Bulls n Bears Daily Market Commentary : 27 March 2019

Thu Mar 28 06:53:14 CAT 2019

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Bulls n Bears Daily Market Commentary : 27 March 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$4,131,011.72 with foreign buys at RTGS$175,817.74 and
foreign sales were RTGS$3,072,161.04. Total trades were 128.

The All Share index dropped another 0.32 points  to close at 120.55 points.
OK ZIMBABWE  led the shakers with a $0.0487 loss to $0.2008, RIOZIM  eased
$0.0285 to settle at $1.7715 and FIDELITY LIFE  was $0.0220 down at $0.0880.
BINDURA  also decreased by $0.0140 to end at $0.0564 and DELTA  traded
$0.0097 weaker at $2.3000.

Losses were partially countered by gains in OLD MUTUAL LIMITED  which
recovered $0.2203 to trade at $7.2640, NAMPAK  added $0.0585 to close at
$0.3515 and ZIMRE HOLDINGS  was $0.0044 stronger at $0.0264.  MASHONALAND
HOLDINGS  increased by $0.0042 to end at $0.0300 and FIRST MUTUAL LIMITED
gained $0.0022 to close at $0.1225. 

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Sudan

Sudan suspends daily exchange rate setting mechanism - report

(Reuters) - Sudan has indefinitely suspended use of a mechanism for setting
the daily exchange rate of the Sudanese pound against the dollar, a
pro-government news website reported on Wednesday, without giving a reason.

The central bank in October announced the mechanism for setting the exchange
rate on a daily basis through a new body of bankers and exchange bureaus.

The move, which allowed for a sharp devaluation of the local currency, was
part of a package of measures designed to tackle an economic crisis.

But the Sudan Media Centre, citing a source in the body that sets the
currency rate, said on Wednesday the decision to suspend it was taken by the
central bank governor after he met the body to review its work.

The website gave no further details and officials from the central bank
could not immediately be reached for a comment.

Sudan’s economy has been struggling since the south seceded in 2011, taking
with it three-quarters of oil output and depriving Khartoum of a crucial
source of foreign currency. 

South Africa

South African rand slumps to 3-month low as Turkey turmoil hits emerging
markets

(Reuters) - South Africa’s rand tumbled to its weakest since early January
on Wednesday, as sentiment toward emerging market currencies was soured by a
slide in the Turkish lira.

At 1515 GMT, the rand was 1.32 percent weaker at 14.6000 per dollar from an
opening level of 14.4100. It earlier touched 14.6675, the softest since Jan.
3 and breaching a technical level that analysts say could see a move to
15.00.

On Monday, the Turkish lira suffered biggest one-day fall since August as
local investors stepped-up conversion of savings into dollars. The lira
continued to weaken on Wednesday, plunging around 2 percent, while
government directed banks to withhold lira liquidity from a key foreign
market.

“The rand has become an after-thought in emerging markets as the focus has
been on the absolute mess in Turkey where overnight rates moved to almost
380 percent,” said chief trader at Standard Bank Warrick Butler.

With key resistance at 14.60 breached and local sentiment subdued by signs
of slow economic growth and concerns that Moody’s may cut the sovereign
rating to junk on Friday, the rand is set to remain on the ropes for the
next few sessions.

Bonds eked out some gains, with the yield on the benchmark government bond
due in 2026 down 1.5 basis points to 8.725 percent.

On the bourse, stocks ended higher with the benchmark JSE Top-40 index up 1
percent at 49,897.32 rand and the broader All share index adding 0.9 percent
to 56,149.

       <mailto:info at bulls.co.zw> 

Bond yields spiral lower amid global growth gloom

(Reuters) - Asian share markets were painted red on Thursday as recession
concerns sent bond yields spiralling lower across the globe, overshadowing
central bank attempts to calm frayed nerves.

Sterling was also hit by another bout of Brexit blues after a round of votes
in the U.K. parliament failed to produce any plan to manage the divorce.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.2
percent in early trade, with South Korea off 0.7 percent.

Japan’s Nikkei fell 1.6 percent, while E-Mini futures for the S&P 500 lost
0.4 percent

On Wall Street, the Dow had ended Wednesday down 0.13 percent, while the S&P
500 lost 0.46 percent and the Nasdaq 0.63 percent.

Worries that the inversion of the U.S. Treasury curve signalled a future
recession only deepened as 10-year yields fell to 15-month lows at 2.35
percent.

The latest lunge lower was led by German bunds where 10-year yields dived
deeper into negative territory after European Central Bank President Mario
Draghi said a hike in interest rates could be further delayed.

Plans to mitigate the side-effects of negative interest rates could also be
considered, suggesting the central bank was preparing for an extended period
below zero.

That shift came hot on the heels of a dovish surprise from the Reserve Bank
of New Zealand which abandoned its neutral bias to say the next rate move
would likely be down.

Yields in both New Zealand and neighbour Australia, quickly sank to record
lows in response.

The RBNZ explicitly cited all the easing moves by other central banks as a
reason for its turnaround since they had put unwanted upward pressure on the
local dollar.

EASING GOES GLOBAL

That is one reason markets are wagering the Reserve Bank of Australia will
also be forced to cut rates, simply to stop its currency from appreciating.
Policy easing then becomes a self-fulfilling cycle across the world.

“The continued dovish shift by G7 central banks, ongoing support by the
Chinese authorities, and the move by the RBNZ will keep pressure on the RBA
to also move in the same direction, however reluctantly,” said Su-Lin Ong,
head of Australian and New Zealand strategy at RBC Capital Markets.

The RBNZ’s action had the desired effect on its currency, which was pinned
at $0.6786 after diving 1.6 percent overnight. The Aussie also slid 0.7
percent to $0.7082.

Draghi’s comments likewise tugged the euro back to $1.1250 , and left the
U.S. dollar firmer against a basket of its competitors at 96.967.

Only the yen held its own thanks to its safe-haven status and was last
steady at 110.31 per dollar.

Sterling had its own troubles as an offer by British Prime Minister Theresa
May to quit to get her European Union deal through parliament failed,
leaving uncertainty hanging over the Brexit process.

That left the pound down at $1.3165, having been as high as $1.3269 at one
point on Wednesday.

In commodity markets, palladium was the focus of attention after sliding 7
percent on Wednesday as its meteoric rally finally ran into profit-taking.
Gold was relatively sedate at $1,310.32 per ounce.

Oil prices nursed modest losses after data showed U.S. crude inventories
grew more than expected last week as a Texas chemical spill hampered
exports.

U.S. crude was last down 12 cents at $59.29 a barrel, while Brent crude
futures lost 7 cents to $67.16.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Palladium falls further on technical sell-off; gold firms

(Reuters) - Palladium fell further on Thursday, a day after the metal posted
its biggest drop in more than two years on technical selling and
profit-booking.

Gold prices, meanwhile, edged higher as an inversion in the U.S. Treasury
yield curve fanned fears of an economic slowdown.

FUNDAMENTALS

* Spot palladium was down 0.2 percent at $1,441.49 per ounce at 1335 GMT,
after hitting its lowest since Feb. 18 at $1,436 earlier in the session.

* The metal fell 6.3 percent on Wednesday, its biggest one-day percentage
decline since January 2017. It hit a record peak of $1,620.52 last week, and
has gained about 14 percent so far this year.

* Spot gold was 0.1 percent higher at $1,310.48 per ounce.

* U.S. gold futures were down 0.1 percent at $1,308.50 an ounce.

* At the FT Commodities Global Summit in Lausanne, Switzerland, Anglo
American Chief Executive Officer Mark Cutifani said palladium, whose price
hit record high this month, was a “bubble”.

* Asian share markets were painted red on Thursday as recession concerns
sent bond yields spiralling lower across the globe, overshadowing central
bank attempts to calm frayed nerves.

* The U.S. economy faces “notable” risks and the Fed can take a wait-and-see
approach to monetary policy, Kansas City Federal Reserve Bank President
Esther George said on Wednesday.

* British Prime Minister Theresa May failed to sway hardline opponents of
her European Union divorce deal on Wednesday with an offer to quit, but
parliament’s bid to agree an alternative fell short, leaving the Brexit
process as deadlocked as ever.

* China’s industrial firms posted their worst slump in profits since late
2011 in the first two months of this year, data showed on Wednesday, as
increasing strains on the economy in the face of slowing demand at home and
abroad took a toll on businesses.

* Euro zone money markets on Wednesday sharply scaled back expectations for
a European Central Bank rate rise in 2020, after latest signals from ECB
officials suggested they were in no hurry to tighten monetary policy.

* South Africa’s Sibanye-Stillwater will explore changing its primary
listing in a bid to access more capital as it explores growth opportunities
outside its home market, Chief Executive Neal Froneman said on Wednesday. 

Copper slips on stronger dollar, eyes trade talks

(Reuters) - London copper prices edged lower in early Asian trade on
Thursday as the dollar strengthened, while investors awaited news from
U.S.-China trade talks restarting in Beijing. 

A strong greenback makes dollar-denominated metals more expensive for
holders of other currencies and weighs on prices. 

    FUNDAMENTALS

* COPPER: Three-month copper on the London Metal Exchange  fell 0.2 percent
to $6,321.50 a tonne by 0204 GMT, after eking out a 0.1 percent gain in the
previous session. 

The most-traded May copper contract on the Shanghai Futures Exchange  was
down 0.1 percent at 48,330 yuan ($7,172) a tonne.

* TC/RCs: The 10-member China Smelters Purchase Team (CSPT)will meet in
Shanghai on Thursday to determine floor treatment and refining charges
(TC/RCs) for copper concentrate in the second quarter.

* COPPER: CSPT member Jiangxi Copper Co,  said on Wednesday 2018 net profit
rose 52.4 percent year on year as a hedging gain boosted its bottom line in
a poor year for copper prices.

* USD: The dollar rose on Thursday as many of its peers weakened after more
central banks opted to shift to a dovish policy stance in the wake of
deteriorating economic prospects.

* OTHER METALS: Shanghai zinc rose as much as 1.4 percent to 22,615 yuan a
tonne, extending the one-year high it hit on Wednesday as LME zinc stocks
MZN-STX fell to just

55,225 tonnes. In London, zinc, nickel and aluminium were all down 0.6
percent, while lead nudged up 0.5 percent.

* NICKEL: Indonesia's nickel-related industries such as the production of
stainless steel and battery materials are set to surpass the value of its
second-biggest export earner, palm oil,

in the next 10 to 15 years, its investment board chief said on Wednesday.

* VALE: Brazilian iron ore miner Vale on Wednesday announced a series of
writedowns and provisions related to the Brumadinho tailings dam collapse
that killed some 300 people two months ago, saying there would be an affect
on future results.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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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