Bulls n Bears Daily Market Commentary : 31 January 2019

Fri Feb 1 05:54:23 CAT 2019

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Bulls n Bears Daily Market Commentary : 31 January 2019

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover $7,841,348.56 with foreign buys at $4,123,726.46 and foreign
sales were $3,944,967.87. Total trades were 188.

The All Share index recovered 0.67 points  to close at 158.09 points. OLD
MUTUAL LIMITED  led the movers with a $0.1275 to close at $9.1778, DELTA
added $0.0540 to $3.1794 and ECONET  was $0.0210 firmer at $1.5212.
ZIMPAPERS  also increased by $0.0098 to settle at $0.0588 and AFRICAN SUN
traded $0.0095 stronger at $0.1300.

Gains were partially offset by loses in CASSAVA SMARTECH   which dropped
$0.0116 to $1.5258, SIMBISA   lost $0.0057 to end at $0.74768 and INNSCOR
decreased by $0.0039 to close at $2.0709.  PADENGA   also retreated by
$0.0034 to settle at $1.0500 and STAR AFRICA   was $0.0012 down at $0.0118.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand climbs to five-month high on dovish Fed

(Reuters) - South Africa’s rand gained to its highest in nearly six months
on Thursday as the United States central bank kept lending rates unchanged
and hinted it would hold off on cutting interest rates, fuelling global
demand for risk assets.

At 1430 GMT the rand was 0.6 percent firmer at 13.2400 per dollar, bring
gains since Wednesday to more than 2.6 percent as the unit broke through
crucial technical resistance levels on its way to its best since Aug. 8.

The rand’s surge began overnight as the Federal Reserve concluded its
two-day policy meeting. It left rates unchanged and said it would be
“patient” before making any further moves, dropping its previous message of
“further gradual increases”.

The rand strengthened to 13.3200 from 13.61 overnight and on Thursday
rallied to 13.2400, below the 200-week moving average. That flushed out
remaining bears as the bulls eyed a sub-13 rally before next week’s annual
address by President Cyril Ramaphosa and the budget later in the month.

In stocks, the blue-chip Top-40 index was off 0.13 percent to 47,910 and the
broader All-share index was little changed at 54,115.

Vodacom was up 0.7 percent to 120.58 rand, shrugging off protests at its
headquarters over compensation for a former employee who developed a
call-back messaging service.

In fixed income, the yield on the benchmark 10-year government bond dropped
15.5 basis points to 8.585 percent, its lowest since mid-July. 

Uganda

Ugandan shilling in firm position on back of end-month flows

(Reuters) - The Uganda shilling traded unchanged on Thursday as some typical
end-month inflows of hard currency from commodity exporters and charities
provided some support.

At 1050 GMT commercial banks quoted the shilling at 3,665/3,675, same as
Wednesday’s close.

       <mailto:info at bulls.co.zw> 

America

Friendly Fed fires world stocks to best January on record

(Reuters) - Soothing sounds from the Federal Reserve propelled world stocks
to their best January on record on Thursday, although having scored stellar
gains this time last year only to flop spectacularly, traders were trying
not to get too carried away.

The Fed said it would pause its 3-year interest rate rise campaign while
assessing the weakening of the economy.

Crucially, it also said that the rundown of its balance sheet - or the
stockpile of bonds it has accumulated over the past 10 years of quantitative
easing - could slow too.

That ticked all the boxes for financial markets, and saw Europe’s bulls push
London, Frankfurt and Paris up 0.7 to 1 percent after Wall Street and then
Asia had both charged overnight.

Added together it lifted the $4 trillion MSCI world stocks index, which
tracks 47 countries, up 0.5 percent and for the 20th day out of the last 23.

For January it is up more than 7.2 percent which is its best January since
the index began in 1988 and the best performance in any month since December
2015.

The gains were matched in bond markets. Benchmark U.S. Treasury yields,
which tend to set the bar for global borrowing costs, had dived
significantly and Europe’s big move saw Italian 2-year yields hit their
lowest since May.

But was all pain for the dollar. It was struggling near a three-week trough
against its major peers and emerging market currencies rose almost in unison
having been steamrollered by the greenback last year.

U.S. stocks were also expected to open higher later after the Fed’s boost
had dovetailed with reassuring tech earnings on Wednesday, and with Amazon
due to report later.

Apple shares had jumped almost 7 percent after it soothed its China worries.
Facebook shares then leapt 11 percent after hours after it had reported
better-than-expected profits following a year of high profile data scandals.

MSCI’s broadest index of Asia-Pacific shares then rose to its highest since
October helped by a 1 percent jump on Japan’s Nikkei which shrugged off the
normal headwind of a higher yen.

The main emerging market index skipped to a more than 8 percent January
gain. while the Shanghai Composite Index climbed 0.3 percent despite data
showing China’s factory activity contracted for a second straight month.

RE-EMERGING MARKETS

With the Fed decision out of the way, investors focused their attention on a
pivotal round of high-level U.S.-China trade talks aimed at easing a
months-long tariff war.

The two-day talks which began in Washington on Wednesday are expected to be
tense, with little indication so far that Beijing is willing to address core
U.S. demands to budge on trade practices and fully protect American
intellectual property rights.

If the two sides cannot reach a deal soon, Washington has threatened to more
than double tariffs on Chinese goods on March 2.

In the commodity markets, oil prices rose for a third day, pushed up by
lower imports into the United States amid OPEC efforts to tighten the
market, and as Venezuela struggles to keep up its crude exports after
Washington imposed sanctions on the nation.

U.S. West Texas Intermediate (WTI) crude futures were at $54.47 per barrel,
up 24 cents, or 0.4 percent, from their last settlement. Brent was up 36
cents, or 0.6 percent, at $62.01 per barrel.

Back in the currency markets, the pound was a shade higher at $1.3127, while
gold held near an eight-month high of $1,323 an ounce hit in the previous
session as its buyers also cheered the weak dollar.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold near 9-month highs on Fed; trade optimism caps gains

(Reuters) - Gold held firm on Friday near nine-month highs touched in the
previous session on the back of a pause in U.S. interest rate hikes,
although optimism about a Sino-U.S. trade deal boosted risk appetite,
capping gains.

FUNDAMENTALS

* Spot gold was steady at $1,321.14 per ounce by 0106 GMT. Prices rose to
$1,326.30, their highest since April 26 on Thursday.

* U.S. gold futures were little changed at $1,320.10 per ounce.

* Spot gold rose nearly 3 percent in January and was up 1.3 percent so far
this week, gaining for a second straight week.

* The Federal Reserve held U.S. interest rates steady on Wednesday but said
it would be patient in lifting borrowing costs further this year as it
pointed to rising uncertainty about the economic outlook.

* Gold tends to rise on expectations of lower interest rates, which reduce
the opportunity cost of holding non-yielding bullion, hurting the demand for
the U.S. dollar in which the metal is priced.

* President Donald Trump said on Thursday he will meet with Chinese
President Xi Jinping soon to try to seal a comprehensive trade deal as the
top U.S. negotiator reported “substantial progress” in two days of
high-level talks.

* Trump said he was optimistic that the world’s two largest economies could
reach “the biggest deal ever made.”

* Global equity prices rose, cheering the hopes of a deal.

* The number of Americans filing applications for unemployment benefits
surged to near a 1-1/2-year high last week, which could raise concerns that
the labor market is slowing.

* The market is now looking to Friday’s U.S. non-farm payrolls report for
January, with economists surveyed by Reuters forecasting job gains of
165,000, down from 312,000 in December.

* Jens Weidmann, the Bundesbank president and a member of the European
Central Bank Governing Council, painted a bleak picture of the German
economy, saying the country’s slump will last longer than initially thought.

* The U.S. Mint sold 65,500 ounces of American Eagle gold coins in January,
up from 3,000 ounces the previous month, the highest level since January
2017 according to the latest data.

* Venezuela will sell 15 tonnes of gold from central bank vaults to the
United Arab Emirates in coming days in return for euros in cash, a senior
official with knowledge of the plan said, as the crisis-stricken country
seeks to stay solvent.

* A surge in gold purchases by central banks to the highest since 1967
helped push global demand for the metal up 4 percent last year, the World
Gold Council (WGC) said on Thursday.

* India’s gold demand could rebound in 2019, rising above the 10-year
average, as the government seeks to bolster consumer confidence and spending
power ahead of general elections due by May, the World Gold Council (WGC)
said on Thursday. 

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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