Bulls n Bears Daily Market Commentary : 02 March 2018

Fri Mar 2 15:54:47 CAT 2018

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Bulls n Bears Daily Market Commentary : 02 March 2018

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Zimbabwe Stock Exchange Update

Market Turnover $3,861,280.06 with foreign buys at $2,550,793.52 and foreign
sales were $1,190,495.72. Total trades were 94.

The All Share index lost a further 0.60 points  to settle at 87.26 as
trading was dominated with losers. BRITISH AMERICAN TOBACCO jumped down
$1.6862 to close at $22.3138, DELTA  came off $0.0131 to $1.5669 while
PADENGA slipped $0.0105 to end at $0.4293. MEIKLES  and NAMPAK both shed
$0.0050 to close at $0.3000 and $0.1600 respectively whilst MASHONALAND
HOLDINGS was $0.0020 weaker at $0.0279.

However, OLD MUTUAL put on $0.0752 to trade at $5.4001, CBZ HOLDINGS  added
$0.0030 to $0.1050 as INNSCOR was marginally up by $0.0008 to close at
$0.9208. TSL LIMITED  closed at $0.3996 after a $0.0004 increase.

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Global Currencies & Equity Markets

South  Africa

South Africa's rand recovers slightly as Trump's tariff hurts dollar

(Reuters) - South Africa’s rand opened weaker against the dollar on Friday,
but had regained some ground lost in the previous session as U.S. President
Donald Trump’s decision to impose tariffs on steel and aluminium stalled the
greenback’s recent recovery.

* At 0640 GMT the rand was 0.27 percent weaker at 11.8800 per dollar, a
touch better than Thursday’s slide to a 2-week worst of 11.9450 triggered by
bets the U.S. Federal Reserve could raise interest rates at least four times
in 2018.

* Trump’s tariff plan sparked fears of an imminent trade war and worries
about its potentially negative impact on the world’s largest economy,
dragging the dollar back from six-week highs.

* With no data releases locally and mid-tier data releases offshore, traders
are set to eye the 11.90 technical resistance level as an indicator of
momentum.

* Stocks were set to open softer with the benchmark Top-40 futures index
down 0.5 percent.

* Bonds were also softer, with the yield on the benchmark paper due in 2026
up half a basis point to 8.14 percent.

Nigeria

Nigeria capital inflow rose in Q4 as economy returned to growth

(Reuters) - The value of capital imported into Nigeria rose 29.9 percent in
the fourth quarter to $5.32 billion, as economic activity gathered pace
after the first recession in a quarter century, the National Bureau of
Statistics (NBS) said on Thursday.

Capital imports stood at $12.2 billion for 2017, up from $5.38 billion
previous year, the NBS said.

Nigeria’s economy climbed 1.9 percent in the fourth quarter to return to
growth as oil revenues rose. The central bank has been injecting dollars
into the forex market to support the naira and the economy.

Capital imports were over $4 billion in the third quarter, the first such
quarterly rise since 2015. The rise was driven by portfolio and other
investments, the NBS said in a report.

Portfolio investment accounted for the largest amount of capital imported in
Q4 2017, driven by strong growth in money market instruments, the statistics
office said.

Yields on treasury bills have traded as high as 18 percent in the past. But
the government has been working to lower its borrowing cost by repaying
matured bills rather than rolling them over as it has done in the past.
Bills now trade at rates of around 13 percent.

America

Stocks, dollar tumble as Trump sparks global trade war fears

(Reuters) - The spectre of a global trade war sent world stocks tumbling
towards a 2.5 percent weekly loss on Friday, and left bruised investors
reaching for the traditional antidotes - government bonds, gold and the
Japanese yen.

The falls came after U.S. President Donald Trump said the United States
would impose tariffs of 25 percent on imported steel and 10 percent on
aluminium, sparking concerns of retaliatory moves from major trade partners
China, Europe and neighbouring Canada.

Europe’s STOXX 600 index fell over 1.5 percent led by a near 5 percent slump
from world’s biggest steelmaker ArcelorMittal SA and 2.5 - 6 percent drops
from the region’s carmakers worried that they might be next.

Wall Street futures were also pointing lower for what would be a fourth
straight day and another difficult week for the benchmark S&P 500, Dow Jones
Industrial and Nasdaq indexes.

The dollar and U.S. Treasury yields both fell as they appeared to push aside
considerations of inflation, a major theme that spooked financial markets
over the last month.

Ten-year U.S. Treasuries yields dipped to 2.8024 percent, hitting its lowest
level in three weeks and further extending the distance from its four-year
peak of 2.957 percent touched on Feb 21.

The dollar fell across the board including to more than one year low against
the yen at 105.54.

Europe’s market moves compounded what was already a fragile mood ahead of a
crunch few days of politics.

Britain’s under-fire Prime Minister Theresa May will flesh out her Brexit
plans later, while Germany will find out if it finally has a coalition
government on Sunday with Italy also holding delicately-poised elections
that day.

Combined with the simmering trade war nerves it was unsurprising then that
safe-haven demand was on the rise.

German Bunds - Europe’s credit market benchmark - saw their yields fall to a
five-week low of 0.618 percent as Italy’s BTP yields dropped to a two-week
low of 2.008 percent.

STEEL BUCKLES

The trade nerves had dominated Asian market moves.

Japan’s Nikkei tumbled 2.5 percent to end the week down 3.3, while MSCI’s
broadest index of Asia-Pacific shares excluding Japan dropped 0.9 percent to
take its losses for the week to 2.1 percent.

Steelmakers were hit the hardest there too with South Korea’s Posco down 3.3
percent and Japan’s Nippon Steel off 3.8 percent.

Toyota Motor shares skidded 2.4 percent too after the automaker had said the
planned tariffs would substantially raise the production costs and therefore
prices of cars and trucks sold in America.

On Thursday on Wall Street, the S&P 500 had lost 36.16 points, or 1.33
percent, to 2,677.67, coming a day after a another heavy sell on worries the
Federal Reserve might increase it interest rates more than expected this
year.

The anxiety over tit-for-tat trade tariff moves was underscored by Canada’s
quick response, with officials in Ottawa saying they will retaliate. China
and the EU both followed, saying that they will safeguard their interests.

The concerns also eclipsed upbeat U.S. economic data including a 14-year
high in manufacturing figures and a 48-year low in the number of Americans
filing for unemployment benefits.

In the currency market, the dollar’s retreat saw the euro jump back to
$1.2273, after having hit a seven-week low of $1.21545 on Thursday.

The yen had got an additional boost when Bank of Japan Governor Haruhiko
Kuroda said he would mull an exit from the BOJ’s current stimulus regime if
the central bank’s 2 percent inflation target is achieved in 2019.

The dollar index is down 2.1 percent this year, dogged by suspicions that
the Trump administration prefers a weaker dollar to help narrow the United
States’ yawning trade deficit.

Worries that Trump’s big tax cuts and spending plans will ramp up fiscal
deficits to the extent that they undermine confidence in U.S. debt have also
hurt the greenback though it had been on the rise again in recent weeks.

Oil prices were also under pressure, having fallen more than 1 percent the
previous day on trade friction fears.

U.S. crude was little changed in European trade at $60.88 per barrel, having
fallen to two-week low of $60.18 on Thursday. It is down 3.7 percent so far
this week.

Brent futures traded at $63.74 per barrel having hit a two-week low of
$63.19.

Commodities Markets

LME aluminium steadies, supported by race to beat new U.S. tariffs

(Reuters) - London aluminium prices steadied on Friday, helped by a weak
dollar and a scramble to deliver more of the metal to the United States
before President Donald Trump imposed hefty new tariffs on imports.

Trump said on Thursday he would impose tariffs of 10 percent on aluminium
imports into the United States in order to protect producers, risking
retaliation from major trade partners like China, Europe and neighbouring
Canada.

FUNDAMENTALS

* LME ALUMINIUM: Three-month aluminium on the London Metal Exchange edged up
0.3 percent at $2,152 a tonne as of 1208 GMT, having hit a two week low in
the prior session.

* SHANGHAI ALUMINIUM: The most-traded April aluminium contract SAFcv1 on the
Shanghai Futures Exchange (ShFE) closed down 0.1 percent at 14,340 yuan
($2,259.98) a tonne. It had earlier touched a two-week high.

The“import duty increase on aluminium products will have a small impact on
China’s aluminium export and domestic market, in our view,” Argonaut
Securities said in a note.

“China’s aluminium products exports to the U.S. accounted for around 14
percent of its total exports in 2017 and represent only 1 percent of China’s
total aluminium production,” it said.

* US PREMIUMS: Spot aluminium premiums in the United States spiked to the
highest in almost three years as buyers sought to secure metal before higher
cost tariffs pledged by Trump come into force.

* JAPANESE PREMIUMS: A global aluminium producer has offered Japanese buyers
a premium of $133 per tonne for primary metal shipments during the April to
June quarter, up 29 percent from the current quarter.

* GLOBAL MARKETS: The spectre of a global trade war sent world stocks
tumbling on Friday and drove investors toward the traditional safe plays of
government bonds and the Japanese yen, which jumped versus the dollar.

* TRADE WAR EUROPE: The firm response Europe has pledged to planned U.S.
tariffs on steel and aluminium imports is likely to stop short of triggering
the trade war that open market supporters fear.

* TRADE WAR ASIA: Trump’s planned tariffs on steel and aluminium risk
retaliation from other economies and could cost jobs, Australia’s trade
minister said, while China predicted harm to trade if other countries follow
the U.S. example.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Proplastics

final dividend of 0.26c record date

02 Mar 2018

Simbisa Brands Limited

EGM

SAZ Building Northend Close, Northridge Park, Borrowdale

09 Mar 2018 8:15am

CFI

AGM

Farm & City Boardroom, 1st Floor, Farm & City Complex, 1 Wayne Street

12 Mar 2018 11am

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
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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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