Bulls n Bears Daily Market Commentary : 07 February 2019

Fri Feb 8 05:50:03 CAT 2019

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Bulls n Bears Daily Market Commentary : 07 February 2019

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Zimbabwe Stock Exchange Update

Market Turnover $3,625,173.96 with foreign buys at $1,434,498.38 and foreign
sales were $562,269.44. Total trades were 140.

The All Share index added 0.33 points  to close at 157.96 points. PADENGA
gained $0.0600 to close at $1.1100, HIPPO VALLEY ESTATES   increased by
$0.0361 to end at $1.7500 whilst CASSAVA SMARTECH   traded $0.0217 firmer at
$1.4924. ECONET  also traded higher at $1.4953 after picking up $0.0103 and
DAIRIBORD  was $0.0005 stronger at $0.1555.

Gains were offset by losses in SIMBISA  and MEIKLES  which both retreated by
$0.0500 to settle at $0.7500 and $0.6000 respectively. SEEDCO dropped
$0.0472 to end at $1.9528, OLD MUTUAL LIMITED  lost $0.0203 to close at
$9.4661 whilst AXIA   traded $0.0179 lower $0.4121.

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  Global Currencies & Equity Markets

Nigeria

Nigeria naira firms as funds shrug off election risk to buy treasuries

(Reuters) - The Nigerian naira has gained 0.55 percent in a week to reach
361 per U.S. dollar on Thursday as foreign funds shrugged off the risk of
forthcoming elections to buy government treasuries, traders said.

The currency was quoted between 362.50 and 363 a week ago on the
over-the-counter market, traders said.

Foreign investors have been buying one-year Nigerian treasuries, yielding 15
percent, helping boost dollar liquidity on the currency market, after the
naira touched 365 last month.

On Thursday, the central bank auctioned 321 billion naira of bills, more
than it had offered. The bank has been selling treasuries to lure foreign
investors that fled at the start of the cycle of interest rate hikes in
United States which hurt the naira.

On the stock market, Nigeria’s top 10 banks soared 3.74 percent on Thursday.

Nigerians go to the polls on Feb. 16 for a presidential election. The
incumbent Muhammadu Buhari and his deputy have been touring the country to
woo voters for a second term in office.

Traders say investors have been buying bonds partly to offset lower yields
abroad, especially after the U.S. central bank signalled a dovish stance on
rates this year and on the assumption of limited policy changes in Nigeria
if Buhari wins re-election.

The main opposition candidate Atiku Abubakar has said he would consider an
amnesty for corruption suspects and privatise the state-owned oil company
NNPC and float the naira currency to attract investors back to the country.

Nigeria has at least three different exchange rates, which the central bank
has used to manage pressure on the currency. At currency bureaus the naira
was quoted at 361 and 306.20 on the official market, supported by the
central bank.

Traders expect Nigerian naira, Kenyan shilling to be steady

(Reuters) - The Nigerian naira and Kenyan shilling are expected to be stable
next week, while the Ugandan shilling and Zambian kwacha are seen firmer.

NIGERIA

The Nigerian naira is seen stable next week after it firmed against the U.S.
currency this week as foreign investors bought naira to participate in a
treasury auction, boosting dollar liquidity, traders said.

The naira was trading at 361 per dollar on the over-the-counter market,
strengthening from 363 last week. At currency bureaus it was quoted at 361
and 306.20 on the official market, supported by the central bank.

Traders say foreign investors have shrugged off election risk to buy
Nigerian treasuries partly to offset lower yields abroad after the U.S.
central bank signalled a dovish stance on rates this year.

KENYA

The Kenyan shilling is seen stable against the dollar in the coming week due
to inflows from diaspora remittances and offshore investors buying
government debt, matching oil importer demand, traders said.

Commercial banks quoted the shilling at 100.00/20 per dollar, compared with
100.65/85 at last Thursday’s close.

UGANDA

The Ugandan shilling is seen firming on the back of hard currency inflows
from offshore investors buying government debt, meeting with flat demand
from importers and banks.

At 1056 GMT commercial banks quoted the shilling at 3,660/3,670, compared to
last Thursday’s close of 3,665/3,675.

He said the shilling might oscillate between 3,650/3,670 against the dollar.
The Bank of Uganda is due to sell Treasury bills worth 220 billion shillings
($60.11 million)on Feb. 13.

ZAMBIA

The kwacha is likely to firm next week due to increased hard currency sales
by companies preparing to pay taxes which are due at the start and end of
the coming week.

On Thursday, commercial banks quoted the currency of Africa’s second-largest
copper producer at 11.8250 per dollar from a close of 11.9200 a week ago.

TANZANIA

The Tanzanian shilling is expected to depreciate next week due to persistent
demand for U.S. dollars from the energy and manufacturing sectors.

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks fall on renewed anxiety over trade, growth risks

(Reuters) - Asian stocks lost ground on Friday as investors worried about a
broadening global economic slowdown, with sentiment not helped by the
absence of any positive signs for a resolution in the U.S.-China trade row.

Safe-haven government bonds benefited in the face of growing anxiety over
the global outlook, with German long-term debt yields falling to their
lowest in over two years.

MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.7 percent,
easing back from a four-month peak touched the previous day. The index was
down 0.3 percent on the week.

Hong Kong’s Hang Seng lost 0.8 percent and South Korea’s KOSPI retreated 1.2
percent. Japan’s Nikkei tumbled 1.6 percent.

The European Commission on Thursday sharply cut its forecasts for euro zone
economic growth this year and next, stoking fears a global slowdown is
spreading to Europe as businesses and investors grapple with trade
frictions.

Adding to the gloomy mood, U.S. President Donald Trump said he did not plan
to meet with Chinese President Xi Jinping before a March 1 deadline to
achieve a trade deal.

Trump’s stance rattled investors hoping for a resolution to the months-long
trade dispute between the world’s biggest economies. Wall Street shares
slumped in response overnight, with the Dow falling 0.9 percent to pull back
from a two-month peak scaled midweek on upbeat corporate results.

Mnuchin and Lighthizer are expected to kick off another round of trade talks
in Beijing next week to push for a deal to protect American intellectual
property and avert a March 2 increase in U.S. tariffs on Chinese goods.

The 10-year U.S. Treasury yield extended its overnight decline to a one-week
low of 2.645 percent.

The 10-year German bund yield fell to 0.105 percent on Thursday, its lowest
since November 2016 after the European Commission’s sharp cuts to growth and
inflation forecasts.

The euro sagged under the weight of declining German bund yields. The single
currency was down 0.2 percent at $1.1339 after dropping to a two-week low of
$1.1325 the previous day. It was on track for a 1 percent weekly loss.

The dollar was little changed at 109.760 yen, nudged off a high of 110.09
reached the previous day. The yen tends to attract demand in times of
political tensions and market volatility due to its perceived safe-haven
status.

Yet, the U.S. currency was still headed for a small weekly gain of 0.3
percent against the yen, supported by the earlier rise in Treasury yields.

The Australian dollar was on course to end a bearish week firmly on the back
foot, last trading down 0.35 percent at $0.7078 after the Reserve Bank of
Australia (RBA) cut its growth outlook.

The Aussie slid sharply on Wednesday after the RBA stepped back from its
long-standing tightening bias, saying the next move in rates could just as
well be down as up. The currency was headed for a weekly loss of 2.3
percent.

In commodities, U.S. crude futures slipped 0.5 percent to $52.37 per barrel,
extending losses after dropping 2.5 percent in the previous session. Brent
crude was down 0.35 percent at $61.42 per barrel.

Oil fell on Thursday as the market was hurt by concerns that global demand
growth would lag in the coming year. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper falls for 2nd session on concerns over global growth

(Reuters) - London copper prices slid for a second session on Friday with
concerns over global economic growth and U.S.-China trade tensions weighing
on the market.

Weak data in recent weeks in key global economies, including in top metals
consumer China, has stoked fears of a recession.

Asian stocks slipped on Friday as investors fretted about a broadening
global economic slowdown, with sentiment not helped by the absence of any
positive signs for a resolution in the U.S.-China trade row.

COPPER: Three-month copper on the London Metal Exchange gave up 0.3 percent
to $6,226 tonne by 0227 GMT. For the week, copper is up 1.4 percent, a
second week of gains.

INDUSTRIAL OUTPUT AND GROWTH : Industrial output in Europe’s biggest
economy, Germany, registered an unexpected fourth consecutive monthly
decline in December, data showed on Thursday, while the Bank of England said
Britain faces its weakest economic growth in a decade.

TRUMP: U.S. President Donald Trump said on Thursday he did not plan to meet
with Chinese President Xi Jinping before a March 1 deadline set by the two
countries to achieve a trade deal.

TRADE TALKS: The remarks confirmed comments from administration officials
who said the two men were unlikely to meet before the deadline, dampening
hopes of a quick trade pact and sparking a drop in U.S stock markets.

CODELCO: Chilean state copper miner Codelco saw a 1.9 percent drop in its
output in 2018, at 1.8 million tonnes, while production at the world’s
largest copper mine, Escondida, shot up 34 percent in the same year, Chile’s
copper commission said on Thursday.

RUSAL: Russian aluminium giant Rusal said on Friday it sees demand for
aluminium growing in 2019 with potential for prices to rise. In a filing,
the Hong Kong-listed company also said the market for alumina, an oxide key
to the aluminium smelting process, may be expected to be more balanced.

Rusal sees aluminium demand improving in 2019

(Reuters) - Russian aluminium giant Rusal said on Friday it sees demand for
aluminium growing in 2019 with potential for prices to rise.

In a filing, the Hong Kong-listed company also said the market for alumina,
an oxide key to the aluminium smelting process, may be expected to be more
balanced. 

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Ariston

AGM

Royal Harare Golf Club

19 Feb 2019 - 2:30pm

Zimbabwe

Robert Mugabe National Youth Day

Zimbabwe

21 Feb 2019

Powerspeed

AGM

Boardroom, Gate 1, Powerspeed Complex, Graniteside

28 Feb 2019 - 11am

Zimbabwe 

Independence Day

Zimbabwe

18 Apr 2019 

Good Friday

19 Apr 2019

Easter Saturday

20 Apr 2019

Easter Sunday

21 Apr 2019

Easter Monday

22 Apr 2019

Workers Day

01 May  2019

Africa Day

25 May 2019

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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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