Bulls n Bears Daily Market Commentary : 27 June 2019

Thu Jun 27 22:57:08 CAT 2019

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Bulls n Bears Daily Market Commentary : 27 June 2019

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 12,636,282.95 with foreign buys at RTGS$ 4,547,513.00
and foreign sales were RTGS$ 1,103,140.06 Total trades were 166.

The All Share index went down by a further 7.38 points to close at 210.68
points as heavyweight counters lost ground. OLD MUTUAL shed by a further
$0.7047 to close at $13.0453, ECONET eased $0.3166 to settle at $1.9757 and
CASSAVA SMARTECH ZIMBABWE LIMITED dropped $0.1331 to close at $2.0997. Other
losses were in SEEDCO INTERNATIONAL   which was $0.1100 lower at $2.2000 and
AXIA CORPORATION LIMITED (AXIA.zw) which slipped $0.0897 to $0.5500.

The losses were partially offset by gains in INNSCOR AFRICA LIMITED which
improved by $0.0954 to settle at $2.7954, ZB FINANCIAL HOLDINGS LIMITED
added $0.0500 to trade at $0.5500, DELTA CORPORATION LIMITED recovered
$0.0347 to close at $3.4347 and EDGARS STORES LIMITED traded $0.0200 higher
at $0.2400.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand lifted by hopes of U.S.-China trade truce

(Reuters) - South Africa’s rand gained on Thursday on hopes the United
States and China could reach an agreement at the G20 summit this week to
prevent a further escalation in their trade war.

The rand is highly sensitive to changes in global market sentiment on the
trade war as China is South Africa’s largest trading partner, and some
investors use the rand as a proxy for emerging market risk.

At 1600 GMT the rand was 0.5% stronger against the U.S. dollar at 14.1550
per dollar.

Supporting hopes for a trade war resolution, the South China Morning Post
reported, citing sources, that the United States and China had agreed to a
tentative truce ahead of the meeting between China’s Xi Jinping and U.S.
President Donald Trump.

Trump said on Wednesday that a deal with Xi was possible this weekend, but
that he was prepared to impose U.S. tariffs on virtually all remaining
Chinese imports if the two countries continue to disagree.

On the Johannesburg Stock Exchange (JSE), emerging market risk appetite
failed to lift local stocks as resource firms led by Glencore weakened.

Glencore was the second-biggest decliner on the All-Share Index, tumbling
8.30% to 46.10 rand, after a copper mine it owns collapsed in southeast
Congo, killing at least 36 illegal miners. It was Glencore’s worst daily
fall on the JSE since July 2018.

The benchmark Top-40 Index weakened 0.67% to 52,056 points.

Concerns about weak economic growth also weighed on sentiment on the JSE
after South African Reserve Bank data showed the country’s business cycle
has been in a downward phase since December 2013.

Kenya

Kenyan shilling weakens on end month dollar demand

(Reuters) - The Kenyan shilling weakened against the dollar on Thursday as
companies in the energy and manufacturing sector bought dollars to meet end
month

obligations, traders said.

At 0811 GMT,  commercial banks quoted the shilling at 102.15/35 per dollar,
compared with 102.05/25 at Wednesday's

close.

       <mailto:info at bulls.co.zw> 

EMERGING MARKETS

U.S.-China trade hopes lift emerging stocks; FX mixed

(Reuters) - Hopes of a de-escalation in the U.S.-China trade dispute at the
G20 summit this weekend boosted emerging market stocks on Thursday, with
Asian equities leading gains, although currencies were mixed against a
steady U.S. dollar.

The Chinese blue-chip stock index closed up over 1%, with similar gains in
Hong Kong, which saw fresh rallies in protest over a suspended extradition
bill that has plunged the Chinese-ruled city into political crisis.

The MSCI index of developing world stocks rose 0.7%, with modest gains seen
across most stock markets. The main equities index has gained in five of the
past eight sessions.

Helping risk-on sentiment, the South China Morning Post (SCMP) reported
Washington and Beijing were laying out an agreement that would help avert
the next round of tariffs on an additional $300 billion of Chinese imports.

Emerging markets sold off sharply in May amid worries of a global slowdown
with both China and the United States sides making little efforts to reach a
trade deal. Markets have recouped some of the losses amid signs of monetary
policy easing from the big central banks to stir growth.

However, the recent toning down of aggressive interest rates from the U.S.
Federal Reserve put the dollar on a recovery mode.

In emerging currencies, Turkey’s lira was a touch weaker. Turkish government
is reviving plans to transfer the central bank’s 46 billion lira ($8
billion) in legal reserves to its deteriorating budget to shore it up,
sources familiar with the plans told Reuters.

Investors will be watching for signs of U.S. sanctions on Turkey over its
purchase of Russian S-400 missile defence systems as presidents Tayyip
Erdogan and Donald Trump prepare to talk on the sidelines of the G20 summit.

“Erodogan is keen to convince Trump that the purchase is not egregious to
the relationship that Turkey has with the U.S. It will be interesting to see
if Trump will agree to that, I’m doubtful. But the most important thing here
is to see if Erdogan has a Plan B if there is a pushback from Trump,” Chow
said.

South Africa’s rand rose about 0.4% after a central bank report showed the
country saw foreign direct investment inflows in the first quarter versus
outflows in the previous quarter. South Africa relies heavily on foreign
money to cover its large budget and current account deficits.

Russia’s rouble slipped for a third day and the Mexican peso edged lower
ahead of its central bank meeting.

Most analysts expect the Bank of Mexico (Banxico) to hold its benchmark
interest rate steady at 8.25%, according to a Reuters poll, as annual
inflation slowed this month more than expected despite signs of weakness in
the economy.

The peso has come under pressure from a credit-rating downgrade as well as
trade tensions with the United States. The currency has climbed about 2.7%
so far this year.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper steady ahead of weekend U.S.-China trade talks

(Reuters) - Copper held near five-week highs on Thursday after reports that
the United States and China had struck a truce on trade ahead of a weekend
meeting, though there was still uncertainty over the likelihood of a full
deal being reached.

The South China Morning Post reported the truce on Thursday, ahead of the
two-day meeting, raising hopes for an end to a trade conflict which has
sapped metals demand.

Capital Economics senior commodities economist Ross Strachan cautioned there
are “fundamental disagreements” between the two sides and that this was
unlikely to be fully hashed out at the meeting in Japan.

Hopes for a resolution to the damaging tit-for-tat trade war had boosted
prices for the metal used in power and construction on Wednesday to a
five-week high of $6,063.50 a tonne.

Benchmark copper on the London Metal Exchange (LME) ended unchanged on the
previous session at $5,988 per tonne.

Prices briefly jumped after part of a copper and cobalt mine owned by
Glencore collapsed in the Democratic Republic of Congo, killing at least 36
illegal miners according to the provincial governor.

Glencore said the incident had no impact on production.

TRADE WAR: A Chinese commerce ministry spokesman said on Thursday that China
opposes U.S. abuse of export controls and urges the United States to return
to a track of cooperation, days before the countries’ leaders are set to
meet for trade talks.

STRIKE: Unions at Chile’s Chuquicamata mine said they will vote again
Thursday on a contract offer from Codelco, the world’s largest copper
producer, amid growing hopes of ending a two-week strike that has docked
output.

BALANCE: Global refined copper output showed a shortage of 32,000 tonnes in
the first three months of the year compared with a 81,000 tonne surplus a
year earlier.

CHINA PREMIUMS: Chinese Yangshan import premiums slipped for a second
session to $57.50 per tonne over LME cash, still above last month’s two-year
low of $47. SMM-CUYP-CN

CHINA INDUSTRIAL: Bolstered by improving sales and better margins, profits
for China’s industrial companies rose in May, bucking a months-long
downtrend.

SCRAP: The port of Sanshan in southern China’s Guangdong province stopped
accepting scrap metal shipments on Thursday after an excessive build-up of
stockpiles caused by importers racing to bring in cargoes ahead of new rules
starting next week.

OTHER PRICES: Aluminium fell 1.6% to $1,790 per tonne, zinc eased 1.2% to
$2,475, lead ended 0.6% higher at $1,941 and tin finished 0.4% higher at
$18,850.

Nickel added 1.8% to $12,710 a tonne, after touching its highest since April
18.

Gold falls as hopes of U.S.-China trade truce boost riskier assets

(Reuters) - Gold prices fell on Thursday as hopes of a truce in the
U.S.-China trade spat ahead of a weekend meeting at the G20 summit rekindled
investors’ interest in riskier assets, weighing on safe-haven bullion.

The South China Morning Post, citing sources, said Washington and Beijing
were laying out an agreement that would help avert the next round of tariffs
on an additional $300 billion of Chinese imports.

Spot gold was down 0.3% at $1,404.85 per ounce by 1203 GMT, after shedding
more than 1% in the previous session.

U.S. gold futures fell 0.5% to $1,408.70 an ounce.

On Wednesday, U.S. President Donald Trump said a trade deal with his Chinese
counterpart Xi Jinping was possible this weekend, though he was prepared to
impose tariffs on virtually all remaining Chinese imports if talks fail.

The next move in gold could depend on how tensions between the United States
and Iran pan out and the weekend G20 meeting, Raevskiy said, adding prices
could go all the way back to $1,300 if there were positive developments on
both fronts.

Gold has fallen more than $35 since touching a more than six-year peak on
Tuesday, especially after officials from the U.S. Federal Reserve signalled
they would not resort to a big interest rate cut in July.

However, gold prices are still up 7.6% so far this month, with prices
gaining nearly $70 since last week alone on hopes there will be at least a
quarter percentage point reduction in July by the Fed.

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.22% to 797.85 tonnes on Wednesday. Still, the
holdings have risen 7.4% so far this month.

Among other precious metals, silver fell 0.2% to $15.21 per ounce and
platinum rose 0.2% to $815.79

Palladium rose 0.2% to $1,526 an ounce.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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

 <mailto:info at bulls.co.zw> 

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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