Bulls n Bears Daily Market Commentary : 19 March 2018

Mon Mar 19 16:57:30 CAT 2018

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Bulls n Bears Daily Market Commentary : 19 March 2018

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover $787,875.27 with foreign buys at $80,326.32 and foreign
sales were $205,350. Total trades were 55.

The All Share index was slightly higher at 86.22 points after gaining 0.02
points . Three counters gained ground as PPC  added $0.0100 to close at
$0.9500,  ECONET gained $0.0010 to settle at 0.6780 whilst CBZ  inched up by
$0.0001 to end at $0.1040.

OK ZIMBABWE  was the only counter trading in the negative territory losing
$0.0001 to close at $0.1650.Heavyweights DELTA , HIPPO , INNSCOR , SEEDCO ,
and OLD MUTUAL   traded unchanged at $1.5600, $1.6800, $0.9350, $1.9500 and
$5.4500 in that order.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand weaker, Moody's rating decision awaited

(Reuters) - South Africa’s rand weakened against the dollar early on Monday
as caution gripped investors ahead of a Moody’s credit rating review
announcement and the U.S. Federal Reserve’s interest rates decision due
later in the week.

* At 0645 GMT, the rand traded at 12.0375 per dollar, 0.44 percent weaker
than its New York close on Friday.

* Moody’s, the only major agency with an investment grade rating on South
African debt but with a downgrade review, is scheduled to make a decision on
Friday.

* Globally, the U.S. Federal Reserve is expected to hike interest rates on
Wednesday and perhaps signal that as many as three more lie in store for the
rest of the year.

* Local focus will also be on February consumer prices inflation data and
fourth-quarter 2017 current account numbers due on Tuesday.

* In fixed income, the yield for the benchmark government bond due in 2026
was up 2.5 basis points at 8.17 percent. 

Kenya

Kenyan shilling firm ahead of central bank rates decision

(Reuters) - The Kenyan shilling was steady against the dollar on Monday
ahead of a central bank decision on lending rates later in the day, traders
said. 

At 0854 GMT, commercial banks quoted the shilling at  01.20/40, unchanged
from Friday's close. Seven out of 11 analysts polled by Reuters expect the
bank to hold rates. 

London

Stocks on longest slide since November as Fed caution hits

(Reuters) - Share markets were stuck on their worst run since November on
Monday, as caution gripped traders in a week in which the Federal Reserve is
likely to raise U.S. interest rates and perhaps signal as many as three more
lie in store this year.

A 0.6-1.2 percent drop for Europe’s main bourses amid a flurry of gloomy
company news and weaker Wall Street futures meant MSCI’s main 47-country
world stocks index was down for a fifth day.

The caution also came against the backdrop of global trade war worries which
are set to dominated a two-day G20 meeting starting later in Argentina and
there were plenty of idiosyncratic factors in play too.

London’s FTSE was down almost double the rest Europe as a savage profit
warning wiped more than half the value off one of its big tech firms and
weak international commodity markets hit oil and gas firms and miners.

The pound, though, was having its best day in almost two months against the
euro as Britain’s Brexit negotiators appeared to be nearing a ‘transition’
deal with soon-to-be-former EU colleagues in Brussels.

The euro also fell against the dollar as bond markets sent the gap between
10-year German and U.S. government yields, referred to as the ‘transatlantic
spread’, out to its widest since December 2016. .

Many analysts had been expecting that spread to be narrowing as the ECB
nears the end of its stimulus programme, but it hasn’t proved the case. The
shorter-dated 2-year borrowing cost gap is near its widest level in over 20
years.

With as many as four hikes seen this year, expectations were “chomping at
the max” he added. “I think the euro ‘longs’ have good reason to be
nervous,” he said referring to those betting on a higher euro.

Weakness in equity markets was almost worldwide. Japan’s Nikkei had ended
down almost 1 percent as its exporters were hit by more strength in the yen
which was up for a third session in the last four.

The rest of Asia had struggled too, though China did manage to eke out some
gains as Beijing announced a new economic team.

It included a surprise new central bank chief but for the most part was
largely as anticipated and is expected to keep the focus on halting riskier
types of lending in the giant economy.

FED AHEAD

Wall Street look set to lose more ground when New York reopens having seen
the Dow lose 1.57 percent last week, the S&P drop 1.04 percent and the
Nasdaq 1.27 percent.

Shares in social media site Facebook were down 3.7 percent in premarket
trading after reports that data of 50 million of its users were misused by a
political consultancy firm ahead of the 2016 U.S. elections and Brexit vote.

Twitter dropped 1.6 percent, while Snapchat-owner Snap was off 0.7 percent.

For the year so far, the BAML figures last week showed $9.8 billion has gone
into tech stocks, while $41 billion has flowed into emerging markets and $31
billion into Japan.

Whether the cash continues to flow could depend on what the Fed decides on
Wednesday. All 104 analysts polled by Reuters expected the Fed would raise
rates to between 1.5 percent and 1.75 percent on Wednesday.

They were less certain on whether the “dot plot” forecasts of committee
members will stay at three hikes this year or shift higher.

Analysts at JPMorgan, however, see a risk the Fed might not only add one
more rate rise for this year but for 2019 as well.

DOLLAR DIVIDED

Any nod to four hikes would normally be considered as bullish for the U.S.
dollar, yet the currency has shown scant overall correlation to interest
rates in recent months.

Reasons cited by dealers include concerns about the U.S. budget and current
account deficits, political chaos at the White House, better growth in
competing countries, particularly Europe, and the risk of a U.S.-led trade
war.

Trade will be top of the agenda at a two-day G20 meeting starting later on
Monday in Buenos Aires and any signs of escalating stress between the U.S.
and China could make investors in Asia nervous.

As U.S. trading began, the dollar had recovered to 106.23 yen having been as
low as 105.69 overnight though it had begun to wilt against the euro which
left it around 0.3 percent weaker against a basket of currencies at just
below 90.

The prospect of higher U.S. interest rates was been a burden for
non-yielding gold, which slipped 0.8 percent last week. On the day, the
metal was down at $1,311.20 per ounce.

Oil prices eased after ending last week with a solid bounce. Brent futures
dropped as much as 40 cents to $65.81 a barrel, while U.S. crude futures for
April, which expire on Tuesday, dipped as far as 36 cents to $61.98 a
barrel.

Commodities Markets

Aluminium hits 3-month low as caution before Fed hurts metals

(Reuters) - Aluminium hit its lowest since mid-December on Monday as base
metals wilted along with other cyclical assets before an expected interest
rate hike from the Federal Reserve this week, and as finance ministers met
for a G20 summit.

Alongside concerns that higher interest rates could dampen growth, U.S.
President Trump’s announcement of import tariffs on steel and aluminium has
sparked fears of a global trade war which could weigh on demand for raw
materials.

Aluminium, which has seen sharp increases in stockpiles in recent weeks as
cuts to Chinese smelting capacity came to an end, slipped to its lowest
since mid December.

* ALUMINIUM PRICES: LME three-month aluminium slipped to its lowest since
Dec. 19 at $2,069 a tonne, and was at $2,078.50 a tonne by 1030 GMT, down
0.3 percent.

* GLOBAL MARKETS: Shares were stuck on their worst run since November as
caution gripped traders in a week in which the Federal Reserve is likely to
raise U.S. interest rates.

* G20: Worries about the potential for a U.S.-China trade war and
frustration over U.S. President Donald Trump’s steel and aluminium tariffs
threatened to dominate the G20 gathering of finance leaders.

* ALUMINIUM STOCKS: Shanghai aluminium stocks surged 87,303 tonnes to a
record 934,216 tonnes, data on Friday showed AL-STX-SGH. Stocks of the metal
in LME warehouses MALSTX-TOTAL fell 12,250 tonnes, according to data
released on Monday, but are still up 22 percent from their early February
lows.

* COPPER: London Metal Exchange copper was 1.1 percent lower at $6,815 a
tonne, extending losses from Friday when prices fell half a percent. Prices
earlier dropped to $6,785, which was the weakest since March 9.

* INVESTORS: Hedge funds and money managers trimmed their net long positions
in COMEX copper contracts in the week to March 13, regulatory data showed on
Friday.

OTHER METALS: LME zinc was down 0.2 percent at $3,252 a tonne, while lead
was 0.7 percent lower at $2,365.50 a tonne. Nickel was down 1.4 percent at
$13,430, and tin was down 0.5 percent at $20,905.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

NicozDiamond

finals and analysts briefing

7th Floor Auditorium, Insurance Centre, 30 Samora Machel Avenue

20/03/2018 12pm

Old Mutual Zim

analysts briefing

Stewart Room, Meikles

20/03/2018 2pm

Simbisa

EGM

Royal Harare Golf Club

21/03/2018 9am

Zimplow

final dividend 0.13c per share record

23/03/2018 

TSL

AGM

28 Simon Mazorodze Road, Southerton

27/03/2018 12pm

Willdale

AGM

19.5km peg, Lomagundi Road, Mount Hampden

29/03/2018 11am

Good Friday

30/03/2018 

Easter Monday

02/04/2018

Zimbabwe

Independence Day

Zimbabwe

18/04/2018

Workers’ Day

01/05/2018

Africa Day

25/05/2018

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

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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