Bulls n Bears Daily Market Commentary : 22 August 2019

Fri Aug 23 03:55:13 CAT 2019

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Bulls n Bears Daily Market Commentary : 22 August 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 4,683,290.92 with foreign buys at ZWL$ 878,892.80 and
foreign sales were ZWL$ 2,028,383.10 Total trades were 123.

The All Share index retreated by 1.67 points to close at 176.29 points.
BRITISH AMERICAN TOBACCO led the shakers with a $2.0000 loss to close at
$34.0000, OLD MUTUAL LIMITED went further down by $0.2511 to $18.7000 and
SIMBISA traded $0.1275 lower at $0.7214. POWERSPEED also eased by $0.0720 to
$0.2880 and PADENGA  was $0.0487 weaker at $1.7013.

Trading in the positive; PPC added $0.0243 to $2.2000, FIRST MUTUAL
PROPERTIES gained $0.0102 to close at $0.0612 and BINDURA  was $0.0050
stronger at $0.1150. FIRST MUTUAL LIMITED also increased by $0.0005 to end
at $0.2550 and SEEDCO INTERNATIONAL LIMITED traded $0.0002 higher at
$2.2000.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.African rand gains fade as investors left on edge over Fed

(Reuters) - South Africa’s rand was flat on Thursday, as a boost from
lower-than-expected local inflation was overshadowed by worries that further
U.S. Federal Reserve easing might take longer than expected.

At 1547 GMT, the rand was 0.07% lower at 15.2050, after firming compared to
its overnight close in New York in early trading, while stocks also closed
lower.

Stock markets slipped worldwide on Thursday following the release of minutes
from the Fed’s July meeting, which revealed a rift between members over its
0.25% rate cut in July.

With a large number reluctant to loosen policy, markets were seen to have
gone too far in pricing in expectations of deeper cuts.

Economists are also divided over whether easing inflation will push the
South African Reserve Bank to cut rates again at its September meeting,
following a 25 basis point reduction in July.

Headline consumer price inflation slowed to 4.0% year-on-year in July,
according to data from Statistics South Africa showed on Wednesday, the
lowest since January and below a consensus forecast of 4.2%.

Lower inflation against relatively high interest rates marginally supports
the rand’s carry yield attraction, but gains based on such data tend to be
quickly overtaken by other factors such as high levels of local credit risk
and diminishing chances of lower U.S. benchmark rates.

Stocks also declined. Johannesburg’s All-share index fell 0.82% to 54,188
points, while the Top-40 index fell 0.82% to 48,435 points.

At the bottom of both was budget retailer Mr Price, which fell 13.70% to
156.44 rand - prices last seen almost two years ago - after sales came in
worse than expected.

Grocery chain SPAR was also down 5.44% to 173.43 rand alongside other
retailers such as Shoprite, which fell 3.6% to 120.65 rand, its lowest in 8
years. Food and clothing retailer Woolworths slipped 3.27% to 51.75 rand.

The yield on the benchmark 10-year government bond fell 0.5 basis points to
8.27%.

Uganda

Ugandan shilling a touch stronger on commodity flows

(Reuters) - The Ugandan shilling was a touch stronger on Wednesday on the
back of hard currency inflows from exporters of coffee and other
commodities.

At 0933 GMT commercial banks quoted the shilling at 3,685/3,695, slightly
stronger than Tuesday’s close of 3,690/3,700.

       <mailto:info at bulls.co.zw> 

America

Stocks edge lower as investors eye Fed's Jackson Hole meeting

(Reuters) - An index of stock markets worldwide crept lower on Thursday on
uncertainty over the outlook for U.S. interest rate cuts and weak U.S.
manufacturing data that raised concerns about the health of the world’s
largest economy.

U.S. manufacturing industries in July recorded their first month of
contraction in almost a decade amid concerns about whether the U.S.-China
trade conflict would tip the economy into a recession, a private survey
showed.

Investors’ focus, however, remained firmly on Friday’s speech by Federal
Reserve Chair Jerome Powell at a Jackson Hole, Wyoming, event, which could
offer clarity on the direction of U.S. monetary policy.

The Fed has come under increasing pressure to cut borrowing costs more,
including a call by President Donald Trump on Wednesday for the central bank
to reduce its benchmark rate.

The MSCI world equity index, which tracks shares in 47 countries, was down
0.25%.

On Wall Street, stocks finished a choppy session nearly unchanged. While
strong results from retailers bolstered confidence in consumer demand and
lifted shares, the manufacturing data and uncertainty about the interest
rate outlook kept investors in check.

The Dow Jones Industrial Average was the strongest of the three U.S. major
stock indexes, helped by a 4.24% jump in Boeing’s shares after a Reuters
report that the company has told suppliers it will resume production of its
best-selling 737 jets at a rate of 52 aircraft per month in February 2020.

The Dow rose 49.51 points, or 0.19%, to finish at 26,252.24, the S&P 500
lost 1.48 points, or 0.05%, to end at 2,922.95 and the Nasdaq Composite
dropped 28.82 points, or 0.36%, to close at 7,991.39.

European shares, which found support from upbeat surveys on Germany and the
euro zone, declined on a report that the Bundesbank sees no need for German
fiscal stimulus right now. The pan-European STOXX 600 index closed down
0.40%.

In currency markets, the dollar slipped 0.1% against a basket of other major
currencies to 98.193, but moved within narrow ranges as investors awaited
more clues from the Fed.

While the Fed’s latest minutes showed U.S. policymakers are reluctant to
begin a big rate-cutting cycle in the coming months, market participants
still expect it to signal a stimulus measure, or an affirmation that the
U.S. central bank is on a steady path to ease interest rates, a scenario
viewed as negative for the dollar.

Kansas City Fed President Esther George and Philadelphia Fed President
Patrick Harker said on Thursday the U.S. central bank currently does not
need to deliver more stimulus to the economy after it cut rates for the
first time in more than a decade last month.

Asian currencies suffered after the Chinese yuan fell to an 11-year low
against the dollar, indicating trade tension between the world’s two biggest
economies remained a major issue. nB9N22601Z]

U.S. Treasury yields climbed as comments from Fed officials dampened hopes
of future interest rate cuts.

Benchmark 10-year notes were down 10/32 in price to yield 1.6131%, up from
1.577% late on Wednesday.

Oil prices weakened as worries about the global economy weighed.

Brent crude settled down 38 cents, or 0.6%, at $59.92 a barrel, while U.S.
West Texas Intermediate crude ended the session 33 cents, or 0.6% lower at
$55.35.

Gold prices were slightly lower as investors awaited the outcome of the
Jackson Hole meeting. Spot gold dropped 0.23% to $1,498.5259 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges lower, focus on Jackson Hole summit for rate-cut direction

(Reuters) - Gold prices fell marginally on Thursday, lingering around the
key $1,500 level, as investors awaited the Federal Reserve chair’s speech at
a global central bankers’ conclave for clues on future U.S. interest rate
cuts.

Spot gold inched down 0.2% at $1,499.60 per ounce as of 0747 GMT.

U.S. gold futures were down 0.5% at $1,507.60 an ounce.

If Powell says they are going to cut rates aggressively, that may not be
great for gold in the short-term since equities will gain, Halley added.

Markets are now focused on Powell’s speech at Jackson Hole on Friday, for
clarity on the direction of U.S. monetary policy, especially after an
inversion in the Treasury yield curve highlighted the risk that the U.S.
economy may fall into recession.

Minutes of the Fed’s July meeting, released on Wednesday, showed
policymakers were divided over whether to cut interest rates, but were
united in wanting to signal they were not on a preset path to more easing.

However, futures are still fully priced for a quarter-point cut in rates
next month, and over 100 basis points of easing by the end of next year.

Traders are also looking at the Group of Seven summit this weekend for clues
on what additional steps policymakers may take to boost economic growth.

Meanwhile, hopes for U.S. fiscal stimulus got a knock when President Donald
Trump reversed course and said he was not looking at cutting payroll taxes.

A range of manufacturing surveys from across the globe are due later on
Thursday and risks are they will show a further slowdown in activity,
especially in Europe.

Minutes from the European Central Bank’s last policy meeting are also
awaited, and markets are looking for more details on exactly when and how
aggressively it might ease policy.

Spot gold may rise to $1,524 per ounce as it has found a support at $1,497,
according to Reuters analyst Wang Tao.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said
its holdings rose 0.80% to 851.91 tonnes on Wednesday.

The holdings have increased about 3%, or around 24 tonnes, so far this
month.

Elsewhere, silver fell 0.6% to $17.01 per ounce, while platinum was down
0.1% to $852.

Palladium fell 0.4% to $1,465.19 per ounce. 

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
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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
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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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