Bulls n Bears Daily Market Commentary : 28 May 2018

Mon May 28 16:05:08 CAT 2018

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Bulls n Bears Daily Market Commentary : 28 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,508,137.41 with foreign buys at $101,914.60 and foreign sales were nil. Total trades were 109.

The All Share index opened the week lower at 105.05 points after losing 0.22 points . HIPPO VALLEY  led the losers with a $0.2300 loss to close at $1.4000, PPC LIMITED shed $0.0499 to end at $1.5500 whilst OLD MUTUAL slipped $0.0117 to settle at $7.8465. PADENGA  went down by $0.0058 to trade at $0.6602 as FIRST MUTUAL HOLDINGS  inched down $0.0005 to $0.1495.

Trading in the positive territory; SEEDCO added $0.0057 to close at $2.2907 while  AXIA and DELTA  both advanced by $0.0048 to settle at $0.2443 and $2.0276 respectively. DAIRIBORD HOLDINGS  put on $0.0025 to $0.1425 whilst BARCLAYS was $0.0020 stronger at $0.0620.

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Global Currencies & Equity Markets

Zimbabwe

Customers Left Confused By Golix’s Silence During Crisis

The month of May has been a rollercoaster for Zimbabwe’s most popular crypto exchange, Golix. At the beginning of the month, Golix were putting together plans for ICO which would have helped them to launch their own GLX token. These plans were halted when the central bank decided to ban cryptos.

The ban was overturned in court just this past week but during the time of the ban customers were trying to withdraw $30 000 a day and were failing because Golix’s banks had shut down their accounts. During this period we got multiple emails from customers who were trying to reach the exchange but were failing and I must say this is worrying. 

South Africa

South Africa's rand rises after S&P leaves ratings unchanged

JOHANNESBURG, May 28 (Reuters) - South Africa’s rand gained on Monday after Friday’s late-night decision by S&P Global Ratings to keep the country’s debt unchanged at sub-investment grade “BB’/‘BB+” with a stable outlook.

* At 0630 GMT, the rand was up 0.42 percent at 12.4500 per dollar. It had traded above 12.50 before the S&P’s decision.

* S&P’s said the stable outlook reflected its belief that economic growth would pick up in 2018, although public debt would remain worryingly above 50 percent of GDP.

* In March, Moody’s kept Pretoria’s investment-grade credit rating and revised its credit outlook to stable from negative. Of the big-three ratings agencies, only Fitch has yet to give its rating update.

* Traders warned that relief for rand may be short-lived, because dollar strength and geopolitical uncertainty meant markets remained wary of riskier assets.

* Bonds rose, with the yield on benchmark debt due in 2026 down 2 basis points at 8.43 percent.

* Stocks were set to open higher at 0700 GMT, with the Johannesburg Stock Exchanges’ Top-40 future’s index up 0.42 percent.

* In early results releases, sugar producer Tongaat Hulett posted full-year profit fell 37 percent. The country’s biggest landline provider, Telkom, said full-year earnings declined 18.4 percent.

Kenya

Kenyan shilling eases due to dollar demand from oil companies

(Reuters) - Kenya's shilling eased on Monday, undermined by dollar demand from oil companies, traders said. 

At 0915 GMT, commercial banks quoted the shilling at 101.30/40 Compared with Friday's close of 101.20/30.

America

Dollar Slides Despite Renewed U.S.-North Korea Summit Hopes

Investing.com -  The dollar opened the week by sliding against other Asian currencies, giving up gains from last week.

After rising to this year’s high of 94.21 on Friday, the U.S. dollar index, which measures the value of the dollar against a basket of six major currencies, fell during Monday morning trade in Asia as the market dealt with the developments over a U.S.-North Korea summit.

The U.S. dollar index stood at 93.87, down 0.36%, at 11:42PM ET (03:42 GMT). 

Geopolitics continued to be the directional driver for the dollar and the yen. U.S. President Donald Trump appeared to confirm his summit with North Korean leader Kim Jong-un is now back on track, just a few days after suddenly canceled a meeting with North Korean leader Kim Jung Un last week.

Meanwhile, Kim Jong Un agreed to hold talks with the U.S., according to South Korean President Moon Jae-in, who met with Kim on Saturday after the North Korean leader requested a casual meeting.

After the initial reaction to the shift in geopolitical concerns, dollar traders are also watching closely economic data due this week in the U.S., which includes GDP growth figures on Wednesday and the Non-Farm Payrolls report on Friday.

The USD/JPY pair gained 0.02% to 109.40. While the pair was rising slightly in late morning, risk aversion increased demand for the yen overall. Investors who bought the yen to avoid risks could sell out the currency if tensions between the U.S. and North Korea ease.

In Australia, the AUD/USD pair gained 0.32% at 0.7571.

In China, the People's Bank of China set the set the reference rate for the yuan against the dollar, the mid-point from which the currency is allowed to trade, at 6.3962 versus the previous day's 6.3867. The USD/CNY pair stood flat to trade at 6.3891.

Commodities Markets

Shanghai lead slips from 7-1/2-month top in holiday-thinned trade

(Reuters) - Chinese lead futures retreated on Monday from their strongest level in nearly eight months, tracking losses in London in the prior session, as investors cashed in on the recent sharp gains.

Trading was slow with the London Metal Exchange shut for a UK public holiday.

The most-traded lead contract on the Shanghai Futures Exchange closed down 1.1 percent at 19,870 yuan ($3,109) a tonne. It touched 20,225 yuan on Friday, its loftiest since Oct. 9.

* CHINA DATA: Profits earned by Chinese industrial firms in April rose at their fastest pace in six months, data from the National Bureau of Statistics showed on Sunday, as factories benefited from higher prices and strong demand.

* CHINALCO: China’s largest state aluminium producer Chinalco has sealed a joint venture deal with the Yunnan government and the province’s state-run metal group, giving it its first foothold in the southwestern region’s aluminium market.

* VEDANTA: India’s Tamil Nadu state deputy head said his government would take all steps to permanently shut a copper smelter run by London-listed Vedanta Resources after deadly protests demanding its closure on environmental grounds.

* FORTESCUE: Australia’s Fortescue Metals Group Ltd , the world’s fourth largest iron ore miner, said its board has approved the development of a $1.28 billion mine and rail project in Western Australia, in a bid to boost the price it gets for its iron ore.

* RUSAL: Russian automaker Avtovaz said it will continue to buy aluminium from sanctions-hit Rusal but was looking for alternative sources in case it has to wind down business with the world’s biggest producer of the metal.

* U.S.-NORTH KOREA TALKS: U.S. President Donald Trump said a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

* MARKETS: U.S. oil futures sank to six-week lows on expectations that major producers may raise output, while Asian stocks and U.S. share futures gained on signs the United States and North Korea were still working towards holding a summit. The euro bounced off a 6-1/2-month low against the dollar.

* OTHER METALS: Shanghai copper rose 0.2 percent to 51,610 yuan a tonne, zinc climbed 1.6 percent to 23,900 yuan, aluminium was flat at 14,800 yuan and tin advanced 2.1 percent to 150,490 yuan. ($1 = 6.3918 Chinese yuan)

Oil sinks while stocks gain on North Korea, euro shaken by Italy

(Reuters) - U.S. oil futures sank to six-week lows on Monday on expectations that major producers may raise output, while Asian stocks and U.S. share futures gained on signs the United States and North Korea were still working towards holding a summit.

The euro bounced back from a 6-1/2-month low after the Italian president rejected a eurosceptic as a key economy minister.

But his move was seen as triggering a possible constitutional crisis and opening the prospect of fresh elections, keeping the single currency fragile.

Oil prices extended their decline from last week on growing expectations that major oil producers may ease their 17-month-old production cuts.

A return to the oil production levels that were in place in October 2016, the baseline for the current deal to cut output, is one of the options for easing curbs, Russia’s energy minister said on Saturday.

His comments came after the energy ministers of Russia and Saudi Arabia met to review the terms of global oil supply, ahead of a key OPEC meeting in Vienna next month.

Brent crude futures dropped as much as 2.6 percent to $74.49 per barrel, their lowest level in about three weeks. They last stood at $75.00, down 1.8 percent.

U.S. crude futures dropped to six-week low of $65.80 per barrel, shedding 3.1 percent and is on course to post its fifth day of decline.

U.S. S&P500 mini futures rose 0.5 percent, but market holidays in the world’s two biggest financial centres — London and New York — could make trading slow and illiquid for the day.

German and French stock futures were up 0.4 percent.

South Korea’s KOSPI rose 0.8 percent, buoyed by stocks which are seen as benefitting from a further thawing in tensions with Pyongyang.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 percent. Japan’s Nikkei rose 0.1 percent.

President Donald Trump said on Sunday a U.S. team had arrived in North Korea to prepare for a proposed summit between him and North Korean leader Kim Jong Un, which Trump pulled out of last week before reconsidering.

Mizuho sees a 10 percent chance that the summit, so far planned on June 12, will not take place, a 20 percent chance of a deal leading to a peace treaty struck at the meeting and a 70 percent likelihood of the summit leading to more talks without producing immediate deals on denuclearisation, he said.

In the currency market, the euro bounced back 0.6 percent to $1.1720 after having a touched a 6-1/2-month low of $1.1646 on Friday.

Italian president Sergio Mattarella rejected a eurosceptic pick for the key economy ministry by the two anti-establishment parties aiming to form a coalition government, the 5-Star Movement and the League.

While his decision allayed immediate concerns of having a eurosceptic minister in the euro zone’s third-largest economy, his move created bigger uncertainties as 5-Star leader Luigi Di Maio, whose party won the most seats at an inconclusive March 4 vote, demanded that parliament impeach Mattarella.

The 10-year Italian bond yield has risen 67 basis points, or 0.67 percentage point, so far this month, on course to make its biggest monthly rise since late 2011.

Its yield spread over benchmark German Bunds rose above 200 basis points for the first time in over a year.

While no one thinks the country will default, people need to make hedging when they face sharp price moves,” said Takafumi Yamawaki, head of currency and fixed income research at J.P. Morgan Securities in Tokyo.

Investors are also increasingly wary of Spain, where Prime Minister Mariano Rajoy is facing growing pressure to resign over a graft case involving his party.

The spread of the Spanish-German debt yields rose to about 105 basis points, the highest since January.

The dollar rose 0.2 percent against the yen in early Monday trade to 109.58 yen, extending its recovery from Thursday’s 108.955 on optimism over the upcoming U.S.-North Korea summit.

Elsewhere, bitcoin traded at $7,330, falling below its 365-day moving average, which stood around $7,370.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

FMP

AGM

Royal Harare Golf Club

29/05/2018 2.30pm

Unifreight

AGM

Royal Harare Golf Club

30/05/2018 10am

Barclays

AGM

Stewart Rooms, Meikles

30/05/2018 3pm

Masimba

AGM

Head Office , 44 Tilbury Road, Willowvale

31/05/2018 13.30pm

Edgars

AGM

Edgars Training Auditorium, 1st Floor, LAPF House, 8th Ave/Jason Moyo St, Bulawayo

07/06/2018 9am

Turnall

AGM

Jacaranda Room, Rainbow Towers

07/06/2018 9am

FMHL

AGM

Royal Harare Golf Club

11/06/2018 2:30pm

RioZim

AGM

Head Office, 1 Kenilworth Road, Highlands

21/06/2018 10:30am

Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

The Harare Agricultural Show

The Harare Agricultural Show

The Harare Agricultural Show

August 27- September 1

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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