Bulls n Bears Daily Market Commentary : 08 November 2018

Fri Nov 9 07:31:45 CAT 2018

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Bulls n Bears Daily Market Commentary : 08 November 2018

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Zimbabwe Stock Exchange Update

Market Turnover $11,406,314.88 with foreign buys at $8,026,516.90 and
foreign sales were $10,246,530.00. Total trades were 143.

The All Share index recovered 2.67 points  to close at 157.44 points.
Beverage giant DELTA  added $0.1149 to close at $2.9000, ECONET  was up
$0.0700 to trade at $2.0621 and ZB FINANCIAL HOLDINGS  gained $0.0109 to
trade at $0.3419. Other gains were in PROPLASTICS which traded $0.0059
higher at $0.1800 and PADENGA   increased by $0.0027 to close at $0.9303.

Two counters lost ground, OK ZIMBABWE  cameoff $0.0050 to trade at $0.2950
and AXIA  lost $0.0030 to close at $0.4320.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.Africa's rand falls on subdued risk sentiment; stocks down

(Reuters) - South Africa’s rand weakened on Thursday as a dollar rally
dimmed investor appetite for riskier assets with investors taking profits
ahead of the U.S. Federal Reserve meeting later in the day.

Bourse heavyweight Naspers and banks led stocks lower.

At 1531 GMT, the rand traded at 14.0700 per dollar, 1.1 percent weaker,
having closed at 13.9175 on Wednesday.

The Federal Open Market Committee (FOMC) is expected to maintain the hawkish
language seen in recent policy statements, while keeping interest rates
unchanged this time. The Fed has raised rates three times this year and
inflation started to pick up, and it has signalled a rate rise in December.

Domestic data also dragged the rand.

South Africa’s total mining output fell 1.8 percent year-on-year in
September compared with the consensus figure which forecast it rising 0.30
percent.

In fixed income, the yield on the benchmark government bond due in 2026 rose
1 basis points to 9.155 percent.

In equities, the all share index was down 1.16 percent to 54,064 points
while the top 40 index fell 1.36 percent to 47,638 points.

Banks were 2.01 percent lower and Naspers was down 2.86 percent to 2,796
rand.

Technology giant Tencent Holdings Ltd, in which Naspers has a 31 percent
stake, is reportedly cutting the marketing budget for its key gaming
division.

Retailer TFG (The Foschini Group) soared 2.67 percent to 170.95 rand after
reporting a 8.3 percent increase in half-year earnings, as London, Australia
and local operations contributed positively to revenue growth. 

Kenyan shilling, Ghana's cedi to come under pressure

(Reuters) - Traders expect the Kenyan shilling and Ghana’s cedi to come
under pressure next week but predict other African currencies will remain
stable.

KENYA

The Kenyan shilling is seen under pressure due to increased dollar demand
from importers of oil and other goods making payments ahead of Christmas and
New Year.

Commercial banks quoted the shilling at 101.70/90 per dollar, compared with
101.60/80 at last Thursday’s close.

UGANDA

Traders said they expect the Uganda shilling shilling to trade in a stable
range. Commercial banks quoted it at 3,747/3,757, compared to last
Thursday’s close of 3,737/3,747.

GHANA

The cedi could remain under pressure on increasing dollar demand from
offshore investors and local businesses needing to settle their last quarter
obligations, analysts said.

After rallying 2 percent against the greenback last month, it has since shed
some of the gains, despite regular forex sales by the central bank and was
trading at 4.8816 to the dollar by mid morning on Thursday, compared to
4.8750 a week ago.

ZAMBIA

The kwacha is expected to trade within the current range next week and on
Thursday, commercial banks quoted the currency of Africa’s second-largest
copper producer at 11.7380 per dollar from 11.8500 a week ago.

TANZANIA

The Tanzanian shilling is expected to hold steady or appreciate next week
due to the cashew nut sale season that began last month.

Mohamed Laseko, Senior Forex Trader at CRDB Bank said the shilling is likely
to remain around 2,290/2,295 next week.

       <mailto:info at bulls.co.zw> 

America

EM shares and currencies gain after U.S. midterm results as dollar eases

(Reuters) - Emerging stock and currency markets inched higher on Wednesday
as investors took a positive view of U.S. midterm elections that gave
Democrats the ability to thwart President Donald Trump but left Republicans
firmly in charge of the Senate.

A dip in the dollar due to reduced expectations of more pro-business policy
moves by Trump, which might soften the case for further rises in U.S.
interest rates in the future, also benefited a number of major emerging
currencies.

The MSCI’s benchmark emerging equity index gained 0.58 percent, with Chinese
equities ending lower in choppy trade as an uncertain economic outlook
outweighed government pledges of support for wavering markets.

But the yuan, buffeted by concerns over Trump’s aggressive trade moves
against Beijing this year, recovered almost all of an early loss as the mood
among financial investors globally turned more positive.

China’s foreign exchange reserves fell to a one-and-a-half year low in
October, suggesting authorities may be stepping up intervention amid
mounting trade pressure.

Stock markets in emerging economies this year have fallen almost 14 percent,
bearing the brunt of higher U.S. rates and worries over global growth and
the U.S.-China stand-off on trade.

Hong Kong and Taiwan stocks outperformed their mainland Chinese
counterparts, with the Hang Seng closing up 0.10 percent and Taiwan up 0.9
percent, at its highest in a little over two weeks.

The emerging market currency index was up about 0.3 percent, with the dollar
continuing to slip as the session wore on.

South Africa’s rand firmed more than 1 percent to its strongest levels since
August, while the Turkish lira edged back into positive territory and sent
the country’s dollar bonds to their highest since August.

The Russian rouble was up by 0.3 percent, with data showing inflation
accelerated in October. Stocks, however, declined as the market priced in
lower oil prices and the prospect of more U.S. sanctions on Moscow.

The Polish zloty gained for the fifth straight session ahead of a central
bank decision at which no rate change expected.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges down as Fed's interest rate view strengthens dollar

(Reuters) - Gold prices inched lower on Friday as the dollar firmed after
the U.S. Federal Reserve kept interest rates steady with a fourth hike for
this year expected next month.

FUNDAMENTALS

* Spot gold was down 0.1 percent at $1,221.78 per ounce at 0124 GMT. Prices
fell to their lowest in a week at $1,219.59 in the previous session.

* Gold was down about 0.9 percent for the week and on track to post its
biggest weekly fall since August.

* U.S. gold futures was down 0.2 percent to $1,223 per ounce.

* Asian stocks dipped on Friday as Wall Street took a breather after the Fed
kept intact its plans to continue raising interest rates at a gradual pace,
while the dollar gained against its major peers.

* The Fed’s statement on Thursday overall reflected little change in its
outlook for the economy since its last policy meeting in September.
Inflation remained near its 2 percent target, unemployment fell, and risks
to the economic outlook were still felt to be “roughly balanced.”

* China wants to resolve problems with the United States through talks but
it must respect China’s choice of development path and interests, President
Xi Jinping said on Thursday ahead of a meeting with the U.S. leader in
Argentina.

* China reported much stronger-than-expected exports for October as shippers
rushed goods to the U.S., its biggest trading partner, racing to beat higher
tariff rates due to kick in at the start of next year.

* Canada is pushing back against U.S. attempts to change the text of their
September trade pact and the issue may have to be referred to ministers to
settle, a Canadian source with direct knowledge of the matter said on
Thursday.

* The euro zone economy will continue expanding but risks ranging from trade
tensions to high asset prices are growing, European Central Bank President
Mario Draghi told Irish lawmakers on Thursday.

* South Africa’s total mining output fell 1.8 percent year-on-year in
September compared with the consensus figure which forecast it rising 0.30
percent, Statistics South Africa said on Thursday.

Abundant aluminium stocks and low prices conceal tight market

(Reuters) - A first glance at aluminium stocks suggest an abundance of the
metal, but analysts say a closer look at how long those stocks would last
shows the market is tight and prices are too low.

Aluminium is a metal key for the transport and packaging industries but at
current prices about 40 percent of the world’s aluminium production is
losing money, analysts say.

Benchmark aluminium on the London Metal Exchange at around $2,000 a tonne
has fallen more than 10 percent since hitting a 3-1/2-month high at $2,267
in early October.

The price drop coincides with receding nervousness about supplies of
alumina, used to make aluminium, and an extension of the deadline for
customers of Rusal, which is under U.S. sanctions, to wind down business
with the Russian producer.

CRU estimates total global aluminium stocks of 11 million tonnes by the end
of this year.

The downtrend can be seen in stocks in LME approved warehouses, which have
more than halved to 1.05 million tonnes since the start of last year.

Wood Mackenzie analysts expect aluminium supplies at nearly 68 million
tonnes this year rising to 72 million tonnes in 2019, with about 2 million
tonnes of the rise coming from China and the remainder from the rest of the
world.

The concern for some is Chinese industrial production, already faltering,
which could slow significantly and hit demand in the world’s largest
consumer of industrial metals.

One of the biggest inputs for aluminium production is electricity, which
accounts for about one-third of costs and where prices have been climbing
for some time.

This is a particular problem for China and can be seen in the tumbling share
price of top global aluminium producer China Hongqiao Group after its home
province of Shandong announced higher fees for onsite power plants.

Alumina accounts for another third of production costs.

Slumping supplies due to outages at Norsk Hydro’s alumina refinery in
Brazil, a strike at Alcoa’s operations in Western Australia and U.S.
sanctions on Rusal fuelled a price surge earlier this year.

Alumina prices on Comex hit a contract high in May, but retreated as Chinese
producers seeing profit opportunities started to ramp up exports.

However, Chinese exports of alumina cannot be sustained as domestic demand
is growing at a faster pace than new production.

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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