Bulls n Bears Daily Market Commentary : 12 February 2019

Wed Feb 13 06:28:22 CAT 2019

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Bulls n Bears Daily Market Commentary : 12 February 2019

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Zimbabwe Stock Exchange Update

Market Turnover $4,319,357.63 with foreign buys at $3,224,781.10 and foreign
sales were $870,135.93. Total trades were 120.

The All Share index lost a significant 4.12 points  to close at 150.49
points. OLD MUTUAL LIMITED  lost $0.2966 to end at $9.2000, CASSAVA SMARTECH
dropped $0.1281 to settle at $1.3570 and INNSCOR  traded $0.0971 weaker at
$2.0029. MEIKLES  also decreased by $0.0800 to close at $0.5200 and ECONET
traded $0.0344 lower at $1.4528.

Trading in positive was HIPPO VALLEY ESTATES  which added $0.0097 to close
at $1.7597, ZIMPLOW gained $0.0021 to $0.2421 and BINDURA  was $0.0018
firmer at $0.0860. FIRST MUTUAL LIMITED  also increased by $0.0005 to settle
at $0.1405 and ARMALGAMATED REGIONAL TRADING  inched up $0.0001 to end at
$0.1181. 

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand recovers after power cuts fallout, stocks rise

(Reuters) - The rand firmed on Tuesday, supported by rising risk appetite
globally and recovering from a sharp selloff in the previous session when it
was hit by a sudden escalation of controlled power cuts in South Africa.

At 1657 GMT, the rand was 0.36 percent firmer at 13.7550 per dollar,
compared to its close of 13.8050 the previous day.

The rand tumbled nearly 2.5 percent on Monday to its weakest in nearly three
weeks as ailing power company Eskom cut 4,000 megawatts from the national
grid after seven generating units unexpectedly went offline.

The power crisis persisted on Tuesday, exposing the frailty of state-owned
Eskom despite government promises to revive the utility.

The yield on the benchmark 10-year South African government bond rose by one
basis point to 8.79 percent.

In the equities market retailer and wholesaler SPAR Group Ltd topped the
Top-40 blue chip index after reporting a 8.2 percent increase in 17-week
sales.

The grocery and building materials retailer closed 5 percent higher at
199.78 rand.

SPAR lifted sentiment in other retailers as well, such as grocery retailer
Pick n Pay and supermarket chain owner Shoprite, which gained 4.09 percent
and 2.69 percent respectively.

Recent sales updates from retailers have been a mix bag, with the majority
of them on the downside as financially strained consumers spent less on food
and clothes.

Gold stocks were also on the rise after bullion rose, supported by a slight
pause in the dollar’s rally as the United States and China continue talks
aimed at ending their trade conflict.

The gold index jumped 1.9 percent.

Harmony Gold was also supported by a robust first-half operating
performance. It rose 2.08 percent to 29.88 rand.

Bucking the upward trend, EOH Holdings plunged 25.87 percent to 19.80 rand,
a level last seen in April 2011 after it said Microsoft has given notice to
terminate its channel partner agreement with its subsidiary.

The Johannesburg all-share index closed 1.03 percent higher at 53,960
points, while the top-40 index rose 1.23 percent to 47,807 points.

Uganda

Ugandan shilling unchanged amid sagging demand from importers, banks

(Reuters) - The Ugandan shilling traded unchanged on Tuesday, amid
lacklustre demand for hard currency from both importers and players in the
interbank market, traders said.

At 1017 GMT commercial banks quoted the shilling at 3,665/3,675, same level
as Monday’s close.

       <mailto:info at bulls.co.zw> 

Asia

Asian stocks touch four-month peak on U.S.-China trade deal hopes

(Reuters) - Asian stocks edged up to a more than four-month high on
Wednesday, lifted by optimism that the United States and China might be able
to hammer out a deal to resolve their nearly year-long trade dispute.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose as much as
0.5 percent to hit its highest level since early October.

Japan’s Nikkei average climbed 1.3 percent to mark an eight-week high, while
South Korea’s KOSPI gained 0.5 percent.

China’s benchmark Shanghai Composite and the blue-chip CSI 300 advanced 0.4
percent and 0.6 percent, respectively, and Hong Kong’s Hang Seng was up 0.6
percent.

Asia took its cue from Wall Street, where the Dow and Nasdaq each rallied
about 1.5 percent overnight on optimism over U.S.-China trade negotiations
and a tentative U.S. congressional spending deal to avert another partial
government shutdown.

U.S. President Donald Trump said on Tuesday that he could see letting the
March 1 deadline for reaching a trade agreement with China slide a little if
the two sides were close to a complete deal.

Officials in Washington and Beijing had expressed hopes that a new round of
talks which began this week would bring them nearer to easing their
seven-month trade war.

U.S. congressional negotiators cobbled together a tentative bipartisan
border security deal late on Monday to avert another partial government
shutdown. However, Trump on Tuesday expressed displeasure with the agreement
and said he had yet to decide whether to support it.

The Cboe Volatility Index, Wall Street’s so-called “fear gauge,” dropped to
as low as 14.95, its lowest level in more than four months, overnight.

With risk aversion ebbing for the time being, safe-haven government bonds
were sold and their yields rose. The 10-year U.S. Treasury note yield
extended an overnight rise and edged up to a near one-week high of 2.694
percent.

The dollar was on the defensive as investors shifted their money to riskier
assets amid the U.S.-China trade-talk hopes.

The dollar index stood at 96.697 after its eight-day winning run came to an
end overnight to push it away from a two-month peak.

The euro was a shade higher at $1.1333 having gained 0.5 percent the
previous day, when it bounced from a three-month low of $1.1258.

The dollar was steady at 110.57 yen.

The kiwi dollar jumped as much as 1.4 percent to a one-week high of $0.6829
after the Reserve Bank of New Zealand held the official cash rate at a
record low of 1.75 percent and emphasised its neutral stance.

The central bank pushed back its forecasts for when it would hike rates to
March 2021 from the September 2020 projected in its last statement in
November.

In commodities, U.S. crude oil futures were up 1.0 percent at $53.64 per
barrel after rallying 1.3 percent on Tuesday.

Oil prices surged on Tuesday after OPEC figures showed it cut production
sharply in January, and as lead member Saudi Arabia said it would reduce its
output in March by an additional 500,000 barrels. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper heads for first gain in five days on trade optimism

(Reuters) - London copper prices rose on  Wednesday, on track to snap four
consecutive sessions of declines, after U.S. President Donald Trump said he
could see the deadline for a trade agreement with top metals consumer China
being pushed back. 

The world's two biggest economies are currently holding their latest round
of trade talks in Beijing. If they cannot reach a deal to end their trade
dispute by March 1, U.S. tariffs on $200 billion worth of Chinese imports
are scheduled to increase to 25 percent from 10 percent. 

FUNDAMENTALS

* LME COPPER: Three-month copper on the London Metal Exchange  , which shed
17.7 percent last year on concerns the U.S.-China trade row would crimp
demand, was up 0.5 percent at $6,134.50 a tonne, as of 0203 GMT, after
ending down 0.7 percent in the previous session. 

* SHFE COPPER: The most-traded March copper contract on the Shanghai Futures
Exchange slipped 0.4 percent to 48,080 yuan ($7,116.01) a tonne. 

* TRADE: U.S. President Donald Trump said on Tuesday he could see letting
the March 1 deadline for reaching a trade agreement with China slide a
little, but that he would prefer not to and expects to meet Chinese
President Xi Jinping to close the deal at some point.             

* SHUTDOWN: Trump also said on Tuesday he was not happy about a tentative
immigration deal reached by a bipartisan group of lawmakers, but he did not
anticipate another partial shutdown of the federal government.             

* ZINC: London zinc  rose 0.4 percent to $2,619 a tonne, after closing 1.4
percent lower and touching a two-week low in the previous session. 

LME zinc stocks MZNSTX-TOTAL are at their lowest since January 2008. 

* LITHIUM: Livent Corp on Tuesday forecast a drop in Chinese lithium sales
for the year because of uncertainty about the country's electric vehicle
subsidies, a worrisome sign

for other producers of the key battery component.             

* VALE: Senior management at Brazilian miner Vale were never shown internal
security documents indicating that its dam at Brumadinho was at risk of
collapse, the company's chief financial officer said on Tuesday.

* COLUMN: Nickel rally fades, electric vehicle buzz doesn't: Andy Home.

Gold steady as Sino-U.S. trade hopes drag dollar

(Reuters) - Gold prices held firm on Wednesday as the dollar weakened on
hopes of a trade deal between the United States and China, but an improved
risk appetite limited gains.

FUNDAMENTALS

* Spot gold was steady at $1,311 per ounce, as of 0115 GMT.

* U.S. gold futures were mostly unchanged at $1,314.20 per ounce.

* U.S. and Chinese officials expressed hopes that a new round of trade
talks, which began in Beijing on Monday, would bring them closer to easing
their nearly year-long trade war.

* U.S. President Donald Trump said on Tuesday that he could let the March 1
deadline for a trade agreement with China “slide for a little while,” but
that he would prefer not to and expects to meet with Chinese President Xi
Jinping.

* Beijing and Washington are trying to hammer out a deal before the March 1
deadline, after which U.S. tariffs on $200 billion worth of Chinese imports
are scheduled to increase to 25 percent from 10 percent.

* In Washington, U.S. lawmakers reached a tentative deal on border security
funding, although aides cautioned that it did not contain the $5.7 billion
President Donald Trump wants to build a wall on the Mexican border.

* Trump expressed displeasure with the deal on border security spending that
offered no funds for his promised U.S.-Mexican border wall, but did not
reject it outright and indicated he did not expect a shutdown.

* For the near-term, gold is expected to stay above $1,300, which is seen as
a critical support level in charts followed by technical traders, analysts
said.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.40 percent to 798.89 tonnes on Tuesday from
Monday.

* South Africa’s Sibanye-Stillwater said on Tuesday it was considering
measures including restructuring if alternative solutions could not be found
to bring loss-making gold shafts back to profitability.

* Investors made a U-turn on emerging markets, naming them the most crowded
trade, in Bank of America Merrill Lynch’s survey for the first time in its
history.

* The risk of a U.S. recession is not currently elevated, Federal Reserve
Chairman Jerome Powell said on Tuesday.

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
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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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