Bulls n Bears Daily Market Commentary : 13 December 2019

Mon Dec 16 04:35:15 CAT 2019

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Bulls n Bears Daily Market Commentary : 13 December 2019

Zimbabwe Stock Exchange Update

Market Turnover ZWL$6,568,453.14 with foreign buys at ZWL$1,904.24 and
foreign sales were ZWL$2,171,101.51 Total trades were 163

The All Share index advanced by 0.3 points  to close at 232.29 points.
ZIMPLOW HOLDINGS LIMITED  gained $0.0900 to close at $0.6000, AFRICAN
DISTILLERS LIMITED  added $0.0900 to close at $3.1900 and OLD MUTUAL LIMITED
gained $0.0650 to close at $35.5644. FIRST MUTUAL LIMITED   advanced by
$0.0540 to close at $0.3240 while DAIRIBOARD ZIMBABWE LIMITED  increased by
$0.0245 to close at $0.3650.

Negative end were in PRETORIA PORTLAND CEMENT COMPANY LIMITED  which eased
$0.1000 to close at $4.1000, AFRICAN SUN LIMITED  which traded $0.0300 lower
to end at $0.2300 and PADENGA HOLDINGS LIMITED lost $0.0225 to close at
$2.4775. INNSCOR AFRICA slumped by $0.0177 to close at $3.7000 while
MASHONALAND HOLDINGS LIMITED dropped by $0.0096 to end at $0.0904

  Global Currencies & Equity Markets

South Africa

South Africa's rand hands back early gains to end flat

(Reuters) - South Africa’s rand was flat against the dollar on Friday,
struggling for direction after surprise gains in the face of a darkening
growth outlook following a week of nationwide power cuts and ongoing
uncertainty over U.S.-China trade talks.

At 1530 GMT, the rand was 0.07% firmer at 14.4790 per dollar, hardly budged
from the morning’s open as investors awaited details of a cabinet decision
on how to deal with a crisis at power utility Eskom.

South Africa’s government on Friday asked industry for the cheapest and
quickest options to ease a power crunch, as cabinet held an emergency
meeting to try to resolve a crisis threatening growth in Africa’s most
industrialised economy.

Eskom, which cut power for a ninth straight day on Friday, is choking under
a massive 450 billion rand ($30.6 billion) debt burden and struggling to
meet demand because its creaking coal-fired power stations haven’t been
maintained properly.

The rand surprised market watchers by racing to a 5-month high in the
session, hitting 14.3700 before pulling back, in what some analysts said was
a move backed by the high yield on offer, more so after local inflation fell
again and the U.S. Federal Reserve held rates.

On the bourse, stocks soared alongside emerging market shares as reports of
a Sino-U.S. trade deal, as well as the prospect of a smooth Brexit, fired
risk appetite across the globe.

The benchmark JSE Top-40 Index climbed 1.81% to 50,499.02 points while the
broader All-Share Index rose 1.78% to 56,815.08 rand.

Financials were the biggest winners on the blue-chip index on the back of a
firmer rand. Insurance and specialised finances company Discovery topped the
bourse, up 6.13% at 122 rand.

Banks followed, with Absa Group up 5.14% to 152.88 rand, and Standard Bank
Group rising 4.36% to 169.50 rand.

Materials shares acted as a drag as gold prices fell and investors switched
to riskier stocks. AngloGold Ashanti was down 5.37%, while Goldfields fell
3.27%. [nL4N28N0B9.

In the fixed income market, the yield on the benchmark government bond due
in 2026 was down 1.5 basis points to 8.32%.

Ethiopia

IMF deal lifts Ethiopia bonds as currency slides to record low

(Reuters) - Ethiopia’s dollar-denominated sovereign bonds jumped on Thursday
to the highest since January 2018 while the currency eased to a fresh record
low after Addis Ababa reached a staff-level agreement with the International
Monetary Fund (IMF).

The bond maturing in 2024 gained as much as 1.1 cents to 106.34 cents in the
dollar, according to Tradeweb data. The birr currency extended its slide to
31.5088 to the dollar, having depreciated sharply in the past four weeks.

The fund and the government reached a $2.9 billion preliminary agreement on
Wednesday for a three-year financing package to support Ethiopia’s economic
reforms.

In its statement, the IMF outlined five pillars to its programme with a
“transition to a more flexible exchange rate regime” topping the list. Other
items were more oversight of state enterprises, domestic revenue
mobilization, financial sector and monetary policy reform, and improving
supervision.

Africa’s biggest coffee exporter has operated a carefully managed floating
exchange rate regime since 1992.

It last devalued the currency by 15% in October 2017.

The IMF agreement marked a big shift for Ethiopia, said Charles Robertson at
Renaissance Capital, who calculates the currency is over-valued by 20-25%.

On the black market, the birr traded at 39 to the dollar.

A number of countries including Angola have recently let their currency
weaken to help their economic adjustments. 

       <mailto:info at bulls.co.zw> 

EMERGING MARKETS

EM stocks inch up to 2-week high; U.S. Fed, China trade in focus

(Reuters) - Developing world stocks inched up on Wednesday, while currencies
trod water ahead of the conclusion of a U.S. Federal Reserve policy meeting,
with uncertainty over the Sino-U.S. trade war adding to the cautious mood.

Amid swathes of mixed headlines over trade talks, markets are holding their
breath ahead of a Dec. 15 deadline for further U.S. tariff action on China,
which, if met, could derail future negotiations.

Stock markets strengthened slightly, as a report on Tuesday suggested that
the United States may delay Sunday’s deadline.

The MSCI emerging markets stock index ticked up to a more-than two-week
high, with Saudi Arabian stocks marking large gains on the market debut of
the now world’s largest listed company, Saudi Aramco.

Shares of the oil and gas behemoth opened up 10% on their Riyadh stock
market debut on Wednesday, closing in on the $2 trillion valuation long
sought by Saudi Crown Prince Mohammed bin Salman.

Markets were also waiting for the conclusion of the Federal Reserve’s final
policy meeting this year. While the bank is expected to keep rates on hold,
markets will be watching for any suggestions of future action, along with
economic growth prospects in 2020.

Chinese stocks closed marginally higher for the day, while Russian stocks
ticked up to a more-than one-week high.

MSCI’s emerging market currencies index was flat as the dollar ticked up
ahead of the Fed decision.

The Turkish lira and the Russian rouble weakened slightly against the
dollar, while the Hungarian forint softened against the euro.

The South African rand ticked up after touching its weakest level against
the dollar in nearly three weeks on Tuesday.

The country’s headline consumer price inflation was growing at its weakest
pace in 10 years in November, data from Statistics South Africa showed.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Japan buyer agrees to Q1 aluminium premium of $83/T, 14% lower than
Q4-source

(Reuters) - A Japanese aluminium buyer has agreed to pay a global producer a
premium of $83 per tonne over the benchmark price for shipments in January
to March, down 14% from the current quarter, a source directly involved in
the pricing talks said.

The figure is lower than the $97 per tonne paid in the October-December
quarter and marks a second consecutive quarterly drop. It is also lower than
the initial offers of around $92 made by producers.

Japan is Asia’s biggest importer of the light metal and the premiums
PREM-ALUM-JP for primary metal shipments it agrees to pay each quarter over
the benchmark London Metal Exchange (LME) cash price set the benchmark for
the region.

Nickel prices hit 2-week highs as investors cover short positions

(Reuters) - Nickel prices hit their highest in nearly two weeks on Thursday,
as investors who bet on falling prices had to buy in at a strong support
level.

Nickel prices have fallen in the past weeks to touch a five-month low of
$12,900 a tonne on the London Metal Exchange (LME) on Tuesday, as the market
viewed prices more expensive than supply and demand fundamentals indicated.

Three-month nickel on the LME on Thursday climbed as much as 0.9% to $13,980
a tonne, its highest since Nov. 29, while the most-traded nickel contract on
the Shanghai Futures Exchange (ShFE) jumped as high as 3.5% to 110,570 yuan
($15,708.42) a tonne, nearing a two-week high.

Other nickel industry players said that a royalty hike in top nickel ore
producer Indonesia contributed to a bullish view on prices, but they
expressed uncertainty over how long the upward trend could last.

FUNDAMENTALS

* SPREAD: The LME cash nickel contract was last at a $65 a tonne discount to
the three-month contract, suggesting sufficient nearby supplies.

* NICKEL STOCKS: LME on-warrant nickel inventories, or those available to
the market, rose to a 2-1/2-month high at 67,248 tonnes. MNISTX-TOTAL

* ALUMINIUM STOCKS & SPREAD: LME headline aluminium stocks MALSTX-TOTAL
jumped to their highest since April 2018 at 1.33 million tonnes, and the
spread between the cash and three-month contract flipped to a discount of
$8.75 a tonne after mostly holding in the premium zone for around a month.
CMAL0-3

* OTHER PRICES: LME zinc advanced 1.3% to $2,251 a tonne at 0436 GMT, while
copper and aluminium were almost unchanged. ShFE copper rallied 0.9% to
49,230 yuan a tonne and zinc jumped 1.2% while aluminium fell 0.4%.

* TRADE TALKS: U.S. President Donald Trump is expected to meet with top
trade advisers on Thursday to discuss planned Dec. 15 tariffs on some $160
billion in Chinese goods, sources told Reuters.

* JIANGXI COPPER: Jiangxi Copper Co,, one of China’s biggest copper
producers, said it will receive “financial assistance” to the tune of 1.5
billion yuan from its parent to repay loans and cut financing costs.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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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
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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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