Bulls n Bears Daily Market Commentary : 16 July 2018

Mon Jul 16 18:09:32 CAT 2018

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Bulls n Bears Daily Market Commentary : 16 July 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $10,480,627.41 with foreign buys at $10,121,655.80 and
foreign sales were $674,631.95. Total trades were 74.

The All Share index put on a further 0.71 points  to settle at 107.08
points. SEEDCO  rose by $0.1000 to close at $2.2000, DELTA  added $0.0248 to
trade at $2.0550 and PPC LIMITED  went up by $0.0187 to end at $1.2713.
ECONET was $0.0038 stronger at $1.1200 whilst MEIKLES advanced by $0.0030 to
$0.3030.

Two counters lost ground as RIOZIM  shed $0.0100 to close at $1.4800 and
CBZ HOLDINGS LIMITED eased $0.0004 to settle at $0.1010.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand firmer in scramble ahead of rates decision

(Reuters) - South Africa’s rand rallied to a new one-month best on Monday,
maintaining a surprise run fuelled by an uncertain dollar trajectory and a
tidy return for investors looking for high yield outside developed markets.

At 1240 GMT the rand was 0.43 percent firmer at 13.1825 per dollar, with
technical markers indicating upside momentum ahead of crucial inflation data
and a lending rates decision later in the week.

Since touching the 14.00 mark on June 28 the rand has soared through
successive technical resistance barriers, and on Friday closed below 13.25,
triggering some technical and short buying as traders burnt by slides in
other EM currencies piled in.

Global risk demand has been dented by the tit-for-tat tariff war between
Washington and Beijing, preventing investors from taking any large bets on
emerging currencies, but a lull in hostilities, coupled with climbing
commodity prices, has seen demand for high-yield currencies return.

The rand in particular has benefited, with the carry trade offered by low
inflation and relatively high lending rates keeping yield-seeking investors
interested, although traders expect the trend to reverse in coming days.

South Africa’s Reserve Bank is expected to hold rates at 6.5 percent on
Thursday, according to all 25 economists polled by Reuters last week..

Bonds were firmer, with the yield on the benchmark issue due in 2026 down
2.5 basis points to 8.705 percent.

Stocks were weaker, with the Johannesburg Stock Exchange’s Top-40 index down
1.04 percent to 49,723 points, while the All-Share index slipped 0.95
percent to 55,828 points.

Private hospital group Netcare and logistics firm Bidvest were chief
stragglers, each falling close to 3 percent to 27.1 rand and 185.24 rand
respectively.

The consumer services index as a whole was down 1.3 percent.

Slightly softer than anticipated China data, showing the world’s no.2
economy grew 6.7 percent in the last quarter, weighed on emerging stocks
globally.

Shares in MTN, Africa’s biggest mobile telecoms group, hardly budged after
its Dubai subsidiary sold its Cyprus business for $304 million, falling 1.2
percent to 105.40 rand. 

Uganda

Ugandan shilling extends gains on interbank sell-off

(Reuters) - The Uganda shilling       extended its recent gains on Monday,
lifted by a sell-off wave as commercial banks sought to trim their hard
currency positions, traders said. 

At 0843 GMT, commercial banks quoted the shilling at 3,695/3,705, stronger
than Friday's close of 3,710/3,720. 

America

Dollar gains fade on China-EU summit, U.S. data eyed

(Reuters) - The dollar eased a bit against most major currencies on positive
trade talks between China and the European Union although softer economic
data from China and Beijing’s escalating trade war with the United States
tempered the enthusiasm.

Chinese Premier Li Keqiang said on Monday the country will raise its market
access and reduce tariff rates as it seeks more balanced trade with the
European Union.

The remarks came just after the country’s second quarter data pointed to an
economic slowdown, raising concerns about the potential fallout from a
full-blown Sino-U.S. trade war.

The China-EU meeting is expected to produce a modest communique affirming
the commitment of both sides to the multilateral trading system. Li said the
two sides agreed to exchange market offers for the first time, which could
reinvigorate long-running investment treaty talks.

The positive tone of the talks nudged up riskier currencies like the
Australian and New Zealand dollars, as well as the euro, and in turn pushed
the dollar index 0.2 percent lower against a basket of major currencies to
94.608.

The dollar was mostly flat on the safe harbour yen at 112.38.

The losses in the dollar index occurred despite Monday’s data showing
China’s economic growth cooled to 6.7 percent in the second quarter of 2018,
from the 6.8 percent growth in each of the previous three quarters.

Separate monthly data showed China’s industrial output weakened to a
two-year low.

The softer economic figures weighed on Asian markets generally, with the
Shanghai Composite index and the blue-chip CSI300 - the world’s
worst-performing major indexes this year - each off 0.7 percent. The Chinese
yuan also dipped on the data but only briefly. It was last up 0.1 percent at
6.7014. It hit an 11-month trough of 6.7326 earlier this month amid worries
about the economic hit to China’s exports from stiff U.S. tariffs.

However, some economists warned against reading too much into data series.

Traders are now looking to June retail sales from the United States for
further cues about the health of the U.S economy.

Federal Reserve chief Jerome Powell will make a semiannual appearance before
Congress later this week. Ahead of the meeting, the central bank released
its accompanying policy report which showed U.S. economic growth and the Fed
expecting to keep raising rates gradually.

The U.S. economy, which is on its second longest expansion on record, has
shown few signs of stress from the trade row with China.

Elsewhere, the euro was a tad higher at 1.1702 to stay above a nine-day
trough of $1.1610 touched last week.

The pound gained slightly to $1.3246 from last week’s low of $1.3101.

The tone for the two currencies could be set by eurozone inflation data this
week and ongoing Brexit discussions as British Prime Minister Theresa May
battles for her political survival.

On Monday, British lawmakers vote on amendments to legislation on the
government’s post-Brexit customs regime. Leading eurosceptics are set to
vote in favour of amendments that May opposes and back their own proposals
to toughen up her exit plan.

While May is not expected to be defeated on the amendments, a high number of
votes in favour of altering the customs bill by members of her party could
further undermine her negotiating strategy. 

Commodities Markets

Copper eases after China Q2 data

(Reuters) - Copper eased along with most other metals in London on Monday
after data showed that China’s economy expanded at a slower pace in the
second quarter, pointing to weaker demand.

Benchmark copper edged down 1 percent to $6,174 per tonne in official rings,
hovering near one-year lows. Prices are down about 14 percent in 2018.

Economic activity in the world’s top consumer of metals was hobbled by
efforts to contain debt, while June factory output growth weakened to a
two-year low as a trade war with the United States intensified.

Julius Baer commodity analyst Carsten Menke said the Chinese GDP data
pointed to overall stability in the economy but revealed some weakness in
the “old economy” or infrastructure sector.

STOCKS: Headline stocks of copper in LME-registered warehouses gained 1,525
tonnes to 257,200 tonnes, but were still at their lowest levels since
January. MCUSTX-TOTAL

TARIFFS: China’s commerce ministry said on Monday it had filed a complaint
to the World Trade Organization (WTO) regarding Washington’s proposed tariff
list on $200 billion worth of Chinese goods on July 16.

INVESTORS: Copper speculators switched to a net short position of 12,919
contracts, the Commodity Futures Trading Commission said last week, the
weakest position since December 2016.

US ECONOMY: The Federal Reserve on Friday pointed to “solid” U.S. economic
growth during the first half of the year and also reiterated that it
expected to continue to raise interest rates gradually.

ALUMINIUM: Aluminium added 0.7 percent to $2,045 per tonne, close to its
lowest since U.S. sanctions on one of the world’s biggest aluminium
producers Rusal on April 6.

COLUMN: Aluminium hasn’t escaped the broader industrial metals rout. Right
now aluminium traders have much more pressing concerns in the form of a
ferocious squeeze on the fast approaching July prompt date.

ALUMINIUM SUPPLY: China’s aluminium producers are responding to tighter
supply conditions by boosting output, data showed. China’s June output rose
by 0.8 percent to 2.83 million tonnes, which on daily basis was the highest
since June 2017, according to Reuters’ calculations based on official data.

PRICES: Zinc was bid down 3 percent to $2,498 per tonne, lead was bid 0.3
percent lower to $2,196, tin fell 1 percent to $19,600 and nickel was bid
down 1.4 percent to $13,775.

METAL DEMAND: China’s top steelmaking city, Tangshan, ordered steel mills to
shut sintering plants and asked that coke and cement factories curb output
for five days due to forecasts of heavy smog over the weekend, denting metal
demand.

Strike halts gold production at Randgold's Ivory Coast mine

(Reuters) - A strike by workers at Randgold Resources’ Tongon gold mine in
Ivory Coast brought production to a halt on Monday as government-led
negotiations broke down, the company said.

Randgold said in a statement that it continued to work with Ivorian
authorities and the workers’ unions to resolve the standoff, without giving
any details about what it was about.

The mine, which produced 288,680 ounces of gold last year, was also hit by
on-and-off strikes in April, causing output to slow. Two of Randgold’s gold
mines in neighbouring Mali have also faced strikes this year.

The strikes, as well as the adoption of steep tax hikes in Democratic
Republic of Congo, where Randgold operates the Kibali gold mine, have
weighed on Randgold’s stock price, which is down nearly 30 percent this
year.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Lafarge

AGM

Manresa Club, Arcturus Road

19/07/2018 12pm

OK Zimbabwe

AGM

OKmart Functions Room, 30 Chiremba Road, Hillside

26/07/2018 3pm

Delta

AGM

Head Office, Northridge Close, Borrowdale

27/07/2018 12:30pm

NicozDiamond

shares delist from the ZSE

06/08/2018

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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