Bulls n Bears Daily Market Commentary : 15 October 2018

[Bulls n Bears]

 <http://www.bulls.co.zw/> Bulls.co.zw        <mailto:bulls at bulls.co.zw>
Views & Comments        <http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

 


 

 


Bulls n Bears Daily Market Commentary : 15 October 2018

 


 

 


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

 


 

 


Zimbabwe Stock Exchange Update

 

 

Market Turnover $858,630.40 with foreign buys at $6,129.11 and foreign sales
were $219,818. Total trades were 79.

 

The All Share index opened the week in the negative after losing 28.69
points to close at 171.60 points. OLD MUTUAL  went further down by $2.0000
to close at $8.2000, DELTA   dropped $0.8476 to end at $3.3925 and ECONET
lost $0.5673 to $2.2800. INNSCOR  also decreased by $0.4285 to end at
$1.7175 and PADENGA  was $0.1992 down at $0.7975.

 

Only two counters traded in the positive territory with GETBUCKS
MICROFINANCE BANK adding $0.0089 to end at $0.0540 and DAWN PROPERTIES  was
$0.0014 stronger at $0.0259.

 

 <mailto:info at bulls.co.zw> 

 

 

  Global Currencies & Equity Markets

 

Kenya

 

Kenyan shilling steady, seen trading in narrow range

(Reuters) - The Kenyan shilling held steady against the dollar on Monday and
was expected to trade in a narrow range with inflows from offshore investors
and remittances matching demand from importers, traders said. 

 

At 1314 GMT, commercial banks quoted the shilling at 100.90.101/00 to the
dollar, the same as Friday's close.

 

 

South Africa

 

South African rand rallies on Moody's, stocks track Asia lower

(Reuters) - A decision by Moody’s to delay its review on South Africa’s
sovereign debt buoyed the rand to its strongest in a week as it rallied for
the third straight session against the dollar on Monday.

 

Stocks followed Asian stocks lower over concerns that trade war tensions
between the United States and China were starting to affect economic growth
in the world’s second biggest economy.

 

The rand was 1.0 percent stronger at 14.3750 per dollar at 1600 GMT, adding
to its early session gains to cross the 14.4400 resistance level after
retail figures in the United States undershot expectations, sending the
greenback weaker.

 

Traders said the decision by Moody’s to postpone publishing a review of the
country’s debt from Friday had given the rand a push. Moody’s did not
announce a new date for releasing its rating on Africa’s most industrialised
economy.

 

While most analysts saw little risk of a downgrade by Moody’s, the last of
the top three ratings firms to rank Pretoria’s debt investment grade, the
possibility of a change to the outlook had prompted some bearish
positioning.

 

Government bonds were also firmer, with the yield on the benchmark paper due
in 2026 down 2.5 basis points to 9.22 percent.

 

On the bourse, the Top-40 index fell 2.07 percent to 46,295 points, while
the broader All-Share index was 1.88 percent weaker at 52,467 points as
Asian stocks slid.

 

Data released on Friday showed Chinese auto sales posted the biggest drop in
seven years.

 

Both major equity indices moved into oversold territory, according to
momentum indicators tracked by analysts, suggesting they could be in for a
technical rebound soon.

 

South African bourse heavyweight Naspers dragged the Top-40 index lower,
falling 5.43 percent to 2,750 rand, as Hong Kong’s Tencent Holdings, in
which Naspers has a 31.2 percent shareholding, closed 1.94 percent lower.

 

Fast-food chain owner Famous Brands Ltd slumped 8.63 percent to 93.20 rand
as the company booked an impairment charge of 874 million rand ($61
million)before tax on its struggling UK Gourmet Burger Kitchen business. 

 

       <mailto:info at bulls.co.zw> 

 

 

 

 

Europe

 

European stocks brush 22-month low as Saudi tensions swirl

(Reuters) - World markets turned tail again on Monday, as a bounceback in
oil prices and rising tensions between Western powers and Saudi Arabia added
to a cocktail of concerns that battered global stocks last week.

 

Japan’s Nikkei and China’s main bourses tumbled overnight as trade concerns
persisted, and Europe’s STOXX 600 index hit a 22-month low as U.S. markets
re-opened a fraction lower after their worst week since March.

 

The lack of confidence continued to boost traditional safe haven assets. The
yen and Swiss franc both made ground on a subdued dollar in the currency
markets while gold hit its highest since the end of July.

 

Germany’s government bonds also rallied and the euro climbed as high as
$1.16 despite a humbling regional election result for Chancellor Angela
Merkel’s conservative Bavarian allies on Sunday.

 

The unexplained disappearance from the Saudi embassy in Istanbul of
prominent Saudi journalist and dissident Jamal Khashoggi remained in the
headlines as Saudi King Salman ordered an internal probe into the case.

 

U.S. President Donald Trump said meanwhile that he had spoken with King
Salman about Khashoggi and that he was sending Secretary of State Mike
Pompeo to meet the king immediately.

 

Over the weekend Trump had promised “severe punishment” if it turned out the
journalist, a U.S. resident and Washington Post columnist, had been killed.

 

The official Saudi Press Agency (SPA) then quoted an unnamed official saying
the kingdom “will respond with greater action,” if there are measures and
that its economy “has an influential and vital role in the global economy.”

 

Traders read that as meaning driving oil prices up further. Brent crude
responded by jumping 1 percent which in turn saw Saudi stocks recover the
full 3.5 percent they had lost on Sunday when the diplomatic tensions
flared.

 

Turkey’s lira was another big riser on Monday, jumping 1.5 percent to its
highest since mid-August after Trump cheered the release of a U.S. pastor
who had been under house arrest in Turkey.

 

Investors hope his release can lead to an improvement in strained
U.S.-Turkey relations.

 

CHINA AMMUNITION

But the broader global picture was still cautious.

 

Wall Street’s S&P 500, Dow Jones and Nasdaq started in the red, albeit only
just, after lacklustre U.S. retail sales data . Saudi Arabia’s riyal
currency was still testing the boundaries of its peg at 3.7514 to the dollar
- its weakest spot rate since June 2017.

 

The Saudi central bank maintains a peg of 3.75 riyals to the dollar, and
usually the currency fluctuates in a range of about 3.7498-3.7503.

 

Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan had
fallen 1 percent as Shanghai ended down 1.5 percent and just off a four-year
low.

 

Japan’s Nikkei slumped 1.8 percent on Monday, with carmaker shares hitting
13-month lows after Washington said it would seek a provision about currency
manipulation in future trade deals with Japan.

 

MSCI’s broadest gauge of the world’s 47 top stock markets was off 0.2
percent after a sizeable 3.87 percent decline last week - its biggest since
March - to a one-year nadir.

 

Over the weekend, China central bank governor Yi Gang said he still saw
plenty of room for adjustment in interest rates and the reserve requirement
ratio (RRR), as downside risks from trade tensions with the United States
remain significant.

 

In London, sterling recovered from renewed Brexit deal worries, while
commodities trading remained hung up on the Saudi tensions and the risk they
could drive up prices.

 

Saudi Energy Minister Khalid al-Falih had said on a trip to India that his
country is planning to push up production , but the prospect of a major
diplomatic feud with the West trumped that sentiment.

 

Investors suspect the developments could ultimately undermine the leadership
of Crown Prince Mohammed bin Salman if they escalate and destabilise the
oil-rich kingdom.

 

Brent crude futures were last up 1 percent to $81.26 per barrel, bouncing
back from Friday’s near-three-week low of $79.23.

 

 <mailto:info at bulls.co.zw> 

 

 

 

Commodities Markets

 

 

 

Alumina wake-up call for the aluminium supply chain: Andy Home

(Reuters) - The alumina market is experiencing a year of unprecedented
turbulence.

 

Alumina, which sits in the aluminium production process between bauxite and
refined metal, has historically been a highly efficient link in the supply
chain.

 

It hasn’t generated many headlines over the years because it has largely
avoided any newsworthy disruption.

 

It is, to quote Greg Wittbecker, analyst at the CRU research house, one of
those markets “people have taken for granted”.

 

Not any more.

 

A series of supply hits have sent the alumina price on a rollercoaster ride
this year, at one stage threatening the closure of several European
aluminium smelters.

 

This volatility poses some hard questions for aluminium producers, not least
as to how alumina is priced.

 

A YEAR OF LIVING DANGEROUSLY - PART 1

 

Alumina’s year of turmoil began in February, when a Brazilian court ordered
the part suspension of Hydro’s Alunorte refinery after heavy rains raised
concerns about leakage from the plant’s tailings ponds.

 

Alunorte, with capacity of 6.3 million tonnes a year, is the world’s largest
single alumina production site and has been operating at half capacity ever
since.

 

Hydro threatened full closure of the plant on Oct. 3 as the existing
tailings area reached capacity, but it reversed the decision on Oct. 8 after
the authorities granted permission to use a new residues facility.

 

Alunorte has reverted to half-capacity operation, as have the bauxite mines
that feed it and the Albras aluminium smelter that takes some of its
product.

 

The CME alumina price has whipsawed on the latest Alunorte developments,
surging from $425 a tonne to $620 on the full-closure news before retreating
back to $515 on confirmation it would resume 50 percent production.

 

Alunorte, CRU’s Wittbecker told an LME Week seminar last Tuesday, has been
“a reality check to pay more attention to alumina”.

 

A YEAR OF LIVING DANGEROUSLY - PART 2

 

The market’s Alunorte woes were compounded in April, when the United States
slapped sanctions on Oleg Deripaska and his Rusal aluminium empire.

 

That blew a hole in alumina’s complex supply chain, threatening the closure
of Rusal’s Aughinish refinery, which in turn placed at risk the European
smelters that rely on the Irish plant’s output.

 

The sanctions deadline has been extended again to Dec. 12 and the market’s
assumption is that it is only a matter of time before they are lifted fully.

 

However, the fragility of the alumina supply chain has been brutally
exposed, serving as wake-up call for the aluminium sector and the U.S. and
European governments, who received a short, sharp lesson in the multiple
interdependencies of this previously uncontroversial commodity.

 

A six-week walkout by workers at Alcoa’s Western Australia bauxite mines and
alumina refineries simply added to the pricing turbulence before a peace
deal was struck at the end of last month.

 

The combined effect of these supply scares has been a 5 percent year-on-year
drop in global alumina output in the first eight months of this year,
according to the International Aluminium Institute.

 

South American output has slumped by 21 percent because of the continuing
loss of production at Alunorte.

 

CRU is forecasting the world outside of China to record a 400,000-tonne
alumina supply deficit this year.

 

CHINA CONSTRAINED

China, the world’s largest producer of both alumina and aluminium, has
helped to fill the supply gap in the rest of the world.

 

Historically a net importer of alumina, China has flipped to net exporter
this year as overseas sales have been driven by the high international
price.

 

But there is a practical limit on how much alumina China can divert to
overseas markets.

 

CRU’s Wittbecker says alumina in China tends to be bagged, which means it
has to be unpackaged before to shipment to the international market. Exports
this year are unlikely to exceed 2 million tonnes, though even this is
“unprecedented”.

 

Moreover, China, is also expected to be in the unusual position of facing a
supply deficit this year, to the tune of 843,000 tonnes, CRU says.

 

The industrial curtailments during the winter heating season took a heavier
toll of the country’s alumina producers than its aluminium smelters.

 

Environmental checks on the bauxite sector this year also caused some
alumina operators to curtail production, while a slew of new projects have
been cancelled in the face of local opposition.

 

China, in short, is unlikely to be able to continue rebalancing the global
market for any sustained period.

 

PRICE VOLATILITY

At current alumina prices, a significant amount of global smelting capacity
is losing money - about 40 percent of it, according to CRU.

 

The aluminium production sector is now paying the price for changing the way
alumina is priced.

 

Historically, the alumina price was linked to that of primary aluminium
metal on the London Metal Exchange (LME), the ratio rarely deviating much
from the 17 percent level.

 

Earlier this decade, however, producers such as BHP Billiton and Alcoa
engineered a switch of pricing to spot indices, arguing that the LME linkage
undervalued alumina.

 

This, arguably, has simply added to this year’s price volatility because the
spot market is still highly illiquid.

 

Some of the price spikes have been based on a very limited number of spot
cargoes, meaning that a 130 million tonne global market has been upended by
the pricing of a couple of hundred thousand tonnes.

 

The CME contract, based on S&P Global Platts’ assessment of the spot market,
is still immature. Turnover this year has totalled 547,500 tonnes, up only
marginally on last year’s levels.

 

The LME is planning to launch its own futures contract next year, while the
Shanghai Futures Exchange (ShFE) is also studying a potential offering.

 

However, such contracts will also depend on assessments of what is currently
a low-liquidity spot marketplace.

 

Evidently, the alumina futures market has a lot of growing up to do - and
fast - if producers are going to be able to hedge what has become an
exceedingly volatile market.

 

That volatility looks to be here to stay, even if both the Alunorte and
Rusal disruptions are resolved.

 

No one will be taking alumina for granted any more.

 

 

 

Anglo Asian's Azerbaijan gold output rises 47 pct in Q3

(Reuters) - Anglo Asian Mining’s gold output rose 47 percent in the third
quarter, the London-listed company said on Monday, adding that full-year
production would be at the top end of its current guidance.

 

Azerbaijan’s leading gold mining firm said it produced 21,318 ounces of the
metal in the last quarter, against 14,468 ounces in the same period of last
year.

 

Its total production of gold-equivalent ounces (GEO), which includes other
metals, rose 38 percent in the same period to 24,412 GEO. In
January-September GEO production was 61,761 ounces, up 28 percent
year-on-year.

 

Gold is produced at Gedabek and other Azeri mines under a production venture
in which Anglo Asian holds 51 percent and the state the remainder.

 

 

The company said copper output fell to 470 tonnes in the third quarter from
550 tonnes in same period of 2017, while silver output rose 47 percent to
59,346 ounces.

 

Anglo Asian said in February its gold output would rise to 64,000-70,000
ounces in 2018 from 59,617 ounces last year, and it expected its total metal
production to increase to 78,000-84,000 GEO in 2018 from 71,461 GEO last
year.

 

The company said on Monday it expected “production for the full year to be
at the upper end of our guidance”.

 

Anglo Asian began production at Gedabek, the bigger of two mines it
operates, in July 2009 with plans to extract 22 tonnes of gold. It
eventually plans to develop seven mines in western Azerbaijan, including
Gedabek, with estimated gold reserves of 430 tonnes in total.

 

The company started a significant exploration programme at the end of 2016
after making a new gold discovery at Ugur, 3 km (2 miles) from its Gedabek
processing facilities.

 

 

Gold bullion sales in the third quarter of 2018 totalled 18,637 ounces at an
average price of $1,216 per ounce. 

 

 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 

 


 

 

 

 


 

 

 

 


 <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.

 


 

 


(c) 2018 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

 


 

 

 

 

 

 

 

Invest Wisely!

Bulls n Bears 

 

Telephone:      <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 3653 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 31067 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 29401 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0009.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 159128 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0010.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20181016/7f643b2b/attachment-0011.jpg>