Bulls n Bears Daily Market Commentary : 14 September 2018

Sat Sep 15 09:49:41 CAT 2018

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Bulls n Bears Daily Market Commentary : 14 September 2018

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

Zimbabwe Stock Exchange Update

Market Turnover $1,320,162.56 with foreign buys at $448,440.00 and foreign
sales were $217,103.31. Total trades were 65.

The All Share index closed the week on a lower note losing 1.24 points to
close at 115.91 points as heavyweight counters continue to lose ground. OLD
MUTUAL  went further down by a hefty $0.7058 to trade at $5.0000 , SEEDCO
was $0.1475 lower at $2.0000 and  DELTA decreased by $0.0119 to $2.2792.
ECONET  dropped $0.0079 to trade at $1.1921 and INNSCOR   traded $0.0075
weaker at $1.4500.  

There were no counters trading in the positive as BRITISH AMERICAN TOBACCO
, MEIKLES  and OK ZIMBABWE  all traded unchanged at $27.000 ,$0.3500 and
$0.2400 respectively.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Kenya

Kenyan shilling expected to ease against the dollar

(Reuters) - The Kenyan shilling is  xpected to ease against the dollar due
to increased demand from importers and commercial banks after Kenya's
standby arrangement with International Monetary Fund ended, traders said. 

At 0728 GMT, commercial banks quoted the shilling at 101.10/30 per dollar,
the same as Thursday's close. 

South  Africa

South African rand enjoys strong week as Moody's turns more upbeat

(Reuters) - The rand was on course for gains of more than 2 percent against
the dollar this week, despite some profit-taking on Friday, after Moody’s
signalled it was unlikely to strip South Africa of its last investment grade
credit rating this year.

That marks a turnaround for the South African currency, which has been
dragged sharply lower since early August by poor economic data and fears
that currency crises in Turkey and Argentina could spark a mass exodus from
emerging market assets.

Moody’s lead analyst for South Africa said on Thursday there was “little
chance” the country would be downgraded at a rating review scheduled for
next month.

Her comments were noticeably more upbeat than a Moody’s research report
released after data showed last week that the economy fell into recession in
the second quarter.

First National Bank (FNB) analysts said the more positive tone from Moody’s
was a rare piece of good news for a country suffering from weak business
confidence and policy uncertainty.

The reprieve from Moody’s “will allow South Africa time to address its
fiscal imbalances and remain in the Citi World Government Bond Index,” FNB
analysts said, referring to the risk that a downgrade could cause South
African bonds to be ejected from one of the world’s major global bond
indices.

At 1525 GMT the rand was 0.7 percent weaker at 14.8800 versus the dollar.
But it was 2.4 percent stronger than its close last Friday after rising for
four straight sessions from Monday to Thursday.

Next week investor attention turns to the South African Reserve Bank (SARB),
which holds a monetary policy meeting on Sept. 20. All bar one of the
economists polled by Reuters this week predicted that the SARB would leave
its main lending rate at 6.5 percent, as it weighs economic weakness against
a pickup in inflation.

On the Johannesburg bourse, stocks ended the week firmer, in line with
global markets buoyed by expectations that the United States and China would
open new trade talks.

The blue-chip top-40 index strengthened 0.90 percent to 50,441 points, while
the broader All-share index was 0.74 percent firmer at 56,582 points.

Among Friday’s top gainers, Investec soared almost 10 percent after it
announced plans to spin off its asset management unit in a surprise
restructuring.

       <mailto:info at bulls.co.zw> 

Asia

Hopes for reduced U.S-China trade tensions lift Asian shares

(Reuters) - Asian shares advanced on Thursday on news the Trump
administration has reached out to China for a new round of trade talks,
which raised hopes for a deal easing the bitter tariff dispute between the
world’s two biggest economies.

Despite Asia’s gains, spreadbetters expected European stocks to dip, with
Britain’s FTSE seen opening 0.1 percent lower, Germany’s DAX losing 0.24
percent and France’s CAC slipping 0.3 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent,
a day after it hit 14-month lows.

Early in the day, China’s A-shares shot up 1.2 percent on hopes for reduced
trade tensions, then most of that gain was erase, but in the afternoon the
index rose again, leaving it up 0.6 percent.

Japan’s Nikkei gained 1.0 percent. On Wall Street, the S&P 500 was up 0.04
percent on Wednesday.

Senior U.S. officials led by Treasury Secretary Steven Mnuchin recently sent
an invitation to their Chinese counterparts, including Vice Premier Liu He,
to hold another bilateral trade meeting.

The development comes as more than 85 U.S. industry groups launched a
coalition on Wednesday to take public its fight against President Donald
Trump’s trade tariffs.

Trump’s tariffs have escalated far beyond what business groups once imagined
as the administration prepares to activate duties on $200 billion worth of
Chinese goods, hitting a broad array of internet technology products and
consumer goods from handbags to bicycles to furniture.

“Public support for Trump has fallen in recent weeks, with Democrats seen
likely to capture the House of Representatives. He probably needs some sort
of achievements on trade ahead of the mid-term elections,” said Mutsumi
Kagawa, chief global strategist at Rakuten Securities in Tokyo.

However, many market players remained cautious.

Still, any serious signs of easing in trade tensions should benefit shares
in China and other Asian courtiers the most given they have borne the brunt
of U.S. protectionist moves. The trade tensions have hammered global riskier
assets over the past few months as policymakers and investors worried about
the hit to the world economy.

MSCI’s broad emerging markets index has fallen more than 20 percent from its
peak in January, entering bear market territory.

That is the highest levels since the 1970s, according to Thomson Reuters
Datastream.

In the currency market, the dollar eased a little on the trade talk hopes as
well as on soft U.S. wholesale price data, which undermined the case for a
faster pace of policy tightening by the Federal Reserve.

U.S. producer prices unexpectedly fell in August, recording their first drop
in 1-1/2 years and denting talk of accelerating inflation following Friday’s
strong wage data.

The euro traded at $1.1624, extending its gain this week to 0.6 percent. The
yen weakened 0.2 percent on Thursday to 111.47 per dollar on easing trade
worries.

Sterling held near a six-week high of $1.3087 as Brexit-supporting lawmakers
in British Prime Minister Theresa May’s party publicly pledged support for
her to stay in power.

The European Central Bank and the Bank of England hold policy meetings on
Thursday, but both are widely expected to leave interest rates unchanged.

Perhaps attracting more attention is a policy meeting by the Turkish central
bank, which is expected to raise interest rates to shore up its battered
lira.

The lira has lost more than 40 percent of its value against the dollar this
year, hit by worries over President Tayyip Erdogan’s grip on monetary policy
and by a diplomatic spat between Ankara and Washington.

The lira crisis has spread to some other emerging market countries with weak
economic fundamentals such as sizable current account deficits.

The lira traded at 6.3700 per dollar, up about 0.7 percent on the week and
well off its record low of 7.240 reached one month ago.

Oil prices fell, reversing some of the strong gains from the previous
session, as economic concerns raised doubts about fuel demand growth.

Brent futures hit $80 per barrel on Wednesday but eased in Asia to $79.31,
down 0.5 percent on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Trade conflict looms but higher rates, oil prices help some stocks

(Reuters) - A world stock index climbed as bank and energy shares rose on
Friday, but the momentum was sapped by a report that Washington may fire a
new salvo in its trade war with Beijing.

U.S. President Donald Trump has directed aides to place U.S. tariffs on
about $200 billion more of Chinese goods, according to a person familiar
with the matter. This was first reported by Bloomberg.

That news deflated the confidence of investors, who earlier pushed the MSCI
All-Country World index, which tracks shares in 47 countries, to its highest
level since Sept. 4. The index rose 0.22 percent on the day.

On Wall Street, financial shares were helped by higher rates, which are seen
to benefit banks, which can charge higher interest. Energy stocks got a
boost from rising U.S. oil prices.

The Dow Jones Industrial Average rose 8.68 points, or 0.03 percent, to
26,154.67, the S&P 500 gained 0.8 points, or 0.03 percent, to 2,904.98 and
the Nasdaq Composite dropped 3.67 points, or 0.05 percent, to 8,010.04.

Benchmark 10-year Treasury notes briefly hit the psychologically significant
3 percent level for the first time in more than a month as prices on U.S.
government bonds fell on economic data that seems solid enough to support
plans by the Federal Reserve to raise rates another two times in 2018.

U.S. crude oil futures settled up 0.58 percent to $68.99 per barrel. Brent
fell 0.12 percent to $78.09. The United States is renewing sanctions on
Iran, a major oil producer, after withdrawing from a nuclear deal forged in
2015 between Tehran and world powers.

The U.S. dollar index rose 0.47 percent. The greenback has been a safe haven
from setbacks on the trade front.

Copper, used heavily by China, lost 2.11 percent to $5,905.50 a tonne. The
Chinese yuan traded offshore slipped to 6.88 per dollar from a high of 6.84
earlier in the session.

Chinese shares earlier had retreated as data showed real estate investment
in the country fell in August, raising concern that a cooling property
market could increase risks for Beijing’s economic outlook as the trade
environment worsens.

RATE HIKE LIFTS LIRA

A sharp interest rate increase by Turkey’s central bank to support a
tumbling lira boosted emerging markets. The bank hiked its benchmark
interest rate by more than one-third, to 24 percent.

Currency crises in both Turkey and Argentina have stoked fears of contagion
over the past several weeks, hammering emerging market assets from Indonesia
and India to South Africa.

Turkish lira implied volatility gauges fell to their lowest in more than a
month, as sentiment continued to improve.

“The bold decision (by Turkey’s central bank) reduces the risk that a
full-scale financial crisis may unfold,” analysts at Rabobank wrote in a
note to clients.

“The central bank’s efforts must be accompanied by an implementation of
constructive macro prudential policies by the administration.”

Emerging market stocks tracked by MSCI rose 0.96 percent.

Copper prices fall on Chinese demand fears

(Reuters) - Copper prices fell on Friday as data in China pointing to a
cooling economy and a worsening trade dispute between Washington and Beijing
raised concerns that Chinese demand for metals would fall more than
expected.

Benchmark copper on the London Metal Exchange (LME) ended down 1 percent at
$5,973 a tonne.

After closing prices were set in the LME’s open outcry ring, a Bloomberg
report said Trump had asked aides to proceed with tariffs on $200 billion
more in Chinese goods.

The report pushed industrial metals prices lower, with copper down 1.9
percent in electronic trading at 1634 GMT and slightly down on the week.

Worries that the U.S.-China trade dispute will damage growth in China, the
world’s largest metals consumer, have helped push the metal used in power
and construction down some 20 percent from a June high.

Despite an uptick in Chinese industrial output, data on Friday suggested the
country’s economy would cool further in coming months and government support
measures would take time to kick in.

DOLLAR: The dollar regained ground after having weakened to the lowest since
late July. The weakening had helped to support prices by making metals
cheaper for buyers with other currencies.

COPPER TECHNICALS: Copper remains in a short-term downtrend, but is
supported between $5,940 and $5,980 by its 8- and 20-day moving averages,
brokers Marex Spectron said.

COPPER STOCKS: On-warrant stocks of copper available to the market in
LME-registered warehouses rose 2,875 tonnes to 145,400 tonnes, but are down
from more than 234,000 tonnes in mid-August, suggesting a tighter market.
MCUSTX-TOTAL

Inventories in Shanghai Futures Exchange (ShFE) warehouses also fell to the
lowest since November at 124,566 tonnes. CU-STX-SGH

ALUMINIUM/STOCKS: LME aluminium closed down 1.1 percent at $2,043 a tonne
and was around 1.5 percent this week even after 29,600 tonnes of fresh
cancellations pushed on-warrant LME stocks down to 726,150 tonnes, the
lowest since February 2007. MALSTX-TOTAL

ShFE stocks also down fell to the lowest since March at 853,749 tonnes.
AL-STX-SGH

CHINA ALUMINIUM: China’s aluminium and steel production fell in August from
the previous month, but output of both metals would likely be at a record
high this year, analysts at Commerzbank said.

OTHER METALS: LME zinc finished down 1.1 percent at $2,334 a tonne, nickel
gained 0.4 percent to $12,655, lead ended 0.2 percent higher at $2,040 and
tin closed down 0.1 percent at $19,040.

INVESTORS DIARY 2018

Company

Event

Venue

Date & Time

Hippo

AGM

Meikles

26/09/2018 12PM

Bindura

AGM

Chapman Golf Club, Eastlea

27/09/2018 9AM

CBZH

interim dividend of 0.5c per share record date

28/09/2018

Hippo

final dividend of 2c per share record date

28/09/2018

Star Africa

AGM

45 Douglas Road, Workington

28/09/2018 11AM

 <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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