Bulls n Bears Daily Market Commentary : 21 September 2018

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Bulls n Bears Daily Market Commentary : 21 September 2018

 


 

 


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

 


 

 


Zimbabwe Stock Exchange Update

 

 

 

Market Turnover $9,183,529.71 with foreign buys at $1,561,310.87 and foreign
sales were $4,590,511.75. Total trades were 111.

 

The All Share index lost 0.11 points to close at 113.40 points. OLD MUTUAL
decreased by $0.1521 to close at $5.1486, SEEDCO  traded $0.1137 lower at
$1.8502 and FIRST MUTUAL HOLDINGS  dropped $0.0050 to end at $0.1550. OK
ZIMBABWE  also went down by $0.0020 to settle at $0.2400 and CBZ  closed at
$0.1600 following a $0.0015 loss.

 

Trading in the positive was DELTA  which put on $0.0257 to $2.1306, PPC
traded $0.0025 higher at $1.1000 and PROPLASTICS  added $0.0015 to end at
$0.1120. FIRST MUTUAL PROPERTIES   also increased by $0.0010 to $0.0610 and
BARCLAYS   was marginally up by $0.0004 to settle at $0.0695.

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

  Global Currencies & Equity Markets

 

South Africa

 

South African rand firms on rate hold, dollar weakness; stocks up

(Reuters) - South Africa’s rand firmed to a three-week high against the
dollar on Thursday after the central bank left its benchmark repo rate
unchanged and the U.S. currency slipped to its lowest since July.

 

Equities rose for a third session in line with global markets that continued
to shrug off lingering concerns over the U.S.-China trade war.

 

The rand was trading at 14.4275 per dollar at 1542 GMT, up 1.47 percent from
Wednesday’s close and its strongest since Aug. 30.

 

South Africa’s central bank left its benchmark repo rate at 6.5 percent on
Thursday, with the bank’s governor striking a more hawkish note than at the
last rate meeting in July.

 

South African President Cyril Ramaphosa will on Friday detail a stimulus
package meant to reignite growth, with the economy having shrunk 0.7 percent
in the second quarter, unexpectedly tipping the country into its first
recession since 2009.

 

The dollar slipped to its lowest levels since July 9 on concern over the
impact of the trade row between China and the United States.

 

In fixed income, the yield on the benchmark government bond due in 2026 was
flat at 9.09 percent.

 

On the stock exchange, the blue-chip Top-40 index was 0.25 percent firmer at
50,397 points while the all share index was up 0.18 percent at 56,547
points.

 

A bounce in global stocks on relief that fresh U.S. and Chinese tariffs on
reciprocal imports were less harsh than feared continued on Thursday, though
investors remained wary about the next steps in the trade war.

 

Aspen Pharmacare ended a five-day losing streak, rising 2.3 percent after
shares slumped on investor concerns about the sale of its baby food unit to
France’s Lactalis and concerns over its debt levels.

 

Telecoms giant MTN closed with a 6.5 percent gain after Nigeria’s central
bank said on Wednesday that it was reviewing information provided by the
company and four banks about a dispute on the repatriation of dividends. 

 

 

Libya

 

Libya sets fee on currency transactions to tackle black market

(Reuters) - Banks in eastern Libya will impose a hefty fee on foreign
exchange transactions, an official said on Thursday, adopting a policy
designed to tackle a currency crisis that was first announced in the
country’s west.

 

Libya has been divided since 2014 between rival authorities that have taken
power amid widespread anarchy prevailing since long-time leader Muammar
Gaddafi fell in a NATO-backed uprising in 2011.

 

On Wednesday, the U.N.-backed administration in the capital Tripoli set the
183 percent fee in a bid to bridge the gap between the official exchange
rate of 1.38 dinars to the dollar and the black market rate of around 5.8.

 

The gap has done much to distort the North African country’s oil-dependent
economy, contributing to a liquidity crisis and fomenting corruption as
armed groups with access to dollars at the official rate make huge profits
through black market transactions and import scams.

 

With the new fee, the official exchange rate will be around 3.9, unofficial
calculations show.

 

The decision to impose it was taken together with the Tripoli central bank.
Its authority is challenged by a separate entity in the east, where a rival
government that is not recognised internationally holds power.

 

Ramzi al-Agha, head of the liquidity committee at the eastern central bank,
signalled the fee would also be collected there. “We have nothing to do with
the decision but it be imposed by all commercial banks,” he told Reuters.

 

It was unclear how the new fee system will be implemented, and the
announcement of its introduction had little impact on the black market rates
in Tripoli or the main eastern city, Benghazi.

 

In Tripoli, street dealers quoted a dollar rate of between 5.5 and 5.8 at
noon compared with 6 at the start of the week.

 

Commercial banks, which grant foreign currencies at the official rate on
orders from the central bank, are in practice controlled by armed groups
which would stand to lose if they paid the fee.

 

The fee is also not intended to cover the whole market. The Tripoli
government has said it would be imposed on personal and commercial dealings
- most likely excluding imports of fuel and other heavily subsidised goods.

 

Travel allowances for Libyan families, which together with fuel imports
comprise the bulk of hard currency allocations, would be also excluded, the
government said last week.

 

Smugglers, often linked to armed groups, make a huge profit by shipping
petrol to Tunisia or Malta where retail prices are much higher.

 

The Tripoli central bank is meant to publish a daily dinar/ rate versus
major currencies on its website. By Thursday noon it was still showing the
old rate. 

 

 

       <mailto:info at bulls.co.zw> 

 

 

 

Asia

 

Asian stocks extend recovery as trade worries take back seat

(Reuters) - Asian stocks extended gains on Friday after Wall Street’s S&P
500 set a new all-time high, while the dollar slipped on views that
Beijing’s and Washington’s fresh exchange of tariffs may be less damaging
than initially feared.

 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6 percent.
It has rebounded 4 percent from a 14-month low on Sept. 12, buoyed in part
by expectations that China will pump more stimulus into its economy to
weather the trade war.

 

Japan’s Nikkei rose 0.6 percent, hitting an eight-month high.

 

On Wall Street, trade-sensitive industrial stocks led the gains on Thursday.
The Dow Jones Industrial Average rose 0.95 percent while the S&P 500 gained
0.78 percent, both hitting record highs that took them deeper into
technically overbought territory.

 

The latest rally comes after new U.S. and Chinese tariffs on each other’s
goods were set at lower rates this week than previously expected, raising
hopes that hostilities between the world’s two largest economies may be
easing.

 

Despite growing anecdotal reports from companies on both sides of the
Pacific that the trade war is starting to impact their operations, the
outlook for corporate profits remained solid in many markets on the back of
strong global growth, keeping equity valuations relatively attractive.

 

Still, some analysts cautioned that the reversals in various assets
including U.S. industrial shares and non-U.S. developed markets could be
driven primarily by position squaring ahead of the end of quarter, and not
reflect a sustained shift in investor sentiment.

 

Chinese shares, which had been hit the hardest by the trade war, have
bounced this week. The CSI 300 index of Shanghai and Shenzen shares, which
hit a two-year low last week, rose 0.6 percent in early Friday week for a
weekly gain of 2.7 percent.

 

MSCI’s ACWI, an index covering the world’s 47 markets, edged up 0.15 percent
to near its 5 1/2-month high hit at the end of August, having gained 1.4
percent so far this week.

 

Leading the gains were developed markets outside the U.S. , which have risen
2.3 percent so far this week.

 

They outperformed U.S shares, which have risen 0.8 percent, reversing their
underperformance since early May when trade disputes intensified.

 

In the currency market, the dollar slipped to three-month low against a
basket of major trading partners as easing worries on trade wars quelled
bids for dollar.

 

The euro last traded at $1.1781, just below its 2 1/2-month high of $1.1785
touched on Thursday.

 

The dollar’s weakness and spikes in U.S. Treasuries yields this week raised
suspicions that some sovereign players may be selling the dollar they hold
in their foreign reserves for other currencies.

 

But Simon Derrick, chief currency strategist at BNY Mellon in London, said
that there is no convincing evidence yet of such a major shift in forex
reserves holdings, adding the euro’s rise could be more related to easing
pressure on Italian bonds.

 

“This suggests that the next week will prove to be critical in determining
the outlook for the euro. In particular, next Thursday will see the release
of Italy’s Economic and Financial Document. This should provide the first
real indication of the scale of the planned fiscal deficit for 2019,” he
said.

 

The British pound climbed to as high as $1.3295, its highest since early
July, after strong UK retail sales data.

 

The closely-watched summit of the European Union produced little progress on
the thorny issue of trade and the Irish border.

 

EU leaders have warned British Prime Minister Theresa May that they are
ready to cope with Britain crashing out of the bloc if she does not
compromise.

 

At home, Britain’s former Brexit minister David Davis has said up to 40
lawmakers from the ruling party will vote against May’s plans to leave the
European Union, meaning she may struggle to get her deal through parliament.

 

The pound last stood at $1.3272.

 

The yen hit a two-month low of 112.585 to the dollar on Thursday and last
stood at 112.51.

 

Oil prices have pulled back from recent highs after U.S. President Donald
Trump urged OPEC to increase production at its meeting in Algeria.

 

U.S. light crude was down 0.1 percent at $70.22 a barrel. Brent crude oil
were little changed at $78.72 a barrel. 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

Commodities Markets

 

 

 

Copper heads for best week in a month as trade fears ease

(Reuters) - London copper rose on Friday and was on track to post its
biggest weekly advance in four weeks as investors viewed that trade tariffs
would have a softer impact to global growth than earlier feared.

 

FUNDAMENTALS

* COPPER: London Metal Exchange copper rose 1 percent to $6,140 a tonne by
0217 GMT, up nearly 3 percent this week and close to its highest in more
than one month. Shanghai Futures Exchange copper edged up 0.1 percent to
49,510 yuan ($7,235) a tonne. The Shanghai Futures Exchange will be closed
on Monday for the mid-autumn festival.

 

* COPPER OPTIONS: Swiss trading house Trafigura was among the first to trade
Shanghai Futures Exchange (ShFE) copper options at their debut on Friday,
according to a source, as the Chinese commodity exchange aims to challenge
its New York and London rivals.

 

* ZINC PREMIUMS: Premiums for zinc have surged to $345 a tonne, the highest
in at least six years amid a squeeze on supply in China. ZN-BMPBW-SHMET

 

* DOLLAR: The dollar struggled near two-month lows, while the yen also
sagged on Friday on reduced safe haven demand amid a switch in investors’
view that the Sino-U.S. trade conflict would be less damaging to global
growth than initially feared.

 

* TRADE: Still, global economic growth has peaked in the face of rising
trade frictions and emerging market turbulence, the OECD said on Thursday,
as it trimmed its earlier outlook.

 

* BHP: Global miner BHP Billiton Ltd said on Thursday that a fire at its
Spence copper mine in Chile had forced it to partially shut down operations.
Spence produced 198,600 tonnes of copper in 2017.

 

* ALUMINA: The Shanghai Futures Exchange (ShFE) aims to release a draft of
an alumina futures contract in late 2018 or early 2019, after requests from
the market to create a price benchmark for the feedstock used to make
aluminium, an official said on Thursday.

 

* For the top stories in metals and other news, click or

 

MARKETS NEWS

* Asian stocks extended gains on Friday after Wall Street’s S&P 500 set a
new all-time high, while the dollar slipped as investors viewed Beijing’s
and Washington’s fresh exchange of import tariffs as less harmful than
initially feared.

 

PRICES

Three month LME copper

 

Most active ShFE copper

 

Three month LME aluminium

 

Most active ShFE aluminium

 

Three month LME zinc

 

Most active ShFE zinc

 

Three month LME lead

 

Most active ShFE lead

 

Three month LME nickel

 

Most active ShFE nickel

 

Three month LME tin

 

Most active ShFE tin

 

ARBS ($1 = 6.8431 Chinese yuan)

 

 

 

Gold rises on weaker dollar, heads for 1st weekly gain in four

Reuters) - Gold prices edged higher on Friday to a one-week high as the
dollar weakened on receding fears of a full-blown Sino-U.S. trade war, with
the yellow metal heading for its first weekly gain in four.

 

FUNDAMENTALS

* Spot gold inched up 0.2 percent to $1,209.38 by 0036 GMT, after touching
its highest since Sept. 13 at $1,210.01. It has risen 1.3 percent so far
this week.

 

* U.S. gold futures were up 0.3 percent at $1,214.30 an ounce.

 

* Investors are awaiting next week’s Federal Reserve meeting. The U.S.
central bank is widely expected to raise benchmark interest rates and shed
light on the path for future rate hikes.

 

* All 113 economists in the Reuters poll forecast the Fed would raise rates
when it meets Sept. 25-26. It is expected to follow that up with one more
before the end of this year, taking the fed funds rate to 2.25-2.50 percent.

 

* Higher rates dent demand for non-interest yielding gold and in turn boost
the dollar in which it is priced.

 

* The dollar index was hovering near a ten-week low against a basket of
major currencies.

 

* The dollar fell as a resurgence in global risk appetite curbed safe-haven
demand for the greenback.

 

* The U.S. economy will expand at a robust pace in coming quarters but slow
to 2 percent by the end of 2019, according to forecasters polled by Reuters
who unanimously said the escalating trade war with China was bad economic
policy.

 

* Some Asian economies running large external surpluses, including Thailand
and South Korea, might be forced to tighten monetary policy soon as high
household debt poses a bigger financial risk than the U.S. Federal Reserve’s
steady pace of rate hikes.

 

* Palladium touched its highest since April 19 at $1,054 per ounce on
Thursday. It was last down 0.2 percent at $1,047.49.

 

* Platinum hit its highest since Aug. 10 at $835.20 on Thursday. It was
steady at $832.74 on Friday.

 

* Russia’s gold reserves stood at 64.3 million troy ounces as of the start
of September, the central bank said on Thursday.

 

* Switzerland’s gold trade boomed in August, with imports hitting their
highest level since January 2017 and exports the highest since June last
year, data from the Swiss customs bureau showed.

 

* Fintech company Tradewind Markets said on Thursday it had hired Steve
Lowe, former head of European operations at Bank of Nova Scotia’s metals
business, to help it expand in Europe. 

 

 


 

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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