Bulls n Bears Daily Market Commentary : 07 May 2018

Mon May 7 15:18:23 CAT 2018

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Bulls n Bears Daily Market Commentary : 07 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $831,118.64 with foreign buys at $192,041.30 and foreign
sales were $2,635.85. Total trades were 66.

The All Share index opened the week higher at 102.21 points after gaining
0.59 points . OLD MUTUAL gained a further $0.1881 to close at $6.3627,
PADENGA added $0.0595 to end at $0.5595 while PPC put on $0.0476 to $1.1001.
INNSCOR  rose by $0.0142 to close at $1.2500, CBZ HOLDINGS  improved by
$0.0045 to end $0.1100 and ECONET was $0.0015 stronger at $0.8961. 

Two counters lost ground; WILLDALE  lost $0.0010 to $0.0050 and FIRST MUTUAL
HOLDINGS shed $0.0009 to end at $0.1591.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand weakens as dollar strength bites

(Reuters) - South Africa’s rand weakened against the dollar in early trade
on Monday as the greenback stayed near its 2018 peak after U.S. jobs and
wages data did little to temper perceptions of strength in the U.S. economy.

* At 0645 GMT, the rand traded at 12.5700 per dollar, 0.48 percent weaker
than its close on Friday.

* The rand was amongst the worst performing emerging market currencies in
April and has remained weak in May with the dollar, lifted by rising U.S.
Treasury yields, climbing to its highest levels this year against a basket
of currencies.

* “The US dollar strength observed since the beginning of May is testing
emerging market resilience. South Africa and Turkey are both vulnerable due
to high financing needs,” Rand Merchant Bank analyst Isaah Mhlanga wrote in
a note.

* He added: “We expect trade tensions and Nafta (US, Mexico and Canada)
trade talks to negatively impact the rand, therefore we do not expect
meaningful gains this week.”

* Stocks were set to open higher at 0700 GMT, with the JSE securities
exchange’s Top-40 futures index up 0.23 percent.

* In fixed income, the yield for the benchmark government bond due in 2026
fell 1.5 basis points to 8.33 percent, reflecting firmer bond prices.

Kenya

Kenyan shilling stable against the dollar, expected to ease

(Reuters) - The Kenyan shilling was stable against the dollar on Monday but
was expected to ease due to demand from multinational companies buying
dollars to repatriate dividends, traders said.

At 0848 GMT, commercial banks quoted the shilling at 100.25/35 per dollar,
unchanged from Friday's close.

China

China's forex reserves drop in April

(Xinhua) -- China's foreign exchange reserves stood at 3.1249 trillion U.S.
dollars at the end of April, down from a month earlier, according to central
bank data released Monday.

This was lower than 3.1428 trillion dollars registered at the end of March,
according to the People's Bank of China (PBOC).

The State Administration of Foreign Exchange attributed the drop to the
weakening of non-dollar denominated currencies against the greenback and
lower asset prices. The cross-border capital flows and transactions had
remained stable, it said.

The economy has delivered a solid start to the year, with economic
transformation continuing apace while the quality and efficiency of growth
continuing to improve, SAFE said on its website.

Looking ahead, the forex regulator said the country had the conditions and
capability to maintain sound and stable growth momentum, and its foreign
exchange reserves would remain generally stable.

According to the PBOC, the country's gold reserves remained unchanged in
April at 59.24 million ounces, equivalent to 77.79 billion U.S. dollars.

Commodities Markets

U.S. oil breaks through $70, dollar hits fresh 2018 high

(Reuters) - Oil prices hit their highest since late 2014 on Monday, driven
by a deepening economic crisis in Venezuela and worries that the Unites
States could re-impose sanctions on Iran, while stocks firmed and the dollar
surged to another 2018 high.

With trading thinned by a holiday closure in London, European shares opened
higher, boosted by energy stocks as well as encouraging earnings updates.

Nestle shares also gained after the Swiss-based food firm agreed to pay
Starbucks $7.15 billion in cash for the rights to sell the U.S. coffee
chain’s products around the world.

Most Asian markets also rose after Friday’s tame reading on U.S. wage growth
lessened the chances of a pick-up in the pace of interest rate hikes by the
Federal Reserve. Gains were capped by Sino-U.S. trade tensions.

U.S. equity futures pointed to a positive open for Wall Street.

The day’s eye-catching moves came in energy markets.

U.S. crude oil prices rose more than 70 cents, or 1.1 percent, pushing above
$70 a barrel for the first time since November 2014 as the crisis in OPEC
member state Venezuela threatened to further crimp its production and
exports.

Brent crude oil futures gained to $75.64 per barrel at 1210 GMT, up 1.14
percent and having also touched their highest since November 2014.

Also driving oil prices higher was the May 12 deadline set by U.S. President
Donald Trump for Europeans to “fix” the deal with Iran over its nuclear
programme. If they do not, Trump has said he would refuse to extend U.S.
sanctions relief for the oil-producing Islamic Republic.

Germany and France on Monday vowed to stand by the 2015 nuclear deal between
Iran and world powers even if the United States pulls out.

The European oil and gas share index was up 0.5 percent.

EURO AT 2018 LOW

The dollar rose to a new 2018 peak, extending its 2-1/2 week-long rally as
investors unwound short positions against the currency and bet that the
relative strength of the U.S. economy would feed through to a stronger
greenback.

Against a basket of currencies the dollar, which has enjoyed a sudden
reversal in fortunes as investors bet on more Fed rate hikes and a slower
pace of tightening in the euro zone, rose 0.4 percent to 92.968, having
shrugged off Friday’s weaker-than-expected jobs report.

The euro slid to below $1.19 versus the dollar,, down half a percent on the
day and its weakest since Dec. 28.

In data from the euro zone’s largest economy Germany, industrial orders
unexpectedly dropped for the third month running in March, suggesting
factories there are shifting into lower gear.

The week ahead includes readings on the health of the Chinese economy and,
U.S. inflation, and a Bank of England monetary policy meeting.

The soft German data supported euro zone government bond markets as
investors continued to bet on caution from the European Central Bank.

Gold dips as dollar index climbs back towards 2018 peak

(Reuters) - Gold fell on Monday, snapping three days of gains as the dollar
index rose back towards its 2018 peak, with the previous session's soft U.S.
jobs data doing little to dampen optimism over the world's largest economy. 

That left traders betting that the Federal Reserve would press ahead with
lifting U.S. interest rates this year, potentially cooling interest in gold
because it increases the opportunity cost of holding non-yielding assets
such as bullion.

 Spot gold        was down 0.1 percent at $1,313.03 an ounce by 0930 GMT,
having touched its highest since April 30 at $1,318.85. U.S. gold futures
for June delivery eased by

0.1 percent to $1,314. 

The market was thinned by a national holiday in the United Kingdom, which
closed trading desks in London.  

The dollar index rose back towards Friday's peak for the year on Monday
after U.S. jobs and wages data did little to alter perceptions of strength
in the U.S. economy and consequently expectations for more Fed rate hikes.

Meanwhile, a surprise drop in German industrial orders served as a reminder
that softer economic data could encourage the European Central Bank to delay
the unwinding of its

extraordinary stimulus measures.          

Investors are therefore tempering bets on higher gold prices, he said. "Spec
net longs are at the lowest since July 2017. (There has been a) massive
reduction in the last few

trading weeks, so most speculative investors have thrown in the towel
already."

Speculators cut their net long positions in COMEX gold by 62,378 contracts
to 51,985 contracts in the week to May 1, data from the U.S. Commodity
Futures Trading Commission (CFTC) showed on Friday.             

Holdings of the world's largest gold-backed exchange-traded fund, New
York-based SPDR Gold Shares      , fell 0.17 percent to 864.13 tonnes on
Friday.             

Spot silver        was down 0.2 percent at $16.46 an ounce, while palladium
gained 1.1 percent to $978. 

Platinum        was 0.9 percent higher at $914.50 an ounce, having earlier
hit its highest since April 25 at $918.70. 

Friday's positioning data from the CFTC suggests the metal may be due a
bounce, analysts said.

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
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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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