Bulls n Bears Daily Market Commentary : 23 January 2019

Thu Jan 24 07:23:13 CAT 2019

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Bulls n Bears Daily Market Commentary : 23 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $15,734,686.87 with foreign buys at $8,120,021.30 and
foreign sales were $9,321,676.85. Total trades were 194.

The All Share index retreated by 1.58 points  to close at 159.24 points as
heavyweight counters lost ground. OLD MUTUAL LIMITED dropped $1.1013 to
close at $8.9990, ECONET  lost $0.1036 to settle at $1.5634 and CASSAVA
SMARTECH  traded $0.0103 lower at $1.5601. SIMBISA also decreased by $0.0004
to $0.7500 and DELTA  was $0.0002 down at $3.2000. 

Losses were partially offset by gains in INNSCOR which added $0.0499 to
$2.0500, EDGARS  put on $0.0260 to settle at $0.1580 and RIOZIM was $0.0194
stronger at $1.8900. AMALGAMATED REGIONAL TRADING   and DAIRIBORD both
increased by $0.0155 to close at $0.1055 and $0.1800 respectively.

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  Global Currencies & Equity Markets

Tunisia

Tunisia's foreign currency reserves rise after Saudi loan

(Reuters) - Tunisia’s foreign reserves have risen since it agreed a $500
million loan from Saudi Arabia last week and are now enough to pay for 91
days of imports, official data showed on Wednesday, up from a previous level
of 80 days.

The North African country’s economy has been in crisis since the toppling of
autocrat Zine al-Abidine Ben Ali in 2011, with unemployment and inflation
shooting up. It has struggled with tough economic reforms to reduce public
spending.

Central bank figures showed that Tunisia’s foreign exchange reserves now
stand at 15.096 billion dinar ($4.99 billion).

The government said last week that Finance Minister Ridha Chalgoum had
signed in Riyadh a $500 million loan with a low interest rate. He gave no
further details.

Last month, Prime Minister Youssef Chaded said after a visit to Riyadh that
Saudi Arabia had pledged financial aid worth about $830 million, of which
$500 million would be used to finance the budget. ($1 = 3.0247 Tunisian
dinars)

South Africa

South African rand rallies against weaker dollar; stocks slip

(Reuters) - The South African rand rallied against a weaker dollar on
Wednesday as top trading partner China pledged more fiscal spending to
support its own slowing economy.

But local stocks slipped as bourse heavyweight Naspers fell.

At 1610 GMT, the rand traded at 13.8350 versus the dollar, 0.9 percent
firmer than its previous close and mirroring gains seen in other emerging
market currencies.

The South African currency has taken its cue from global drivers for much of
this month, first from expectations that the pace of U.S. monetary
tightening will slow this year and more recently from concerns over global
growth.

The signal from Chinese finance ministry officials on Wednesday that the
world’s second-largest economy will increase stimulus measures this year
helped ease concerns about demand for South Africa’s commodity-heavy
exports.

Data showing South Africa’s consumer inflation fell significantly in
December, to 4.5 percent from 5.2 percent in the previous month, barely
moved the rand.

The inflation reading was in line with the forecasts of economists polled by
Reuters. It added to evidence that the central bank is unlikely to raise
interest rates at its next monetary policy meeting in March.

South African government bonds edged higher on Wednesday, as the yield on
the benchmark 2026 instrument fell 3 basis points to 8.82 percent.

Stocks closed slightly lower, with the Johannesburg Stock Exchange’s
All-share index down 0.3 percent to 53,915 points and the Top-40 index down
0.4 percent to 47,742 points.

Internet and entertainment group Naspers was the biggest faller on the
blue-chip index, falling 3.2 percent to 3,050 rand.

Trader Greg Davies of Cratos Capital said Naspers was likely dragged down by
bad news for Chinese tech giant Tencent , in which it holds a more than 30
percent stake.

Tencent was singled out by China’s cyber watchdog for spreading “vulgar
information” via one of its apps. The regulator ordered the platform to make
changes, as it deleted thousands of other mobile apps. 

       <mailto:info at bulls.co.zw> 

Asia

Asian shares subdued as U.S. political standoff, ECB decision eyed

(Reuters) - Asian shares were subdued on Thursday as political uncertainty
in the United States and worries about weakening global economic growth left
investors wary of riskier assets.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.1
percent. It has gained 3.7 percent so far this year.

Australian shares were flat while Japan’s Nikkei was last down almost half a
percent after moving between positive and negative territory.

China’s blue-chip CSI300 shed 0.3 percent while Hong Kong’s Hang Seng Index
gave up two-tenths of a percent.

On Wall Street, all three major U.S. equity indexes closed in positive
territory, with the Dow Jones Industrial Average booking the largest gains
on upbeat quarterly results from International Business Machines and other
major firms. The S&P 500 gained 0.22 percent.

But gains were capped by uncertainty over the partial U.S. government
shutdown, slowing global economic growth and the yet-unresolved trade
standoff between the United States and China.

Japan’s manufacturing growth stalled in January as export orders fell at the
fastest pace in 2-1/2 years, a preliminary business survey showed Thursday,
offering the latest sign of slower growth hitting a major developed economy.

White House economic adviser Kevin Hassett said in a CNN interview the U.S.
economy could see zero growth in the first three months if the partial
government shutdown lasts for the whole quarter.

Analysts at Capital Economics warned that China’s economic slowdown looks
set to be of a similar scale to that in 2015-16, though there are some
significant differences so far, most notably less downward pressure on the
yuan and no signs of major capital outflows.

CENTRAL BANK MEETINGS

Investors’ focus also turned to the European Central Bank.

The ECB is widely expected to stay on hold at its first monetary policy
meeting of 2019 that ends later on Thursday, but may acknowledge a sharp
slowdown in growth, raising the prospect that any further policy
normalisation could be delayed.

The ECB’s meeting will come a day after the Bank of Japan cut its inflation
forecasts on Wednesday but maintained its massive stimulus programme, with
Governor Haruhiko Kuroda warning of growing risks to the economy from trade
protectionism and faltering global demand.

Data released on Wednesday had already shown Japan’s exports in December
fell 3.8 percent from a year earlier, the most since October 2016.

Meanwhile, South Korea’s central bank left its benchmark policy rate steady
on Thursday, reinforcing market bets that rates will remain unchanged for
some time amid worsening trade conditions.

In currency markets, the dollar was last off 0.1 percent against the yen,
changing hands at 109.47 yen per dollar. .

The dollar hit a year-to-date high of 110.00 yen against the Japanese
currency after the BOJ kept its policy on hold the previous day.

The euro was basically flat at $1.1384. It has lost more than 1.5 percent
after climbing to a three-month high of $1.1570 on Jan. 10.

Sterling hit a fresh 11-week high against the dollar, rising to $1.3094, on
bets that a no-deal Brexit can be avoided if parliament exerts greater
control over the process.

The Australian dollar gave up early gains, last trading 0.1 percent lower at
$0.7136. Solid Australian jobs data for December helped give the Aussie a
boost early in the session.

The yield on benchmark 10-year Treasury notes fell to 2.744 percent compared
with its U.S. close of 2.755 percent on Wednesday.

In commodity markets, oil prices extended losses from Wednesday as the EU
sought to circumvent U.S. trade sanctions against Iran, and on weaker U.S.
gasoline prices.

U.S. West Texas Intermediate (WTI) crude futures fell 31 cents, or 0.6
percent, to $52.31 a barrel, while Brent crude futures were last down 34
cents, or 0.6 percent, at $60.80.

Gold was slightly higher. Spot gold was traded at $1284.20 per ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Aluminium slips as near-term supply pinch expected to ease

(Reuters) - London aluminium prices slipped on Thursday from near one-month
highs hit the session before on expectations that a period of tight supply
will soon ease.

FUNDAMENTALS

* London Metal Exchange aluminium slipped by 0.7 percent to $1,896 a tonne
by 0117 GMT, trimming a 1.4 percent gain in the previous session that saw
prices tip the highest in a month at $1,917.

* Supporting prices, cancelled warrants, or metal earmarked for removal from
LME warehouses, have surged in the past 10 days to nearly 400,000 tonnes
from 235,000 tonnes in the middle of January, accounting for around one
third of the LME’s 1.3 million tonnes of stock. MALSTX-TOTAl

* The Trump administration is expected to lift sanctions on companies linked
to Russian oligarch Oleg Deripaska, including Rusal, as soon as Friday. That
could mean that aluminium that had previously been caught by sanctions is
available to market.

* DOLLAR: Other metals were a touch firmer, finding support from a weaker
dollar.

* SHFE: On the Shanghai Futures Exchange, aluminium traded up 0.6 percent at
at 13,565 yuan ($1,998) having hit the weakest in more than two years at
13,230 mid-month.

* SHFE stocks: Stocks of most metals have fallen in China over the past few
months. A trader said that banks are reluctant to lend to zinc manufacturers
ahead of Chinese New Year, which he expects to lengthen a shortage of
refined metal.

* TRADE CONCERNS: U.S. President Donald Trump said on Wednesday that the
United States was doing well in trade talks with China.

* CHINA GROWTH: China’s economy can maintain sustainable rates of growth
despite global uncertainties, Vice President Wang Qishan said on Wednesday,
days after the world’s second-largest economy posted its weakest expansion
in nearly three decades.

* DOLLAR: The dollar eased against its peers on Thursday, as concerns over
global growth, a U.S. government shutdown and U.S.-Sino trade talks kept a
tight lid on the greenback.

Gold up as growth concerns, U.S. govt shutdown weigh on dollar

(Reuters) - Gold prices edged up on Thursday, supported by a softer dollar,
limited demand for risky assets on the back of uncertainty over prolonged
U.S. government shutdown and slowing global growth.

FUNDAMENTALS

* Spot gold was up 0.2 percent at $1,284.35 per ounce, as of 0118 GMT, while
U.S. gold futures were steady at $1,283.80 per ounce.

* The U.S. dollar edged lower against a basket of currencies and demand for
riskier assets continued to be dented on uncertainty over Sino-U.S. trade
standoff, U.S. government shutdown and worries over slowing growth in global
economy.

* White House economic adviser Kevin Hassett said in a CNN interview the
United States could see zero growth in the first three months if the partial
government shutdown is extended for the whole quarter.

* U.S. economic growth will take a hit this quarter from the longest-ever
government shutdown, keeping the Federal Reserve on the sidelines until at
least its April 30-May 1 meeting, a Reuters poll of economists showed.

* Barclays economists said on Wednesday they reduced their outlook on U.S.
economic growth in the first quarter to an annualized rate of 2.5 percent
from an earlier projection of 3 percent as a result of the historically long
partial federal government shutdown.

* Trump told reporters on Wednesday that the United States was doing well in
trade talks and that China “very much wants to make a deal.”

* China said on Wednesday it will increase fiscal spending to support its
economy this year.

* Investor focus turned to the European Central Bank (ECB), which is widely
expected to stay on hold at its first monetary policy meeting of 2019 that
ends later on Thursday.

* Market watchers also expect ECB to acknowledge growing threats to the euro
zone economy.

* The ECB’s meeting will come a day after the Bank of Japan cut its
inflation forecasts on Wednesday, but maintained its massive stimulus
programme, with Governor Haruhiko Kuroda warning of growing risks to the
economy from trade protectionism and faltering global demand.

* Meanwhile, the United States on Wednesday rejected a move by Venezuela’s
Nicolas Maduro to break diplomatic ties, saying it did not think he had the
authority to cut ties and it would conduct relations with a government led
by opposition leader Juan Guaido.

* Societe Generale on Wednesday raised its gold price forecast for 2019 to
$1,325 per ounce from $1,275 per ounce earlier.

* Holdings of SPDR Gold, the largest gold-based ETF, was at its highest
since June 2018. 

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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