Bulls n Bears Daily Market Commentary : 09 November 2018

Mon Nov 12 07:59:34 CAT 2018

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Bulls n Bears Daily Market Commentary : 09 November 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $2,839,072.52 with foreign buys at $909,240.00and foreign
sales were $1,416,767.48. Total trades were 143.

The All Share index continued its winning streak as it added 2.52 points  to
close at 159.96 points. DELTA went up by a further $0.0948 to close at
$2.9948, ECONET added $0.0690 to settle at $2.1311 and SIMBISA  increased by
$0.0248 to $0.6748. Insurance giant OLD MUTUAL was $0.0235 stronger at
$6.5038 and AFRICAN SUN  was up by $0.0230 to trade at $0.1390.

The gains were partially offset by losses in INNSCOR  which traded $0.0499
lower at $1.6001, RIOZIM  dropped $0.0150 to close at $1.8750 and BINDURA
shed $0.0109 to settle at $0.0711 and CBZ  eased $0.0050 to trade at
$0.1555.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Zimbabwe

Zimbabwe's unlicensed foreign currency traders face 10-year jail

(Reuters) - Unlicensed foreign currency traders in Zimbabwe face up to 10
years in jail if convicted and loss of their money and assets when new
exchange control rules are published this week, a senior government official
said on Sunday.

The southern African nation, which adopted the U.S. dollar after dumping its
hyperinflation-hit currency in 2009, is gripped by a shortage of cash
dollars, which has seen prices of imported goods spiral in recent weeks.

President Emmerson Mnangagwa’s government, under pressure to make good on
pre-election promises to mend the stricken economy, is on a drive to end
parallel market trading it blames for fuelling price increases.

Ministry of Justice permanent secretary Virginia Mabhiza said Mnangagwa
would use executive powers to amend the exchange control and
money-laundering laws in an official notice that will be gazetted on Monday.

Mabhiza said the new rules will also empower police, the National
Prosecuting Authority and anti-corruption commission to compel suspects to
explain their source of wealth and bank deposits.

Last year in September the government published similar regulations, which
lapsed this year with no major arrests.

The new regulations would be in effect for six months and require parliament
approval to become permanent, she said.

The central bank last month directed banks to separate foreign currency
accounts from the surrogate bond note currency and their associated
electronic deposits.

This tacit admission that the bond notes and electronic deposits were not at
par with the U.S dollar accelerated their collapse on the black market.

South  Africa

South Africa's rand slips on hawkish Fed; stocks slip

(Reuters) - South Africa’s rand weakened on Friday in line with emerging
market currencies as indications the United States central bank would stay
on a policy tightening path drained the demand for risk that followed U.S.
election results.

Stocks fell largely due to subdued risk demand globally and weak consumer
demand locally.

At 1512 GMT the rand had slipped 1.06 percent to 14.2850 per dollar, having
hit a session-low of 14.3475 as investors digested the Federal Reserve’s
Thursday statement and bought dollars cheap, booking profits from earlier in
the week.

The Federal Reserve held interest rates steady but struck an expectedly
hawkish tone that fed into some dollar gains and put emerging market
currencies under pressure.

The rand had rallied to 13.8700 on Wednesday following the U.S. midterm
elections, breaking through the 14.00 long term resistance level for the
first time in two months, lifted by a return of global risk appetite.

Bonds were also weaker with the yield on the benchmark paper due in 2026
adding 7.5 basis points to 9.22 percent ahead of an auction where Treasury
will place 10.655 billion rand in short-term bills.

On the bourse the Top-40 index fell 1.56 percent to 46,897 points, while the
broader the All-share index slipped 1.42 percent to 53,295 points.

Bourse heavyweight Napsers fell 1.83 percent to 2,745 rand. Shares in
Technology giant Tencent Holdings Ltd , in which Naspers has a 31 percent
stake, also fell. Tencent is reportedly cutting the marketing budget for its
key gaming division.

Shares in sugar producer Tongaat dove as much as 12 percent and closed 6
percent weaker at 61.30 rand after reporting that it had swung into a
half-year loss and cited unfavourable market conditions in its South African
and Mozambique sugar operations.

Gold Fields shares were 2.56 percent lower after the company reported a 3
percent drop in third-quarter production, dragged down by a decline in
output from its last South African asset, South Deep.  

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks lower amid growth worries; oil rebounds

(Reuters) - Asian shares drifted lower on Monday as signs of softening
demand in China rekindled anxiety about the outlook for world growth, but
Saudi Arabia’s plans to cut production helped to halt a slide in oil prices.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.07
percent, trimming earlier losses on a bounce in Chinese shares, but
struggling to break into positive territory.

Australian shares added 0.13 percent, while Japan’s Nikkei stock index
gained 0.11 percent.

A combination of weak factory-gate inflation data in China and low oil
prices weighed on global stocks on Friday, dragging MSCI’s gauge of global
stocks to its worst day in two weeks. The index was last 0.09 percent lower.

Kevin Lai, chief economist for Asia ex-Japan at Daiwa Capital Markets, said
there were genuine concerns from an equity market perspective about China’s
economic growth in general and its significant debt burden in particular.

“There’s no way the economy can really can get back on a nice recovery path
unless they can seriously compress the debt significantly ... all this
deleveraging we’ve been talking about hasn’t really delivered any results,”
he said.

E-commerce giant Alibaba Group Holding Ltd added to the uncertain outlook in
China, recording the slowest-ever annual growth in sales for its annual
“Singles’ Day” event,.

Its sales outlook has weakened amid rising trade tensions between China and
the United States that have taken a bite out of China’s economy.

An index tracking consumer staples firms in China was 0.95 percent lower,
even as the blue-chip CSI300 index rebounded from last week’s string of
losses to gain 0.68 percent.

Risk asset markets have been under intense pressure of late as fears of a
peak in earnings growth added to anxiety about slowing global trade and
investment.

A spike in U.S. bond yields, driven by the Federal Reserve’s commitment to
keep raising borrowing costs, has also shaken emerging markets as investors
poured money into U.S. dollar assets.

The Dow Jones Industrial Average fell 0.77 percent on Friday, the S&P 500
lost 0.92 percent and the Nasdaq Composite dropped 1.65 percent.

The yield on benchmark U.S. 10-year Treasury bonds closed at 3.189 percent
on Friday.

The Wall Street losses came after the Fed held rates steady earlier in the
week but stayed on track to tighten policy next month.

The Fed’s stance disappointed some investors who had hoped that October’s
rout in equities might have prompted policy makers to take a more cautious
approach on interest rates.

SAUDI PRODUCTION CUT

Taking some pressure off a sharp drop in oil prices last week, Saudi
Arabia’s energy minister said on Sunday that Riyadh plans to reduce its oil
supply to world markets by 500,000 barrels per day in December, a global
reduction of about 0.5 percent.

That helped to lift oil prices on Monday, with U.S. crude rising 1.08
percent to $60.84 a barrel and Brent crude gaining 1.34 percent to $71.12
per barrel. However, Saudi Arabia’s supply cut may prove to be a temporary
solution to falling prices as global growth slows, with two of the world’s
biggest economies - Germany and Japan - expected to report a contraction in
output in coming days.

In currency markets, the dollar rose 0.18 percent against the yen to 114.03,
and the euro was down 0.11 percent on the day at $1.1322.

The dollar index, which tracks the greenback against a basket of six major
rivals, was up 0.12 percent at 97.022.

The British pound was off 0.35 percent to fetch $1.2929. Sterling has been
under pressure over the past few weeks as investors worried over whether an
orderly Brexit deal would be achieved.

Spot gold gained 0.07 percent to $1,210.09 per ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Nickel drops to 11-mth lows as falling steel prices weigh

(Reuters) - Nickel on both the London and Shanghai exchanges on Monday fell
to its lowest in around 11 months as rebar steel prices tumbled on concerns
over slowing demand in top consumer China.

Thee-month nickel, used mainly in steelmaking, fell 0.4 percent to $11,420 a
tonne on the London Metal Exchange by 0335 GMT, after earlier hitting its
lowest since mid-December at $11,360 a tonne. The most-traded Shanghai
nickel contract lost 2.3 percent to 94,760 yuan ($13,623.80) a tonne.

A strong U.S. dollar and worries over economic growth in China as well as
the U.S.-China trade tensions have been weighing on industrial metals.

* REBAR STEEL TUMBLE: Shanghai rebar steel prices tumbled nearly 4 percent
to their lowest since late July on Monday, pressured by worries over slowing
demand in top consumer China over the seasonally weak winter period.

* U.S. DOLLAR: The dollar built on last week’s gains and rose towards a
16-month high on Monday as traders expect the U.S. Federal Reserve to keep
tightening monetary policy.

A stronger U.S. currency makes dollar-denominated metals more expensive for
buyers paying in other currencies.

SPONSORED STORIES

* OTHER METALS: London’s three-month copper futures rose 0.4 percent to
$6,080 a tonne, while aluminium edged up 0.3 percent.

* RUSAL: The United States said on Friday it was postponing the enforcement
of sanctions on Russia’s Rusal, the world’s second-biggest producer until
Dec. 12 as its top shareholder works on a plan to cut his stakes.

* GLOBAL MARKETS: Asian shares fell on Monday, extending weakness in global
equity markets at the end of last week as soft Chinese economic data and
falling oil prices rekindled anxiety about the outlook for world growth. ($1
= 6.9555 yuan)

Gold prices hold steady near 1-month low

(Reuters) - Gold prices were steady on Monday, having dipped to a one-month
low in the previous session after the U.S. dollar firmed on the Federal
Reserve’s plans to gradually keep tightening borrowing costs.

FUNDAMENTALS

* Spot gold was little changed at $1,209.57 per ounce at 0121 GMT. On
Friday, prices fell to their lowest since Oct. 11 at $1,206.13 per ounce.

* U.S. gold futures were up 0.3 percent at $1,211.7 per ounce.

* The dollar index, which measures the greenback against a basket of six
major currencies, inched up 0.1 percent. The greenback built on last week’s
gains and rose towards a 16-month high.

* Asian shares fell on Monday, extending weakness in global equity markets
at the end of last week as soft Chinese economic data and falling oil prices
rekindled anxiety about the outlook for world growth.

* U.S. producer prices rose more than expected in October and at their
fastest pace in six years but measures of underlying price pressure cooled,
bolstering the view that the U.S. central bank is not facing a resurgence in
inflation.

* Former British foreign minister Boris Johnson called again on Sunday for
Prime Minister Theresa May to change course on Brexit, accusing her of
forcing through a deal to keep the country locked in the EU’s customs union
in a “total surrender”.

* Italy’s economy minister is looking to revise down the budget’s growth
forecast for next year to try to reach a deal with the European Commission
over fiscal policy, a government source said on Sunday.

* China’s factory-gate inflation slowed for the fourth month in October on
cooling domestic demand and manufacturing activity, signalling Beijing would
likely roll out more growth-boosting measures in the face of trade frictions
with the U.S..

* Hedge funds and money managers cut their net short position in gold by
8,136 contracts to 37,486 contracts, Commodity Futures Trading Commission
(CFTC) said on Friday.

* Demand for physical gold gathered steam during a key festival week,
shrugging off a recent downtrend going into the traditional busy wedding
season, while other major Asian hubs saw limited activity.

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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