Bulls n Bears Daily Market Commentary : 03 October 2018

Thu Oct 4 08:25:30 CAT 2018

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Bulls n Bears Daily Market Commentary : 03 October 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,614,501.49 with foreign buys at $48,220.28 and foreign
sales were $808,064.10. Total trades were 105.

The All Share index added another 2.40 points  to close at 124.47 points as
heavy weight counters continue to gain ground. OLD MUTUAL  led the movers
with a $0.1859 gain to close at $5.6531, ECONET  was up by  $0.0976 to
$1.6505 and INNSCOR  increased by $0.0231 to end at $1.4001. PROPLASTICS
also added $0.0201 to settle at $0.1205 and DELTA also traded $0.0145 higher
at $2.2650.

ZIMRE HOLDINGS  was the only counter trading in the negative as it lost
$0.0022 to end the day at $0.0216.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand flat as dollar gains, stocks fall

(Reuters) - South Africa’s rand was flat in afternoon trade on Wednesday,
giving up earlier gains as a solid U.S. dollar kept pressure on emerging
markets, while the bourse was led lower for a second session by banks and
gold stocks.

At 1508 GMT, the rand traded at 14.3600 per dollar, largely unchanged from
its close of 14.3650 on Tuesday.

The dollar gained on Wednesday as data supported the view that the U.S.
economy is in strong shape.

Earlier in the day, the rand had gained more than 0.5 percent on improved
risk appetite after Italy indicated it was open to cutting its budget
deficit and debt, soothing investors’ nerves and prompting a wider move back
into riskier assets.

Cilliers said the big risks for the rand in the short term were Moody’s
ratings review due next week and Finance Minister Nhlanhla Nene’s medium
term budget policy statement, where he is expected to unveil more details on
the government plans to reprioritise expenditure and spur growth.

Having stagnated for a decade, Africa’s most industrialised economy slipped
further in the second quarter, entering recession for the first time since
2009, led by declines in the agricultural, transport and retail sectors.

In fixed income, the yield on the benchmark government bond due in 2026 fell
0.5 basis points to 9.09 percent.

On the bourse, the all share index was 0.54 percent lower at 55,172 points
and the top 40 index was 0.55 percent lower at 48,992 points.

Banks and gold stocks were among the biggest fallers, down 2.62 percent and
0.98 percent respectively.

Gold prices retreated from recent highs after Italy indicated it was open to
cutting its budget deficit and debt, soothing investors’ nerves and
prompting a wider move back into riskier assets.

Retailers also fell 0.50 percent.

Uganda

Ugandan shilling posts sharp gains after rate cut

(Reuters) - The Ugandan shilling posted sharp gains on Wednesday after the
central bank made a surprise hike of its key policy rate by 100 basis points
to 10 percent, traders said.

       <mailto:info at bulls.co.zw> 

America

Dollar elated by yield surge, Asia stocks downcast

(Reuters) - The dollar scored an 11-month top on the yen on Thursday as
stunningly strong U.S. economic data drove Treasury yields to their highest
since May 2011, while Asian stocks were sideswiped by rising borrowing costs
at home.

Higher U.S. yields are anything but favourable for emerging markets as they
tend to draw away much-needed foreign funds while pressuring local
currencies.

Bond prices fell across Asia and long-term Japanese yields reached ground
not visited since early 2016, a market tightening not warranted by domestic
economic conditions.

MSCI’s broadest index of Asia-Pacific shares outside Japan skidded 1.7
percent in response, with South Korea, the Philippines, Indonesia and Taiwan
all down.

Even the Nikkei eased 0.3 percent, as rising yields offset the boost to
exporters from a weaker yen. EMini futures for the S&P 500 also lost 0.4
percent in Asian trade, while European bourses were seen starting mixed.

The dollar had taken off after an influential survey of the U.S. services
sector showed activity at its strongest since August 1997, sparking
speculation the payrolls report on Friday could also surprise.

Federal Reserve Chairman Jerome Powell declared the economic outlook was
“remarkably positive” and said rates might rise above “neutral”, currently
anywhere from 2.5 to 3 percent.

DOLLAR TRACKS YIELDS

A Fed hike in December is now put at an 8 in 10 chance, while investors
lifted expectations for how high rates may eventually go.

Fed fund futures for December 2019 sank to a contract low of 97.095,
implying a rate of 2.905 percent. At the start of this year they had looked
for only 2.1 percent.

Yields on 10-year Treasury debt were up at 3.225 percent, having spiked 12
basis points overnight. That was the steepest daily increase since the shock
outcome of the U.S. presidential election in November 2016.

The jump in yields boosted financial shares on Wednesday, putting the S&P
500 within striking distance of a record. The Dow rose 0.2 percent, while
the S&P 500 gained 0.07 percent and the Nasdaq 0.32 percent.

The groundswell of economic optimism swept the U.S. dollar to a six-week
high on a basket of currencies and it was last trading up 0.34 percent at
96.086.

The gains were broad based with the euro falling back to $1.1471 after being
as high as $1.1593 on Wednesday.

The dollar shot to its highest so far this year on the yen at 114.55 before
steadying at 114.40. It was now threatening a major peak from November 2017
at 114.735.

In Asia, the Indian rupee and Indonesian rupiah have been under heavy fire,
in part because both countries are being squeezed by the soaring cost of
imported oil.

Oil prices have reached four-year peaks as the market focused on upcoming
U.S. sanctions on Iran while shrugging off the year’s largest weekly build
in U.S. crude stockpiles.

Brent eased 17 cents to $86.12 a barrel on Thursday, while U.S. crude fell
15 cents to $76.26.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Aluminium extends rally to 3-1/2 mth peak on alumina shortage fears

(Reuters) - Aluminium prices rose to a more than three-month high on
Thursday, stretching a rally to a fifth session, amid worries the closure of
the world’s largest alumina refinery in Brazil will lead to a shortage of
the raw material.

Norsk Hydro said on Wednesday that it would halt production indefinitely and
lay off 4,700 people at Brazil’s Alunorte refinery, which has been operating
at half capacity since March due to an environmental dispute.

Three-month aluminium on the London Metal Exchange was up 1 percent at
$2,228 a tonne by 0215 GMT, after earlier hitting $2,246, the highest since
June 15. The metal surged 4.2 percent overnight, its largest single-day gain
since April.

Argonaut Securities analyst Helen Lau said the shutdown of the Alunorte
plant “will worsen the global supply tightness as production resumption by
refineries elsewhere will take time to fill the void.”

The global price of alumina has increased nearly 13 percent this year to
$460 a tonne. LME aluminium is down 1.8 percent year to date.

* ALUNORTE: Norsk Hydro’s decision also triggered a shutdown of its
Paragominas bauxite mine, which supplies Alunorte, and will lead to the
imminent closure of the nearby Albras aluminium smelter.

* OTHER METALS: Copper climbed 0.6 percent to $6,304.50 a tonne and zinc
added 0.6 percent to $2,666.50. China’s markets remain shut for the
week-long National Day holiday.

* CHINA COPPER DEMAND: China’s overseas expansion will spread over land that
is home to more than half the world’s population, potentially boosting
copper use by 1.6 million tonnes, or roughly 7 percent of annual demand,
said major miner BHP .

* NICKEL DEMAND: Global demand for nickel is expected to increase to 2.42
million tonnes in 2019 versus a projection of 2.35 million tonnes in 2018,
the International Nickel Study Group said.

* DOLLAR: The dollar reached an 11-month high against the yen and stood tall
against other peers, boosted by upbeat U.S. economic data and hawkish
comments from Federal Reserve Chairman Jerome Powell.

Gold hovers in narrow range as dollar rises on upbeat U.S. data

(Reuters) - Gold prices moved in a narrow range on Thursday after losses in
the previous session, with robust U.S. economic data and hawkish comments
from Federal Reserve policymakers boosting the dollar.

FUNDAMENTALS

* Spot gold was up 0.1 percent at $1,198.16 an ounce at 0103 GMT, after
falling about 0.5 percent in the previous session.

* U.S. gold futures were down 0.1 percent at $1,202.1 an ounce.

* The dollar index against a basket of six major currencies was up 0.3
percent, after climbing to a six-week peak of 96.116 overnight.

* U.S. services sector activity raced to a 21-year high in September and
companies boosted hiring, signs of enduring strength in the economy at the
end of the third quarter. The upbeat reports on Wednesday likely keep the
Federal Reserve on track to raise interest rates again in December.

* The Fed may raise interest rates above an estimated “neutral” setting as
the “remarkably positive” U.S. economy continues to grow, Fed Chairman
Jerome Powell said on Wednesday.

* Fed policymakers continue to signal that gradual U.S. interest rate hikes
will be enough to tame inflation despite a fast-growing economy, even as a
jump in longer-term borrowing costs suggests investors may be increasingly
nervous about that rosy scenario.

* The Trump administration on Wednesday pulled out of two international
agreements after Iran and the Palestinians complained to the International
Court of Justice about U.S. policies, the latest withdrawal by Washington
from multilateral accords.

* Italy will cut its budget deficit targets from 2020 and reduce its debt
over the next three years, Prime Minister Giuseppe Conte said on Wednesday,
easing fears about fiscal policy in the euro zone’s third-biggest economy.

* The euro will withstand the latest political turmoil in Italy and any
short-term spill will be limited, but it may be another six months before
the dominant dollar trade is swept aside, according to a Reuters poll of
currency strategists.

* British Prime Minister Theresa May appealed to her Conservative Party on
Wednesday to unite behind her plan to leave the European Union, warning
critics their arguments could put Brexit in jeopardy.

* Holdings in SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.84 percent to 23,522,860.09 ounces on
Wednesday, the lowest since February 2016.

* India’s gold imports may rise in the fourth quarter as investors seek
alternatives to faltering equity markets and a plunging rupee at the same
time traditional buying will climb during the festival season, said multiple
sources involved in the market.

DATA/EVENT AHEAD (GMT) 0600 International Monetary Fund Managing Director
Christine

Lagarde holds news conference in Tokyo 1230 U.S. Weekly jobless claims 1400
U.S. Factory orders Aug 

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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