Bulls n Bears Daily Market Commentary : 02 May 2018

Wed May 2 16:36:54 CAT 2018

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Bulls n Bears Daily Market Commentary : 02 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,729,241.76 with foreign buys at $1,472,911.73 and foreign
sales were $1,253,765.36. Total trades were 89.

The All Share index opened the week on a high note adding 1.19 points  to
settle at 99.90 points. INNSCOR  jumped by $0.1218 to close at $1.1936,
CAFCA gained a hefty $0.1000 to end at $0.7000 and MEIKLES  put on $0.0299
to close at $0.3299. OLD MUTUAL went up by $0.0295 to end at $5.7636, OK
ZIMBABWE  rose by $0.0219 to $0.2029 whilst PADENGA   picked up $0.0155 to
trade at $0.4705.

Trading in the negative territory, PPC  shed $0.0475 to close at $1.0525,
NATIONAL FOODS eased $0.0100 to $5.4000 and SIMBISA lost $0.0020 to end at
$0.4580.  AFRICAN SUN   was down by $0.0011 to $0.0360 and AXIA inched down
$0.0002 to close at $0.2473.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling gains against the dollar

(Reuters) - The Kenyan shilling strengthened marginally against the dollar
on Wednesday with thin demand from retail importers being easily met by
inflows from horticulture exports and remittances, traders said. 

At 1000 GMT, commercial banks quoted the shilling at 100.15/35 per dollar,
compared with 100.30/50 at Monday's close. 

Markets were closed on Tuesday for Labour Day holiday.

South  Africa

South Africa's rand stronger before U.S. Fed meeting

(Reuters) - South Africa’s rand strengthened against the dollar in early
trade, as investors waited cautiously for a U.S. Federal Reserve interest
rate decision later on Wednesday.

* By 0649 GMT, the rand was 0.45 percent stronger at 12.5950 per dollar
compared to a close of 12.6525 on Tuesday in New York.

* The U.S Federal Reserve is holding its policy meeting ending on Wednesday
and will decide whether to hold or hike interest rates.

* As central banks in some advanced economies move away from the era of
historically low interest rates, emerging markets that have wide current
account deficits to fund are expected to be hit the hardest as the supply of
liquidity tightens globally.

* In fixed income, the yield for the benchmark government bond was up 6
basis points to 8.25 percent.

* Stocks were set to open lower at 0700 GMT, with the JSE securities
exchange’s Top-40 futures index down 0.25 percent. 

America

Dollar set for best weekly gain since November 2016 on yield bets

LONDON (Reuters) - The dollar edged higher on Friday and is on track to post
its best weekly performance in more than 1-1/2 years as a spike in U.S.
Treasury yields prompted some investors to unwind some short bets against
the dollar, especially against some emerging market currencies.

FILE PHOTO: U.S. dollar and Euro bank notes are photographed in Frankfurt,
Germany, in this illustration picture taken May 7, 2017. REUTERS/Kai
Pfaffenbach/Illustration/File Photo

Against a basket of rivals, the dollar rose 0.2 percent to 91.71, its
highest level since Jan 12. For the week, it has gained more than 1.5
percent and is on track to post its best weekly performance since late
November 2016.

While the dollar has ignored yield differentials for more than a year with
investors preferring to give greater weight to the momentum of economic
recovery in other major economies, notably Europe, this week’s spike of
ten-year U.S. Treasury yields above the 3 percent mark forced investors to
acknowledge the widening yield differentials favoring the greenback.

Benchmark ten-year U.S. Treasury yields surged past the 3 percent mark
earlier this week before peaking out at 3.03 percent on Wednesday.
Short-dated U.S. yields hit a more than a decade high of 2.51 percent on
Wednesday.

The rise in U.S. Treasury yields has unnerved some currency bears who had
piled multi-year short bets against the dollar on expectations the world’s
biggest economy was in the late stages of an economic expansion which might
force the central bank to slow the pace of its policy tightening.

Speculators’ net dollar short position in currency futures in Chicago, a
closely-watched indicator on market positioning, had hit a 6-1/2-year high,
suggesting some short-covering will be due.

In Japan, the Japanese yen was little changed after the central bank’s
policy decision at which it kept settings unchanged.

In the BOJ’s first policy meeting under the new leadership, the central bank
dropped a reference to inflation reaching its two percent goal in about two
years, however, few see policy implications from this shift in
communication.

The dollar changed hands at 109.17 yen, having risen to a 2-1/2-month high
of 109.49 yen earlier in the week. So far this week, it has gained 1.4
percent.

The euro, in which speculators held record long position, fell to $1.20965
in the previous session, its lowest level since Jan. 12. It last stood at
$1.2112, and is down 1.4 percent on the week.            

Commodities Markets

Gold near 4-month low, under pressure from dollar, weak demand

(Reuters) - Gold steadied on Wednesday near 4-month lows as the dollar's
uptrend paused, but prices of the precious metal are expected to remain
under pressure from a significantly stronger U.S. currency and weak
investment demand.

Spot gold        was up 0.4 percent at $1,309.34 an ounce at 1302 GMT. It
touched $1,301.51 on Tuesday, its lowest since Dec.29. U.S. gold futures
rose 0.2 percent to $1,309.9 an ounce.

The U.S. currency hit a 3-1/2 month high on Tuesday. Its gains makes gold
priced in dollars more expensive for holders of other currencies, which
could potentially subdue demand; a

relationship used by funds to generate buy and sell signals from numerical
models.       

At around 28 million ounces, holdings of the largest gold-backed
exchange-traded-fund (ETF), New York's SPDR Gold Trust      , are down more
than 10 percent since the middle of

2016.

Protectionism is a reference to U.S. plans to levy taxes on aluminium and
steel imports, which could mean retaliation from places such as China and
the European Union.

Investors often use gold as a hedge against inflation, which erodes wealth.
Higher interest rates make gold, which earns nothing and costs money to
store and insure, unattractive.

The U.S. Federal Reserve concludes a two-day meeting on  Wednesday. It is
likely to keep interest rates steady, but encourage expectations of higher
rates in June. The Fed is due

to announce its decision at 1800 GMT.             

On the technical front, support kicks in around $1,305 where the 200-day
moving average sits and resistance at $1,321 near the 100-day moving
average.

Elsewhere spot silver        rose 1.4 percent to $16.34 per ounce and
palladium        climbed 0.7 percent to $955.  

Platinum        was up 0.6 percent at $895 an ounce after hitting $888.50 on
Tuesday, its lowest since December.

Platinum is used in autocatalysts, mainly for diesel cars, where demand has
been sliding after the Volkswagen emissions scandal.

Copper, nickel bounce off lows after China factory data, steel rally

(Reuters) - Copper and nickel bounced off multi-week lows on Wednesday as
Chinese steel prices soared, a dollar rally paused and a private survey
showed growth in China’s manufacturing sector unexpectedly picked up in
April.

The Caixin/Markit Manufacturing Purchasing Managers’ index (PMI) climbed to
51.1, from a four-month low of 51.0 in March, and topped economists’
forecast for a modest slowdown to 50.9.

But the same survey showed a sub-index on export orders shrinking for the
first time since November 2016. An official PMI survey on Monday also showed
slower shipment orders last month.

COPPER, NICKEL: Three-month copper on the London Metal Exchange rose 1.1
percent to $6,817 per tonne by 1035 GMT, after hitting $6,710 on Tuesday,
its weakest since April 4. Nickel rose 2.1 percent to $13,945, after hitting
its lowest since April 12 on Tuesday.

CHINA STEEL: China’s steel rebar futures soared to their highest in eight
weeks, buoyed by a firm physical market that helped run down inventories
amid supply constraints.

GLOBAL MARKETS: World stocks inched higher after two days of losses but
remained pinned down by the dollar’s recent surge and expectations that a
U.S. Federal Reserve meeting later in the day will signal further policy
tightening.

U.S. TRADE RESTRICTIONS: U.S. officials are pushing for quotas and “other
restrictions” on steel and aluminium imports, a top trade official said.

RUSAL: The U.S. Treasury gave investors an additional month to divest or
transfer their holdings in sanctions targets En+ Group Plc, GAZ Group and
United Company Rusal Plc, Russia’s largest aluminium producer.

RIO TINTO: The U.S. Treasury’s move may greatly reduce restrictions on
Rusal, Rio Tinto said.

ALUMINIUM: Aluminium eased 0.1 percent to $2,257 a tonne. Prices hit a
seven-year peak of $2,718 on April 19 after the United States imposed
sanctions on Rusal.

ALUMINIUM STOCKS: LME data showed on-warrant or available aluminium stocks
have fallen to 880,350 tonnes, close to the 836,175 tonnes hit in January,
which was the lowest number since 2007.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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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