Bulls n Bears Daily Market Commentary : 15 May 2019

Thu May 16 04:57:15 CAT 2019

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Bulls n Bears Daily Market Commentary : 15 May 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 5,859,529.67 with foreign buys at RTGS$ 3,593,583.23
and foreign sales were RTGS$ 5,522,731.20. Total trades were 77.

The All Share index continues on the upward trend as it added 0.67 points
to close at 143.13 points. OLD MUTUAL LIMITED  went further up by $0.5464 to
close at $11.0251, DELTA  gained $0.0361 to $2.9162 whilst PROPLASTICS  and
RIOZIM  both added $0.0300 to close at $0.2800 and $1.7500 respectively.
PADENGA traded $0.0187 stronger at $1.1776.

Gains were partially offset by losses in ECONET  which retreated further by
$0.0180 to $1.0778, FIRST MUTUAL PROPERTIES  eased $0.0082 to $0.0510 and
FIRST MUTUAL LIMITED   was $0.0060 weaker at $0.1300. OK ZIMBABWE also lost
$0.0050 to $0.2950 and INNSCOR  traded $0.0019 lower at $1.9500.

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  Global Currencies & Equity Markets

South Africa

South African rand rises on China stimulus hopes, stocks dip

(Reuters) - South Africa’s rand strengthened on Wednesday alongside emerging
market currencies on hopes of more stimulus for China’s slowing economy, but
local stocks dipped after data showing another weak month for retail sales.

At 1530 GMT, the rand traded at 14.1850 to the dollar, 0.5 percent stronger
than its New York overnight close.

China, South Africa’s biggest trading partner, reported unexpectedly low
retail sales, suggesting that consumers were distressed about U.S.-China
trade talks.

Beijing typically responds rapidly to signs of economic weakness.

South African retail sales were 0.2 percent stronger year-on-year in March,
data showed on Wednesday, highlighting lingering economic weakness ahead of
President Cyril Ramaphosa’s highly anticipated cabinet announcement.

In fixed income, the yield on the benchmark government bond due in 2026 fell
7 basis points to 8.420 percent.

On the Johannesburg bourse, the All-Share index was down 0.34 percent to
56,043 points, while blue chips on the Top-40 index fell 0.4 percent to
49,877 points.

The biggest faller on the Top-40 index was private healthcare provider
Netcare, which fell for a second straight session to trade down 3.51 percent
after warning its hospital margins would fall.

Among other decliners retailer Mr Price weakened 2.7 percent to 205.31 rand,
while Tiger Brands fell 1.81 percent to 253.33 rand.

Uganda

Ugandan shilling holds steady against the dollar

(Reuters) - The Ugandan shilling was stable on Wednesday on the back of
sluggish appetite for dollars from banks and  importers. 

At 0951 GMT, commercial banks quoted the shilling at 3,765/3,775, the same
level as Tuesday's close.

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Asia

Asian shares win reprieve as Trump seen delaying auto tariffs

(Reuters) - Asian shares steadied on Thursday on news that U.S. President
Donald Trump is planning to delay tariffs on auto imports, providing much
needed relief to markets hit by a flare-up in trade tensions and on weak
U.S. and and Chinese economic data.

MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, with
both Australia and South Korea little changed.

Japan’s Nikkei fell 0.6%, with banks hurt by weak earnings.

On Wednesday, Wall Street shares extended their rebound, with the S&P 500
gaining 0.58% and the MSCI’s broadest gauge of world stocks bouncing back
from a two-month low hit on Tuesday.

The uptick came after three administration officials told Reuters on
Wednesday that Trump is expected to delay a decision on tariffs on imported
cars and parts by up to six months.

Hyundai Motor jumped more than 5% but reaction in Japanese carmaker shares
was muted.

Also on Wednesday, less than a week after Washington slapped higher tariffs
on $250 billion imports from China, U.S. Treasury Secretary Steven Mnuchin
said he will likely travel to Beijing soon to continue negotiations with
Chinese counterparts.

The positive trade developments lifted risk sentiment that had been dampened
earlier in the session by weak economic data.

China reported surprisingly weaker growth in retail sales and industrial
output for April, with overall retail sales posting the slowest increase
since May 2003.

In the U.S., retail sales unexpectedly fell in April as households cut back
on purchases of motor vehicles and a range of other goods, while industrial
production fell 0.5% in April, the third drop this year.

That prompted the Atlanta Federal Reserve’s GDPNow forecast model to cut the
second-quarter growth estimate to 1.1% from 1.6% estimated on May 9.

Weak data underpinned U.S. bond prices, pushing down their yields further.

The 10-year U.S. Treasuries yield eased to 2.376 percent , near its 15-month
low of 2.340 percent touched on March 28.

The two-year notes yield hit a 15-month low of 2.139 percent on Wednesday
and last stood at 2.155 percent.

Fed funds rate futures are fully pricing in a rate cut by the end of this
year and more than a 50 percent chance of a move by September.

Oil prices edged up on the prospect of mounting tensions in the Middle East
hitting global supplies despite an unexpected build in U.S. crude
inventories.

Brent crude rose 0.7% to $72.25 a barrel, while U.S. West Texas Intermediate
(WTI) crude fetched $62.45 a barrel, up 0.7%.

The United States pulled staff from its embassy in Baghdad on Wednesday out
of apparent concern about perceived threats from Iran.

The sabotage of the tankers, for which no one has claimed responsibility,
and Saudi Arabia’s announcement on Tuesday that armed drones hit two of its
oil pumping stations have raised concerns Washington and Tehran may be
inching toward conflict.

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Commodities Markets

Gold holds steady as rising equities counter safe-haven demand

(Reuters) - Gold prices marked time on Thursday as an uptick in equities
offset support from doubts over trade talks between the United States and
China.

FUNDAMENTALS

* Spot gold was steady at $1,295.84 per ounce at 0103 GMT.

* U.S. gold futures edged 0.1% lower to $1,296.90 an ounce.

* Asian shares steadied on Thursday on news that U.S. President Donald Trump
is planning to delay tariffs on auto imports, providing much needed relief
to markets hit by a flare-up in trade tensions and on weak U.S. and Chinese
economic data.

* President Trump is expected to delay a decision on imposing tariffs on
imported cars and parts by up to six months, three Trump administration
officials told Reuters, avoiding opening yet another front in his global
trade battles.

* Meanwhile, U.S. Treasury Secretary Steven Mnuchin said on Wednesday he
will likely travel to Beijing soon to continue negotiations with Chinese
counterparts as the world’s two biggest economies try to salvage talks aimed
at ending their months-long trade war.

* However, the Trump administration hit Chinese telecoms giant Huawei with
severe sanctions on Wednesday, adding a new incendiary element to the
U.S.-China trade dispute, casting a shade over investor optimism on the
Sino-U.S. trade front.

* Escalating geopolitical tensions usually boost inflows into safe-haven
gold.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund,
said its holdings fell 0.44 percent to 733.23 tonnes on Wednesday from
736.46 tonnes on Tuesday.

* China Gold International’s first quarter gold production fell 5% to 44,023
ounces from 46,264, the company reported on Wednesday.

* Lonmin Plc will delay or reduce the number of jobs it had planned to cut
in South Africa as soaring palladium prices have boosted revenue, its chief
executive said, ahead of a takeover by Sibanye-Stillwater.

* The world’s top platinum miners are bracing for a fresh round of
negotiations with South African workers as a rise in producer profits is
likely to provoke higher wage demands from labour unions including the
militant AMCU.

Mexico says it is close to U.S. metals tariff deal, waiting for Canada

(Reuters) - Mexico is close to resolving its dispute with the United States
over steel and aluminum tariffs without quotas but hopes Canada can reach a
similar agreement before completing it, a senior Mexican official said on
Wednesday.

Jesus Seade, Mexican deputy foreign minister for North America, told Reuters
by telephone that a deal to remove the so-called Section 232 tariffs was
“very close” but he wanted Canada to be in the same position in its
negotiations with Washington.

Sudden movements in future trade could be handled via a “consultation and
monitoring system,” he added, noting Mexico still had the option of sealing
a deal without Canada.

U.S. Treasury Secretary Steven Mnuchin also expressed optimism about a
resolution to the steel dispute, but a top Canadian official avoided direct
comment on that possibility.

Canadian Foreign Minister Chrystia Freeland said she discussed the tariffs
on Canadian metals with U.S. Trade Representative Robert Lighthizer on
Wednesday, but declined to say whether the two countries were close to a
deal.

A USTR spokeswoman declined comment on the meeting.

Asked about prospects for a deal, Freeland said she would not discuss
Canada’s negotiating strategy. She added that if Washington kept the tariffs
in place, it would be “very, very problematic” for Canadian ratification of
the new U.S.-Mexico-Canada Agreement trade deal (USMCA).

TRADE DEAL VOTE

Canada, Mexico and some U.S. lawmakers see lifting the tariffs imposed last
year as imperative for ratifying USMCA, which would replace the 25-year-old
North American Free Trade Agreement. None of the three countries’
legislatures has ratified USMCA.

Canada has been trying to impress on the Trump administration that time is
running out to ratify USMCA this year, a Canadian government source told
Reuters.

A bill to ratify the deal would need approval by Canada’s House of Commons,
which adjourns for the summer on June 21 ahead of an October general
election. It will not reconvene until December.

Lighthizer met later with Democratic U.S. House of Representatives Speaker
Nancy Pelosi to discuss the path forward on a potential USMCA vote. A Pelosi
aide called the meeting productive, but offered few details.

Mexico and Canada imposed tariffs against a range of U.S. products in
retaliation for Trump’s metals duties to put pressure on Washington to
repeal them.

Mexico says it has prepared a revised list of products to spread the pain to
different sectors of the U.S. economy if necessary, but has yet to apply
them.

In a sign of thawing tension, Mexico’s Seade said it was not the right time
to target new products. “It’s not necessary because I think the top priority
is to get a deal first.” 

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

NMB

AGM

Head Office, 4th Floor, Unity Court

23 May 2019 , 3pm

Africa Day

25 May 2019

Dairibord

AGM

Steward Room, Meikles

31 May 2019, 12pm

Lafarge

AGM

Manresa Club, Arcturus

05 June 2019 , 12pm

CBZ

AGM

Stewart Room, Meikles

05 June 2019 , 3pm

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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
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