Bulls n Bears Daily Market Commentary : 30 December 2019

Mon Dec 30 04:15:37 CAT 2019

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Bulls n Bears Daily Market Commentary : 30 December 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$3,545,633.83 with foreign buys at ZWL$665.50 and foreign
sales were ZWL$1,697,705.00 Total trades were 77.

The All Share index gained 0.42 points to close at 228.24 points. CASSAVA
SMARTECH  added $0.0146 to close at $1.3946, OK ZIMBABWE  was up $0.0117 to
trade at $0.5636, DELTA  traded $0.0015 higher at $3.3949 and
STARAFRICACORPORATION   went up $0.0002 to $0.0355.

Two counters lost ground; AXIA  dropped $0.0050 to settle at $0.6550 and
FIDELITY shed $0.00060 to close at $0.0914. 

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Ghana

Ghana wants to join new West African currency but ditch euro peg

(Reuters) - Ghana’s government said it is determined to join a West African
currency that will replace the France-backed CFA franc as soon as next year
in eight regional countries, but it urged members of the currency union to
ditch a planned peg to the euro.

Ghana’s adoption of the new currency, which is called the eco, would make it
the bloc’s largest economy, ahead of neighbour Ivory Coast.

Ghana is not part of the West African Economic and Monetary Union (UEMOA) of
mostly former French colonies that uses the CFA franc and has its own
currency, the cedi.

Ivory Coast President Alassane Ouattara and French President Emmanuel Macron
announced this month that West Africa’s monetary union had agreed to cut
some financial links with Paris that have underpinned the region’s common
currency since its creation soon after World War Two.

Under the deal, African countries in the bloc will not have to keep half of
their reserves in the French Treasury and a French representative will no
longer sit on the currency union’s board.

However, the statement indicated that Ghana opposed plans to keep the eco
pegged to the euro, urging regional authorities to work quickly toward
“adopting a flexible exchange rate regime”.

The countries due to change from the CFA franc to the eco are Benin, Burkina
Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo - all former
French colonies except Guinea-Bissau.

The group is aiming to have the new currency up and running by the end of
2020.

South Africa

South Africa's rand powers to new five-month high

(Reuters) - South Africa’s rand rose to a new five-month high on Friday as
investors globally looked to take on risk, targetting emerging markets for
their higher yields.

At 1515 GMT, the rand was 0.69% firmer at 14.0440 per dollar, pulling back
slightly after breaching 14.00 for the first time since July earlier in the
session.

The rand has gained about 5% since mid December, despite a raft of data
releases showing a weak economy and nationwide blackouts by state power firm
Eskom, with investors willing to overlook the negatives and pocket the high
yield.

A global backdrop of low-to-zero central bank rates in developed markets,
paired with the spectre of recession as the United States and China continue
to tussle over tariffs, has prompted investors to hunt for yield.

Analysts see a further pick up in risk appetite in early 2020, especially
with the U.S. central bank set to keep lending rates flat or lower them
further.

In local data, South Africa’s trade surplus widened to 6.1 billion rand
($435 million) in November from 2.75 billion rand surplus in October.

Bonds were firmer, with the yield on the benchmark government paper due in
2026 down 6 basis points to 8.165%.

Stocks ended higher, with the JSE Top-40 Index up 0.24% at 51,147 points,
while the All-Share Index rose 0.41% to 57,480 points.

       <mailto:info at bulls.co.zw> 

Global shares gain in record year-end rally, dollar slips

(Reuters) - World equity markets scaled records on Friday with global growth
prospects raised by upbeat Chinese economic data and optimism a U.S.-Sino
trade deal is imminent, but the year-end rally ebbed on Wall Street and the
dollar eased as risk appetite grew.

Wall Street set all-time highs early and European shares rose to a third day
of record peaks this week as various U.S. and European indexes remained set
to post their best year since the global financial crisis a decade ago.

Profits at Chinese industrial firms grew at the fastest pace in eight months
in November, rising 5.4% from a year earlier to 593.9 billion yuan ($84.93
billion). The gains snapped three months of decline, but broad weakness in
domestic demand remains a risk for Chinese corporate earnings in 2020.

The U.S.-China trade war has rattled international commerce. Trade between
the world’s two largest economies fell 15.2% in the 12 months through
November from the same period in 2018, according to Panjiva, a S&P Global
Market Intelligence unit.

The dollar slipped across the board as growing risk appetite sapped the
safe-haven appeal of the greenback.

MSCI’s gauge of stock performance in 49 countries gained 0.26% while the
pan-European STOXX 600 index rose 0.21%, both setting all-time highs.

In Europe, financial services, industrial, chemicals and health care notched
intraday record highs. The STOXX 600 index is up 24% this year.

Equity markets are poised to rise further in 2020, even as high valuations
pose a concern, said Rahul Shah, chief executive of Ideal Asset Management
in New York.

Wall Street’s three main indexes lost steam at the close, with the Nasdaq
edging lower and the S&P 500 just a fraction higher.

The Dow Jones Industrial Average rose 23.87 points, or 0.08%, to 28,645.26.
The S&P 500 gained 0.11 points, or 0.00%, to 3,240.02 and the Nasdaq
Composite dropped 15.77 points, or 0.17%, to 9,006.62.

The S&P 500 closed four-tenths of a percentage point shy of surpassing a
29.6% gain in 2013, which would give the U.S. benchmark its best year since
1997.

Overnight in Asia, MSCI’s broadest index of Asia-Pacific shares outside
Japan jumped 0.8% to 555.39, a level not seen since mid-2018. It is up 15.5%
so far this year.

Emerging market stocks rose 0.58%.

Germany’s benchmark 10-year Bund yield held steady below recent six-month
highs of about -0.21% reached last week, while U.S. Treasury yields fell as
government debt found support following a sell-off that sent yields to
one-month highs.

Yields have risen amid increased risk appetite driven by optimism that a
Phase 1 U.S.-Sino trade pact will spur global growth and as major central
banks inject liquidity into the market.

Ten-year bond yields in Germany, France and the Netherlands were broadly
steady having dipped a basis point in early trade.

Benchmark 10-year notes rose 9/32 in price to push yields down to 1.8752%.

The euro rose to a 10-day high. The dollar index fell 0.52%, with the euro
up 0.7% to $1.1174. The Japanese yen strengthened 0.19% versus the greenback
at 109.45 per dollar.

Oil prices edged down from three-month highs as Russian Energy Minister
Alexander Novak made comments that fed doubts about crude output cuts next
year from the Organization of the Petroleum Exporting Countries and allied
producers including Russia, a group known as OPEC+.

Brent crude settled up 24 cents to $68.16 a barrel, while West Texas
Intermediate rose 4 cents to settle at $61.72 a barrel.

U.S. gold futures climbed to a seven-week high of $1,519.90 an ounce, and
settled up 0.2% higher at $1,518.10.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Asia Gold-Indian gold dealers switch to premium on holiday constrained
supply

(Reuters) - Gold prices flipped to a premium this week in India due to
limited supplies even as demand remained subdued, while other Asian regions
barely saw any holiday purchasing.

Indian dealers were charging a premium of up to $1 an ounce over official
domestic prices this week, compared to a discount of $2.5 an ounce last
week. The domestic price includes a 12.5% import tax and 3% sales tax.

Supplies are limited as most of the international suppliers are on leave,
allowing sellers to charge a premium, said a Mumbai-based dealer with a
private bullion importing bank.

Gold futures in India, the world’s biggest gold consumer after China, rose
for a fourth straight session to a nearly 4-month high of 38,980 rupees
earlier in the day.

Chinese gold traders offered premiums of $4-$5 an ounce over the benchmark,
little higher than last week’s $3-$5 an ounce.

Demonstrations in Hong Kong against Beijing’s influence continued to hurt
tourism, resulting in subdued physical purchasing of the safe haven metal.

Premiums in Hong Kong ranged between flat to $0.30 an ounce, compared with
last week’s $0.20-$0.30 an ounce.

Hundreds of protesters marched through Hong Kong shopping malls on Thursday,
disrupting business in the Asian financial hub for a third day.

Traders in Singapore charged premiums of $0.60- $0.80 an ounce over the
benchmark, the same as last week, but demand is expected to improve in
January ahead of the Chinese lunar new year, traders said.

In Japan, gold was sold at a premium of around $0.30 an ounce, slightly
lower from last week’s $0.50. While Christmas helped sales slightly, higher
gold rates kept buyers on the sidelines.

Benchmark spot gold prices are on track to post their biggest weekly gain in
more than four months after hitting a near two-month peak earlier this week.

London aluminium falls after Hydro restarts Brazil operations

(Reuters) - London aluminium prices fell in early trade on Monday and were
on course for their first daily drop in seven sessions after Norsk Hydro
said it had resumed bauxite production in Brazil and was ramping up alumina
output.     

Bauxite is a rock refined to make alumina, which is then used to produce
aluminium metal. A power outage earlier this month had affected production
at Hydro's Paragominas mine and Alunorte alumina refinery, supporting
aluminium prices.     

    FUNDAMENTALS

* ALUMINIUM: Three-month aluminium on the London Metal Exchange fell 0.3% to
$1,819 by 0137 GMT after closing up 0.6% on Friday. The most traded February
aluminium contract  on the Shanghai Futures Exchange rose 0.5% to 14,130
yuan ($2,019.90) a tonne as ShFE stocks continue to fall.

* ALUMINIUM: Premiums for aluminium shipments to Japan for the first quarter
of 2020 were set at $83 per tonne, down 14% from the previous quarter amid
soft demand from electronics and auto companies, two sources directly
involved in the pricing talks said.

* CHINA: Ge Honglin, the former chairman of state-owned Chinese aluminium
firm Chinalco, has been named as the new head of the China Nonferrous Metals
Industry Association.

* COPPER: LME copper edged up 0.2% to $6,227.50 a tonne in holiday-thinned
trade, while ShFE copper fell 0.5% to 49,420 yuan a tonne. 

* LITHIUM: SQM, the world's No. 2 lithium producer, said on Friday it
"regrets" a ruling by a Chilean environmental court that it should be
prosecuted over excessive water use in the country's northern Atacama
Desert. 

* INDIUM: An auction of around 3,609 tonnes of indium formerly held by
China's now-defunct Fanya Metal Exchange is due to end at 0200 GMT.

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
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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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