Bulls n Bears Daily Market Commentary : 16 May 2019

Fri May 17 05:03:29 CAT 2019

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Bulls n Bears Daily Market Commentary : 16 May 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 6,075,932.72 with foreign buys at RTGS$ 3,555,299.41
and foreign sales were RTGS$ 3,951,282.24. Total trades were 105.

The All Share index increased by 0.44 points   to close at 143.68 points.
OLD MUTUAL LIMITED   added $0.6676 to $11.9667, PADENGA   rose by $0.0352 to
settle at $1.2128 and SEEDCO INTERNATIONAL   was $0.0281 stronger at
$1.5131. ECONET   recovered $0.0191 to end at $1.0643 and GETBUCKS
MICROFINANCE BANK   gained $0.0160 to $0.0960.

Gains were offset by losses in LAFARGE   which eased $0.1500 to settle at
$1.0000, CASSAVA SMARTECH  lost $0.0214 to $1.0816 and SIMBISA  decreased by
a marginal $0.0100 to settle $0.8575. CBZ   also dropped $0.0016 to $0.2984
and MASIMBA   was $0.0010 down at $0.0880.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand firms slightly, stocks gain

(Reuters) - South Africa’s rand firmed modestly and stocks rose on Thursday,
shaking off worries about local growth and trade tensions abroad as
investors bet on economic reform with President Cyril Ramaphosa preparing to
name a new cabinet.

At 1430 GMT, the rand was 0.1 percent firmer at 14.2000 per dollar,
following a soft start that saw the currency well above 14.2500 before
offshore interest helped it stabilise.

Ramaphosa told investors on Wednesday he would act quickly on economic
reforms after his ruling African National Congress (ANC) was returned to
power in last week’s elections.

He is due to announce a new cabinet on May 27.

There are growing signs the economy is set for a first quarter contraction
with recent data showing the mining sector continued to slide while growth
in the manufacturing and retail sectors remained modest.

Bonds weakened, with the benchmark 10-year yield adding 2.5 basis points to
8.445 percent.

Stocks strengthened, helped by gains in financial services group Investec.

The broader All-Share index gained 0.88 percent to 56,538 points, while the
Top-40 index strengthened 0.97 percent to 50,360 points.

Investec rose 3.66 percent to 92.37 rand, after a rise in annual earnings
showed its resilience in the face of a weak South African economy and
Brexit. 

Zambian Kwacha seen on the ropes, Kenyan shilling to firm

(Reuters) - Zambia’s currency is expected to continue trading with a bearish
tone while the Kenyan shilling is likely to firm and Uganda’s currency
should remain stable.

ZAMBIA

The kwacha is likely to remain under pressure in the coming week as major
suppliers of U.S. dollars hold on to hard currency in anticipation of higher
levels.

On Thursday, the currency of Africa’s second-largest copper producer touched
a year-high of 13.6000 per dollar from a close of 12.8300 a week ago.

The International Monetary Fund (IMF) has repeatedly warned that Zambia is
struggling with high debts and shrinking foreign currency reserves.

KENYA

The Kenyan shilling is expected to strengthen against the U.S. dollar due to
tightening liquidity in the local money market and muted demand for the
greenback from oil importers, traders said.

Commercial banks quoted the shilling at 101.00/20 per dollar, the same as
last Thursday’s close.

UGANDA

The Uganda shilling is seen trading in a stable range as some players start
to stay on the sidelines, loath to take positions ahead of the presentation
of the national budget next month.

At 1056 GMT, commercial banks quoted the shilling at 3,765/3,775, compared
to last Thursday’s close of 3,770/3,780.

Uganda’s finance minister is due to unveil the budget for the 2019/20
(June-July) financial year early next month but the date has not been fixed.

       <mailto:info at bulls.co.zw> 

Asia

Asian shares struggle for footing after tough week

(Reuters) - Asian shares were trying to end a bleak week in the black on
Friday as upbeat U.S. economic news and solid company earnings offered a
respite from the interminable Sino-U.S. trade saga.

The reprieve might prove brief, however, given the fallout from President
Donald Trump’s move to block China’s Huawei Technologies from buying vital
American technology.

For now, Asian markets were just happy for a break. MSCI’s broadest index of
Asia-Pacific shares outside Japan inched up 0.1% and off a 15-week trough,
but was still down 1.8% for the week.

Japan’s Nikkei bounced 0.7% in early trade, while the main Australian index
added 0.5%. E-Mini futures for the S&P 500 were steady.

Sentiment had been bolstered by better U.S. economic news, with U.S. housing
starts surprisingly strong and a welcome pickup in the Philadelphia Federal
Reserve’s manufacturing survey.

Upbeat results from Walmart burnished the outlook for retail spending,
though the giant chain also warned that tariffs would raise prices for U.S.
consumers.

As the earnings season winds down, of the 457 S&P 500 companies reporting
about 75% have beaten profit expectations, according to Refinitiv data.

The Dow ended Thursday with gains of 0.84%, while the S&P 500 added 0.89%
and the Nasdaq 0.97%.

DOLLAR IN DEMAND

The pullback in risk aversion lifted Treasury yields, particularly at the
short end where two-year yields rose to 2.19 percent.

Bond prices might also have been pressured by a speech from influential Fed
Governor Lael Brainard who said the central bank could encourage
“opportunistic reflation” by allowing inflation to run above its 2% target
for some years.

The rise in yields underpinned the U.S. dollar, which hit a two-week high
against a basket of currencies at 96.882.

The dollar regained a little lost ground on the safe-haven yen to stand at
109.85, while the euro eased to $1.1171 and was off 0.5% for the week so
far.

Sterling was one of the worst performers as Britain’s Prime Minister Theresa
May battled to keep her Brexit deal, and her premiership, intact amid
growing fears of a disorderly departure from the European Union.

The pound touched a three-month low of $1.2785 and was down a hefty 1.6% for
the week so far.

Also under pressure was the Australian dollar, losing 1.5% for the week to
$0.6890 as investors piled into bets that interest rates would be cut in
June.

In commodity markets, spot gold dropped off to $1,286.37 per ounce as risk
sentiment improved.

Oil futures firmed as tensions in the Middle East grew, with a Saudi-led
coalition launching air strikes in retaliation for recent attacks on its
crude infrastructure.

U.S. crude was last up 31 cents at $63.18 a barrel, while Brent crude
futures rose 13 cents to $72.75.

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Commodities Markets

Shanghai aluminium rises for 6th day, set for best week since Aug

(Reuters) - Shanghai aluminium prices moved higher for a sixth consecutive
session in early trade on Friday, as alumina refinery shutdowns in northern
China's Shanxi province raise production costs for the metal used in
everything from cans to cars.

Aluminium is on course to gain 1.7% in Shanghai this week, which would mark
its best week since the one ended Aug. 24, 2018.

    FUNDAMENTALS

* ALUMINIUM: The most traded July aluminium contract on the Shanghai Futures
Exchange rose as much as 0.5% to 14,420 yuan ($2,092.43) a tonne, the
highest since Oct. 26, and

stood at 14,370 yuan a tonne as of 0147 GMT. London aluminium  was down 0.5%
at $1,850.50 a tonne after hitting a two-week high in the previous session.

* ALUMINA: Alumina prices in northern China SMM-ALM-NCHNhave now exceeded
3,000 yuan a tonne and touched their highest since Dec. 10.

* CHINA: Prior to the shutdowns, China's alumina output rose 4.2% y/y to
6.28 million tonnes in April, according to data released on Thursday. The
figure is the highest monthly total on

records on the bureau's website since June 2017.

* HYDRO: A Brazilian federal court has lifted one of two production
embargoes on Norsk Hydro's Alunorte alumina refinery, the company said on
Thursday, raising hopes that full

production can soon resume. 

* COLUMN: Chinese outages a reminder of aluminium's dirty secret: Andy Home 

* OTHER METALS: Benchmark three-month copper on the London Metal Exchange
was down 0.3% at $6,080.50 a tonne, while the rest of the LME complex was
also trading lower, except for tin. 

* COPPER: Polish mining company KGHM may producemore copper than planned at
its Sierra Gorda mine in Chile in 2019, while keeping capital expenditure
below target, its deputy

chief executive in charge of foreign assets said. 

Gold edges lower as improved risk sentiment dents safe-haven demand

(Reuters) - Gold extended its losses on Friday, following its biggest
one-day percentage loss in a month in the previous session on a firmer
dollar and as a strong U.S. data, corporate results boosted investor
appetite for riskier assets.

FUNDAMENTALS

* Spot gold was down 0.1% at $1,285.19 per ounce at 0101 GMT.

* U.S. gold futures were 0.1% lower at $1,285.10 an ounce.

* Gold fell 0.8% on Thursday, its biggest one-day percentage decline in a
month after risk sentiment improved.

* U.S. stock indexes extended gains on upbeat earnings as well as robust
economic data that underlined the strength of the domestic economy.
Meanwhile, the dollar index rose to its highest level in nearly two weeks
against a basket of currencies.

* The pullback in risk aversion lifted treasury yields. The rise in yields
underpinned the U.S. dollar.

* A stronger dollar makes gold more expensive for holders of non-U.S.
currency.

* The U.S. housing data showed homebuilding increased more than expected in
April, while unemployment benefits fell more than expected last week,
pointing to sustained labour market strength that should underpin the
economy.

* A U.S. bid to block China’s Huawei Technologies from buying vital American
technology threw into question prospects for sales at some of the largest
tech companies and drew a sharp rebuke from Beijing, further ratcheting up
tensions over trade.

* Early in the week, spot gold prices rose 1.1%, registering their best
one-day percentage gain in nearly three months after China announced that it
would impose retaliatory tariffs on a range of U.S. goods.

* One of the most popular questions at mining conferences is what is your
top metal and why are you bullish on it. The clear winner so far this year
is gold.

* Africa-focused gold miner Metallon Corporation is demanding nearly $132
million it says it is owed by Zimbabwe’s central bank, legal documents
showed on Thursday, as the country’s mining sector grapples with a severe
dollar crunch.

* Higher prices for industrial precious metals palladium and platinum have
boosted earnings at Sibanye-Stillwater, enabling the miner to repay debt and
plan to resume dividends next year, its chief executive Neal Froneman said.

* Canada’s Iamgold Corp IMG.TO is exploring a possible sale of all or parts
of the gold miner business, Bloomberg reported on Thursday, citing people
familiar with the matter.

* Azerbaijan’s leading gold mining company, Anglo Asian Mining AAZ.L, said
on Thursday its gold output rose 22% in 2018 to 72,798 ounces from 59,617
ounces in 2017.

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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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
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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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