Bulls n Bears Daily Market Commentary : 30 October 2018

Wed Oct 31 07:17:48 CAT 2018

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Bulls n Bears Daily Market Commentary : 30 October 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $2,440,722.14 with foreign buys at $105,126.73 and foreign
sales were $1,641,183.54. Total trades were 138.

The All Share index went further down by 1.02 points  to close at 166.29
points in a mixed  session. SIMBISA  dropped $0.0352 to $0.8123, DELTA
eased $0.0335 to close at $3.1666 and SEEDCO  was $0.0229 down at $2.2271.
EDGARS also lost $0.0225 to $0.1275 and FIRST MUTUAL HOLDINGS  traded
$0.0224 lower at $0.1906.

Losses were partially offset by gains in OLD MUTUAL LIMITED  which added
another $0.1142 to settle at $6.5147, AMALGAMATED REGIONAL TRADING  was
$0.0142 stronger at $0.0852 and DAIRIBORD was $0.0039 firmer at $0.2000.
MEIKLES  also gained $0.0035 to $0.7000 and AXIA  increased by $0.0013 to
$0.4439.

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

  Global Currencies & Equity Markets

South Africa

South Africa's rand tracks emerging markets rally, stocks fall

(Reuters) - South Africa’s rand firmed against the dollar on Tuesday, in
line with other emerging market currencies, despite disappointing economic
data showing the country’s unemployment rate rose in the third quarter.

Stocks tracked global markets lower on fresh concerns about the U.S.-Sino
trade war triggered by reports of possible new tariffs on China from
Washington.

At 1525 GMT, the rand traded at 14.6050 per dollar, 0.78 percent firmer than
its close on Monday of 14.7200.

Rand Merchant Bank forex trader Jan Sluis-Cremer said the rand was tracking
a rally in emerging markets, led by the Turkish lira.

The lira firmed as it continued to recover some of this year’s steep losses
on the back of easing concerns over the central bank’s independence and
deteriorating ties between Ankara and Washington.

The rand largely ignored numbers showing South Africa’s unemployment rate
rose to 27.5 percent in the third quarter as the formal sector, private
households and agriculture shed jobs.

The health of Africa’s most industrialised economy has been in focus since
last Wednesday, when Finance Minister Tito Mboweni delivered a medium-term
budget with wider deficit estimates and lower growth forecasts.

In fixed income, the yield on the benchmark government bond due in 2026 rose
3.5 basis points to 9.28 percent.

On the bourse, the all-share index fell 1.1 percent to 50,756 points and the
Top-40 index was down 1.28 percent to 44,534 points.

Bourse heavyweight Naspers was the biggest drag on the blue chip index for a
second session, closing 3.55 percent weaker at 2,370 rand. Tencent which
Naspers has a 31 percent shareholding, closed 3 percent lower in Hong Kong. 

Kenya

Kenyan shilling steady, forecast to ease due to excess liquidity, importer
demand

(Reuters) - The Kenyan shilling was stable against the dollar on Tuesday and
was expected to weaken due to excess liquidity in the money markets and
demand from manufacturers and oil importers, traders said.

At 1010 GMT, commercial banks quoted the shilling at 101.85/95 per dollar,
compared with 101.80/90 at Monday's close.

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks crawl up after a merciless Oct for global equities

(Reuters) - Asian stocks pulled away from 20-month lows on Wednesday, thanks
to a rebound on Wall Street, although investors remained cautious after an
October month that saw sharp downturns across global equity markets.

A confluence of factors from Sino-U.S. trade tensions to worries about U.S.
corporate earnings to the end of easy money in development economies have
spurred volatility in financial markets in the past few weeks.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.75
percent, but it was still on track to fall roughly 11 percent this month.

The index had dropped to its lowest level since February 2017 on Monday as
worries over corporate profits weighed heavily on U.S. equities.

Wall Street’s three stock indexes jumped more than 1 percent on Tuesday,
helped by strong gains for chip and transport stocks as investors took
advantage of cheaper prices following the steep recent pullback for
equities.

Hong Kong’s Hang Seng rose 1 percent and the Shanghai Composite Index
climbed 0.75 percent, with the gains coming despite weak factory activity
data for this month.

Australian stocks were up 0.3 percent, South Korea’s KOSPI rose 0.1 percent
and Japan’s Nikkei advanced 1.3 percent.

The MSCI AC World index, which includes a few large emerging markets in
addition to developed markets, was down 8.5 percent this month and has lost
about $4 trillion in value. The narrower MSCI World Index was down 8.7
percent and has wiped out $4.5 trillion in October.

Ichikawa at Sumitomo Mitsui Asset Management said the outlook for markets
was still cloudy, adding that the U.S.-China trade row will “likely to
remain a factor of concern beyond the U.S. midterm elections.”

U.S. President Donald Trump said during an interview with Fox News late on
Monday that he thought there could be an agreement with China on trade. But
he also said he had billions of dollars worth of new tariffs ready to be
imposed if a deal was not possible.

In currencies, the dollar index against a basket of six major currencies
extended overnight gains and rose to a 16-month peak of 97.054 after data on
Tuesday showed U.S. consumer confidence rose to an 18-year high in October,
suggesting strong economic growth could persist in the near term.

The dollar rose to a three-week high of 113.330 yen.

Immediate focus for the yen was on the Bank of Japan’s policy decision due
later in the day.

Later on Wednesday, the BOJ is set to keep monetary policy steady and
maintain its optimistic view on the economic outlook, even as global trade
frictions, growth worries and volatile markets put it further away from
achieving its elusive inflation target.

The euro was little changed at $1.1345 after losing 0.25 percent the
previous day. A dip below $1.1336 would take the single currency to its
lowest since mid-August.

China’s yuan strengthened a touch to 6.9652 dollar in onshore trade but
remained in proximity of a decade low of 6.9724 brushed on Tuesday.

The yuan has been pressured by worries about slowing Chinese economic growth
and a potential sharp escalation in the U.S.-China trade war.

The Australian dollar was down 0.3 percent at $0.7083 , weighed by soft
domestic inflation data. The lacklustre October China factory growth data
was also a drag on the Aussie.

Oil prices recovered slightly after dropping to multi-month lows the
previous day on signs of rising supply and concern that global economic
growth and demand for fuel will fall victim to the U.S.-China trade war.

U.S. crude futures was up 0.4 percent at $66.44 per barrel after dropping to
$65.33 on Tuesday, their lowest since mid-August.

Brent crude gained 0.53 percent to $76.31 per barrel after a decline of 1.8
percent on Tuesday. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Glencore hikes coal cost savings forecast by 50 pct

(Reuters) - Recent mine acquisitions have helped Glencore Plc achieve 50
percent more cost savings in its coal business than it had targeted, the
world’s biggest exporter of coal for power plants said on Wednesday.

Glencore had expected to achieve annual cash savings of more than $300
million in its coal business by the end of 2018 in a two-year cost-cutting
drive, but on Wednesday said it now expects savings of more than $450
million by year-end.

The company now expects its mine unit costs to fall to $49 a tonne in 2019,
from a forecast of $52 for 2018, from its operations in Australia, Colombia
and South Africa, it said in a presentation to analysts on a tour of its
Australian coal mines.

The cost-cutting comes as the company, whose own coal sales make up about 12
percent of the seaborne thermal market, is boosted by strong coal prices,
driven by rising demand in Asia.

The growth in Asia comes just as investment in new coal production has
slumped and as the energy content of traded coal has dropped compared with
the average energy content of coal sold by Glencore, the company said.

It added that it expected to produce 145 million tonnes of coal in 2019,
which could generate $6.2 billion in earnings before interest, tax,
depreciation and amortisation (EBITDA) at a spot price of $108 a tonne for
Newcastle coal.

Glencore earlier this year completed the acquisitions of the Hail Creek coal
mine in Australia and a 49 percent stake in the Hunter Valley Operations
(HVO) from Rio Tinto in a joint venture with Yancoal Australia.

Hail Creek is expected to be the biggest earner of its top 12 coal complexes
in 2019 and HVO the sixth biggest, Glencore said, without giving specific
forecasts for EBITDA from those mines.

The HVO joint venture has already cut nearly a fifth of its full-time
workers and removed 13 percent of trucks without affecting production
levels, Glencore said.

Shanghai zinc, copper prices slide after downbeat China data

(Reuters) - Zinc and copper prices fell in Shanghai on Wednesday after data
showed that China’s manufacturing sector grew at its weakest pace in more
than two years, dampening the outlook for demand in the world’s top metals
consumer.

Amid rising headwinds from the Sino-U.S. trade row, China’s official
Purchasing Managers’ Index dropped to 50.2 in October from 50.8 in
September, only slightly above the 50-point mark that separates growth from
contraction.

The latest reading suggests a further slowing in the world’s second-biggest
economy and could prompt more policy support from Beijing on top of a raft
of recent initiatives.

The previous soft patch in China’s economy in 2015-2016 “triggered a period
of intense capital outflows from China, as markets anticipated policymakers
to step up monetary easing, opening the path to (yuan) depreciation,” Mizuho
Bank said in a note.

The most-traded December zinc on the Shanghai Futures Exchange was down 1.7
percent at 21,570 yuan ($3,097) a tonne by 0212 GMT. Copper dropped 1.3
percent to 49,200 yuan.

* LME METALS: Three-month copper on the London Metal Exchange was up 0.3
percent at $6,047 a tonne and zinc added 0.1 percent to $2,553.50. Aluminium
gained 0.2 percent to $1,971 a tonne, having earlier touched $1,966, just a
tad off a 14-month low reached on Tuesday.

* CHINA’S YUAN: As China’s yuan approaches the 7 to the dollar barrier,
investors are betting authorities will eventually let the currency fall
beyond the historic level. Yet they are just as confident that China won’t
allow the kind of capitulation seen in past market meltdowns.

* NYRSTAR HIT: Falling zinc prices, along with rising energy prices and
higher mine operating expenses, caused third-quarter core profit at metals
producer Nyrstar NV to drop 74 percent. LME zinc has lost more than 2
percent in October, on course for its eighth monthly loss in nine.

* EQUITIES, DOLLAR: Asian stocks pulled away from 20-month lows to eke out
small gains, thanks to a rebound on Wall Street. The dollar hovered near
16-month highs versus a basket of its major rivals.

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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