Bulls n Bears Daily Market Commentary : 21 January 2019

Tue Jan 22 08:56:34 CAT 2019

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Bulls n Bears Daily Market Commentary : 21 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $5,153,708.56 with foreign buys at $1,342,598.50 and foreign
sales were $492,163.92. Total trades were 107.

The All Share index opened the week on  a higher note after adding 3.87
points  to close at 157.12 points. OLD MUTUAL LIMITED  gained $0.1304 to
close at $8.6424, DELTA   moved up $0.1073 to trade at $3.1100 and INNSCOR
increased by $0.0818 to $1.9006. ECONET   traded $0.0751 higher at $1.6210
whilst CASSAVA SMARTECH  was $0.0490 firmer at $1.5490. 

Only one counter lost ground as BINDURA   dropped $0.0002 to settle at
$0.0700.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Nigeria

Nigerian opposition candidate plans central bank overhaul - spokesman

(Reuters) - Nigeria’s main opposition candidate for president wants to
overhaul the central bank by separating supervisory and monetary policy
functions, and to transition the naira to a managed float, a spokesman for
him said on Monday.

Atiku Abubakar, a businessman who served as vice president between 1999 and
2007, is the main challenger to President Muhammadu Buhari in the Feb. 16
election.

Chidoka also said Abubakar did not think current governor Godwin Emefiele
was best placed to continue at the helm given his past record supporting the
government.

Emefiele’s office did not immediately reply to a request for comment.

Emefiele imposed currency restrictions in 2015, defying bankers’ advice to
float the naira and raise interest rates as some other oil exporters had
done.

His decisions were in line with current leader Buhari, a staunch opponent of
letting the naira float freely.

The currency restrictions saw investors cutting their exposure to Nigerian
asset as the once promising emerging market was ejected from key bond
indexes.

Chidoka also confirmed Abubakar planned to oversee the currency transition
into a managed float that would give more flexibility but also reflected the
fact that Nigeria’s oil-dependent economy hugely depended on crude oil
prices.

Nigeria has a plethora of exchange rates against the U.S. currency and has
been selling the dollar on the interbank market to boost liquidity after
floating the naira for investors.

However, the official rate stood at around 307 to the dollar on Monday - a
level it has been close to since late 2016, while black market currency
dealers quoted the naira at 362.

Nigeria vies with South Africa’s to be the largest economy on the continent,
but has performed below par since 2016, when it suffered its first recession
in 25 years. 

South Africa

South African rand retreats, Naspers lifts stocks

(Reuters) - South Africa’s rand eased on Monday as the dollar neared a
two-week high, while Naspers boosted stocks on expectations of positive news
about the spin-off of its pay-TV business, which duly emerged after the
market close.

At 1555 GMT, the rand traded at 13.8600 versus the dollar, down 0.25 percent
from its previous close.

The rand followed several other emerging market currencies lower after the
dollar shrugged off concerns about weakening global growth and data that
showed China’s economy slowed sharply in 2018.

Government bonds were slightly weaker, with the yield on the benchmark 2026
instrument up 0.5 basis points at 8.910 percent.

The Johannesburg Stock Exchange’s top-40 index closed 0.95 percent stronger,
at 48,037 points, while the broader all-share index was up 0.76 percent to
54,139 points.

Tile retailer and manufacturer Italtile led the all-share index higher after
reporting good sales data in a difficult climate, while paper and pulp
manufacturer Sappi topped the top-40 index, up 3.9 percent.

Bourse heavyweight Naspers rose 3.3 percent on what traders said was
sentiment around its plans to unbundle its pay-TV business Multichoice.

After the market close, Naspers said its plan to list Multichoice had been
conditionally approved by the Johannesburg Stock Exchange.

Meanwhile, shares in South Africa’s largest retailer Shoprite closed 2.17
percent down after the Competition Tribunal fined its ticket selling
subsidiary 20 million rand for anticompetitive behaviour - a decision the
firm said it would appeal.

       <mailto:info at bulls.co.zw> 

Asia

Asian shares, oil skid on global growth worries

(Reuters) - Asian shares stumbled and oil prices fell on Tuesday as
pessimism about world growth drove investors away from risky assets, while
sterling ticked lower in the face of the latest twists and turns in the
Brexit saga.

China got the week off to a shaky start on Monday after Beijing reported
2018 growth in the world’s second-largest economy slowed to its weakest pace
in nearly 30 years. Adding to the air of caution, the International Monetary
Fund trimmed its global growth forecasts and a survey showed increasing
pessimism among business chiefs as trade tensions loomed.

The gloomy news highlighted the challenges facing policymakers globally as
they tackle an array of current or potential crises, from the U.S.-China
trade war to Brexit.

Spreadbetters point to another weak start for Europe. FTSE futures were off
0.2 percent while U.S. stock futures, which offer an indication of how Wall
Street will open, were down about 0.7 percent.

In Asia, losses were led by Chinese shares, with the blue-chip index off 1.2
percent. Hong Kong’s Hang Seng index was down more than 1 percent and
Australia’s main share index faltered 0.5 percent.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.9
percent on Tuesday, drifting away from a recent seven-week top.

Japan’s Nikkei, which had opened firmer, skidded 0.7 percent.

U.S. markets were closed on Monday for a holiday so trading was generally
subdued overnight. However, equity prices in Europe and Latin America
stumbled after the weak Chinese data.

Those worries sent prices for copper, used in electrical wires and vehicles,
drifting lower.

In another sign of risk aversion, the Australian dollar , often used as a
liquid proxy for China investments, eased 0.3 percent to $0.7134, putting it
on track for a third straight session of losses.

Sterling was a shade weaker at $1.2872 as British Prime Minister Theresa May
refused to rule out a no-deal Brexit. There are few signs she can break a
deadlock with parliament after her Brexit deal was rejected last week.

May offered to tweak her defeated deal by seeking further concessions from
the European Union on a backup plan to avoid a hard border in Ireland.

Analysts said investors were nervous about building positions in the pound,
specially given the possibility of Britain leaving the EU without a deal.

Demand for the safe-haven yen kept the greenback under pressure with the
Japanese currency last buying at 109.41 per dollar. The euro was near the
floor of its recent trading range at $1.1358. Against a basket of
currencies, the dollar was barely changed at 96.393.

In commodities, global growth worries pulled oil prices lower with Brent
down 55 cents at $62.19 and U.S. crude futures off 39 cents at $53.41.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold near 3-wk lows as firmer dollar dents safe-haven appeal

(Reuters) - Gold prices edged lower on Tuesday, hovering near a three-week
low touched in the previous session, as a firmer dollar made bullion more
expensive for buyers using other currencies, even as concerns about a global
slowdown mounted.

Spot gold fell 0.1 percent at $1,278.77 per ounce by 0546 GMT, after
touching its lowest since Dec. 28 at $1,276.31 on Monday. U.S. gold futures
fell 0.3 percent to $1,278.70 per ounce.

The dollar hovered near 2-week highs against its peers on Tuesday.

The dollar’s rise weighed on gold, which has climbed more than 10 percent
since mid-August, largely because of equity market turmoil and a weak
dollar.

A weaker Chinese economic data also supported the U.S. dollar.

China’s economy cooled in the fourth quarter under pressure from faltering
domestic demand and bruising U.S. tariffs, dragging 2018 growth to the
lowest level in nearly three decades, data showed on Monday.

Asian shares slipped on Tuesday on pessimism about world growth after the
International Monetary Fund trimmed its global growth forecasts.

However, this did not influence gold prices.

Fed officials have left little doubt that they want to stop raising interest
rates, at least for a while.

Higher interest rates tend to reduce appetite for non-yielding gold.

Spot gold may fall to $1,268, as it has broken a support at $1,279 per
ounce, according to Reuters technical analyst Wang Tao.

Meanwhile, spot palladium, which hit a record high of $1,434.50 last week
driven by a sustained deficit and rising demand, stood firm at $1,362.50 an
ounce.

Silver fell 0.1 percent to $15.21 an ounce while platinum was down 0.2
percent at $789.50. 

Copper prices extend declines amid slowing China economy

(Reuters) - London copper prices edged down on Tuesday, extending a sharp
drop from the previous session  after economic growth in top metals consumer
China slowed to itsweakest in 28 years. 

    FUNDAMENTALS

* LME COPPER: Three-month copper on the London Metal Exchange was down 0.2
percent at $5,971 a tonne by 0207 GMT, after ending down 1.2 percent in the
previous session.

* SHFE COPPER: The most-traded March copper contract on the Shanghai Futures
Exchange fell by 0.8 percent to 47,590 yuan ($7,003.58) a tonne, snapping
four straight days of gains.

* COPPER: The global world refined copper market showed a 15,000-tonne
deficit in October, compared with a 161,000-tonne deficit in September, the
International Copper Study Group

(ICSG) said in its latest monthly bulletin. 

* ZAMBIA: Barrick Gold Corp said on Monday that it was considering all
options for the Lumwana copper mine in Zambia as the African nation's
proposed new mining taxes would make it challenging to generate adequate
returns for all its stakeholders.

* WAREHOUSING: Years after sweeping reform aimed at  eliminating logjams in
warehouses that collect rent for storingmetal, a firm is preventing
companies from getting material when

they need it from a Malaysian port, five sources close to the matter said.

* ZINC: The global zinc market deficit widened to 96,600 tonnes last
November from a revised deficit of 52,000 tonnes in October, data from the
International Lead and Zinc Study Group

(ILZSG) showed on Monday.

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
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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
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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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