Bulls n Bears Daily Market Commentary : 28 November 2018

Thu Nov 29 08:42:19 CAT 2018

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Bulls n Bears Daily Market Commentary : 28 November 2018

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Zimbabwe Stock Exchange Update

Market Turnover $7,149,073.79 with foreign buys at $2,578,573.45 and foreign
sales were $944,705. Total trades were 192.

The All Share index recovered 0.11 points   to close at 158.55 points.
BRITISH AMERICAN TOBACCO   added $1.7844 to close at $34.7844, OLD MUTUAL
LIMITED   increased further by $0.0986 to close at $8.0534 and TSL   was
$0.0782 firmer at $0.6000. SIMBISA   also added $0.0124 to $0.7324 and DELTA
traded $0.0064 higher at $3.2768.

Gains were partially offset by losses in MEIKLES   which lost $0.0900 to
$0.5100, ECONET   decreased by $0.0326 to end at $1.6867 and FIRST CAPITAL
BANK   was $0.0038 lower at $0.0660. AFRICAN SUN   also dropped $0.0019 to
settle at $0.1000 as OK ZIMBABWE  traded $0.0004 weaker at $0.2955.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Zimbabwe

Zimbabwe drivers queue for hours as fuel pumps dry up again

(Reuters) - Motorists in Zimbabwe have been queuing for hours as fuel pumps
run dry, with many filling stations in the capital Harare empty on Wednesday
as the country suffers its second fuel crisis in just over a month amid a
severe dollar shortage.

Since the July 30 election which many had hoped would lay the foundations
for an economic recovery, Zimbabweans have seen inflation race into double
digits due to shortages of basic goods, all blamed on an underlying lack of
dollars to pay for those goods.

Zimbabwe dumped its currency in 2009 after it was rendered worthless by
hyperinflation and it instead adopted the U.S. dollar.

Finance Minister Mthuli Ncube said the latest fuel shortages were caused by
the government’s decision last week to allow gold and platinum mining
companies to retain more of their dollar earnings, which meant less hard
cash for fuel imports.

The land-locked southern African country now spends $120 million on fuel
imports a month, up from $80 million earlier this year as demand has
increased, government officials say.

Ncube, however, said he was sure supplies would improve in the next few days
because the government had arranged credit lines to fund fuel purchases.

But when the central bank governor gave similar assurances in October, it
took another two weeks for the fuel situation to normalise.

Ncube also said dollar shortages in Zimbabwe were traditionally acute in the
last quarter of the year after tobacco auctions close. Tobacco is the
second-largest export earner after gold.

South Africa

South Africa's rand weakens on risk aversion; stocks rise

(Reuters) - South Africa’s rand weakened against the dollar on Wednesday
amid dwindling demand for riskier assets and fears U.S.-China trade tension
would not be resolved at an upcoming G20 summit.

At 1500 GMT the rand traded at 13.9675 per dollar, 0.4 percent weaker than
its New York close of 13.9125. The intraday high was 13.9900.

Bonds also weakened, with the yield on the benchmark bond due in 2026 rising
5 basis points to 9.040 percent.

In equities, the All Share index rose 1.47 percent to 52,111 points while
the Top 40 index climbed 1.74 percent at 46,023 points. Banks gained 1.58
percent.

U.S. President Donald Trump is prepared to raise tariffs on Chinese imports
if there is no breakthrough on longstanding trade issues when he meets with
Chinese leader Xi Jinping on Saturday, White House economic adviser Larry
Kudlow said on Tuesday.

Global markets had climbed on reports on Tuesday when Kudlow said Trump
would meet with Xi at the upcoming G20 gathering in Argentina, renewing
hopes of a trade deal.

Bourse heavyweight Naspers closed 4.66 percent higher at 2,917 rand after
shares in technology giant Ten cent Holdings, in which it has a 31 percent
stake, jumped to an eight-week high on plans to roll out mobile payment
services in Japan. 

       <mailto:info at bulls.co.zw> 

America

World stocks climb to one-week high on hopes of trade reconciliation

(Reuters) - Hopes for a thaw in U.S.-China trade ties at the upcoming G20
summit helped world shares inch to a one-week high on Wednesday, though
fears of a no-deal outcome weighed on European bourses and kept the dollar
firm for the fourth day in a row.

While President Donald Trump talked tough on the trade tariffs issue ahead
of a meeting with Chinese President Xi Jinping on Saturday, markets focused
on comments by White House economic adviser Larry Kudlow, who held open the
possibility that the two countries would reach a trade deal.

A rapprochement is seen as crucial, given that world growth and trade are
already showing signs of an alarming slowdown.

Kudlow’s comments allowed Chinese and Japanese shares to rally 1 percent
while MSCI’s all-country equity index was up 0.15 percent and the
pan-European benchmark rose 0.2 percent.

Futures indicated a firm opening on Wall Street, with the S&P500, Nasdaq and
Dow Jones tipped to rise between 0.3-0.5 percent .

There was some caution, however, especially in Europe, which was hit on
Tuesday by a report that Trump may soon decide about new taxes on imported
cars. Europe’s auto sector shares were 0.3 percent in the red.

The uncertainty over global trade as well as Brexit and Italy’s conflict
with the European Union, are supporting the U.S. dollar, which is at a
two-week high against a basket of currencies.

While the main driver for the greenback is the U.S. interest rate path,
Rodrigo Catril, senior strategist at National Australia Bank, said it was
also benefiting from the uncertain mood.

With the currency index approaching 1-1/2-year highs reached earlier this
month, traders are focusing on a speech at 1700 GMT by Federal Reserve Chair
Jerome Powell to see if he offers clues on how many more times the Fed could
raise interest rates.

While Fed Vice Chair Richard Clarida took a less dovish stance on Tuesday
than some had expected and backed more rate rises, Powell and his colleagues
have in recent weeks alluded to global volatility, leading many to speculate
the bank’s three-year-long rate rise campaign could pause in 2019. .

However most reckon the Fed is on track to tighten policy in December and
early-2019 at least.

Sterling climbed off two-week lows to rise 0.4 percent by 1215 GMT, having
touched a session-high of $1.2806 after the opposition’s main finance
spokesman John McDonnell said he could accept a second Brexit referendum.

Against the euro it rose half a percent to touch a high of 88.105 pence

McDonnell’s comments raise hopes that the Labour Party will more firmly back
putting the Brexit issue to a second vote, should Prime Minister Theresa May
fail to convince sceptical lawmakers of the benefits of her Brexit deal
ahead of a December 11 parliamentary vote.

Investors are monitoring developments in Italy’s row with the EU over its
budget spending, with Germany’s Handelsblatt and Italy’s La Stampa quoting
EU commissioner Valdis Dombrovskis as saying the draft budget needed
“substantial correction”.

Italian bond yields flatlined after sharp rallies that were triggered by
what appeared to be a more conciliatory stance from the government over the
issue.

On other markets, cryptocurrency bitcoin jumped 6 percent to above $4,000,
extending its rebound from a low of $3,475 touched on Sunday.

Brent oil futures slipped back to around $60 a barrel, reversing earlier
gains as Saudi Arabia dampened expectations of production cuts by the OPEC
producer club and inventories of crude remain high.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips to 2-week low as dollar gains ahead of Powell speech

(Reuters) - Gold fell to a two-week low on Wednesday as the dollar gained on
interest from investors seeking refuge from trade tensions while they
awaited clues on further U.S. rate hikes from Federal Reserve Chairman
Jerome Powell.

Spot gold inched 0.2 percent lower to $1,211.36 per ounce at 09:56 a.m. EST
(1456 GMT). It fell to its lowest level since Nov. 15 at $1,210.65 earlier
in the session.

U.S. gold futures also shed 0.2 percent to $1,211.30.

Gold’s momentum at the moment is being dictated more by the dollar and
developments surrounding interest rates rather than the G20 meeting later
this week, Melek said.

Powell is due to speak before the Economic Club of New York Signature
Luncheon later on Wednesday.

Investors will also keep a close watch for the minutes from the central
bank’s Nov. 7-8 meeting, scheduled to be released on Thursday, for
indications on the rate hike trajectory in 2019.

The Fed has raised rates three times this year and a fourth increase is
expected in December, making non-yielding bullion less attractive.

Meanwhile, the greenback held near a two-week high against a basket of major
currencies, denting gold’s appeal, as investors flocked to the U.S. currency
on concerns over the outcome of the G20 summit in Argentina this week.

U.S. President Donald Trump is likely to meet his Chinese counterpart on the
sidelines of the summit to discuss the trade dispute between the major
economies.

Bullion has largely lost out to the dollar as a safe haven asset this year
as the U.S.-China trade war unfolded against a backdrop of rising U.S.
interest rates.

On the technical front, the yellow metal hovered just above the 100-day
moving average of around $1,210.

Among other precious metals, silver slid 0.4 percent to $14.09 per ounce,
while platinum fell 1.2 percent to $820.30, having earlier touched its
lowest in more than a month, at $814.50.

Palladium rose more than 2 percent to $1,174.00 per ounce, having earlier
jumped to its highest in one week, at $1,182, just shy of an all-time high
of $1,185.40 hit earlier this month.

Zinc prices steady after plunge to 10-week low

(Reuters) - Zinc prices steadied on Wednesday as falling stockpiles and
rising premiums for nearby metal highlighted a short-term supply squeeze,
halting a slide to 10-week lows.

Zinc, used to galvanise steel, had tumbled more than 7 percent from last
Thursday’s close as traders anticipated an increase in supply and weakening
demand from steelmakers.

The benchmark contract on the London Metal Exchange (LME) fell to $2,393.50
a tonne on Wednesday, the lowest since Sept. 19, before recovering to $2,441
at 1500 GMT for a 0.2 percent gain.

Prices could fall to the low $2,000s and remain there until supply tightens
again in the early 2020s, he added.

SPREAD: The cash zinc premium over three-month metal, at $89.50, was heading
back towards 10-year highs after easing earlier in the week, suggesting a
shortage of immediately available metal. MZN0-3

STOCKS: Zinc inventories in LME-registered warehouses fell by 1,025 tonnes
to a 10-year low of 120,250 tonnes. MZNSTX-TOTAL

WARRANTS: Exacerbating the squeeze, one entity was holding 50-79 percent of
zinc warrants. One entity was also holding 50-79 percent of lead warrants.
<0#LME-WHL>

ZINC POSITIONING: Speculative investors are beginning to ramp up bets on
lower prices, with their net short expanding to 3 percent of open contracts,
brokers Marex Spectron said.

TRADE DISPUTE: U.S. President Donald Trump and Chinese leader Xi Jinping are
due to meet at this weekend’s G20 summit.

Trump’s economic adviser said the U.S. President was open to reaching a deal
on trade but is ready to increase tariffs if there is no breakthrough.

China’s ambassador to Washington said Beijing hoped for a deal and warned of
dire consequences if U.S. hardliners tried to separate the world’s two
largest economies.

Fears that tariffs will damage the economy in China, the world’s biggest
metals consumer, have helped push industrial metals prices sharply lower.

CHINA FACTORIES: Chinese factories are expected to have increased output for
a second month running in November, a Reuters poll showed.

CHILE STRIKE: The union at BHP’s Spence mine in Chile, which produced
198,600 tonnes of copper last year, said workers had started a strike after
layoffs.

OTHER METALS: LME copper was up 1 percent at $6,185 a tonne, aluminium was
down 0.2 percent at $1,926, nickel gained 0.4 percent to $10,820, lead rose
1.4 percent to $1,936.50 and tin was up 0.1 percent at $18,285.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

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
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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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