Bulls n Bears Daily Market Commentary : 21 May 2018

Mon May 21 16:38:05 CAT 2018

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Bulls n Bears Daily Market Commentary : 21 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,851,625.60 with foreign buys at $475,997.40 and foreign
sales were $502,007.83. Total trades were 91.

The All Share index opened the week on a lower note after dropping 0.09
points  to close at 104.71 points. OK ZIMBABWE   lost $0.0186 to settle at
$0.1914, SIMBISA   shed $0.01500 to close at $0.4850 as DAIRIBORD  eased
$0.0076 to trade at $0.1379. OLD MUTUAL  retreated $0.0050 to close at
$7.8010 and AXIA  went down $0.0025 to $0.2475.

The losses were partially offset by gains in PPC  which traded $0.1741
higher to close at $1.4724, AFRICAN SUN  was $0.0069 solid at $0.0479 and
BARCLAYS  added $0.0050 to close at $0.0600. Other gains were in INNSCOR
which traded $0.0020 higher at $1.3000  and BINDURA   which was up $0.0010
to close at $0.0510.

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Global Currencies & Equity Markets

Zimbabwe

Banks Close Down Golix Accounts

Earlier this month, the Reserve Bank of Zimbabwe instructed banks to stop
holding accounts for cryptocurrency exchanges and to stop facilitating
transfer of cryptos. The central bank gave the banks 60 days to halt
activities but it seems the grip has been tightened as it now seems some of
Golix’s bank accounts have already been frozen yet only nine days have
passed since the directive was passed.

Something’s amiss

We realised something wasn’t right when 3 days ago we received this email:

Not sure if the RBZ directive on cryptocurrency is the cause of this but it
seems Golix not processing withdrawals. Its the 3rd day now I am trying to
withdraw my $1500 from the exchange and i am being told different excuses.
Yesterday was told all withdrawals would be processed last night and it
never happened. Normally its been taking just 1 hour to withdraw.

The challenges this man faced are probably a result of the fact that by the
time he attempted to make a withdrawal yet the accounts had already been
frozen. People in our Whatsapp community groups have also been facing
challenges with withdrawals and now we know what the problem is.

A source close to the situation has informed us that some of (not all)
Golix’s have been frozen. Since some of their accounts are still active it
probably means the particular bank that has closed the Golix account has
decided to take an aggressive stance and not give Golix any time to move
their money or facilitate withdrawal until the 60-day timeline has come to
pass. The source did not share which bank had frozen the Golix account.

What happened to the 60 days?

It’s interesting that the sixty-day timeline seems to have been throw out of
the window and banks have been given free rein to proceed as they please. It
does seem quite harsh to close the accounts a mere week after the directive
has been given.

How does the RBZ or the bank that decided to freeze the account expect
citizens to secure their funds? Wasn’t the whole point of this directive to
‘safeguard’ the public? I’m not sure if ensuring that people cannot access
their funds falls in line with the safeguarding or maybe those who were
dealing in cryptos have just been left in the cold
--techzim

Kenya

Kenyan shilling gains against dollar due to increased remittances

(Reuters) - The Kenyan shilling gained against the dollar on Monday due to
increased diaspora remittances associated with Ramadan holiday festivities,
traders said.  

At 0700 GMT, commercial banks quoted the shilling at 100.30/50 per dollar,
compared with 100.40/60 at Friday's close.

South Africa

South African rand falls to new 5-month low vs dollar

(Reuters) - South Africa’s rand tumbled to a new five-month low against the
dollar early on Monday as the greenback rose amid hopes for an easing of
trade tensions between the United States and China.

* At 0640 GMT, the rand traded at 12.8825 per dollar, 0.72 percent weaker
than its close on Friday, and trading at its firmest levels since Dec. 18.

* U.S. Treasury Secretary Steven Mnuchin said on Sunday that the U.S. trade
war with China is “on hold” after the world’s largest economies agreed to
drop their tariff threats while they work on a wider trade agreement.

* On the local front, a focus for markets this week is Wednesday’s consumer
price inflation data, central bank interest rates decision on Thursday and
S&P Global Ratings review on Friday.

* In fixed income, the yield for the benchmark government bond due in 2026
rose 8 basis points to 8.705 percent, reflecting weaker bond prices.

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 scores one-week high as U.S. says China trade war "on hold"

(Reuters) - Copper rose to a one-week high on Monday as fears over a
U.S.-China trade war eased, countering the impact of a rising dollar, while
nickel came under pressure from falling ferrous metals prices in China.

The dollar hit a five-month high versus a currency basket, making
dollar-priced metals costlier for non-U.S. investors and capping the upside
in metals. Gold hit a 2018 low.

That risk-on sentiment was not enough to support stainless-steelmaking
ingredient nickel, which came under pressure after Chinese iron ore prices
plunged more than 3 percent on uncertain prospects for steel demand.

U.S. Treasury Secretary Steven Mnuchin declared the U.S. trade war with
China “on hold” following an agreement to drop tariff threats that had
roiled global markets this year.

* COPPER: Three-month copper on the London Metal Exchange traded up 0.6
percent to $6,895 a tonne in official midday rings, having hit a one week
high of $6,923.

* NICKEL: Nickel was last bid down 0.7 percent in rings at $14,650 a tonne,
after Dalian iron ore touched a two-week low amid reports steel mills may
postpone raw material purchases due to uncertainty over demand.

* CHINA STEEL CAPACITY: China will send eight inspection teams to conduct
spot overcapacity checks on the iron and steel industry in 21 regions from
May 22 to June 15, the country’s state planner said.

* ALUMINIUM: Aluminium traded up 0.4 percent at $2,280 amid reports UC Rusal
has not yet received any formal notice that sanctions target Oleg Deripaska
has resigned from his board position at major Rusal shareholder EN+.

* CHINA ECONOMY: China’s economy will likely expand by around 6.7 percent in
the second quarter this year, the State Information Center said in an
article in the state-owned China Securities Journal on Saturday.

* OTHER METALS: Zinc >CMZN3> was last bid up 0.1 percent at $3,101, lead was
last bid up 1.5 percent at $2,365 while tin traded down 1.2 percent at
$20,525.

Gold hits 2018 low as trade comments lift stocks, dollar

(Reuters) - Gold marked a new low for the year on Monday after U.S. Treasury
Secretary Steven Mnuchin's declaration that a trade war between China and
the United States was "on hold" helped boost appetite for higher risk assets
such as stocks and the dollar.

Buoyancy in U.S. Treasury yields also weighed on appetite for non-interest
bearing assets such as bullion, analysts said. 

Spot gold        fell to its lowest since late December at $1,281.76 an
ounce, and by 1205 GMT was down 0.5 percent at $1,285.17 an ounce. U.S. gold
futures         for June delivery

were 0.5 percent lower at $1,284.50.

He said gold could benefit from safe-haven buying in the long run if that
exuberance loses steam and inflation pressures mount. But he added: "It's
possible that we might see a further

correction in the very short term. That will of course depend on the
newsflow, and whether the dollar can hold onto its gains."

Gold prices fell below the psychologically important level of $1,300 an
ounce last week, and posted the first weekly close below their 200-day
moving average since late December.

A stronger dollar makes assets priced in the U.S. currency more expensive
for holders of other currencies, while a bounce in yields had added to
pressure on gold.

The metal is also being weighed down by expectations that U.S. Federal
Reserve will lift U.S. interest rates again next month, further hurting
demand for non-yielding assets. 

Hedge funds and money managers cut their net long position in COMEX gold
contracts by 21,294 contracts to 31,327 in the week to May 15, data showed
on Friday.                 

Among other precious metals, platinum        was down 0.2 percent at $881 an
ounce, after also marking a fresh low for the year in earlier trade at
$873.50.

Silver        was down 0.2 percent at $16.39 an ounce, while palladium
, the most industrial of the major precious metals, was up 1.2 percent at
$974.70 an ounce, bucking the

falling trend.

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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