Bulls n Bears Daily Market Commentary : 13 February 2019

Thu Feb 14 05:56:09 CAT 2019

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Bulls n Bears Daily Market Commentary : 13 February 2019

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Zimbabwe Stock Exchange Update

Market Turnover $3,957,676.11 with foreign buys at $2,116,645.71 and foreign
sales were $772,419.13. Total trades were 128.

The All Share index recovered 2.41 points  to close at 152.90 points. SEEDCO
INTERNATIONAL  led the movers with a $0.2500 gain to settle at $2.0000,
CASSAVA SMARTECH  recovered $0.1000 to end at $1.4570 and PPC  was up by
$0.0800 to settle at $1.8800. ECONET  regained $0.0327 to end at $1.4855 and
NATFOODS  traded $0.0300 stronger at $7.1500.

Gains were partially offset by losses in DELTA  which dropped $0.0756 to
$2.8244, PADENGA  fell by $0.0022 to $1.0500 and OLD MUTUAL LIMITED  was
$0.0007 down at $9.1993. OK ZIMBABWE  also traded lower at $0.2700 after
inching down by $0.0001.

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  Global Currencies & Equity Markets

South Africa

South African rand slumps on Eskom fears, U.S. inflation

(Reuters) - South Africa’s rand sank more than 1 percent on Wednesday as
concerns over state power firm Eskom were compounded by a firming dollar
after a measure of U.S. inflation came in stronger than expected.

At 1515 GMT the rand was 1.1 percent weaker at 13.9125 per dollar,
stretching losses to nearly 3 percent since Eskom intensified electricity
blackouts on Monday.

The rand, aided by signs of progress in the U.S.-China trade dispute, had
steadied in the previous session after being battered to a three-week low on
Monday and opened Tuesday trade at 13.7650. However, the sell-off resumed as
more details about Eskom’s financial stress came to light.

As the cash-strapped utility cut electricity for a fourth straight day, the
government said the firm was technically insolvent and would “cease to
exist” at the current trajectory by April without a bailout.

Markets have been unnerved by the crisis, more so with the annual budget due
on Feb. 20 and national elections in May.

Moody’s, the last of the top three ratings firms to rank the country’s
sovereign debt at investment level, is due to make its next credit
assessment in late March.

Bonds were weaker, with the yield on the government 10-year issue rising 14
basis points to 8.93 percent.

Stocks rose as rand-hedged shares, which make the bulk of their revenue
outside South Africa and tend to rise as the currency weakens, benefited
from a fall in the rand.

The benchmark Top-40 index rose 1.22 percent to 48,389 points while the
All-Share index gained 1.08 percent to 54,543 points.

Among the biggest gainers, Richemont rose 6.29 percent to 100.95 rand,
MediClinic gained 3.04 percent to 55.95 rand and British American Tobacco
closed up 4 percent at 506.26 rand.

Petrochemical firm Sasol was also among the top gainers on the blue-chip
index. The company closed 5.59 percent higher at 411.90 rand after shares
were boosted by production coming online from the first of seven units at
its Lake Charles chemical plant in the United States. 

Kenya

Kenyan shilling firms on inflows from horticulture exports

(Reuters) - The Kenyan shilling was stronger against the dollar on
Wednesday, helped by inflows of hard currency from horticulture exports and
Diaspora remittances, traders said. 

At market close at 0100 GMT, commercial banks quoted the shilling at
100.15/35 per dollar, compared with 100.25/45 at Tuesday's close.  

       <mailto:info at bulls.co.zw> 

Asia

Asia offers muted cheer as China trade beats forecasts

(Reuters) - Asian stock markets were in a cautious mood on Thursday as
investors hung on for any hint of progress in the latest Sino-U.S. tariff
talks, though China trade data handily beat expectations in a welcome relief
for the global economy.

Beijing reported exports rose 9.1 percent in January on a year earlier,
confounding forecasts of a fall, while imports dipped by a surprisingly
slight 1.5 percent.

As a result China’s trade surplus also topped forecasts while imports from
the U.S. plunged 41 percent, which might not please the White House.

With Treasury Secretary Steven Mnuchin and Trade Representative Robert
Lighthizer in China for high level talks, investors had been daring to hope
for good news.

U.S. President Donald Trump said on Wednesday the talks were “going along
very well” as they try to resolve the dispute ahead of a March 1 deadline.

The reaction in share markets was guarded with Shanghai blue chips down 0.2
percent, having jumped 2 percent on Wednesday to levels last seen in late
September.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.3
percent, though that was off a peak last seen in early October.

Japan’s Nikkei edged up 0.05 percent to its highest for the year so far as a
weakening yen boosted export stocks. E-Mini futures for the S&P 500 added
0.02 percent.

There was some hope another U.S. government shutdown would be averted as
Trump edged toward backing a deal in Congress on funding for a border
barrier.

Data showing U.S. consumer price inflation rose at the slowest annual pace
in more than 1-1/2 years also supported speculation the Federal Reserve
could stay patient on rates and helped lift Wall Street.

The Dow ended Wednesday up 0.36 percent, while the S&P 500 gained 0.30
percent and the Nasdaq 0.26 percent.

DOLLAR BEST OF BAD BUNCH

In currency markets, the improvement in risk appetite undermined the safe
haven yen and propelled the dollar to its best levels of the year so far at
111.04.

The euro took a hit of its own from dire data on European industrial output
which pushed long-term market inflation expectations to new lows, while
putting downward pressure on bond yields in the bloc.

The single currency was last at $1.1275 and above the floor of a
$1.1213/1.1570 trading range that has held since mid-October.

Sterling was also on edge at $1.1856 ahead of another parliamentary vote on
British Prime Minister Theresa May’s Brexit plan.

All of which left the dollar near its highest since mid-December on a basket
of currencies at 97.089.

In commodity markets, spot gold edged up 0.18 percent to $1,308.56 per
ounce.

Oil prices found support as top exporter Saudi Arabia said it would cut
crude exports and deliver an even deeper cut to its production.

U.S. crude was last up 14 cents at $54.04 a barrel, while Brent crude
futures rose 15 cents to $63.76.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices inch up ahead of China trade data

(Reuters) - London copper prices edged higher for a second session in early
Asian trade on Thursday as investors awaited their cue from the latest trade
data from top metals consumer China and the Sino-U.S. trade talks in
Beijing. 

China is due to report its copper import and aluminium export numbers for
January later in the day. 

FUNDAMENTALS

* COPPER: Three-month copper on the London Metal Exchange  was up 0.3
percent at $6,142.50 a tonne, as of 0115 GMT, extending a 0.3 percent gain
from the previous session. 

* SHFE COPPER: The most-traded March copper contract on the Shanghai Futures
Exchange also added 0.3 percent to 48,310 yuan ($7,146.66) a tonne. 

* TRADE: U.S. Treasury Secretary Steven Mnuchin said on Thursday he was
"looking forward" to trade talks with China as the two countries were set to
begin formal high-level discussions in Beijing.

* ZINC: Floods in Australia's Queensland state are set to disrupt the rail
delivery of zinc exports to the northern port of Townsville, with the line
likely to be out of action for at least a month, analysts said on Wednesday.

The metal used to galvanise steel rose by 0.4 percent in London after ending
down 0.3 percent in the previous session.

* SOUTH32: The world's largest manganese miner South32 Ltd  on Thursday
posted an 18 percent rise in half-year underlying profit as a surge in
metallurgical coal output and stronger commodity prices helped boost its
bottom-line.

Gold rises on hopes of Fed pause; trade talks in focus

(Reuters) - Gold prices inched up on Thursday on expectations that the U.S.
Federal Reserve will hold rates steady this year, while investors hoped for
developments in trade talks between Washington and Beijing.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,308.20 per ounce, as of 0105 GMT.

* U.S. gold futures were down 0.3 percent at $1,311.

* U.S. consumer prices were unchanged for a third straight month in January,
leading to the smallest annual increase in inflation in more than 1-1/2
years, which could allow the Federal Reserve to hold interest rates steady
for a while.

* Several Federal Reserve officials have indicated that they will support a
pause in interest rate hikes from the U.S. central bank to assess its impact
in economy.

* Risk sentiment has remained high over the last 48 hours in the financial
markets on rising expectations of a breakthrough in the trade impasse
between United States and China which has led to a modest rally in global
equities.

* U.S. Treasury Secretary Steven Mnuchin said talks with China went well on
Wednesday, as the world’s two largest economies try to hammer out an
agreement.

* Spain’s parliament rejected a draft 2019 budget on Wednesday after Catalan
separatists turned their back on the government, pushing the country close
to an early national election amid an increasingly fragmented political
landscape.

* BNP Paribas on Wednesday said it expects gold prices to average $1,330 per
ounces in 2019 and $1,415 per ounces in 2020.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, dropped 0.26 percent to 796.85 tonnes on Wednesday
from 798.89 tonnes on Tuesday.

* Barrick Gold Corp on Wednesday forecast a double-digit jump in gold output
this year, underscoring the growth potential of the world’s largest publicly
traded bullion producer after it bought rival Randgold Resources last month.

* Russia’s Finance Ministry said on Wednesday that Russia had produced
314.42 tonnes of gold and 1,119.95 tonnes of silver in 2018.

* The Italian government has no intention of selling the Bank of Italy’s
gold reserves to plug budget holes, a prominent lawmaker of the ruling
League party said on Wednesday.

* A deficit in the palladium market that has driven prices of the
autocatalyst metal to record highs will widen dramatically this year,
specialist materials company Johnson Matthey said in a report on Wednesday.

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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