Bulls n Bears Daily Market Commentary : 21 June 2018

Thu Jun 21 15:53:54 CAT 2018

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Bulls n Bears Daily Market Commentary : 21 June 2018

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

Zimbabwe Stock Exchange Update

The All Share index lost 2.39 points   to close at 109.70 points. Seed
producer SEEDCO shed $0.4375 to close at $2.3000, DELTA dropped $0.0975 to
close at $1.9010 and SIMBISA eased $0.0023 to $0.4775. ECONET  slipped
$0.0022 to settle at $1.1646 whilst PPC went down by $0.0009 to $1.2000.

Two counters gained ground; OLD MUTUAL  added $0.0792 to trade at $6.0856
and PROPLASTICS was up $0.0011 to trade at $0.0980.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Ugandan shilling weakens to all-time low of 3,890/3,900 to dollar - traders

(Reuters) - The Ugandan shilling weakened to an all-time low on Thursday as
interbank players exerted strong dollar demand while the central bank held
back from another intervention, traders said.

The shilling has experienced an accelerated depreciation over the last three
months and is now 6.6 percent weaker against the U.S. currency so far this
year.

In recent years Uganda has seen growth of around 4 percent, below what the
central bank says is the economy’s potential growth rate of 7 percent,
largely on account of weak agricultural output and exports which has lead to
lower inflows of hard currency.

The country’s economy has also been hurt by regional conflicts in South
Sudan, Burundi and eastern DRC.

At 1015 GMT commercial banks quoted the shilling at 3,890/3,900, weaker than
Wednesday’s close of 3,880/3,890.

After staying on the sidelines amid the shilling’s rapid weakening, the
Ugandan central bank intervened on June 8 and sold dollars to try to restore
stability.

The intervention achieved only fleeting relief for the local currency and a
trader at a leading commercial bank said the bank’s refusal so far to
intervene a second time was eroding confidence in the local currency.

Uganda expects economic growth of at least 6 percent in 2018/19 (July-June)
from 5.8 pct in 2017/18, partly helped by public infrastructure investments,
Finance Minister Matia Kasaija said on June 14 during the budget
announcement.

Kenya

Kenyan shilling firm, withstands surge in dollar strength

(Reuters) - The Kenyan shilling was firm against the dollar on Thursday due
to inflows from portfolio investors withstanding a global surge in dollar
strength, traders said. 

At 0852 GMT, commercial banks quoted the shilling at 100.75/95 per dollar
compared with 100.85/101.05 at Wednesday's close.

America

Dollar perched at 11-month highs as trade concerns weigh

(Reuters) - The dollar hit a 11-month high against a basket of its rivals on
Wednesday as an escalating trade conflict kept investors from buying
higher-yielding currencies and markets braced for growing volatility.

Currency markets had breathed a sigh of relief after Beijing signalled its
tolerance of a stronger currency by fixing a stronger daily midpoint than
expected. Safe-haven currencies such as the Swiss franc and the Japanese yen
were still well-supported, though.

On Wednesday, the dollar edged 0.1 percent higher against a basket of its
rivals at 95.30, its highest since mid-July 2017.

Led by the U.S. Federal Reserve, global central banks are pulling back from
their financial-crisis policies, and market expectations are for volatility
to pick up.

Morgan Stanley estimates that FX volatility remains one standard deviation
below its long-term average. U.S. bond market volatility was more than 1.5
standard deviations below its long- term average.

A gauge of perceived equity market swings rose to a two-week high of 14.64
vol on Tuesday before pulling back.

EURO

The euro slipped a quarter of a percent, with traders wary of pushing it
higher before some large option expiries this week. In addition, European
Central Bank policymaker Ewald Nowotny said on Wednesday the euro weakness
was caused by the growing interest rate differential between the United
State and Europe.

Roughly $2 billion of currency options on the euro/dollar are set to expire
this week between $1.1550 and $1.1500, dampening any large moves in the cash
markets.

Emerging currencies won some reprieve, with the Mexican peso stronger on the
day along with the Taiwan dollar and the South African rand

The Australian dollar, considered sensitive to shifts in sentiment towards
China, fell to a 13-month low of $0.7347 on Tuesday before pulling back
slightly to $0.7391.

The Swiss franc slipped 0.1 percent to 0.9953 franc per dollar, handing back
the previous day’s gains.

Before Thursday’s Bank of England policy decision, the pound struggled near
a seven-month low of $1.3151.

No economists polled by Reuters expect the BoE to raise rates on Thursday,
and some are getting cold feet about their forecasts for a rate rise in
August, which would be only the central bank’s second increase since the
2008 financial crisis .

Before market opening on Wednesday, the People’s Bank of China lowered the
midpoint rate by 0.54 percent to 6.4586 per dollar. Traders said the daily
fixing was far stronger than their models suggested, an attempt to stabilise
sentiment and prevent the yuan from sinking further.

Markets also turned their focus to Sintra in Portugal, where U.S. Federal
Reserve Chair Jerome Powell, European Central Bank President Mario Draghi,
Bank of Japan Governor Haruhiko Kuroda and Reserve Bank of Australia
Governor Philip Lowe are all scheduled to speak at a conference on
Wednesday. 

Commodities Markets

Dollar scales 11-month peak, oil slides ahead of OPEC

(Reuters) - Simmering trade and political tensions and a pumped-up dollar
weighed on world shares on Thursday, while oil prices were under pressure
before an OPEC meeting expected to increase the world’s supply of crude.

Europe’s main stock markets were back near two-month lows and Wall Street
futures had also turned lower , as the jitters that have dominated markets
for months began to reassert themselves.

Europe’s car shares fell to a nine-month lows after Mercedes-Benz maker
Daimler warned the global trade tensions were slowing its sales. Italian
stocks and bonds also tumbled on reports a eurosceptic had been given a key
finance role.

Asia had been mixed, too, with Japan’s Nikkei adding 0.6 percent and
Australia’s main index enjoying another strong day before the end of its
financial year next week.

China remained the weak link, though, finished more than 1 percent lower ,
and ensured MSCI’s broadest index of Asia-Pacific shares fell, dropping as
much as 0.5 percent higher at one point.

Strains were compounded by the dollar’s surge to an 11-month high. That
raises inflation outside the U.S. and puts pressure on any country or
company that has gorged itself on dollar-denominated debt.

The mere absence of new threats from U.S President Donald Trump on tariffs
was nevertheless enough to keep hopes alive that all the bluster was a ploy
which would stop short of an outright trade war.

Markets had also been encouraged by the People’s Bank of China’s move to set
firm fixings for its yuan, along with the addition of extra liquidity,
though the spot yuan rate did hit a fresh five-month low.

There was also much speculation the central bank would cut bank reserve
requirements, thus boosting lending power in the economy.

On Wall Street on Wednesday, tech stocks helped the Nasdaq to an all-time
high, though the moves were modest. The Dow Jones fell 0.17 percent, the S&P
500 gained 0.17 percent and the Nasdaq 0.72 percent.

Twenty-First Century Fox Inc had climbed 7.5 percent after Walt Disney Co
sweetened its offer for some of the company’s assets to $71.3 billion,
looking to topple Comcast Corp’s bid.

WAITING ON THE BOE

The dollar’s latest spurt softened safe havens such as the yen, with the
dollar adding 0.31 percent to 110.71 yen.

It also firmed 0.45 percent against a basket of currencies to 95.484,
hitting an 11-month top and sending the euro down to a three-week low of
$1.1500.

Sterling was at seven-month low of $1.3108, having made only a fleeting
recovery after Britain’s Prime Minister Theresa May won another crucial
Brexit vote in parliament.

The Bank of England holds a policy meeting later in the session, but not a
single analyst polled by Reuters expects a rate hike and some are getting
cold feet about a rise in August given recent soft economic data.

While the European Central Bank has signalled an end to bond-buying, it also
pledged to keep rates low past next summer, and the Bank of Japan shows no
sign of unwinding its stimulus.

Switzerland’s central bank kept its rates deep in negative territory on
Thursday and warned that risks to the economy were rising amid all the trade
war noise.

Ahead of Friday’s meeting of oil producers in Vienna, Saudi Arabia is trying
to convince fellow OPEC members of the need to pump more oil, according to
sources familiar with the talks. Iran on Thursday signalled it could be won
over to a small rise in output, potentially paving the way for a deal.

Benchmark Brent crude fell $1.56 a barrel to a low of $73.18 before
recovering slightly to $73.34, down $1.40, by 0850 GMT. U.S. light crude was
$1.00 lower at $64.71.

Russian Jan-March gold output at 51.6 tonnes

(Reuters) - Russia produced 51.6 tonnes of gold in the first three months of
2018, up from 50.9 tonnes in the same period in 2017, the finance ministry
said on Thursday.

Production for the period included 39.78 tonnes of mined gold compared with
38.93 tonnes a year ago, the ministry said.

Silver production totalled 250.77 tonnes in January-March, up from 222.97
tonnes in the same period of 2017. 

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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Bulls n Bears 

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