Bulls n Bears Daily Market Commentary : 08 May 2018

Tue May 8 15:56:53 CAT 2018

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Bulls n Bears Daily Market Commentary : 08 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $804,703.94 with foreign buys at $166,057.82 and foreign
sales were $6,064.20. Total trades were 51.

The All Share index went up by 0.43 points to close at 102.64 points. OLD
MUTUAL gained a further $0.2295 to close at $6.5922, PADENGA  added $0.043
to end at $0.6025 while RIOZIM  put on $0.0076 to $1.2300. DAIRIBORD  rose
by $0.0042 to close at $0.1608 and ECONET was $0.0039 stronger at $0.9000. 

In the negative HIPPO lost $0.0300 to $1.6500 , DELTA  was down $0.0038 to
trade at $2.0200 and WILLDALE  lost $0.0002 to $0.0048.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South  Africa

South Africa's rand rallies as U.S. decision on Iran in focus

JOHANNESBURG, May 8 (Reuters) - South Africa’s rand inched higher early on
Tuesday, as investors took profits on a recent dollar surge ahead of a U.S.
decision on whether to pull out of the Iran nuclear agreement.

* At 0650 GMT, the rand was 0.2 percent firmer at 12.5175 per dollar
compared to a close of 12.5200 overnight in New York.

* With a light data calendar locally, market participants are set to focus
on events abroad, and with fundamentals still favouring dollar strength,
pressure will remain on emerging currencies, rendering any rand gains brief.

* “With no clear bullish local events on the horizon, we believe that the
rand will continue to trade in line with the international environment which
will be dictated by the U.S dollar,” said analysts at Nedbank in a note.

* Market participants were looking to take profits on stretched carry-trade
positions amid concerns around slowing global growth and escalating trade
tensions, said Nedbank’s Mehul Daya and Walter de Wet.

* U.S. President Donald Trump is expected to make an announcement on the
nuclear deal at 1800 GMT. A U.S. withdrawal from the agreement, which eased
economic sanctions in exchange for Tehran limiting its nuclear programme,
would impact risk sentiment in the broader markets.

* Stocks were set to open firmer, with the Top-40 futures index up 0.48
percent.

Bonds were slightly firmer, with the yield on benchmark paper due in 2026
down 0.5 basis points to 8.32 percent.

Kenya

Kenyan shilling unchanged, to get support from remittances

(Reuters) - The Kenyan shilling was unchanged against the dollar on Tuesday
and was forecast to gain  ground, helped by inflows from diaspora
remittances, traders said. 

At 0947 GMT, commercial banks quoted the shilling at 100.25/45, the same as
Monday's close.  

Remittance inflows to Kenya increased to $222.2 million in March from $210.4
million in February, and compared with $142.7 million in March 2017, latest
central bank data showed. 

America

Dollar strengthens back towards 2018 high

(Reuters) - The dollar climbed back towards its highest level in 2018 on
Monday as investors continued to bet that rising interest rates in the
United States would boost the greenback.

The index measuring the dollar against a basket of currencies rose 0.2
percent to 92.749, not far from the 92.9 level - a 2018 high - it hit on
Friday.

The dollar has rallied heavily over the past two weeks after investors
rushed to unwind short positions and bet that higher rates in the U.S. and
signs its economy is performing better than other regions would feed through
to a stronger currency.

Commerzbank analyst Esther Reichelt said the dollar move was the “bursting
of a dollar negative bubble” and that it had further to go.

Weaker U.S. jobs and wages data on Friday did little to temper perceptions
of strength in the U.S. economy and failed to hold back the dollar’s rise,
although renewed concerns about trade frictions with China could cloud its
outlook.

The U.S. economy added fewer jobs than expected and the average hourly
earnings, closely watched for signs of inflationary pressures, rose a
less-than-expected 0.1 percent in April, leaving the annual increase at 2.6
percent.

None of this changed the perception that the Federal Reserve will likely
hike interest rates at least twice, and possibly three times, by year-end.

In contrast, recent data have suggested the stellar growth seen in Europe
last year is losing momentum, leading speculators to trim bets on the single
currency on expectations the European Central Bank will wind down its
stimulus.

The euro changed hands 0.3 percent lower at $1.1927, not far from Friday’s
four-month low of $1.1910.

Data from U.S. financial watchdog published late on Friday showed
speculators’ net long positions in the euro in Chicago’s futures exchange
declined only slightly in the latest week.

They held 120,568 contracts of net short positions , down from a record
151,476 set last month but still at a high level.

A wider measure of dollar positioning that includes contracts on some
emerging market currencies showed net dollar shorts shrank to $18.32
billion, from a seven-year high of $28.18 billion two weeks earlier.

Traders were also keeping an eye on the fate of the 2015 Iran nuclear deal,
from which U.S. President Donald Trump has threatened to pull out.

An escalating diplomatic stand-off could have innumerable repercussions,
including a further rise in oil prices and damage to investors’ risk
appetite.

Trump has said that unless European allies rectify “flaws” in Tehran’s deal
with world powers by May 12 he will refuse to extend U.S. sanctions relief
for Iran.

Elsewhere, the British pound traded up 0.1 percent at $1.3543, near its
four-month low of $1.3487 touched on Tuesday. Sterling has slumped in the
past fortnight as investors reversed expectations of a rate hike at
Thursday’s BoE meeting.

The dollar rose 0.1 percent versus the Japanese currency to 109.22 yen, off
its three-month high of 110.05 yen.

The yen, while suffering a big drop in recent weeks, has been supported by
short-covering by Japanese margin traders, especially against the Turkish
lira, which fell to record lows during Japan’s Golden Week holidays.

The lira fell more than 4 percent last week versus the dollar. 

Commodities Markets

Copper falls as stronger dollar overpowers positive China data

(Reuters) - Copper prices fell on Tuesday as the effect of a strengthening
dollar overshadowed positive trade data from China, the world’s largest
consumer and producer of industrial metals.

Chinese imports and exports grew more strongly than expected in April and
copper imports rose 2.8 percent from the previous month, implying healthy
demand and pushing prices higher in early trading.

But interest was curbed by the dollar, which reached a new 2018 high against
a basket of major currencies, making dollar-denominated industrial metals
more expensive for users of other currencies.

COPPER: Benchmark three-month copper on the London Metal Exchange did not
trade in official rings but was bid down 1 percent at $6,758 a tonne,
falling below its technically important 200-day moving average.

RANGEBOUND: Copper has been locked between around $6,600 and $7,300 since
late last year after recovering from a 2016 low of $4,318.

STOCKS: Headline copper inventories in LME-registered warehouses fell 8,750
tonnes to 302,625 tonnes, the least in three months but far more than
December’s 183,525 tonnes MCUSTX-TOTAL.

CHINA IMPORTS: Higher Chinese copper imports may not imply greater demand,
said analysts at Commerzbank. “The question is whether this is thanks to a
dynamic economy or simply arbitrage, i.e. stocks being shifted between
warehouses,” they said.

CHINA DATA: A flurry of data in coming weeks is expected to show China’s
economy remained strong in April, underpinned by a pick-up in industrial
output and a rebound in exports.

U.S.-CHINA TRADE: China’s top economic official will visit Washington next
week to resume trade talks, the White House said on Monday, after
discussions in Beijing last week failed to produce agreement.

ANTOFAGASTA: Chilean copper producer Antofagasta said it would take up to
three months for stocks to return to normal after a pipeline blockage
between the Los Pelambres processing plant and port. Full year production
guidance was unchanged.

ALUMINIUM: Aluminium exports from top producer China inched higher in April,
as new U.S. import tariffs were offset by U.S. sanctions on Russia’s Rusal
that pushed up international prices, making export more lucrative.

ALUMINIUM SPREAD: The premium for cash aluminium over the three-month
contract MAL0-3 has risen to $18.50 from close to zero a week ago,
suggesting tighter nearby supply.

LME aluminium traded up 0.6 percent at $2,363 a tonne after surging to
seven-year highs last month.

OTHER METALS: Zinc traded up 0.8 percent at $3,079 a tonne after touching a
nine-month low last week. Nickel was bid down 0.5 percent at $13,925, lead
traded 0.8 percent lower at $2,300.50 and tin was bid down 0.6 percent at
$21,100.

Gold slips as dollar hits 2018 high, Iran tensions underpin

(Reuters) - Gold slipped on Tuesday as the dollar surged to a new 2018 high
against its rivals, though losses were limited by worries the United States
may be set to pull out of a key nuclear accord with Iran.

U.S. President Donald Trump will announce at 1800 GMT whether Washington
will withdraw from a deal that eased economic sanctions on Iran in exchange
for Tehran limiting its nuclear

programme. 

A decision to leave the accord could raise risk aversion in the broader
markets, helping gold, seen as a safe asset that holds its value in times of
geopolitical turmoil.

Still, gold has been under pressure over the last three weeks with the
dollar having rallied around 4.5 percent. 

A strong dollar makes dollar-priced gold costlier for non-U.S. investors.

Spot gold        was down 0.3 percent at $1,309.57 per ounce at 1016 GMT.
The precious metal has lost some 3.5 percent of its value over the last
three weeks.

U.S. gold futures         for June delivery were down 0.3 percent at
$1,309.80 per ounce.  

Against a basket of rivals, the dollar        surged to a 2018 high as
expectations that other major central banks would follow the footsteps of
the U.S. Federal Reserve in normalising

monetary policy have been dashed.       

Gold in 2018 will deliver its strongest annual price performance in five
years, GFMS analysts forecast on Tuesday, as political uncertainty drives
investment in bars and bullion-backed investment funds.             

In industry news, the World Gold Council, owner of the world's largest
gold-backed exchange traded fund (ETF), is launching a new fund with a
cut-price management fee to fend off

rivals with lower charges.             

Spot gold may revisit its May 1 low of $1,301.51 per ounce  as it twice
failed to break resistance at $1,317, Reuterstechnical analyst Wang Tao
said.              

Silver        slipped 0.2 percent to $16.41 an ounce, while platinum
was flat at $904 an ounce, having hit its highest since April 25 in the last
session.

Palladium        rose 0.4 percent to $975.72 an ounce, after hitting on
Monday its highest since April 27.

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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