Bulls n Bears Daily Market Commentary : 02 August 2019

Mon Aug 5 03:40:39 CAT 2019

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Bulls n Bears Daily Market Commentary : 02 August 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 4,243,883.20 with foreign buys at ZWL$ 1,456,220.00 and
foreign sales were ZWL$1,678,600.00 Total trades were 53.

The All Share index dropped 1.18 points to close at 184.63 points. SIMBISA
lost $0.0499 to end at $0.9500, CASSAVA SMARTCEH ZIMBABWE LIMITED fell by
$0.0405 to trade at $1.4894 and ECONET shed $0.0225 to settle at $1.5575.
Other losses were in DELTA which dropped $0.0215 to $3.4013 and INNSCOR went
down by $0.0108 to close at $2.1950.

OLD MUTUAL was leading with a $1.0558 gain to close at $17.3529, CBZ
HOLDINGS added $0.0123 to settle at $0.5600 and SEEDCO INTERNATIONAL

  rose by $0.0006 to close at $2.1212. ZIMRE HOLDINGS traded $0.0001 higher
at $0.0455.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Kenya

Kenyan shilling strengthens against dollar

(Reuters) - The Kenyan shilling strengthened against the dollar on Friday
after the central bank sold dollars to the market during the previous
trading sessions, traders said.

At 0645 GMT, commercial banks quoted the shilling at 102.85/95 per dollar,
compared with 103.20/30 at Thursday's close.

South Africa

S.Africa's rand slides as lengthy Fed easing ruled out, stocks rise

(Reuters) - South Africa’s rand weakened on Thursday along with other
emerging market currencies, a day after the U.S. central bank cut lending
rates but ruled out a long rate-cutting campaign.

Stocks closed higher.

At 1505 GMT the rand was 1.45% weaker at 14.5475 per dollar, its weakest
since June 18.

The U.S. Federal Reserve cut interest rates as expected on Wednesday but
chief Jerome Powell said the move might not be the start of a lengthy
campaign to shore up the economy against risks, disappointing investors who
hoped for a more dovish stance.

The dollar index rose to a two-year high, hurting demand for developing
world currencies.

The tame outlook for U.S. rates adds to economic pressures faced by the rand
at home after unemployment hit an 11-year high and the fiscal and credit
ratings risk posed by power utility Eskom continued to unnerve investors.

In equities, the Top-40 index closed 1% higher while the broader all-share
was up 0.5%.

Among the gainers were e-commerce giant Naspers, which closed up nearly 4%.

Bonds weakened, with the yield on the benchmark 10-year government issue
climbing 5.5 basis points to 8.38%. 

       <mailto:info at bulls.co.zw> 

China

Yen up, stocks slide on China's counter-threat to Trump

(Reuters) - A measure of stocks across the globe was on track to post its
largest weekly loss of the year on Friday while yields in U.S. and German
debt were near multi-year lows, after China vowed to retaliate against a
possible new round of U.S. tariffs.

Oil prices bounced back from losses that exceeded 7% the previous session
and the yen scaled further against the dollar a day after its strongest
daily gain in over two years.

The moves followed a sharp Wall Street selloff triggered by U.S. President
Donald Trump’s threat Thursday to impose a 10% tariff on $300 billion worth
of Chinese imports.

China did not specify how it would retaliate, but analysts have said options
include tariffs, a ban on export of rare earths used in everything from
military equipment to consumer electronics, and penalties against U.S.
companies in China.

The trade war between the world’s largest economies has already dislocated
global supply chains and slowed economic growth. The abrupt escalation
capped a critical week for global markets after the U.S. Federal Reserve
delivered a widely anticipated interest rate cut but played down
expectations of many more ahead.

“The tariff threat was a splash of cold water. The market had become
accustomed to the current state of U.S-China trade negotiations, but a hike
in tariffs wakes you up to the fact that the trade war is still with us,”
said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

The Dow Jones Industrial Average fell 188.95 points, or 0.71%, to 26,394.47,
the S&P 500 lost 28.59 points, or 0.97%, to 2,924.97 and the Nasdaq
Composite dropped 132.18 points, or 1.63%, to 7,978.94.

The pan-European STOXX 600 index lost 2.46% and MSCI’s gauge of stocks
across the globe shed 1.30%.

Emerging market stocks lost 2.12%. MSCI’s broadest index of Asia-Pacific
shares outside Japan closed 1.94% lower, while futures in Japan’s Nikkei
lost 1.09%.

MORE FED CUTS SEEN

U.S. data on Friday showed employment growth in July slowed as expected,
which along with trade turmoil may encourage the Federal Reserve to cut
interest rates again in September.

A further 25-basis-point cut by the Fed is priced in for the central bank’s
September meeting while the chance of another cut in October is roughly
1-in-2 according to Fed futures markets.

Safe-haven assets were bid across markets with German 10-year government
bond yields dropping to an all-time low of -0.502% and the country’s entire
government bond yield curve turning negative for the first time ever.

Benchmark 10-year notes last rose 10/32 in price to yield 1.8571%, from
1.892% late on Thursday. They fell to 1.832% earlier, the lowest since
November 2016.

In currency markets the Japanese yen, which on Thursday gained the most in
over two years against the dollar, further strengthened 0.74% to 106.58 per
dollar.

The Swiss franc reached a two-year high of 1.0907 against the euro, which
bounced back from a two-year low of $1.1027 earlier in the week. The common
currency was recently up 0.23% to $1.1109.

The British pound held near a 30-month low versus the dollar as the
governing Conservatives’ majority in parliament was reduced to one seat,
three months before the country is due to leave the European Union.

Sterling was last trading at $1.2159, up 0.23% on the day.

U.S. crude rose 3.02% to $55.58 per barrel and Brent was last at $61.78, up
2.12% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold steadies, on course for weekly gain as dollar eases on U.S. data

(Reuters) - Gold steadied on Friday in seesaw trade as the dollar retreated
on lackluster U.S. jobs data, putting bullion on course to notch its best
week in six weeks following a surge of more than 2% in the previous session
as U.S.-China trade relations soured further.

Spot gold was steady at $1,444.86 per ounce at 01:41 p.m. EDT (1741 GMT),
retracing earlier declines of about 1%. The yellow metal is up nearly 2% so
far this week.

U.S. gold futures settled 1.8% higher at $1,457.50.

Gold has been supported by a “big push by global major central banks to
lower interest rates in light of deteriorating macro conditions,” INTL
FCStone analyst Edward Meir said.

Bullion rose more than 2% on Thursday after U.S. President Donald Trump said
he would slap an extra 10% tariff on $300 billion worth of Chinese imports
and would raise it further if trade talks do not progress.

Data pointing to slow U.S. job growth in July, coupled with an escalation in
trade tensions, could give the Federal Reserve fresh ammunition to cut
interest rates again next month.

Lower interest rates tend to boost gold as they reduce the opportunity cost
of holding non-yielding bullion and also weigh on the dollar.

Spot gold may retest resistance at $1,449 per ounce, a break above which
could lead to a rise into the $1,461-$1,474 per ounce range, Reuters
technical analyst Wang Tao said.

Separately, palladium fell 1.5 % to $1,403.41 per ounce, after breaking
below the $1,400 level for the first time since mid-June to its lowest in
more than seven weeks at $1,378.50.

Platinum was up 0.3% at $846.30 per ounce, while silver fell 0.4% to $16.26
per ounce.

Both silver and platinum appeared set for their first weekly decline in four
weeks.

Aluminium firm Zhongwang seeks advice after U.S. smuggling charges

(Reuters) - China Zhongwang Holdings said on Sunday it was seeking legal
advice after the company and its controlling shareholder, Liu Zhongtian,
were indicted on charges they evaded $1.8 billion of tariffs by smuggling
aluminium into the United States.

Zhongwang said in a statement to the Hong Kong stock exchange that it and
Liu had still not been served with any notice in relation to the legal
proceedings.

Zhongwang is based in northeast China’s Liaoning province and makes
aluminium products for the automotive and construction industries.

U.S. prosecutors have alleged that companies affiliated with Liu used ports
in the Los Angeles area to import aluminium from China that was disguised as
a finished product not subject to duties, before making bogus sales.

Zhongwang has previously described smuggling allegations as “misleading” and
“without any factual basis.”

Liu stepped down as Zhongwang chairman in 2017 but remains its largest
shareholder with a 74.16% stake, according to Refinitiv Eikon data.

Zhongwang’s share price fell by 14.2% on Thursday, after the indictment was
reported, and fell a further 7.6% on Friday to end the week on HK$3.18
($0.4062), its lowest close since October 2015.

In its statement, Zhongwang said its board believed the legal proceedings
had so far had no material adverse impact on the company’s operations or its
financial condition.

($1 = 7.8290 Hong Kong dollars)

.

INVESTORS DIARY 2019

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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