Bulls n Bears Daily Market Commentary : 26 June 2019

Thu Jun 27 01:26:07 CAT 2019

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Bulls n Bears Daily Market Commentary : 26 June 2019

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 7,943,801.07 with foreign buys at RTGS$ 855,500.00 and
foreign sales were RTGS$ 855,500.00 Total trades were 116.

The All Share index lost a hefty 12.06 points  to close at 218.06 on the
back of widespread losses. OLD MUTUAL went down by $3.4144 to trade at
$13.7500, cement maker PPC  dropped $0.4875 to settle at $1.9500 and DELTA
came off $0.4413 to close at $3.4000. Other losses were in CASSAVA SMARTECH
shed $0.1136 to $2.2328 and ECONET  eased $0.1082 to close at $2.2923.

On the upside; AFDIS  and POWERSPEED  both traded $0.0400 higher at $1.8000
and $0.2500 respectively. EDGARS  added $0.0200 to close at $0.2200, FIRST
MUTUAL LIMITED  increased by $0.0104 to settle at $0.2104 and ZBFH  went up
$0.0100 to $0.5000

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

S.Africa's rand firmer as trade talk hopes rise, stocks edge up

(Reuters) - South Africa’s rand firmed on Wednesday as risk appetite
improved after comments from the U.S. Treasury Secretary suggesting progress
in a trade deal with China, offsetting disappointment about the size of
potential U.S. interest rate cuts.

Stocks rose marginally but were held back as bullion shares came under
pressure.

At 1510 GMT, the rand traded 0.57% firmer at 14.2750 per dollar. Lack of
local economic data or political news kept the currency in a narrow range.

Treasury Secretary Steven Mnuchin said on Wednesday that the United States
and China were close to a trade deal, CNBC reported ahead of G20 meeting
this week between presidents Donald Trump and Xi Jinping.

The rand extended gains made on Tuesday even after members of the Federal
Reserve’s policy committee tempered market bets on aggressive U.S. rate cuts
next month, with St. Louis Fed President James Bullard saying a
50-basis-point reduction “would be overdone.”

The benchmark JSE Top-40 share Index rose 0.24% to 52,407.30, while the
broader All-Share Index ticked up 0.13% to 58,421.72.

Curbing gains were bullion miners which fell 2.2% on a lower spot gold price
after the Fed signals. Gold Fields fell 4.17% to 76.71 rand and
Sibanye-Stillwater closed down 2.14% at 16.49 rand.

Technology giant and bourse heavyweight company Naspers rose 1.5% to
3,420.55 rand.

In fixed income, the yield on the benchmark government bond due in 2026
dipped 3 basis points to 8.14%.

Uganda

Ugandan shilling weakens due to manufacturing, energy demand

(Reuters) - The Ugandan shilling        weakened on Tuesday, undercut by
month-end dollar demand from energy and manufacturing importers, traders
said.  

At 0844 GMT commercial banks quoted the shilling at 3,705/3,715, compared to
Monday's close of 3,680/3,690. 

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks slip after Fed tempers aggressive rate cut expectations

(Reuters) - Asian stocks slipped on Wednesday and the dollar pulled back
from three-month lows after Federal Reserve officials tempered expectations
in the markets for aggressive monetary easing.

Fed Chair Jerome Powell on Tuesday said the central bank is “insulated from
short-term political pressures,” pushing back against U.S. President Donald
Trump’s demand for a significant rate cut. Powell, however, said Fed
policymakers are wrestling with whether uncertainties around U.S. tariffs,
Washington’s conflict with trading partners and tame inflation require a
rate cut.

Separately, St. Louis Fed President James Bullard told Bloomberg Television
he does not think the U.S. economy is dire enough to warrant a
50-basis-point cut in July, even though he pushed to lower rates last week.

Equity markets have rallied this month, with Wall Street shares advancing to
record highs, after the Fed was seen to have opened the door to possible
rate cuts as early as next month at is policy-setting meeting last week.

According to CME Group’s FedWatch program, federal funds futures implied
that traders saw a 27% chance of the Fed lowering rates by half a percentage
point in July, compared to 42% on Monday.

Trump said on Twitter on Monday that the Fed “doesn’t know what it is
doing,” adding that it “raised rates far too fast” and “blew it” given low
inflation and slowing global growth.

Tracking overnight losses on Wall Street, Australian stocks dipped 0.15%,
South Korea’s KOSPI shed 0.1% and Japan’s Nikkei retreated 0.6%.

MSCI’s broadest index of Asia-Pacific shares outside Japan was a shade
lower.

The United States hopes to re-launch trade talks with Beijing after Trump
and his Chinese counterpart Xi Jinping meet in Japan during the G20 summit
on Saturday but Washington will not accept any conditions on tariffs, a
senior administration official said on Tuesday.

The two sides could agree not to impose new tariffs as a goodwill gesture to
get negotiations going, the official said, but it was unclear if that would
happen.

The dollar index against a basket of six major currencies stood at 96.177,
holding to modest gains made the previous day.

The index had bounced back from 95.843 on Tuesday, its lowest level since
March 21, following comments from the top Fed officials.

The dollar was steady at 107.160 yen after a rebound from a near six-month
low of 106.780.

The greenback had sunk to the six-month trough as the yen, a perceived safe
haven, had drawn bids in the face brewing U.S.-Iran tensions.

The euro was little changed at $1.1368 after being nudged off a three-month
peak of $1.1412.

U.S. crude oil futures edged up to a four-week high of $58.87 per barrel
after data showed a decline in U.S. crude stocks.

Spot gold slipped from a six-year high of $1,438.63 an ounce after the
comments from Fed officials trimmed expectations for a rate hike in July.
Gold last traded at $1,418.18 an ounce.  

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold soars to six-year high, stocks slide after Powell speech

(Reuters) - Gold soared to an almost six-year high on Tuesday on escalating
U.S.-Iran tensions, while equity markets slid on disappointing economic data
and uncertainty on whether the Federal Reserve will cut interest rates in
July as has been expected.

Fed Chairman Jerome Powell said in a speech the U.S. central bank is
insulated from short-term political pressures as policymakers wrestle with
whether to cut rates amid slowing growth as President Donald Trump has
demanded.

Equity markets have rallied this month in anticipation that Fed policymakers
would cut rates, but Powell’s remarks cast doubt on those expectations when
he referred to the Fed’s independence.

The dollar rebounded and gold prices retreated after Powell’s comments
trimmed market expectations that the U.S. central bank will cut rates by
half a percentage point next month.

Gold had gained 10% in price so far in June, climbing above $1,400 an ounce
for the first time since August 2013 after briefly touching the
psychological barrier on Monday.

The dollar had fallen to a three-month low against the euro and dropped to
its weakest against the Japanese yen since early January as the prospect of
a Fed rate cut eroded demand. The yen also benefited from concerns about
U.S.-Iranian tensions.

Tehran said new U.S. sanctions permanently closed the path to diplomacy
between the two countries.

The dollar index rose 0.19%, while the euro reversed course to fall 0.25% to
$1.1369. The yen strengthened 0.1% versus the greenback at 107.17 per
dollar.

Disappointing economic data weighed on stocks.

U.S. consumer confidence tumbled to a 21-month low in June as households
grew a bit more pessimistic about business and labor market conditions amid
concerns of an escalation in the trade tensions between the United States
and China.

The U.S. economy’s prospects were further dimmed by other data showing sales
of new single-family homes unexpectedly fell for a second straight month in
May.

MSCI’s gauge of global equity markets, most major European indexes and
stocks on Wall Street slipped.

MSCI’s gauge of stocks across the globe shed 0.73%, while the pan-European
STOXX 600 index closed down 0.1%.

The Dow Jones Industrial Average fell 179.32 points, or 0.67%, to 26,548.22.
The S&P 500 lost 27.97 points, or 0.95%, to 2,917.38 and the Nasdaq
Composite dropped 120.98 points, or 1.51%, to 7,884.72.

U.S. benchmark Treasury yields fluctuated around the key 2% level as
investors weighed the outlook for the U.S.-China trade spat against the
prospect that the Fed may be less dovish than traders expect.

The benchmark 10-year Treasury note rose 8/32 in price to push yields down
to 1.9918%.

Trump threatened to obliterate parts of Iran if it attacked “anything
American,” in a new war of words. Tehran condemned the latest U.S. sanctions
on Iran and called White House actions “mentally retarded.”

Trump is due to meet one-on-one with at least eight world leaders at the G20
summit in Osaka, Japan, at the end of the week, including Chinese President
Xi Jinping, for discussions on trade, and Russian President Vladimir Putin.

Chinese investors seemed none too hopeful as Shanghai blue chips slipped 1%.
Japan’s Nikkei dropped 0.4%.

Oil prices rose slightly ahead of U.S. data expected to show crude stocks
declining there, outweighing investors’ concerns that U.S.-China trade
tensions could weigh on fuel demand.

Benchmark Brent crude futures rose 19 cents to settle at $65.05 per barrel.

U.S. crude futures slid 7 cents to settle at $57.83 a barrel.

U.S. gold futures were little changed on settlement at $1,418.7 an ounce. 

Copper hits 1-month high as Chile strike underlines deficit

(Reuters) - Copper prices reached a one-month high on Tuesday as a strike at
a major mine in Chile underlined a supply shortfall, although investors were
on edge ahead of U.S.-China trade talks later this week.

Benchmark copper on the London Metal Exchange (LME) ended up 1.4% at $6,042
a tonne after touching $6,051.50, the highest since May 21.

But prices remain far from April’s peak of $6,608.50, having been pushed
lower by a deepening rift between Washington and Beijing that investors fear
will weaken economic growth and demand for metals.

TRADE WAR: U.S. President Donald Trump views this week’s meeting with
China’s Xi Jinping as a chance to see where Beijing stands on the two
countries’ trade war, and is “comfortable with any outcome” from the talks,
a senior U.S. official said.

DOLLAR: The dollar touched its weakest since March, helping dollar-priced
metals by making them cheaper for buyers with other currencies.

U.S. ECONOMY: U.S. consumer confidence fell to a 21-month low in June.

STRIKE: Workers at Codelco’s Chuquicamata copper mine in Chile rejected the
company’s latest offer over the weekend, having been on strike since
mid-June.

DEFICIT: The global world refined copper market showed a 51,000 tonnes
deficit in March after a 72,000 tonnes surplus in February, the
International Copper Study Group (ICSG) said.

For January-March, the market was in a 32,000 tonnes deficit, the ICSG said.

CHINA PREMIUMS: Chinese Yangshan import premiums have risen to $59.50 from a
two-year low of $47 last month. SMM-CUYP-CN

CHINA IMPORTS: China’s refined copper cathode imports fell 29% year-on-year
in May to 243,056 tonnes and were also down 15% from the previous month.

STOCKS: Copper stockpiles in Shanghai Futures Exchange (ShFE) warehouses
have fallen to 134,747 tonnes from more than 260,000 tonnes at the end of
March. CU-ALX-SGH

Stocks in LME-registered warehouses, however, have climbed to 242,875 tonnes
from a low of 111,125 tonnes in March. MCUSTX-TOTAL

LEAD: LME lead finished up 1.4% at $1,939.50 a tonne as China’s top producer
Henan Yuguang Gold and Lead Co shut down one production line at a lead
smelter in Jiyuan for a 30-day maintenance that will affect some 10,000
tonnes in output.

TIN: LME tin ended 0.1% lower at $19,050, with the premium for cash metal
over the three-month contract diving to $15 from more than $200 earlier this
month, pointing to more plentiful nearby supply. MSN0-3

OTHER METALS: LME aluminium rose 1.2% to $1,814 a tonne, zinc gained 2.1% to
$2,543 and nickel closed up 1.3% at $12,300.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Proplastics

AGM

Palm Court, Meikles

25 June  2019, 10am

Fidelity Life

AGM

Great Indaba Room, Crowne Plaza Monomotapa

26 June 2019, 10am

GB Holdings

AGM

Cernol Chemicals Boardroom,  111 Dagenham Road, Willowvale

26 June 2019, 11:30am

Dawn Properties

AGM

Ophir Room, Monomotapa Hotel

27 June 2019, 10am

Unifreight

AGM

Royal Harare Golf Club

27 June 2019, 10am

African Sun

AGM

Ophir Room, Monomotapa Hotel

27 June 2019, 12pm

FMP

AGM

Palm Court, Meikles

27 June 2019, 12pm

MedTech

AGM

Boardroom, Stand 619, corner Shumba/Hacha Roads, Ruwa

27 June 2019, 2pm

FML

AGM

Palm Court, Meikles)

27 June 2019, 2:30pm

FBC

AGM

Royal Harare Golf Club

27 June 2019, 3pm

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
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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