Bulls n Bears Daily Market Commentary : 26 January 2018

Fri Jan 26 16:07:56 CAT 2018

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Bulls n Bears Daily Market Commentary : 26 January 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $2,180,302.39 with foreign buys at $1,167,942.40 and foreign
sales were $229,995.04. Total trades were 111 .

The All Share Index closed the week lower at 91.27 points after losing 0.20
points . SIMBISA  shed $0.0425 to close at $0.3975, NAMPAK  lost $0.0079 to
$0.1721 whilst BINDURA  eased $0.0052 to settle at $0.0400. PROPLASTICS came
off $0.0008 to end at $0.0750, AXIA   was down by $0.0005 to trade at
$0.1800 as ECONET  inched down $0.0001 to settle at $0.7000. 

Trading in the positive territory; PPC put on $0.0486 to close at $0.8500,
SEEDCO  added $0.0244 to $2.0297 while DELTA  increased by $0.0073 to close
at $1.6584. INNSCOR  went up by $0.0019 to $0.8050 while OK ZIMBABWE  was
marginally up by $0.0005 to trade at $0.1660. 

WEEK ON WEEK CHANGES

•        All Share Index shed 0.22 points .

•        Industrial Index eased 0.52 points  .

•        Top 10 Index shed 0.24 points .

•        Mining Index eased up 4.10 points .

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling stable; horticulture dollar flows match oil importer demand

(Reuters) - Kenya's shilling was steady on Friday, with dollar inflows from
horticulture exporters matching demand from oil companies, traders said.

At 0912 GMT, commercial banks quoted the shilling at 102.35/45 to the
dollar, the same as Thursday's close.

South Africa

South African rand firmer, stocks set to open higher

(Reuters) - South Africa’s rand firmed against the dollar in early trade on
Friday, holding at its best levels since mid-2015, as expectations the new
leader of the ruling ANC would rejuvenate the economy lifted sentiment.

* At 0643 GMT, the rand traded at 11.9000 per dollar, 0.19 percent firmer
than its New York close on Thursday.

* The rand has surged since Deputy President Cyril Ramaphosa won the race to
succeed Jacob Zuma as ANC leader last month, putting him in pole position to
become the country’s next president.

* Ramaphosa, who has promised to fight corruption and boost economic growth,
told a news conference in Davos on Thursday that investors had warmed to the
changes that the South African delegation had highlighted in the country.

* Stocks were set to open higher at 0700 GMT, with the JSE securities
exchange’s Top-40 futures index up 0.3 percent.

* In fixed income, the yield on the benchmark government bond was up 0.5
basis points to 8.43 percent. 

America

Dollar falls, set for biggest monthly drop in nearly 2 years

LONDON (Reuters) - The dollar fell more than half a percent against a basket
of currencies on Friday as comments by senior U.S. officials this week
backing a weak dollar reverberated through currency markets.

FILE PHOTO: A U.S. Dollar note is seen in this June 22, 2017 illustration
photo. REUTERS/Thomas White/Illustration/File Photo

After U.S. President Donald Trump said on Thursday he ultimately wanted the
dollar to be strong, the dollar pared some losses against major currencies,
but it was on track for its biggest monthly drop since March 2016.

“The broader dollar decline story remains in place and, unless we see a
substantial shift in expectations on future policy tightening in the U.S,
the dollar will likely remain on the back foot,” said Richard Falkenhall, a
senior currency strategist at SEB in Stockholm.

Against a basket of six major currencies, the dollar last traded on Friday
at 88.92 .DXY, after hitting a three-year low of roughly around 88.43.

Though comments on Thursday that he wanted a “strong dollar” contradicted
earlier comments by Treasury Secretary Steven Mnuchin, investors suspect a
protracted decline in the greenback may be likely.

“While President Trump has since said that he expects the dollar to get
‘stronger and stronger’, it will be hard for Washington to put the ‘weak
dollar’ genie back in the bottle,” Viraj Patel, an FX strategist at ING in
London said in a note.

In keeping with the rising theme of expecting more dollar weakness, UBS
Wealth Management upgraded its six-month forecasts for the euro and sterling
on Friday to $1.28, from $1.22, and $1.45 from $1.36 respectively.

The signature of the President of the European Central Bank (ECB), Mario
Draghi, is seen on the new 50 euro banknote during a presentation by the
German Central Bank (Bundesbank) at its headquarters in Frankfurt, Germany,
March 16, 2017. REUTERS/Kai Pfaffenbach

Some market participants are also concerned that Trump may encourage more
protectionist policies at a speech in Davos around 1300 GMT and at his State
of the Union speech next week, policies that may ultimately end up pushing
the dollar lower.

Against the euro, the dollar's weakness was the most apparent, with the
single currency EUR=EBS up half a percent at $1.2493 and not far away from a
December 2014 high of above $1.2538 hit on Thursday.

With European Central Bank President Mario Draghi declining to lean against
the recent euro rally and instead signaling that economic data pointed to
“solid and broad” growth, investors were encouraged to push the currency
higher.

Draghi also said that the surge in the euro was a source of uncertainty and
that the ECB might have to review strategy if U.S. comments on the benefits
of a weak dollar lead to a change in monetary conditions.

“Draghi’s reluctance to offer any resistance to the euro means that
euro/dollar is only set to rise more in the coming months,” said Manuel
Oliveri, an FX strategist at Credit Agricole in London.

Sterling briefly rose more than one percent to $1.4289 GBP=D3, but remained
below its peak on Thursday of $1.4346, which was the pound's highest level
since the Brexit vote in June 2016 as some investors turned bullish on the
currency's outlook.

Gross domestic product grew by 0.5 percent in the three months to end of
December, faster than analyst expectations of 0.4 percent, official data
showed.

Commodities Markets

Gold climbs back towards 17-month peak as dollar slides

(Reuters) - Gold rose on Friday, climbing back towards the previous
session's 17-month peak as suggestions that senior U.S. officials may
support a weaker dollar knocked the currency lower. 

The dollar slid 0.4 percent against the euro on Friday as comments in favour
of a weaker U.S currency by Treasury Secretary Steven Mnuchin - though later
somewhat contradicted by

U.S. President Donald Trump - led investors to suspect a protracted decline
in the greenback may be likely.       

Spot gold        was 0.3 percent higher at $1,351.46 an ounce at 1245 GMT,
up 1.5 percent so far this week. The metal hit its highest since August 2016
on Thursday at $1,366.07. 

Dollar weakness tends to benefit assets priced in the U.S.unit, which become
more affordable for holders of other currencies, while ultra-low interest
rates cut the opportunity cost of holding non-yielding bullion.

World stocks were set for their tenth straight week of gains on Friday,
having rallied over the past year on the back of a synchronised uptick in
global economic growth in a boon to

corporate profits and stock valuations.            

Gold could benefit if that scorching run cools, GFMS analysts at Thomson
Reuters said, predicting volatility in equities and concerns over global
politics could lead to a spike in gold prices above $1,500 an ounce this
year.             

U.S. gold futures         were down 0.9 percent at $1,350.30 an ounce.  

Among other precious metals, silver        was up 0.6  percent at $17.40,
having touched its highest in more than four months at $17.69 on Thursday.
It was this week's best performing

precious metal, climbing 2.4 percent from Friday's close. 

Platinum        was up 0.5 percent at $1,015.20, while palladium        was
little changed at $1,096.90. After hitting record highs early this year, the
metal was on track for its second weekly loss, dropping nearly 1 percent so
far this week. 

South African mining seen a winner as Ramaphosa woos investors

(Reuters) - South Africa’s embattled mining industry could be first in line
to benefit from a boost in foreign direct investment (FDI) if the new leader
of the ruling party Cyril Ramaphosa implements measures seen as vital to
draw in more cash, analysts said.

The governing African National Congress (ANC) needs to water down black
ownership targets in mining, roll out mobile broadband access and cut red
tape in the labour market to revive investor interest, they say.

South Africa has failed in recent years to attract significant direct
investment due to slow economic growth, policy uncertainty and higher labour
costs.

South Africa recorded FDI inflows of $2.3 billion in 2016 against outflows
of $3.4 billion, U.N. trade and development agency UNCTAD data show. A
decade ago, it had average annual inflows of $4.5 billion against outflows
of $3.3 billion.

The agency said on Monday South Africa’s FDI “still remained low by
historical standards” in 2017 at $3.2 billion.

Ramaphosa, South Africa’s vice president who succeeded President Jacob Zuma
as head of the ANC in December, has promised to deliver economic policy
change.

Investors in particular want Ramaphosa to end an impasse over the Mining
Charter, introduced as part of a wider drive designed to rectify the
lingering disparities of apartheid.

A revised charter drawn up under Zuma raised the target for black ownership
in mining to 30 percent from 26 percent, a level being challenged in court
by the industry.

Changes to the Mineral and Petroleum Resources Development Act, yet to be
passed by parliament, have added to uncertainty.

Amendments include a move to give the state a 20 percent stake in any new
gas and oil ventures, a level the industry said was too high to encourage
investment.

South Africa attracts more short-term portfolio flows than FDI, while local
firms have tended to expand operations abroad.

Ramaphosa said at the Davos global forum that “if the Mining Charter is
holding us back we must deal with that” and said South Africa did not want
to miss out on a commodity boom.

Financial markets have cheered talk of economic reform. The rand has surged
to 2-1/2 year highs against the dollar and bond yields have fallen.

“RIPE FOR REFORM”

Mining firms are also encouraged. Anglo American said it was looking forward
to engaging with the ANC leadership to build a competitive industry to
attract investment.

Harmony Gold said it was committed to South Africa and welcomed efforts to
boost investor confidence.

He said the investor mood would improve further if Zuma left the presidency
early - a subject of persistent speculation after a series of scandals
during his tenure - and if cabinet was reshuffled to shake up the mineral
resources, public enterprises, energy and telecommunications departments.

Analysts say South Africa’s telecoms industry, where the government plans to
establish a Wireless Open Access Network to roll out mobile broadband access
to the majority of the population, was another area that could attract FDI.

Privatisation of some state-owned firms, which economists say drain the
public purse, could also draw foreign investors.

But Ramaphosa faces challenges in his bid to deliver change.

The former union leader, is likely to encounter resistance from former
colleagues, particularly those in the COSATU labour union who backed his bid
to lead the ANC, if he tries to shake up the labour market, which is prone
to strikes.

The ANC still dominates the political landscape, as it has since the end of
the apartheid in 1994, but its popularity has been hit by a failure to
fulfill expectations that it would transform the lives of the country’s
poor.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Nampak

AGM

Boardroom, 68 Birmingham Road, Southerton

07 Feb 2018 12PM

Mash 

sets AGM

Boardroom, 19th Floor, ZB Life Towers, 77 Jason Moyo Ave

08 Feb 2018 12PM

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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