Bulls n Bears Daily Market Commentary : 12 November 2018

Mon Nov 12 17:29:07 CAT 2018

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Bulls n Bears Daily Market Commentary : 12 November 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,437,842.84 with foreign buys at $181,542.17 and foreign
sales were $232,845.54. Total trades were 130.

The All Share index opened the week on a higher note after adding 1.06
points to close at 161.02 points. DELTA  added $0.1394 to close at $3.1342,
ECONET  traded $0.0483 higher at $2.1794 and OLD MUTUAL  was up $0.0162 to
trade at $6.52000. Other gains were in ZIMPLOW  which moved up $0.0100 to
settle at $0.2900 and NMBZ HOLDINGS  gained $0.0056 to close at $0.2400.

On the downside BRITISH AMERICAN TOBACCO  lost $5.0000 to close at $33.0000,
SEEDCO INTERNATIONAL traded $0.0400 lower at $1.5100 and AFRICAN SUN eased
$0.0231 to settle at $0.1159. AXIA was $0.0094 lower at $0.43000 and SEEDCO
went down by $0.0060 to $2.0000.

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  Global Currencies & Equity Markets

Sudan

Cash runs out in Khartoum as Sudan tries to halt economic crisis

(Reuters) - Many cash machines in the Sudanese capital have run out of
banknotes as the government scrambles to prevent economic collapse with a
sharp devaluation and emergency austerity measures.

Rising demand for cash due to inflation, lack of trust in the banking system
and the central bank’s policy of restricting the money supply to protect the
Sudanese pound have all contributed to a liquidity crunch that has worsened
in the past 10 days pending new banknote deliveries.

The banknote shortage comes one month after authorities let the value of the
pound slide from 29 pounds to the dollar to 47.5 pounds and announced
measures to tighten spending.

Sudan has suffered from a lack of foreign currency since losing
three-quarters of its output of oil when the south of the country seceded in
2011. The lifting of two decades of U.S. sanctions in October 2017 did not
bring a hoped for reprieve.

Rampant inflation, strict withdrawal limits and a currency crisis had
already placed Sudan’s economy in deep trouble before the latest liquidity
crisis.

President Omar al-Bashir, who seized power in a coup in 1989 and whose
ruling party has said it would nominate him to run for reelection in 2020,
has taken a series of steps to address the economic crisis in recent weeks.

A new central bank governor changed the system for setting the exchange rate
and a new prime minister announced a 15-month economic reform plan.

PRICES UP

Though the streets have been quiet after rare nationwide protests triggered
by bread prices early this year, further price rises since last month’s
devaluation have triggered fresh grumbling.

Spot checks with traders and market vendors showed that over the past month
the cost of a kilo of flour has risen 20 percent, beef 30 percent and
potatoes 50 percent. Sudan’s inflation stood at more than 68 percent in
September, one of the world’s highest rates.

At the start of the month the government bolstered flour subsidies to try to
contain the impact on bread.

A week ago, the prime minister tweeted that he had met the central bank
governor to address the cash machine problem, and was reassured over the
supply of banknotes.

But an official at a commercial bank in Khartoum said the central bank was
not injecting enough fresh currency, triggering the liquidity crunch and
long queues at ATM machines.

Sudan imported one shipment of new banknotes last month, and three further
shipments are due to arrive soon, a finance ministry source said, without
giving further details.

Even after last month’s devaluation the pound is still under pressure and
the gap between the official and black market rates has widened. On the
black market, a dollar costs 52 pounds in sought-after cash and 58 pounds by
cheque.

The body of banks and exchanges that since last month has fixed the official
rate daily strengthened the pound to 46.95 pounds days after the devaluation
but soon returned it to 47.5.

Egypt

Egypt sells 695.10 million euros in one-year Euro-denominated T-bills -
c.bank

(Reuters) - Egypt’s central bank sold 695.10 million euros in one-year
euro-denominated treasury bills on Monday at an average yield of 1.75
percent, data from the bank showed.

The bank sold 617.80 million euros in a similar auction in August with an
average yield of 1.598 percent.

       <mailto:info at bulls.co.zw> 

America

"King dollar" reigns supreme in world of slowing growth, European risks

(Reuters) - The dollar surged to nearly 17-month highs on Monday against a
basket of major currencies as investors sought out the liquid and
high-yielding asset against a backdrop of global growth worries and rising
political risk in Italy and Britain.

World stocks fell 0.3 percent for a third straight day in the red, receiving
no respite from a rise in oil prices, while initial European equity gains
fizzled amid growing fears for Italian lender Carige whose shares were
suspended after reports of a capital hole.

While Shanghai was lifted one percent by regulators’ promise to simplify
share buybacks, Asian markets broadly weakened following Friday’s weak Wall
Street close. New York trade will likely be thinned by the Veterans Day
holiday and futures indicated the S&P500 and Dow Jones flat to lower but
Nasdaq futures are marginally.

Investors are fretting about signs of slowing growth worldwide but
especially in China where e-commerce giant Alibaba was the latest to raise
alarm bells, with the slowest ever annual sales growth during its Singles
Day shopping event.

Many also reckon that U.S. President Donald Trump could turn up the heat
over trade, further damaging China’s economy.

All that, coupled with European political risks, conspired to push the
dollar 0.5 percent higher against a basket of currencies by 1230 GMT.

Sterling lost more than one percent at one point, holding near a 10-day low
hit earlier, while the euro, comprising more than 50 percent of the dollar
index, fell 0.7 percent to its lowest since July 2017.

British Prime Minister Theresa May’s Brexit strategy came under attack from
all sides, increasing the risk that her plan for leaving the European Union
will be voted down by parliament, thrusting the United Kingdom towards a
potentially chaotic “no-deal” Brexit.

The opposition Labour Party said that if May’s Brexit deal was voted down in
parliament, it would push for a national election and possibly also another
referendum.

Latest futures data showed net short sterling positions registered their
biggest weekly rise in 1-1/2 months

Deutsche Bank analysts, however, predicted more pain, telling clients: “not
enough risk is priced into sterling given the parliamentary problems ahead”.

In the euro zone, Italy faces a Tuesday deadline to submit a revised budget
to the EU, but its refusal so far to cut the draft deficit sets the stage
for a collision with Brussels.

Markets were also spooked by reports that Banca Carige would need around 400
million euros ($451 million) to plug a hole in its capital base and Italy’s
deposit protection fund could fill only part of it.

That raises the spectre of a banking crisis in the euro zone’s third-biggest
economy, lifting Italy’s bond yield spread over Germany - the risk premium
attached to Italian assets - back above the psychologically key 300
basis-point mark . Italian bank shares fell 1.2 percent.

Bernd Berg, global macro strategist at Woodman Asset Management, predicted
the euro would tumble below $1.10 from the current $1.126 “as renewed
eurozone and Brexit angst and a diverging economic outlook with a strong
U.S. economy versus a weakening eurozone economy will trigger further euro
selling pressure.”

All of this has been good news for dollar bulls, who have benefited from
safe-haven flows. Speculators’ net long dollar positions rose last week to
the highest since January 2016, calculations by Reuters and Commodity
Futures Trading Commission, show.

The other big move was in commodities, where Saudi Arabia’s energy minister
jolted Brent crude futures around 2 percent higher with comments that Riyadh
could reduce supply to world markets by 500,000 barrels per day in December,
a global reduction of about 0.5 percent.

Brent is trading around $71.4 per dollar, off seven-month lows touched last
week.

But slowing world growth could make supply cuts a temporary solution to
falling oil prices. Two of the world’s biggest economies - Germany and Japan
- are expected to report a contraction in output in coming days.

 <mailto:info at bulls.co.zw> 

Commodities Markets

TSX declines as lower gold prices weigh

(Reuters) - Canada’s main stock index fell on Monday, weighed by losses in
shares of precious metal miners as gold prices hit its lowest in a month.

* Gold fell for a seventh straight session, as the dollar jumped to 16-month
highs on the back of political uncertainty in Europe and the U.S. Federal
Reserve’s hawkish stance on interest rates.

* The materials sector, which includes precious and base metals miners and
fertilizer companies, lost 0.9 percent.

* At 9:48 a.m. ET (14:48 GMT), the Toronto Stock Exchange’s S&P/TSX
composite index was down 37.22 points, or 0.24 percent, at 15,237.22.

* Four of Canada’s 11 major sectors were trading higher led by the energy
sector’s 0.3 percent rise.

* U.S. crude prices were up 0.8 percent a barrel, while Brent crude added
0.7 percent.

* The Canadian dollar edged higher against a broadly stronger U.S. dollar on
Monday, supported by a bounce in the price of oil, but remained close to the
multi-month low touched on Friday.

* Aurora Cannabis Inc, up 3.3 percent, was the second biggest percentage
gainer on the main index after reporting higher quarterly revenue and
profit.

* On the TSX, 102 issues were higher, while 133 issues declined for a
1.30-to-1 ratio to the downside, with 20.95 million shares traded.

* The largest percentage gainer on the TSX was Nuvista Energy, which jumped
4.9 percent, after reporting third-quarter results.

* Interfor Corpora fell 4.8 percent, the most on the TSX, after multiple
brokerages lowered their price target on stock.

* The second biggest decliner was Kinaxis Inc, down 4.7 percent.

* The most heavily traded shares by volume were Aurora Cannabis, Bombardier
Inc and Royal Nickel Corp .

* The TSX posted two new 52-week highs and nine new lows.

* Across all Canadian issues there were two new 52-week highs and 25 new
lows, with total volume of 34.64 million shares. 

Nickel slumps to 11-month low on stainless steel worries

(Reuters) - Nickel fell to an 11-month low on Monday on worries about
stainless steel, while other base metals were pressured by uncertainty about
the global economy.

Aluminium touched the weakest since August last year as speculators piled on
more bearish positions.

In addition to the macro-economic concerns, nickel was weighed down by the
stainless steel market, the main source of demand for the metal.

Increasing nickel pig iron production and rising Shanghai nickel inventory
also pointed to further nickel weakness in the short term, said analyst
Helen Lau of Argonaut Securities.

Three-month nickel on the London Metal Exchange shed 0.7 percent to $11,375
a tonne in official open outcry trading, its lowest since Dec. 15 last year.

* DOLLAR: The dollar climbed to a 16-month high, making dollar-denominated
metals more expensive for buyers paying in other currencies.

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

That weighed on zinc, mainly used in galvanised steel, with the LME price
1.8 percent weaker at $2,478.50 a tonne in official activity.

* ALUMINIUM INVENTORIES: LME on-warrant aluminium stocks MALSTX-TOTAL, those
not earmarked for delivery, rose 5,550 tonnes to 745,750, data showed on
Monday. They have climbed 22 percent over the past month.

LME aluminium, untraded in official rings, was bid down 0.7 percent to
$1,942 a tonne, the lowest since Aug. 7 last year.

* 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.

* COPPER: LME copper bucked the weaker trend, bid up 0.1 percent at $6,060 a
tonne.

* PRICES: Lead was bid down 2.4 percent at $1,930 a tonne in official rings,
while tin traded up 0.7 percent at $19,275.

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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