Bulls n Bears Daily Market Commentary : 06 November 2018

Tue Nov 6 18:05:04 CAT 2018

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Bulls n Bears Daily Market Commentary : 06 November 2018

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Zimbabwe Stock Exchange Update

Market Turnover $7,542,777.71 with foreign buys at $2,032,220.17 and foreign
sales were $5,148,281.91. Total trades were 126.

The All Share index weakened further by 1.99 points to close at 156.32
points. The seed manufacturer SEEDCO lost $0.2000 to trade at $2.0000, TSL
went down by $0.1475 to close at $0.6000 and SEEDCO INTERNATIONAL  dropped
$0.0600 to trade at $1.5500. Other losses were in DELTA  which softened by
$0.0435 to $2.8565 and INNSCOR traded $0.0297 lower at $1.6503.

On the upside, BINDURA gained $0.0100 to trade at $0.0820, CAFCA  was
$0.0075 higher at $1.0325 and MEIKLES  added $0.0074 to $0.5599. MASIMBA was
up by $0.0050 to trade at $0.1000 and CBZ  increased by $0.0034 to close at
$0.1594.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand weaker, stocks fall before U.S. midterm elections

(Reuters) - South Africa’s rand fell on Tuesday and stocks snapped a
four-session winning streak, with markets favouring caution ahead of U.S.
midterm Congressional elections as policy decisions that could sway the
world’s largest economy hinge on the results.

At 1515 GMT, the rand traded at 14.2150 per dollar, 0.37 percent weaker,
having closed at 14.1625 on Monday.

Investors are bracing for a split Congress, with Democrats taking control of
the House of Representatives and Republicans holding their advantage in the
Senate, but are mindful that President Donald Trump’s victory in 2016
surprised experts.

A split Congress would likely reduce trade tensions, while the dollar could
come under pressure as it is unlikely any new fiscal stimulus could be
launched to counterbalance forecasts of slowing U.S. economic growth next
year.

In fixed income, the yield on the benchmark government bond due in 2026 fell
one basis points to 9.14 percent.

On the bourse, both the blue chip Top-40 index and the All-share index fell
0.85 percent to 48,124 points and 54,450 points, respectively.

Shares in South African engineering firm Group Five fell nearly 14 percent
in the session after it said that construction on its Ghanaian Kopje power
plant had been delayed once again due to fuel contamination.

Group Five closed 0.86 percent lower at 1.15 rand.

Mozambique

Mozambique dollar bond jumps 7 cents after Maputo announces restructuring
deal

(Reuters) - Mozambique’s dollar-denominated sovereign bond jumped 7 cents on
Tuesday after the finance ministry announced it had reached agreement in
principle on a debt restructuring with its Eurobond holders.

The 2023 issue traded at 90.02 cents, according to data from MarketAxess.

       <mailto:info at bulls.co.zw> 

America

Stocks, dollar hunker down for U.S. midterm elections

(Reuters) - European shares sagged and the dollar and bond markets barely
budged on Tuesday, as traders braced for midterm elections in the United
States and potentially lively sessions ahead.

Japan and Hong Kong had helped Asia overcome another Chinese wobble, but
Europe was in the 0.4 percent red as investors pounced on corporate earnings
misses and pre-market caution dragged down Wall Street futures.

The elections mark the first major test of President Donald Trump’s sweeping
tax cuts and hostile trade policies. Polls point to his Republican party
losing control of the House of Representatives which could curb some of his
policymaking power.

With so much at stake, currency market moves were extremely tight. The
dollar hardly moved against the euro, lost ground to Brexit-bound sterling
but made some back against the yen as dealers kept their options open.

There was plenty for investors to digest from Europe too.

Italian and Spanish stocks and bonds weakened as updated PMI figures
confirmed euro zone business growth had fallen to a two-year low last month
against the backdrop of trade tensions.

The future output index caused even more concern as it fell to a near
four-year low.

Italian politics also played on the nerves too after euro zone finance
ministers had called on Rome to change its budget at a meeting late on
Monday.

With Italy unlikely to bow to the demands any time soon, it pointed to a
further escalation in the damaging feud and pushed Italian borrowing costs
up 5-7 basis points on the day.

OIL SPILL

The uncertainty over the U.S. midterms for U.S. stocks futures was
understandable. The S&P 500 has risen 28 percent since Trump’s election in
November, 2016, which is more than under any other president in the past 64
years.

MSCI’s broadest index of Asia-Pacific shares ex-Japan had edged up 0.4
percent overnight following a positive finish for Wall Street on Monday.

Japan’s Nikkei also climbed 1.1 percent, although weaker Chinese markets and
regional technology shares capped the region.

Apple suppliers such as Taiwan’s Hon Hai Precision Industry were hit by a
report that Apple had told its smartphone assemblers to halt plans for
additional production lines dedicated to the iPhone XR. The report had also
driven Apple shares 2.8 percent lower in U.S. trade.

While political gridlock between the White House and Congress could hinder
Trump’s pro-business agenda and raise concerns about U.S. political
instability, some analysts say this may have already been priced in by
investors.

The Cboe Skew index, also known as the “black swan” index, hovered not far
from its 2-1/2-year low hit on Friday, indicating demand for options that
provide protection remains tepid.

A higher skew typically indicates investors are buying more protection on
heightened anxiety.

Safe-haven gold was little changed but in oil markets crude prices were down
near multi-month lows after the United States allowed eight countries to
continue buying oil from Iran temporarily, easing the likelihood of a sharp
supply drop.

U.S. West Texas Intermediate (WTI) crude futures slipped 0.5 percent to
$62.80 a barrel, after hitting a seven-month low of $62.52 on Monday.

Brent crude futures dropped 0.6 percent to $72.74 a barrel, near Friday’s
2-1/2-month low of $72.16.

Both oil benchmarks have slid more than 15 percent since hitting four-year
highs in early October.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rises on uncertainty over U.S. midterm elections

(Reuters) - Gold edged up on Tuesday as investors sought shelter from
uncertainty over the outcome of the U.S. midterm elections.

Spot gold rose 0.3 percent to $1,234.94 per ounce as of 1314 GMT, while U.S.
gold futures were up 0.4 percent at $1,236.50.

Opinion polls and election forecasters favour Democrats to secure the
minimum 23 seats they need to capture a majority in the U.S. House of
Representatives, which would enable them to stymie President Donald Trump’s
legislative agenda and investigate his administration.

European shares sagged and the dollar and bond markets barely budged on
Tuesday, as traders braced for midterm elections in the United States and
potentially lively sessions ahead.

Investors also awaited a two-day Federal Reserve meeting starting on
Wednesday to gauge the outlook for U.S. monetary policy, analysts said.

Higher U.S. interest rates tend to boost the dollar, making dollar-priced
gold more expensive for holders of other currencies. Rate increases also
pressure gold prices by increasing the opportunity cost of holding
non-yielding bullion.

Meanwhile, holdings of the world’s largest gold-backed exchange-traded fund,
SPDR Gold Trust, fell 0.23 percent to 757.29 tonnes on Monday.

Among other precious metals, silver rose 0.3 percent to $14.68 per ounce
while palladium was little changed at $1,132.70.

Platinum gained 0.6 percent to $869.24 per ounce, having touched its highest
since June 25 at $874.60 earlier in the session.

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
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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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