Bulls n Bears Daily Market Commentary : 22 May 2018

Tue May 22 18:12:49 CAT 2018

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Bulls n Bears Daily Market Commentary : 22 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $3,723,060.32 with foreign buys at $1,436,877.55 and foreign
sales were $179,052.99. Total trades were 148.

The All Share index gained 0.21 points  to settle at 104.92 points. OK
ZIMBABWE  put on $0.0184 to close at $0.2098, OLD MUTUAL  added $0.0106 to
end at $7.8116 and PROPLASTICS   rose by $0.0034 to $0.0800. AFRICAN SUN
went up by $0.0031 to close at $0.0510, PPC  was up by $0.0026 to close at
$1.4750 while FIRST MUTUAL PROPERTIES   closed at $0.0420 following a
$0.0020 gain. 

Trading in the negative; HIPPO  shed $0.0075 to close at $1.6400 and SEEDCO
eased $0.0067 to $2.2847. SIMBISA  was down by $0.0050 to trade at $0.4800,
AXIA  lost $0.0025 to settle at $0.2450 and MASIMBA  was $0.0020 lower at
$0.0580.

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Global Currencies & Equity Markets

South Africa

South African rand recovers on retreating dollar

(Reuters) - South Africa’s rand staged a modest recovery on Tuesday, as the
dollar retreated after a recent rally.

At 1505 GMT the rand traded at 12.5900 to the dollar, up 0.7 percent from
the previous day’s close.

The South African currency was around 2.5 percent stronger than a five-month
low struck on Monday, helped by the dollar easing back from a five-month
high.

The rand’s fortunes have been determined mainly by global market moves in
recent weeks, in the absence of major shifts in local economic indicators.

A central bank business cycle indicator on Tuesday pointed to a slight
slowdown in the pace of an economic recovery, but traders said its impact on
the rand was minimal.

First-quarter gross domestic product data is expected to be released in
early June.

Economists polled by Reuters expect the central bank to leave interest rates
unchanged on Thursday, while market expectations are for ratings agency S&P
Global to leave South Africa’s sovereign rating unchanged on Friday.

Stocks ended higher on Tuesday, tracking a upbeat tone in major overseas
markets as an easing of pressure on Italy’s debt markets coincided with
China’s latest move to open up its giant economy to the rest of the world.

The blue-chip JSE Top-40 index rose 0.56 percent to 51,598 points and the
broader All-share index advanced 0.52 percent to 58,121 points.

Mobile phone company Vodacom and drugmaker Aspen were among the top gainers
on the benchmark index, rising 4.4 percent and 4.6 percent, respectively.

Among the worst performers, Aveng slumped 23.8 percent as investors worried
that its tie-up with rival builder Murray & Roberts could be scuppered.

In fixed income, the yield on the benchmark government bond due in 2026 was
little changed at 8.56 percent.

Kenya

Kenyan shilling weakens on increased importer demand

(Reuters) - The Kenyan shilling weakened against the dollar on Tuesday as a
result of increased demand from oil importers which exceeded diaspora
remittances, traders said.

At 0800 GMT, commercial banks quoted the shilling at 100.50/60 per dollar,
compared with 100.30/50 at Monday's close.

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

Lead hits 2-1/2 month peak on tightness, zinc ratio activity

(Reuters) - Lead prices touched the highest in 2-1/2 months on Tuesday on
concern over potential shortages and as investors sold zinc and bought lead.

Environmental inspections at secondary lead smelters in China have reduced
supply in recent months, analysts said.

The ratio of zinc to lead - which is often traded because the two metals are
usually found in the same ore bodies - has slid to 1.25, the lowest since
December, after touching 1.39 in April and March, the highest since 2007.

Nugent said he was wary of the rally due to heavy speculation in China.

* LME LEAD: Benchmark lead on the London Metal Exchange was up 1.9 percent
at $2,456.50 a tonne by 1415 GMT after touching $2,474, the highest since
March 1.

* SHANGHAI LEAD: Lead on the Shanghai Futures Exchange jumped as much as 3.6
percent to the highest since October at 20,465 yuan a tonne.

* CRACKDOWN: “Authorities are clamping down on recycling plants in China,
which are the source of nearly 60 percent of lead,” ANZ said in a note.

“The closures come amid a widening import arbitrage into China and falling
inventories on both the LME and ShFE,” it said.

* ZINC: LME zinc shed 1.3 percent to $3,062.50 a tonne, hit as traders sold
the zinc/lead ratio, Nugent said.

* COPPER: Three-month LME copper climbed 1.2 percent to $6,962 a tonne after
hitting $6,999, the strongest since April 26.

Copper has been lifted due to buying in the Far East as well as by Commodity
Trader Advisor (CTA) funds, Alastair Munro at broker Marex Spectron said in
a note.

* PROTESTS: Copper was also supported by trouble at a Vedanta
Resources-controlled copper smelter in southern India, where at least nine
people were killed on Tuesday after police fired at protesters calling for
the plant’s closure.

* NICKEL: LME nickel added 0.3 percent to $14,715 a tonne. It was the
largest speculative long of the LME complex at 12.2 percent of open
interest, according to Marex Spectron estimates.

* PRICES: Aluminium edged down 0.1 percent to $2,278.50 a tonne and tin was
unchanged at $20,700.

Gold steadies as dollar rally comes off the boil

(Reuters) - Gold steadied on Tuesday from a 2018 low as the dollar fell from
its five-month high, although risk appetite in the broader financial markets
kept the metal's gains in check.

The dollar lost momentum following a rally prompted by rising U.S. bond
yields and the prospect of a resolution to U.S.-China trade tensions. A
weaker dollar makes dollar-priced

gold cheaper for non-U.S. investors.

Washington and Beijing both claimed victory on Monday as the world's two
largest economies stepped back from the brink of a trade war and agreed to
hold further talks to boost U.S. exports to China.

Spot gold        was flat at $1,291.48 per ounce by 1410 GMT. In the
previous session, it slid to $1,281.76, its lowest since Dec. 27.

U.S. gold futures         for June delivery were flat at  $1,290.80 per
ounce. 

Capping gains in gold, European shares inched to a near four-month high as
an easing of pressure on Italian markets coincided with China's latest move
to open its economy to the

rest of the world.

Gold, regarded as a safe haven, tends to weaken when there is strong
investor appetite for equities, seen as riskier assets. 

Meanwhile, expectations that the Federal Reserve will raise U.S. interest
rates again next month added to downward pressure on gold. Higher U.S. rates
tend to boost the dollar and push

bond yields up, making non-yielding assets such as bullion less attractive.

Innes said any drop to somewhere around the $1,275 level would start to
attract more bullish sentiment. "But in the meantime the driver is going to
remain the U.S. dollar," he

added.

Holdings in SPDR Gold Trust      , the world's largest gold-backed
exchange-traded fund, fell 0.38 percent to 852.04 tonnes on Monday.

Silver        rose 0.4 percent to $16.55 an ounce, whilepalladium
fell 1.4 percent to $975.72 an ounce. 

Platinum        climbed 0.9 percent to $903.70 an ounce, after marking a low
for the year in the previous session at $873.50.

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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