Bulls n Bears Daily Market Commentary : 17 July 2019

Thu Jul 18 02:13:13 CAT 2019

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Bulls n Bears Daily Market Commentary : 17 July 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 3,390,673.41 with foreign buys at ZWL$ 100,975.00 and
foreign sales were ZWL$184,275.00 Total 

trades were 91.

The All Share index added another 0.97 points  to close at 192.33 points.
MEIKLES gained $0.1000 to close at $1.2000, OK ZIMBABWE rose by $0.0548 to
$0.4559 and RIOZIM  was $0.0300 stronger at $2.3000. Other counters to
advance include OLD MUTUAL LIMITED which put on $0.0241 to end at $15.7500
and ECONET traded $0.0212 stronger at $1.7200.

Trdaing in the negative; EDGARS lost $0.0199 to $0.1801, AMALGAMATED
REGIONAL TRADING eased $0.0150 to $0.0800 and AXIA was $0.0083 lower at
$0.4917. CASSAVA SMARTECH also decreased by $0.0007 to end at $1.6500 and
STAR AFRICA  was $0.0004 weaker at $0.0180.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand softer ahead of rate decision, stocks slide

(Reuters) - South Africa’s rand edged lower on Wednesday in cautious trade
ahead of an interest rate decision that is set to test the currency’s recent
rally and its ability to draw yield-seeking investors.

At 1500 GMT the rand was 0.14% weaker at 13.9800 per dollar, inching closer
to the 14.00 mark that has in recent times determined the momentum of the
currency either direction.

South Africa’s central bank meets on Thursday. According to a Reuters poll
last week, it is set to cut interest rates by 25 basis points, while forward
rate markets on Wednesday showed investors pricing in a close to 40%
probability of a cut by that margin.

While a cut might reduce the rand’s carry-trade advantage, the impact on the
currency could be limited by expectations the Federal Reserve will also cut
rates, on July 31.

The rand had managed to withstand the greenback’s recovery in the last two
sessions and in early trade on Wednesday touched a session-best 13.9425,
aided in part by a solid retail sales print boosting bets the economy would
avoid a second consecutive quarterly contraction.

But as traders in New York came online later in the session the rand
stalled, with dollar bulls emboldened by better-than-expected data on U.S.
jobs, inflation and retail sales in previous sessions.

The mood across emerging markets was not helped by a threat by U.S.
President Donald Trump to put tariffs on another $325 billion of Chinese
goods.

Government bonds were flat, with the yield on the benchmark 2026 instrument
was at 8.025%.

On the bourse, stocks fell alongside emerging market assets amid resurfacing
worries over the U.S-China trade conflict.

The benchmark JSE Top-40 Index was down 0.76% at 51,565 points while the
broader All-Share Index dropped 0.83% to 57,573 points.

Aspen and Sappi were the worst performers on the blue-chip index, falling by
3.73% to 99.96 rand and 3.08% to 50.48 rand.

Mining companies Anglo American Platinum and Impala Platinum, a midcap,
dropped 2.83% and 5.83% respectively as the platinum price fell.

Tunisia

Tunisia's foreign currency reserves rise after it sold bond

(Reuters) - Tunisia’s foreign reserves have risen after it sold a 700
million euro bond last week, and are now enough to pay for 87 days of
imports, official data showed on Tuesday, up from a previous level of 73
days.

Central bank figures showed that Tunisia’s foreign exchange reserves now
stand at 15.596 billion dinars ($5.42 billion).

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.

Last week, Tunisia sold a seven-year euro-denominated bond worth 700 million
euros at an interest rate of 6.37 percent. ($1 = 2.8756 Tunisian dinars) 

       <mailto:info at bulls.co.zw> 

America

Trade, earnings worry drag on stocks; U.S. Treasury yields fall

(Reuters) - A gauge of global equities retreated for a second straight
session and U.S. Treasury yields fell as simmering trade concerns gained
steam and the pace of the U.S. corporate earnings season picked up.

On Wall Street, CSX Corp was one of the biggest drags on the benchmark S&P
500 index. The railroad tumbled 10.27% after it reported quarterly earnings
that missed expectations and cut its full-year revenue forecast on weakness
in its trade-related intermodal business. Fellow railroad Union Pacific lost
6.34% while Berkshire Hathaway, which owns railroad Burlington Northern
Santa Fe, saw its Class B shares fall 2.55%.

The results come after U.S. President Donald Trump renewed his threat to tax
another $325 billion of Chinese goods on Tuesday, which weighed on stocks.
In addition, the U.S. could also face Chinese sanctions, following a World
Trade Organization ruling on Tuesday, further complicating trade talks
between the two countries.

U.S. stocks have also eased over the past two sessions in part due to a
sluggish start to the quarterly earnings season. Those declines also follow
a rally that sent key stock averages to record peaks on expectations for
lower U.S. rates.

Big banks such as Citi, JPMorgan and Wells Fargo have recorded drops in net
interest margins, a sign low interest rates are hurting their bottomlines.

Bank of America shares were up 0.7% after it reported results on Wednesday
but lowered its annual net interest income guidance.

While it is still early in what is expected to be a lackluster reporting
season, the earnings growth rate for the second quarter now stands at 0.4%,
according to Refinitiv data. Expectations were recently calling for a
quarterly decline in S&P 500 results.

The Dow Jones Industrial Average fell 115.64 points, or 0.42%, to 27,219.99,
the S&P 500 lost 19.63 points, or 0.65%, to 2,984.41 and the Nasdaq
Composite dropped 37.59 points, or 0.46%, to 8,185.21.

European shares closed lower as weakness in Swedish shares on some
disappointing quarterly results and a decline in shares of oil majors helped
snap a three-day winning streak.

The pan-European STOXX 600 index lost 0.37% and MSCI’s gauge of stocks
across the globe shed 0.45%.

Along with the trade concerns, U.S. Treasury yields moved lower after data
showed weakness in the housing market for a second straight month, even as
mortgage rates have declined.

“The housing starts were a little weaker but the building permits were
definitely significantly weaker,” said Justin Lederer, an interest rates
strategist at Cantor Fitzgerald in New York.

Benchmark 10-year notes last rose 20/32 in price to yield 2.052%, from 2.12%
late on Tuesday.

The dollar retreated after notching strong gains on Tuesday following
better-than-expected monthly retail sales data, while pound bounced after
touching a 27-month low versus the greenback as no-deal Brexit concerns
mounted.

The dollar index fell 0.18%, with the euro up 0.12% to $1.1223. Sterling was
last trading at $1.2434, up 0.25% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper tumbles from two-week peak as Trump renews China tariff threat

(Reuters) - Copper retreated from a two-week high on Wednesday after U.S.
President Donald Trump threatened to impose further tariffs on China, a move
which could dent demand for metals.

Three-month copper on the London Metal Exchange (LME) closed 0.5% lower at
$5,980 per tonne, after the metal touched its highest since July 1 in the
previous session.

Trump questioned China’s failure to make good on what he saw as its promise
to buy more U.S. agricultural goods, and said Washington could impose
tariffs on an additional $325 billion worth of Chinese goods if it needed to
do so.

The year-long tariff standoff between the world’s two largest economies has
sapped metals demand and helped dent growth in top consumer China.

Trump’s remarks came after the World Trade Organization (WTO) said the
United States did not fully comply with its ruling and could face Chinese
sanctions if it does not remove certain tariffs that break WTO rules.

LME STOCKS: Copper inventories in LME-registered warehouses climbed 8,500
tonnes to 276,025 tonnes, the highest since April 2018, suggesting a better
supplied market. MCUSTX-TOTAL

CHINA PREMIUMS: Yangshan copper premiums SMM-CUYP-CN, paid on top of LME
copper prices to import metal into China, rose to their highest since
February at $62.

CONTRACTS: Jiangxi Copper Co and Tongling Nonferrous Metals Group signed a
concentrate supply deals with Chilean miner Antofagasta for the first half
of 2020.

PERU COPPER: Peruvian President Martin Vizcarra rejected a demand to cancel
a permit for Southern Copper Corp’s $1.4 billion Tia Maria copper mine
project amid protests from local residents.

ZAMBIA COPPER: Zambia expects nine companies to submit bids for Konkola
Copper Mines within weeks, mines minister Richard Musukwa said, even as a
court case with Vedanta over its ownership was underway.

TIN: China’s refined tin production fell by roughly 10% in the first half of
2019 to around 75,000 tonnes, data from the Beijing branch of the
International Tin Association showed.

CHILE LITHIUM: How lithium-rich Chile botched a plan to attract battery
makers.

COLUMN: Nickel is enlivening an otherwise torpid summer for the base metals
complex.

PRICES: Aluminium fell 0.2% to $1,847 per tonne, zinc shed 0.3% to
$2,474.50, lead added 1% to $2,007, tin fell 0.4% to $17,925, while nickel
touched a one year high, up 2.5% at $14,440.

Gold eases as dollar holds firm after robust U.S. data

(Reuters) - Gold slipped on Wednesday as the dollar held near a one-week
high on the back of better-than-expected retail sales data from the United
States, while investors waited for direction on interest rates from the U.S.
Federal Reserve.

Spot gold fell 0.3% to $1,402.42 per ounce as of 1131 GMT. Prices were on
track for a third straight session of losses as robust U.S. data trimmed
expectations of an aggressive interest rate cut by the Fed.

U.S. gold futures for August delivery shed 0.5% to $1,403.80.

The dollar was marginally lower against a basket of six major currencies at
97.325 after gaining 0.5% the previous day following a rise in U.S. retail
sales numbers. The U.S. currency held near a one-week high.

The data dampened expectations that the Fed could cut interest rates by 50
basis points (bps) rather than 25 bps at its month-end policy review.

Chicago Fed President Charles Evans said on Tuesday that an interest rate
cut of a half a percentage point at the U.S. central bank’s July 30-31
policy meeting could mean that the Fed’s inflation goal is reached sooner.

Investors are now awaiting the Fed’s Beige Book later in the day for insight
on how trade tensions are affecting the business outlook.

Gold is highly sensitive to rising interest rates, which lift the
opportunity cost of holding non-yielding bullion. They also boost the
dollar, in which the metal is priced.

In the latest on the trade row, U.S. President Donald Trump said on Tuesday
the United States still has a long way to go to conclude a deal with China
but could impose tariffs on an additional $325 billion worth of Chinese
goods if needed.

Meanwhile, silver rose 0.4% to $15.62, extending gains for a fourth straight
session. It hovered close to a more than four-month high of $15.69 it hit on
Tuesday.

Amongst other precious metals, platinum fell 0.4% to $834.99 per ounce,
while palladium dropped 0.4% to $1,518.71. 

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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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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