Bulls n Bears Daily Market Commentary : 03 May 2018

Fri May 4 09:14:26 CAT 2018

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Bulls n Bears Daily Market Commentary : 03 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $2,247,153.56 with foreign buys at $504,788.40 and foreign
sales were $682,500.00. Total trades were 74.

The All Share index put on 0.64 points  to settle at 100.54 points as
trading was dominated with movers. OLD MUTUAL gained a further $0.1383 to
close at $5.9019, PADENGA added $0.0295 to $0.5000 and OK ZIMBABWE went up
by $0.0180 to settle at $0.2209. HIPPO gained $0.0159 to close at $1.6800,
SIMBISA   rose by $0.0120 to trade at $0.4700 while INNSCOR  closed at
$1.2000 following a $0.0064 increase.

Losses were seen in CBZ HOLDINGS which dropped by $0.0050 to close at
$0.1050, ECONET  shed $0.0018 to $0.8958 while FIRST MUTUAL PROPERTIES  and
ZIMPLOW  both lost $0.0005 to end at $0.0430 and $0.1100 respectively.

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Global Currencies & Equity Markets

Kenya's shilling to hold steady, kwacha to ease

(Reuters) - Kenya’s shilling is expected to hold steady against the dollar
in the next week to Thursday, while Zambia’s kwacha is forecast to weaken,
traders said.

KENYA

The Kenyan shilling is expected to trade in a tight range as dollar inflows
from horticulture exports and offshore investors are likely to meet dollar
demand from the energy and manufacturing sector, traders said.

Commercial banks quoted the shilling at 100.20/40 per dollar, compared with
100.35/55 last Thursday.

UGANDA

The Uganda shilling is expected to be stable in the coming days on
expectations the central bank is likely to intervene in the market if the
local currency weakens substantially below 3,700.

At 1139 GMT commercial banks quoted the shilling at 3,710/3,720, slightly
weaker than last Thursday’s close.

Faisal Bukenya, head of treasury at Exim Bank, said the central bank
appeared comfortable with the shilling around 3,700 and that it was likely
to sell dollars to support the local currency if it depreciated
substantially below that.

ZAMBIA

The kwacha is likely to remain on the back foot due to scant supply of
dollars and general greenback strength against a basket of currencies.

Commercial banks quoted the currency of Africa’s No.2 copper producer at
9.9300 per dollar, weaker than 9.7300 at which it closed a week ago.

GHANA

Ghana’s cedi could remain under pressure next week on a persisting high
interbank and corporate dollar demand, pending the drawdown of a $191
million IMF credit support for the central bank, analysts said.

The local currency was trading at a three-month low of 4.52 to the greenback
by mid-morning on Thursday, compared with 4.50 a week ago.

Ghana began a roadshow this week for the issuance of up to $2.5 billion
worth of Eurobonds for the government’s finances, including restructuring
debt.

NIGERIA

The Nigerian naira could ease against the dollar next week for investors due
to increased demand as companies seek to repatriate dividends after the end
of the earnings season, coupled with portfolio investors taking profits,
traders said.

Traders said the naira eased to 361 on Thursday for investors, from the 360
levels it has maintained for over six months, as some forward currency
contracts matured amid tight dollar liquidity.

On the official market, the naira was quoted at 305.70, supported by the
central bank’s regular intervention. One lender traded the currency at
314.50 naira on Thursday.

TANZANIA

The Tanzanian shilling is seen holding steady or strengthening marginally
against the U.S. dollar in the days ahead, helped by expected inflows of
hard currency from the agriculture sector.

Commercial banks quoted the shilling at 2,283/2,288 to the dollar on
Thursday, weaker than 2,278/2,288 two weeks ago. There was no foreign
exchange trading on Thursday last week due to a public holiday.

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 extends gains on Fed meeting and geopolitics

(Reuters) - Gold prices gained on Thursday after the U.S. central bank
reassured investors that increases to interest rates would be gradual, with
geopolitical uncertainties also providing support.

Spot gold        rose for a second session, firming by 0.8  percent to
$1,315.01 an ounce by 1400 GMT, while U.S. gold futures         for June
delivery added 0.8 percent to

$1,316.60.      

The U.S. Federal Reserve said inflation on a 12-month basis was "expected to
run near the committee's symmetric 2 percent objective".             

Gold is highly sensitive to rising U.S. interest rates because it becomes
less attractive compared with interest-bearing assets.

Julius Baer economists expect the Fed to shift its guidance to four rate
hikes this year, from three, which will weigh on gold, said Carsten Menke,
commodities analyst at the Swiss bank.

Uncertainties were providing a supportive background for bullion, including
U.S.-China trade talks and the potential U.S. withdrawal from the Iranian
nuclear accord.

Meanwhile, gold demand has made its weakest start to a year since 2008, the
World Gold Council said on Thursday, with stagnant prices and the threat of
rising interest rates leading

investors to seek better returns elsewhere.             

Among other precious metals, spot silver        rose 1 percent to $16.51 an
ounce, platinum        climbed by 1.2 percent to $900.50 and palladium
was up 0.9 percent at $968.

Copper touches one-week high as dollar slips from four-month peak

(Reuters) - Copper rose on Thursday on a weaker dollar and as the market
awaited cues from China-U.S. trade talks that have started in Beijing.

The world’s two biggest economies have imposed import tariffs on each
other’s goods, including Chinese aluminium and U.S. aluminium scrap, and
threatened more action in a trade dispute that has roiled metals markets.

Copper added 0.8 percent to $6,873 a tonne in official rings, close to
one-week highs and marking the second straight session of gains.

He added that trade talks between China and the United States could drag on
for weeks and that the first round of talks are unlikely to yield much.

TRADE: A U.S. trade delegation arrived in Beijing on Thursday for tariffs
talks, with Chinese state media saying that China will stand up to U.S.
bullying if needed but that it is better to work things out at the
negotiating table.

DOLLAR: The dollar index edged 0.1 percent lower, slipping from four-month
highs. A weaker U.S. currency makes dollar-denominated commodities such as
zinc cheaper for non-U.S. firms, which could boost demand.

ZINC: Benchmark zinc touched a low of $3,034 a tonne but in official trading
was down 0.1 percent at $3,043.

STOCKS: Headline inventories of zinc in LME-approved warehouses dropped by
225 tonnes to 236,775 tonnes. The amount of cancelled inventory - stock
earmarked for delivery - was very low at 5.6 percent, LME data showed.
MZNSTX-TOTAL

ZINC TREATMENT CHARGES: The zinc industry agreed a 15 percent drop in annual
zinc processing fees to $147 a tonne, miner and metals smelting company
Nyrstar said, with supply dwindling in a tight market.

GLENCORE: The miner and trader said that copper output in its first quarter
rose 7 percent to 345,000 tonnes and that the ramp-up of its Katanga cobalt
and copper mine in the Democratic Republic of Congo was on track.

RIO TINTO: Rio Tinto’s majority-owned aluminium smelter in New Zealand is
expanding output after securing a new energy deal, the plant said this week,
as a recovery in the price of the metal boosts interest among global
producers.

RUSAL: The chairman of En+ Group on Wednesday said he was working on
implementing a plan that En+ hopes will lead to the United States lifting
sanctions on the company, the biggest shareholder in aluminium giant Rusal.

PRICES: Aluminium was bid 0.8 percent higher at $2,340 a tonne, lead was bid
up 0.4 percent at $2,278, tin was bid at a steady $21,110 and nickel was bid
up 2.5 percent at $14,335.

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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