Bulls n Bears Daily Market Commentary : 03 January 2019

Fri Jan 4 06:14:32 CAT 2019

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Bulls n Bears Daily Market Commentary : 03 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $2,061,641.85 with foreign buys at nil and foreign sales
were $892,182.37. Total trades were 73.

The All Share index recovered 1.94 points to close at 146.32 points. DELTA
led the movers with a $0.2013 gain to close at $2.8500, SEEDCO INTERNATIONAL
went up by $0.0200 to settle at $1.7400 and CBZ  traded $0.0145 higher at
$0.1550. ZIMPAPERS also increased by $0.0052 to $0.0340 and PROPLASTICS  was
$0.0050 stronger at $0.2000.

Trading in the negative was FIRST MUTUAL HOLDINGS  which dropped $0.0254 to
$0.1035 whilst FBC HOLDINGS and ZIMPLOW  both lost $0.0100 to settle at
$0.2900 and $0.2400. AXIA also decreased by $0.0055 to end at $0.4233 and
ZIMRE HOLDINGS  traded $0.0045 weaker at $0.0211.

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  Global Currencies & Equity Markets

South Africa

South African rand steadies after being hit by global selloff

(Reuters) - The South African rand had recovered losses by the end of the
day on Thursday after a sharp selloff in emerging market currencies on
rising concerns about global growth.

Traders said the rand recovered as selling was considered to have been
excessive and investors still see value at around 14.60 to the dollar.

AT 1516 GMT the rand was 0.02 percent firmer at 14.4657 per dollar after
tumbling to as far as 14.8975, its weakest in three months.

Emerging market currencies were hit by rising risk aversion after
phone-maker Apple sparked fears about global growth with a warning about
flagging sales in China and other emerging markets.

The rand was already on the backfoot following weak factory data from China
on Wednesday.

A scramble to safe-haven currencies such as the Japanese yen caused what
some traders called a “flash crash” in world markets as stop-losses and
automated orders were triggered in low-liquidity conditions.

At one stage the rand was down about 4 percent against the yen, which is
seen as a safe asset in times of volatility.

Political uncertainty ahead of national elections in May is set to leave the
rand vulnerable in the longer term and more susceptible to sharp,
sentiment-driven outflows, analysts said.

Bonds also gained, with the yield on the benchmark 2026 paper falling 8
basis points to 8.855 percent.

Stocks were also recovering on Thursday after seeing their largest
single-day drop since August the day before. The Johannesburg Stock
Exchange’s top-40 index was up 0.52 percent at 1500 GMT and the broader
all-share index was 0.63 percent higher.

Metals and mining companies were among the biggest winners of the day, with
the South African unit of steel manufacturer ArcelorMittal rising almost 10
percent and gold companies, including Harmony Gold and AngloGold Ashanti
continuing to benefit from the retreat to safe haven assets.

Telecoms giants MTN and Vodacom joined only a handful of falling stocks on
the top-40 index, down 0.7 percent and 0.14 percent at 1514 GMT
respectively.

Kenya, Tanzania, Uganda currencies seen weakening next week

(Reuters) - The Kenyan, Tanzanian and Ugandan currencies are likely to
weaken in the coming week, while Zambia’s currency is expected to remain
firm.

KENYA

The Kenyan shilling is expected to be under pressure against the dollar due
to demand from oil and merchant importers as business activity resumes after
the holiday season, traders said.

Commercial banks quoted the shilling at 102.10/20 per dollar, compared with
101.45/65 when markets shut for holidays.

TANZANIA

The Tanzanian shilling is likely to depreciate slightly against the U.S.
dollar due to market demand for the greenback after the Christmas holiday.

A forex trader at one of the commercial banks said on Thursday the shilling
was trading last week at 2,295/2,303 against the dollar.

ZAMBIA

The kwacha is expected to remain firm against the dollar in the coming week
as companies convert hard currency to the local unit to pay taxes.

At 1000 GMT on Thursday, commercial banks quoted the currency of Africa’s
second-largest copper producer at 11.9500 per dollar from a close of 11.9400
a week ago.

UGANDA

The Ugandan shilling is seen trading with a weakening tone in coming days on
the back of demand from typical hard currency buyers in sectors like
manufacturing, telecoms and energy.

At 0900 GMT, commercial banks quoted the shilling at 3,720/3,730, compared
to last Thursday’s close of 3,710/3,720.

Most bulk foreign exchange buyers in Uganda are typically fuel importers,
manufacturers and telecommunications firms. 

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Emerging market stocks drop as Chinese data disappoints; FX stable

(Reuters) - Most bourses in emerging markets fell on Wednesday to start 2019
on the back-foot, as lacklustre factory data out of China fed worries about
slowing global economic growth, while developing world currencies marked
time against a softer dollar.

Factory activity in the world’s second biggest economy shrank for the first
time in over two years in December, testifying to the toll the U.S.-China
trade war has exacted.

A soft dollar provided some leeway for emerging market currencies with
cautious sentiment prevailing amid the partial U.S. government shutdown and
a slower pace of Federal Reserve rate hikes.

MSCI’s index of developing world stocks dropped 1.6 percent, set to clock
its biggest one-day percentage loss in more than three weeks.

China’s blue-chip CSI300 index fell 1.4 percent while bourses in
export-oriented South Korea and Taiwan each recorded losses of more than 1.5
percent.

Russia’s rouble edged higher, weathering a 1.5 percent slide in the price of
key export oil. Its oil production rose to a post-Soviet record high of
11.16 million barrels per day in 2018, data showed on Wednesday.

Resources major South Africa saw its rand soften 0.4 percent, while the
Johannesburg Stock Exchange’s Top-40 index tumbled 3.5 percent, on track for
its worst session in about four and a half months.

Turkey’s lira, the focal point of a crisis in 2018, was 1.1 percent weaker
on Wednesday. A business survey showed manufacturing activity contracted for
the ninth straight month in December, as output and new orders continued to
decline.

Data showing German manufacturing growth slowed in December hurt sentiment
towards central and eastern Europe - regions generally dependent on Germany
as an export destination.

The Czech crown, Polish zloty and Hungary’s forint all softened against the
euro, falling in a range between 0.09 percent and 0.3 percent.

The forint weakened to slip away from 200-day moving average of about 321
against the euro, despite data showing the seasonally-adjusted Purchasing
Managers’ Index in Hungary rose in December from November. Hungarian stocks
dipped 0.4 percent.

Polish stocks were trading down 1.3 percent lower on broad-based losses, on
pace for their lowest closing level in over three weeks.

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Commodities Markets

Gold hits multi-month high as falling equities cement growth fears

(Reuters) - Gold touched its highest in more than six months on Wednesday as
sagging equities compounded concerns over weakening global markets,
prompting safe-haven flows into the precious metal.

Spot gold was up 0.2 percent at $1,284.71 an ounce at 1250 GMT, having
earlier touched its highest since June 15 at $1,288.66.

U.S. gold futures rose 0.5 percent to $1,287.10.

Global shares began 2019 on a downbeat note while oil prices and bond yields
slid and the Japanese yen strengthened as data from far and wide exacerbated
concern over the potential for a global economic slowdown.

Economic and geopolitical concerns mean it is only a matter of time before
gold shoots up, said Kunal Shah, head of research at Nirmal Bang Commodities
in Mumbai.

Markets are also awaiting views from Federal Reserve Chairman Jerome Powell
on the U.S. economic outlook and hints about interest rates in 2019 when he
participates in a joint discussion on Friday with former Fed heads Janet
Yellen and Ben Bernanke.

Further pointers are expected this week from a closely watched survey on
U.S. manufacturing, due on Thursday, followed by the December payrolls
report on Friday.

There are expectations that a three-year rate-hiking cycle in the United
States has come to a close, which would be beneficial for non-yielding
bullion.

The United States Treasury market fell earlier in the day on assumptions
that the Federal Reserve will call a halt to its rate increases.

Among other precious metals, palladium fell 0.5 percent to $1,257.49 an
ounce.

Silver was steady at $15.44, having earlier touched its highest since Aug. 3
at $15.51, while platinum fell 0.2 percent to $789.80.

Copper hits 3-1/2 month low, China data reinforces demand angst

Reuters) - Copper prices hit 3-1/2 month lows on Wednesday as worries about
economic and demand growth in top  consumer China were reinforced by
manufacturing data showingshrinkage.

Benchmark copper         on the London Metal Exchange traded down 1.7
percent at $5,861 a tonne in official rings from an earlier $5,856 a tonne,
its lowest since Sept. 18. Prices of the

metal used in power and construction fell 18 percent last year.

China's factory activity contracted for the first time in 19 months in
December as domestic and export orders weakened further, a private survey
showed.             

CHINA: The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) for
December fell to 49.7 from 50.2 in November, marking the first contraction
since May 2017. Manufacturing is a key source of jobs in China's economy. 

China accounts for half of global copper consumption  estimated at around 24
million tonnes this year.

TRADE: One major reason behind slowing growth is the  U.S.-China trade
dispute. Last month the two countries agreed a 90-day ceasefire to allow
time for fresh talks to try and end a

dispute that has seen them impose increasingly severe tariffs on each
others' goods.             

POLICY: "While (China) authorities are loosening policy, we only expect the
economy to stabilise by mid-year, which will be a factor weighing on all
commodity prices but particularly the

industrial metals", Capital Economics said in a note.

  RUSAL: The LME confirmed on Monday it would lift the suspension on
aluminium produced by Russia's Rusal if U.S. sanctions are lifted, saying a
consultation with users had not raised any objections to the plan.

ALUMINIUM: Aluminium was flat at $1,846 a tonne. It touched $1,830 on
Monday, the lowest since February last year, on worries about oversupply
despite Chinese producers' plans to cut capacity.              

SPREADS: Worries about a tight LME aluminium market due to  low stocks and
one company holding between 50 and 79 percent of warrants has created a
premium for the cash over the three-month contract CMAL0-3 currently around
$14 a tonne. It touched $16 on Monday, its highest since July last year.

STOCKS: The premium has attracted some aluminium to the LME  system, but
stocks at 1.27 million tonnes are still 10 percent below those seen last
April and a fraction of global demand estimated at around 67 million tonnes
this year. 

MALSTX-TOTAL PRICES: Zinc fell 2.9 percent to $2,395, lead lost 1.9 percent
to $1,982, tin was little changed at $19,470 and nickel  slipped 1.5 percent
to $10,525 a tonne.

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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