Bulls n Bears Daily Market Commentary : 25 September 2018

Tue Sep 25 19:42:31 CAT 2018

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Bulls n Bears Daily Market Commentary : 25 September 2018

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Zimbabwe Stock Exchange Update

Market Turnover $494,283.68 with foreign buys at $144,484.77 and foreign
sales were $156,192.03. Total trades were 106.

The All Share index recovered 0.13 points  to close at 112.02 points. DELTA
led the movers with a $0.0874 gain to close at $2.1001, SIMBISA   was up
$0.0037 to end at $0.4698 and PADENGA  added $0.0011 to settle at $0.6175.
ZIMPLOW  also traded $0.0005 higher at $0.2025.

Gains were offset by losses in OLD MUTUAL which retreated $0.1507 to close
at $5.2626, INNSCOR lost $0.0571 to end at $1.3204 and ECONET  was $0.0341
weaker at $1.1620. SEEDCO   traded $0.0141 lower at $1.8996 and FIRST MUTUAL
PROPERTIES dropped $0.0010 to settle $0.0600.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa rand on the ropes as stimulus package disappoints; stocks fall

(Reuters) - South Africa’s rand remained on the rack on Tuesday with
investors unconvinced by the economic stimulus plan President Cyril
Ramaphosa announced last week.

Stocks were lower as renewed trade war concerns put emerging markets on the
back foot.

At 1505 GMT the rand was 0.17 percent softer at 14.41 per dollar, with a
move to the 14.50 level seen as a pivot point that could increase selling on
the unit towards 14.70.

The currency is down close to 20 percent year-to-date.

A statement by ratings agency Fitch on Tuesday said Ramaphosa’s turnaround
plan was unlikely boost dismal economic growth significantly.

The rand’s reaction to the stimulus plan on Friday was subdued, while
traders said the slew of domestic data releases due later in the week was
keeping investors on the sidelines.

Bonds were also weaker, with the yield on the benchmark government bond due
in 2026 up 6.5 basis points to 9.150 percent.

The blue chip top 40 index was down 0.64 percent to 50,659 points while the
all share index fell 0.49 percent to 56,883 points.

Market heavyweight Naspers closed 1.95 percent lower, mirroring Tencent
Holdings which ended 1.97 percent lower. Naspers has an over 31 percent
stake in China’s biggest gaming and social media company.

Shares in South African petrochemicals group Sasol rose to 3.85 percent on
the back of higher oil prices.

Brent crude oil prices rose to four-year highs on imminent U.S. sanctions on
Iranian crude exports and the apparent reluctance of OPEC and Russia to
raise output. 

Nigeria

Nigeria's central bank governor optimistic over $8.1 bln MTN transfer
dispute

(Reuters) - Nigeria’s Central Bank Governor Godwin Emefiele said on Tuesday
he was optimistic the bank would resolve a dispute linked to allegations
that South African telecom firm MTN moved funds out of the country
illegally.

The regulator last month ordered MTN and its banks to bring $8.134 billion
back into Nigeria which the central bank alleged the company had sent abroad
in breach of foreign exchange regulations.

MTN’s latest troubles come about two years after it agreed to pay more than
$1 billion to settle a dispute over SIM cards in Nigeria, whose finances
have been hit by a weak economy and volatile global oil prices.

Emefiele said the crux of the latest alleged infraction, related to the
repatriation of funds, was that MTN did not obtain final approval before
moving the naira equivalent of $8.1 billion from its profits out of Nigeria.

MTN and its banks have written to the central bank and provided documents on
the matter, Emefiele said.

Nigeria, which accounts for a third of MTN’s annual core profit, is MTN’s
biggest market and Emefiele said MTN was “systemically important” to his
country.

Emefiele said an investigation into the matter started two years ago. He
said inadequate responses from the telecoms group compelled it to publish
its finding.

The central bank announcement on Aug. 29 sent MTN shares in Johannesburg
down by nearly a third but they have recovered after the Nigerian regulator
softened its stance on the matter. The shares initially fell on Tuesday but
rallied from the previous session to gain 3.24 percent by 1445 GMT.

MTN’s lenders; Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond
Bank were also fined in connection to the money transfer.

Earlier on Tuesday, Standard Bank, said Nigeria’s central bank would not be
debiting its local unit Stanbic for $2.6 billion, which the regulator said
was the bank’s portion of the MTN funds which had been sent abroad.

Emefiele said any liability arising from the funds transfer was that of MTN
and not its banks. 

       <mailto:info at bulls.co.zw> 

America

Dollar rises before Fed; trade woes check risk appetite

(Reuters) - The dollar carved out small gains against the euro and yen on
Tuesday as investors looked to policy clues from the U.S. Federal Reserve,
which is widely expected to hike rates this week, and as the Sino-U.S. trade
dispute kept markets cautious.

The euro edged lower, having hit a 3-1/2-month high in the previous session
after European Central Bank chief Mario Draghi expressed confidence in
eurozone inflation and wages growth.

Global markets have been sideswiped over the past few months as the
intensifying trade row between China and the United States stoked
uncertainty about the outlook for global growth and broader monetary policy
for some developed and emerging market economies.

On Monday, the United States and China imposed a new round of tariffs on
each other’s goods with no sign either side is willing to back down.

The Fed begins its two-day policy meeting later on Tuesday at which it is
expected to raise interest rates for the eighth time since late 2015.
Markets are also betting on another rate hike before year-end, though the
outlook for 2019 is less clear.

The dollar index, which measures the greenback against a basket of six major
currencies, was 0.15 percent higher at 94.323.

Against the Japanese yen, the dollar gave up some of its gains after the
release of minutes from the July policy meeting by the Japanese central
bank.

The minutes showed a few of the Bank of Japan’s board members said the
central bank must consider more seriously the potential dangers of
ultra-easy policy, such as the negative impact on the country’s banking
system.

The greenback edged 0.05 percent higher to 112.86 yen, after briefly
reaching as high as 112.96 yen, its highest level since touching 113.18 yen
on July 19, in early trade.

The Australian dollar, a proxy of China-related trades and a gauge of broad
risk appetite, shed 0.2 percent to $0.7240, extending losses from the
previous two sessions.

Speculators have ramped up bets that interest rate differentials between the
United States and other major economies, including Japan and Australia, will
increase.

For example, net long positions for the dollar have grown to nearly $25
billion according to CFTC data.

The euro was slightly lower at $1.1749 after surging to $1.1815 the previous
day, its highest level since June 14, before giving up most of its gains
during U.S. trade overnight.

The common currency rose after ECB’s Draghi on Monday described an
acceleration in underlying inflation in the euro zone as “relatively
vigorous” and expressed confidence that a pick-up in wage growth would
continue.

But Draghi reaffirmed the ECB’s pledge to keep rates at their current,
rock-bottom level “through the summer” of next year, effectively rebuffing
calls from some policymakers to tighten policy more quickly.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper pressured by China property worries after holiday

(Reuters) - Copper, zinc and other base metals slid on Tuesday, rattled by
more concerns about the economy of top metals consumer China and adjusting
after a one-day closure of Chinese markets.

Chinese share markets fell on Tuesday, partly driven by a plunge in property
companies on worries that a property pre-sale system may be scrapped.

The construction sector is one of the top sources of demand for industrial
metals such as copper and zinc.

The negative sentiment in China caused the Shanghai Futures Exchange (ShFE),
which was closed on Monday for the Mid-Autumn Festival, to only partially
track Friday’s rally on the London Metal Exchange.

Though LME copper surged 4.6 percent on Friday in its biggest one-day
advance since May 2013 and pulled back marginally on Monday, ShFE copper
rose only 1.5 percent on Tuesday.

Three-month LME copper closed 0.6 percent down at $6,318 a tonne.

* ARBITRAGE: Copper, zinc and nickel arbitrage windows have been open for an
extended period, normally spurring imports of metals into China, but this
has been curbed by uncertainty over possible cuts in import taxes, Snowdon
said.

“At the moment traders are holding back on importing metal until they have
clarity on the actual tax adjustment and the timing,” he said.

Premier Li Keqiang, in comments posted on Sunday, said that China would cut
import and export costs for foreign firms.

* COPPER STOCKS: LME copper inventories MCUSTX-TOTAL fell further on Tuesday
to 212,925 tonnes, the lowest since January.

* TECHNICALS: Commerzbank technical analyst Axel Rudolph has upgraded copper
to “bullish” from “neutral”, saying in a note: “We expect the
$6,378/$6,382.50 resistance area to soon give way, in which case our
once-again bullish forecast will be confirmed, with the 200-day moving
average at $6,700.79 then being targeted.”

* ZINC: Bearish investors have been targeting LME zinc , which shed 2.2
percent to finish at $2,507 a tonne. “The metal exhibits the second-largest
short of the complex on our estimates at 25 percent of open interest,”
Marex’s Munro said.

* PRICES: LME aluminium ended the day 0.5 percent firmer at $2,071 a tonne,
lead fell 1.7 percent to $2,009, nickel edged down 0.04 percent to $12,950
and tin dipped by 0.1 percent to $18,900.

Gold gains as investors await Fed rate view, dollar drifts

(Reuters) - Gold edged up on Tuesday as the dollar drifted ahead of a U.S.
Federal Reserve meeting, but the precious metal’s upside remains capped by
strong U.S. economic data that continues to underpin the greenback.

The dollar fell versus a basket of major currencies, with an expected
Federal Reserve rate rise mostly priced in by traders, who will be looking
for clues on the future pace of rate hikes from the central bank.

A strong dollar makes dollar-priced gold costlier for non-U.S. investors,
while rising U.S. interest rates typically deter investors from buying a
non-yielding asset such as gold.

Spot gold was up 0.2 percent to $1,201.39 an ounce at 1410 GMT. U.S. gold
futures were up 0.1 percent at $1,206.10 an ounce.

Gold has fallen around 12 percent since in April, hit by rising U.S.
interest rates and a global trade war that threatens growth and has led
investors to chose the dollar as a safe haven rather than gold.

A senior Chinese official said on Tuesday it was difficult to proceed with
trade talks with the United States while Washington was putting “a knife to
China’s neck”, a day after both sides heaped fresh tariffs on each other’s
goods.

In wider markets, European shares and Wall Street got a lift as oil’s move
above $80 a barrel boosted energy equities. Oil’s rise will fan inflation
and growth concerns in many countries, and could in the long run benefit
gold

Silver was up 1.5 percent at $14.48 an ounce, having hit its highest since
early September.

Spot palladium rose 0.3 percent to $1,062.47 after hitting its highest since
late January.

Platinum was flat at $827.70 an ounce. 

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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