Bulls n Bears Daily Market Commentary : 17 May 2019

Fri May 17 18:56:57 CAT 2019

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Bulls n Bears Daily Market Commentary : 17 May 2019

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 14,750,807.56 with foreign buys at RTGS$ 8,419,067.05
and foreign sales were RTGS$ 8,427,008.29. Total trades were 131.

The All Share index closed the week higher at 145.65 points after gaining
1.97 points  in a session dominated with gains in heavyweight counters. OLD
MUTUAL LIMITED  continues to gain ground as it added another $0.2439 to
close at $12.2106, PPC  was $0.1875 stronger  at $1.7000 and MEIKLES  rose
by $0.0525 to end at $0.6525. Other counters to advance include PADENGA
which increased by $0.0372 to close at $1.2500 and ECONET added $0.0345 to
settle at $1.0988.

Three counters lost ground; UNIFREIGHT  lost $0.0089 to close at $0.1011,
INNSCOR  eased $0.0009 to $1.9500 whilst CBZ traded $0.0004 weaker at
$0.2980.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South  Africa

S.Africa's rand slips to 1-week low, financial stocks drag down bourse

(Reuters) - The South African rand slipped to its weakest in one week on
Friday as escalating trade tensions between China and the United States
dragged down demand for emerging markets assets.

At 1540 GMT, the rand was 1% weaker at 14.4300 per dollar, its weakest level
since May 9, after an overnight close of 14.2875.

With soft local economic data in the first half of the week and an
escalation in the tariff spat between Washington and Beijing in the second
half, the currency has struggled to hold on to gains it made following last
week’s general elections.

Tit-for-tat restrictions, including Beijing imposing higher tariffs on most
U.S. imports and U.S. President Donald Trump blocking China’s Huawei
Technologies from buying vital American technology, have dented investor
enthusiasm for risk assets.

And while the victory of South African President Cyril Ramaphosa’s African
National Congress (ANC) in parliamentary and provincial polls has been
cheered by financial markets, investors are holding fire until he appoints a
new cabinet.

Bonds were also weaker, with the yield on the benchmark 10-year government
issue adding 7 basis points to 8.495 %.

On the bourse, stocks weakened on the back of U.S.-China trade talks.

The broader All-Share index fell 0.63% to 56,183 points, while the Top-40
index closed 0.55% down at 50,081 points.

Among the losers was South African diversified industrial goods wholesaler
Bidvest, down 4.32% to 199.49 rand, while lender FirstRand fell 3.19% to
65.80 rand.

U.S. markets had a weak opening, suggesting volatility and posing a threat
to South African markets, said Byron Lotter, Vestact Asset Management
portfolio manager.

Local stocks such as investment house Rand Merchant Bank and Bidvest - often
seen as proxies for local economic health along with other financial firms -
fell.

Standard Bank slipped 3.1 % to 195.61 rand after ICBC Standard Bank
announced the closure of its Tokyo metals branch. 

Uganda

Ugandan shilling inches up as tax payments help

(Reuters) - The Ugandan shilling edged up on Friday due to low demand as
some firms sought the local currency to pay their mid-month taxes. 

At 0909 GMT, commercial banks quoted the shilling at 3,750/3,760, compared
to Thursday's close of 3,753/3,763.

       <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.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Trudeau and Trump discuss steel and aluminum tariffs, new NAFTA

(Reuters) - Canadian Prime Minister Justin Trudeau spoke on Friday with U.S.
President Donald Trump about tariffs on steel and aluminum imports from
Canada and about the trade agreement signed last year between the two
countries and Mexico.

The two leaders spoke “about Section 232 tariffs on steel and aluminum, and
Canada’s retaliatory tariffs,” Cameron Ahmad, Trudeau’s communications
director, said on Twitter. “They also discussed China, uranium, and the new
NAFTA.”

It is the third time Trudeau and Trump have spoken in nine days, and the
latest conversation comes amid media reports saying the United States is
close to a deal to remove tariffs on steel and aluminum imports from Canada
and Mexico. 

Asia Gold-India flips to discount as prices gain; demand dips in top hubs

(Reuters) - Gold was sold at a discount this week in India for the first
time in 2-1/2 months as higher prices deterred jewellers and retail buyers,
while currency fluctuations and economic worries triggered caution amongst
buyers in other Asian hubs.

Gold futures in India, the world’s second biggest bullion consumer after
China, jumped to 32,538 rupees per 10 grams earlier this week, a peak since
March 4.

Dealers offered a discount of about $2 an ounce over official domestic
prices, versus a premium of $2.5 last week.

The domestic price includes a 10% import tax and 3% sales tax.

Last week, Indians celebrated the Akshaya Tritiya festival, when buying gold
is considered auspicious.

In China, premiums fell to $6-8 from $8-12 last week, compared with
mid-April when premiums hit a two-year high of around $20 over the
benchmark.

Global benchmark spot gold held around $1,284 an ounce on Friday, having
climbed to a one-month peak of $1,303.26 earlier this week.

However, trading volume has picked up at the Shanghai Gold Exchange, said
Samson Li, a Hong Kong-based precious metals analyst with Refinitiv GFMS.

The yuan fell to its weakest since December on Friday.

Meanwhile, buyers in Japan kept a close eye on currency fluctuations, with
the Japanese yen strengthening this week, a Tokyo-based trader said, adding
that demand had not, however, moved significantly due to weak economic
conditions in Japan and China.

The stronger yen pushed premiums to about $1 from 50 cents last week, the
trader added.

In Hong Kong, demand was quiet as people are closely watching the U.S.-China
trade talks, said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in
Hong Kong.

Premiums in the region were little changed at 60 cents-$1.30.

In Singapore too, demand was quiet, as the Akshaya Tritiya festival has
ended and most jewellers have already bought gold, said Brian Lan, managing
director at dealer GoldSilver Central in Singapore.

The premiums were unchanged at 60-80 cents.

Also, the Singapore dollar has strengthened against the U.S. greenback,
making Singapore gold more expensive, added Lan. 

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

 <mailto:info at bulls.co.zw> 

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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
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
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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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