Bulls n Bears Daily Market Commentary : 01 March 2019

Mon Mar 4 07:49:03 CAT 2019

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Bulls n Bears Daily Market Commentary : 01 March 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$291,739.40 with foreign buys at RTGS$4,999.80 and
foreign sales were RTGS$62,325.00. Total trades were 39.

The All Share index recovered 0.31 points  to close at 148.42 points. OLD
MUTUAL LIMITED  led the movers with a $0.1845 gain to close at $7.4803, AXIA
added $0.0300 to $0.4300 and SIMBISA   traded $0.0250 stronger to $0.7450.
UNIFREIGHT  also increased by $0.0166 to settle at $0.0994 and SEEDCO  was
$0.0100 firmer at $1.9600.

Four counters lost ground as ECONET  dropped $0.0106 to $1.4300, DELTA
retreated further by $0.0017 to $2.7484 and NAMPAK was $0.0005 down at
$0.3000. HIPPO VALLEY ESTATES   also increased by a marginal $0.0001 to
close at $1.7100.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Tanzania

Tanzania revokes licenses of exchange bureaus operating illegally - central
bank

(Reuters) - Tanzania said on Thursday it was revoking licenses from some
exchange bureaus in the commercial capital Dar es Salaam, a day after the
government banned a newspaper for using unofficial data on exchange rates.

The move comes as the shilling is down 0.34 percent from the beginning of
the year, data from the central bank website showed.

The statement comes a day after a leading newspaper was banned for a week
for publishing a story about the depreciating currency that drew on
unofficial data from exchange bureaus, the paper’s editor said. It was the
latest incident in a series of restrictions muzzling the media. It was
unclear if the two events were related.

The government ordered English language daily The Citizen to cease
publication for a week beginning Feb. 27 over an article on the falling
shilling, said Bakari Machumu, the executive editor of the newspaper’s
owners, Mwananchi Communications Ltd.

Mwananchi Communications is a subsidiary of Kenya-based Nation Media Group
(NMG), one of East Africa’s largest media conglomerates.

The Citizen did not appear on newsstands on Thursday and its website was
offline.

Government spokesman Hassan Abbas did not return calls seeking comment on
the newspaper’s suspension.

The shilling’s depreciation in the region’s third-biggest economy will make
it more difficult to service Tanzania’s external debt, which stood at $21
billion in December.

President John Magufuli’s government has embarked on an ambitious program of
industrialisation, but foreign investment in the country has fallen after
contentious government interventions in the mining and agriculture sectors.

Foreign direct investment fell to 2 percent of GDP in 2017, down from about
5 percent in 2014, the World Bank said.

The central bank said last month that the shilling’s depreciation was a
seasonal dip.

Magufuli’s government has banned some newspapers, restricted opposition
rallies and detained dozens of opposition politicians.

Four publications have been shut down in the last two years, the Committee
to Protect Journalists (CPJ) said.

South Africa

South Africa's rand falls on subdued risk appetite

(Reuters) - The South African rand fell on Thursday as fading hopes for a
U.S-China trade deal and an unsatisfactory end to the U.S.-North Korea
summit subdued demand for emerging market currencies.

Stocks ended slightly lower, with Massmart among the biggest decliners after
the retailer reported annual earnings down by a third and gave downbeat
outlook.

At 1520 GMT the rand was 0.77 percent weaker at 14.0425 against the U.S.
dollar.

U.S. Trade Representative Robert Lighthizer’s comments overnight that the
issues between United States and China are “too serious” to be resolved
prodded investors into scaling back risk as hopes of a swift resolution to
the bruising U.S.-China trade dispute waned.

Riskier assets also took a hit after an early end to a U.S.-North Korea
aimed at denuclearising the Korean peninsula, with U.S. President Donald
Trump walking away as the respective leaders failed to reach a deal on
winding back sanctions.

Domestic events also weighed on sentiment, with power utility Eskom warning
that it could resume rotational power cuts because of supply constraints.

On the data front, trade figures showed that South Africa’s trade balance
swung to a deficit of 13.08 billion rand ($931.5 million) in January, from a
revised 16.70 billion rand surplus in December.

In fixed income, the yield on the benchmark government paper due in 2026
closed 4 basis points higher at 8.7 percent.

On the stock market, the JSE Top-40 index was off 0.58 percent at 49,667 and
the broader All-share index fell 0.58 percent to 56,002.

Wal-Mart’s Massmart featured on the loser board, falling 6.4 percent to
87.11 rand after posting a 32 percent drop in annual profit. ($1 = 14.0424
rand)

       <mailto:info at bulls.co.zw> 

Mexico

Mexican peso carving out place in Japan's crowded retail FX market

(Reuters) - The Mexican peso is steadily carving out a niche in Japan’s
crowded retail foreign exchange market despite being a relative newcomer,
thanks to its high yields and perceived stability relative to emerging
market peers like the Turkish lira.

Data released on Friday by the Tokyo Financial Exchange, (TFX), a major
Japanese trading exchange provider for retail margin trading, showed trading
in Mexican peso/yen generated roughly 143,000 lots in February, equivalent
to roughly 82 billion yen ($734.31 million) based on prevailing exchange
rates.

That represents a 64 percent increase in the number of lots traded since the
first full month of peso trading on TFX in November 2017.

The peso/yen now generates more trading than euro/yen and it was almost on
par with sterling/yen, which was the fifth most traded pair on TFX in
February with about 147,000 lots.

Peso volumes at the exchange are gaining on the Turkish lira and South
African rand, high yielding emerging market currencies traditionally
favoured by Japanese retail investors.

The peso also captured the imagination of retail investors after U.S.
President Donald Trump raised the country’s profile by demanding for a wall
to be built along the Mexican border, according to FX Prime by GMO.

The lira experienced extreme gyrations in 2018, due to a mix of regional
political tension, domestic governance worries and monetary and fiscal
policy uncertainty.

There is selective interest among investors for finding yield in emerging
markets such as Mexico, Malaysia and Indonesia, according to Bart
Wakabayashi, Tokyo branch manager at State Street Bank.

Turkey’s interest rate stands at a whopping 24 percent, although analysts
reckon the country’s central bank could ease policy going forward on falling
inflation, especially as Turkish President Tayipp Erdogan advocates low
rates.

Interest rates in Mexico and South Africa are at 8.25 percent and 6.75
percent, respectively.

Mexico’s national oil company Pemex had its credit ratings slashed by Fitch
in January, raising fears that the country’s sovereign rating could be
threatened in turn by the downgrade.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper flat after China PMI miss, heads for best month since late 2017

(Reuters) - Copper prices were steady in early trade on Thursday, with
concerns over low stocks balancing out a contraction in China manufacturing
and a U.S. warning that it was too early to say what the outcome of trade
talks with Beijing will be.     

Copper is on course to rise 5.5 percent in February amid supply concerns and
earlier optimism over the trade talks, which would mark its best month since
December 2017. 

    FUNDAMENTALS

* LME COPPER: Three-month copper on the London Metal Exchange was flat at
$6,509 a tonne at 0129 GMT, after closing up 0.2 percent in the previous
session. The most-traded copper contract on the Shanghai Futures Exchange
nudged up 0.2 percent to 50,240 yuan ($7,518.48) a tonne. 

* CHINA: Factory activity in China shrank for the third straight month in
February, with its official Purchasing Manager's Index falling to a
three-year low of 49.2, missing the 49.5 forecast in a Reuters poll of
analysts.

* TRADE: U.S. issues with China are "too serious" to be resolved with
promises from Beijing to purchase more U.S. goods and any deal between the
two countries must be include a way to ensure commitments are met, U.S.
Trade Representative Robert Lighthizer said.

* STOCKS: Copper inventories in LME-registered warehouses MCU-STOCKS, near
130,000 tonnes, are close to their lowest in 10 years.

* CODELCO: Chile's Chuquicamata underground copper mine is due to start
operations in middle of this year, state copper miner Codelco's chairman
said.

* BHP: BHP Group Ltd, the world's biggest miner,  announced a raft of
management changes, in line with its "transformation agenda" led by Chief
Executive Andrew Mackenzie.

* HKEX: Hong Kong's stock exchange operator said it would expand its connect
schemes and launch a series of new products, as it announced its strategy
for the next three years.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Powerspeed

AGM

Boardroom, Gate 1, Powerspeed Complex, Graniteside

28 Feb 2019 - 11am

Zimbabwe 

Independence Day

Zimbabwe

18 Apr 2019 

Good Friday

19 Apr 2019

Easter Saturday

20 Apr 2019

Easter Sunday

21 Apr 2019

Easter Monday

22 Apr 2019

Workers Day

01 May  2019

Africa Day

25 May 2019

 <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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