Bulls n Bears Daily Market Commentary : 23 August 2019

Mon Aug 26 04:27:44 CAT 2019

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Bulls n Bears Daily Market Commentary : 23 August 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 6,960,132.21 with foreign buys at ZWL$ 3,190,511 and
foreign sales were ZWL$ 712,134.40 Total trades were 158.

The All Share index closed the week on a lower note losing 1.96 points to
close at 174.33 points. OLD MUTUAL LIMITED led the shakers with a $0.2000
loss to close at $18.5000, DELTA  eased $0.1228 to $3.3347 and RIOZIM
traded $0.0500 lower at $2.1000. SEEDCO  also decreased by $0.0451 to
$1.4549 and SEEDCO INTERNATIONAL LIMITED was $0.0380 down at $2.1620.

There were no counters trading in the positive territory as EDGARS , DAWN
and FIRST MUTUAL LIMITED  traded unchanged at $0.1300, $0.0462 and $0.2550
respectively.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand firms on weaker dollar after Fed chair speech

(Reuters) - South Africa’s rand firmed to a two-week high on Friday as the
dollar slipped after U.S. Federal Reserve Chair Jerome Powell set the stage
for further interest rate cuts.

At 1540 GMT the rand was 0.41% firmer at 15.1800 per dollar, after hitting a
two-week peak of 15.0750 earlier in the immediate aftermath of Powell’s
speech.

In his speech, Powell said the U.S. economy is in a “favourable place” and
the Fed will “act as appropriate” to keep the economic expansion on track.

Markets had been divided on what they thought Powell would say at the
Jackson Hole, Wyoming, symposium, with some expecting him to announce a
major stimulus measure while others believed he would downplay the chances
of a September rate cut.

Headline consumer price inflation slowed to 4.0% year-on-year in July, 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.

In equities, Johannesburg’s broader All-share index fell 0.35% to 53,996
points, while the benchmark Top-40 index declined 0.39% to 48,248 points.

Retailers were among the biggest decliners, with Massmart shedding 7.81% to
40.26 rand, while Shoprite fell 3.61% to 116.29 rand.

In fixed income, the yield on the benchmark bond due in 2026 added 0.5 basis
points to 8.275%. 

Zambia

Zambia will avoid debt default and new loans - finance minister

(Reuters) - Zambia, which is struggling with high debt levels, will avoid a
default and will continue to shun new loans as it reins in lending and
expenditure, Finance Minister Bwalya Ng’andu said on Friday.

The International Monetary Fund has repeatedly warned that Zambia’s high
debt and shrinking foreign exchange reserves leave its economy vulnerable.

Zambia’s external debt rose to $10.05 billion at the end of 2018, compared
with $8.74 billion a year earlier, raising fears that the southern African
country is headed for a debt crisis.

Ng’andu’s predecessor, Margaret Mwanakatwe, said in May that Zambia had
delayed the receipt of loans totalling $2.6 billion contracted last year in
order to rein in its soaring debt.

Ng’andu said the position had not changed, and reiterated plans to delay
some projects and cancel others in order to cut down on expenditure and
debt.

Zambia is trying to shrink a fiscal deficit that amounted to 7.5% of gross
domestic product last year.

       <mailto:info at bulls.co.zw> 

America

Stocks tumble, yen rallies as U.S. and China escalate trade war

(Reuters) - Stocks, the dollar and oil prices fell on Friday while safe
havens rose after President Donald Trump demanded U.S. companies look at
alternatives to China for manufacturing, following Beijing’s retaliatory
tariffs on American goods.

China’s Commerce Ministry said in a statement early on Friday it would
impose tariffs on about $75 billion in imports from the United States
including some agricultural products, crude oil and small aircraft.

Trump responded mid-morning in a series of tweets, writing that “American
companies are hereby ordered to immediately start looking for an alternative
to China.”

Trump cannot force U.S. companies to abandon China and he gave no detail on
how he might proceed with any such order. But his series of tweets was seen
as a harbinger for yet another escalation of the trade war.

After markets closed in New York, Trump tweeted the United States would
raise tariffs on $250 billion worth of Chinese imports to 30% from 25%
beginning Oct. 1.

The morning’s tweets “certainly heightened concerns about trade and its drag
on global growth,” said Craig Bishop, lead strategist of the fixed income
group at RBC Wealth Management at Minneapolis.

Stocks that benefit during economic expansions fell the most on Wall Street,
also hinting at recession concerns.

The Dow Jones Industrial Average fell 623.34 points, or 2.37%, to 25,628.9,
the S&P 500 lost 75.84 points, or 2.59%, to 2,847.11 and the Nasdaq
Composite dropped 239.62 points, or 3%, to 7,751.77.

The pan-European STOXX 600 index turned sharply lower after Trump’s tweets,
dropping 1% in the last half hour of trading to close down 0.78%, while
MSCI’s gauge of stocks across the globe dropped 1.57%.

Emerging market stocks lost 0.20%, an index of Latin American shares dropped
more than 3% to close at its 2019 low and U.S. dollar-denominated Nikkei
futures fell 2.0%.

OIL, YIELDS FALL

Oil prices fell after China’s retaliatory tariffs announcement highlighted
concern that the trade dispute between the world’s two largest economies
could slow global growth or even trigger a recession.

Trump’s tweets made matters worse.

U.S. crude fell 2.67% to $53.87 per barrel and Brent was last at $59.11,
down 1.35% on the day.

Trump’s comments came after Federal Reserve Chair Jerome Powell said the
U.S. central bank will “act as appropriate” to keep the economic expansion
on track, but noted rising risks.

Powell’s remarks had given markets some relief after the overnight
announcement from Beijing. Trump’s tweeted response to the speech asked who
is “our bigger enemy” between Powell and China’s President Xi Jinping.

The two-year/10-year yield curve inverted last week for the first time since
2007, a signal that a U.S. recession is likely in one to two years. The
curve has traded in and out of inversion over the past three days.

U.S. Treasury yields fell, with 10-year notes last up 22/32 in price to
yield 1.5351%, from 1.61% late on Thursday.

The U.S. dollar fell after Powell’s comments and dropped further after
Trump’s tweets.

The dollar index fell 0.47%, with the euro up 0.53% to $1.1137.

The Japanese yen strengthened 0.95% versus the greenback at 105.45 per
dollar, while sterling was last trading at $1.228, up 0.24% on the day.

Spot gold added 1.8% to $1,525.37 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

China to raise import tariffs on U.S. scrap copper, aluminium from Dec 15

* China will impose an extra 5% tariff on imports of copper scrap and
aluminium scrap from the United States from Dec. 15, according to a list of
retaliatory tariffs published by the Ministry of Finance late on Friday.

* Beijing had already levied a 25% tariff on copper scrap from the United
States, one of its biggest suppliers, in a previous round of duties and
twice hit U.S. scrap aluminium with a 25% tariff in 2018.

* The tariffs saw China’s copper scrap imports from the United States fall
by 80% year-on-year in the first half of 2019 to around 52,022 tonnes,
customs data show, while aluminium scrap imports were down 16% to 229,837
tonnes.

* China, the world’s biggest metals consumer, is tightening restrictions on
imports of scrap metal, regardless of its origin, as part of an
environmental campaign against foreign solid waste. 

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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