Bulls n Bears Daily Market Commentary : 18 February 2019

Tue Feb 19 06:56:03 CAT 2019

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Bulls n Bears Daily Market Commentary : 18 February 2019

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Zimbabwe Stock Exchange Update

Market Turnover $4,430,168.02 with foreign buys at $3,955,209.86 and foreign
sales were $207,171.37. Total trades were 104.

The All Share index opened the week in red after losing 0.47 points   to
close at 151.21 points. DELTA dropped $0.0470 to close at $2.7550, TSL  lost
$0.0300 to end at $0.8100 and OK ZIMBABWE  traded $0.0122 lower at $0.2734.
MASHONALAND HOLDINGS  eased $0.0077 to settle at $0.0323 and CASSAVA
SMARTECH   was $0.0036 down at $1.4500.

Trading in the positive was PADENGA  which added $0.0490 to $1.1000 and
ECONET  gained $0.0154 to close at $1.4944. NATFOODS   and SIMBISA  both
increased by $0.0100 to close at $7.1600 and $0.7600 respectively. OLD
MUTUAL LIMITED   traded $0.0063 stronger at $9.2062.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand weaker, stocks hit 3-1/2-month high

(Reuters) - South Africa’s rand weakened in late afternoon trade on Monday
as investors awaited Wednesday’s budget, when the finance minister is
expected to unveil plans to shore up state-owned power utility Eskom.

Stocks rallied, with the Johannesburg All-share index and Top-40 index
touching 3-1/2-month and 4-1/2-month highs respectively, with investors
growing hopeful the United States and China will agree a deal to end their
trade war.

At 1530 GMT, the rand was down 0.43 percent at 14.1300 per dollar compared
with Friday’s close of 14.0700 in New York.

Since the resumption of nationwide rolling power cuts by Eskom on Feb. 10,
the rand has lost nearly 4 percent, breaching the psychological 14.00 mark
as the crisis at the cash-strapped utility put a possible credit downgrade
to junk back on the radar.

Although Eskom paused the blackouts on Friday for the first time in five
days, it warned its creaking infrastructure could buckle at any time.

Finance Minister Tito Mboweni is expected to unveil a rescue package for
Eskom in the annual budget on Wednesday.

Government bonds firmed, with the yield on the benchmark paper due in 2026
down 2.5 basis points to close at 8.855 percent.

On the bourse, the Johannesburg All-Share index ended the session up 1.16
percent at 55,259 points, a level last seen on Nov. 2, while the Top-40
index climbed 1.18 percent to 49,019 points, a level it last touched on Oct.
4.

U.S. and Chinese officials will continue negotiations in Washington this
week after both sides reported progress at talks in Beijing last week.

Davies added that weaker rand was also helping the market “because the rand
hedges and all the resources are climbing.”

Rand-hedged shares make the bulk of their revenue outside South Africa and
tend to rise as the currency weakens.

Royal Bafokeng Platinum topped the gainers, climbing 10 percent to 33 rand,
while market heavyweight Naspers rose 1.93 percent to 3,115 rand and
MediClinic gained 1.64 percent to 58.09 percent.

Nigeria

Nigeria's election delay triggers stock-market sell-off

(Reuters) - A delay in Nigeria’s presidential elections set off the biggest
decline in the country’s stock market in six months on Monday and also put
pressure on its bonds and currency.

Nigeria’s electoral commission postponed the vote hours before polls were
due to open on Saturday, citing the logistical complexities of holding an
election in a large country with a population of 180 million.

The country has a history of election delays; it postponed the 2011 and 2015
votes. But the move surprised financial markets and led both President
Muhammadu Buhari and his main rival, former vice president Atiku Abubakar,
to call for voters to stay calm.

Lagos’s main stock market finished down 1.6 percent, after a last-minute
recovery. At one point, it had fallen more than 2.5 percent, its biggest
slump since September and a turnaround from the three-month high it reached
last week.

Currency traders reacted by pushing one-year non-deliverable naira forwards
to 401 per dollar from 397. The naira remains partly controlled by the
central bank and was stable at 306.80 per dollar on the spot market.

Investors had started to pick up shares to position for a post-election
rally, assuming that the election would pass without violence or other
problems. That boosted dollar liquidity on the currency market.

The government’s dollar-denominated bonds sold off, too, and as yields rose,
analysts wondered what kind of impact that would have on a naira-denominated
debt auction later in the week.

RISK OF CONTESTED RESULT

President Muhammadu Buhari was meeting with senior members of his party on
Monday over the postponement. His main rival, former vice president Atiku
Abubakar, said on Saturday that Buhari’s administration hoped to
disenfranchise the country’s electorate by delaying the vote.

Though a long delay could disrupt Nigeria’s economy, most analysts remained
optimistic. A rise in oil prices has helped Nigeria boost FX reserves by
around $2 billion since November, insulating it from a broader sell-off.

Others were more alarmed. “The economic consequences of this decision will
be felt significantly, as what was supposed to be a smooth process is now
mired in lengthened uncertainty and controversy,” analysts at Vetiva Capital
wrote in a note.

       <mailto:info at bulls.co.zw> 

Emerging-markets

Stocks rise as China shares gain on trade-talks optimism

(Reuters) - Emerging-market stocks rose on Monday as Chinese blue chips
surged more than 3 percent, encouraged by progress in Sino-U.S. trade talks
that might see an extension of the deadline to strike a trade deal.

U.S. and Chinese officials will continue negotiations in Washington this
week after both sides reported progress at talks in Beijing last week. U.S.
President Donald Trump repeated on Friday that he may extend the deadline
from March 1.

With most Asian markets in the black, the MSCI index of emerging-market
stocks rose 0.8 percent. Trading was light with U.S. markets closed for the
Presidents Day holiday.

China’s blue-chip index climbed 3.2 percent, and the Shanghai Composite
index rose 2.7 percent - both logging their best day since Nov 2.

Hong Kong stocks gained 1.6 percent. Export- reliant indices in South Korea
and Taiwan rose more than 0.6 percent each. Elsewhere, South Africa’s
benchmark index was up 0.6 percent, reaching its highest in more than 15
weeks.

Among currencies, the Chinese yuan eked out gains against a weaker dollar.
Optimism around trade put pressure on the dollar as investors bet on riskier
assets.

The Russian rouble was supported by higher oil prices. The South African
rand struggled to hold gains.

The Turkish lira slumped 0.7 percent after a central bank decision to lower
the level of lira reserves that banks must hold against deposits. That
raised concern the bank might loosen monetary policy.

Separately, Standard and Poor’s affirmed Turkey’s sovereign ratings with a
stable outlook but warned that ratings may be lowered if it sees greater
chances of systemic distress in the banking system.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Shanghai aluminium slips after Malaysia lifts bauxite ban

(Reuters) - Shanghai aluminium prices moved lower in early trade on Tuesday
after Malaysia said it would not extend a moratorium on mining bauxite,
potentially reducing  costs in the aluminium supply chain for top producer
China.

Bauxite is a rock refined to make alumina, which is then used to make
aluminium metal. 

    FUNDAMENTALS

* SHFE ALUMINIUM: The most traded April aluminium contract  on the Shanghai
Futures Exchange slipped 0.4 percent to 13,395 yuan ($1,977) a tonne as of
0156 GMT, just above the

two-year low of 13,230 yuan struck last month. Three-month aluminium on the
London Metal Exchange was down 0.1 percent at $1,855 a tonne.

* BAUXITE: The Malaysian government said it would not extend  its moratorium
on bauxite mining which ends on March 31 due tostrong demand for the
industry, state news agency Bernama reported on Monday, quoting the water,
land and natural resources minister. 

* ALUMINIUM: Mining giant Glencore has bought 200,000 tonnes of aluminium on
the LME and will take delivery of the metal from warehouses owned by ISTIM
UK in Port Klang, Malaysia, five sources familiar with the matter said.    

* COPPER: Three-month LME copper edged down 0.3 percent to $6,257.50 a
tonne, on course to snap a run of four straight daily gains on optimism over
U.S.-China trade talks.

ShFE copper was up 1 percent, tracking Monday's jump in the LME price, which
was also driven by supply concerns.

* VEDANTA: India's Supreme Court on Monday set aside an order by an
environmental court which had cleared the way for reopening Vedanta's south
Indian copper smelter, in a blow to the company's plans to begin operations.

* TRADE: Chinese Vice Premier Liu He will visit Washington  on Thursday and
Friday to continue trade negotiations with theUnited States, the Commerce
Ministry in Beijing said.

* VALE: Brazil's government on Monday banned new upstream mining dams and
ordered the decommissioning of all such dams by 2021, targeting the type of
structure that burst last month in the town of Brumadinho, killing hundreds
of people.

Gold steady near 10-month high; palladium hits record level

(Reuters) - Gold prices were steady near 10-month peaks on Tuesday as the
dollar held little changed and markets awaited clarity on U.S.-China trade
talks, while palladium struck a record high on supply fears.

FUNDAMENTALS

* Spot gold was little changed at $1,326.10 per ounce as of 0048 GMT, after
touching a 10-month high of $1,327.64 an ounce in the previous session.

* U.S. gold futures rose 0.5 percent to $1,328.9 an ounce.

* Palladium hit a record high of $1,459 an ounce in early trade as a
sustained supply deficit boosted the autocatalyst metal

* The dollar index versus a basket of six major currencies was little
changed at 96.784 after ending the previous session flat. U.S. financial
markets were closed on Monday for Presidents’ Day.

* Asian shares hovered near a four-month peak on Tuesday, supported by hopes
that Sino-U.S. trade talks were making positive progress and expectations of
policy stimulus from central banks.

* The United States and China will resume trade talks this week in
Washington, with U.S. President Donald Trump saying he may extend a March 1
deadline for a deal. Both sides reported progress at last week’s talks in
Beijing.

* The United States has blocked efforts by a U.N. agency to improve civil
aviation in North Korea to maintain sanctions pressure ahead of a second
summit between President Donald Trump and leader Kim Jong Un in Vietnam in
late February.

* Minutes of the Federal Reserve’s last policy meeting are due on Wednesday
and should provide more guidance on the likelihood of rate increases this
year. There is also talk the bank will keep a much larger balance sheet than
previously planned.

* The U.S. Commerce Department sent a report on Sunday to U.S. President
Donald Trump that could unleash steep tariffs on imported cars and auto
parts, provoking a sharp backlash from the industry even before it is
unveiled, the agency confirmed.

DATA/EVENT AHEAD (GMT) 0930 Britain Unemployment Claimant Count Jan 0930
Britain Employment Change Dec 0930 Britain Average Wk Earnings 3M YY Dec
1000 Germany ZEW Economic Sentiment Feb 1000 Germany ZEW Current Conditions
Feb 1300 Russia Unemployment Rate Jan 1500 U.S. NAHB Housing Market Index
Feb ECB Vice President Luis de Guindos participates in a panel session at
the 2019 European Parliamentary Week in Brussels.

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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