Bulls n Bears Daily Market Commentary : 25 October 2018

Thu Oct 25 19:46:51 CAT 2018

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Bulls n Bears Daily Market Commentary : 25 October 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $2,857,990.85 with foreign buys at $746,491.97 and foreign
sales were $411,317.60. Total trades were 115.

The All Share index lost 5.83 points  to close at 174.07 points in a session
dominated with losses in heavy weight counters. OLD MUTUAL LIMITED dropped
$0.4293 to close at $6.4056, ECONET  lost $0.2507 to $2.1867 and INNSCOR was
$0.1999 down at $1.8001. NATFOODS  also decreased by $0.1000 to close at
$6.4000 and PPC traded $0.0533 lower at $1.4967.

Trading in the positive was PADENGA  which added $0.0108 to close at
$0.9100, GETBUCKS MICROFINANCE traded $0.0054 stronger at $0.0702 and FIRST
CAPITAL BANK  increased by $0.0052 to settle at $0.0702.

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

  Global Currencies & Equity Markets

South Africa

South Africa's rand eases further on budget worries, stocks bounce

(Reuters) - The South African rand weakened further on Thursday, as
investors were rattled by bleak medium-term budget forecasts a day earlier
and a stronger dollar, which dampened appetite for emerging markets
globally.

At 1500 GMT, the rand traded at 14.5800 versus the dollar, 0.19 percent
weaker on the day after falling by around 2 percent on Wednesday.

Finance Minister Tito Mboweni predicted wider budget deficits and cut growth
forecasts in his medium-term budget on Wednesday, laying bare the challenges
he faces at a time of revenue shortfalls and ballooning debt.

On Thursday, Mboweni called for urgent action to prevent high debt levels
forcing South Africa to seek help from the International Monetary Fund.

The medium-term budget partly unsettled investors because of fears that
ratings agency Moody’s could strip the country of its last investment grade
credit rating.

Treasury One analyst Wichard Cilliers said the rand was also dragged lower
by a rally in the dollar, which saw the U.S. unit hit a two-month high
against a basket of currencies.

In fixed income, the yield on the benchmark government bond due in 2026 rose
7 basis points to 9.370 percent.

Stocks rose, helped by technical factors after a recent sell-off pushed the
main indices into oversold territory, according to momentum indicators
tracked by analysts.

The benchmark Top-40 index climbed 1.67 percent to 45,416.62 while the wider
All-share index added 1.47 percent to 51,624.86.

Kenya

Kenyan shilling expected to ease due to importer dollar demand

(Reuters) - The Kenyan shilling was expected to come under pressure against
the dollar on Thursday due to end-month importer demand and excess liquidity
in the money markets, traders said. 

At 0922 GMT, commercial banks quoted the shilling at 101.20/30 per dollar,
compared with 101.15/25 at Wednesday's close. 

       <mailto:info at bulls.co.zw> 

America

Stocks crumble as global growth, U.S. earnings fears spook markets

(Reuters) - Asian shares plunged on Thursday as hundreds of billions of
dollars haemorrhaged from global markets after a rout in tech stocks
inflicted the largest daily decline on Wall Street since 2011, wiping out
all its gains for the year.

Stock investors have become increasingly nervous about lofty equities
valuations, a likely peak in corporate earnings momentum, faster rate hikes
in the United States and an ongoing Sino-U.S. trade war that threatens to
hurt world growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan has fallen more
than 18.5 percent so far this year after skidding almost 2 percent on
Thursday.

Japan’s Nikkei tumbled 3.3 percent to a six-month trough while Australian
shares hit a more than one-year low. Tokyo’s Topix index tumbled 3 percent,
evaporating more than $155 billion in market value.

Chinese shares were in the red too with the blue-chip SSE Composite index
plummeting 2.5 percent as fresh market-support measures by the Chinese
government failed to ease investor worries about high leverage and the
Sino-U.S. trade war.

Hong Kong’s Hang Seng index sank 2.2 percent.

Some analysts feel equity bears may be better off focusing outside the
United States, at least for now.

The return of the bears has already been more pronounced outside the United
States, according to data analysed by Reuters. In addition, a Bank of
America Merrill Lynch study recently found that 58 percent of the 2,767
stocks in MSCI’s global index are now in bear market territory.

Weak readings on manufacturing in Europe have added to angst over world
growth, as has a surprise slump in U.S. home sales, which suggested rising
mortgage rates were sapping demand for housing.

Adding to the air of tension, police intercepted suspected bombs mailed to
former U.S. President Barack Obama, Hillary Clinton and other high-profile
Democrats, as well as to CNN, in what New York officials branded an act of
terrorism.

The growing international pressure on Saudi Arabia over the death of
journalist Jamal Khashoggi also weighed on investor sentiment.

On the trade front, disappointing forecasts from industrial bellwether
Caterpillar weighed on Wall Street as the giant warned of rising costs due
to U.S. import tariffs.

The Nasdaq closed down 12.4 percent from its Aug. 29 record closing high,
falling 4.4 percent on Wednesday in its biggest one-day percentage decline
since Aug. 18, 2011. In dollar terms, the Nasdaq vaporised $524 billion in
market capitalisation overnight.

The Dow <.DJI > fell 2.41 percent and the S&P 500 lost 3.09 percent.

Also weighing on sentiment, Citi lowered its global growth forecast for both
2019 and 2020 by 0.1 percentage point each to 3.2 percent and 3 percent,
respectively, it said in a note Thursday, citing policy tightening by the
U.S. Federal Reserve.

CURRENCIES

In foreign exchange markets, client participation on both spot and options
was fairly light, Citi noted in a separate note.

Funds flowed to the U.S. dollar and Treasuries and out of the euro and the
British pound.

The euro shed 0.7 percent to $1.1397 and breached a major chart bulwark at
$1.1430. It was last up 0.2 percent at $1.1409.

Against a basket of currencies, the dollar eased from near a nine-week peak
to 96.267.

Sterling hit a seven-week trough $1.2865, having dropped 0.8 percent
overnight. It was last a shade higher at $1.2887.

The yen got the usual safe-haven bid, with the euro skidding to a two-month
low at 127.68 yen. Even the high-flying dollar eased to 112.08 yen.

Oil prices slipped amid concerns over global growth. Brent crude fell 52
cents to $75.65 a barrel, while U.S. crude dropped 53 cents to $66.29.

Spot gold was a tad firmer at $1,236.76 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Barrick Gold sees potential to expand Tier 1 assets - Thornton

(Reuters) - Barrick Gold Corp could have nine of the world’s top gold mines
in a “relatively short” time under its $6.1 billion acquisition of African
miner Randgold Resources Ltd, Barrick Executive Chairman John Thornton said
Thursday.

Barrick and Randgold will focus on Tier 1 assets which produce 500,000
ounces of gold annually, have a mine life of more than 10 years and are low
cost. The combined company, subject to a Nov. 5 shareholder vote, will have
five of the world’s top 10 Tier 1 assets, Thornton said.

Barrick’s Fourmile project and Turquoise Ridge mine in Nevada have “high
potential” to become Tier 1 assets, Thornton said, adding there is also
optimism about what can be done with its Veladero mine in Argentina and
Acacia’s North Mara mine in Tanzania.

Talks with the government of Tanzania, to resolve a long-running tax dispute
affecting Barrick’s Acacia Mining unit, are continuing but have slowed,
senior vice-president Kevin Thomson said on the call.

This week, a third Acacia employee was charged with corruption and
money-laundering.

Barrick has not held any talks with Acacia about buying out the 31.9 percent
stake that it does not own, he said in response to a question about a
Bloomberg report that Barrick favors taking back control of Acacia after the
Randgold deal closes.

Barrick has also identified non-core assets that it will consider selling,
among other options, to maximize value, Thornton said.

Barrick is in “slow-motion, long-term conversations” with partners in Saudi
Arabia and China who are highly interested in Barrick’s copper assets, he
added.

Thornton, who last week joined Randgold CEO Mark Bristow to meet with
shareholders in the United States, Canada and Europe, encouraged investors
to vote on the deal. 

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.

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