Bulls n Bears Daily Market Commentary : 06 August 2019

Wed Aug 7 01:46:37 CAT 2019

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Bulls n Bears Daily Market Commentary : 06 August 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 2,723,759.71 with foreign buys at ZWL$ 290,174.20 and
foreign sales were ZWL$ 200,480.00 Total trades were 143.

The All Share index dropped further by 0.65 points to close at 183.51
points. CASSAVA SMARTECH eased $0.0542 to $1.4284, SIMBISA lost $0.0204 to
end at $0.9000 and WILLDALE was $0.0036 weaker at $0.0214. SEEDCO also
decreased by $0.0024 to settle at $1.4876 and INNSCOR was $0.0023 lower at
$2.1852.

Trading in the positive; OLD MUTUAL LIMITED added $0.2054 to $17.8038, DELTA
gained $0.0424 to end at $3.4424 and ARISTON was $0.0091 stronger at
$3.4424. PADENGA also increased by $0.0034 to $1.8034 and SEEDCO
INTERNATIONAL traded $0.0020 firmer at $2.1244. 

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  Global Currencies & Equity Markets

South Africa

South African rand hits 2-month low after Moody's comments on Eskom

(Reuters) - South Africa’s rand weakened to two-month lows in late afternoon
trade on Tuesday, giving up gains earlier in the session, after ratings
agency Moody’s said power utility Eskom urgently needs a turnaround plan as
its capital structure is unsustainable.

At 1535 GMT, the rand was 0.4% weaker at 14.9800 per dollar, having hit a
session low of 15.000 - its weakest since June 7. The currency had also
fallen sharply on Monday after an escalation in the U.S.-China trade war.

Cash-strapped power utility Eskom said last week it expects to make a 20
billion rand ($1.34 billion) net loss in the current 2019/20 financial year
after the 20.7 billion rand loss in 2018/19, exposing the country’s public
finances to grave risks at a time of fiscal constraints.

The government has proposed giving Eskom a 59 billion rand cash injection
over the next two financial years, in addition to 230 billion rand of
bailouts spread over the next decade.

Moody’s is the last of the three big international ratings agencies to have
South African debt at investment grade. South Africa’s rating with S&P
Global Ratings and Fitch has been non-investment grade since 2017.

On the bourse, stocks snapped a two-session losing streak as a rout in
global markets eased as signs Beijing is keen to stem the yuan’s slide
soothed markets unnerved by the Trump administration’s labelling of China as
a currency manipulator.

The Johannesburg All-Share index closed 0.16% firmer at 55,062 points, while
the Top-40 index ended the day 0.1% up to 49,113 points, after both weakened
to levels last seen on May 30 on Monday.

The top performer was Rebosis Property Fund, which surged 14.29% to 56 cents
after it said it is considering a merger with Delta Property Fund.

Gold stocks continued to shine, with prices consolidating near the highest
in more than six years as the trade war drove investors to safe-haven
assets. The Gold Index closed 1.83% firmer.

The yield on the benchmark government bond due in 2026 shed a single basis
point to 8.43%.

$1 = 14.9249 rand

Nigeria

Nigeria naira quoted weaker as funds exit bonds

(Reuters) - Nigerian naira was quoted at 363.50 on Tuesday, weaker than
362.80 a week ago, traders said, as foreign investors exited local bonds and
businesses repatriated dividends.

The naira hit resistance at 363 last week, traders said, saying that
businesses with urgent dollar demand were bidding the currency weaker to
fill their orders. Traders said the central bank was targeting dollar sales
to foreign investors.

Pressure has been building up on the currency as oil prices drop and as
foreign investors book profits from local bonds after yields fell on the
debt market. A one-year open-market bill auction fetched around 12% last
month, down from as high as 18% a year ago.

Nigeria operates a multiple exchange rate regime. It maintains an official
exchange rate of 306.90 naira to the dollar, supported by the central bank.
The traded rate of 363.50 is the one widely quoted by foreign investors and
exporters.

Another trader said the central bank was directing dollar sale to foreign
investors to help curb pressure on the currency and keep the naira quoted in
an orderly manner.

The bank has been intervening on the forex market over the past two weeks to
prop up the naira as foreign investors exit.

       <mailto:info at bulls.co.zw> 

America

Emerging debt, stocks suffer biggest daily outflows of 2019 on Friday -IIF

(Reuters) - Emerging market debt and equities suffered their biggest
outflows of 2019 on Friday with hefty losses continuing on Monday amid a
sharp escalation of Sino-U.S. trade tensions, data from the Institute of
International Finance showed (IIF).

Analysing high frequency data from local stock exchanges and debt offices,
the IIF, found that $2.33 billion of portfolio money had been pulled from
developing bond and stock markets on Friday - the largest daily outflows of
the year.

Meanwhile, partial flow data for Monday showed that developing fixed income
and equities had hemorrhaged another $1.43 billion already even before
trading in the Americas was added.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold climbs back toward six-year peak on U.S.-China trade clash

(Reuters) - Gold prices strengthened on Tuesday, consolidating near the
highest in more than six years as an intensifying U.S.-China trade war
threatened global economic growth.

Spot gold rose 0.5% to $1,470.96 an ounce as of 2:08 p.m. EDT (1808 GMT),
after hitting $1,474.81, the highest since May 2013. The previous session,
gold jumped as much as 2%.

U.S. gold futures settled up 0.52% at $1,484.20.

A rout in global markets eased as China kept the yuan on a tight leash a day
after letting it weaken past 7 to the dollar. This led the United States to
label Beijing a currency manipulator, a decision that China’s central bank
said would “severely damage international financial order and cause chaos in
financial markets.”

Influential Wall Street bank Goldman Sachs said it no longer expects
Washington and Beijing to agree on a truce to end their prolonged trade
dispute before the November 2020 presidential election.

St. Louis Federal Reserve President James Bullard on Tuesday said Fed does
not need to “pile on” interest rate cuts at a time when the economy
continues to grow and is still adjusting to the looser monetary policy set
by the Fed this year.

The U.S. central bank last week cut interest rates for the first time since
the financial crisis in 2008. Lower rates reduce the opportunity cost of
holding bullion, which yields no interest.

Holdings of the largest gold-backed exchange-traded fund (ETF), SPDR Gold
Trust, rose to 835.16 tonnes on Monday, the highest level since June 6,
2018.

Meanwhile, gold denominated in sterling soared to an all time high of
1,213.54 pounds an ounce as investors worried about the possible
repercussions of Britain’s impending exit from the European Union.

Among other precious metals, silver inched up 0.2% to $16.42 an ounce and
palladium jumped 1.9% to $1,441.55.

Platinum fell 0.4% to $849.96. 

Copper pinned at two-year low by trade conflict

(Reuters) - Copper prices hovered around a two-year low on Tuesday as
further escalation in the U.S.-China trade conflict delayed resolution to a
dispute that has depressed economic growth and increased fears over metals
demand.

Three-month copper on the London Metal Exchange (LME) inched up 0.1% to
$5,690 a tonne in official trading rings, failing to achieve any real
distance from the $5,640 two-year low touched in the previous session.

China’s central bank on Tuesday said Washington’s decision to label Beijing
as a currency manipulator would “severely damage international financial
order and cause chaos in financial markets”.

ING commodities analyst Warren Patterson said prices would continue to be
dictated by macro events and that Tuesday’s prices were “a bit of a
correction” after the previous session’s plunge.

The escalation in tensions could cause a further rift between the world’s
two largest economies and hurt global growth, including in China, the
world’s biggest metals consumer.

TRADE WAR: The U.S.-China dispute has already spread beyond tariffs to areas
such as technology, with analysts warning that tit-for-tat measures could
widen in scope and severity, weighing further on business confidence and
global economic growth.

CHINESE CURRENCY: The offshore yuan pulled back from a record low after
Beijing appeared to take steps to prevent it from weakening further after
the sharp drop that prompted the U.S. government to accuse China of
manipulating its currency. A sharp weakening of the yuan has made metals
more expensive for buyers in China.

CHINESE PREMIUMS: Yangshan copper premiums SMM-CUYP-CN have climbed to their
highest since mid-February at $66.50 a tonne, suggesting stronger physical
demand in China, though ING said the demand outlook remained uncertain
because of the trade conflict.

NICKEL INDONESIA: A top Indonesian mining ministry official said on Monday
he would not speculate on whether the government might bring forward a
planned ban on mineral ore exports from 2022.

This helped propel benchmark nickel prices to a two-week high on Monday. In
official rings, the metal advanced 1% to $15,030 per tonne.

ALUMINIUM SMELTERS: Production costs for aluminium smelters in China, the
world’s top maker of the metal, fell 4% month-on-month to an average of
13,888 yuan ($1,974) a tonne in July as alumina prices slumped, Antaike
said.

PRICES: Aluminium rose from a seven-week low touched on Monday, gaining 0.2%
to $1,766 a tonne while zinc firmed 0.6% to $2,324.50 after touching an
11-month low in the previous session.

Lead traded 2.4% higher at $2,001 and tin rose 0.9% to $17,050.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
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companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
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for guideline purposes only and sourced from third parties.

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