Bulls n Bears Daily Market Commentary : 10 January 2019

Fri Jan 11 07:03:16 CAT 2019

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Bulls n Bears Daily Market Commentary : 10 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $9,332,615.92 with foreign buys at $3,674,484.50 and foreign
sales were $5,768,773.20. Total trades were 153.

The All Share index recovered 0.19 points  to close at 142.44 points. OLD
MUTUAL LIMITED  led the movers with a $0.3059 gain to settle at $7.5994,
DELTA  added $0.0463 to end at $2.8498 and OK ZIMBABWE   was $0.0178
stronger at $0.2878. EDGARS  also increased by $0.0080 to $0.1100 and
BRITISH AMERICAN TOBACCO   was $0.0055 firmer at $33.0055.

Gains were partially offset by losses in PPC  which dropped $0.1001 to end
at $1.7000, CASSAVA SMARTECH   lost $0.0196 to settle at $1.3219 and MEIKLES
traded $0.0195 lower at $0.4905. INNSCOR  also decreased by $0.0140 to end
at $1.6360 and ECONET  was $0.0044 weaker at $1.3597.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Zimbabwe

AB Inbev to invest $120 million Zimbabwe dividends in central bank bonds

(Reuters) - Global brewing giant Anheuser-Busch Inbev will invest more than
$120 million of its dividends and fees that are trapped in Zimbabwe in the
central bank’s savings bonds, its local associate said on Thursday.

AB Inbev owns a 40 percent stake in Zimbabwe’s largest brewer and soft
drinks maker Delta Corporation, which has been struggling to repatriate
dividends and import raw materials due to a severe shortage of dollars in
the economy.

Delta said last week it had abandoned a plan to accept only hard currency
payments to cope with the crippling shortage of U.S. dollars, after the
government intervened.

“AB Inbev has agreed to place more than $120 million due to them in relation
to unremitted dividends and fees into RBZ (Reserve Bank of Zimbabwe) savings
bonds in order to reduce the pressure on the demand of foreign currency,”
Delta said.

The bonds, which were introduced in September 2017, have a coupon of 7
percent and a tenure of between 12 and 60 months. 

South Africa

South African rand steady as U.S.-China optimism offsets weak data

(Reuters) - South Africa’s rand held steady on Thursday, as disappointing
economic data were offset by market optimism over U.S.-China trade tensions.

At 1420 GMT, the rand traded at 13.8900 versus the U.S. dollar, 0.2 percent
weaker than its previous close.

A South African business confidence index fell last month, while
manufacturing growth slowed to 1.6 percent in November, data showed on
Thursday.

Those figures supported the view that growth in Africa’s most industrialised
economy slowed in the final three months of 2018 after a particularly strong
third quarter, when the economy exited recession.

Underpinning investor sentiment, China said on Thursday that it had made
progress on “structural issues” in talks on ending a multibillion-dollar
trade dispute with the United States.

The rand has enjoyed a strong start to 2019, gaining more than 3 percent
against the dollar, which has been dragged lower by signs that the pace of
U.S. monetary tightening will slow.

But analysts warn the rand remains vulnerable to global risk factors like
Brexit, as well as domestic issues including possible credit ratings
downgrades and political uncertainty in the lead up to this year’s national
election.

On the bourse, the benchmark JSE Top-40 index was barely changed at 47,164
and the broader All-share index inched up 0.09 percent to 53,271.

In fixed income, the benchmark 2026 government bond was marginally stronger
on Thursday as the yield fell 0.5 basis point to 8.775 percent.

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks reach 5-week high, yuan makes big weekly gains

(Reuters) - Asian stocks inched up to five-week highs on Friday, after
Chairman Jerome Powell reiterated the Federal Reserve will be patient about
raising interest rates and news that trade talks between Washington and
Beijing are moving to higher levels.

As the Fed’s dovish stance kept a lid on the dollar, China’s yuan rose to
its highest levels in more than five months and was on course for its
biggest weekly gains since the 2005 revaluation in onshore trade.

MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.2
percent to the highest levels since Dec. 6, while Japan’s benchmark Nikkei
advanced 0.7 percent. Shanghai Composite Index initially rose 0.8 percent,
but that was pared to just 0.1 percent.

Wall Street extended its rally into a fifth straight day on Thursday in a
whipsaw trading session as investors responded to mixed comments by Powell,
while a warning from Macy’s pummelled retail stocks.

At the Economic Club of Washington, Powell reiterated the views of other
policymakers that the Fed would be patient about interest rate hikes.

Major U.S. stock indexes also quickly recovered from brief losses after
Powell said that the Fed’s balance sheet would be “substantially smaller”.

U.S. and Chinese officials are working on arrangements for higher-level
trade talks after mid-level officials this week discussed U.S. demands that
would require structural change in China to address issues such as IP theft,
forced technology transfers and other non-tariff barriers.

U.S. Treasury Secretary Steven Mnuchin said late on Thursday that Chinese
Vice Premier Liu He will “most likely” visit Washington later in January for
trade talks.

Still, fundamental tensions between the U.S. and China “are unlikely to go
away and there is a high likelihood that any agreement to suspend tariffs
eventually breaks down when it becomes clear that Trump’s objectives cannot
really be met.”

Some investors are also increasingly wary of lingering disputes in
Washington over a wall Trump wants on the U.S.-Mexico border, which has led
to a weeks-long partial government shutdown.

Flanked by border agents who are going without paychecks during the
shutdown, Trump again threatened on Thursday to declare a national emergency
to bypass Congress to fund a wall.

In the foreign exchange markets, the dollar was broadly soft after a small
rebound from three-month lows the previous day.

The dollar index, measuring it against major peers, dipped 0.1 percent to
95.38.

The euro firmed 0.2 percent to $1.1523, while the dollar dipped 0.1 percent
to 108.28 yen.

The yuan, both onshore and offshore, climbed to the highest levels since
late July, aided by a weaker dollar and rising hopes of progress in the
U.S.-China talks.

In onshore trade, the Chinese currency has risen 1.6 percent this week, the
biggest gain since July 2005 when Beijing abandoned the yuan’s peg to the
dollar.

U.S. Treasury debt prices erased early gains after a soft 30-year bond
auction and in reaction to Powell’s comments on the Fed “substantially”
reducing the size of its balance sheet.

The 10-year U.S. Treasuries yield last stood at 2.728 percent.

Crude prices held near one-month highs, but a more than week-long in oil
rally slowed as optimism surrounding U.S.-China trade talks faded a little.

In Asian trade, West Texas Intermediate crude futures slipped 0.6 percent to
$52.30 per barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices inch up as dollar softens on Fed rate outlook

(Reuters) - Gold prices edged up on Friday as the dollar softened a touch on
expectations the U.S. central bank will keep interest rates steady if the
economy slows this year, while the Sino-U.S. trade spat also remained in
focus.

FUNDAMENTALS

* Spot gold had risen 0.2 percent to $1,288.83 per ounce by 0117 GMT.

* U.S. gold futures climbed about 0.2 percent to $1,289.40 per ounce.

* The dollar index, which tracks the greenback against major currencies, was
marginally lower in early Asian trade, but was off its near three-month lows
posted in the previous session.

* U.S. Federal Reserve Chairman Jerome Powell said on Thursday that the
central bank had the ability to be patient on monetary policy given stable
price measures, and he downplayed predictions from policymakers suggesting
interest rates would be raised twice more this year.

* People familiar with the three days of trade talks in Beijing said hopes
are mounting that the top Chinese negotiator, Vice Premier Liu He, will
visit Washington this month to meet with his negotiating counterparts.

* Flanked by border agents who are going without paychecks during a
government shutdown, U.S. President Donald Trump threatened on Thursday to
use emergency powers to bypass Congress to pay for a wall on the U.S.-Mexico
border.

* British Labour leader Jeremy Corbyn called on lawmakers on Thursday to
help his opposition party “break the deadlock” over Brexit and support his
call for a motion of no confidence in the government to trigger an election.

* Holdings in SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.18 percent to 797.71 tonnes on Thursday.

* Newmont Mining Corp, the world’s No. 2 gold producer, is cutting 120 jobs
at its Carlin mining operation in Nevada after deciding to reduce the life
span of one mine and suspending part of another due to a wall slide, a
spokesman said on Thursday.

DATA AHEAD (GMT) 0930 Britain GDP estimate Nov 0930 Britain Industrial
Output Nov 0930 Britain Manufacturing Output Nov 0930 Britain Goods Trade
Balance Nov 1330 U.S. Consumer prices Dec 

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
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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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