Bulls n Bears Daily Market Commentary : 23 October 2018

Wed Oct 24 07:42:51 CAT 2018

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Bulls n Bears Daily Market Commentary : 23 October 2018

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Zimbabwe Stock Exchange Update

Market Turnover $1,908,002.35 with foreign buys at $624,707.58 and foreign
sales were $245,158.00. Total trades were 136.

The All Share index dropped by 3.50 points  to close the day at 178.61
points. OLD MUTUAL  lost a further $0.9998 to close at $7.1545, DELTA  was
$0.1370 down at $3.3999 and ECONET traded $0.0978 lower at $2.4022. CBZ also
decreased by $0.0154 to end at $0.1561 and BINDURA was $0.0112 lower at
$0.0704.

Losses were partially offset by gains in SEEDCO INTERNATIONAL  which added
another $0.2500 to settle at $1.5100, PADENGA  added $0.0375 to $0.9000 and
INNSCOR was $0.0128 stronger at $2.0000. AXIA  also traded $0.0078 higher at
$0.4500 and DAIRIBORD  increased by $0.0023 to end at $0.2123.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Zimbabwe

Zimbabwe lifts import ban after cash crunch prompts panic buying

(Reuters) - Zimbabwe lifted a ban on the import of basic goods and
foodstuffs on Tuesday after shelves were emptied in recent weeks by
consumers panicking over a deepening currency crisis.

After winning a disputed election in July, President Emmerson Mnangagwa
pledged to end long-running currency shortages and revive a struggling
economy but his government’s early interventions have caused public alarm.

The introduction of a new tax on electronic transactions in an economy
desperately short of hard cash caused fuel shortages this month and prompted
shoppers to stockpile goods, leaving shops empty of basics like cooking oil
and sugar.

Zimbabwe introduced a ban on the imports of many basic goods in 2016 as it
sought to help its manufacturing recover after more than a decade of
contraction.

Zimbabwe adopted the use of foreign currencies, mostly the U.S. dollar, in
2009 after its own Zimbabwe dollar was destroyed by hyperinflation.

But a huge trade deficit has led to a shortage of physical U.S. dollar bills
in the economy, to which the authorities responded by issuing a “bond note”
quasi-currency pegged at parity to the greenback in November 2016.

The bond notes trade at a significant discount to the U.S. dollar on the
black market and have failed to address the shortage of banknotes.

On Oct. 1, the central bank directed banks to separate foreign currency
accounts from the bond notes and their associated electronic deposits.

This tacit admission that the bond notes were not at par with the U.S dollar
accelerated its collapse on the black market.

Kenya

Kenyan shilling expected to ease due to end-month importer demand

(Reuters) - The Kenyan shilling was seen easing against the dollar on
Tuesday due to demand from oil and merchant importers, traders said.  

At 0845 GMT, commercial banks quoted the shilling at 100.95/101.05 per
dollar, the same as Monday's close. 

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks struggle as global woes persist, oil near 2-mth lows

(Reuters) - Asian stocks edged lower on Wednesday as concerns, ranging from
worries about U.S. corporate earnings to Middle East tensions, weighed on
sentiment while crude oil approached two-month lows after Saudi Arabia
flagged possible supply increases.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2
percent, extending the decline of more than 2 percent in the previous
session.

Global stocks have suffered this week on worries about U.S. earnings,
Italian government finances, U.S. trade tensions and mounting pressure on
Saudi Arabia over the death of dissident journalist Jamal Khashoggi.

Saudi Arabia’s diplomatic standing looked increasingly precarious as Turkey
dismissed the kingdom’s efforts to blame Khashoggi’s death on rogue
operatives while U.S. President Donald Trump said Riyadh staged the “worst
cover-up ever.”

Hong Kong’s Hang Seng fell 0.3 percent while the Shanghai Composite Index
retreated 0.6 percent.

South Korea’s KOSPI slipped 0.25 percent and Japan’s Nikkei lost 0.35
percent, handing back earlier gains.

Equity losses in the region were modest, however, after a late round of
buying helped Wall Street indexes pare most of their earlier panic-driven
losses.

Wall Street’s three major indexes slumped early on Tuesday but ended well
off the day’s lows as investors snapped up beaten-down shares late in the
session.

The dollar flagged against the yen, which is often sought in times of risk
aversion. The U.S. currency was at 112.49 yen after dropping 0.35 percent
overnight.

The greenback was also weighed by a decline in Treasury yields, as the
recent risk aversion drove investors to safe haven government bonds. The
10-year Treasury note yield was at 3.158 percent after stooping to a
three-week low of 3.111 on Tuesday.

The Canadian dollar shook off the plunge in oil and stood firm against its
U.S. counterpart as investors maintained bets that the Bank of Canada (BoC)
will hike interest rates later on Wednesday.

The Canadian dollar stood little changed at C$1.3083 per dollar after
gaining 0.1 percent the previous day.

China’s yuan added to the previous day’s modest gains and rose to 6.9369 per
dollar in onshore trade, continuing its modest pull-back from a near
two-year low of 6.9445 marked on Monday.

The pound was little changed at $1.2976 and near a three-week trough of
$1.2937 brushed overnight.

Sterling briefly gained half a percent against the dollar on Tuesday after a
media report that the European Union could offer British Prime Minister
Theresa May a UK-wide customs union to clinch a Brexit deal.

The pound’s strength was fleeting, however, a sign the market remains
unconvinced May can successfully sell any deal to her Conservative party
colleagues and get it through parliament.

The euro was steady at $1.1463 after nudging up 0.05 percent the previous
day.

The dollar index against a basket of six major currencies was flat at 96.979
after posting a modest loss the previous day.

In commodities, U.S. crude futures traded at $66.41 per barrel after
dropping roughly 4 percent on Tuesday to a two-month low of $65.74.

Brent crude futures traded at $76.53 per barrel after dropping more than 4
percent on Tuesday to $75.88, their lowest since Sept. 7.

Crude slid after Saudi Arabia said it could supply more crude quickly if
needed, easing concerns ahead of U.S. sanctions on Iran.

The recent sell-off in global equities has also raised worries about slowing
growth curbing demand for crude. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper under pressure on worries over weaker China demand

(Reuters) - Copper prices were flat to lower on Wednesday, reflecting
concerns over slower demand in top consumer China for the rest of this year
as Beijing’s plans to reinvigorate the world’s second-largest economy may
only kick in by 2019.

China said earlier this week that it will roll out more policies to support
private companies, including measures to help them raise funds in capital
markets, after data last week showed its third-quarter gross domestic
product growth slowed to 6.5 percent, the lowest since the first quarter of
2009.

Copper is used mostly in the power and construction sectors, and Wu said
there “hasn’t been a lot of orders from China’s State Grid” and Beijing’s
latest round of anti-smog production cuts for this weinter would also limit
construction activity in the current quarter.

Three-month copper on the London Metal Exchange was little changed at $6,195
a tonne by 0258 GMT. The most-traded copper contract, for December delivery,
on the Shanghai Futures Exchange eased 0.4 percent to 50,110 yuan ($7,223) a
tonne.

* CHINA SUPPORT: China’s state planner said it will step up support to
stabilise jobs in regions most affected by the U.S.-China trade friction.

* CHINA ALUMINA: China’s alumina exports in September surged more than
fivefold from August to 165,839 tonnes, the highest monthly volume this
year.

* ALUMINIUM PRICES: LME aluminium rose 0.5 percent to $2,010 a tonne, but
not far above 6-1/2-month lows reached last week. In Shanghai, aluminium
gained 0.6 percent to 14,255 yuan a tonne.

* EQUITIES: Asian stocks edged up as a late round of buying helped Wall
Street indexes pare most of their earlier panic-driven losses, although
crude oil struggled near two-month lows after Saudi Arabia flagged possible
supply increases.

* CERRO MATOSO: The Cerro Matoso nickel mine, owned by Australian miner
South32, owes more than $56 million in unpaid royalties to Colombia, the
country’s comptroller said.

ARBS ($1 = 6.9378 Chinese yuan)

Wall St ends down while oil tumbles on demand worries

(Reuters) - Wall Street indexes fell in Tuesday’s volatile session though
they had pared losses sharply by the closing bell as investors looked for
bargains, but oil dropped sharply on demand worries.

After falling as much as 2.3 percent in the morning, the S&P 500 gradually
regained ground as the day wore on.

Oil prices plunged about 5 percent to two-month lows as the equities
sell-off raised worries about demand growth and Saudi Arabia said it could
supply more crude quickly if needed, easing concerns ahead of U.S. sanctions
on Iran.

Benchmark U.S. Treasury prices rose, sending yields to their lowest levels
in almost three weeks as declining stocks worldwide fed demand for low-risk
debt.

The U.S. dollar recovered some of its early losses in the afternoon as the
stock sell-off eased, but the greenback remained down against other
safe-haven currencies.

On top of geopolitical worries and Nov. 6 U.S. congressional elections,
Oliver Pursche, chief market strategist at Bruderman Asset Management in New
York, cited an uncertain growth outlook amid a U.S.-China trade war.

But after hitting a low of 2,691.43 around 10:20 a.m. ET (1420 GMT), the S&P
gradually revived though trading was volatile.

The Dow Jones Industrial Average fell 125.98 points, or 0.5 percent, to
25,191.43, the S&P 500 lost 15.19 points, or 0.55 percent, to 2,740.69 and
the Nasdaq Composite dropped 31.09 points, or 0.42 percent, to 7,437.54.

Of the S&P 500’s 11 major sectors, energy was the biggest percentage
decliner, last down 2.7 percent due to the tumble in oil futures.

U.S. crude fell 4.4 percent to $66.30 per barrel and Brent was last at
$76.39, down 4.3 percent on the day.

Pressure mounted on Saudi Arabia over the death of journalist Jamal
Khashoggi after Turkish President Tayyip Erdogan said intelligence and
security institutions have evidence Khashoggi’s death at a Saudi consulate
in Istanbul this month was planned. He dismissed attempts by Riyadh to blame
the “savage” killing on rogue operatives.

U.S. President Donald Trump had said Monday he was not satisfied with what
he heard from Saudi Arabia about the death but did not want to lose
investment from Riyadh.

Benchmark 10-year notes last rose 7/32 in price to yield 3.1676 percent,
from 3.194 percent late on Monday.

The dollar index fell 0.09 percent, with the euro up 0.07 percent to
$1.1471.

The Japanese yen strengthened 0.35 percent versus the greenback at 112.44
per dollar, while the British pound was last trading at $1.2986, up 0.19
percent on the day.

Spot gold added 0.7 percent to $1,229.90 an ounce after hitting its highest
level since mid-July as investors looked for safety.

Emerging market stocks lost 2.08 percent. MSCI’s broadest index of
Asia-Pacific shares outside Japan closed down 2.2 percent.

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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