Bulls n Bears Daily Market Commentary : 18 December 2019

Thu Dec 19 03:30:46 CAT 2019

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Bulls n Bears Daily Market Commentary : 18 December 2019

Zimbabwe Stock Exchange Update

Market Turnover ZWL$15,097,198.81 with foreign buys at ZWL$1,197,095.00 and
foreign sales were ZWL$3,615,586.53Total trades were 144.

The All Share index further retreated by 0.70 points  to end at 228.96
points. OLD MUTUAL lost $0.1298 to trade at 36.2447, INNSCOR AFRICA  lost
$0.0452 to close at $3.5547 whilst FIRST MUTUAL HOLDINGS LIMITED  traded
$0.0400 lower at $0.2900. CASSAVA SMARTECH ZIMBABWE LIMITED  eased $0.0391
to trade at $1.4222 and DELTA CORPORATION  was $0.0344 lower at $3.4365.

Trading in the positive was SEEDCO INTERNATIONAL  which added $0.0700 to
trade at $2.9525, ECONET WIRELESS  which increased by $0.0645 to $1.4611 and
RIO ZIM which put on $0.0460 to close at $2.3460. Other counters to advance
were CBZ HOLDINGS  which was up by $0.0300 to trade at $0.6800 and
AMALGAMATED REGIONAL TRADING HOLDINGS LIMITED  which inched $0.0165 to close
at $0.1125.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.Africa's rand leaps to 4-month best as risks ease, Fitch holds fire

South Africa’s rand rallied to a new four-and-half-month peak on Wednesday
as lingering optimism over a U.S.-China trade deal, technical factors and a
ratings reprieve from Fitch combined to boost the ailing economy’s currency.

At 1600 GMT the rand was 0.85% firmer at 14.2670, its firmest level since
July 31, compared to an opening at 14.4150.

Late in the session Fitch said it affirmed both the long-term foreign and
local currency debt ratings at “BB+” with a negative outlook, warning that a
downgrade could be triggered by government failure address ballooning debt
fast.

Earlier, the currency had eked out gains as investor appetite toward risk
and emerging currencies was soothed by hopes that the two economic
superpowers would strike a deal.

On Monday Washington said it would reduce some tariffs in exchange for what
U.S. officials said would be a big jump in Chinese purchases of American
farm products and other goods.

Government bonds were firmer, with the yield on the benchmark 2026
instrument down 1.5 basis point at 8.285%.

On the bourse, stocks rose, led by Sasol as it continued to ride Tuesday’s
gains after the energy and chemical company said its embattled Lake Charles
chemicals project (LCCP) was increasing production rates, easing investor
concerns over the project.

Sasol’s LCCP in Louisiana, United States is costing billions of dollars more
than initial estimates and its problems have led to the resignation of both
of the company’s joint chief executives.

On Tuesday it said ethylene production rates are approximately 85 - 90% of
nameplate capacity and are increasing following the successful replacement
of the acetylene reactor catalyst.

Shares in Sasol closed 6.35% firmer to 324.97 rand, a near five-month high.

The Top-40 Index was up 0.92% to 51,462 points, while the broader All-Share
Index rose 0.77% to 57,767 points.

Mobile operator MTN Group gained 1.37% to 88.14 rand after saying that its
mobile money service will go live in January in South Africa, allowing
customers to send, receive, save money and pay for goods using their mobile
phones. 

Kenya

Kenyan shilling strengthens against the dollar

(Reuters) - The Kenyan shilling strengthened on Wednesday supported by
inflows from diaspora remittances amid thin importer dollar demand and tight
liquidity in the local money market, traders said.

At 0837 GMT, commercial banks quoted the shilling at 101.25/45 per dollar,
compared with 101.40/60 at Tuesday’s close. 

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asian shares tiptoe higher, sterling wounded before BoE

(Reuters) - Asian shares edged higher on Thursday amid growing confidence in
the global outlook following improving economic indicators and a preliminary
trade deal between the United States and China.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.08%.
Australian shares were up 0.07%, while Japan’s Nikkei stock index slid
0.12%.

The pound nursed heavy losses due to concerns Britain could still crash out
of the European Union without a trade deal in place after a transition
period ending in December 2020.

Traders also await a Bank of England (BoE) policy meeting later Thursday. No
change in policy is expected, but the meeting could pose further downside
risks for sterling if more policymakers swing to the dovish camp and vote
for an interest rate cut.

Overall sentiment was supportive of equities and riskier assets, but less
favourable for safe-haven assets like bonds due to expectations that
economic growth will start to pick up next year after a tumultuous 2019.

Traders are also monitoring a vote in the Democrat-led U.S. House of
Representatives over whether to impeach Republican U.S. President Donald
Trump.

However, market reaction is unlikely to be significant given it is widely
expected that the Republican-controlled Senate will not vote to remove Trump
from office.

U.S. stock futures edged 0.02% lower in Asia on Thursday. The S&P 500 fell
0.04% on Wednesday, weighed by a steep drop in FedEx Corp shares after the
U.S. parcel delivery company cut its fiscal 2020 profit forecast.

Earlier in the session, the S&P 500 hit its fifth consecutive record high,
and analysts said market sentiment remained largely upbeat following last
week’s announcement of an initial U.S.-China trade agreement.

Other analysts pointed to recent data releases showing economic improvements
in China, the United States and Germany as reasons to be more optimistic.

In the currency market, sterling traded at $1.3087, having tumbled more than
3% from an 18-month high struck on Dec. 13 after UK Prime Minister Boris
Johnson’s Conservative Party scored a landslide victory in a general
election.

Against the euro, the pound stood at 84.96 pence, close to its weakest since
Dec. 4.

Johnson’s government on Tuesday ruled out an extension to the December 2020
deadline for negotiations on a trade deal with the EU, creating a new Brexit
cliff-edge and cutting short sterling’s post-election rally.

The focus shifts to the BoE’s policy meeting later Thursday. At its previous
meeting, two of the central bank’s nine policymakers voted to cut interest
rates.

British inflation remained mired at a three-year low in November, data
showed on Wednesday, and uncertainty surrounding Brexit remains high, but
this is unlikely to shift expectations that monetary policy will remain on
hold.

U.S. crude dipped 0.08% to $60.88 a barrel in Asia after U.S. government
data showed a decline in crude inventories.

However, prices are likely to be supported due to production cuts coming
from the Organization of the Petroleum Exporting Countries and its allies,
including Russia.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Shanghai aluminium hits 3-month peak on demand optimism

(Reuters) - Shanghai aluminium scaled a three-month high on Wednesday, as
the expected finalization of an initial U.S.-China trade deal fuelled
optimism about demand for the metal used in transportation, construction and
packaging.

Aluminium demand has turned “extremely good” in China, said a source with a
major smelter. “Real estate is quite good and expectations are not bad
either”

Global investor confidence has improved since the United States and China
last week said they reached a “phase one” trade pact to cool their
17-month-long trade war that has hurt global economic growth and the demand
for most base metals, including aluminium.

The most traded aluminium contract on the Shanghai Futures Exchange (ShFE)
climbed as much as 1% to 14,115 yuan ($2,005.28) a tonne, a level not seen
since Sept. 18.

Benchmark three-month aluminium on the London Metal Exchange (LME) was 0.4%
higher at $1,771 a tonne by 0315 GMT.

FUNDAMENTALS

* ALUMINA: China’s average price of alumina SMM-ALM-AVEG, the substance used
to make aluminium, fell to 2,429 yuan a tonne, its lowest since May 2017,
lowering production costs for aluminium smelters.

* LEAD: China’s lead production hit a record high of 572,000 tonnes in
November, up 15.1% year-on-year, sparking oversupply concern and pushing
ShFE lead to 14,740 yuan a tonne, its lowest since April 2018.

* BALANCE: But the global lead market recorded a deficit of 81,000 tonnes in
the first 10 months of this year, compared with a shortage of 53,000 tonnes
in the same period of 2018, the International Lead and Zinc Study Group
(ILZSG) said.

* ZINC: The global zinc market moved to a surplus of 7,300 tonnes in October
from a deficit of 21,100 tonnes in September. It recorded a global deficit
of 152,000 tonnes in Jan-Oct, ILZSG said.

* OTHER PRICES: LME copper fell 0.5% to $6,168 a tonne, nickel rose 0.5% to
$14,025 a tonne, while zinc advanced 0.4% to $2,290 a tonne. ShFE copper
fell 0.3% to 49,110 yuan a tonne, while nickel dropped 1.2% to 110,170 yuan
a tonne.

* MORGAN STANLEY: U.S. investment bank Morgan Stanley is building up its
base metals trading business after abandoning it four years ago, sources
told Reuters.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Asian stocks camped out at 18-month peaks, having climbed for five
straight sessions, while the British pound was licking fresh wounds as
revived Brexit fears came back to bite it.

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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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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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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