Bulls n Bears Daily Market Commentary : 05 September 2018

Wed Sep 5 17:35:13 CAT 2018

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Bulls n Bears Daily Market Commentary : 05 September 2018

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Zimbabwe Stock Exchange Update

The All Share index came off 0.13 points to close at 116.36 points as three
counters lost ground.  ECONET  shed $0.0204 to trade at $1.2017, FIRST
MUTUAL HOLDINGS   dropped $0.0050 to $0.1650 while AXIA  slipped $0.0023 to
end at $0.2677.

OLD MUTUAL   gained a further $0.0575 to close at $5.7097, POWERSPEED  put
on $0.0230 to close at $0.1380 and ZIMPLOW rose by $0.0120 to trade at
$0.2020. INNSCOR  went up by $0.0078 to settle at $1.4200 while AFRICAN SUN
closed at $0.0825 following a $0.0025 increase.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand tumbles as recession shock spurs sell-off

(Reuters) - South Africa’s rand slumped as much as 2 percent on Wednesday
and government bonds sold off, as the economy entered recession and a dollar
rally stoked another sell-off in local assets.

At 0920 GMT, the rand traded 1.5 percent weaker at 15.5775 versus the
dollar, after hitting a low of 15.6925 earlier in the session.

The yield on the benchmark rand-denominated government bond due in 2026 rose
8 basis points to 9.29 percent, striking its highest since December, and
dollar bonds fell across the curve.

Statistics South Africa said on Tuesday that gross domestic product (GDP)
declined 0.7 percent in the second quarter, after a 2.6 percent contraction
in the first three months of the year.

The unexpected GDP contraction came as a blow to President Cyril Ramaphosa,
who is trying to revive the economy and woo foreign investors.

Appetite for rand assets has been hurt by a risk-off mood that has swept
through global markets in the wake of financial turmoil in Turkey and
Argentina in recent weeks.

The rand has now lost more than 3 percent since the end of last week, and
analysts believe it may fall further towards the 16.00 mark.

Tuesday’s GDP figures led many economists to cut their full-year growth
forecasts for South Africa.

After current account figures are published on Thursday, attention is set to
shift to an October ratings review by Moody’s.

Moody’s is the last of “big three” international ratings firms to rate the
country’s debt in investment grade. It has warned that South Africa’s rating
could suffer if it fails to boost economic growth and address debt issues. 

Uganda

Ugandan shilling weakens as energy, manufacturing demand weighs

(Reuters) - The Uganda shilling        weakened on Wednesday, hurt by a
surge in dollar demand from companies in the manufacturing and energy
sectors and commercial banks, traders said.

At 0853 GMT commercial banks quoted the shilling at 3,783/3,793, weaker than
Tuesday's close of 3,770/3,780. 

       <mailto:info at bulls.co.zw> 

America

Dollar rises on fears of new U.S. trade tariffs

(Reuters) - The dollar rose broadly on Wednesday as concerns grew that U.S.
President Donald Trump may soon ramp up a trade war with Beijing by imposing
tariffs on more Chinese imports.

Trump could impose levies on $200 billion more of Chinese imports after a
public comment period on the new tariffs ends on Thursday, though it is
unclear how quickly that will happen. Investors wary of the deadline stayed
loyal to the safe-haven greenback on Wednesday and it rose against major
currencies like the euro and the British pound.

The greenback also drew further support from upbeat U.S. indicators
underlining the case for further interest rate increases by the Federal
Reserve. The dollar index , which measures the U.S. unit against a basket of
six currencies, was up 0.1 percent at 95.442 as of 1100 GMT, not far off a
two-week high of 95.737 reached during the previous session.

This year began with the dollar in retreat and investors convinced of
further declines but now there appears to be very little to stop its ascent.

A crisis in the Turkish lira and the U.S.-China trade war have made the
dollar a principal haven for investors seeking shelter and President Trump
appears to be revelling in the strong dollar and its ability to bring
pressure on his foes.

Since Tuesday, the dollar has gained more than 2 percent against the South
African rand and the Argentine peso , and more than 1 percent against
Mexican and Colombian pesos. The greenback is up in 2018 against every major
currency except the Mexican peso and Japanese yen. But some analysts believe
the dollar may yet stumble before the year is out.

The Australian dollar , which had been languishing at its weakest levels
since mid-2016, gained on Wednesday after Australia posted its best economic
growth in six years. It advanced 0.3 percent to $0.7196 moving off its
lowest level since May 2016, reached during the previous session.

The euro was 0.1 percent lower at $1.1597 and the British pound was down 0.2
percent at $1.2827.

Emerging market currencies fell overnight as investors feared
export-oriented economies would be caught in the crossfire of any escalating
trade conflict. A JPMorgan emerging market currency index on Wednesday
hovered near a 15-month low reached during the previous session.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges higher as dollar rally takes a breather

(Reuters) - Gold prices rose on Wednesday from an 11-day low in the previous
session as a U.S. dollar rally faltered.

Gold has fallen 1.5 percent from an Aug. 28 high as currency weakness in
emerging markets and concerns over global trade disputes strengthened the
dollar, making bullion more expensive for buyers with other currencies.

But the greenback slipped on Wednesday after a report that Britain and
Germany were prepared to drop a key sticking point in Brexit negotiations
boosted the pound and the euro.

And with gold still close to a 1-1/2 year low of $1,159.96 an ounce touched
last month, there is little room for prices to fall, Julius Baer analyst
Carsten Menke said.

Spot gold was 0.5 percent higher at $1,196.51 at 1409 GMT after falling to
$1,189.20, the lowest since Aug. 24, on Tuesday.

U.S. gold futures were up 0.3 percent at $1,202.30 an ounce, with the dollar
down 0.3 percent against a basket of major currencies.

Gold has tumbled more than 12 percent from a peak in April as the dollar
rose to 14-month highs and investors turned against the metal.

Helping drive prices down, holdings of gold by exchange traded funds have
fallen by 8 percent, or 4.6 million ounces, since late May, while bets by
hedge funds and money managers on lower prices on the Comex exchange
exceeded bets on higher prices by the most on record last month.

Such negative positioning means speculators will struggle to push prices
much lower, Menke said, though he added that without a weakening of the
dollar, gold would find it difficult to rise.

Trade concerns continue to support the greenback, however, with a deadline
looming in the U.S.-China trade dispute and a refusal by Canada to back down
on key demands in its trade talks with Washington.

Technical and momentum indicators were positive for gold, but the technical
picture would remain mixed unless it could close above $1,200.70, analysts
at ScotiaMocatta said.

Fibonacci resistance was at $1,213.20 with support at $1,185.30, they said.

In other precious metals, spot silver was up 0.7 percent at $14.18 after
falling to its lowest since January 2016 at $13.97 in the previous session.

Platinum gained 0.5 percent to $779.90 having hit$761.80, the lowest since
Aug. 16, on Tuesday.

Palladium was up 0.3 percent at $982.45 after touching the highest in 11
weeks at $988.47 on Tuesday.

METALS-Copper snaps 5-day losing streak as dollar steadies

(Reuters) - Copper steadied on Wednesday after five straight days of losses
as a dollar rally paused, but gains were firmly capped by persistent fears
over escalating trade tensions between the United States and top metals
consumer China.

A public comment period on the possibility of fresh U.S. tariffs on another
$200 billion of Chinese goods ends on Thursday, with expectations that the
additional levies will be imposed by U.S. President Donald Trump.

The dollar has benefited from these tensions, though it steadied on
Wednesday, off a two-week high hit in the previous session, making
dollar-priced metals less costly for non-U.S. investors.

* COPPER PRICES: Three-month copper on the London Metal Exchange was last
bid up 0.9 percent at $5,865 a tonne in official midday rings, having lost
2.5 percent in the previous session.

* A London-based trader said metals had recovered thanks to a lack of
further dollar strength, little follow-through selling overnight, short
covering and consumer buying after holidays. A second London-based trader
said some selling pressure had been relieved after an options expiry.

* OTHER METALS: Stainless steelmaking ingredient nickel was last bid up 0.2
percent at $12,490 a tonne, having hit its lowest since January, while zinc,
used to galvanise steel, traded up 0.4 percent at $2,426.50, having hit a
two-week low.

* STEEL: The most active steel rebar future on the Shanghai Futures Exchange
notched up its ninth day of losses out of the past 11 sessions as worries
lingered about slowing demand in the world’s top producer.

* ALUMINA: Alcoa’s alumina production has likely been hit by a four-week
strike at its Western Australian operations, the Australian Workers’ Union
said, raising the prospect of a widening supply deficit in the key
aluminium-making ingredient.

* OTHER METALS: Lead was last bid up 0.1 percent in rings at $2,078 a tonne,
tin was last bid up 0.1 percent at $18,850, while aluminium was last bid up
0.7 percent at $2,076. The second London-based trader cited bearish
sentiment overall in aluminium, saying the metal was being chased up because
of short covering.

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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