Bulls n Bears Daily Market Commentary : 18 May 2018

Fri May 18 15:58:43 CAT 2018

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Bulls n Bears Daily Market Commentary : 18 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $2,994,499.42 with foreign buys at $1,611,662.00 and foreign
sales were $443,880.35. Total trades were 80.

The All Share index closed the week higher at 104.80 after adding 0.02
points .  OLD MUTUAL extended its gains by $0.1045 to trade at $7.8060,
RIOZIM was up by $0.0086 to close at $1.3000 whilst BARCLAYS   and
AMALGAMATED REGIONAL TRADING both closed at $0.0550 following $0.0030 and
$0.0028 gains respectively. ARISTON  and NAMPAK  increased by $0.0010 each
to close at $0.0150 and $0.1610 in that order. 

DAIRIBORD  lost $0.0361 to settle at $0.1455, MEIKLES  retreated $0.0100 to
$0.3700,  SEEDCO   dropped $0.0081 to close at $2.2914 and ECONET  was
$0.0001 marginally lower at $0.9000.

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Global Currencies & Equity Markets

Kenya

Kenyan shilling edges up against the dollar

(Reuters) - The Kenyan shilling inched up against the dollar on Friday due
to some hard currency inflows sent by citizens who live abroad, traders
said. 

At 1000 GMT, commercial banks quoted the shilling at 100.40/60 per dollar,
compared with 100.50/60 at Thursday's close. 

South Africa

South Africa's rand firms slightly on dollar wobble

(Reuters) - South Africa’s rand firmed early on Friday, clawing back some
ground after plunging in a broad emerging market slide the previous day,
with some end-of-week positioning and a dollar wobble on trade fears helping
to lift the unit.

* At 0645 GMT the rand was 0.26 percent firmer at 12.5600 per dollar
compared to a close of 12.5925 overnight in New York.

* Traders have warned of volatile trade in the rand this week, albeit in a
narrow range between 12.40 and 12.80 and with risks to the upside, with the
rally in U.S. assets set to continue while risk appetite remains fragile.

* “Despite some resilience over the most recent sessions, the rand
ultimately remains vulnerable as a result of various global and local
factors,” said Nedbank senior analyst Reezwana Sumad in a note.

* The greenback has pummelled all contenders this week while U.S. Treasuries
have also soared on bets of higher lending rates there as well as signs of
improved economic growth.

* In early trade on Friday however the dollar was down 0.05 percent.

* On Thursday China offered U.S. President Donald Trump a package of trade
concessions and increased purchases of American goods to prevent a trade
war, however there remained scepticism whether Trump would accept the offer.

* Bonds were slightly firmer, with the yield on the benchmark 2026 paper
down 1.5 basis points to 8.495 percent.

* Stocks were due to open firmer at 0700 GMT, with the Top-40 futures index
up 0.22 percent.        

China

Chinese banks record net forex purchase in April

(Xinhua) -- Chinese commercial banks recorded a net foreign exchange
purchase in April, and forex market supply and demand remained balanced, the
country's forex regulator said Friday.

Chinese lenders bought 157.4 billion U.S. dollars worth of foreign
currencies and sold 146.7 billion dollars last month, resulting in a net
purchase of 10.6 billion dollars, the State Administration of Foreign
Exchange (SAFE) said in a statement.

It was the first net forex purchase since December 2017. In March, the banks
saw a net forex sale of 9.2 billion dollars.

The forex market supply and demand has been "relatively balanced" recently,
a SAFE spokesperson said in a separate statement, noting overall equilibrium
in cross-border fund flows.

The spokesperson, who was not identified, attributed the stability to the
essential role played by China's economic fundamentals in stabilizing forex
market expectations.

Since April, emerging markets have seen increased pressure for capital
outflow and currency depreciation, with a more volatile international
financial market, a stronger dollar and higher U.S. interest rates,
according to the spokesperson.

However, "based on sustained steady operation of the domestic economy,
China's forex market will be able to adapt to external changes and maintain
reasonable, balanced cross-border capital flows in the future," said the
spokesperson.

The Chinese yuan has weakened against the dollar in recent weeks after
marked strengthening in the first quarter, but it has continued to
strengthen against a basket of currencies.

China's economy expanded 6.8 percent year on year in the first quarter of
2018, above the government's annual target of around 6.5 percent.

Economic activity held largely stable in April, with strong momentum in the
industrial sector buffering the impact from slowing retail sales and
fixed-asset investment.

In the first four months of the year, Chinese banks saw a net forex sale of
7.6 billion dollars, according to SAFE data.

Commodities Markets

Copper falls for first week in three while nickel rises

(Reuters) - Copper fell on Friday, heading for its first weekly loss in
three as uncertainties over the outlook for global growth and this week’s
burst of dollar strength weighed on prices.

Aluminium steadied after two days of losses, however, and nickel jumped more
than 1 percent on expectations that rising numbers of electric vehicles
would boost the metal’s demand profile.

While he was confident that manufacturing growth would pick up, Pedersen
said that uncertainties remain over the China-U.S. trade dispute, the
geopolitical situation and the dollar outlook.

“If the dollar continues to rise, which we don’t expect, it would usually
take its toll on commodity prices,” he said.

* COPPER: LME copper was down 0.9 percent in official midday trading at
$6,817 a tonne, on track to end the week down 1.7 percent.

* SPREADS: The spread between copper for immediate delivery and the
three-month contract MCU0-3 pulled back to its narrowest since October at
$23 a tonne, down from $39 a tonne earlier this week, suggesting some
tightening in the market.

* ALUMINIUM SPREADS: In aluminium, the spread between the same contracts
MAL0-3 held in backwardation - a forward curve structure indicative of
market tightness, into which it flipped at the start of the week - to the
tune of $10 a tonne. Particular tightness in the curve was seen in the July
to August spread, which was last trading in a $24 backwardation.

* ALUMINIUM PRICES: Three-month aluminium on the London Metal Exchange was
untraded in official rings and was last bid at $2,293 a tonne, unchanged
from Thursday’s close.

* ALUMINIUM STOCKS: Data on Friday showed on-warrant aluminium stocks in
warehouses certified by the London Metal Exchange - those not earmarked for
delivery, and thus available to the market - fell 28,725 tonnes after
surging by 153,075 tonnes earlier in the week.

* FINANCIAL MARKETS: The dollar hit a five-month high against a basket of
currencies, buoyed by a further rise in U.S. Treasury yields that suggests
an upbeat outlook for the world’s largest economy.

* NICKEL PRICES: LME nickel, also untraded in official rings, was last bid
up 1.4 percent at $14,800 a tonne. “Discussions out of LME Week Asia have
... been positive, with the focus on the rising impact of the electric
vehicle market boosting sentiment,” ANZ said in a note.

OTHER METALS: LME zinc was down 0.4 percent in official trading at $3,083.50
a tonne. Lead and tin were both untraded in rings but were last bid 1
percent lower at $2,350 a tonne and 0.4 percent lower at $20,575 a tonne
respectively.

Dollar and oil pause ascent, bonds and gold lick wounds

(Reuters) - World markets began to strain on Friday after a rollercoaster
week that has seen oil break $80 a barrel, Italian politics rattle the euro
zone again and emerging markets battered by a pumped-up dollar and rising
borrowing costs.

Traders hit Italian bonds, stocks and the euro as a pledge to ramp up
spending from a coalition government taking shape in Rome caused fresh
unease, while Wall Street was waiting to see the outcome of U.S. and China
trade talks..

Italy’s strife sent long-term borrowing to more than seven-month highs,
stocks in Milan fell one percent taking European stocks down with them,
while the euro dropped back towards this week’s 5-month low.

Rome’s bonds have seen their biggest sell-off in over a year this week.
Italy accounts for around 15 percent of euro zone GDP and a qaurter of the
bloc’s public debt. For comparison, crisis poster child Greece contributed
just 1.8 percent to euro zone GDP and 3.3 percent to its pile of public
debt.

One policy includes issuing more short-term debt to pay companies owed money
by the state, the economics chief of the one of the coalition parties, the
far-right League, said on Friday.

With the dollar’s surge back on though, and oil shares gleeful about its
rapid rise, European shares were heading for an eighth straight week of
gains despite the Italian turbulence.

Slowing Japanese core consumer price growth that kept the Bank of Japan’s
elusive 2 percent target well out of reach also kept the yen on the slide.
It hit a four-month low of 111 per dollar.

It helped the six-currency dollar index rise to a new five-month high of
93.63.

The index has gained about 1 percent this week, buoyed by the surge in U.S.
Treasury yields, with the 10-year U.S. Treasury note yield scoring a
seven-year peak of 3.128 percent.

Euro traders meanwhile have nudged the shared currency back below $1.18. It
has fallen nearly 1.2 percent this week, largely pressured by the Italian
uncertainty.

It is also heading for its fifth successive weekly drop versus the dollar,
which would be a first for the shared currency since 2015.

SUBMERGING MARKETS

Elsewhere the two other macro spotlights were the hot oil markets after
Brent crude broke up through $80 a barrel on Thursday, and the strain on
emerging economy currencies.

The Turkish lira was wobbling again having fallen to a record low this week,
the Brazilian real plumbed a two-year low, while Mexico’s peso has shed more
than 5 percent this month.

That latter continues to be hit by negotiations to rework the North American
Free Trade Agreement (NAFTA), which governs Mexico’s trade with the United
States.

A retreat by Indonesia’s rupiah to a 2-1/2-year low prompted the central
bank to tighten monetary policy on Thursday for the first time since 2014 to
support the currency. It slipped again on Friday too.

Overall for the big emerging market currencies it has been the worst week in
18 months.

In commodities, Brent crude oil futures were 47 cents higher at $79.76 a
barrel after rising to $80.50 on Thursday, their highest since November
2014.

Brent has risen 3 percent this week and is headed for a sixth week of gains.

A rapid slide in oil supply from Venezuela, concern that U.S. sanctions will
disrupt exports from Iran, and falling global inventories have all combined
to push oil prices up nearly 20 percent in 2018.

Gold meanwhile has had its worst week since early December, having dropped
more than 2 percent.

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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