Bulls n Bears Daily Market Commentary : 19 December 2019

Fri Dec 20 00:23:23 CAT 2019

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Bulls n Bears Daily Market Commentary : 19 December 2019

Zimbabwe Stock Exchange Update

Market Turnover ZWL$32,397,591.01 with foreign buys at ZWL$7,652,989.82 and
foreign sales were ZWL$376,886.50 Total trades were 141

The All Share index dropped 0.51 points to end at 228.45 points. OK ZIMBABWE
lost $0.0760 to trade at $0.5766, ECONET WIRELESS dropped $0.0602 to close
at $1.4009 whilst CASSAVA SMARTECH ZIMBABWE LIMITED  traded $0.0421 lower at
$1.3801. SIMBISA BRANDS LIMITED  eased $0.0303 to trade at $1.2500 and
INNSCOR AFRICA  was $0.0172 lower at $3.5375.

Losses were offset by gains in OLD MUTUAL LIMITED which added $1.0375 to
trade at $37.2822, MEIKLES advanced by $0.0541 to close at $2.3100 and
SEEDCO INTERNATIONAL LIMITED traded $0.0475 higher at $3.0000. Other
counters to advance were TSL LIMITED which was up by $0.0375 to trade at
$0.7575 and CBZ HOLDINGS LIMITED gained $0.0200 to close at $0.7000.

  Global Currencies & Equity Markets

AFRICA

Kenyan shilling, Zambian kwacha seen strengthening

KAMPALA (Reuters) - Zambia’s kwacha and Kenya’s shilling are expected to
strengthen against the dollar in the next week to Thursday, while Tanzania’s
shilling will hold steady, traders said.

KENYA

The Kenyan shilling is expected to strengthen due to increased inflows from
diaspora remittances ahead of the holiday season amid tightening liquidity
in the local money market and a slowdown in importer dollar demand.

Commercial banks quoted the shilling at 100.65/85 per dollar, compared with
101.50/70 at last Thursday’s close.

UGANDA

The Ugandan shilling is expected to firm on the back slumping importer
demand and removal of excess liquidity from the money markets.

Commercial banks quoted the shilling at 3,659/3,669, compared with last
Thursday’s close of 3,665/3,675.

On Thursday, the central bank also removed an unspecified amount of
liquidity from the money markets via a seven-day repo. The trader said this
would also support to the shilling.

TANZANIA

Tanzania’s shilling is expected to hold steady due to a slowdown in
activity.

Commercial banks quoted the Shilling at 2,293/2,303 against the dollar, the
same levels as last Thursday’s close.

ZAMBIA

The kwacha is expected to firm against the dollar as commercial banks start
implementing a central bank directive of increasing the statutory reserve
ratio to 9% from 5%, starting on Dec. 23.

On Thursday, commercial banks quoted the currency of Africa’s second-largest
copper producer at 14.4240 per dollar, almost the same as last week’s close
of 14.4200 per dollar.

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Bond yields rise as Sweden ends negative rates, stocks drift lower

(Reuters) - Bond yields rose and Sweden’s crown stayed ice cool on Thursday
as the country became the first to raise interest rates out of sub-zero
territory, while world stocks drifted off this week’s record highs.

It was a packed day of central bank action all round. While Sweden made its
big move, Norway sat tight on rates, and sterling pulled out of a dive even
as two Bank of England policymakers pushed for a UK interest rate cut.

Stock markets stalled, however, after their rapid recent run-up and with a
record-high Wall Street now facing the complexity of U.S. President Donald
Trump’s impeachment in Washington.

Wall Street futures pointed to a subdued start, while the pan-European index
STOXX 600 continued to dip in and out of the red, although Britain’s
blue-chip FTSE index did manage to hold a 0.2% rise.

Asia has also pulled back from a 1-1/2 year peak.

The focus remained on the day’s big milestone - Sweden ending five years of
negative interest rates. The crown stayed calm after the move, rising as
much as 0.2%.

Bond yields rose across Europe though, with those in higher-rated countries
such as Germany, France and the Netherlands up 3-4 bps on the day .

Germany’s benchmark 10-year bond yield rose to -0.212% , a new six-month
high, pushing past a peak touched on Friday.

Economists now wonder how Sweden’s open economy will react and whether other
central banks with sub-zero rates in the euro zone, Japan, Denmark,
Switzerland and Hungary will consider following suit.

Commerzbank said Sweden’s hike showed it was throwing “in the towel in a
state of exasperation” at the impact of negative rates, and “neither because
the economy is doing so well (on the contrary: the PMI is in free fall) nor
because inflation justified (it)”.

POUND REBOUND

The British pound also gained after suffering heavy losses this week as
concerns have returned that Britain could still crash out of the European
Union without a trade deal in place when a transition period ends in
December 2020.

Sterling rose 0.2% to $1.3104 after falling more than 3%. It had reached an
18-month high on Dec. 13 after UK Prime Minister Boris Johnson’s
Conservative Party won a majority in a general election.

Against the euro, it stood at 84.99 pence, close to its weakest since Dec.
4. British inflation remained at a three-year low in November, data had
showed on Wednesday.

The Australian dollar jumped by 0.3% to $0.6879 after better-than-expected
labour-market data made interest rate cuts less likely. The yen barely moved
from 109.58 per dollar after the Bank of Japan kept its quantitative easing
in place and issued a gloomier assessment on factory output.

In Asia overnight, Japan’s Nikkei fell 0.3% and China’s stocks slipped for
the second session despite trade optimism. Australian shares ended 0.3%
lower, led lower by mining stocks.

Investors were also watching proceedings in Washington, where the
Democratic-led House of Representatives voted to impeach Trump for abuse of
power and obstruction of Congress.

Market reaction was limited, since the Republican-controlled Senate is very
widely expected not to remove Trump from office.

In commodities, Brent crude was up 0.1% to $66.26 per barrel. U.S. crude
also gained 0.04% to $60.97 a barrel after U.S. government data showed a
decline in crude inventories.

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

Gold eased as optimism over U.S.-China trade ties offset political
uncertainty over Trump’s impeachment. Spot gold dipped 0.1% to $1,474.64 per
ounce.

Elsewhere, palladium gained 0.5% to $1,934.08 per ounce. Prices of the auto
catalyst metal hit an all-time peak of $1,998.43 on Tuesday, within a
whisker of breaking above $2,000 for the first time due to a gaping supply
deficit.

 <mailto:info at bulls.co.zw> 

Commodities Markets

AngloGold aims to produce 350,000–400,000 oz of gold a year from Ghana mine

(Reuters) - AngloGold Ashanti said it expects its Obuasi gold mine in Ghana
to produce about 350,000 to 400,000 ounces per year for the first ten years,
after achieving its first gold pour since it was suspended five years ago.

The initial capital expenditure for the mine, which has been in the process
of redevelopment since last year, remains in the range of $495 million to
$545 million, the company said on Thursday.

Growing confidence in Chinese demand sustains copper

(Reuters) - Copper prices hovered near seven-month highs on Thursday, buoyed
by optimism about Chinese growth and demand, and progress in the prolonged
trade dispute between the United States and China.

Benchmark copper on the London Metal Exchange ended up 0.7% at $6,215 a
tonne, a gain of more than 12% from the two-year low of $5,518 hit in
September. Prices of the metal, seen as a gauge of economic health by
investors, hit $6,223 a tonne earlier this week, the highest since May 8.

TRADE: China and the United States are in touch over the signing of their
Phase 1 trade deal, China’s commerce ministry said, which will see lower
U.S. tariffs on Chinese goods and higher Chinese purchases of U.S. farm,
energy and manufactured goods.

China on Thursday unveiled a new list of import tariff exemptions for six
chemical and oil products from the United States, days after the world’s two
largest economies announced a Phase 1 trade deal.

DATA: China’s industrial production rose 6.2% year-on-year in November, the
fastest in five months, beating the consensus of 5.0% and rising from 4.7%
in October.

Manufacturing in top consumer China and globally is highly correlated with
demand for industrial metals.

CONSTRUCTION: “Chinese commodity demand strengthened notably in November,
driven by solid construction activities as evident in the steady draws of
domestic steel, copper and aluminium inventories,” Citi analysts said in a
note.

BAROMETER: Aluminium touched $1,800 a tonne on the LME, the highest since
Nov. 11. It closed up 1.1% at $1,797.

Traders say aluminium is another barometer of global economic health. But
they also say the LME contract is, to some extent, following the Shanghai
Futures Exchange where aluminium hit its highest in more than three months
due to falling stocks.

Aluminium stocks in warehouses monitored by ShFE AL-STX-SGH dropped to
218,367 tonnes, their lowest since March 2017.

PRICES: Zinc was up 1.0% at $2,325, lead fell 0.4% to $1,919, tin gained
0.5% to $17,375 and nickel gained 2.2% to $14,170 a tonne. 

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
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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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