Bulls n Bears Daily Market Commentary : 28 June 2018

Thu Jun 28 15:58:58 CAT 2018

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Bulls n Bears Daily Market Commentary : 28 June 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $1,976,544.34 with foreign buys at $475,604.40 and foreign
sales were $300,909.05. Total trades were 97.

The All Share index rebounded 0.70 points  to settle at 102.11 points. HIPPO
VALLEY  added $0.1000 to end at $1.6000, ECONET put on $0.0826 to trade at
$1.0252 while RIOZIM   put on $0.0300 to $1.4900. SEEDCO  rose by $0.0100 to
close at $2.0100 and EDGARS  went up by $0.0038 to $0.0650.

However, INNSCOR  shed $0.1296 to end at $1.1996,  PADENGA  dropped $0.0175
to close at $0.6300 and AXIA  came off $0.0095 to trade at $0.2200. SIMBISA
decreased by $0.0058 to $0.4717 while BARCLAYS  was $0.0012 weaker at
$0.0698.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling under pressure, tight liquidity helping

(Reuters) - The Kenyan shilling weakened against the dollar on Thursday due
to end month demand from oil importers and manufacturers although tight
liquidity in the local money markets was seen to be offering support,
traders said. 

At 0900 GMT, commercial banks quoted the shilling at 101.05/25 per dollar,
compared with 100.95/101.15 at Wednesday's close. 

The weighted average daily interbank lending rate was quoted at 6.6815
percent on Wednesday, compared with 6.6646 percent in the previous session.

South  Africa

South Africa's rand steadies after slipping to 7-month low

(Reuters) - South Africa’s rand steadied early on Thursday after slipping to
a seven-month low the previous day amid broad-based dollar gains.

* At 0625 GMT, the rand traded at 13.8625 per dollar, not far off its New
York close of 13.8550 on Wednesday.

* The randy slipped to 13.9375 on Wednesday, its weakest since Nov. 27.

* The dollar was steady against its peers on Thursday, amid conflicting
signals from Washington on a proposal to restrict Chinese investment as the
bitter U.S.-China trade row kept financial markets on edge.

* They added: “From here look for a possible pull back towards 13.74/76 but
14.00 seems to be well in the sights now and break through their targets
14.15/20.”

* In fixed income, the yield for the benchmark paper due in 2026 was up 3.5
basis points to 8.935 percent. 

America

Dollar near 1-year highs on trade concerns, H1 flows

(Reuters) - The dollar held near one-year highs on Thursday as conflicting
signals about developments in the trade row between Washington and its
business partners prompted buying of the currency, with support also coming
from half-year end rebalancing flows.

Though overnight headlines suggested a more conciliatory approach from
Washington, broader risk appetite remained modest in the currency markets,
with perceived safe-havens such as the Japanese yen and the Swiss franc
firmly supported.

U.S. President Donald Trump said on Wednesday he would use a strengthened
national security review process to block Chinese acquisitions of sensitive
American technologies, a softer approach than imposing China-specific
investment restrictions.

In early London trading, the dollar edged 0.3 percent higher to 95.51
against a basket of its rivals, just below a mid-July 2017 high of 95.529
hit last week.

Though the yen showed some weakness overnight, it remains firmly below a
2018 high of above 111 yen per dollar hit last month. The Swiss franc,
another risk barometer, also remains firmly below 1.16 per euro, a level
considered too strong for the central bank’s comfort.

The euro was on the back foot, with likely weak data and political concerns
in Germany weighing. It was down 0.2 percent at $1.1538.

German Chancellor Angela Merkel’s fragile coalition government faces
potential collapse as the Christian Social Union (CSU), her Bavarian ally,
has threatened to defy her and impose border controls unless their demands
to reduce Germany’s immigration burden are met.

There was some confusion about Washington’s trade intentions, with U.S.
shares making an about-turn and dropping after White House economic adviser
Larry Kudlow told Fox Business Network that Trump’s announced plan did not
indicate a softened stance on China.

Among other major event risks is an EU summit starting on Thursday, from
which Brexit-related headlines might sway the pound. In recent days,
however, sterling has been moved more by expectations of UK rate changes.

The Australian dollar bounced modestly after sliding the previous day on the
U.S.-China trade tensions. The Aussie was up 0.2 percent at $0.7356 after
plumbing a 1-1/2-year trough of $0.7323 on Wednesday.

Commodities Markets

China smelter cuts boost zinc price

(Reuters) - Zinc rose on Thursday, edging further away from 10-month lows
after reports that top Chinese smelters planned to cut output by 10 percent
to address low prices and treatment charges of the metal used to galvanise
steel.

Benchmark zinc on the London Metal Exchange added 1.4 percent to $2,915 per
tonne by 1040 GMT. It touched a low of $2,815 on Tuesday, a level last seen
in August 2017 and prices are about 12 percent this year.

CHINA SMELTERS: China’s top zinc smelters plan to cut zinc output by 10
percent after holding a meeting in Shaanxi province, two sources briefed on
the matter said on Thursday.

TREATMENT CHARGERS: The zinc industry agreed a 15 percent drop in annual
zinc processing fees, Nystar said in May, squeezing revenues for smelters.

SPREADS: The premium of cash to three month zinc CMZN0-3 eased to $42.20,
edging further away from October highs touched on Friday and easing concerns
over looming supply tightness.

ZINC INVENTORIES: On-warrant zinc stocks in LME-registered warehouses fell
by 15,175 tonnes to 222,650 tonnes, data showed on Thursday, after fresh
cancellations in New Orleans. Total stocks inched 25 tonnes lower to 249,325
tonnes.

SUPPLY: Australia’s New Century Resources is on track to turn a giant
tailings dam into the world’s fifth-biggest source of zinc as it defies
doubters to make its first shipment in August, the mineral processor’s
managing director said.

COPPER: China’s top copper smelters on Thursday failed to set minimum
treatment and refining charges for copper concentrate in the third quarter
of 2018, two people with knowledge of the matter said.

LME copper slipped to its lowest since April 4 at $6,653 per tonne, down 0.6
percent.

DOLLAR: A slightly strong dollar also weighed on most commodities on
Thursday. Dollar-denominated metals become more expensive for non-U.S. firms
when the currency rises. The dollar index against a basket of currencies hit
its highest in nearly a year.

Conflicting signals about developments in the trade row between Washington
and its main trading partners prompted buying of the greenback.

PRICES: Aluminium slipped 0.8 percent to $2,159 per tonne, lead fell 0.5
percent to $2,423, tin inched 0.3 percent lower to $19,795, while nickel
edged 0.1 percent higher to 14,900.

Trade war fears grip stocks, dollar drives higher

(Reuters) - Pressure on world shares from a U.S.-driven trade dispute
mounted on Thursday, as a fast-charging dollar and a jump in oil prices also
cranked up the pain in emerging markets.

Europe’s bourses inched lower as traders positioned for a potentially
fraught meeting of EU leaders, with the mood set overnight by two-year lows
for Chinese stocks and a six-month low for the yuan.

They, like Wall Street, had been buffeted again after U.S. President Donald
Trump and White House economic adviser Larry Kudlow outlined plans to clamp
down on Chinese acquisitions of sensitive American technologies.

Asian shares had reached a nine-month trough, while MSCI’s emerging market
index - which also includes other hard-hit countries including Mexico,
Brazil, Turkey and South Africa - dropped to its weakest in almost a year.

MSCI’s broadest gauge of the world’s stock markets meanwhile fell to its
lowest in almost three months and was on course to post its fourth losing
month in the last five.

There were other signs too that markets were getting nervous about the
economic impact of the dispute.

U.S. Treasury and German Bund yields remained near one-month lows as bond
investors sought out the guaranteed returns that stocks cannot offer.

The U.S. 2- to 10-year yield curve, whose flattening can be an early warning
indicator of recessions, stayed pinned near the 11-year low of 31 basis
points it had hit on Wednesday. A dip in Italian yields ahead of a key bond
sale there did though point to some risk appetite returning.

Analysts cited local reports that tax cuts and a citizens’ income would not
be introduced next year as another factor boosting Italian government bonds.

A European Union summit scheduled to begin later in the day could prove
disruptive to markets, though, as embattled German Chancellor Angela Merkel
seeks broader agreement on migration.

HOT OIL

Two main forces were playing out in the currency markets.

The trade tensions pushed the dollar - seen as one of the safest investments
especially if U.S. interest rates keep rising - to test a one-year high
against a basket of other top currencies.

Though the yen had shown some strength overnight, it remains firmly below a
2018 high of above 111 yen per dollar hit last month. The Swiss franc,
another risk barometer, also remains firmly below 1.16 per euro, a level
considered too strong for the central bank’s comfort.

In emerging markets, clear signs are emerging that traders think higher oil
prices will lead to higher inflation in big oil importing economies, hurting
their growth levels.

The Indian rupee hit an all-time low of 69.09 to the dollar during the Asian
session, while Indonesia’s rupiah slumped as much as 0.83 percent to touch
its weakest since October 2015.

U.S. crude futures had surged 3.16 percent on Wednesday, rising to as much
as $73.06 a barrel, the highest since November 2014, on signs of tight
supply.

U.S. crude stocks fell nearly 10 million barrels last week while a fall in
Canadian exports helped drain supplies of heavy crude across North America.

White House pressure on other countries to stop all imports of Iranian oil
is seen as creating a shortage, while a power struggle in Libya has left it
unclear whether its internationally recognised government or rebels will
handle oil exports.

U.S. crude futures traded back a touch at $72.62 a barrel, while global
benchmark Brent was 16 cents lower at $77.46. 

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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