Bulls n Bears Daily Market Commentary : 21 March 2019

Fri Mar 22 06:41:08 CAT 2019

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Bulls n Bears Daily Market Commentary : 21 March 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$2,927,480.32 with foreign buys at RTGS$1,234,077.84 and
foreign sales were RTGS$208,053.65. Total trades were 90.

The All Share index dropped another 1.06 points  to close at 126.01 points.
Telecomms giant ECONET  was $0.0942 lower at $1.1017, AXIA  eased $0.0300 to
$0.3700 whilst CASSAVA SMARTECH  traded $0.0108 weaker at $1.1002. DAIRIBORD
also decreased by $0.0080 to $0.1400 and MEIKLES  was $0.0013 down at
$0.4912.

Five counters gained ground as OLD MUTUAL LIMITED  recovered $0.2215 to
$7.2474, PADENGA  added $0.0268 to end at $0.9800 whilst DELTA was $0.0199
firmer at $2.3200. SIMBISA   also increased by $0.0100 to settle at $0.6800
and CBZ  traded $0.0090 stronger at $0.1500.

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  Global Currencies & Equity Markets

Nigeria

Nigeria central bank sees 3 pct post-election growth

(Reuters) - Nigeria’s central bank expects the economy to pick up in 2019,
lifted by increased productivity after last year’s output grew at its
fastest pace since a recession three years ago, its governor said on
Thursday.

The bank has forecast growth of 3 percent, up from 1.9 percent last year,
Godwin Emefiele told an economic conference in the commercial capital Lagos.
He added that the economy would see more growth as the recovery becomes
self-sustaining.

Growth in Africa’s biggest economy has been recovering since recession
bottomed out in the third quarter of 2016, with higher oil prices helping
the country halt the contraction.

Emefiele, whose term at the central bank ends in June, said GDP growth is
expected to pick up in the first quarter, buoyed by election spending and
this year’s government budget.

President Muhammadu Buhari won a second term in charge of Africa’s most
populous country in February by defeating pro-business rival Atiku Abubakar,
who had espoused privatisations and a floating of the currency to boost the
economy.

Buhari has also pledged to rejuvenate the economy and the government this
week announced plans to cut its stake in joint oil ventures with
multinational oil companies to generate revenue.

Nigeria has been borrowing abroad and at home over the past three years to
help to finance its budgets and to fund infrastructure projects. The
government now intends to tap soft loans to curb debt servicing costs.

Emefiele expects volatility in the crude oil market to put pressure on the
naira, but the central bank would maintain its managed currency regime over
the next year.

He said that more than $6 billion had flowed into the local bond market
since last month’s presidential election as foreign investors piled into
debt to lock in yields as high as 14 percent, helping to keep the currency
stable.

Bond investors had been worried that elections would turn violent, not about
who won. Buhari has favoured a strong and stable naira, which bondholders
hope will continue.

Emefiele said the bank would continue its tight monetary stance in the near
term and sees inflation of 11.3 percent in February rising to 12 percent
this year before moderating. 

Sudan

Sudan's Bashir bans hoarding of Sudanese pounds, protests flare

(Reuters) - Sudan’s President Omar al-Bashir banned hoarding of the Sudanese
pound and “speculation” on the currency, a presidency statement said on
Thursday, as anti-government protesters again clashed with security forces
in several cities.

Bashir has faced three months of persistent protests calling on him to step
down, amid an economic crisis that has seen people queueing at ATMs and has
caused sharp price rises.

Police fired tear gas on Thursday at hundreds of anti-government protesters
in Omdurman, across the Nile from the capital Khartoum, witnesses said.
Police also used batons to disperse protesters in El-Obeid, capital of North
Kordofan state, where hundreds demonstrated.

Tear gas was used on dozens more in the south of Khartoum, where police
chased demonstrators through side streets, and on Sitteen Street in the east
of the capital, witnesses said.

Under the new rules announced by Bashir’s office, individuals are not
allowed to store more than 1 million Sudanese pounds ($21,000) outside the
banking system.

Entities are banned from storing more than 5 million Sudanese pounds and are
not allowed to store amounts “that are not commensurate with the scale of
(their) activity”, the statement said.

Bashir’s order, made in an emergency decree, also banned the counterfeiting
of any currencies, as well as the possession, transportation or storage of
counterfeit currencies and any tools used to produce counterfeit currencies.

It further banned all providers of goods and services from accepting
payments via bank cards or cheques.

Any violators of the decree, in addition to punishments in any other
breached laws, would face a minimum of six months in prison and a maximum of
10 years, as well as a fine.

       <mailto:info at bulls.co.zw> 

Asia

Asian shares hit 6-1/2-month high on tech hopes, U.S. data

(Reuters) - Asian shares hit 6-1/2-month highs on Friday after upbeat U.S.
data and optimism in the tech sector lifted Wall Street stocks, helping calm
some of the jitters sparked by the Federal Reserve’s cautious outlook on the
world’s biggest economy.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.3 percent,
led by 0.5 percent gains in the info tech sector, while Japan’s Nikkei
bucked the trend and lost 0.2 percent.

On Wall Street, the S&P 500 gained 1.09 percent while the Nasdaq Composite
rallied 1.42 percent, both hitting five-month highs.

Apple Inc led the tech sector’s advance, rising 3.7 percent, ahead of the
company’s expected streaming service debut next week.

The Philadelphia SE Semiconductor Index soared 3.5 percent, coming within a
striking distance from its all-time high marked about a year ago.

A U.S. trade delegation headed by Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin will visit China on March 28-29, which
will be followed by a trip by Chinese Vice Premier Liu He to Washington in
early April.

Thursday’s U.S. economic data was also upbeat as initial claims for jobless
benefits fell more than expected and mid-Atlantic factory activity rebounded
sharply.

The figures mollified worries about the U.S. economic outlook after the Fed
on Wednesday surprised investors by adopting a sharp dovish stance,
anticipating no further interest rate hikes this year and ending its balance
sheet rolloffs.

The dollar also jumped back, with its index against a basket of six major
currencies rising to 96.327 from Wednesday’s 1-1/2-month low of 95.735.

The euro traded at $1.1374, flat on the day and off Wednesday’s 1-1/2-month
high of $1.14485.

The dollar stood at 110.74 yen, having hit a five-week low of 110.30 on
Thursday.

The benchmark U.S. 10-year notes yield stood at 2.530 percent after having
slipped to as low as 2.500 percent on Thursday, its lowest since early
January last year.

The five-year yield dropped to 2.34 percent, below the current Fed funds
rate around 2.40 percent, as fed funds rate futures price in about 50
percent chances of a rate cut this year.

DoubleLine Capital’s chief executive Jeffrey Gundlach, known as the “Bond
King,” said on Thursday that the stock market “likes the fact that they (the
Fed) aren’t going to give them any problems,” for now.

He added, however, the Fed’s cautious stance on raising rates could backfire
by creating uncertainty in the economy and hurt the U.S. central bank’s
credibility.

Another cloud hanging over markets was Britain’s fraught moves to exit from
the European Union, as the British pound was bruised anew by rising worries
about a no-deal Brexit.

EU leaders said Britain could leave the European Union without a deal on
April 12 if lawmakers fail next week to back Prime Minister Theresa May’s
agreement with Brussels.

EU leaders gave May an extra two months, until May 22, to leave if she wins
next week’s vote in parliament.

The pound traded at $1.3136, having dropped to $1.3004 the previous day.
Against the euro, it hit one-month low of 0.8722 to euro on Thursday and
last stood at 0.8664.

Oil dipped but held near 2019 highs reached the previous day, supported by a
broad risk-on mood, OPEC production cuts and U.S. sanctions on key producers
Iran and Venezuela.

Brent crude oil futures edged down 0.3 percent to $67.65 per barrel while
U.S. crude futures fell 0.3 percent to $59.81.

 <mailto:info at bulls.co.zw> 

Commodities Markets

London metal prices steady after upbeat U.S. data, but stronger dollar drags

Reuters) - Base metals on the London Metal Exchange were steady on Friday
after solid U.S. data helped calm worries over the outlook for the global
economy, although a strong U.S. dollar put some downward pressure on prices.

Thursday’s U.S. economic data was upbeat as initial claims for jobless
benefits fell more than expected and mid-Atlantic factory activity rebounded
sharply.

FUNDAMENTALS

* COPPER, ALUMINIUM: Three-month copper on the London Metal Exchange was
almost flat at $6,423.5 a tonne by 0335 GMT, while aluminium edged up 0.2
percent.

* COPPER OUTLOOK: “We are looking at three months and I think copper will go
up ... because we are going to have more demand as part of a cyclical
trend,” said CRU analyst Chris Wu, referring to seasonally higher growth in
China in the second quarter.

* ZINC: Both London zinc and Shanghai zinc fell, despite depleting
inventories in LME warehouses MZNSTX-TOTAL.

ADVERTISEMENT

* AUSTRALIA: Commodity giant Glencore on Friday said it had suspended
operations at its McArthur River zinc mine in northern Australia as a
cyclone approaches.

* NORSK HYDRO: Norsk Hydro, one of the world’s largest aluminium producers,
said one of its key units is operating at only 50 percent of capacity
following a cyber attack on the company this week.

* SHANGHAI: The most-traded copper contract on the Shanghai Futures Exchange
fell 0.8 percent to 48,940 yuan ($7,300.77) a tonne, while aluminium lost
0.4 percent and nickel fell 2.3 percent.

Gold slips as equities gain on robust U.S. data

(Reuters) - Gold extended losses on Friday, moving further away from a
three-week peak hit in the previous session, as appetite for riskier assets
improved on upbeat U.S. economic data, while the metal was still on path for
a third straight weekly gain.

FUNDAMENTALS

* Spot gold was down 0.1 percent at $1,308.26 per ounce as of 0119 GMT,
after touching its highest since Feb. 28 at $1,320.22 in the previous
session.

* The metal has risen 0.5 percent so far this week and is on track for a
third consecutive gain on a weekly basis.

* U.S. gold futures were flat at $1,307.50 an ounce.

* Asian shares advanced on Friday after upbeat data and optimism in the tech
sector lifted Wall Street stocks, helping calm some of the jitters sparked
by the U.S. Federal Reserve’s cautious outlook on the world’s biggest
economy.

* U.S. data showed jobless benefit applications fell more than expected
while mid-Atlantic factory activity rebounded.

* The dollar largely held onto the previous session’s gains in early Asian
trade on Friday, while sterling edged up on news that Britain could leave
the European Union without a Brexit deal at a slightly later date.

* Britain could leave the European Union without a Brexit deal on April 12
if lawmakers fail next week to back Prime Minister Theresa May’s agreement
with Brussels, EU leaders said after a crisis summit in Brussels on
Thursday.

* Prime Minister Theresa May on Friday welcomed the European Union’s
decision to delay Brexit, saying that lawmakers in the British parliament
now had clear choices about what to do next.

* The Bank of England kept interest rates steady on Thursday and said most
businesses felt as ready as they could be for a no-deal Brexit that would
likely hammer economic growth and jobs.

* A U.S. trade delegation headed by Trade Representative Robert Lighthizer
and Treasury Secretary Steven Mnuchin will visit China on March 28-29 for
the next round of negotiations, China’s commerce ministry said on Thursday.

* The United States imposed sanctions on Thursday on two Chinese shipping
companies it says helped North Korea evade U.S. and international sanctions
over its nuclear weapons program, the first such steps since U.S. President
Donald Trump and North Korean leader Kim Jong Un’s summit collapsed last
month.

* Paulson & Co Inc, which holds 14.2 million Newmont Mining Corp shares,
will not support Newmont’s planned $10 billion takeover of rival Goldcorp
Inc as the premium offered is unjustified, the investor said in a letter on
Thursday.

DATA AHEAD (GMT) 0830 Germany Markit Manufacturing Flash PMI (March) 0900 EU
Markit Manufacturing Flash PMI (March) 0900 EU Markit Services Flash PMI
(March) 

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Dairibord

Analysts Briefing

Palm Court, Meikles Hotel, Harare

20 March 2019 3pm

CFI

AGM

Farm & City Boardroom, 1st Floor Farm & City Complex, 1 Wynne Street

26 March 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

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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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