Bulls n Bears Daily Market Commentary : 10 May 2019

Mon May 13 08:16:05 CAT 2019

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Bulls n Bears Daily Market Commentary : 10 May 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 6,511,539.14 with foreign buys at RTGS$ 3,035,741.97
and foreign sales were RTGS$ 1,258,335.16. Total trades were 149.

The All Share index closed the week on a high note adding 1.63 points  to
close at 141.62 points. BRITISH AMERICA TOBACCO  led the gainers with a
$0.8742 increase to $30.9242, OLD MUTUAL LIMITED  went further up by $0.2849
to settle at $10.4017 and INNSCOR   was $0.0874 firmer at $1.9519. Other
counters to advance include PPC which added $0.0568 to end at $1.5025 and
CBZ   which rose by $0.0304 to close at $0.2800.

Losses were recorded in AXIA  which retreated by $0.0189 to $0.4003, SEEDCO
lost another $0.0029 to $1.4495 and OK ZIMBABWE  was $0.0018 down at
$0.2900. SIMBISA  also eased $0.0014 to close at $0.8573 and NAMPAK  traded
$0.0010 weaker at $0.3000.

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  Global Currencies & Equity Markets

South Africa

South African rand firms as ANC heads for re-election

(Reuters) - South Africa’s rand strengthened more than 1% on Friday on
expectations of political continuity, as the governing African National
Congress (ANC) headed for a national election victory.

The ANC held a commanding lead with 94% of voting districts counted,
according to the electoral commission’s website. It had secured 57.7% of the
vote, with the main opposition Democratic Alliance (DA) on 20.6% and the
leftist Economic Freedom Fighters (EFF) on 10.5%.

At 1545 GMT, the rand traded at 14.1900 per dollar, 1.08% firmer than
Thursday’s New York close.

Also powering the rand were hopes that the U.S. and China will find a middle
ground in their trade dispute, said FXTM Research analyst, Lukman Otunuga in
a note.

In fixed income, the yield on the benchmark bond due in 2026 was down 9
basis points at 8.460 percent.

Stocks also rose on the election news, tracking gains in other emerging
markets too. The Johannesburg All-share index rose 0.5% to 56,780 points,
while the Top-40 index firmed 0.54% to 50,533 points.

Leading blue-chip gainers were financial stocks, with Standard Bank up 4.08%
and FirstRand up 3.72%. Absa Group and Nedbank climbed 3.43% and 3.13
percent respectively.

Kenya

Kenyan shilling steady on tight money market liquidity

(Reuters) - The Kenyan shilling held steady against the dollar on Friday
supported by tight liquidity in the local money market, traders said.  

At 0958 GMT, commercial banks quoted the shilling at 101.00/20 per dollar,
the same as Thursday's close.  

The weighted average interbank lending rate rose to 6.5629 percent on
Wednesday, compared with 6.3810 percent during the previous session,
Refinitiv data showed. 

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America

Stocks, yuan fall as Sino-US trade talks deadlocked; investors await China
retaliation

(Reuters) - U.S. stock futures and Asian shares fell on Monday on growing
anxiety over whether the United States and China will be able to salvage a
trade deal, after Washington sharply hiked tariffs and Beijing vowed to
retaliate.

The United States and China appeared at a deadlock over trade negotiations
on Sunday as Washington demanded promises of concrete changes to Chinese law
and Beijing said it would not swallow any “bitter fruit” that harmed its
interests.

Investors are bracing for threatened “countermeasures” from China in
retaliation for Washington’s tariff increase on Friday on $200 billion worth
of Chinese goods. The move followed accusations by U.S. President Donald
Trump that Beijing “broke the deal” by reneging on earlier commitments.

E-Mini futures for the S&P 500 shed 1.0%.

MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 0.5%,
nearing its two-month low marked on Thursday.

Chinese shares tumbled, with the benchmark Shanghai Composite and the
blue-chip CSI 300 shedding as much as 1.6% and 1.9%, respectively, before
paring some of the losses. Hong Kong’s financial markets were closed for a
holiday.

Japan’s Nikkei average sunk as much as 1.0% to hit its lowest level since
March 28. It last traded down 0.5%.

U.S. benchmark 10-year Treasury note yield inched down to 2.437%, partly as
a safe haven but also on speculation that the escalating trade war would put
more pressure on global growth and thus keep major central banks
accommodative.

White House economic adviser Larry Kudlow told a Fox News program that China
needs to agree to “very strong” enforcement provisions for an eventual deal
and said the sticking point was Beijing’s reluctance to put into law changes
that had been agreed upon.

Kudlow said the U.S. tariffs would remain in place while negotiations
continue and there is a “strong possibility” that Trump will meet Chinese
President Xi Jinping at a G20 summit in Japan in late June.

Others were more pessimistic.

Under that scenario, the renminbi was likely to fall between 5%-6% against
the U.S. dollar in the coming three months, said Hanson, as a shock absorber
to the economic impact of heavier tariffs.

The offshore Chinese yuan fell to its lowest levels in more than four months
at 6.88 to the dollar. It last stood down 0.5% at 6.852 per dollar.

The other major currencies were relatively calm, with the safe-haven yen
still supported but not aggressively so. The dollar was holding at 109.75
yen, down 0.2% on the day and just above a 14-week trough of 109.46.

The euro was steady at $1.1233, while the dollar was little changed against
a basket of currencies at 97.302.

In commodity markets, oil prices remained a relatively tight range, with the
U.S. crude futures were last down 0.1% at $61.62 a barrel, while Brent crude
futures gained 0.3 percent at $70.81.

Spot gold eased 0.1% to $1,283.61 per ounce.

On the other hand, digital currencies maintained most of their big gains
made over the weekend.

Bitcoin jumped more than 10 percent on Saturday and marked its nine-month
high of $7,585.00 on Sunday before paring the gains. It last quoted at
$7069.76, up 1.4% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices fall amid deadlock in U.S.-China trade talks

(Reuters) - Copper prices dropped on Monday, pressured by concerns over the
outlook for the global economy and metals demand as Washington and Beijing
struggled to salvage a deal to end a bitter trade war.

The trade conflict between the world’s top two economies escalated on
Friday, with the United States hiking tariffs on $200 billion worth of
Chinese goods after President Donald Trump said Beijing “broke the deal” by
reneging on earlier commitments made during months of negotiations.

White House economic adviser Larry Kudlow told the “Fox News Sunday”
programme that the sticking point was China’s reluctance to put into law
changes that had been agreed upon, while Beijing remained defiant.

Meanwhile, copper prices could gain some support from falling output in
China as some smelters there are scheduled to go into maintenance in May,
said copper analyst He Tianyu of metal consultants CRU.

FUNDAMENTALS

* COPPER PRICES: Three-month copper on the London Metal Exchange (LME) had
dropped 0.5% to $6,093 a tonne by 0351 GMT, while the most-traded copper
contract on the Shanghai Futures Exchange (ShFE) declined 0.1% to 47,700
yuan ($6,957.00) a tonne.

* ANTOFAGASTA: Copper prices would be 5% to 15% higher without the
U.S.-China trade war, the chairman for Chile’s Antofagasta Plc told a
Chilean newspaper on Sunday.

* COPPER STOCKS: Copper stocks in warehouses tracked by the ShFE CU-STX-SGH
dropped to a 3-1/2-month low 1 on Friday, while copper inventories in
LME-approved warehouses fell to a 2-week low on May 9, the latest data
showed.

* OTHER PRICES: London aluminium fell 0.4%, nickel was down 0.6% and zinc
decreased 0.4%. Shanghai aluminium rose 0.6% and nickel increased 0.5%,
while zinc eased 0.1% and lead decreased 0.7%.

Gold firms as U.S.-China trade impasse fuels safe-haven demand

(Reuters) - Gold prices steadied on Monday as trade talks between the United
States and China hit a wall, raising doubts over whether the two countries
would be able to reach a deal, thereby boosting demand for safe-haven
assets.

FUNDAMENTALS

* Spot gold gained 0.1% to at $1,286.59 per ounce at 0113 GMT.

* U.S. gold futures were steady at $1,287.90 an ounce.

* The United States and China appeared at a deadlock over trade negotiations
on Sunday as Washington demanded promises of concrete changes to Chinese law
and Beijing said it would not swallow any “bitter fruit” that harmed its
interests.

* Washington had already hiked tariffs on $200 billion worth of Chinese
exports on Friday, while U.S. President Donald Trump further ordered his
trade chief to begin the process of imposing tariffs on all remaining
imports from China.

* Stock futures turned red in Asia early on Monday as a standoff in
Sino-U.S. trade talks blunted risk appetite, underpinning safe harbours
including the Japanese yen and sovereign bonds.

* The safe-haven yen edged higher and the Chinese yuan and Australian dollar
dipped early on Monday after the latest escalation in the trade war between
the United States and China.

* Gold demand jumped last week in India due to increased retail purchases
for key festival and weddings on price corrections, while premiums in China
eased as buying slowed at the world’s top consumer.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund,
said its holdings fell 0.91 percent to 733.23 tonnes on Friday from 739.94
tonnes on Thursday.

* Hedge funds and money managers raised their net long positions in COMEX
gold for the week to May 7, the U.S. Commodity Futures Trading Commission
(CFTC) said last week.

* South Africa’s Competition Appeals Court will rule next week on a union
request to block the mining deal in which Sibanye-Stillwater intends to
acquire rival Lonmin , legal counsel said on Friday.

* The price gap between palladium and its sister metal platinum needs to
shrink as number one platinum producer South Africa requires a higher price
for the metal to keep investing in new supply, Russia’s Norilsk Nickel said.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

Africa Day

25 May 2019

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
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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
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for guideline purposes only and sourced from third parties.

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