Bulls n Bears Daily Market Commentary : 29 June 2018

Mon Jul 2 08:58:07 CAT 2018

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Bulls n Bears Daily Market Commentary : 29 June 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $3,000,008.71 with foreign buys at $33,356.40 and foreign
sales were $30,719.77. Total trades were 83.

The All Share index lost a marginal 0.01 points  to settle at 102.10 points.
MEIKLES  lost $0.0298 to end at $0.3302, INNSCOR was $0.0196 weaker at
$1.1800 whilst PADENGA  dropped $0.0104 to trade at $0.6196. CBZ also traded
$0.0096 lower at  $0.1025 and BARCLAYS dropped $0.0048 to settle at $0.0650.

Trading in the positive OLD MUTUAL LIMITED added $0.0433 to end at $4.8533,
SEEDCO gained $0.0103 to close at $2.0203 and ECONET was $0.0190 firmer at
$1.0442. UNIFREIGHT also increased by $0.0042 to close at $0.0252 and
ARISTON closed at $0.0168 following a $0.0028 gain.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling holds steady against end month demand

(Reuters) - The Kenyan shilling was firm against the dollar on Friday
supported by tight shilling liquidity in the money markets and hard currency
sent by Kenyans living abroad, traders said. 

At 0812 GMT, commercial banks quoted the shilling at 100.80/101.00 per
dollar, compared with 101.00/20 at Thursday's

close. 

Uganda

Uganda shilling holds steady against the dollar

(Reuters) - The Ugandan shilling was unchanged on Friday, helped by some
month end hard currency inflows from non-governmental organisations and
slowed demand from both commercial banks and importers.

At 1118 GMT, commercial banks quoted the shilling at 3,875/3,885, unchanged
from Thursday’s close.

Global

World stocks rise though trade tensions dent yuan, euro gets summit boost

(Reuters) - World stocks enjoyed a strong bounce on Friday with European
shares recovering from a turbulent week as investors’ fears of higher
barriers to trade came closer to becoming reality.

MSCI’s index of world stocks rose 0.6 percent by 1212 GMT, its strongest
gain in three weeks, but its second quarter was still set to be in the red
as investors priced in U.S. tariffs set to be implemented next week.

The U.S. administration is due to activate tariffs on Chinese goods worth
$34 billion on July 6, likely prompting a tit-for-tat response from Beijing.

European stocks rallied strongly, with the pan-European STOXX 600 up 1.1
percent and Germany’s trade-sensitive DAX up 1.4 percent.

U.S. stock futures also extended gains, up 0.5 to 0.6 percent and recovering
from a brief spike lower after Axios reported that U.S. President Donald
Trump has repeatedly told aides he wants to withdraw from the World Trade
Organization.

It was the latest sign of investors’ heightened sensitivity to deepening
divides over trade. Tariff disputes have already mauled assets from the
Chinese yuan to European autos stocks, and wiped $1.75 trillion off the
value of world stocks since June 12.

Investors pulled nearly $30 billion out of equity funds globally this week,
the second-largest ever outflows according to Bank of America Merrill Lynch,
while U.S. equity funds suffered $24.2 billion of outflows as investors bet
U.S.-led protectionism would backfire.

EURO GAIN, YUAN PAIN

The euro was set for its strongest day in a month after leaders at an EU
summit reached an agreement on migration, rising 0.8 percent to $1.1658. The
agreement eased a threat to German Chancellor Angela Merkel’s ruling
coalition over the issue.

While Asian stocks rose, the Chinese yuan suffered its worst month on
record, losing 3 percent against the dollar in June as investors pulled
money from a market likely to suffer from higher barriers to trade.

The yuan traded as low as 6.6441 to the dollar, its lowest since November,
as investors speculated China may seek to devalue its currency to compensate
for higher tariffs.

Despite gains on Friday, the CSI300 and Shanghai Composite are the world’s
worst-performing major indexes this year.

In stark contrast to the yuan, the U.S. dollar was set for its strongest
quarterly gains since Q4 2016, helped by the U.S. Federal Reserve’s move to
raise interest rates in June, and expectations of further hikes this year.

On the day the dollar index edged down 0.5 percent to 94.924 as the euro
rose.

European bonds diverged, with the EU Summit migration agreement pushing
Germany’s Bund yields up while Italian 10-year government bond yields fell
to a one-week low.

The yield on benchmark 10-year Treasury bonds held steady at 2.8455 percent
and the yield curve flattened further to 32.17 basis points. Some investors
see its flattening as a sign recession may be around the corner.

Intensifying trade tariff fears contrasted with a still strong picture of
the global economy and robust company earnings growth.

Despite trade tensions, the STOXX 600 remained on track for its strongest
quarter since Q1 2017, and Britain’s FTSE 100 was set for its biggest
quarterly gain since 2010.

Oil prices extended their gains to fresh highs on a tighter market as U.S.
sanctions against Iran threatened to remove a substantial volume of crude
oil from world markets amid rising demand.

Brent crude rose 1.3 percent to $78.85 per barrel, while U.S. crude held
steady at $73.45 a barrel.

Emerging stocks jumped 2 percent from a one-month low. The index was still
set for its worst month since January 2016 as the rising dollar battered
emerging economies, and outflows from EM debt and equity funds accelerated
in June to $18 billion.

Commodities Markets

Asia Gold-Price drop spurs India demand, buyers eye bigger dips

(Reuters) - Gold demand improved this week in India as prices fell to their
lowest level in nearly three months, while demand elsewhere in Asia remained
tepid as investors waited for prices to fall further.

Gold futures in India were trading at around 30,419 rupees ($444.4) per 10
grams by 1010 GMT on Friday, after falling to 30,365 rupees earlier in the
day, the lowest level since April 5.

Dealers in India were offering a discount of up to $2 an ounce over official
domestic prices this week, compared with a premium of $1 last week. The
domestic price includes a 10 percent import tax.

Indian rupee hit a record low on Thursday, limiting the drop in local gold
prices.

Gold imports into India, the world’s second biggest buyer of the metal,
could drop by 18 percent in 2018 from a year ago, according to a Reuters
poll.

Spot gold hit a more than six-month low this week at $1,250.98 per ounce, as
demand for remained weak and as the dollar strengthened to near one-year
highs.

In top consumer China, premiums were in a range of $2-$4 an ounce against
the international benchmark, versus $5-$6 last week.

China’s yuan hit a 7-1/2-month low of 6.6522 on Friday.

Premiums of 80 to 90 cents were charged in Singapore, little changed from
the 80 cents-$1 range last week.

Demand has been quite good in Singapore because prices are at their lowest
this year, said Brian Lan, managing director at dealer GoldSilver Central in
Singapore.

Premiums in Hong Kong were unchanged from the previous week at 50 cents to
$1.20.

In Japan, gold was being sold at a premium of 50 cents over benchmark spot,
a 25 cent rise from the previous week, as bargain hunting increased demand
for the metal. ($1 = 68.4500 Indian rupees)

Japan Q3 aluminium premiums set at $132/T amid uncertainty over Rusal
sanctions

(Reuters) - Premiums for Japanese aluminium shipments for July to September
were set at $132 a tonne, 2 percent higher than the current quarter on
rising spot premiums in the United States and supply uncertainty caused by
sanctions on Rusal, four sources directly involved in the pricing talks
said.

Premiums were at $129 per tonne PREM-ALUM-JP for the April to June quarter,
making this the third straight quarterly increase and the highest premium in
more than three years. Producers’ initial offers were at $159 to $160.

Japan is Asia’s biggest importer of aluminium and the premiums for primary
metal shipments it agrees to pay each quarter over the London Metal Exchange
(LME) cash price set the benchmark for the region.

The negotiations began last month between Japanese buyers and global
producers, including Alcoa, Rio Tinto , and South32 Ltd.

Three sources with buyers and one at a producer said all deals were done at
$132 per tonne by Friday.

Japan’s buyers had sought lower levels as local spot premiums were hovering
at below $100 per tonne while suppliers had claimed that U.S. sanctions on
Rusal and new import tariffs on the metal boosted U.S. spot premiums,
underlining potential tightness in the global market, the source said.

Washington imposed 10 percent duties on aluminium in March aimed at
kickstarting domestic output and sanctions on Rusal in April, preventing
customers with U.S. exposure from buying metal from the world’s
second-largest producer.

Even as U.S. premiums held at three-year highs, Japan’s spot aluminium
premiums nearly halved in May, driven lower by an influx of Chinese metal
and bets that Rusal would avoid sanctions. LME backwardation also prompted
traders to cut their long positions.

But given a gap between producers’ last offer of $132 and the current spot
premiums, some buyers have skipped the next quarter contract, the sources
said.

Some Japanese buyers have resumed trade with Rusal, or are in the process of
doing so for July to September, while others are keeping their business with
the Russian firm suspended due to concerns over secondary sanctions, the
sources said.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Hwange

AGM

Royal Harare Golf Club

29/06/2018 10:30am

Fidelity Life

AGM

Great Indaba Room, Monomotapa Hotel

29/06/2018 11am

Barclays

EGM to consider the change of registered statutory name to First Capital
Bank Limited

Meikles Hotel

03/07/2018 3pm

NicozDiamond

shares delist from the ZSE

06/07/2018

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

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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