Bulls n Bears Daily Market Commentary : 07 June 2019

Sat Jun 8 05:14:56 CAT 2019

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Bulls n Bears Daily Market Commentary : 07 June 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 1,997,108.86 with foreign buys at RTGS$ 7,664.00 and
foreign sales were RTGS$ 392.00. Total trades were 92.

The All Share index lost 1.03 points to close at 189.60 points.OLD MUTUAL
LIMITED led the movers by $0.2289 to close at $13.5000, CASSAVA SMARTECH
lost $0.0446 to close at $1.6993 and ECONET  was $0.0422 weaker at $1.7016.
FIRST CAPITAL BANK LIMITED  also declined by $0.0070 to $0.0800 and DELTA
was $0.0062 down at $3.598.

Trading in the positive; RIOZIM LIMITED  gained $0.1500 to end at $2.0000,
HIPPO VALLEY ESTATES LIMITED rose by $0.0950 to settle at $2.1075 and SEEDCO
INTERNATIONAL LIMITED was $0.0375 stronger at $1.65. Other counters to
advance include SEEDCO LIMITED which increased by $0.0271 to settle at
$1.6496 and NAMPAK ZIMBABWE LIMITED  which put on $0.0225 to close at
$0.3225..

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  Global Currencies & Equity Markets

South Africa

South Africa's rand set for weekly losses on central bank row, stocks up

(Reuters) - South Africa’s rand firmed in afternoon trade on Friday thanks
to a weakening U.S. dollar, but the local currency was on track to end the
week on a weaker footing after a row over the central bank’s mandate rattled
investors, while stocks also gained.

At 1500 GMT, the rand was 0.58% firmer at 14.9075 per dollar, as the
greenback fell on weak U.S. jobs data that boosted expectations the Federal
Reserve would cut interest rates this year.

But the recovery was not strong enough to erase huge losses suffered in the
week, after a public spat among senior ruling African National Congress
officials over the Reserve Bank’s mandate added to the bad news of a
contraction in the economy.

The currency had weakened to a session low of 15.1750 earlier on Friday, its
weakest since September 2018, bringing losses since Monday to 5%.

The central bank mandate row has exposed deep divisions within the ANC. A
group loyal to President Cyril Ramaphosa opposes calls from a rival faction
for the bank to do more to boost employment and kick-start growth in the
country’s ailing economy.

Data on Tuesday showed first-quarter growth contracted 3.2%, the most in a
decade, almost immediately followed by the ANC’s announcement that it wanted
the bank to consider quantitative easing to lower government debts, sending
the rand crashing.

In fixed income, the yield on the benchmark 10-year government bond was down
1.5 basis points at 8.455%.

On the bourse, stocks closed stronger with the broader All-share index up
1.77% at 58,099 points, while the Top-40 index rose 1.94% to 51,976 points.

Petrochemicals company Sasol topped the blue chips and gained 3.57% to
379.45 rand after the company announced that it had signed $1.8 billion
senior credit facilities to refinance the Lake Charles project asset finance
loan.

Absa also climbed 3.31% to 170 rand after the company said its split from
parent company Barclays was on course and within budget, while clothing
retailer Mr Price gained 3.240% to 202.83 rand. 

Uganda

Ugandan shilling trades unchanged as importers trim demand

(Reuters) - The Ugandan shilling        was unchanged on Friday underpinned
by subdued dollar demand from merchandise importers and players in the
interbank  arket. 

At 0812 GMT commercial banks quoted the shilling at 3,765/3,775, same level
as Thursday's close. 

       <mailto:info at bulls.co.zw> 

Asia

Asia shares dazed by trade uncertainty, U.S. jobs risks

(Reuters) - Asian share markets dithered on Friday as investors waited for
concrete signs of progress in the U.S.-Mexican trade standoff, while bracing
for a U.S. jobs report that could sway the course of interest rates there.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged 0.04%
higher and looked set for another cautious session being up just 0.6% for
the week so far.

Japan’s Nikkei firmed 0.3%, but South Korea slipped 0.5%. E-Mini futures for
the S&P 500 were mostly flat.

Mexican and U.S. officials had held a second day of talks on trade and
migration on Thursday amid reports President Donald Trump might delay the
imposition of tariffs that was due on Monday.

That had helped the Dow end Thursday up 0.71%, while the S&P 500 gained
0.61% and the Nasdaq 0.53%.

However, the White House later said the tariffs would go ahead as scheduled,
and there were reports Trump might declare a national emergency to dodge any
Senate objections.

The uncertainty kept investors from getting too bullish, particularly with
the U.S. payrolls report promising to be an unknown quantity later in the
session.

Market forecasts are for jobs to rise a solid 185,000 in May and
unemployment to stay at a low 3.6%, though much was in doubt after dismal
data on private hiring released earlier in the week.

Oddly, a weak number might actually prove positive for equities since it
would bolster the case for an early rate cut from the Federal Reserve.

Markets have fully priced in a cut by September, and a further two easings
by mid-2020.

Two-year Treasury yields were near their lowest since December 2017 at
1.88%, having fallen 28 basis points in just two weeks.

KILLER PUNCH

That seismic shift in Fed expectations has hampered the U.S. dollar, which
was currently down 0.7% for the week so far against a basket of currencies
at 97.020.

The dollar has at least steadied on the yen at 108.44 and was off the recent
five-month low of 107.80.

It fared less well on the euro which was currently holding gains of almost
1% for the week at $1.1273.

The single currency bounced sharply overnight after the European Central
Bank pushed back the timing of any rate hike, but failed to canvass the
policy easing that many had wagered on.

Money market futures are now pricing in a 45% chance of a 10 basis point
euro zone rate cut by the end of year versus 75% before the ECB statement.

In commodity markets, all the chatter of rate cuts globally kept gold near
15-week highs at $1,333.45 per ounce.

Oil prices regained a little ground after a rough week but was still
vulnerable to worries about global demand and oversupply.

Brent crude futures bounced 59 cents to $62.26, but were still down 3.5% for
the week so far, while U.S. crude firmed 58 cents at $53.17 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper stumbles towards eighth consecutive weekly loss

(Reuters) - Copper prices were set for their eighth straight weekly fall
after trade disputes, signs of slowing global economic growth and
disappointing U.S. jobs data weakened the demand outlook for metals.

Benchmark copper on the London Metal Exchange (LME) traded down 0.2% at
$5,799 a tonne in closing rings, down 0.5% this week.

Copper has fallen by about 14% from an April high of $6,608.50 after hopes
of a quick U.S.-China trade deal faded and U.S. President Donald Trump
threatened tariffs on Mexican goods.

A run of poor economic data continued on Friday with figures showing a sharp
slowdown in U.S. jobs growth.

An increase in risk appetite among investors this week has lifted global
stock markets from recent lows and helped to support copper prices, said
Saxo Bank analyst Ole Hansen.

CHINA HOLIDAY: Volumes were subdued, with Chinese markets closed for the
Dragon Boat Festival.

TRADE WAR: President Trump said he would decide whether to impose tariffs on
at least $300 billion of Chinese goods after a meeting of G20 nations later
this month.

Washington has, however, granted Chinese exporters two more weeks before
imposing a set of previously announced tariffs.

MEXICO: U.S.-Mexico talks were set to resume on Friday as Mexican officials
push to avert U.S. tariffs due to take effect next week.

CHINA STIMULUS: China, the largest consumer of metals, announced measures to
revive slumping car sales. The governor of its central bank said there was
“tremendous” room to make adjustments if the China-U.S. trade war worsens.

GERMANY: Industrial output and exports fell sharply in April.

DOLLAR: The dollar was heading for its biggest weekly fall since February
2018, helping metals by making them cheaper for buyers with other
currencies.

POSITIONING: Speculators’ net short position in LME copper has expanded to
9.8% of active contracts - the largest since September, according to broker
Marex Spectron.

CODELCO: Unions at Chile’s huge Chuquicamata copper mine agreed to extend
negotiations with operator Codelco in the hope of averting a strike.

LEAD: LME lead closed down 3.1% at $1,832 a tonne but was up about 1.5% on
the week after a major smelter halted production and declared force majeure.

LEAD SPREAD/STOCKS: The premium for cash lead over the three-month contract
MPB0-3 fell to $11 from a more than two-year high of $39 earlier this week.
A premium suggests tight nearby supply. MPBSTX-TOTAL

OTHER METALS: LME aluminium finished down 0.7% at $1,764 a tonne, zinc
closed 0.7% lower at $2,484 and tin slipped 0.1% to $19,225.

Nickel was not included in closing rings but was down 0.5% at $11,620 in
electronic trading.

All but tin were down this week.

Asia Gold-India flips to discount, premiums skid elsewhere as prices surge

(Reuters) - Gold prices in India flipped into discounts this week as a rally
in local prices dampened demand, while premiums in other major Asian hubs
declined as a price surge prompted investors to sell back bullion.

Global benchmark spot gold was headed for its best week this year, supported
by expectations of an interest rate cut by the Federal Reserve and
heightened global trade tensions.

Gold futures in India, the world’s second-biggest bullion consumer after
China, hit their highest level since March 1, at 32,834 rupees per 10 grams,
earlier this week.

Dealers this week were offering a discount of 50 cents an ounce over
official domestic prices, compared with a premium of up to 50 cents last
week. The domestic price includes a 10% import tax and 3% sales tax.

Jewellers made enough purchases last month and they would prefer to build
inventory at lower prices, said a Mumbai-based dealer with a bullion
importing bank.

India’s gold imports in May jumped 49% from a year earlier to 116 tonnes as
a correction in local prices during a key festival boosted retail demand, a
government source said on Tuesday.

Premiums in leading consumer China were seen around $7-$10 an ounce over the
benchmark this week, compared with $14-$18 last week.

Traders said there was physical buying during the beginning and towards the
end of the week with premiums firming around $10 on Thursday.

Markets in China and Hong Kong were closed for holidays on Friday.

Taking advantage of higher prices, customers resorted to selling back gold
and Asian centres saw increased volumes of scrap gold, a trader with a
Singapore-based bullion bank said.

In Singapore, premiums fell to a range of 20 cents to 50 cents from 80 cents
last week, while those in Hong Kong declined to around 40 cents from 60
cents.

The bar inventory was higher due to sell-backs, which also reduced premiums,
Lan said.

In Japan, higher prices and weak demand pushed premiums down to 50 cents
from $1 last week, said a Tokyo-based trader, adding that banks also sold
back gold.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Dairibord

AGM

Steward Room, Meikles

31 May 2019, 12pm

Lafarge

AGM

Manresa Club, Arcturus

05 June 2019 , 12pm

CBZ

AGM

Stewart Room, Meikles

05 June 2019 , 3pm

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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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