Bulls n Bears Daily Market Commentary : 26 November 2018

Mon Nov 26 21:09:17 CAT 2018

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Bulls n Bears Daily Market Commentary : 26 November 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $5,707,290,.89 with foreign buys at $283,891.51 and foreign
sales were $109,679.10. Total trades were 141.

The All Share index added 0.74 points  to close at 158.81 points. INNSCOR
was $0.1358 higher at $1.9500, OLD MUTUAL  added $0.0208 to settle at
$7.8708 and PADENGA  gained $0.0194 to $0.9400. AXIA   also went up by
$0.0051 to trade at $0.4423 and ZIMRE PROPERTY INVESTMENTS  traded $0.0042
stronger at $0.0252.

Trading in the negative was AMALGAMATED REGIONAL TRADING   which lost
$0.0145 to $0.0855, AFRICAN SUN   dropped $0.0141 to close at $0.1019 and
ECONET   traded $0.0056 lower at $1.7534. GENERAL BELTINGS HOLDINGS  also
eased $0.0020 to $0.0160 and BINDURA   was $0.0008 down at $0.0700.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.Africa's rand firms in line with emerging markets, stocks rise

(Reuters) - South Africa’s rand firmed slightly against a softer dollar on
Monday, in line with emerging markets, as focus remained on clues on the
U.S. Federal Reserve’s 2019 hiking cycle and the high-stakes meeting between
the leaders of China and the U.S.

Stocks were firmer along with other emerging markets on the back of improved
sentiment.

At 1500 GMT, the rand traded at 13.8500 per dollar, 0.05 percent firmer,
having closed on Friday at 13.8575.

The rand remains under pressure ahead of the speech by the U.S. Federal
Reserve Chairman Jerome Powell and policy-meeting minutes that may give
clues on the 2019 rates, as a hike is expected in December.

At a G20 meeting in Buenos Aires on Nov. 30, U.S. President Donald Trump and
Chinese President Xi Jinping are expected to discuss contentious trade
matters which would have an impact on currencies, ahead of the next
scheduled escalation in tariff hikes.

The rand hit a three-month high after S&P Global Ratings kept its foreign
and local currency ratings unchanged late on Friday, with a “stable”
outlook.

Bonds were weaker, with the yield on the benchmark 2026 government bond up
2.5 basis points to 8.960 percent.

In equities, the blue chip Top 40 index gained 2.27 percent to 45,545 points
while the All Share index rose 1.96 percent to 51,690 points.

Banks were 3.48 percent firmer.

Trump and Xi are expected to meet on the sidelines of a G20 summit in
Argentina at the end of this week.

Retailer Pepkor Holdings Ltd, formerly Steinhoff Africa Retail, has been
fined five million rand by the Johannesburg Stock Exchange (JSE) for
breaching listing requirements including loans to directors or key
management personnel in its pre-listing statement and 2017 financial
results.

“This is actually quite serious and I have never seen this happen before.
The fine is nothing but what the JSE is saying is that they lied in their
prospectus and did not disclose material information. They might be lining
themselves up for future legal action from irate shareholders,” McCurrie
said.

Pepkor closed 7.55 percent higher at 19.79 rand.

Ghana

Ghana central bank keeps policy rate at 17 percent

(Reuters) - Ghana’s central bank kept its benchmark interest rate unchanged
at 17 percent on Monday to cushion the West African economy against possible
global pressures on emerging economies, governor Ernest Addison said.

The decision, the third hold this year, also helps to stabilise the local
currency which has come under marginal pressure in recent weeks, Addison
told reporters in Accra.

Ghana, which exports cocoa, gold and oil, is in its final year of a $918
million aid programme with the International Monetary Fund to narrow fiscal
deficit, reduce debt and cut inflation to 8 percent, plus or minus 2
percentage points by the end of year.

The local currency depreciated 7.8 percent since January, above the bank’s
end-year projection of less than 5 percent while public debt rose to $35.8
billion or 57.2 percent of gross domestic product at the end of September
from $31.6 billion or 54.3 percent.

Addison said majority of commercial banks operating in the country were
close to meeting the central bank’s new minimum capital requirement of 400
million cedis before the start of 2019

       <mailto:info at bulls.co.zw> 

Europe

Failed tech reboot hits stocks, pound cheers Brexit progress

(Reuters) - Europe’s share markets fell back into the red on Thursday, as
investor worries about slowing global growth in the face of rising U.S.
interest rates and trade tensions outweighed crucial Brexit progress.

Chinese markets had extended their slump in Asia amid the trade war with the
United States, and with Wall Street closed later for Thanksgiving and
trading therefore lighter than normal, Europe followed suit.

The region also had plenty to keep it busy.

A disappointing batch of company earnings added to the stocks gloom but
Italian bonds rallied for a second day as sparring continued over its budget
and sterling jumped as London and Brussels agreed wording on a Brexit
transition deal.

The dollar also edged lower for a second day as traders sold the greenback
going into Thanksgiving and after Wall Street had seen Apple shares, which
have slumped $280 billion in recent weeks, fail with an attempted rebound.

Europe’s tech sector duly lost another 0.75 percent, but it wasn’t the worst
performer. Banks fell as much as 1.6 percent and mining companies and other
resources firms dropped nearly 2 percent before clawing some ground back.

The falls also reflected the bitter Sino-U.S. trade war, encouraging
investors to take money off the table before U.S. President Donald Trump and
his Chinese counterpart, Xi Jinping, meet in Argentina next week.

The focus is on whether they can make any progress on their trade feud.

Countries belonging to the G20 group of the world’s biggest economies
applied 40 new trade restrictive measures between mid-May and mid-October,
covering around $481 billion of trade, the World Trade Organization said on
Thursday.

Three-quarters of the restrictions were tariff hikes, many of them
retaliation to steel and aluminium tariffs imposed by U.S. President Donald
Trump in March.

But the WTO did not count measures announced since or not yet implemented,
and one G20 country had asked for its actions to be omitted from the
monitoring report, the WTO said.

RUSH FOR THE BREXIT

With no U.S. trading to look forward to later, traders contented themselves
by watching Europe’s Brexit drama unfold.

Sterling jumped back up to $1.29 and 88.50 pence per euro after London and
Brussels agreed on a text setting out their post-split ties that EU leaders
are expected to endorse at a summit on Sunday.

Just over four months before Britain’s departure from the EU, Brexit
negotiations and political uncertainty in Britain remain the key drivers for
the pound, and many analysts are cautious about its prospects.

Simon Fraser, the former permanent secretary at the UK foreign office, said
he expected British politicians to vote on May’s deal on Dec. 10.

OIL TOILS

The Brexit text had also seen the euro rise against the dollar which meant
the single currency barely budged when ECB meeting minutes showed its
policymakers were keen to affirm their plans to cut stimulus at the end of
the year.

South Africa’s central bank triggered far more action though, as a tight
decision to hike interest rate in what had already been a hard to call
meeting sent its currency, the rand, up more than 1 percent.

Back in emerging economy share markets, MSCI’s broadest index of
Asia-Pacific shares outside Japan had ended little changed after recovering
from an initial wobble.

The index has managed to hold up so far in November after three straight
monthly declines, but is on track for its worst annual performance since
2011.

Japan’s Nikkei had finished almost 0.7 percent higher but the ongoing trade
and tech jitters saw Chinese shares close 0.4 percent in the red.

In commodities, China-sensitive metals like copper fell and oil prices
reversed, although they were still above one-year lows touched earlier this
week.

U.S. crude futures were last down 42 cents at $54.21 a barrel after hitting
a one-year low of $52.77 on Tuesday. Brent eased 45 cents to $63.03, off
Tuesday’s low of $61.71.

Gold rose, with spot prices at $1,227.60 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Zinc falls as weaker Chinese demand outweighs supply fears

(Reuters) - Zinc prices fell for a second session on Monday as expectations
of weaker demand from Chinese steel mills overpowered signs that the market
is short of metal.

Most other industrial metals also fell on caution over the outcome of trade
talks between U.S. President Donald Trump and Chinese President Xi Jinping
later this week that could influence demand for commodities.

Benchmark three-month zinc on the London Metal Exchange (LME)         traded
down 1.4 percent at $2,484 a tonne in official rings after falling 2.4
percent on Friday. 

The metal used to galvanise steel was under pressure after demand concerns
drove Chinese steel prices down more than 5 percent to a five-month low.

Zinc fell 2.5 percent on the Shanghai Futures Exchange (ShFE)         , its
biggest one-day drop since August. China is the biggest consumer of zinc and
other industrial metals.

But prices are supported by stockpiles at 10-year lows and shortages of
immediately available metal, said ING analystWarren Patterson.

ZINC SPREAD: The premium of cash zinc to the three-month contract, at $91.50
MZN0-3, remains close to last week's two-decade high of $97. A premium
suggests a shortage of nearbysupply. 

STOCKS: Stocks of zinc in LME-registered warehouses have halved to 121,550
tonnes since August, a ten-year low, while inventories in ShFE warehouses at
around 35,000 tonnes are down from almost 160,000 tonnes in March.
MZNSTX-TOTAL ZN-STX-SGH

TECHNICALS: Zinc has fallen below its 50- and 100-day moving averages,
worsening its technical picture.  

SPECULATORS: Speculative investors are neutral on zinc, with  brokers Marex
Spectron estimating their net short position at1.4 percent of active
contracts.

DEFICIT: The roughly 13.5 million-tonne-a-year zinc market had a 305,000
tonne deficit over January-August, according to the International Lead and
Zinc Study Group.

SUPPLY: Zinc prices have fallen 30 percent from a February high as investors
anticipated a surge in refined zinc outputafter a clutch of new mine
openings. 

But delays in that new supply due to bottlenecks at smelters across Asia
have put a floor under prices, helping them recoverfrom an August low of
$2,283 a tonne.             

CHINA GROWTH: Economic growth in China is expected to hit  6.6 percent this
year and slow to 6.3 percent in 2019,economists from Beijing's Renmin
University said.             

PRICES: LME aluminium         traded down 1 percent at $1,930 a tonne,
nickel         traded 0.5 percent lower at $10,860, lead         lost 1.3
percent to $1,942 and tin slipped 0.3 percent to $18,750. 

Copper         bucked the trend, trading up 0.2 percent at $6,219 a tonne. 

World stocks, euro rise on politics and retail signals

(Reuters) - U.S. stocks rose on Monday, fueled by gains in retailer shares
during a prime holiday shopping period, while European stocks rallied after
signs that Italy was preparing to rework the spending plans that have fueled
tensions with the European Union.

Oil bounced back after its own “black” Friday, adding to a risk-on
sentiment, and the pound rose after Britain’s Brexit agreement won approval
from European leaders.

Italy’s governing coalition may reduce next year’s budget deficit target to
as low as 2 percent of gross domestic product to avoid disciplinary action
from the European Commission, Reuters reported.

Currently, Italy’s deficit target is 2.4 percent, far higher than the 0.8
percent set by the previous government. The country’s budget has put it in
dispute with the Commission and alarmed the euro zone.

The prospect of a lower deficit sent Italy’s banks index up nearly 5 percent
on Monday, toward its strongest day since June. An equally strong rally in
bond markets sent Italian borrowing costs to their lowest since September.

The euro was down 0.03 percent to $1.1337, while sterling was last trading
at $1.2814, up 0.02 percent on the day.

The dollar index rose 0.03 percent.

Analysts remain cautious that the Brexit deal faces stiff opposition within
the British Parliament, which is expected to vote on the agreement in around
two weeks.

BLACK FRIDAY

Wall Street rose as retailers anticipated $7.8 billion in sales on the
largest online shopping day of the year, with shoppers who missed out on
Black Friday deals expected to flock to the internet for Cyber Monday.

Technology stocks were also higher after taking a beating last week.

The Dow Jones Industrial Average rose 262.62 points, or 1.08 percent, to
24,548.57, the S&P 500 gained 31.12 points, or 1.18 percent, to 2,663.68 and
the Nasdaq Composite added 104.17 points, or 1.5 percent, to 7,043.16.

The pan-European STOXX 600 index rose 1.27 percent and MSCI’s gauge of
stocks across the globe shed 0.48 percent.

On Friday, the S&P 500 recorded its lowest close in six months, down more
than 10 percent from September’s peaks, pushing it back into “correction”
territory.

Oil rose above $60 a barrel on Monday, recovering some of the previous
session’s near-7 percent fall, although uncertainty over global economic
growth limited the gains.

U.S. crude rose 2.8 percent to $51.83 per barrel and Brent was last at
$60.77, up 3.35 percent on the day. 

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Simbisa Brands

AGM

Standards Association of Zimbabwe, Northend Close, Borrowdale

23/11/2018 (8:15am)

Axia

AGM

Chapman Golf Club, Eastlea

27/11/2018 (8:15am )

Econet

AGM

Econet Park, Msasa

29/11/2018  (9am )

Econet

EGM

Econet Park, Msasa

29/11/2018  (10am )

GetBucks

AGM

Conference Room 1, Monomotapa Hotel

04/12/2018 (10am )

Innscor

AGM

Royal Harare Golf Club

05/12/2018 (8:15am)

Truworths

AGM

Boardroom, Prospect Park, 808 Seke Road

06/12/2018 (9am)

TSL

EGM

Head Office, 28 Simon Mazorodze Road, Southerton

07/11/2018 (10am )

Cassava shares list on the ZSE

11/12/2018

 <mailto:info at bulls.co.zw> 

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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