Bulls n Bears Daily Market Commentary : 23 July 2019

Wed Jul 24 04:36:25 CAT 2019

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Bulls n Bears Daily Market Commentary : 23 July 2019

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 5,266,042.79 with foreign buys at ZWL$ 778,296.09 and
foreign sales were ZWL$1,132,362.18 Total trades were 136.

The All Share index recovered 0.52 points to close at 191.91 points. TSL
added $0.1000 to $0.7000, ZIMPLOW  was $0.0500 firmer at $0.4500 and BINDURA
traded $0.0160 stronger at $0.1000. OLD MUTUAL LIMTED  also increased by
$0.0118 to end at $16.0427 and MEIKLES  gained $0.0089 to close at $1.2500.

Gains were offset by losses in NAMPAK  which decreased by $0.0080 to
$0.3900, OK ZIMBABWE lost $0.0057 to close at $0.4343 and PPC was $0.0014
lower at $1.9486. CASSAVA SMARTECH LIMITED retreated by $0.0011 to settle at
$1.6438.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Kenya

Kenyan shilling weakens after finance minister charged with corruption

(Reuters) - The Kenyan shilling weakened on Tuesday after the finance
minister and other senior government officials were charged in court with
various  ffences related to the award of two dam construction tenders.

At 0855 GMT, commercial banks quoted the shilling at 103.65/85 per dollar,
compared with 103.50/70 at Monday's close. The shilling is down 0.5 percent
since the charges against the minister were announced on Monday morning.

South Africa

South Africa's rand, stocks slip as dollar bounces back

(Reuters) - South Africa’s rand edged weaker on Tuesday, losing momentum as
the dollar surged and the appeal of the local currency waned after the
International Monetary Fund cut its growth forecast for Africa’s most
industrialised economy.

At 1515 GMT the rand was 0.16% weaker at 13.8800 per dollar compared to its
close of 13.8575 overnight in New York.

The greenback rose to near a five-week high against a basket of currencies
after President Donald Trump and U.S. lawmakers reached a two-year deal that
raises the limits on government borrowing to cover spending.

On Tuesday the IMF, in its World Economic Update, slashed its 2019 economic
growth expectation for South Africa to 0.7% from 1.2% in April, and to 1.1%
in 2020, citing weak first quarter growth and energy supply issues as the
main drag on the outlook.

Globally, the IMF expects GDP to grow 3.2%, while economic growth in
sub-Saharan Africa is seen at 3.4%.

The rand’s recent gains, about 2.5% in the past two weeks as bets of rate
cuts in the United States and Europe contined to support high-yielding
emerging market currencies, have now hit a technical barrier, traders said.

Bonds also weakened, with the yield on the benchmark 2026 government issue
up 4 basis points to 8.07%.

Stocks rose along with some emerging market peers amid expectations that
central banks around the world would cut interest rates soon.

The Johannesburg All-Share index rose 0.51% to 58,309 points, while the
Top-40 index increased 0.61% to 52,209 points.

Markets are focusing on the European Central Bank (ECB), which is expected
to cut a key rate by 10 basis points on Thursday, and next week the Federal
Reserve is forecast to cut its benchmark rate by 25 basis points.

Among the leading blue-chip gainers, paper and packaging firms Sappi and
Mondi rose 2.50% and 2% respectively.

Miner Kumba Iron Ore Ltd jumped more than 6% after it saw its first-half
earnings soar 239% as it benefited from higher iron ore prices and a weaker
rand/dollar exchange rate.

But the shares then gave up most of those gains as analysts said the high
iron price was unsustainable. It closed 2.93% lower at 475.90 rand. 

       <mailto:info at bulls.co.zw> 

America

Stocks rise on trade hopes, sterling slips on Brexit jitters

(Reuters) - U.S. stocks added to their gains on Tuesday following news of
potential progress in U.S.-China trade negotiations, while the pound fell
after Brexit hard-liner Boris Johnson won the leadership of Britain’s
Conservative Party, clearing the way for him to become prime minister.

A host of strong earnings gave U.S. stock indexes an early boost, with Dow
components Coca-Cola Co and United Technologies Corp both beating
second-quarter earnings estimates.

Stocks extended their gains on reports that U.S. negotiators were headed to
China on Monday for face-to-face trade talks, a sign of potential progress
in the two countries’ prolonged, acrimonious tariff spat.

U.S.-China trade tensions, along with the prospect of Britain exiting the
European Union, or Brexit, without a deal, were cited by the International
Monetary Fund as reasons it cut its global growth forecast through 2020.

The Dow Jones Industrial Average rose 177.29 points, or 0.65%, to 27,349.19,
the S&P 500 gained 20.44 points, or 0.68%, to 3,005.47 and the Nasdaq
Composite added 47.27 points, or 0.58%, to 8,251.40.

The European STOXX 600 benchmark rose about 1%, helped by a 6% surge in
automakers and growing certainties of policy easing from the European
Central Bank and the U.S. Federal Reserve.

The pan-European STOXX 600 index rose 0.98% and MSCI’s gauge of stocks
across the globe gained 0.48%.

The dollar advanced to a near five-week high against a basket of world
currencies, on the heels of a congressional deal to extend the U.S. debt
limit for two years, easing fears of a government default.

But the British pound lost ground after Johnson, who has promised to lead
Britain out of the European Union with or without a deal by the end of
October, won the Conservative Party leadership and will replace Theresa May
as the country’s prime minister.

The dollar index rose 0.49%, with the euro down 0.55% to $1.1146.

The pound was last trading at $1.2435, down 0.31% on the day.

Crude prices rose late in the session following reports that the United
States may have shot down a second Iranian drone, adding to escalating
Middle East tensions.

U.S. crude oil futures settled at $56.77 per barrel, up 1%, while Brent
Crude futures settled at $63.83 per barrel, up 0.9% on the day.

U.S. Treasury yields inched higher on renewed trade optimism, and as market
participants eyed expected interest rate cuts from ECB and Federal Reserve.

Benchmark 10-year notes last fell 9/32 in price to yield 2.0724%, from
2.043% late on Monday.

The 30-year bond last fell 26/32 in price to yield 2.6069%, from 2.57% late
on Monday.

Spot gold prices dropped 0.5% to $1,417.02 an ounce as the safe-haven metal
was held in check by a robust dollar.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Aluminium producers in Canada cash in on U.S. tariff exemption

(Reuters) - Canada’s exemption from U.S. tariffs on imports of aluminium
metal has boosted earnings at the Canadian operations of companies such as
Rio Tinto and Alcoa, but has not cut costs for U.S. consumers.

In May, the United States lifted the Section 232 tariff of 10% imposed on
Canadian imports of aluminium, a vital ingredient for auto makers, drinks
firms and military equipment companies.

Aluminium costs for U.S. consumers are the benchmark price on the London
Metal Exchange at around $1,810 a tonne plus the physical market premium,
around $400 a tonne.

Analysts say $192 of the premium is the tariff non-exempt producers pay.

Aluminium is used to make cans and extrusions, which are solid, semi-hollow
and hollow shapes for home appliances and auto makers. Higher costs are
either passed through the supply chain or absorbed by end consumers.

HIGHEST COST SUPPLIER

Rio Tinto and Alcoa are the two largest producers in Canada. Rio produced
1.884 million tonnes of aluminium in Canada last year, while Alcoa’s North
American operations have capacity to produce 1.674 million tonnes.

Rio Tinto declined to comment.

Other exempt countries include Argentina, Australia and Mexico which are
estimated to account for nearly 10% of aluminium going to the United States.

Global aluminium demand is estimated at 67 million tonnes this year.

Highest cost suppliers are those who have to pay the tariff.

Costs of exporting aluminium to the United States include insurance,
shipping and trucking from port to manufacturing hubs in the Midwest.

Physical market premiums in Europe at $95 a tonne are up nearly 60% since
the start of January, due to aluminium tied up in financing deals and
collateral for loans.

Financing deals involve buying aluminium now and selling it forward for a
higher price and profit after storage and interest costs have been deducted.

.

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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