Bulls n Bears Daily Market Commentary : 11 May 2018

Fri May 11 16:48:23 CAT 2018

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Bulls n Bears Daily Market Commentary : 11 May 2018

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover $3,434,697.01 with foreign buys at $1,469,728 and foreign
sales were $850,799. Total trades were 55.

The All Share index gained a further  0.07 points  to close at 103.24
points. OLD MUTUAL  added $0.1171 to close at $6.8192 , PADENGA  increased
by $0.0150 to close at $0.6200 and INNSCOR  was up by $0.0025 to close at
$1.2525. ECONET  also moved up by $0.0018 to close at $0.8967 and AXIA.zw
traded $0.0200 higher at $0.2475. 

In the negative ZIMRE HOLDINGS  lost $0.0030 to close at $0.0220 , DELTA
was down $0.0062 to close at $2.0199 and HIPPO  traded $0.0025 lower at
$1.6475.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling eases due to increased energy sector dollar demand

(Reuters) - Kenya's shilling weakened on Friday due to increased dollar
demand from across all sectors, including energy importers, traders said. 

At 0858 GMT, commercial banks quoted the shilling at 100.45/65 to the
dollar, compared with 100.30/50 at Thursday's close.

South Africa

South African rand recovers, stocks rise but Steinhoff stumbles

(Reuters) - South Africa’s rand recovered on Thursday, firming more than 1.5
percent against the dollar as the greenback fell after weaker than forecast
U.S. inflation data pared market expectations of a faster interest rate rise
by the Federal Reserve.

At 1508 GMT, the rand traded at 12.3650 per dollar, 1.51 percent firmer than
its close on Wednesday, rebounding after three straight sessions of losses.

The dollar edged away from 2018 highs on Thursday as U.S. consumer prices
increased less than expected in April, paring traders’ optimism inflation is
accelerating which would allow for faster Fed interest rates hikes.

The rand largely ignored local data showing mining and manufacturing
industries contracted in March, threatening to reverse a fragile economic
rebound.

In fixed income, the yield for the benchmark government bond due in 2026
fell 6.5 basis points to 8.39 percent, reflecting firmer prices.

The equities market also ended in positive territory as world stocks hit
three-week highs with rising oil prices lifting energy counters.

But shares in troubled retailer Steinhoff fell almost 14 percent at one
point and ended 3.9 percent lower after the company said a probe by auditors
PwC found previous overstatements of its profits may result in additional
material impairments.

Steinhoff, which runs chains such as Britain’s Poundland, Mattress Firm in
the United States and Conforama in France, is fighting for its survival
after discovering irregularities in its accounts in December.

Overall, the benchmark Top-40 index added 0.42 percent to 51,493.07 while
the broader All-share index closed 0.16 percent higher at 58,005.62. 

America

Stocks set for strongest week since March, dollar erases week's gains

(Reuters) - Shares rose worldwide on Friday, getting a boost from soft U.S.
inflation numbers that helped soothe worries of faster Fed monetary
tightening and pushed the dollar to its lowest for a week.

The MSCI All Country World Index, which tracks shares in 47 countries, was
up nearly 0.4 percent and was set for its strongest week since March 9. The
dollar fell 0.2 percent against a basket of currencies, erasing this week’s
gains in the wake of inflation data released on Thursday.

Oil prices steadied near 3-1/2-year highs as the prospect of new U.S.
sanctions on Iran tightened the outlook for Middle East supply at a time
when global crude production is only just keeping pace with rising demand.

The inflation numbers followed employment data last week that pointed to
sluggish wage growth.

While the rally in stocks seemed to point to investor relief, analysts were
split over whether the slowdown in inflation could lower the chances of the
Fed increasing the number of rate hikes it has suggested will take place
this year.

Federal Reserve Bank of St. Louis’ President James Bullard will make a
speech on Friday, as will European Central Bank President Mario Draghi.

ADS Securities head of research Konstantinos Anthis said the case for two or
three further U.S. rate hikes might be decided after the summer. Fed funds
futures show a 93-percent chance of one next month.

The inflation data also flattened the U.S. Treasury yield curve further,
with the gap between 5-year and 30-year bonds at its narrowest since 2007.
Investors also bought southern European government bonds, taking advantage
of a rise in yields on the back of Italian political concerns.

Italian, Spanish and Portuguese 10-year borrowing costs fell 2-3 basis
points (bps), outpacing better-rated peers at the end of a week in which the
increasing likelihood of an anti-establishment coalition taking power in
Italy had hurt the euro zone’s lower-rated debt.

Italian 10-year yields were set for their biggest weekly rise since
February.

SHIFTING POLITICAL CONCERNS

European stocks, meanwhile, were set to seal their longest winning streak
for more than three years as M&A activity stole the spotlight from the
tail-end of a robust earnings season.

The pan-European STOXX 600 was flat, but set for its seventh straight week
of gains - its longest winning streak since March 2015. Germany’s DAX was
down 0.3 percent and Britain’s FTSE 100 was down 0.1 percent. Wall Street
was futures indicated a positive start to the session.

Asian markets were cheered by a further easing in tensions on the Korean
Peninsula, after U.S. President Donald Trump said he would meet North Korean
leader Kim Jong Un in Singapore on June 12 for talks on Pyongyang’s nuclear
weapons programme.

MSCI’s broadest index of Asia-Pacific shares outside Japan . rose 0.7
percent to near three-week highs while Japan’s Nikkei climbed 1.2 percent.

With the situation around North Korea off the boil for now, political
concerns are focused elsewhere as the United States and China continue
skirmishing over trade and as tensions rise in the Middle East.

U.S. and Chinese officials will meet in Washington for a second round of
trade talks next week, after apparently making little progress in
discussions in Beijing this month.

In currency markets, the pound traded at $1.3573, rising half a percent
above a four-month low of $1.3457 touched on Thursday after the Bank of
England held interest rates.

In commodities markets, spot gold rose 0.3 percent to $1,324.66 an ounce.

U.S. crude futures were up 0.2 percent at $71.46 a barrel. Brent crude
futures fell 0.1 percent to $77.41 a barrel.

Commodities Markets

Soft U.S. inflation pushes gold prices higher

(Reuters) - Gold was set for its first weekly gain in four weeks on Friday
after soft U.S. inflation data suggested that the Federal Reserve might show
caution on the pace of interest rate rises. 

The weaker-than-expected April consumer price data on Thursday helped to
knock the dollar from 2018 highs and push U.S. bond yields down. Both fell
further on Friday.             

That benefits gold because a weaker dollar makes bullion cheaper for users
of other currencies, while lower bond yields make non-yielding gold more
attractive to investors. 

Spot gold        was up 0.3 percent at $1,324.71 an ounce by 1156 GMT after
touching its highest since April 26 at $1,325.61, nudging its 100-day moving
average of $1,326. It was up 0.8 percent for the week. 

U.S. gold futures         for June delivery had gained 0.2 percent to
$1,325.40. 

Gold has traded in a range of about $1,310 to $1,355 since hitting a
1-1/2-year high in January. 

Prices appeared to be building positive momentum, ScotiaMocatta technical
analysts said.  

Consolidation above resistance at the 100-day moving average might be a
catalyst for more gains, MKS PAMP trader Tim Brown said. 

But with the Fed likely to raise interest rates three more times this year,
gold was likely to end 2018 at $1,300, Capital Economics' Gambarini said.
Higher interest rates hurt gold

because they push up bond yields and tend to boost the dollar. 

Federal Reserve Bank of St. Louis head James Bullard will make a speech on
Friday, as will European Central Bank President Mario Draghi.

Gold investors largely brushed off tensions in the Middle East after the
United States ditched an accord designed to stop Iran from developing
nuclear weapons. Two days after this,

Israel attacked Iranian military infrastructure in Syria.

Gold is traditionally seen as a safe asset in times of uncertainty. 

In other precious metals, silver        was up 0.8 percent at $16.80 an
ounce, rising above its technically important 100-day moving average and
nearing its 200-day moving average.

It was at 2-1/2-week highs and set for a weekly gain of 2 percent. 

Platinum        was flat at $924, having hit its highest since April 25 at
$928.

Palladium        advanced by 0.6 percent to $1,004.70, holding above its
technically important 200-day moving average after reaching its highest
since April 23. 

Aluminium on track for weekly loss on price correction

(Reuters) - Aluminium fell to its lowest in a week on Friday and was poised
to end the week in negative territory as the market corrected after a recent
price surge on U.S. sanctions against a major shareholder in the world’s
largest producer.

Benchmark aluminium on the London Metal Exchange (LME) was bid down 2.6
percent to $2,274 a tonne, its lowest since May 3, after failing to trade in
official rings. The price in the light metal rallied to a nine-year high
last month.

Washington last month announced sanctions on Russian billionaire Oleg
Deripaska and several companies in which he is a large shareholder,
including Rusal.

RUSAL: Russian aluminium giant Rusal on Friday warned of expected harm to
its business from U.S. sanctions, sending its share price lower despite the
company reporting a 20 percent jump in first-quarter core profit.

STOCKS: On-warrant stocks in aluminium — those not earmarked for delivery —
fell by 3,250 tonnes to 860,700 tonnes. They have shed 18 percent since
April 16 to the lowest levels since early February, while headline stocks
are down 11 percent.

CHINA LENDING: Chinese banks extended 1.18 trillion yuan ($186.4 billion) in
net new yuan loans in April, up slightly from March and higher than
expected, as policymakers look to support the economy in the face of fresh
risks from U.S. trade threats.

Signs of more lending in China, the world’s top consumer of metals, should
generally support prices.

EGA: Emirates Global Aluminium’s stock market listing is likely to slip to
2019 because of turmoil in global aluminium markets after the U.S. sanctions
on Rusal, three sources familiar with the deal said.

JAPAN SUPPLY: Japanese copper miners JX Nippon Mining & Metals and Sumitomo
Metal Mining plan to increase output from their mines in Chile this year but
face challenges in bringing them to full capacity and meeting profit
targets.

PRICES: Copper traded 0.1 percent lower at $6,907 a tonne but was on track
to end the week with a gain of more than 1 percent. Lead was bid down 1.5
percent to $2,340, tin was flat at $20,825, zinc added 0.2 percent to
$3,093.50 and nickel rose 0.7 percent to $13,975.

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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