down by a hefty $1.0492 to end at
$28.9500, SEEDCO  eased $0.0047 to close at $2.0053 while PADENGA   came off
$0.0013 to $0.4787. BARCLAYS  went down by a marginal $0.0001 to settle at
$0.0450.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand pauses rally, weakens 0.25 percent

JOHANNESBURG, Jan 25 (Reuters) - South Africa’s rand was slightly weaker in
early deals on Thursday, pausing a rally that lifted the local unit to its
strongest level since mid-2015.

* At 0626 GMT, the rand traded at 11.8800 versus the dollar, 0.25 percent
weaker from its overnight close in New York.

* The currency has surged since Cyril Ramaphosa won the race to succeed
Jacob Zuma as African National Congress leader last month, putting him in
pole position to become the country’s next president.

* “This morning so far a relatively quiet session, range 11.85-11.8950. The
market could be getting ahead of itself and would look for some local
importer interest this morning,” Nedbank said in a note.

* Government bonds were flat, and the yield for the benchmark instrument due
in 2026 at 8.340 percent. 

Uganda

Ugandan shilling edges down against the dollar

(Reuters) - The Ugandan shilling inched down on Thursday, undercut by a pick
up in demand for dollars from manufacturing and energy sector firms.

At 0947 GMT, commercial banks quoted the shilling at 3,633/3,643, slightly
down from Wednesday’s close of 3,625/3,635.

America

Dollar slump drives gold to highest since August 2016

(Reuters) - Gold prices climbed on Thursday to their highest since August
2016 as a weakening dollar helped  it to extend gains of more than 10
percent since mid-December.

The dollar plunged to a three-year low against a basket of major currencies
after the U.S. treasury secretary said he welcomed a weaker greenback,
making gold cheaper for users of

other currencies.                          

The lower dollar could also drive prices higher in the United States and
increase demand for gold as a hedge against inflation. 

Spot gold        was up 0.1 percent at $1,358.80 an ounce by 1042 GMT. It
had earlier touched $1,366.07, the highest level since Aug. 3, 2016. 

U.S. gold futures         were up 0.2 percent at $1,358.50  an ounce.

Gold has broken above its 2017 high of $1,357.54, a key technical level,
with further resistance around $1,370 and the 2016 high of $1,374.91. 

Momentum indicators signalled that gold should rise further, ScotiaMocatta
analysts said. 

Holdings of gold in ETFs tracked by Reuters and bets by funds on higher gold
prices on the Comex exchange have surged in recent weeks.

The market was looking ahead to a European Central Bank interest rate
decision at 1245 GMT and a news conference by its chief, Mario Draghi, at
1330 GMT.             

Draghi is expected to pour cold water on any view that the bank is speeding
towards an interest rate increase.

In other precious metals, silver        was down 0.1 percent at $17.56 an
ounce after touching $17.69, its highest since mid-September. It had jumped
by 3 percent on Wednesday for the

biggest daily gain since July 2016. 

Platinum        was up 0.8 percent at $1,020.50 after hitting its highest
since March 2017 at $1,024.30. 

Palladium        fell by 0.7 percent to $1,102.80.

Commodities Markets

Base metals near multi-year peaks on weaker dollar

LONDON, Jan 25 (Reuters) - Zinc, nickel and lead rallied to multi-year highs
on Thursday on a softer dollar and steadily declining inventories in London
Metal Exchange-approved warehouses.

The dollar skidded against other major currencies on Thursday after the U.S.
treasury secretary said he welcomed a weaker greenback. A weaker dollar
makes commodities more affordable for buyers paying with other currencies.

Capital Economics senior commodities economist Caroline Bain said that a
stronger dollar had supported commodities across the board but warned that
rising U.S. interest rate expectations tempered the outlook.

INVENTORIES: On-warrant LME inventories of lead MPBSTX-TOTAL -- those not
earmarked for delivery -- fell by 1,200 tonnes to 78,000 tonnes and have
shed 31 percent since mid-September.

LEAD PRICE: Lead eased by 0.4 percent to $2,623.50 a tonne after touching
its highest since August 2011 at $2,653.

LEAD TRADE: Capping gains was Chinese data showing December lead imports
down 18 percent.

ZINC PRICE: Zinc hit a decade high of $3,481.50 a tonne as headline stocks
reached a more than nine-year low of 179,450 tonnes.

NICKEL: Customs data showed China’s refined nickel imports grew by 116
percent year on year last month. LME nickel touched its highest since May
2015, later trading 0.2 percent up at $13,605 a tonne. Nickel, mainly used
in stainless steel, had jumped by 5.6 percent in the previous session.

LME COPPER: London Metal Exchange copper was flat at $7,153 a tonne. Prices
have rebounded from one-month lows towards the highest in a week but are
still below the late-December peak of $7,312 and expected to be pressured by
rising exchange inventories.

COPPER INVENTORIES: On-warrant copper stocks in LME-approved warehouses
jumped by 24,825 tonnes to 253,400 tonnes and are up 67 percent over the
past week. Headline levels have climbed by 46 percent to 2996,600 tonnes.

CHINA: China’s December refined copper imports fell 8.8 percent year on year
to 328,338 tonnes, according to customs data on Thursday. The figure was
also down fractionally from November.

Capital Economics’ Bain said the market had been overestimating copper
demand and that it was no surprise to see stocks reappearing.

CHINA CURBS: China will ease restrictions for foreign companies in its
manufacturing and services sectors as it rolls out fresh market-opening
measures that could exceed international expectations, a senior Communist
Party member said in Davos on Wednesday.

New capacity, restarts to plug aluminium supply gap

(Reuters) - Shortages of aluminium created by cutbacks in China are expected
to be filled by new Chinese capacity and restarts in the United States,
which means prices are likely to have peaked for now.

Benchmark aluminium on the London Metal Exchange hit $2,290.50 a tonne in
December, its highest since March 2012.

Attempts to go higher have failed mainly due to stock data suggesting
oversupply in China.

Inventories of aluminium in warehouses monitored by the Shanghai Futures
Exchange stand at record highs of 783,759 tonnes compared with around
100,000 tonnes a year ago. AL-STX-SGH

Wood Mackenzie expects new capacity in China and restarts “could be a
catalyst for a correction in the aluminium price - a correction not a price
collapse”.

U.S.-based Alcoa is planning to restart more than 161,000 tonnes of capacity
in Indiana in the second quarter, analysts say, while Century Aluminium is
considering the restart of about 100,000 tonnes in South Carolina.

China accounts for more than half of global production estimated at around
65 million tonnes this year.

An environmental crackdown last year on polluting industries such as
aluminium smelting and a clampdown on unauthorised capacity meant China’s
surplus fell short of the amounts needed to cover the deficit in the rest of
the world.

Consultants AZ China estimate China will add around 4.4 million tonnes of
new capacity this year, though much of that will be replacing older
polluting plants. They estimate China’s output will total 38.7 million
tonnes this year

Additionally, output cuts during the winter months starting in November will
also be unwound from the middle of March, creating surpluses which are
likely to mean higher stocks in exchange warehouses or rising Chinese
exports.

China’s exports are also expected to be boosted by higher aluminium prices
on the LME versus those on ShFE.

Signs of China ramping up are already coming through in data. The National
Bureau of Statistics recently reported that China churned out 2.71 million
tonnes in December, up 15.3 percent from November.

AZ China expects a recovery in industrial activity this year to boost demand
to 38.4 million tonnes.

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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