Bulls n Bears Daily Market Commentary : 18 July 2018

Wed Jul 18 19:01:30 CAT 2018

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Bulls n Bears Daily Market Commentary : 18 July 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $3,364,285.92 with foreign buys at $438,932.98 and foreign
sales were $1,218,640.58. Total trades were 140.

The All Share index went up by 4.03 points  to settle at 111.96 as trading
was dominated with movers. BRITISH AMERICAN TOBACCO  added $0.2184 to close
at $25.2184, DELTA  gained $0.1390 to $2.2423 while INNSCOR put on $0.0665
to end at $1.2815. SEEDCO  rose by $0.0600 to settle at $2.2600 while
PADENGA  improved by $0.0500 to close at $0.6000. 

OLD MUTUAL LIMITED was the only lame duck marginally losing $0.0001 to trade
at $5.0000.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Ugandan shilling weakens as demand from energy, manufacturing firms weigh

(Reuters) - The Uganda shilling surrendered some of its recent gains on
Wednesday, pressured by a surge in demand from commercial banks and firms in
energy and manufacturing sectors, traders said.

Kenya

Kenyan shilling strengthens on tourism and horticulture inflows

(Reuters) - The Kenyan shilling strengthened against the dollar on Wednesday
supported by inflows from horticulture exports and increased tourism
earnings, traders said. 

At 0735 GMT, commercial banks quoted the shilling at 100.30/50 per dollar,
compared with 100.60/80 at Tuesday's close. 

Emerging markets feel dollar pinch, Turkey's lira shines

(Reuters) - A perky dollar hurt emerging market assets on Wednesday with
stocks edging lower and many currencies weakening, but Turkey’s lira rallied
to a one-week high on expectations of another interest rate hike next week.

The dollar chalked up solid gains for a second straight day and hit its
highest level in nearly three weeks after Federal Reserve Chairman Jerome
Powell gave an upbeat assessment on the U.S. economy and played down the
impact of global trade risks on the outlook for interest rate hikes.

The stronger dollar and prospect of higher borrowing costs cast a shadow
over emerging markets with MSCI’s emerging market index slipping 0.2
percent.

The broader benchmark was dragged lower by losses in Asia, where indexes in
China mainland and Hong Kong lost 0.3 percent while export behemoth South
Korea slipped 0.4 percent. China stocks have also suffered in recent days
and weeks as concerns over slowing growth in the world’s second largest
economy and an escalating trade conflict between Beijing and Washington.

TURKISH RATES

Currencies also painted a glum picture. Russia’s rouble chalked up some of
the biggest losses against the dollar, weakening 0.6 percent with oil prices
slipping more than 1 percent adding to the pressure.

South Africa’s rand and Mexico’s peso weakened 0.3 percent, while China’s
yuan also edged lower.

However, Turkey’s lira proved the exception to the rule, strengthening 0.5
percent as markets were increasingly expecting that the country’s central
bank would be forced to hike interest rates once again at its policy meeting
next week.

Markets have been rattled by concerns that President Tayyip Erdogan - a
self-declared enemy of high interest rates - would seek to exercise greater
influence over monetary policy at a time when the country is grappling with
stubbornly high, double digit inflation and an overheating economy.

The currency’s decline has been exacerbated by Erdogan appointing his
son-in-law Berat Albayrak to the post of finance minister, with the lira
having plumbed record lows and slumped more than 20 percent since the start
of the year.

Commodities Markets

Stocks hit one-month high, dollar puts squeeze on gold

(Reuters) - World stocks hit a one-month high on Wednesday as strong company
earnings and a bullish outlook from the head of the U.S. central bank buoyed
the dollar.

The dollar’s advance took its toll on a host of global currencies and melted
gold to its lowest level in a year, but otherwise traders’ spirits were
definitely up.

Morgan Stanley became the latest heavyweight U.S. bank to deliver a jump in
profits m though Wall Street looked set for a groggy start after reclaiming
the 2,600-point mark on Tuesday.

In Europe, London’s FTSE rose 0.5 percent as Brexit continued to hit the
pound. Germany’s DAX climbed to its a one-month high on hopes the European
Union and United States would cut a deal on car tariffs.

In Asia overnight, Japan’s Nikkei had also hit a one-month peak as a
weakening yen promised to fatten exporters’ profits.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose as much as
0.1 percent and Australia 0.6 percent. Shanghai blue chips flagged as
China’s yuan lost ground to the advancing dollar.

U.S. Federal Reserve Chairman Jerome Powell was due to speak again at 10.00
am ET. On Tuesday, he stuck with an upbeat assessment on the U.S. economy
and downplayed the impact of global trade risks on the outlook for interest
rate rises.

BofA Merrill Lynch’s latest fund manager survey showed a trade war remained
the biggest threat cited by 60 percent of respondents.

For now, U.S. companies seem to be profiting from tax cuts as the earnings
season shifts into top gear. Analysts now see second-quarter S&P 500
earnings growth of 21.2 percent, up from 20.7 percent on July 1.

Of the 39 companies in the index that have reported so far, 84.6 percent
have beat market expectations. EBay and IBM are among firms reporting after
the closing bell.

Next stop is the all-time top of 2,872 from January.

POUND IN PERIL

Powell’s support for more rate hikes had sent two-year Treasury yields to
their highest for nearly a decade and lifted the dollar broadly.

Against a basket of currencies, the dollar was up at 95.231 , after jumping
0.46 percent overnight. It also climbed to its highest since January against
the yen at 113.07.

The euro slipped further to $1.1627, after weakening 0.4 percent on Tuesday.

The pound suffered after UK inflation data came in weaker than expected,
adding to the pressure created when British Prime Minister Theresa May
barely cleared the latest parliamentary hurdle to leave the European Union .

Wednesday’s edition of the Times reported May threatened rebel lawmakers in
her own party with a general election if they defeated the bill.

Bank of England Governor Mark Carney warned a no-deal Brexit would have
“big” economic consequences and force a review of plans to raise interest
rates.

Sterling was at a 10-month low of $1.3035, after sliding 0.9 percent on
Tuesday.

The rising U.S. dollar coupled with the prospect of higher U.S. interest
rates also spelled trouble for gold, which crashed through major chart
support to hit a one-year low.

Spot gold was hovering at $1,224.86 per ounce, having fallen to $1,223.78.
The steadily less-precious metal is down more than 5 percent for the year.

Oil prices also eased after an industry group reported an unexpected
increase in U.S. crude inventories. Brent fell 70 cents to $71.40 a barrel,
while U.S. crude was quoted down 54 cents at $67.55 a barrel.

Zinc extends rally from one-year lows, copper and lead at year low

(Reuters) - Zinc recovered further on Wednesday from this week’s one-year
low, helped by falling inventories and consumers’ buying, while copper and
lead hit their lowest for a year as the dollar strengthened and trade
tensions simmered.

Shanghai Futures Exchange (ShFE) zinc stocks ZN-STX-SGH dropped by 16,919
tonnes to 58,016 tonnes last week, their lowest since February 2008, while
LME zinc stocks MZN-STOCKS have fallen for six straight days.

* LME ZINC: Three-month zinc on the LME traded up 1.9 percent in official
midday rings at $2,023 a tonne, adding to a 1.5 percent jump in the previous
session. Zinc, which is used to galvanise steel, is down some 10 percent
this month.

* ZINC TECHNICALS: Indicating near-term supply tightness in zinc, cash zinc
traded at a premium of $26 a tonne to the three-month price CMZN0-3, up from
an $8.50 premium a week ago.

* GRAPHIC: Expectations for a rise in zinc concentrate supplies in coming
years have driven down the metal price in London to one-year lows, but
smelting capacity constraints suggest the sell-off is premature.

* COPPER, LEAD: Copper was last bid down 0.9 percent in rings at $6,095 a
tonne, having hit a year low at $6,080, while lead was last bid down 1.4
percent at $2,136, having hit a year low at $2,131.

* MARKETS: The world’s major stock markets were mostly firmer on Wednesday
as a bullish outlook from the head of the U.S. central bank buoyed the
dollar, lifted bond yields and sent safe-haven gold to a one-year trough.

* CHINA: The U.S.-driven trade war has become the biggest “confidence
killer” for the global economy, China’s foreign ministry warned on
Wednesday, saying the whole world would fight back if the United States
continued to be “wilful”.

* VEDANTA: India’s southern state of Tamil Nadu will ask the nation’s
environment court to dismiss a Vedanta Ltd petition seeking to reopen its
copper smelter, a lawyer representing the state government said on
Wednesday.

* OTHER METALS: Aluminium was last bid down 0.4 percent in rings at $2,023,
tin traded down 0.4 percent at $19,430 while nickel traded down 0.3 percent
at $13,445, having hit its lowest since April.

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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