Bulls n Bears Daily Market Commentary : 22 March 2019

Mon Mar 25 06:50:58 CAT 2019

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Bulls n Bears Daily Market Commentary : 22 March 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$3,923,719.28 with foreign buys at RTGS$646,783.83 and
foreign sales were RTGS$1,232,442.15. Total trades were 98.

The All Share index closed the week in red after dropping a significant 4.45
points  to close at 121.56 points. INNSCOR  led the losers with a $0.1141
loss to trade at $1.2559, ECONET   eased $0.1015 to end at $1.0002 and
CASSAVA SMARTECH   traded $0.1002 lower at $1.0000. FIRST MUTUAL HOLDINGS
also decreased by $0.0250 to $0.1030 and HIPPO VALLEY ESTATES  was $0.0211
down at $1.5289.

MASIMBA  was the only counter trading in the positive gaining $0.0050 to
close at $0.0860.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand falls on risk aversion, stocks steady

(Reuters) - South Africa’s rand fell on Friday, alongside other
emerging-market currencies, after disappointing economic data from the euro
zone added to concerns of a slowdown in global growth and drove investors
away from riskier assets.

Gains in gold stocks failed to lift the main indexes as stocks mirrored
weakness in global markets.

At 1545 GMT, the rand traded at 14.4600 per dollar, 1.72 percent weaker than
its New York close on Thursday.

Developing market currencies fell after weak data from Europe reaffirmed
fears about global growth, wiping out much of the support the Federal
Reserve provided earlier in the week with its accommodating monetary policy.

Locally, concerns over power utility Eskom continued to weigh on sentiment
with the cash-strapped state firm carrying out eight straight days of
nationwide electricity cuts on Friday as it struggles with generation
capacity shortages.

Caution also prevailed among investors ahead of a Moody’s sovereign rating
review scheduled for next week.

Moody’s is the only one of the “big three” agencies to rate South Africa at
investment grade. South Africa is rated “junk” by S&P Global Ratings and
Fitch.

In fixed income, the yield on the benchmark government bond due in 2026 was
flat at 8.75 percent.

Stocks, meanwhile, traded little changed on risk-off sentiment, with the
Johannesburg All-Share index at 56,107 points and the Top-40 index at
49,792.

Among the decliners, clothing and homeware retailer Mr Price led the bourse
lower, falling 5.71 percent to 181.03, while investment firm Brait weakened
4.87 percent to 23.85.

Gold stocks were the bright spark on the bourse as they benefited from
safe-haven demand in times of risk-off sentiment.

AngloGold Ashanti climbed 6.75 percent to 205.83, while Harmony Gold gained
4.46 percent to 29.27 and Gold Fields rose 5.83 percent to 59 rand.

Uganda

Ugandan shilling firms on dollar inflows from charities, commodities

(Reuters) - The Ugandan shilling        strengthened on Friday, underpinned
by dollar inflows from charities and commodity exporters.  

At 0920 GMT commercial banks quoted the shilling at 3,690/3,700, compared to
Thursday's close of 3,700/3,710. 

       <mailto:info at bulls.co.zw> 

America

Stocks tumble as bond markets sound U.S. recession warning

(Reuters) - Investors ditched shares on Monday and fled to the safety of
bonds while the Japanese yen hovered near a six-week high as risk assets
fell out of favour on growing fears about a U.S. recession, sending global
yields plunging.

U.S. stocks futures fell, with E-minis for the S&P 500 skidding 0.5 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.4
percent to a one-week trough in a broad sell-off in equities in the region.

Japan’s Nikkei tumbled 3.2 percent to the lowest in two weeks, South Korea’s
Kospi index declined 1.6 percent while Australian shares faltered 1.3
percent.

Chinese shares also declined with the blue-chip CSI 300 index down 0.8
percent.

On Friday, all three major U.S. stock indexes clocked their biggest one-day
percentage losses since Jan.3. The Dow slid 1.8 percent, the S&P 500 was off
1.9 percent and the Nasdaq dropped 2.5 percent.

Concerns about the health of the world economy heightened last week after
cautious remarks by the U.S. Federal Reserve sent 10-year treasury yields to
the lowest since early 2018.

U.S. 10-year treasury yields were last 1.9 basis points below three-month
rates after yields inverted for the first time since 2007 on Friday.
Historically, an inverted yield curve - where long-term rates fall below
short-term - has signalled an upcoming recession.

Compounding fears of a more widespread global downturn, manufacturing output
data from Germany showed a contraction for the third straight month. And in
the United States, preliminary measures of manufacturing and services
activity for March showed both sectors grew at a slower pace than in
February, according to data from IHS Markit.

National Australia Bank’s yield curve recession modelling is pointing to a
30-35 percent probability of a U.S. recession occurring over the next 10-18
months.

As bonds rallied on Monday, yields on 10-year Japanese government bonds
slumped to minus 9 basis points, the weakest since September 2016.
Australian 10-year year yields plunged to a record low of 1.754.

Some analysts, such as ING’s Rob Carnell, advised against rushing to place
bets on the yield inversion.

POLITICAL HEADWINDS

Much of the concerns around global growth is stemming from Europe and China
which are battling separate tariff wars with the United States.

Politics was also in focus in the United States and Britain.

A nearly two-year U.S. investigation found no evidence of collusion between
Donald Trump’s election team and Russia, in a major political victory for
the U.S. President as he prepares for his 2020 re-election battle.

Political turmoil in Britain over the country’s exit from the European Union
also remains a drag on risk assets.

On Sunday, Rupert Murdoch’s Sun newspaper said in a front page editorial
British Prime Minister Theresa May must announce on Monday she will stand
down as soon as her Brexit deal is approved.

The British pound was a shade lower at $1.3198 after three straight days of
wild gyrations. The currency slipped 0.7 percent last week.

In currency markets, the Japanese yen - a perceived safe haven - held near
its highest since Feb. 11. It was last 0.1 percent higher at 109.77 per
dollar.

The Australian dollar, a liquid proxy for risk play, was down for its third
straight session of losses at $0.7076.

In commodities, U.S. crude fell 61 cents to $58.43 per barrel. Brent crude
futures eased 60 cents to $66.43.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Shanghai copper set for biggest drop since Aug on U.S. recession fears

(Reuters) - Most base metals fell on Monday, with Shanghai copper heading
for its biggest drop since August, as investors worried about the prospect
of a recession in the United States, the world's biggest economy.

U.S. Treasury 10-year note yields dropped on Friday below three-month
Treasury bill yields for the first time since 2007 after disappointing U.S.
manufacturing data. A yield curve inversion is seen as a leading recession
indicator.

    FUNDAMENTALS

* COPPER: The most traded May copper contract on the Shanghai Futures
Exchange (ShFE) fell 1.7 percent to 48,240 yuan ($7,186.06) a tonne at 0345
GMT. That is the lowest price since Feb. 18. 

Three-month copper on the London Metal Exchange edged up 0.1 percent at
$6,319 a tonne after declining by 1.7  percent last week, its biggest weekly
decline since December. 

* COPPER STOCKS: Copper stockpiles in ShFE warehouses CU-STX-SGH dipped
slightly to 259,172 tonnes last week. 

A rapid build during a seasonal lull in demand in February pushed copper
stockpiles to a nine-month high by mid-March.

* COPPER: Peruvian police said they have arrested the leader and two lawyers
of an indigenous community, accusing them of trying to extort Chinese miner
MMG Ltd by blocking a

road it uses to transport copper for the past month.

* ANTOFAGASTA: Chile's Antofagasta expects to reach an agreement with miner
BHP Group to help ensure water supply at its Zalidvar copper mine in the
country's northern desert, a company official told a Chilean newspaper on
Friday.

* GLENCORE ZINC: Glencore said that its McArthur River zinc operations in
northern Australia were returning to normal after a cyclone over the
weekend.

* OTHER METALS: Most other metals were down across the board, with Shanghai
nickel shedding 1.7 percent, while  London nickel lost 0.9 percent and
London aluminium decreased 0.4 percent.

* ALUMINIUM: China Hongqiao Group said on Friday that a doubling of alumina
sales helped offset lower aluminium production and prices, leaving its net
profit steady in the second half of 2018.

* CHINA: China reverted to being a net importer of alumina in February for
the first month since April 2018, while its scrap metal imports plunged to
just 160,000 tonnes, the lowest

in customs website records going back to June 2014. Scrap copper imports
stood at 60,000 tonnes.

Gold gains as U.S. recession fears lift safe-haven appeal

(Reuters) - Gold prices firmed on Monday as concerns about a potential U.S.
recession and decelerating global growth weighed on stock markets, which
increased appetite for safer assets.

FUNDAMENTALS

* Spot gold was up 0.1 percent at $1,314.21 per ounce as of 0128 GMT.

* The metal last week posted its third consecutive weekly gain and rose 1
percent, the most since the week ending Feb. 1.

* U.S. gold futures were up 0.2 percent at $1,314.40 an ounce.

* Investors dumped shares on Monday and fled to the safety of bonds, while
the Japanese yen hovered near a six-week high as risk assets fell out of
favour on growing worries about an impending U.S. recession, sending global
yields plunging.

* U.S. markets received a clear warning of coming recession on Friday when
the spread between yields on three-month Treasury bills and 10-year notes
fell below zero for the first time since 2007 after U.S. manufacturing data
missed estimates.

* U.S. manufacturing activity unexpectedly cooled in March, a troubling sign
for the economy although the housing market showed signs lower interest
rates were giving it a boost.

* Businesses across the euro zone performed much worse than expected this
month as factory activity contracted at the fastest pace in nearly six
years, hurt by a big drop in demand, a survey showed on Friday.

* British Prime Minister Theresa May held crisis talks with senior
colleagues and hardline Brexiteers on Sunday trying to breathe life into her
twice-defeated European divorce deal after reports her cabinet was plotting
to topple her.

* U.S. President Donald Trump said trade negotiations with China were
progressing and a final agreement “will probably happen,” adding that his
call for tariffs to remain on Chinese imported goods for some time did not
mean talks were in trouble.

* Hedge funds and money managers increased their bullish wagers in COMEX
gold by 15,971 contracts to 57,746 in the week to March 19, the U.S.
Commodity Futures Trading Commission (CFTC) said on Friday.

* Demand for physical gold moderated this week in India as many jewellers
held off on purchases ahead of the end of the country’s financial year to
pay off advance taxes, while premiums in Singapore rose slightly on tight
supplies.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund,
said its holdings rose 0.4 percent on Friday.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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

 <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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