Bulls n Bears Daily Market Commentary : 30 May 2018

Thu May 31 08:10:01 CAT 2018

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Bulls n Bears Daily Market Commentary : 30 May 2018

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Zimbabwe Stock Exchange Update

Market Turnover $4,187,747.80 with foreign buys at $703,432.10 and foreign sales were $5,024.23. Total trades were 146.

The All Share index gained a further 1.63 points  to settle at 107.13 points. BRITISH AMERICAN TOBACCO  jumped up by $3.0000 to close at $23.0000, SEEDCO  added $0.2494 to trade at $2.4994 and  RIOZIM  shifted up $0.0500 to end at $1.3500. DELTA  rose by $0.0176 to $2.0574, SIMBISA  advanced by $0.0097 to trade at $0.4697 while OLD MUTUAL  was $0.0051 higher at $7.8565.

Trading in the negative territory; PPC LIMITED  came off $0.0500 to trade at $1.5000, LAFARGE slipped by $0.0100 to end at $1.3500 and OK ZIMBABWE  went down by $0.0007 to settle at $0.2193. FIRST MUTUAL HOLDINGS and   MEIKLES both decreased by $0.0005 to close at $0.1490 and $0.3695 respectively.

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Global Currencies & Equity Markets

South Africa

South Africa's rand firmer as technicals point to recovery

(Reuters) - South Africa’s rand firmed early on Wednesday with investors seeing some buying value as technical indicators pointed to a mild recovery in a currency that has suffered recently against a surging dollar.

* At 0640 GMT the rand was 0.61 percent firmer at 12.6200 per dollar from a close of 12.7025 overnight in New York, regaining some ground following a selloff of emerging currencies on Tuesday that pushed the unit as far as 12.7425.

* The dollar index was down 0.17 percent.

* The relative strength index and short-term moving average both suggested the rand had strayed into oversold territory, prompting some traders to buy the dip with a view of booking profits near the May 21 low of 12.8950.

* Volumes were high at the 12.6300 mark.

* Gross domestic product revisions for the first quarter from the United States is the main risk event, with the figure expected to support the market view of an expanding economy, possibly re-igniting E.M. outflows.

* Bonds were weaker in early trade, with the yield on the 2026 benchmark paper up 2 basis points to 8.55 percent.

* Stocks opened weaker, with the Johannesburg Stock Exchange’s Top-40 up 0.1 percent to 49,573 points. (Reporting by Mfuneko Toyana Editing by Joe Brock)

Kenya

Kenyan shilling steady, end-month demand subsiding

(Reuters) - The Kenyan shilling was expected to remain steady against the dollar on Wednesday due to reduced demand from importers who already covered their end month obligations, traders said.

AT 0701 GMT, commercial banks quoted the shilling at 100.45/55 per dollar, the same as Tuesday's close. 

America

Dollar and Yen Rally On Risk Aversion

Investing.com - The dollar maintained its momentum, continuing to rally against major currencies in morning trade in Asia Wednesday even as both the Japanese yen and Korean won also gained ground.

The U.S. dollar index climbed to a fresh high of 94.93 overnight. The index that tracks the greenback against a basket of six major currencies gained 0.08% to 94.91 at 11:19PM ET (03:19 GMT).  The dollar is poised to continue climbing.

Meanwhile, the political turmoil in Italy sent investors rushing to U.S. Treasuries and to the Japanese yen.

The United States 10-Year rose to 2.82%, boosting the demand for the dollar.

Geopolitical tensions in East Asia eased as White House confirmed the U.S.-North Korean summit, boosting market confidence. White House spokeswoman Sarah Huckabee Sanders said on Tuesday that the U.S. is prepared for the planned meeting between President Donald Trump and North Korean leader Kim Jong Un.

The Korean won traded higher against the dollar, with the USD/KRW pair losing 0.33% to 1,081.81 on Wednesday morning.

Like the won, the Japanese yen also gained against the dollar, with the USD/JPY pair sliding 0.07% to 108.68.

Political woes in Italy also supported the yen, as the euro fell to a 10-month low, prompting investors to move into safe-haven assets.

The yen was also supported by Japan’s monthly retail sales data, which beat expectation by posting 1.6% growth for April versus the estimated 0.9% and the 1.0% recorded in March. The data measures the change in the total value of inflation-adjusted sales at the retail level and is the top indicator of consumer spending, which accounts for the majority of overall economic activity in Japan

However, Bank of Japan (BoJ) Governor Kuroda said the central bank must begin to investigate why Japan's inflation is still sluggish and wage growth is lagging despite years of ultra-loosening monetary policy.

In Australia, the AUD/USD pair lost 0.15% at 0.7494. The Aussie was dragged down by the weaker-than-expected building approvals data that came in at -5.0% rather than the forecast -2.9%. The approvals data measures the change in the number of new building approvals issued by the government and serves as a key indicator of demand in the housing market.

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 6.4207 versus the previous day's 6.4021. The USD/CNY pair gained 0.10% to trade at 6.4255.

Commodities Markets

Berlin braced for U.S. steel, aluminum tariffs from June 1

(Reuters) - U.S. steel and aluminium tariffs will probably take effect on June 1 unless a deal is struck, a spokesman for the German economy ministry said on Wednesday.

U.S. President Donald Trump has granted the European Union an exemption from the tariffs until June 1.

Asked about the procedure, the ministry spokesman said:

Copper slips as Italy crisis, U.S.-China trade row feed risk aversion

(Reuters) - Copper fell to a three-week low on Wednesday as a retreat in stock markets on worries over political turmoil in Italy kept up pressure on cyclical assets, offsetting a weaker dollar.

Concerns over the prospect of a U.S.-China trade war also simmered, weighing on appetite for stocks and industrial metals.

China warned on Wednesday that it was ready to fight back if Washington was looking for a trade war. That came after the United States, in a change of tone, said it still held the threat of imposing tariffs on $50 billion of imports from China.

Given those pressures, copper is sliding towards the bottom of its recent range, Saxo Bank’s head of commodity strategy Ole Hansen said.

* COPPER PRICES: Three-month copper on the London Metal Exchange was down 0.6 percent at $6,815 a tonne in official trading, having earlier touched $6,727, its weakest since May 8.

* FINANCIAL MARKETS: Italy’s political crisis and renewed trade war fears sent world stocks lower for the sixth day in a row on Wednesday.

* COPPER INVENTORIES: On-warrant copper stocks in London Metal Exchange warehouses MCUSTX-TOTAL - representing metal not earmarked for delivery - eased to 191,200 tonnes, data showed on Wednesday. That was the lowest level since January.

* INDIA SMELTER: Vedanta Resources is working on a legal challenge to an Indian state’s closure of one of its copper smelters but will not proceed until tensions have eased over the deaths of 13 people during protests last week.

* TARIFFS: European Union Trade Commissioner Cecilia Malmstrom said she would seek a full exemption from new U.S. steel and aluminium tariffs when she meets her U.S. counterparts on Wednesday.

* ALUMINIUM: LME aluminium was 0.1 percent lower at $2,272 a tonne in official trading.

* ZINC STOCKS: On-warrant zinc stocks in LME warehouses eased to 195,225 tonnes, their lowest in a month. The proportion of cancelled warrants - metal earmarked for delivery and therefore not available to the market - rose to nearly 15 percent from 6 percent last week.

* ZINC SPREADS: Cash zinc held in a 25 cent premium over the three-month contract, versus a discount of $6.50 a tonne a week ago, indicating near-term market tightness.

* ZINC PRICES: LME zinc was untraded in official rings, but was last bid up 0.7 percent at $3,110 a tonne.

* OTHER METALS: LME lead was 0.5 percent lower in official trading at $2,433 a tonne, while tin was down 0.1 percent at $20,405. Nickel, also untraded in official rings, was last bid at $14,910, little changed from Tuesday’s close.

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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