Bulls n Bears Daily Market Commentary : 03 December 2019

Wed Dec 4 02:39:01 CAT 2019

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Bulls n Bears Daily Market Commentary : 03 December 2019

Zimbabwe Stock Exchange Update

Market Turnover ZWL$9,636,599.99 with foreign buys at ZWL$167,062.50 and
foreign sales were ZWL$766,427.20 Total trades were 249

The All Share index added 0.38 points  to close at 238.47 points. CAFCA
gained $0.1800 to $1.7800, ECONET WIRELESS LIMITED  rose by $0.1478 to
$1.5910 and SIMBISA BRANDS  traded $0.0524 firmer at $1.3025. OLD MUTUAL
LIMITED  also gained $0.0496 to end at $36.0010 and MEIKLES LIMITED  traded
$0.0200 stronger at $2.2250.

Gains were offset by losses in the following;PADENGA HOLDINGS LIMITED lost
$0.1869 to end at $2.6104, DAIRIBOARD ZIMBABWE LIMITED  was $0.0617 lower at
$0.3283 and OK ZIMBABWE  also decreased by $0.0500 to end at $0.8000.
AFRICAN SUN  traded $0.0350 weaker at $0.4000 and CASSAVA SMARTECH  eased
$0.0222 to end at $1.4648.

  Global Currencies & Equity Markets

Egypt

Egypt's foreign reserves rise to $45.354 bln in November

(Reuters) - Egypt’s net foreign reserves rose to $45.354 bln in November
from $45.247 bln in October, the central bank said on Tuesday.

Reserves climbed sharply after Egypt embarked in 2016 on a three-year,
IMF-backed economic reform programme. They have seen smaller increases since
the summer of 2018. 

South Africa

South African rand, stocks slide after GDP shrinks

(Reuters) - South Africa’s rand fell sharply on Tuesday after third quarter
economic growth showed a surprise contraction, underlying the weak state of
the economy and growing risk of credit downgrades.

Among stocks, retail and fast food firm Taste Holdings plunged 20% after it
said group chief executive Dylan Pienaar was stepping down with immediate
effect as part of a restructuring plan to exit the food industry and focus
on its luxury goods brands.

At 1530 GMT, the rand was 0.76% weaker at 14.6500 per dollar. Most of the
losses came after the gross domestic product (GDP) figures showed a 0.6%
contraction as mining, manufacturing and agriculture led a broad based
slowdown.

Analysts polled by Reuters had predicted a 0.1% expansion in
quarter-on-quarter growth.

The data piles the pressure on President Cyril Ramaphosa as ratings agencies
have flagged weak growth as a major risk, while investors are weary of
increasing state debt as revenues slide.

Moody’s is the last of the top three agencies to rate the country’s debt at
investment level, and it is set to review the rating in March after
downgrading the outlook to negative in November.

Bonds also weakened, with the yield on the benchmark government issue due in
2026 adding 2.5 basis points to 8.475%.

On the bourse, stocks fell as well after the GDP data.

Local shares were also dragged down by falling emerging market equities
after the United States said it would restore tariffs on metal imports from
Brazil and Argentina, raising concerns of yet another trade war.

The benchmark JSE Top-40 Index fell 0.64% to 48,299.66 points, while the
broader All-Share Index was down 0.6% to 54,485.41 points.

Financial services company Discovery fell to the bottom of the blue chip
index, down 2.6% to 109.12 rand, while packaging and paper company Mondi PLC
was down 2.45% to 311.03 rand.

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GLOBAL MARKETS

Stocks fall, bonds climb amid concern over longer trade war

(Reuters) - A comment by President Donald Trump that a deal to end the
U.S.-China trade war might not come until after the November 2020 election
weighed on global stock markets on Tuesday, sending investors to the safety
of bonds.

Trump’s saying the trade war may last another year came a day after his
administration announced new tariffs on steel from Brazil and Argentina and
threatened duties of up to 100% on French goods because of a digital
services tax that Washington says harms U.S. tech companies.

All that appeared to dash hopes that an agreement with China could be
reached before another round of U.S. tariff hikes kicks in on Dec. 15 and
“triggered a lot of high-frequency traders to sell stocks,” said Bucky
Hellwig, senior vice president at BB&T Wealth Management in Birmingham,
Alabama.

“But later on in the day, we saw buying come in,” he said, since “the
underlying fundamentals are still favorable.” They include a potential
re-acceleration in earnings growth, stable economic growth and low interest
rates.

MSCI’s gauge of stocks across the globe shed 0.6%.

On Wall Street, the Dow Jones Industrial Average fell 280.23 points, or
1.01%, to 27,502.81, the S&P 500 lost 20.67 points, or 0.66%, to 3,093.2 and
the Nasdaq Composite dropped 47.34 points, or 0.55%, to 8,520.64.

The S&P 500’s session low was 3,070.33.

Europe appeared to be the next theater of the global trade war.

France said on Tuesday it was prepared to push the European Union to respond
in kind if the United States followed through on its threats to raise
tariffs.

Investors sought out bonds as a safe haven. The benchmark 10-year U.S.
Treasury note’s yield was 12.7 basis points lower at 1.709% in afternoon
trade. Around noon, it had fallen as low as 1.693%, 14.3 basis points off
the close on Dec. 2 and the biggest daily fall since May 2018.

German bond yields slipped from three-week highs , but bond prices are
likely to stay under pressure amid renewed risks of early elections or a
minority government in the biggest euro zone economy.

The safe-haven bid was in evidence on currency markets too, with the yen and
Swiss franc rallying against the dollar.

In afternoon trading, the dollar fell 0.3% against the yen to 108.60 yen,
after hitting a two-week low of 108.49. The dollar also slid against the
Swiss franc, down 0.4% at 0.9870 franc. Earlier, the greenback hit a
four-week trough of 0.9858 franc.

In the energy market, Brent crude futures fell 10 cents to settle at $60.82
a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 14 cents to
settle at $56.10 a barrel. 

  <mailto:info at bulls.co.zw> 

Commodities Markets

India's Nov gold imports jump to 5-month high as prices retreat

(Reuters) - India’s gold imports in November jumped 78% from a month earlier
to the highest level in five months as jewellers in the world’s
second-biggest market for the metal restocked after a fall in prices, a
government source said on Tuesday.

Higher imports by the South Asian country could support global prices that
have risen more than 12% so far in 2019, but could also widen India’s trade
deficit and put pressure on the rupee. India fills nearly all of its gold
demand through imports.

India imported 71 tonnes of gold in November, compared with 40 tonnes in
October, the source said on condition of anonymity as he was not authorised
to speak to media.

Imports were down 16% from November 2018, however, he added.

Gold prices corrected after the Diwali festival, giving an opportunity for
jewellers to replenish inventory, said Mukesh Kothari, director at Mumbai
bullion dealer RiddiSiddhi Bullions.

Indians celebrated the Dhanteras and Diwali festivals in October, when
retail demand for gold peaks as it is considered auspicious and invokes
lasting prosperity.

In November, local gold futures fell to 37,477 rupees ($522.18) per 10 grams
after hitting an all-time high of 39,885 rupees in September.

In value terms, November imports totalled $2.94 billion, slightly higher
than last year’s $2.76 billion, the source said.

Gold started trading at a premium in India to the official domestic price
last month for the first time in 5-1/2 months on an improvement in demand
from jewellers, which prompted refiners to increase gold dore imports, said
a Mumbai-based bullion dealer at a gold importing bank.

Dealers charged a premium of up to $1.5 an ounce over official domestic
prices in November, compared with a discount of up to $21 an ounce in
October. The domestic price includes a 12.5% import tax and 3% sales tax.

The share of dore - a partially refined form of gold - in India’s gold
imports in November was 33 tonnes, compared with imports of 8.5 tonnes in
October, the government official said.

India’s gold imports could fall below 40 tonnes in December, said a
Mumbai-based dealer with a gold importing bank, which would mark a drop from
last year’s 73 tonnes.

Copper primed for a pop if U.S./China trade war is resolved

(Reuters) - Low inventories across the copper supply chain mean that any
resolution to the U.S.-China trade war could trigger a snap rally in prices
as consumers rush to restock, market participants said on Tuesday.

Combined stocks of on-warrant copper in London Metal Exchange and Shanghai
exchange warehouses have declined 50.5% since mid-August metal buyers have
slowed replenishment rates.

Declines in warehouse stocks are often seen as a sign of robust demand in
the main industrial demand centres for the metal, used in construction and
power industries.

But low stocks also reflect a risk reduction strategy by consumers who have
switched to making hand-to-mouth purchases that avoid building any
inventories not already ordered by a customer, delegates at an LME
conference in Singapore said.

But the current lack of certainty over how the tit-for-tat spat will play
out is making traders cautious about making new purchases, he said.

Julie Zhu, a director at Singapore-based Viant Commodities, said the market
in China was slow.

Shigemoto Toma, a senior base metals trader with Anglo American, said
China’s infrastructure investment could boost copper demand by as much as
3-4% in 2020, which could impact prices due to “not much of a (stocks)
buffer.” .

LME copper traded at about $5,834 a tonne on Tuesday, down 0.8% on the day
and 2.2% for the year.

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
whatsoever for any loss howsoever arising from any use of this report or its
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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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