Bulls n Bears Daily Market Commentary : 09 May 2018

Wed May 9 16:34:20 CAT 2018

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Bulls n Bears Daily Market Commentary : 09 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $934,952.39 with foreign buys at $359,203.35 and foreign
sales were $451,852.89. Total trades were 77.

The All Share index gained a further  0.14 points  to close at 102.78
points. OLD MUTUAL  added $0.0401 to close at $6.6323, SIMBISA  was up
$0.0300 to  $0.5000 while RIOZIM   put on $0.0149 to $1.2449. AMALGAMATED
REGIONAL TRADING   rose by $0.0080 to close at $0.0520 and BINDURA   was
$0.0030 stronger at $0.0390. 

Two counters lost ground with  ECONET   trading $0.0025 lower at $0.8975 and
OK ZIMBABWE  lost $0.0100 to end at $0.2500.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand, bonds tumble as Trump's Iran pullout rattle sentiment

(Reuters) - South Africa’s rand slumped to its weakest in three sessions on
Wednesday and looked vulnerable to further falls after U.S. President Donald
Trump’s decision to pull out of an international nuclear deal with Iran hit
global risk sentiment.

* By 0640 GMT the rand was 0.82 percent weaker at 12.6700 per dollar. It had
held steady near the 12.50 mark for most of the previous session before
being floored by a combination of safe-haven buying and light liquidity late
on.

* Trump on Tuesday pulled the United States out of an international nuclear
deal with Iran, raising the risk of conflict in the Middle East, upsetting
European allies and casting uncertainty over global oil supplies.

* “This (decision) led to a U.S. dollar rally and resulted in U.S.
Treasuries moving higher. This should affect emerging markets adversely as a
global risk-off sentiment takes hold,” said analyst at Rand Merchant Bank
Michelle Wohlberg.

* Bonds were also weaker, with the yield on the benchmark 2026 issue rising
8 basis points to 8.47 percent, its highest since the second week of
February.

* Stocks were set to open slightly firmer at 0700 GMT, with the Top-40
futures index up 0.1 percent.

Kenya

Kenyan shilling weakens against the dollar due to increased liquidity

(Reuters) - The Kenyan shilling weakened against the dollar on Wednesday
amid increased shilling liquidity in the money markets, traders said.

At 0950 GMT, commercial banks quoted the shilling at 100.50/70 per dollar,
compared with 100.25/45 at Tuesday's close. The weighted average interbank
rate stood at 4.9032 percent on Tuesday, down from 5.2245 in the previous
session.

America

Dollar near 4-month high, Trump's Iran decision in focus

(Reuters) - The dollar hovered near a four-month high on Tuesday, continuing
to draw support from higher Treasury yields and upbeat prospects for the
U.S. economy, leaving its major rivals such as the euro struggling and
others including the Argentine peso down sharply.

The market’s attention was on U.S. President Donald Trump’s decision about
the future of an international nuclear agreement with Iran, which he has
repeatedly threatened to withdraw from.

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

Diminished market concerns over perceived risks from the U.S.-China trade
spat and North Korea, have helped shift investor focus back on
dollar-supportive fundamentals over the past month.

The dollar dipped was flat at 109.090 yen after going as high as 109.400
overnight. The yen is often sought in times of political tensions and market
turmoil.

The dollar index against basket of six major currencies was 0.1 percent
higher at 92.864 after reaching 92.974 overnight, its highest since Dec. 28.

The greenback received its latest boost as the euro sank below $1.19 for the
first time this year the previous day in the wake of weaker-than-forecast
data on German industrial orders and euro zone investor sentiment.

The euro was effectively flat at $1.1920 after plumbing $1.1897 the previous
day, its lowest in more than four months.

The soft economic indicators added to already shrinking expectations of the
European Central Bank raising interest rates any time soon, which has been a
major drag on the common currency.

Rising U.S. Treasury yields and solid economic data have bolstered the
dollar in recent weeks. While Friday’s U.S. payrolls data came in mixed,
underlying strength in the labour market backed expectations of steady rate
increases by the Federal Reserve.

Indeed, monetary policy normalisation in the United States, which has moved
significantly ahead of other countries, has been a major dollar-supportive
factor.

And persistent concerns over rising U.S. interest rates kept up the
relentless sell-off in Latin American currencies overnight, with the
Mexican, Chilean and Argentine pesos all falling more than 1 percent, while
the Brazilian real lost 0.84 percent.

The Argentine peso’s slide stood out in particular as the country’s central
bank had just raised rates on Friday.

Emerging market currencies have taken a hit in recent weeks as investors
have shed high-yielding assets on expectations that accelerating U.S.
inflation and a widening fiscal deficit could force the Fed to tighten
policy at a quicker pace.

Elsewhere, the Australian dollar was down 0.25 percent at $0.7498 following
the release of soft domestic retail sales data for March.

Upbeat China trade figures for April helped limit losses for the Aussie,
often used as a proxy for China-related trades.

The New Zealand dollar was little changed at $0.7017 .

Commodities Markets

Copper rises as demand hopes hem prices into range

(Reuters) - Copper rose on Wednesday as expectations for solid demand this
quarter helped the metal claw back some lost ground after it fell 1 percent
in the previous session, although caution over the Iran nuclear deal kept a
lid on gains.

Crude oil prices jumped back to 3-1/2-year highs after U.S. President Donald
Trump pulled the United States out of an international nuclear pact with
Iran, while the dollar pushed up to another high for the year.

Copper meanwhile pulled back towards the centre of its March to April range,
underpinned by expectations for seasonal strength in demand, analysts said,
and a drop in stocks to their lowest in 3-1/2 months.

* INVENTORIES: Copper stocks MCUSTX-TOTAL in London Metal
Exchange-registered warehouses fell 9,600 tonnes to 293,025 tonnes, their
lowest since late January, exchange data showed on Wednesday.

* TECHNICAL ANALYSIS: A break in copper prices above resistance at $6,833
could lead to a gain limited to $6,869, Reuters technical analyst Wang Tao
said.

* CHILE OUTPUT: Copper output in Chile, the world’s top producer and
exporter, rose 18.9 percent in the first quarter of 2018 from the same
period a year earlier to 1.42 million tonnes.

* ZINC PRODUCTION: China’s refined zinc production rose 2.1 pct in April
from a month earlier to 377,000 tonnes as smelters returned from
maintenance, research house Antaike said in a note.

* ZINC PRICES: LME zinc was 0.6 percent higher in official rings at $3,077 a
tonne.

* ALUMINIUM: Aluminium stocks in LME warehouses fell 21,100 tonnes or 1.6
percent, exchange data showed on Wednesday, taking headline inventories to
1,276,450 tonnes.

* ALUMINIUM PRICES: LME aluminium was down 3.1 percent at $2,281 a tonne in
official trading.

OTHER METALS: LME tin was up 0.6 percent at $21,050 a tonne in official
trading. LME nickel and lead were untraded in official rings, but were last
bid down 0.3 percent at $13,835 and up 0.4 percent at $2,297 respectively.

Oil soars as Trump dumps Iran nuclear deal, dollar dips

(Reuters) - Crude oil prices hit 3-1/2-year highs on Wednesday after
President Donald Trump pulled the United States out of an international
nuclear deal with Iran, while the dollar touched a new high for the year and
world stocks held steady.

Trump’s move sparked fears of increased tension in the Middle East and
uncertainty over global oil supplies.

Demand for safe-haven assets remained muted as the immediate market impact
was seen as specific to oil supply, but investors remained mindful of the
knock-on effects on inflation.

Gold prices retreated and bond yields rose. The U.S. 10-year Treasury once
again breached the psychologically significant 3-percent level and hit a
two-week high of 3.0140 percent, supported by expectations of higher
interest rates.

The impact of Trump’s decision was mostly limited to oil markets and
energy-related stocks. West Texas Intermediate crude futures hit their
highest level since November 2014 at $71.17 per barrel, last up 2.7 percent.

Brent crude futures jumped as much as 2.8 percent to a 3-1/2-year high of
$77.20.

The MSCI world equity index, which tracks shares in 47 countries, was flat
and continued to trade in a narrow range. The pan-European STOXX 600
meanwhile rose 0.2 percent as oil majors gained and earnings from Siemens
and Imperial Brands dominated trading.

In the U.S., stocks futures pointed to a positive start for Wall Street,
with E-Mini futures for the S&P 500 up 0.5 percent.

The reaction in Asian markets was more pronounced as renewed U.S. sanctions
on Tehran were seen as disruptive for many companies that have dealings with
Iran. Trump’s move is also seen as likely to worsen already-tense relations
between Iran and U.S. allies in the region.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.1
percent, while Japan’s Nikkei fell 0.4 percent.

Iran, the third-biggest OPEC producer, produces about 3.8 million barrels
per day (bpd), or about 4 percent of the world’s oil supplies.

The U.S. Treasury said it will reimpose a wide array of Iran-related
sanctions after the expiry of 90- and 180-day wind-down periods, including
those aimed at Iran’s oil sector and transactions with its central bank.

DOLLAR STEPS BACK FROM HIGH

The rise in Treasury yields helped fuel the dollar’s rally, with the
greenback hitting a new 2018 high before giving up gains.

The dollar index against a basket of major currencies was at 93.026. It has
risen about 1 percent this year.

Souring risk sentiment is hitting emerging markets, which have been
depressed in recent weeks by concerns about capital outflows, as the
prospect of higher U.S. interest rates lures investors back to U.S. bonds
rather than riskier assets.

Countries with high perceived political risks, such as Brazil and Turkey,
were among the worst hit.

The Brazilian real hit a near two-year low and the Turkish lira reached a
record low. Since the start of this week, those currencies are both down
about 1 percent.

The Indonesian rupiah hit a 2-1/2-year low, and has slid 1 percent this
week.

Among major currencies, the risk-sensitive Australian dollar hit an 11-month
low of $0.74130 and last stood at $0.74510 .

The euro recovered slightly after hitting a new 4-1/2-month low of $1.1821
and last stood at $1.1880, having fallen about 4 percent in the past three
weeks.

The currency was hit by increasing prospects of another election in Italy as
the political impasse there has continued since early March’s vote.

The British pound was slightly firmer at $1.3538 but remained close to a
four-month low ahead of the Bank of England’s meeting on Thursday.

The dollar rose 0.5 percent to 109.65 yen, edging near its three-month high
of 110.02 yen touched last week. 

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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