Bulls n Bears Daily Market Commentary : 18 June 2018

Mon Jun 18 17:16:14 CAT 2018

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Bulls n Bears Daily Market Commentary : 18 June 2018

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

Zimbabwe Stock Exchange Update

The week opened on a subdued note with losses in Axia, Delta and OM pulling
the All share Index 1.50 points lower despite a 10.59 points gain in the
Mining Index led by Riozim. 

The Industrial Index retreated a further 5.65 points as profit taking was
evident across the bourse. The Top Ten Index lost 2.65 points as
heavyweights remained under selling pressure amid limited buying. Turnover
stood at USD 2.8 million with decent trades in Delta, Econet and OM.-IES

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling firm on tightening liquidity

(Reuters) - The Kenyan shilling held steady against the dollar on Monday but
was expected to strengthen due to tightening liquidity in the money markets
increasing demand for the local currency, traders said. 

At 1000 GMT, commercial banks quoted the shilling at 101.00/20 per dollar,
unchanged from Thursday's close.  

Markets were closed on Friday as it was a public holiday in Kenya. 

South Africa

South Africa's rand firmer; focus CPI, current account data

(Reuters) - South Africa’s rand firmed slightly early on Monday, pulling
away from a six-month low hit in the previous session, with investor focus
on consumer price inflation and current account data due later in the week.

* At 0633 GMT, the rand traded at 13.4050 per dollar, 0.22 percent firmer
than its close on Friday.

* The currency hit a six-month low of 13.4975 on Friday as global trade war
fears rattled emerging markets, while locally the country suffered power
outages as workers protested over wages at national electricity provider
Eskom.

* Statistics South Africa publishes May CPI figures on Wednesday and the
central bank will release first-quarter current account numbers on Thursday.

* In fixed income, the yield for the benchmark government bond due in 2026
was down one basis point to 9.005 percent. 

Trade war tremors send emerging stocks to 2018 lows

Reuters) - Escalating trade tensions between Washington and Beijing knocked
emerging stock markets to a six-month low on Monday while a stronger dollar
weighed on currencies.

MSCI’s emerging market stocks weakened 0.4 percent on their fourth straight
day in the red, with Asian bourses such as export-heavyweight South Korea
tumbling more than 1 percent, though China and Hong Kong markets were closed
for a holiday.

The losses came after the United States on Friday detailed $50 billion of
Chinese imports to face 25 percent tariffs. The move prompted a swift
response from Beijing, which reciprocated saying it would sanction $50
billion of U.S. imports and suspending all previous trade agreements with
U.S. President Trump’s administration.

Emerging markets had already suffered following last week’s hawkish outlook
from the U.S. Federal Reserve and the European Central Bank signalling
interest rates would be kept at record lows up to at least mid-2019, which
pushed up the dollar.

Data from EPFR Global underscored investors’ cautiousness, with global
emerging market equity funds seeing outflows accelerate to hit $1.3 billion
in the week to last Wednesday and dedicated GEM funds suffering their
biggest weekly leakage since the week after the U.S. elections in November
2016.

Emerging currencies were also struggling thanks to weaker commodity prices,
with oil under pressure as China’s retaliatory tariffs included U.S. crude
while the dollar was still trading within view of the seven-month highs hit
on Friday.

Mexico’s peso, a weather-vane for trade sentiment, weakened 0.4 percent
against the dollar, while South Korea’s won, sensitive to export swings,
also softened.

Crude exporter Russia saw the rouble weaken 0.3 percent amid slipping oil
prices while South Africa’s rand matched those falls.

Turkey’s lira proved the exception to the rule, strengthening 0.2 percent
after five days in the doldrums and with local markets catching up on
re-opening after Friday’s Eid al-Fitr holiday.

But SEB’s Hammarlund said this might be a short lull ahead of Sunday’s
presidential and parliamentary elections. Several recent polls have
suggested President Tayyip Erdogan’s ruling AK Party could lose its
parliamentary majority in the poll, which would put a brake on his ability
to exercise the powers of the new executive presidency.

Commodities Markets

Copper slips to 2-week low on U.S-China trade tensions

(Reuters) - Copper eased for a third session on Monday on fears trade
tensions between the world’s two largest economies could escalate and demand
from China could cool after last week’s lacklustre data.

Benchmark copper on the London Metal Exchange was down 0.4 percent at $6,988
per tonne in official rings, amid thin trade due to a Chinese holiday. The
industrial metal earlier touched its weakest since June 4 at $6,886.75.

U.S.-CHINA: U.S. President Donald Trump said he was pushing ahead with hefty
tariffs on $50 billion of Chinese imports on Friday as Beijing immediately
vowed to respond in kind.

CHINA DATA: China posted weaker-than-expected industrial output, investment
and retail sales for May on Thursday, signalling further weakness ahead if
Beijing sustains its crackdown on factory pollution and local government
spending.

China is the world’s top consumer of metals such as copper and any sign of
weakness in its economy saps demand for the industrial metals.

METALS DEMAND: Japan’s exports rose in May at the fastest pace in four
months thanks to increased shipments of cars, car parts, and semiconductor
equipment in a sign that global demand is gaining strength.

DOLLAR: The dollar rose against a basket of currencies on Monday,
approaching seven-month highs on bets the United States and China will avoid
a full-blown trade war, although tensions between the two slowed its gains.

INVESTORS: Hedge funds and money managers raised their net long positions in
COMEX copper in the week to June 12 by 28,941 contracts to 77,740 contracts,
U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. This
was the strongest net long position since January.

ALUMINIUM: Aluminium hit its weakest in nearly eight weeks at $2,193.50, but
moderated to trade 0.5 percent higher at $2,215.50 in official trading
rings. Support is seen at $2,175 a tonne, the 200-day moving average.

COBALT: Panasonic Corp expects to more than triple its cobalt consumption in
five years’ time, industry sources said, even as the company aims to develop
cobalt-free automotive batteries in the near future.

PRICES: Lead was bid 1.2 percent higher at $2,433 per tonne, tin was little
changed at $20,800, zinc was down 0.2 percent to $3,073 while nickel slipped
1 percent to $15,020.

Global stocks, oil suffer as U.S.-China trade spat heats up

(Reuters) - Global stocks slid on Monday and U.S. oil prices slumped after
U.S. President Donald Trump announced tariffs on Chinese goods and Beijing
responded with similar measures in an escalating trade dispute.

Fears the spat between the world’s two largest economies could intensify
added to pressure on oil prices, which extended Friday’s big fall into the
start of week, while the dollar retreated from near 3-week highs against the
safe-haven yen.

Trump announced tariffs on Friday on $50 billion of Chinese imports,
including cars, starting on July 6.

China said it would retaliate immediately by slapping duties on American
export products, including crude oil, and suspend all previous trade
agreements with Trump’s administration.

The exchange of blows between Beijing and Washington has heightened fears of
a broader and more protracted dispute, sending Asian shares to a 2-1/2 week
low.

European shares opened lower as investor angst about the outlook for
economic growth filtered through to European stocks.

The STOXX 600 slipped 0.3 percent and Germany’s DAX was down 0.5 percent
while France’s CAC 40 declined 0.7 percent.

A potentially destabilising vote in German Chancellor Angela Merkel’s
governing coalition partner over a migration plan could put further pressure
on European shares.

In commodity markets, Brent crude futures fell to a six-week low of $72.45 a
barrel on Monday on worries about a hit to global growth from the trade
dispute and after reports that top suppliers Saudi Arabia and Russia would
likely agree to increase production at the June 22 OPEC meeting in Vienna.

U.S. light crude oil hit a two-month low of $63.59 a barrel before edging
back to $64.00, down $1.06, by 0755 GMT.

The producer cartel of the Organisation of the Petroleum Exporting Countries
(OPEC), which is de facto led by Saudi Arabia, and some allies including
Russia have been restricting output since the start of 2017.

They will meet in Vienna on June 22 to decide future production policy.

ROOM FOR COMPROMISE

China has hiked its list of U.S. goods on which it said it would slap
tariffs six-fold from a version released in April, but the value was kept at
$50 billion, as some high-value items such as commercial aircraft were
deleted.

Some analysts, however, believe there is still room for compromise,
suspecting Trump’s announcement was a negotiating tactic to wring faster
concessions from Beijing.

Analysts also say the direct impact of the tariffs may be limited,
especially for the U.S. economy, which is in decent shape.

The immediate fallout from the dispute was limited in currency markets. A
mild reaction in the dollar suggested that the exchange of blows was
anticipated in some markets.

The dollar index versus a basket of six major currencies crept up 0.1
percent to 94.862.

The index was close to 95.131, a peak scaled on Friday, thanks to the dollar
soaring more than 1 percent last week after the U.S. Federal Reserve gave a
hawkish signal on interest rates while the European Central Bank struck a
dovish tone.

The euro traded at $1.1565, not far from a recent two-week low of $1.1543
after the European Central Bank suggested it would hold off raising interest
rates through the summer of next year.

The Australian dollar, a liquid hedge for risk, slipped to a six-week trough
while its New Zealand cousin fell to the lowest since end-May.

Asian trade-reliant economies and companies plugged into China’s supply
chains are worried that they will suffer collateral damage if world trade
slows down, hurting global growth and dampening business confidence.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

ZHL

AGM

Ophir Room, Monomotapa Hotel

20/06/2018 2:30pm

ZPI

AGM

206 Samora Machel Avenue

21/06/2018 12pm

RioZim

AGM

Head Office, 1 Kenilworth Road, Highlands

21/06/2018 10:30am

SeedCo

final dividend of 2.95c and special dividend of 1.48c and sets record date

22/06/2018

GB Holdings

AGM

Cernol Chemicals Boardroom, 11 Dagenham Road, Willowvale

26/06/2018 11:30am

MedTech

AGM

Head Office, Boardroom, Stand 619, Corner Shumba/Hacha Roads, Ruwa

27/06/2018 3pm

Dawn Properties

AGM

Ophir Room, Monomotapa Hotel

28/06/2018 10am

NicozDiamond

Scheme meeting

7th Floor, 30 Samora Machel Ave

28/06/2018 10am

ZBFH

AGM

Boardroom, Ground Floor, 21 Natal Road, Avondale

28/06/2018 10:30am

African Sun

AGM

Kariba Room, Holiday Inn Harare

28/06/2018 12pm

FBC

AGM

Royal Harare Golf Club

28/06/2018 3pm

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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