Bulls n Bears Daily Market Commentary : 27 June 2018

Wed Jun 27 16:21:46 CAT 2018

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Bulls n Bears Daily Market Commentary : 27 June 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $1,196,089.97 with foreign buys at $855,233.17 and foreign
sales were nil. Total trades were 71.

The All Share index continued in the downward trend losing 1.22 points to
settle at 101.41 points. ECONET led the losers with a $0.0549 decrease to
close at $0.9426; INNSCOR  eased $0.0508 to $1.3292 whilst TSL LIMITED  lost
$0.0500 to end at $0.4000. PROPLASTICS  slipped $0.0040 to trade at $0.0940,
MASIMBA  and NMBZ HOLDINGS each came off $0.0005 to close at $0.0621 and
$0.1155 respectively.

Two counters gained ground as OLD MUTUAL LIMITED advanced by $0.3100 to
trade at $4.8100 and EDGARS  inched up $0.0002 to close at $0.0612.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Uganda shilling weakens towards psychologically key level

(Reuters) - The Uganda shilling weakened on Tuesday due to demand for
dollars from manufacturing and energy firms and traders said it was headed
towards a key level that prompted the central bank to pump in dollars last
week.

At 0903 GMT, commercial banks quoted the local currency at 3,880/3,890,
weaker than Monday’s close of 3,870/3,880. The central bank sold dollars in
the market last Friday after the currency fell to 3,900 per dollar.

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling held steady on Tuesday as traders tried to
gauge the level of demand for dollars by importers at the end of the month. 

At 0900 GMT, commercial banks quoted the shilling at 100.70/90 per dollar,
little changed from Monday's close of 100.75/95. Demand for dollars usually
goes up at the of the month as firms seek to meet their obligations. 

China

Bears prowl world markets, maul Chinese stocks as trade tensions simmer

(Reuters) - A 2 percent slide in Chinese equities on Wednesday and a fresh
weakening in the yuan highlighted mounting stress on the world’s number two
economy from trade tensions with the United States, while global stocks
slipped to approach two-month lows.

Equity futures signalled a weaker opening for Wall Street, with S&P e-minis
down 0.4 percent following sharp losses in Asia and Europe after news the
U.S. House of Representatives had approved tightening foreign investment
rules.

The Nasdaq and Dow Jones indexes also are poised to open lower.

And while the prospect of trade protectionism and tit-for-tat tariffs
hammers equities and raises fears for the world economy, the growth and
inflation outlook is further complicated by oil prices rising back above $75
per barrel, due to Washington pressuring its allies to halt Iranian imports.

Oil’s rise, despite last week’s deal by crude producers to raise output, had
helped Wall Street rebound on Tuesday. But the rally fizzled in Asian
trading, driving MSCI’s ex-Japan Asian equity index almost one percent lower
to a fresh two-year low.

Losses were led by China, where Shenzen-listed blue chips sank 2.2 percent
to stand a whisker above 13-month lows. Chinese equities have now fallen
into so-called bear market territory, having tumbled 20 percent from recent
peaks.

The yuan too slipped to a fresh six-month low against the dollar, as the
central bank allowed the biggest one-day weakening in the currency in
percentage terms since January 2017. Many analysts now see authorities
allowing currency weakness in order to counter the hit to trade.

In contrast, the S&P500 is just 6 percent off peaks.

Lowman said a ten-year equity bullmarket had left many assets “priced for
perfection”, meaning setbacks could have an outsize impact, especially
because central banks, led by the U.S. Federal Reserve, are tightening
policy after years of ultra-low interest rates.

The Iran supply worries have overshadowed a supply increase agreed by OPEC
and other oil producers last week, pushing Brent futures more than half a
cent higher to $76.8 a barrel

European shares, meanwhile, touched 11-week lows , later recouping some
losses as auto shares, vulnerable to U.S. tariffs, trimmed some big early
falls.

Many investors still caution against reading too much into the trade
fallout, citing robust global growth and hopes of an ultimately pragmatic
approach by leaders on the trade issue.

Nevertheless, trade-sensitive assets including currencies continue to feel
the heat — the Australian dollar traded towards one-year lows hit recently
and the New Zealand dollar touched seven month lows to the U.S. dollar.

The greenback itself, recovered from 10-day lows, but fell 0.25 percent
against Japan’s yen which is considered a safe-haven asset.

Safe-haven bonds also gained from the turmoil, with 10-year Treasury yields
slipping 3 basis points to around 2.84 percent, a near-one month low.

But fears of an inflationary impact from the trade tensions and oil prices,
have flattened the yield curve, with the yield gap between two- and 10-year
Treasuries narrowing to a new decade-low.

Political concerns in Europe are also worrying investors at the margin as a
row over migration policy in Germany’s coalition government rumbled on,
raising concerns that the euro zone’s biggest economy could be headed for
snap elections.

That also contributed to pushing euro zone yields lower , with German yields
edging towards one-month lows.

Commodities Markets

Asia shares sideswiped by China skid, oil extends gains

(Reuters) - Asian share markets were under stress on Wednesday as further
falls in Chinese stocks and the yuan sent ripples across the region, while
oil climbed as the United States leaned on allies to stop buying Iranian
crude.

Chinese blue chips sank 2.2 percent to be a whisker above 13-month lows as a
resolution of Sino-U.S. tensions remained a distant prospect.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost another 0.6
percent after touching a two-year trough on Tuesday.

Japan’s Nikkei had been faring better but soon succumbed to risk aversion
and fell 0.3 percent.

European shares were expected to open flat, while E-mini futures for the S&P
500 were off 0.18 percent.

The fragile mood in Asia overshadowed gains in energy stocks made after news
broke that Washington was pushing allies to halt imports of Iranian crude.

U.S. crude added 17 cents to $70.70, having surged 3.6 percent overnight,
while Brent climbed 18 cents to $76.49 a barrel.

The jump in oil boosted the Wall Street energy sector 1.4 percent, making it
the biggest gainer on the S&P 500.

But the S&P still only managed to add 0.22 percent overall, while the Dow
rose 0.12 percent and the Nasdaq was up 0.39 percent.

Confusion remained the watchword with U.S. trade policy.

The U.S. House of Representatives overwhelmingly passed a bill on Tuesday to
tighten foreign investment rules, spurred by bipartisan concerns about
Chinese bids to acquire sophisticated U.S. technology.

Yet President Donald Trump also endorsed a measured approach to restricting
Chinese investments in U.S. technology companies, saying a strengthened
merger security review committee could protect sensitive technologies.

BACK TO YUAN WATCHING

In currency markets, trade-sensitive currencies including the Australian and
New Zealand dollars lost ground while the safe-haven yen found demand. The
kiwi dollar hit its lowest in seven months at $0.6812.

The U.S. dollar was broadly steady against a basket of currencies at 94.661,
after bouncing from 94.171 on Tuesday. The euro was back at $1.1650, having
run into profit-taking at a top of $1.1720 overnight.

Yet the dollar could not sustain gains on the yen and eased back to 109.85
from an early 110.12.

The dollar has been aided in part by recent gains on the Chinese yuan, which
has stirred speculation Beijing was allowing its currency to weaken to
bolster exports.

The People’s Bank of China (PBOC) fixed the yuan midpoint at a six-month low
of 6.5569 per dollar on Wednesday. That was down 0.6 percent from the
previous fix but actually a little firmer than market expectations.

However, the spot rate continued to slip with the yuan breaking past 6.6600
per dollar for the first time since December.

In commodity markets, gold was seemingly no longer considered a safe haven
by investors and hit its lowest in more than six months.

Spot gold was last at $1,255.93 having hit its weakest since mid-December at
$1,253.00.

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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