Bulls n Bears Daily Market Commentary : 31 October 2018

Thu Nov 1 07:52:25 CAT 2018

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Bulls n Bears Daily Market Commentary : 31 October 2018

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Zimbabwe Stock Exchange Update

Market Turnover $2,440,722.14 with foreign buys at $105,126.73 and foreign
sales were $1,641,183.54. Total trades were 138.

The All Share index lost another 2.47 points to close at 163.82 points.
DELTA  went further down by $0.1688 to close at $2.9978, SIMBISA eased
$0.1096 to $0.7027 and ECONET  shed $0.0317 to $2.0855. SEEDCO  also lost
$0.0271 to $2.200 and MEIKLES traded $0.0100 lower at $0.6900.

Trading in the positive was OLD MUTUAL LIMITED  which added $0.1873 to close
at $6.7020, PADENGA  increased by $0.0696 to $0.9955 and PPC  traded $0.0499
stronger at $1.4999. FBCH also gained $0.0400 to $0.3500 and AFRICAN SUN
was $0.0228 firmer at $0.1475.

 <http://www.nedbank.co.zw/> 

  Global Currencies & Equity Markets

Zimbabwe

Zimbabwe's RioZim shuts mines over dollar shortages

(Reuters) - Zimbabwe’s gold miner RioZim has closed its three mines due to a
shortage of dollars, the company said in a letter to the central bank seen
by Reuters on Wednesday.

The country, which adopted the use of the United States dollar in 2009 to
tame hyperinflation, is gripped by acute shortages of greenbacks. Prices of
basic goods, public taxis and medicines have risen in the last few weeks.

RioZim is the southern African nation’s third biggest gold producer and
early this month threatened legal action to force the Reserve Bank to pay it
more U.S. dollars for part of its output.

However, the firm has not yet filed its case against the government.

RioZim chairman Lovemore Chihota told the central bank in a letter dated
October 28 that the company had run out of critical consumables and spares
required for its mines, forcing the shutdown.

Chihota and central bank governor John Mnangudya did not answer their mobile
phones when contacted for comment.

Chihota said in the letter that RioZim should be allowed to retain all its
sales earnings in U.S. dollars when it restarts operations and 60 percent
thereafter.

Producers sell gold to a central bank subsidiary and are only allowed to
retain 30 percent of their dollar sales. Mining companies say this is
inadequate as local costs soar while some suppliers have begun to demand
U.S. dollar payments. 

South Africa

South African stocks follow global rally, rand falls on trade data

(Reuters) - South African markets sharply diverged on Wednesday, with stocks
tracking a global rally higher while the rand yielded ground to a resurgent
dollar.

At 1530 GMT, the rand was 1.4 percent lower against the dollar, which scaled
its highest level in 16 months against a basket of currencies as investors
bought the greenback on rising Treasury yields.

The rand was further hobbled by data that showed South Africa’s trade
balance swung to a 2.95 billion rand ($199 million) deficit in September
from a revised 8.77 billion rand surplus in August.

Stocks made hefty gains, led by market heavyweight Naspers , as global
markets bounced back at the end of a volatile month.

The blue chip Top-40 index surged 3.61 percent to 46,141 points, while the
wider All Share index was 3.22 percent firmer at 52,388 points.

The All-share index had lost 8 percent this month before Wednesday, amid
rising U.S. interest rates and concerns about global growth.

Naspers bounced back from recent lows, jumping 9.40 percent to 2,593 rand as
its Chinese cash spinner Tencent, the gaming and social media firm in which
it has a 31 percent stake, closed 5.87 percent firmer.

Index provider MSCI Inc said on Tuesday it would allow companies, such as
Naspers, with a dual voting system that give shareholders unequal voting
rights to remain in its equity indexes without their weightings being
reduced.

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Asia

Asia starts new month up on strong Wall St after brutal Oct

(Reuters) - Asian stocks rose on Thursday as bruised investor sentiment got
some relief from another robust Wall Street session thanks to upbeat
corporate earnings, while the dollar hovered near a 16-month high on further
signs of strength in the world’s largest economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.15
percent, adding to modest gains the previous day, though this came after a
brutal October month.

The index had fallen 10.2 percent in October, it worst monthly performance
since August 2015, as factors ranging from Sino-U.S. trade tensions to
worries about global economic growth, higher U.S. interest rates and company
earnings spurred volatility in global markets.

There were tentative signs of the gloom slowly beginning to lift, led by a
rebound in beaten-down U.S. shares.

Wall Street rose for a second day on Wednesday as strong company results and
bargain hunting of beaten-down technology and internet favourites lifted
spirits.

The improved mood filtered down to Asia, with Australian stocks up 0.55
percent and South Korea’s KOSPI putting on 0.5 percent. Japan’s Nikkei
slipped 0.3 percent following two days of big gains.

The dollar index against a basket of six major currencies hovered near a
16-month high of 97.20 scaled overnight after the ADP national employment
report showed that U.S. private sector payrolls increased by the most in
eight months in October.

The greenback has enjoyed a boost from robust economic reports, including
data last week which showed the U.S. economy slowed less than expected in
the third quarter.

The euro, on the other hand, has been weighed by less-than-stellar economic
news from the euro zone region.

The single currency stood at $1.1316 after retreating to $1.1302 on
Wednesday, its lowest since mid-August.

The pound rose 0.45 percent to $1.2819 after the Times reported that British
Prime Minister Theresa May had sealed a deal with Brussels that would give
British financial serves companies continued access to European markets
after Brexit.

The bounce lifted the pound further away from a 2-1/2-month low struck on
Tuesday.

In commodities, U.S. crude futures were down 0.47 percent at $65.00 per
barrel.

The benchmark remained on the back foot after falling more than $10 from a
four-year peak reached early in October as the global market tumult last
month was seen hurting demand for fuel. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price increase to dampen Indian festive purchases -WGC

(Reuters) - Indian gold demand in 2018 is expected to fall from the previous
year as a rally in local prices to five-year highs is likely to dent
purchases during key festivals in the December quarter, the World Gold
Council (WGC) said on Thursday.

A fall in demand from the world’s second-biggest bullion buyer could weigh
on global prices that are already down 6.5 percent so far this year. But
lower imports could also help the South Asian country reduce its trade
deficit and support a weak rupee, which hit a record low last month.

“Demand is expected to be muted due to a steep rise in prices. It is likely
to be at the lower end of the 700 to 800 tonnes range,” Somasundaram PR,
managing director of the gold council’s Indian operations, told Reuters.

India’s gold demand in 2017 was 771.2 tonnes.

Gold demand in India usually spikes towards the end of the year, when buying
the precious metal for weddings and major festivals such as Diwali and
Dussehra is considered auspicious.

This year’s seasonal increase could be moderate, though, due to a liquidity
crunch, rising local prices and impending elections in some key states that
could impact trade logistics, Somasundaram said.

Gold prices in India are holding near 33,000 rupees ($446.25) per 10 grams,
the highest since September 2013. The Indian currency has lost more than 13
percent of its value against the U.S. dollar so far in 2018, making
purchases of commodities denominated in the greenback more expensive.

Monsoon rainfall was deficient in some pockets of the country and that could
hurt demand as well, Somasundaram said.

India received below-normal monsoon rains this year, squeezing farmers
earnings. Two-thirds of India’s gold demand comes from rural areas, where
jewellery is a traditional store of wealth.

In the July-September quarter, Indian gold demand rose 10 percent from a
year earlier to 183.2 tonnes, as prices fell to their lowest in 2018,
encouraging bargain buying, the WGC said in a report published on Thursday.

Demand for gold coins and bars, also known as investment demand, rose 11
percent in the quarter to 34.4 tonnes as the volatility in the stock market
and lower prices lured investors, the report said.

But investment demand could moderate again in the December quarter due to
higher prices, Somasundaram said.

($1 = 73.9500 rupees)

Shanghai aluminium extends falls to fresh 2-year low

(Reuters) - Most Shanghai base metals fell on Thursday, with aluminium
hitting a fresh two-year low, on  concerns that an escalating Sino-U.S.
trade row will hurtdemand, while another batch of weak data from top metals
consumer China added to the negative tone.

China's manufacturing sector barely grew last month after stalling in
September, a private survey showed, a day after the country's official
Purchasing Managers' Index showed the slowest growth in over two years.

Sentiment on base metals "wasn't helped by data showing cancelled warrants
and orders to withdraw metal from (London Metal Exchange) warehouses had
fallen," ANZ wrote in a note.

    FUNDAMENTALS

* ALUMINIUM: SHFE aluminium fell for a sixth straight session, shedding as
much as 1.2 percent to 13,860 yuan ($1,989.84) a tonne, the lowest since
Oct. 24, 2016, before ending the morning session at 13,870 yuan a tonne.

* SMELTERS: China's aluminium smelters are under pressure from current low
prices, with the situation exacerbated by high costs for key raw material
alumina, analysts say.  

* LME ALUMINIUM: London aluminium nudged up 0.3 percent to $1,960 a tonne,
after hitting a near 15-month low of $1,953 in the previous session. 

* CHINA: The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI)
for October edged up to 50.1 from 50.0 in September, while an extended
contraction in export orders

highlighted rising pressure on the economy as a trade war with the United
States intensified. 

* COPPER: Three-month LME copper CMCU3> edged up 0.2 percent  to $6,006.50 a
tonne, while Shanghai copper lost 0.8percent to 48,770 yuan a tonne.    

* OTHER METALS: Nickel, which is used to make stainless steel, slipped as
much as 2 percent in Shanghai to a six-month low of 96,330 yuan a tonne.
Lead bucked the negative trend with a 2.4 percent jump on concerns of an
environmental crackdown in China.    

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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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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