Bulls n Bears Daily Market Commentary : 14 November 2018

Thu Nov 15 07:02:22 CAT 2018

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Bulls n Bears Daily Market Commentary : 14 November 2018

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Zimbabwe Stock Exchange Update

Market Turnover $965,138.59 with foreign buys at $35,102.60 and foreign
sales were $6,045.80. Total trades were 103.

The All Share index increased by 1.65 points  to close at 167.68 points. OLD
MUTUAL LIMITED  was  $0.2531 up to $7.0360, ECONET  added $0.1980 to $2.5683
and AFRICAN DISTILLERS   traded $0.1000 stronger at $1.6000. BINDURA  also
moved up by $0.0070 to close at $0.0720 and  MASIMBA  increased by $0.0050
to settle at $0.1050

Gains were partially offset by losses in EDGARS  which lost $0.0255 to
$0.1020, AXIA   dropped $0.0474 to $0.3824 and BRITISH AMERICAN TOBACCO
decreased by $3.6870 to close at $33.0000. HIPPO VALLEY ESTATES  also lost
$0.0941 to $1.7061 and CBZ   traded $0.0060 lower at $0.1500.

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  Global Currencies & Equity Markets

Uganda

Uganda shilling firms as importer and interbank demand ebbs

(Reuters) - The Ugandan shilling firmed on Wednesday on the back of ebbing
appetite for hard currency from both merchandise importers and players in
the interbank market, traders said.

At 1019 GMT commercial banks quoted the local currency at 3,730/3,740,
firmer than Tuesday’s close of 3,735/3,745. 

South Africa

South African rand steady before retail sales data

(Reuters) - South Africa’s rand was little changed early on Wednesday as
investors awaited the release of retail sales figures.

At 0646 GMT, the rand traded at 14.43 versus the dollar, 0.2 percent
stronger than its close on Tuesday.

Analysts polled by Reuters expect September retail sales to have risen by
2.2 percent, after 2.5 percent growth in the previous month.

Consumer spending is one of the top growth drivers for South Africa. The
economy is gradually recovering after falling into recession in the first
half of the year.

Government bonds were also barely changed, with the yield on the benchmark
instrument due in 2026 down 2 basis points at 9.225 percent.

Stocks were set to open slightly lower at 0700 GMT, with the Johannesburg
Stock Exchange’s Top-40 futures index down 0.3 percent.  

       <mailto:info at bulls.co.zw> 

Europe

Euro under pressure as Italy sticks to deficit target in budget

(Reuters) - The euro struggled below $1.13 on Wednesday as Italy stuck to
its deficit target in a re-submitted draft budget and after confirmation
that the euro zone economy grew at its slowest pace in four years in the
third quarter.

Major currencies traded in tight ranges in London trading hours, with the
dollar below a 16-month high hit this week as investors took profits.

Sterling slipped as investors prepared for Prime Minister Theresa May's
showdown with her cabinet colleagues when she will try to sell her Brexit
agreement. Italy re-submitted its draft budget for next year to the European
Commission with the same growth and deficit assumptions as a draft rejected
last month for breaking European Union rules, but with falling debt, the new
draft showed. That rattled investors in volatile Italian government debt
markets and pressured the euro.

The single currency fell to $1.1265 , down 0.2 percent, after trading above
$1.13 late Tuesday. The euro hit a 16-month low of $1.1216 earlier this
week.

Thu Lan Nguyen, a strategist at Commerzbank, said she "did not anticipate an
escalation in the crisis in Italy", but "much will depend on how the
Europeans react. We are in a wait and see game."

Concerns that the row, along with slowing economic growth, would force the
European Central Bank to postpone monetary tightening next year might also
hurt the euro, she added.

Euro zone gross domestic product rose by 0.2 percent in the July-September
period, official data showed, confirming its earlier preliminary flash
estimate from Oct. 30. The numbers were in line with expectations.
Industrial production in September declined 0.3 percent month-on-month.

U.S. INFLATION

The dollar index ticked 0.1 percent up to 97.383. The index hit a 16-month
high of 97.693 on Monday.

Traders are now preparing for U.S. inflation data, due at 1330 GMT.
Economists polled by Reuters forecast consumer price inflation of 0.3
percent in October, up from 0.1 percent in September. Any strong reading
could fire up dollar bulls expecting more Federal Reserve interest rate
rises.

"With the outlook for core prices skewed to the upside as wages are set to
rise, today’s number will reinforce the Fed’s approach towards gradual and
ongoing tightening, keeping USD supported," ING analysts said in a note to
clients.

Sterling skidded 0.4 percent to $1.2922 and fell 0.2 percent versus the euro
to 87.18 pence.

News of the draft Brexit deal had supported the euro on Tuesday as agreement
could reduce political uncertainty in one of the bloc's principal trading
partners.

The Swedish crown lost as much as 0.7 percent versus the euro to 10.299
crowns after weaker-than-expected inflation. The dollar was little changed
versus the Japanese yen at 113.90. The yen touched a six-week low of 114.20
on Monday.

The Australian dollar weakened to $0.7199 against the U.S. dollar, down 0.2
percent.

The Canadian dollar was marginally lower at C$1.3240, trading near its
four-month low brought on by a plunge in the price of crude oil, a major
Canadian export.

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Commodities Markets

Oil finds floor, stocks ease, sterling braces for wild swings

(Reuters) - Oil prices bounced from multi-month lows on Wednesday but stocks
fell as disappointing data heightened worries over slowing global growth,
while the pound wavered as Prime Minister Theresa May faced the hard task of
selling her Brexit deal.

European shares hit a two-week low after data showed the German economy
contracted for the first time since 2015, tracking similar losses in Asia
where data in Japan and China underscored worries about weaker growth.

They later pared some losses after Reuters reported that OPEC and its
partners were discussing a proposal to cut output, helping oil prices
reverse opening losses and putting an end to their longest losing streak in
decades.

The MSCI’s world equity index remained on track for its fifth day of losses
in a row, but reduced its decline to 0.1 percent by 1243 GMT.

The pan-European STOXX benchmark index was down 0.2 percent, while U.S.
stock index futures pointed to a flat open.

Sterling fell from the 7-month high versus the euro EURGBP= D3 and eased
below $1.30 in volatile trading after being boosted from news that Britain
and the European Union agreed on the text of a Brexit divorce deal.

Before seeking UK parliamentary approval before exiting the bloc on March
29, 2019, May will try to persuade senior ministers to accept the deal that
opponents said would imperil her own government and threaten national unity.

The British cabinet is due to meet at 1400 GMT.

Although sterling softened from peaks hit in the previous session, investors
were anticipating wild swings ahead for the British currency.
Sterling/dollar implied overnight volatility jumped to 23 percent, its
highest since a general election in June 2017.

OIL BOUNCES AFTER LONG LOSING STREAK

Meanwhile, oil attempted to rebound after plunging around 7 percent the
previous session, with surging supply and the spectre of faltering demand
scaring off investors.

The growing prospect of OPEC and allied producers cutting output at a
meeting next month however propped up the market, helping U.S. West Texas
Intermediate (WTI) crude futures trade 0.3 percent at $55.9 a barrel and
reverse opening losses.

According to three sources familiar with the issue, OPEC and its partners
are discussing a proposal to cut oil output by up to 1.4 million barrels per
day for 2019, to avert an oversupply that would weaken prices.

In the previous session, U.S. crude futures suffered 12 straight sessions of
losses.

Brent crude oil futures also bounced, up 0.9 percent, at $66.05 per barrel.
In the previous session they hit an eight month low following a 25 percent
slide from the four-year high reached early in October.

Energy stocks in Europe also recovered ground but remained in negative
territory, down 0.4 percent.

The oil plunge underlined cracks in the global economy.

The German economy shrank 0.2 percent in the third quarter as global trade
disputes and problems in the auto industry threw the traditional export
growth engine into reverse. Earlier in the day, data from Japan confirmed
the world’s third-largest economy contracted in the third quarter.

ITALIAN BUDGET WOES

Still in currency markets, the euro struggled below $1.13 as Italy
re-submitted its draft budget for next year to the European Commission with
the same growth and deficit assumptions that had been rejected by Brussels.

Concerns over the Italian budget also spread to debt markets with yields on
Italian government bonds hitting three-week highs, widening the gap over
top-rated German peers, while shares in Italian banks fell 1.3 percent.

In commodities, base metals eased slightly as weak retail sales data from
top consumer China took the shine off upbeat industrial output and
investment figures in the country.

Gold eases as dollar holds near multi-month high

(Reuters) - Gold fell on Wednesday as the dollar held near a multi-month
high, buoyed by interest from investors seeking cover from sliding stocks
and by prospects for higher U.S. interest rates.

Spot gold was down 0.2 percent at $1,200.18 per ounce at 1121 GMT. Prices
had slipped to their lowest since Oct. 11 at $1,195.90 in the previous
session.

U.S. gold futures fell 0.1 percent to $1,200.6 per ounce.

The dollar index, a gauge of its value versus major currencies, was firm
near a 16-month high, after retracing slightly earlier in the session as
investors took profits, prompted by gains in the euro and sterling on the
back of growing confidence about a draft Brexit deal.

The British cabinet will meet at 1400 GMT to consider the withdrawal
agreement.

Meanwhile, stocks fell on worries about a slowdown in global economic
growth.

Gold, considered a safe haven asset, has fallen about 12 percent since
hitting a peak in April as investors flocked to the dollar instead, with the
U.S.-China trade war unfolding against a background of higher U.S. interest
rates.

Market participants will also be keeping a close eye on Federal Reserve
Chairman Jerome Powell’s appearance in the Federal Reserve Bank of Dallas
Global Perspective Speaker Series at 2300 GMT for clues on the U.S. monetary
policy outlook.

The dollar has benefited over the last week from expectations of further
U.S. interest rate hikes.

Spot gold may bounce to $1,211 per ounce, as it has found a support around
$1,195, said Reuters technical analyst Wang Tao.

Meanwhile, holdings of the world’s largest gold-backed exchange-traded fund,
SPDR Gold Trust, fell 0.11 percent to 761.16 tonnes on Tuesday.

Among other precious metals, silver was down 0.2 percent to $13.95 per
ounce, having matched its lowest since Jan. 21, 2016, at $13.85.

Palladium fell 0.5 percent to $1,104.65 per ounce, while platinum was down
0.3 percent at $832.10 an ounce.

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
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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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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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