Bulls n Bears Daily Market Commentary : 25 June 2018

Tue Jun 26 05:41:59 CAT 2018

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Bulls n Bears Daily Market Commentary : 25 June 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $3,371,439.52 with foreign buys at $1,681,526.40 and foreign
sales were $1,470,553.65. Total trades were 38.

The All Share index came off a further 2.06 points  to settle at 106.70
points as trading was dominated with losers. SEEDCO  eased $0.1500 to close
at $2.1500, INNSCOR  dropped $0.0783 to $1.4000 whilst ECONET was $0.0336
weaker at $1.0856. DELTA decreased by $0.0242 to close at $1.8754, AXIA
slipped $0.0200 to end at $0.2300 and OK ZIMBABWE  went down by $0.0186 to
$0.2000.

Two counters gained ground; AFRICAN SUN and NMBZ HOLDINGS LIMITED both added
$0.0010 to close at $0.0690 and $0.1160 respectively.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Uganda shilling little-changed after central bank intervention

(Reuters) - The Ugandan shilling        was little-changed on Monday after
the central bank last week intervened and sold dollars to try to stop the
local currency's rapid depreciation in recent days. 

At 0737 GMT commercial banks quoted the shilling at 3,868/3,878, slightly
weaker than Friday's close of 3,865/3,875. 

Friday's intervention was the second this month by the central bank trying
to boost the shilling which is down 6.1 percent against the dollar so far
this year.

South Africa

South African rate hikes seen unlikely this year despite weaker rand

(Reuters) - South African markets are pricing in the possibility of an
interest rate hike this year as the rand falls, even though economists say
this is unlikely as inflation expectations have not breached the upper end
of the central bank’s target range.

South Africa’s rand has slumped nearly 9 percent against the dollar year to
date, hurt by global risk-off sentiment and poor domestic economic data. It
fell to a 7-month low last week.

Capital Economics senior emerging markets economist John Ashbourne said the
currency fall has raised speculation that South African policymakers would
follow some emerging market countries that have started raising interest
rates.

Some have moved as a pick-up in their economy or other factors push up
inflation, while others are being forced to act to steady their currencies.

South Africa’s forward rate agreements are implying a 25 basis-point hike in
interest rates by the end of the year.

But a Reuters poll found last week that economists expect the South African
Reserve Bank to keep its repo rate unchanged at 6.5 percent until 2020.

The central bank said in May it would maintain its vigilance to ensure
inflation remained within the 3 to 6 percent target range, and would adjust
the policy stance should the need arise.

The bank currently forecast CPI to average 5.1 percent in fourth quarter
2018, and 5.2 percent in the last quarters of 2019 and 2020. The next
interest rates decision and inflation forecasts are due on July 19.

South Africa’s consumer price inflation slowed to 4.4 percent year-on-year
in May as the rise in food prices eased.

Schoeman said rate hikes over the past five years happened when the
inflation forecast for twelve months out had breached 6 percent and stayed
above that for two or three quarters.

Mexico’s central bank raised its benchmark interest on Thursday in a bid to
counteract the effects of a peso slump and keep a downward inflation trend
on track.

Argentina, Turkey, India and Indonesia are among the other countries hiking
rates. 

America

Dollar falls to 2-week low vs yen on renewed trade tensions

(Reuters) - The dollar fell to a two-week low against the yen on Monday as a
latest flare-up in global trade concerns dented investor risk appetites and
drove down U.S. yields.

The greenback was down 0.4 percent at 109.54 yen after dropping to 109.45,
its weakest since June 11.

Investors steered from risk, with Asian equities in retreat and Treasury
yields declining, after the Wall Street Journal reported the U.S. Treasury
Department is crafting rules that would block firms with at least 25 percent
Chinese ownership from buying U.S. companies involved in “industrially
significant technology”.

The report added to the sense of caution felt after U.S. President Donald
Trump on Friday threatened to impose a 20 percent tariff on all cars
imported from the European Union. The EU responded by saying it will have no
choice but to retaliate to such a move.

This week’s U.S. indicators include housing-related data on Monday, the
Conference Board’s consumer confidence index on Tuesday, durable goods
orders on Wednesday and personal consumption expenditures (PCE) numbers on
Friday.

The dollar index against a basket of six major currencies stood at 94.559
having retreated from 95.529, its highest level since July 2017, scaled
early on Friday.

The greenback had climbed to the 11-month peak as higher U.S. yields
underlined the divergence in monetary policies between the United States and
Europe.

The dollar, however, began to sag towards the end of last week as U.S.
yields lost their lift amid heightened trade tensions between Washington and
the European Union. The 10-year Treasury note yield fell to a one-week low
of 2.871 percent on Monday.

The euro was steady at $1.1654 after gaining about 0.5 percent on Friday.
The single currency was lifted after Friday’s upbeat German and French
business activity data and fresh assurances by Italian politicians that
their nation would not leave the single currency.

Commodity-linked currencies dipped as a surge by crude oil prices ran out of
steam amid the latest round of trade jitters.

Oil had rallied on Friday after OPEC agreed to an unexpectedly modest
increase in production from next month after Saudi Arabia persuaded Iran to
cooperate.

The Australian dollar was down 0.3 percent at $0.7418 after gaining 0.85
percent on Friday. The Aussie had fallen to a one-year low of $0.7394 last
week, hurt by the Sino-U.S. trade spat.

The Canadian dollar slipped 0.25 percent to C$1.3295 per dollar after
advancing 0.4 percent on Friday. The loonie had brushed a one-year low of
C$1.3384 last week, buffeted by volatility in crude oil prices.

The Turkish lira was up about 0.5 percent at 4.64 per dollar, after jumping
as much as 1.6 percent earlier.

The lira had initially soared after Turkish president Tayyip Erdogan and his
ruling AK Party claimed victory in presidential and parliamentary elections
on Sunday, overcoming the biggest electoral challenge to their rule in a
decade and a half.

Commodities Markets

Zinc hits 10-month low as inventories rise, speculators sell

(Reuters) - Zinc prices hit the lowest in over 10 months on Monday as a rise
in inventories signalled supplies were healthy and speculators put pressure
on the market.

Daily data showed zinc on-warrant inventories - those not earmarked for
delivery - in warehouses certified by the London Metal Exchange rose 2,300
tonnes to 241,525 tonnes. They have shot up 83 percent since the beginning
of March. MZNSTX-TOTAL

The steady rise in stocks has mirrored a breakdown in prices, which have
shed a fifth since touching the strongest in over a decade of $3,595.50 a
tonne on Feb. 15.

Benchmark LME zinc fell 0.9 percent to $2,891 a tonne in official open
outcry trading after touching $2,856.50, the lowest since Aug. 7 last year.

* CHINA BANKS: Metals rallied during Asian trading after the central bank in
top metals consumer China said on Sunday it would cut the amount of cash
that some banks must hold as reserves by 50 basis points to spur lending to
smaller firms.

* CHINA DEMAND: Chinese demand for industrial metals was holding up well and
the Chinese central bank move demonstrated that the government was concerned
about growth, Torlizzi said.

* COPPER: Three month LME copper traded down 0.1 percent to $6,785 a tonne
in official rings after hitting the lowest since late May at $6,756.50 a
tonne.

* STRIKES: Supporting copper was news on Friday that workers’ unions at
Codelco’s small Salvador copper division in Chile had rejected an early wage
deal from the company.

* INVENTORIES: Reflecting a pick-up in demand, U.S. exchange copper stocks
have dropped by 10 percent in the past six weeks, reversing an uptrend seen
since December. LME stocks are down by more than a fifth from a peak in late
March, with nearly 12,000 tonnes reserved on Friday to be taken from
warehouses.

* INVESTORS: Hedge funds and money managers trimmed their net-long positions
in copper futures and options in the week to June 19, U.S. Commodity Futures
Trading Commission data showed on Friday.

* ALUMINIUM - LME aluminium, untraded in official activity, was bid down 0.5
percent to $2,165 a tonne after hitting $2,159, the weakest since April 10.

* PRICES: Nickel was bid down 1.1 percent at $15,100 a tonne in official
rings, lead traded up 0.4 percent to $2,425 and tin was bid 0.4 percent
weaker at $20,325.

London copper gives up earlier gains amid U.S.-China trade concerns

(Reuters) - London copper prices on Monday were little changed after giving
up earlier gains as concerns of a widening trade dispute between the United
States and China roiled markets.

The U.S. Treasury Department is crafting rules that would block firms with
at least 25 percent Chinese ownership from buying U.S. companies involved in
“industrially significant technology,” the Wall Street Journal reported on
Sunday.

That reduced the momentum of a rally earlier on Monday’s session after
China’s central bank said on Sunday it would cut the amount of cash that
some banks must hold as reserves by 50 basis points to spur lending to
smaller firms.

Fears of a full-blown trade war with Washington had magnified concerns about
the outlook for the world’s second-largest economy, following
weaker-than-expected growth data for May.

FUNDAMENTALS

* COPPER: London Metal Exchange copper traded flat at $6,787 a tonne, as of
0758 GMT. Prices ended flat on Friday, when they hit their lowest since late
May at $6,768 a tonne. Shanghai Futures Exchange copper eased by 0.1 percent
to 51,860 yuan ($7,938) a tonne.

* STRIKES: Chile’s Codelco, the world’s top copper miner, said late on
Friday that workers’ unions at its small Salvador copper division had
rejected an early wage deal from the company, pushing off further
negotiations until later this year when its contract expires.

* INVENTORIES: Reflecting a pick-up in demand, U.S. exchange copper stocks
have dropped by 10 percent in the past six weeks, reversing an uptrend seen
since December. LME stocks are down by more than a fifth from a peak in late
March, with nearly 12,000 tonnes reserved on Friday to be taken from
warehouses.

* U.S. DOLLAR: The dollar was near its lowest since mid-June, lending
support to metals.

* INVESTORS: Hedge funds and money managers trimmed their net-long positions
in copper futures and options in the week to June 19, U.S. Commodity Futures
Trading Commission data showed on Friday.

* ZINC: Reflecting tight supply of zinc in spot markets, the cash price is
trading at nearly $60 above the benchmark price, the highest since last
October.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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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