Bulls n Bears Daily Market Commentary : 09 October 2018

Wed Oct 10 07:05:53 CAT 2018

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Bulls n Bears Daily Market Commentary : 09 October 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $16,747,868,883 with foreign buys at $415,027.23 and foreign
sales were $8,018,461.22. Total trades were 150.

The All Share index continues its bullish trend as it gained 17.76 points
to close at 151.99 points in a session dominated by heavy weight gains. OLD
MUTUAL  added another $1.4691 to close at $8.8400, DELTA traded $0.5047
stronger at $3.0350 and ECONET  increased by $0.3297 to trade at $2.0371.
INNSCOR  also went up by $0.2800 to $1.6900 and PPC traded $0.2581 firmer at
$1.5500.

Trading in the negative was BRITISH AMERICAN TOBACCO  which traded $3.5000
lower at $28.0000 and NMB BANK  which lost $0.0033 to settle at $0.1500.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Libya

New Libyan dinar rate not fixed -senior official

(Reuters) - The newly devaluated exchange rate of the Libyan dinar versus
the dollar is not fixed and will alter based on market demand, a senior
official said on Tuesday.

Last month, Libya’s internationally recognized government based in Tripoli
imposed a fee of 183 percent on hard currency transactions, effectively
devaluing the dinar to 3.9 versus the dollar compared to the official rate
of around 1.4.

The move is meant to bridge the gap to the dominant black market, a source
of corruption as armed groups with access to dollars at the official rate
make huge profits through import scams.

The fee is supposed to be paid on commercial transactions but it remains
unclear how it will be collected as armed groups effectively control banks
and stand to lose if they have to pay.

The issue of tackling the black market rate and economic reforms became
urgent late in August after clashes between armed groups vying for access to
public funds.

The U.N. brokered a ceasefire which has since been broken though the last
few days have been relatively quiet in the capital.

Libya has been divided since 2014 by rival authorities in west and east amid
widespread anarchy since the fall of Muammar Gaddafi in a NATO-backed
uprising in 2011.

The eastern central bank has said it would implement the fee as done in the
west of the country.

South Africa

South Africa's rand, banking stocks rally as Mboweni named finance minister

(Reuters) - South Africa’s rand climbed to a session best on Tuesday after
President Cyril Ramaphosa appointed former central bank governor Tito
Mboweni as finance minister, a moved that soothed markets after days of
uncertainty.

At 1622 GMT the rand was 1.24 percent firmer at 14.6825, a touch softer than
the session best of 14.6525 after the decision.

Bank stocks rose 1.19 percent, as investors welcomed Mboweni’s appointment
that eased a week of uncertainty.

Ramaphosa said he received and accepted Nhlanhla Nene’s resignation as
finance minister on Tuesday.

Nene faced calls to resign after he admitted visiting the Gupta brothers,
friends of scandal-plagued former president Jacob Zuma who have been accused
of high-level influence-peddling, and failing to disclose the meetings
earlier. Zuma and the Guptas have denied any wrongdoing.

Bonds were also firmer, with the yield on the benchmark paper due in 2026
down 4 basis points 9.22 percent. “Tito brings strength to the position. He
is not afraid to go up against other ministers and he also understands the
importance of fiscal consolidation which is crucial at this moment,” said
Nazmeera Moola of Investec.

Moody’s, the last of the top three rating agencies to have Pretoria’s debt
at investment grade, is set to release its latest review on Friday.

In the equities market, the Johannesburg all-share index and the Top-40
index struggled to hold on to gains registered immediately after the
appointment of Mboweni, despite the rally by banking stocks.

The All-share inched 0.06 percent lower to 54,187 points and the blue-chip
ended the session 0.15 percent weaker at 47,970 points.

First Rand gained 1.95 percent to 62.09 rand, while Absa Group rose 1.54
percent to 148.61 rand. Capitec Bank Holdings firmed 1.44 percent at 991.38
rand.

       <mailto:info at bulls.co.zw> 

Asia

Asian shares subdued as global bond sell-off eases; sterling rises

(Reuters) - Asian shares barely moved on Wednesday after world stocks hit
eight-week lows the previous day on worries about global economic growth,
although the British pound stayed firm on hopes for a Brexit deal.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, while
Japan’s Nikkei average fell 0.4 percent and the Australian benchmark was up
just 0.1 percent.

In China, mainland’s benchmark Shanghai Composite shed 0.2 percent in choppy
trade and Hong Kong’s Hang Seng added 0.3 percent.

“As uncertainty continues to prevail in financial markets across the world,
many investors are staying on the sidelines until more clarity emerges in
U.S. Treasury and Chinese markets,” said Yasuo Sakuma, chief investment
officer at Libra Investments.

Benchmark U.S. 10-year Treasury yields touched a 7-1/2-year peak of 3.261
percent and those on 30-year bonds hit their highest in more than four
years, but later fell back.

SPONSORED STORIES

Some traders say comments on Tuesday by U.S. President Donald Trump helped
cool Treasuries yields. He said the Federal Reserve was going too fast in
raising rates when inflation was minimal and government data pointed to a
strong economy.

Italian government bond yields also fell from multi-year highs after Economy
Minister Giovanni Tria pledged to do whatever is necessary to restore calm
if market turbulence turns into a financial crisis.

On stock markets, Wall Street showed a mixed picture, with the Dow Jones
Industrial Average falling 0.21 percent while the S&P 500 and the Nasdaq
Composite were little changed.

The MSCI All-Country World index, which tracks shares in 47 countries, hit
the lowest level since August 16 overnight. It last traded up 0.1 percent on
the day.

The International Monetary Fund cut global economic growth forecasts for
2018 and 2019, as well as its U.S. and China estimates for next year, saying
the two countries would feel the brunt of the impact of their trade war next
year.

The dollar dipped due to a fall in U.S. bond yields after touching a
seven-week peak against a basket of currencies. The dollar index last traded
flat at 95.586.

Sterling continued to gain after a report that rekindled hopes that Britain
and the European Union are on the brink of a Brexit deal. It last traded up
0.1 percent at $1.3158.

The offshore yuan rose 0.1 percent to 6.9236 after falling earlier this week
to as low as 6.9371 to the dollar, its weakest since mid-August.

Oil prices edged lower on Wednesday after the IMF lowered its global growth
forecasts but prices were somewhat supported as Hurricane Michael churned
towards Florida, causing the shutdown of nearly 40 percent of U.S. Gulf of
Mexico crude output.

U.S. crude oil futures dropped 0.5 percent to $74.61 a barrel and Brent
crude futures eased 0.2 percent to $84.80 a barrel.

Gold prices stood flat as investors remained cautious after U.S. Treasury
yields hit then retreated from multi-year highs.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold inches up as retreat of bond yields weigh on dollar

(Reuters) - Gold prices crawled higher on Wednesday, as long-dated U.S.
Treasury yields retreated from multi-year highs, pressuring the dollar.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,191.03 an ounce at 0108 GMT. On
Tuesday, it touched a more than one-week low of $1,183.04

* U.S. gold futures rose 0.3 percent to $1,194.50 an ounce.

* The dollar index, which measures the greenback against a basket of six
major currencies, was down 0.1 percent.

* Stocks on major world markets edged lower on Tuesday, with a decline in
the materials sector offsetting rising energy shares.

* U.S. long-dated Treasury yields fell on Tuesday in choppy trading, as
investors took a respite from selling bonds that took rates to multi-year
highs following recent economic data and on interest rate prospects over the
next year and a half.

* The IMF cut global economic growth forecasts for 2018 and 2019, as well as
its U.S. and China estimates for next year, saying the two countries would
feel the brunt of their trade war next year.

* Risks to the global financial system have risen over the past six months
and could increase sharply if pressures in emerging markets escalate or
global trade relations deteriorate further, the IMF said on Wednesday.

* U.S. President Donald Trump on Tuesday again criticized the Federal
Reserve, telling reporters the central bank is going too fast in raising
rates when inflation is minimal and government data points to a strong
economy.

* Trump said on Tuesday his second summit with North Korean leader Kim Jong
Un would be held after U.S. congressional elections on Nov. 6.

* U.S. inflation expectations for both one and three years into the future
were unchanged last month, according to a Federal Reserve Bank of New York
survey that painted a picture of price stability among consumers.

* China must take strong stimulus measures to support growth, with the
country in a “critical” period of stabilising its economy, according to a
commentary in the Global Times, a state-backed Chinese tabloid.

* Italy will do whatever is necessary to restore calm if market turbulence
turns into a financial crisis, Economy Minister Giovanni Tria said on
Tuesday, calling for more measured debate over government budget plans.

* The Bank of England urged the European Union on Tuesday to do more to
protect cross-border financial services from the risks of a “cliff-edge
Brexit”, saying the need for action was now pressing.

Zinc surges as supply deficit erodes stockpiles

(Reuters) - Zinc prices rose on Tuesday towards last week’s three-month high
as falling stockpiles underlined a global supply shortage.

Benchmark zinc on the London Metal Exchange (LME) closed up 2.4 percent at
$2,678 a tonne.

The metal used to galvanise steel has surged by more than 17 percent from
August’s 22-month low of $2,283 and is close to a $2,706.94 peak reached on
Oct. 2.

But the rally is likely to be short-lived, said Capital Economics analyst
Caroline Bain.

STOCKS: Zinc inventories in LME-registered warehouses fell below 200,000
tonnes from more than 250,000 tonnes in August and are nearing 10-year lows.
MZNSTX-TOTAL

Stockpiles in Shanghai Futures Exchange storehouses are at 29,204 tonnes,
the lowest since 2007. ZN-STX-SGH

SPREAD: The premium of cash zinc over the three-month contract rose to
$41.50, reversing recent falls and signalling a lack of nearby supply.
MZN0-3

TECHNICALS: Zinc was struggling to break above its 100-day moving average at
$2,685.

DEFICIT: Demand for refined zinc will exceed supply by 322,000 tonnes this
year and 72,000 tonnes in 2019, the International Lead and Zinc Study Group
(ILZSG) said on Monday.

CHINA OUTPUT: Production cutbacks at China’s zinc smelters in response to
tighter environmental checks and weaker profits have tightened supply, said
CRU analyst Dina Yu in Beijing.

China accounts for nearly half of global refined zinc production of about
13.5 million tonnes. It is also the largest consumer of the metal.

OUTLOOK: A mixture of rising mine output, reduced pressure on polluting
Chinese industry to close during the winter period and a weakening of
Chinese economic growth is likely to ease the supply situation, said Capital
Economics analyst Bain.

CHINA GROWTH: The International Monetary Fund cut China’s 2019 growth
forecast to 6.2 percent from 6.4 percent, leaving the 2018 forecast
unchanged at 6.6 percent. Lower growth implies weaker demand for metals.

It also reduced its global economic growth forecasts for 2018 and 2019 to
3.7 percent from 3.9 percent for both years.

ALUMINIUM: LME aluminium ended 0.6 percent down at $2,055 a tonne, falling
for a fourth day.

A supply scare involving a Norsk Hydro alumina smelter in Brazil appeared
resolved, while consultancy CRU said tax rebates in China, the largest
aluminium producer, heralded a surge in exports from the country.

OTHER METALS: Copper closed up 1.8 percent at $6,292, lead fell 1.8 percent
to $1,936, tin did not trade but was bid 0.4 percent higher at $18,980 and
nickel finished up 3.5 percent at $13,015.

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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