Bulls n Bears Daily Market Commentary : 07 January 2019

Mon Jan 7 21:24:14 CAT 2019

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Bulls n Bears Daily Market Commentary : 07 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $1,761,484.92 with foreign buys at $1,034,484 and foreign
sales were $210,882.90. Total trades were 97.

The All Share index opened the week in red losing 1.97 points  to close at
143.21 points. OLD MUTUAL LIMITED   retreated further by $0.4985 to close at
$7.1055, SIMBISA  dropped $0.1200 to close at $0.7300 and DELTA   was
$0.0424 weaker at $2.8076. INNSCOR  also lost $0.0423 to $1.7077 and PPC
was $0.0200 down at $1.8800.

Losses were partially offset by gains in ARISTON   which added $0.0048 to
end at $0.0288, DAWN   gained $0.0030 to settle at $0.0280 and PADENGA   was
$0.0025 stronger at $0.8525. OK ZIMBABWE   also increased by $0.0021 to
$0.2900 and FIRST CAPITAL BANK   was $0.0010 firmer at $0.0600.

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  Global Currencies & Equity Markets

South Africa

South African rand extends gains versus sliding dollar

(Reuters) - The South African rand strengthened against the dollar on
Monday, adding to strong gains last week as dovish comments by the Federal
Reserve chair hurt the U.S. currency.

At 1445 GMT the rand was more than 0.6 percent firmer at 13.8650 to the
dollar after earlier striking a session best of 13.8325.

The rand fell more than 14 percent in 2018, partly weakened by U.S. interest
rate hikes which boosted the dollar, but it is up 3.5 percent since the
start of 2019.

Fed chair Jerome Powell said late last week that the U.S. central bank would
be sensitive to the downside risks that markets are pricing in, bolstering
expectations of a slowdown in the pace of U.S. interest rate increases.

Money markets have priced out a U.S. rate hike this year and are even
pricing in a small probability of a rate cut in 2020. The Fed raised rates
four times in 2018, detracting from the appeal of emerging market currencies
like the rand and Russian rouble.

South Africa-focused investors will scrutinise manufacturing data due later
in the week for clues about the health of Africa’s most industrialised
economy.

Economists polled by Reuters are betting that the South African economy will
stage a gradual recovery, growing by 1.5 percent in 2019, after a 0.7
percent expansion last year. The economy expanded 2.2 percent in the third
quarter, pulling out of recession.

On the stock market, shares ended lower, led by cigarette giant British
American Tobacco (BATS) following a broker downgrade of the stock.

BATS lost 5.6 percent to 437.56 rand, topping the decliner’s list on the
benchmark index. Cowen analysts downgraded a clutch of tobacco stocks,
including BATS, to ‘market perform’, citing falling volumes.

Overall, the blue-chip Top-40 index ended 0.7 percent lower at 45,815 and
the broader All-share index lost 0.6 percent to 51,891.

Tunisia

Tunisia tourism revenues jump by 45 pct with record number of visitors in
2018

(Reuters) - Tunisia’s tourism revenues jumped in 2018 to $1.36 billion as
the country saw the arrival of a record 8.3 million visitors, a strong
recovery for a vital sector from two militant attacks on holidaymakers in
2015, official figures showed on Monday.

The tourism industry accounts for 8 percent of Tunisia’s gross domestic
product. A return of Europeans visitors would give a strong boost to the
struggling economy and raise the country’s weak foreign currency reserves.

Major European tour operators started to return to Tunisia last year, after
three years of shunning the country following the attack on a beach in
Sousse that killed 39 tourists and a separate attack at the Bardo National
Museum in Tunis that killed 21.

Tourism revenues rose in 2018 by about 45 percent compared to 2017 to reach
4.09 billion dinars ($1.36 billion), the central bank figures showed.

The number of tourists jumped to 8.3 million from 7 million in 2017, as
hotels were filled with visitors from Algeria, Russia and oter parts of
Europe.

Tunisia expects tourist arrivals to reach 9 million for the first time in
2019. ($1 = 3.0087 Tunisian dinars) 

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America

Stocks extend Fed, data-fueled rally, dollar slides

(Reuters) - An index of world stocks rose on Monday, extending strong gains
logged last week as investors took heart from Friday’s robust U.S.
employment data and a message from the U.S. central bank that it would be
patient and flexible in policy decisions this year.

Growing bets the Federal Reserve will halt its multi-year rate hike cycle
sent the dollar lower across the board, while rising equity markets and
support from OPEC production cuts helped lift oil prices.

MSCI’s world equity index, which tracks shares in 47 countries, was up 0.77
percent, its highest since Dec. 19.

On Friday, Powell told the American Economic Association that the Fed is not
on a preset path of rate hikes and that it will be sensitive to the downside
risks markets are pricing in.

The comments, coming after a robust U.S. jobs report, helped boost risk
sentiment and lift stock markets around the world.

On Monday, U.S. stocks edged higher as investors turned their attention to
the latest round of U.S.-China trade talks and a prolonged government
shutdown, halting Wall Street’s strong surge from Friday.

U.S. officials are meeting their counterparts in Beijing this week for the
first face-to-face talks since U.S. President Donald Trump and China’s
President Xi Jinping agreed in December to a 90-day truce in a trade war
that has roiled global markets.

China has the “good faith” to work with the United States to resolve trade
frictions, the Foreign Ministry said on Monday, as the world’s two largest
economies resumed talks in a bid to end their trade dispute.

The Dow Jones Industrial Average rose 74.9 points, or 0.32 percent, to
23,508.06, the S&P 500 gained 14.26 points, or 0.56 percent, to 2,546.2 and
the Nasdaq Composite added 58.25 points, or 0.86 percent, to 6,797.11.

European shares were slightly lower amid lingering worries about the euro
zone economy and Brexit. The pan-European STOXX 600 was down 0.29 percent.

In currency markets, the dollar weakened amid diminished expectations for
further U.S. interest rate hikes.

The dollar index, which tracks the greenback versus the euro, yen, sterling
and three other currencies, was down 0.48 percent at 95.722.

Interest rate futures traders are now pricing in a partial rate cut for this
year, while the Fed has indicated that two rate hikes are likely.

Gold rose and palladium hit a record high as the weaker dollar spurred
demand for the metals from holders of other currencies. Spot gold was up
0.27 percent at $1,288.25 per ounce.

U.S. Treasury prices erased early gains after a private report released on
Monday showed growth of U.S. services industries slowed to a five-month low
in December, signalling the world’s largest economy is decelerating faster
than economists’ forecasts.

Benchmark 10-year notes shed 2/32 in price to yield 2.6640 percent, from
2.659 percent on Friday.

Stable equity markets and production cuts by the Organization of the
Petroleum Exporting Countries helped oil prices rise for a fifth straight
session.

Brent crude oil was up $1.66 at $58.72 a barrel. U.S. crude was up $1.64 at
$49.6 a barrel. 

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Commodities Markets

Gold gains on dollar weakness, dovish Fed; palladium sets new record

(Reuters) - Gold rose on Monday, just below a more than six-month peak hit
in the last session, as the dollar slid on reduced chances of further rate
hikes by the U.S. Federal Reserve, and as the United States and China
resumed trade talks.

Palladium hit an all-time high as the market suffers from a sustained
deficit due to high demand and a supply shortage. The metal, used mainly in
emissions-reducing catalysts for vehicles, was trading at a premium to gold.

Spot gold was up 0.3 percent at $1,288.02 per ounce as of 12:18 p.m EST
(1718 GMT), having reached $1,298.42 an ounce on Friday, its highest since
June 15.

U.S. gold futures gained 0.3 percent to $1,289.40 per ounce.

The dollar slipped following dovish comments from Fed Chairman Jerome
Powell, making gold cheaper for holders of other currencies.

Powell on Friday said the U.S. central bank would be more sensitive to
downside risks in the market, adding that it was “prepared to shift the
stance of policy” if needed.

Gold tends to gain when expectations of interest rate hikes ease because
lower rates reduce the opportunity cost of holding non-yielding bullion and
weigh on the dollar, in which it is priced.

The United States and China are likely to reach a good settlement over
immediate trade issues, U.S. Secretary of Commerce Wilbur Ross said on
Monday.

Investor appetite for gold can be seen in the holdings of SPDR Gold Trust,
the world’s largest gold-backed exchange-traded fund, which rose to 798.25
tonnes on Friday, the highest since July 31, 2018.

Palladium, meanwhile, slipped 0.6 percent to $1,292.90 an ounce after
touching a record high of $1,313.24 earlier in the session.

Silver was steady at $15.69 per ounce, while platinum fell 0.7 percent to
$816.71, having touched a more than one-month high of $831.10 earlier in the
session. 

Copper steadies as traders eye U.S.-China trade talks

(Reuters) - Copper prices steadied on Monday after the biggest rise in three
months in the previous session on investor hopes that Chinese measures to
boost lending would be followed by progress in trade talks with the United
States.

Prices were also supported by a weaker dollar after Federal Reserve Chairman
Jerome Powell hinted that the pace of U.S. interest rate rises could slow.

A weaker dollar makes metals cheaper for buyers using other currencies.

Benchmark copper on the London Metal Exchange (LME) closed 0.1 percent up at
$5,923 a tonne after surging 3.2 percent on Friday in its biggest one-day
gain since Sept. 21.

It rose from a low base, however, having hit an 18-month low of $5,725 last
week.

Copper, aluminium, zinc and nickel fell by between 16 and 26 percent last
year as top consumer China’s metals-hungry economy slowed and a trade
dispute with Washington heralded further deceleration.

Prices could fall again if this week’s trade talks fail, said ING analyst
Warren Patterson, adding that tight supplies of copper and other industrial
metals would lift prices over the course of the year.

TRADE TALKS: U.S. and Chinese officials are meeting for the first
face-to-face talks since the two countries agreed in December to a 90-day
truce in a trade war that investors fear will curb global economic growth.

China said on Monday it had the “good faith” to work with the United States
to resolve trade frictions.

U.S. Secretary of State Wilbur Ross said a good settlement was likely on
immediate trade issues but an agreement on structural trade issues and
enforcement would be harder.

CHINESE ECONOMY: The talks come after China’s central bank on Friday said it
was cutting reserve requirements for banks for the fifth time in a year,
freeing up $116 billion for new lending.

GERMAN FACTORIES: German industrial orders fell more than expected in
November, adding to a slew of recent indicators showing Germany’s exporters
are suffering from the trade dispute between China and the United States.

OTHER METALS: LME aluminium ended 0.7 percent up at $1,878.50 a tonne, zinc
finished with a gain of 2.5 percent at $2,498, lead rose 0.2 percent to
$1,953, tin climbed 1 percent to $19,750 and nickel, which did not trade at
the close, was bid up 0.4 percent at $11,150.

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
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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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