Bulls n Bears Daily Market Commentary : 17 December 2019

Wed Dec 18 01:38:38 CAT 2019

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Bulls n Bears Daily Market Commentary : 17 December 2019

Zimbabwe Stock Exchange Update

Market Turnover ZWL$5,728,571.66 with foreign buys at ZWL$937,302.22 and
foreign sales were ZWL$147,600.00 Total trades were 96

The All Share index closed lower at 229.66 points after it dropped 2.28
points . RIOZIM lost $0.5000 to trade at 2.3000, TSL lost $0.1300 to close
at $0.7200 whilst INNSCOR and PPC both lost $0.1000 each to trade at $3.5999
and $4.0000 respectively. ECONET came off $0.0785 to settle at $1.3966 and
FIRST MUTUAL HOLDINGS shed $0.0585 to close at $0.3300.

Losses were partially offset by gains in OLD MUTUAL which added $0.3745 to
trade at $36.3745, DELTA increased by $0.0661 to $3.4709 and SEEDCO
INTERNATIONAL  put on $0.0136 to close at $2.8825. OK ZIMBABWE  was up
$0.0052 to trade at $0.6764 and POWERSPEED inched $0.0050 to close at
$0.1900.

  Global Currencies & Equity Markets

Egypt

Egyptian pound breaks through 16 per dollar, first time since Feb 2017

(Reuters) - The Egyptian pound extended the robust gains it has made against
the dollar in 2019, trading stronger than 16.00 pounds to the greenback for
the first time since February 2017.

The Egyptian currency closed at 15.99 against the dollar on Monday and
strengthened marginally to 15.98 on Tuesday. It has appreciated around 10.5%
against the dollar since Jan. 1.

The pound last traded stronger than 16.00 to the dollar on Feb. 28, 2017,
when if firmed to 15.79.

Ahmed Hafez, Renaissance Capital’s head of research for the Middle East and
North Africa, said a stronger pound could reduce foreign purchases of
Egyptian treasuries, predicting the currency may weaken next year.

Allen Sandeep, head of research at Naeem Brokerage, expected a stronger
pound in the first quarter of 2020, however.

Uganda

Ugandan shilling a notch firmer on offshore flows

(Reuters) - The Ugandan shilling firmed slightly on Tuesday on the back of
inflows from offshore investors looking to take part in this week’s Treasury
auction.

At 0845 GMT commercial banks quoted the shilling at 3,665/3,675, marginally
stronger compared to Monday’s close of 3,670/3,680.

       <mailto:info at bulls.co.zw> 

Great Britain

Pound and stocks flop as Brexit fears resurface

(Reuters) - European stocks skidded off record highs and sterling dropped
more than 1% on Tuesday, as reports that Britain’s prime minister was ready
to play rough in Brexit talks brought December’s cross-market rally to a
halt.

U.S.-China trade optimism and reassuring Chinese economic data had driven
Asia and emerging market stocks to 18-month highs, but green immediately
turned red when London, Frankfurt and Paris opened.

Britain’s FTSE 100, which had seen its best day in nearly a year on Monday,
dropped 0.2% on reports that Prime Minister Boris Johnson would use his
control of parliament to stop any extension of the Brexit transition period
beyond 2020.

The news knocked the domestically focused mid-cap index as much 1.7% lower,
while the pound fell 1% to back below $1.32 - nearly 2% under Thursday and
Friday’s post-election highs of just over $1.35.

A profit warning from consumer goods giant Unilever that sent its shares
down nearly 6% also helped push the broader European STOXX 600 down 0.6%.

The resurgence of uncertainty over Britain’s departure from the European
Union on Jan. 31, and the country’s future relationship with the bloc, meant
Wall Street was expected to give back some ground when New York reopens and
put safety trades back in play.

Most 10-year European bond yields were around 2 basis points lower. UK and
German 10-year yields dipped to 0.77% and -0.29% respectively, compared with
1.85% for U.S. Treasuries.

Britain’s political wrangling had earlier not kept Asian stocks from joining
a global rally, as more U.S. officials confirmed phase one of a trade deal
with China was done, although the details remain unpublished.

The preliminary deal reached last week between Washington and Beijing will
double U.S. agricultural exports to China, U.S. trade representative Robert
Lighthizer said. The United States will also reduce some tariffs on Chinese
goods under the agreement.

Shanghai, Hong Kong and Seoul all gained more than 1% and MSCI’s all-country
index set a record high, putting its gains for 2019 at almost 23%, its best
year in a decade and the fourth-best year ever.

PALLADIUM SHINES

A new survey of almost 200 global fund managers by BofA published on Tuesday
showed there had been a record surge in global growth expectations over the
last two months that has drastically cut recession worries.

Ahead of the start of Wall Street trading, there were more upbeat signals as
U.S. homebuilding figures increased more than expected and permits for
future home construction surged to a 12-1/2-year high.

Elsewhere, investors were staying broadly optimistic over the tentative
U.S.-Sino trade deal, which has fuelled gains in emerging market currencies
and capped the Japanese yen and Swiss franc.

The Australian dollar was also under pressure, though that was after the
minutes of this month’s Reserve Bank of Australia meeting suggested the
central bank might cut interest rates again when it next meets in February.

The RBA has already cut three times since June, taking rates to a record low
of 0.75%. “Members agreed it would be concerning if there were a
deterioration in the outlook,” the bank’s December minutes showed.

Oil was nearing three-month highs in anticipation of growing demand from the
world’s biggest economies. Brent crude ticked up for a fourth day at $65.52
per barrel, while gold held just below $1,480 per ounce.

Palladium, which is widely used in catalytic converters for car and truck
exhausts, remained the real focus, though, as it sped towards $2,000 an
ounce for the first time.

 <mailto:info at bulls.co.zw> 

Commodities Markets

China Nov refined copper, lead output hit record highs - stats bureau

* China’s refined copper output rose by 19.6% year-on-year to a record
monthly high of 909,000 tonnes in November, data released by the National
Bureau of Statistics showed on Tuesday

* The bumper output, which came in a month China imported a record amount of
copper concentrate as smelting capacity in the world’s top copper consumer
expands, was 4.7% higher than the previous all-time high set in October.

* China’s lead production also hit a record high of 572,000 tonnes last
month, up 15.1% year-on-year, the data showed, while output of sister metal
zinc rose 13.1% to a two-year high of 594,000 tonnes

* Production of alumina, the substance used to make aluminium, slipped by
9.7% year-on-year to 5.67 million tonnes in November, the lowest monthly
total since October 2018

* Iron ore output rose by 3.9% year-on-year to 79.25 million tonnes in
November, the data showed

Management at Bosnia's sole aluminium smelter resigns

(Reuters) - The management of Bosnia’s sole aluminium smelter, Aluminij
Mostar, has resigned after an only investor interested to help it restart
production had submitted an inadequate offer, the company said on Tuesday.

The smelter was shut down in July over debt it had incurred because of high
electricity and alumina prices.

The closure followed a failed attempt to find a strategic partner for the
company, after the London-listed miner and commodity trader Glencore and
other investors pulled out of talks on a possible takeover.

Aluminij accumulated debt of almost 380 million Bosnian marka ($216.5
million), and the financial and tax police were investigating its
operations.

In September, a consortium of Israeli and Chinese companies made an offer to
invest into the smelter, asking for subsidised electricity prices in return,
as well as regional government help in prolonging the debt payment.

The government said these conditions were not acceptable.

On Monday, the company’s Supervisory Board said that new offer from the
consortium of Israeli M.T Abraham Group and China Machinery Engineering
Corporation (CMEC) and China Non-Ferrous Metal Industry’s Foreign
Engineering & Construction was not acceptable and needed to be reworked.

The board accepted the resignations but said it will continue to work until
a new team has been appointed. It also asked management to continue the
talks with the consortium to improve its offer.

The board said in a statement it has agreed with the management that all
employees who will be declared redundant on Dec. 31 or later should be paid
severance payments.

Aluminij has paid severance payments to 600 of its 900-strong workforce
while the remaining 300 workers have been waiting to see the outcome of
possible privatisation. (1$ = 1.755 Bosnian marka) 

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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