Bulls n Bears Daily Market Commentary : 03 July 2019

Thu Jul 4 00:27:20 CAT 2019

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Bulls n Bears Daily Market Commentary : 03 July 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 12,480,580.15 with foreign buys at ZWL$ 653,633.00 and
foreign sales were ZWL$119,644.50 Total trades were 294.

The All Share index lost 2.79 points to close at 194.20 points. SIMBISA
dropped $0.1014  to trade at $1.0986 , ECONET eased $0.0951 to close at
$1.7289 and CASSAVA SMARTECH  shed $0.058 to settle at $1.7358. Other losses
were in PADENGA  which traded $0.0361 lower at $2.1139 and CBZ  fell $0.0200
to close at $0.5000.

Cement manufacturer PPC added $0.3000 to close at $1.9000, RIOZIM increased
by $0.2565 to trade at $2.2700 and OLD MUTUAL  gained $0.2007 to trade at
$13.2114. INNSCOR was up $0.1000 to close at $2.4827 and MEIKLES  was
$0.0365 higher at $1.1363.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand steady as trade woes hit EM currencies, stocks dip

(Reuters) - South Africa’s rand was little changed late on Wednesday,
struggling for momentum along with stocks as worries that a prolonged
U.S.-China trade war will slow global growth put emerging markets under
pressure.

At 1500 GMT, the rand was trading at 14.0800 per dollar, little changed from
its closing price of 14.0875 on Tuesday.

The United States and China agreed on Saturday to restart trade talks after
President Donald Trump offered concessions including no new tariffs and an
easing of restrictions on tech company Huawei in order to reduce tensions
with Beijing.

But investors have grown more skeptical about the possibility of a speedy
resolution to the trade war, especially given Trump’s comments that any deal
would have to be tilted in favour of the United States.

On the bourse, the benchmark JSE Top-40 Index was down 0.25% to 51,960.56
points while the broader All-Share Index slipped 0.13% to 58,014.54 points.

“Our market saw a bit of a push with the gold prices going up. I think [the
market] was driven more by opportunities in the resource sector,” said BP
Bernstein trader Vasili Girasis.

Financials were mostly negatively affected with Firstrand down 1.76% at
65.97 rand and Discovery dipping 1.63% to 148.25 rand.

Gold prices were up 1.68% with AngloGold 2.075% higher and Goldfields up
0.18%.

Online services group Naspers picked up slightly following the appointment
of Phuti Mahanyele-Dabengwa to the newly created role of chief executive
officer of South Africa, up 0.14% to 3,480.03 rand.

In fixed income, the yield on the benchmark 10-year government issue was at
8.11%. 

Uganda

Ugandan shilling unchanged as banks' and importer demand flat

(Reuters) - The Ugandan shilling was unchanged on Wednesday as demand for
hard currency from both merchandise importers and commercial banks remained
flat.

At 0938 GMT commercial banks quoted the shilling at 3,700/3,710, same level
as Tuesday’s close.

       <mailto:info at bulls.co.zw> 

Asia

Asian shares weaken as trade optimism fades

(Reuters) - Asian shares fell on Wednesday as initial enthusiasm over the
latest U.S.-China trade truce was overtaken by fresh concerns over
Washington’s threat of tariffs on additional European goods.

Global growth concerns also weighed on investor confidence, with South Korea
the latest trade-reliant economy to cut its economic growth and export
targets, a day after weaker factory readings worldwide.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.3% lower,
while Japan’s Nikkei slipped 0.6% in early trade.

U.S. stocks managed modest gains on Tuesday after holding near the unchanged
mark for much of the session, with the S&P 500 gaining 0.29% to a record
close of 2,972.98, underpinned by dividend-oriented utilities and real
estate stocks.

Still, a rally in global stocks following the U.S.-China summit at weekend
is rapidly losing steam. While the threat of new U.S. tariffs has been
postponed for now, existing tariffs that have disrupted global supply chains
are unlikely to be lifted any time soon.

The United States and China agreed on Saturday to restart trade talks after
President Donald Trump offered concessions including no new tariffs and an
easing of restrictions on tech company Huawei in order to reduce tensions
with Beijing.

Data published so far this week has showed factory activity in the euro zone
shrank at a faster pace than expected last month and U.S. manufacturing
activity slowed in June. Most Asian factory gauges also contracted.

Moreover, the U.S. Trade Representative’s office released a list of
additional European products that could be subject to tariffs, on top of
products worth $21 billion that were announced in April. These included
olives, Italian cheese and Scotch whisky.

Global bond yields are also hitting new lows as investors bet on further
monetary easing around the world amid faltering global growth.

Bank of England Governor Mark Carney on Tuesday flagged uncertainties
stemming from trade disputes and Britain’s departure from the European Union
even as he stuck to his line that the central bank could raise rates in the
event of a smooth Brexit.

The UK gilts yield tumbled 9 basis points to 0.722 , the first time in a
decade the 10-year yield is below the BOE’s main policy rate.

European bond yields are expected to fall further after European Union
leaders agreed late on Tuesday to name France’s Christine Lagarde as the new
head of the European Central Bank. .

In the United States, Trump said on Tuesday he intends to nominate Judy
Shelton, an economic adviser to his 2016 presidential campaign, and
Christopher Waller, an executive vice president at the Federal Reserve Bank
of St. Louis, to the Federal Reserve board of governors.

The 10-year yield fell below two percent to go as low as 1.969%, a low last
seen in November 2016.

In the currency market the pound flirted with two-week lows after Carney’s
comments and last stood at $1.2599.

The euro was steadier at $1.1291 while the dollar traded at 107.87 yen, off
Monday’s high of 108.535 hit after China and the United States agreed to
resume trade talks.

Oil prices rose a tad after data showed U.S. crude inventories fell more
than expected last week but remained wobbly after four-percent dives on
Tuesday even after OPEC and allies including Russia agreed to extend supply
cuts until next March.

Brent crude futures traded at $62.85 per barrel, up 0.7% after having fallen
4.1% on Tuesday.

U.S. West Texas Intermediate (WTI) crude futures rose 0.6% to %56.56 a
barrel, following 4.8% drop the previous day. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold steadies as stocks surge; growth risks, rate cut bets lend support

(Reuters) - Gold steadied on Wednesday, paring earlier gains as a rally in
equities reduced the attraction of the non-yielding metal, while global
growth concerns and prospects for dovish monetary policy kept bullion
supported.

Spot gold was steady at $1,416.98 per ounce as of 1:33 p.m. EDT (1733 GMT),
after earlier touching $1,435.99, its highest level since June 25.

U.S. gold futures settled about 1% higher at $1,420.90 per ounce.

Wall Street stocks rose on Wednesday, with each of the major indexes closing
at a record high, as expectations grew that the U.S. Federal Reserve would
take a more dovish turn as a raft of data provided more evidence of a
slowing economy.

The yellow metal reversed course briefly after U.S. markets opened, but
later steadied.

The case for gold - which last week hit a six-year high at $1,438.63 per
ounce - is still positive, analysts said, driven by a dovish outlook from
major central banks and an escalation of tensions between the United States
and Iran.

European Union leaders nominated IMF chief Christine Lagarde as Mario
Draghi’s replacement at the helm of the European Central Bank after marathon
talks that have exposed deep divisions in the bloc.

“German 10-year Bund yields were at record lows and the U.S. benchmark
yields are also falling on government monetary policy, giving the equity
markets a boost and taking away investor interest from gold,” said Jim
Wyckoff, senior analyst at Kitco.com.

U.S. Treasury yields fell on Wednesday with yields on U.S. benchmark 10-year
Treasury notes hitting their lowest in over 2-1/2 years as euro zone yields
tumbled on record lows on bets the European Central Bank’s next chief would
stay a dovish course to help the euro zone economy.

Government yields around the world were also pressured after Bank of England
Governor Mark Carney flagged uncertainties over Brexit and trade conflicts
that prompted speculation the central bank may lower interest rates.

On the technical front, gold will find support at Tuesday’s close, around
$1,418, and could find resistance around $1,440, TD Securities’ Ghali added.

Holdings of the SPDR Gold Trust have gained more than 5% over the past one
month.

Silver was slightly lower at $15.30 per ounce. The precious metal is
unlikely to follow gold’s upward trajectory, analysts said.

Platinum climbed 1.3% to $838.50 per ounce, while palladium rose 0.8% to
$1,570.27, hovering near a three-month peak of $1,572.50 touched earlier in
the session. 

Global stock markets, bonds rally in expectation of rate cuts

(Reuters) - Record low bond yields in Europe and the expectation of further
interest rate cuts by central banks worldwide helped push global stock
market indices higher Wednesday as the benchmark U.S. S&P 500 hit another
record high.

European Union leaders’ nomination of Christine Lagarde, the head of the
International Monetary Fund, to replace Mario Draghi as president of the
European Central Bank reinforced expectations of more monetary policy easing
if it is needed.

Traders greeted the decision by sinking German 10-year Bund yields to record
lows of minus 39 basis points, lowering Italian two-year yields back into
negative territory for first time in over a year and lifting stocks
worldwide.

The yield on 10-year UK gilts fell 4 basis points to 0.687% , which left it
below the Bank of England’s main policy rate for the first time in a decade.
U.S. Treasury yields slumped to their lowest since late 2016.

On Wall Street, the Dow Jones Industrial Average rose 179.32 points, or
0.67%, to 26,966, the S&P 500 gained 22.81 points, or 0.77%, to 2,995.82 and
the Nasdaq Composite added 61.14 points, or 0.75%, to 8,170.23.

MSCI’s gauge of stocks across the globe gained 0.55%, following broad equity
gains in Europe.

The U.S. market closed early due to the Fourth of July holiday and will
reopen Friday, when the closely-watched monthly jobs report will provide one
of the most important data points before the Federal Reserve holds its next
meeting at the end of the month.

Investors continued to seek out the safe haven of bonds due to concerns of
slowing global growth after data showed Britain’s economy apparently shrank
in the second quarter. Benchmark 10-year notes last rose 7/32 in price to
yield 1.9532%, from 1.977% late on Tuesday.

In the currency markets, the pound flirted with two-week lows and stood at
$1.2568, on course for its fifth drop in the past six sessions.

Oil prices also rose after data showed U.S. crude stockpiles fell more than
expected last week. They remained wobbly, however, after falling more than
4% on Tuesday, even after OPEC and allies including Russia agreed to extend
supply cuts.

Brent crude futures rose 1.4% to $63.28 per barrel. U.S. West Texas
Intermediate crude futures gained 0.9% to $56.78 a barrel after dropping
4.8% the day before.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

ZHL

AGM

Aquarium Room, Crowne Plaza Monomotapa Hotel

30 June 2019, 10am

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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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
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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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