Bulls n Bears Daily Market Commentary : 30 January 2019

Thu Jan 31 06:53:45 CAT 2019

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Bulls n Bears Daily Market Commentary : 30 January 2019

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Zimbabwe Stock Exchange Update

Market Turnover $7,841,348.56 with foreign buys at $4,123,726.46 and foreign
sales were $3,944,967.87. Total trades were 188.

The All Share index recovered 0.67 points  to close at 158.09 points. OLD
MUTUAL LIMITED  led the movers with a $0.1275 to close at $9.1778, DELTA
added $0.0540 to $3.1794 and ECONET  was $0.0210 firmer at $1.5212.
ZIMPAPERS  also increased by $0.0098 to settle at $0.0588 and AFRICAN SUN
traded $0.0095 stronger at $0.1300.

Gains were partially offset by loses in CASSAVA SMARTECH   which dropped
$0.0116 to $1.5258, SIMBISA   lost $0.0057 to end at $0.74768 and INNSCOR
decreased by $0.0039 to close at $2.0709.  PADENGA   also retreated by
$0.0034 to settle at $1.0500 and STAR AFRICA   was $0.0012 down at $0.0118.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Nigeria

Nigerian opposition candidate to create $25 bln fund for infrastructure

(Reuters) - Nigeria’s main opposition candidate for president said on
Wednesday he would create a $25 billion fund to support private sector
investment in infrastructure if elected next month, as part of plans to
revive the economy.

Atiku Abubakar, a businessman who served as vice president between 1999 and
2007, has promised to double the size of Nigeria’s economy to $900 billion
by 2025.

He is the main challenger to President Muhammadu Buhari in the Feb. 16
election. Nigeria’s oil-dependent economy, which vies with South Africa’s to
be the largest in Africa, has performed below par since 2016, when it
suffered its first recession in 25 years.

“Our vision is to accelerate investment to double our infrastructure stock
to approximately 50 percent of GDP by 2025 and 70 percent by 2030,” Abubakar
said in a statement.

Part of Abubakar’s plan if elected would be to close a 60 naira premium
between the official exchange rate and the parallel market rate against the
U.S. dollar, and channel a fund for petrol subsidies into health and
education spending. 

Egypt

Egypt GDP grew by 5.5 pct in Oct-Dec quarter - ministry

(Reuters) - Egypt’s gross domestic product grew by 5.5 percent in the period
from October to December 2018, compared with 5.3 percent during the same
period last a year earlier, the Planning Ministry said on Wednesday.

Egypt is targeting GDP growth of 5.8 percent during its current fiscal year.

Two government sources earlier said Egypt’s gross domestic product grew by
around 5.6 percent in the first half of the 2018-2019 fiscal year which
began on July 1, up from 5.2 percent a year earlier. 

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks scale 4-mth peak as Fed turns more cautious; dollar sags

(Reuters) - Asia stocks rose to a four-month high on Thursday after the
Federal Reserve pledged to be patient with further interest rate hikes,
signalling a potential end to its tightening cycle amid signs of slowing
global growth.

The dollar struggled near a three-week trough against its major peers and
U.S. Treasury yields were significantly lower as investors reacted to the
Fed’s change in tone.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose to its
highest since Oct. 4 and was last up 0.7 percent.

Japan’s Nikkei rose 0.9 percent.

The Shanghai Composite Index climbed 0.8 percent despite data showing
China’s factory activity contracted for a second straight month amid
weakening orders.

Australian stocks edged up 0.1 percent.

The Fed on Wednesday held interest rates steady as expected, and also
discarded its promises of “further gradual increases” in interest rates.

The central bank said it would be “patient” before making any further moves
amid a suddenly cloudy outlook for the U.S. economy due to global growth
risks and impasses over trade and government budget negotiations.

On Wall Street, the Dow and the Nasdaq rallied 1.7 percent and 2.2 percent,
respectively, on hopes the Fed’s pause would give the U.S. economy and
corporate profits more room to run.

Late in December the Dow had sunk to its lowest level since September 2017,
dogged by factors including worries over cooling economic growth and trade
tensions, adding pressure on the Fed to reassess its tightening bias.

“The Fed’s statements firmly confirmed its dovish stance, which had already
been on display at the start of the year. Market concerns towards the Fed’s
rate hikes have now been put to rest,” said Masahiro Ichikawa, senior
strategist at Sumitomo Mitsui Asset Management in Tokyo.

The U.S. central bank also said on Wednesday that its balance sheet would
remain larger than previously expected.

However, while market expectations for Fed tightening may have waned
significantly, some analysts suggested rate hikes still remained a near-term
possibility.

With the Fed decision out of the way, investors focused their attention on a
pivotal round of high-level U.S.-China trade talks which began on Wednesday
aimed at easing a months-long tariff war.

The two-day talks in Washington are expected to be tense, with little
indication so far that Chinese officials are willing to address core U.S.
demands to fully protect American intellectual property rights and end
policies that Washington has said force U.S. companies to transfer
technology to Chinese firms.

If the two sides cannot reach a deal soon, Washington has threatened to more
than double tariffs on Chinese goods on March 2.

In currencies, the dollar index against a basket of six major currencies
struggled near a three-week low of 95.253 brushed on Wednesday, when it had
sunk 0.5 percent.

A weaker dollar helped nudge the euro to $1.1501 on Wednesday, its highest
since Jan. 11, and the common currency was last up 0.15 percent at $1.1493.

The greenback was down 0.15 percent at 108.88 yen and close to a two-week
low of 108.81 reached overnight.

The pound was steady at $1.3117, given some reprieve after slipping earlier
in the week when British lawmakers voted down a proposal in parliament that
could have prevented a potentially chaotic “no-deal” Brexit.

The benchmark 10-year U.S. Treasury yield extended its decline to as far as
2.674 percent, its lowest since Jan. 14.

Oil prices rose after U.S. government data showed signs of tightening supply
and as investors remained concerned about supply disruptions following U.S.
sanctions on Venezuela’s oil industry.

U.S. crude oil futures were up 0.7 percent at 54.59 per barrel. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

China's 2018 gold consumption +5.73 pct y/y at 1,151.43 tonnes - state media

* China’s 2018 gold consumption rose by 5.73 percent year-on- year to
1,151.43 tonnes, the state-run Securities Times reported on Thursday, citing
data from the China Gold Association.

* China has now been the world’s top gold consumer for six years running,
the newspaper said.

* The country’s gold output fell 5.87 percent to 401.12 tonnes but China
retained its position as the top global producer of the precious metal for a
12th straight year, it added.

* China’s gold reserves rose for the first time in two years to 59.560
million fine troy ounces at end-December, according to central bank data
released on Jan. 7. 

Climbing nickel output to cast shadow on prices

(Reuters) - Soaring nickel output in China and Indonesia to record levels
this year is expected to weigh on prices for the metal used to make
stainless steel and batteries for electric vehicles even if some projects
are delayed.

Nickel on the London Metal Exchange (LME) is up 15 percent so far this year
to a three-month high of $12,325 per tonne due to falling stocks and
concerns that Brazil’s Vale could cut some of its production.

However, rising output from lower-grade nickel pig iron (NPI) producers and
high-pressure acid lead (HPAL) facilities mainly in top producers China and
Indonesia are likely to drag prices down.

Analysts at Wood Mackenzie expect smelter expansion in the two Asian
countries will result in a 12 percent rise in NPI production to a record
840,000 tonnes this year.

BMO Capital Markets expects mine output from Indonesia, the world’s largest
nickel producer, to rise 34 percent this year to around 777,000 tonnes of
contained nickel, rising to 850,000 tonnes in 2020.

Producers such as China’s Tsingshan Group, PT Virtue Dragon Nickel and
Shandong Xinhai Technology plan expansions.

However, analysts have cast doubts on the timely completion of a
50,000-tonne HPAL project in Indonesia by Tsingshan and its partners
scheduled to begin production this year.

Global nickel demand this year is estimated at around 2.4 million tonnes.

BMO Capital Markets sees a deficit of 129,000 tonnes which is expected to
narrow to 96,000 tonnes in 2019.

But Citi analysts see a balanced market this year after a deficit of 40,000
tonnes last year.

Citi analyst Oliver Nugent said changes in the discount for the cash over
the three-month contract “do not chime with market consensus of a wider
deficit”.

Suggesting ample supply, the discount now at $66 a tonne recently narrowed
to $9 a tonne as the market worried about falling stocks in LME registered
warehouses.

LME stocks have fallen 45 percent since the beginning of last year to
202,032 tonnes while inventories in ShFE warehouses are at their lowest
since October at 11,357 tonnes. MNISTX-TOTAL SNI-TOTAL-W

The ongoing trade dispute between the United States and China has also hit
prices of nickel as Chinese stainless steel mills are major consumers.

In addition, nickel’s bull rally partly based on electric vehicle excitement
is premature, analysts say, with stainless steel still accounting for about
two-thirds of demand.

Stainless steel production rose 10 percent in the first nine months of 2018
but showed signs of slowing growth in the third quarter, the International
Stainless Steel Forum said.

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
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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
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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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