Bulls n Bears Daily Market Commentary : 03 July 2018

Wed Jul 4 08:54:47 CAT 2018

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Bulls n Bears Daily Market Commentary : 03 July 2018

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Zimbabwe Stock Exchange Update

Market Turnover $6,175,628.31 with foreign buys at $1,926,373.01 and foreign
sales were $931,744.65. Total trades were 119.

The All Share index gained a further 0.20 points to close at 103.07 points.
SEEDCO gained $0.0823 to end at $2.1026, DELTA added $0.0369 to trade at
$1.8382 and TSL LIMITED  went up by $0.0275 to $0.4275. PPC LIMITED  added
$0.0037 to end at $1.2037 while AFDIS  closed at $1.4525 following a $0.0025
gain. 

However, OLD MUTUAL LIMITED  dropped $0.2928 to close at $4.5572, PADENGA
eased $0.0675 to trade at $0.5500 while MEIKLES shed $0.0302 to close at
$0.3000. SIMBISA slipped $0.0005 to end at $0.4690 while ZIMRE PROPERTY
INVESTMENTS  inched down $0.0001 to close at $0.0190.

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Global Currencies & Equity Markets

Kenya

Kenyan shilling firm, underpinned by healthy inflows and tight liquidity

(Reuters) - The Kenyan shilling was firm against the dollar on Tuesday,
helped by hard currency inflows from offshore investors buying government
debt and tight liquidity in the money market. 

At 0939 GMT, commercial banks quoted the shilling at 100.75/95 per dollar,
compared with 100.80/101.00 at Monday's close.  

Uganda

Ugandan shilling strengthens on liquidity squeeze

(Reuters) - The Ugandan shilling posted gains on Tuesday, buoyed by a local
currency liquidity squeeze in the interbank market and a slowdown in
appetite for dollars by importers.

At 0914 GMT commercial banks quoted the shilling at 3,850/3,860, stronger
than Monday’s close of 3,870/3,880.

America

Dollar dips, euro steadies after German coalition partners resolve row

(Reuters) - The dollar eased marginally against its peers on Tuesday, as the
euro steadied after partners in Germany’s coalition settled a row over
migration that had threatened to topple Chancellor Angela Merkel’s
government.

The euro was little changed at $1.1630 after shedding 0.45 percent
overnight.

The single currency had slipped on Monday after German Interior Minister
Horst Seehofer offered to resign, but it later steadied when his Christian
Social Union (CSU) party reached a deal with Merkel’s Christian Democrats
(CDU) over illegal immigration, and the resignation threat was withdrawn.

The dollar remained broadly supported, meanwhile, as trade tensions propped
up the greenback against commodity currencies, like the Australian dollar,
and emerging market currencies whose economies are most vulnerable to a
downturn in trade.

The dollar index against a basket of six major currencies inched down 0.1
percent to 94.913 after gaining about 0.45 percent the previous day.

The Chinese yuan remained volatile on the back of nervousness ahead of July
6, when U.S. tariffs on Chinese exports are due to take effect.

The yuan earlier fell to 6.7204 per dollar, its weakest since August 2017,
before recovering to 6.7035 in what traders described as efforts by
state-owned banks to prop up the currency.

Commodity-linked currencies such as the Australian dollar, which is
sensitive to shifts in sentiment towards China, have also felt pressure from
trade conflict concerns.

The Aussie was down 0.15 percent at $0.7330 and near a 1-1/2-year low of
$0.7311 plumbed on Monday after the Reserve Bank of Australia (RBA) kept
interest rates unchanged and signalled a steady outlook for some time to
come.

In a widely expected move the RBA left its cash rate at 1.5 percent on
Tuesday following its policy meeting.

The dollar was a shade lower at 110.850 yen after edging up 0.2 percent the
previous day, supported by robust U.S. economic data, higher Treasury yields
and a bounce in shares on Wall Street. 

Commodities Markets

Copper steadies near 7-month low, trade worries dominate

(Reuters) - Copper steadied on Tuesday as the dollar slipped and equity
markets recovered, but worries about global growth due to a trade spat
between the United States and China are expected to keep prices near
seven-month lows.

Benchmark copper on the London Metal Exchange rose 0.9 percent to $6,580 a
tonne in official open outcry trading after hitting $6,519 on Monday, its
lowest since Dec. 5.

Prices of the metal, used widely in power and construction, have tumbled
more than 10 percent since June 7.

DOLLAR: A lower U.S. currency makes dollar-denominated commodities cheaper
for non-U.S.-firms, which potentially could mean stronger demand for metals
such as copper.

This relationship is used by funds which trade using buy and sell signals
generated by numerical models.

COPPER SHORTS: Data from Marex Spectron shows speculative short positions in
LME copper — bets on lower prices - on the LME at 8 percent of open interest
as of Friday, levels last seen in Sept. 2016.

TRADE DISPUTE: U.S. President Donald Trump has this year sought to
renegotiate some of the United States’ trading relationships, in particular
with China. He has imposed tariffs on some imports, in turn sparking
retaliatory action by other countries, raising fears of a global trade war.

DEMAND: China accounts for nearly half of global copper demand, estimated
this year at around 24 million tonnes. The U.S. accounts for a smaller, but
nevertheless significant 8 percent.

MANUFACTURING - Growth in China’s manufacturing sector cooled slightly in
June as firms faced rising input costs and a decline in export orders amid
an escalating trade dispute with the United States, a private survey showed
on Monday.

CHINA GROWTH: “Somewhat softer economic growth in China – as evidenced by
the slight fall in the unofficial PMI – can explain some of the weakness in
industrial metals prices,” analysts at Capital Economics said in a note.

PBOC: China’s central bank moved to calm jittery markets after the yuan
dropped through the psychologically significant 6.7 to the dollar mark,
hitting its lowest in almost a year as anxieties over U.S. trade frictions
deepened.

PRICES - Aluminium, untraded in official rings, was bid up 1.6 percent to
$2,132 a tonne, zinc was bid up 0.2 percent at $2,828, lead was bid up 0.7
percent to $2,402, tin was bid up 0.2 percent at $19,795 and nickel traded
up 0.8 percent to $14,670.

Stocks edge higher on rising oil prices, but trade worries persist

World stocks rose on Tuesday, supported by broad gains in Europe and rising
oil prices, even though markets across Asia remained in the grip of trade
turbulence.

A July 6 deadline is looming for Washington to impose tariffs on $34 billion
worth of Chinese goods that Beijing has vowed to match with tariffs on U.S.
products. President Donald Trump also threatened on Monday to “do something”
if the United States was not better treated by the World Trade Organization.

Prospects of a full-blown trade war and relentless yuan weakening - it has
fallen 5 percent in the past two weeks and is near 11-month lows -
reportedly forced China into intervention via state-run banks.

Among equity markets, Hong Kong dived as much as 3.3 percent to nine-month
lows, hit also by U.S. curbs on China Mobile. Shanghai’s bourse hit a
two-year trough but closed higher as the yuan recovered.

The mood was more cheerful in Europe where a pan-European equity index rose
1 percent, the euro firmed and bond yields climbed after German Chancellor
Angela Merkel struck a migration deal with her Bavarian conservative
coalition partners.

In the United States, the Dow Jones Industrial Average rose 88.76 points, or
0.37 percent, to 24,395.94, the S&P 500 gained 7.04 points, or 0.26 percent,
to 2,733.75 and the Nasdaq Composite added 2.71 points, or 0.04 percent, to
7,570.40.

U.S. markets are set to close early for the Fourth of July holiday.

Energy stocks have been boosted by Brent crude’s rise past $78 a barrel,
McPherson noted. Europe’s tech and energy sectors rose 0.5 and 1 percent
respectively .

That helped MSCI’s world index to rise 0.25 percent, inching further off
2-1/2 month lows hit last week.

While U.S. growth and company earnings seem unassailable, tit-for-tat
tariffs from China and Europe may ultimately prove detrimental for American
businesses and jobs.

U.S. bond yields rose slightly amid the easier mood but concern about the
trade row has helped push the gap between two- and 10-year yields to the
narrowest since 2007.

The dollar retreated 0.4 percent against a basket of currencies and the
easing tensions in Germany helped the euro to gain 0.2 percent against the
greenback.

Friday’s monthly payrolls data should show labor markets remain tight,
keeping the U.S. Federal Reserve’s policy tightening on track.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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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