Bulls n Bears Daily Market Commentary : 22 May 2019

Wed May 22 21:35:33 CAT 2019

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Bulls n Bears Daily Market Commentary : 22 May 2019

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Zimbabwe Stock Exchange Update

Market Turnover RTGS$ 9,653,793.23 with foreign buys at RTGS$ 5,034,330.00
and foreign sales were RTGS$ 5,426,059.39. Total trades were 247.

The All Share index’s bullish trend continues unabated  adding a significant
3.19 points to close at 150.16 points. LAFARGE  recovered $0.1500 to close
at $1.1500, HIPPO VALLEY ESTATES  gained $0.1400 to end at $1.8500 and
MEIKLES  was $0.0967 stronger at $0.7000. CASSAVA SMARTECH  also increased
by $0.0586 to settle at $1.1999 and DELTA   traded $0.0501 firmer at
$2.9457.

Trading in the negative; TSL  eased $0.0500 to trade at $0.5500, ZB
FINANCIAL HOLDINGS  dropped $0.0305 to end at $0.3800 and SEEDCO LIMITED
was $0.0181 down at $1.4324. AMALGAMATED REGIONAL TRADING  decreased by
$0.0100 to close at $0.1100 and RTG  retreated by $0.0038 to settle at
$0.0812.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand steady ahead of Fed minutes, stocks down

(Reuters) - South Africa’s rand steadied in afternoon trade on Wednesday as
markets positioned for the release of minutes from the Federal Reserve’s
latest meeting that might give more clues on the U.S. interest rate outlook.

Stocks were dragged down by Sasol as the South African petrochemicals firm
raised the expected cost of its U.S. ethane cracker project by $1 billion.

At 1530 GMT the rand was trading at 14.3825 per dollar following a close of
14.3800 overnight in New York.

For much of this week, a dearth of domestic economic and political drivers
has exposed it to offshore factors dominated by the U.S.-China trade
standoff.

The Fed minutes will be released at 1800 GMT.

South Africa-focused investors also await the central bank’s interest rates
decision on Thursday.

A Reuters poll of economists and analysts conducted last week forecast rates
will stay at 6.75%, with the bank resisting pressure to lower them to
support flagging economic growth.

In fixed income, the yield on the benchmark government bond due in 2026
dipped by 6 basis point to 8.41%.

On the bourse, the broader All-Share index declined 0.53% to 55,231 points,
while the blue chips on the Top-40 index slipped 0.59% to 49,194 points.

Leading the downside was Sasol, which fell 13% to 375 rand, while property
investment company Redefine declined 6.7 percent to 9.05 rand.

Zambia

Zambia's central bank raises benchmark rate by 50 bps to 10.25%

(Reuters) - Zambia’s central bank raised its benchmark lending rate by 50
basis points to 10.25% to counter inflationary pressure and support
macroeconomic stability, its governor Denny Kalyalya said on Wednesday.

Annual inflation is expected to remain above the bank’s 6-8 percent target
over the next eight quarters, Kalyalya told journalists.

Those risks were also contributing to the negative sentiment which was
pressuring the kwacha, he added.

When asked about the situation at Vedanta-controlled Konkola Copper Mines
(KCM), which is facing liquidation, Kalyalya said developments in the mining
sector had a bearing on the economy.

He added that he hoped a disagreement with mining companies over a hike in
tax bills could be resolved amicably so that the focus can return to
production.

Zambia has started to look for a new investor for KCM, President Edgar Lungu
said on Monday, in a move likely to stoke international miners’ concerns
about rising government intervention in the sector.

       <mailto:info at bulls.co.zw> 

Asia

Asia stocks wobble as trade fears overshadow Huawei reprieve

(Reuters) - Asian stocks were on shaky ground on Wednesday, as earlier
relief over Washington’s temporary relaxation of curbs against China’s
Huawei Technologies failed to offset deeper worries about trade frictions
between the world’s two largest economies.

MSCI’s broadest index of Asia-Pacific shares outside Japan initially edged
up following gains on Wall Street but was last down 0.15%.

Australian stocks slipped 0.25%, South Korea’s KOSPI fell 0.45% and Japan’s
Nikkei edged up 0.05%.

The U.S. Commerce Department on Monday granted Huawei Technologies Co Ltd a
license to buy U.S. goods until Aug. 19, a move intended to give telecom
operators that rely on Huawei time to make other arrangements.

The United States blocked Huawei from buying U.S. goods last week, a major
escalation in the trade war against China, saying the firm was involved in
activities contrary to national security.

Shares of technology companies helped lift Wall Street on Tuesday after
Washington’s easing of curbs on Huawei. Chipmakers, many of which sell to
Huawei, had been hit at the start of the week.

Leaders from G20 nations are scheduled to gather for a summit in Japan at
the end of June.

The dollar traded at 110.580 yen after popping up to a two-week high of
110.675 against the safe-haven Japanese currency as risk aversion in the
broader markets softened.

The greenback was also supported as U.S. yields rose in the wake of gains by
Wall Street shares.

The euro was little changed at $1.1165 after brushing a 2-1/2-week trough of
$1.1142.

The Australian dollar, sensitive to shifts in risk sentiment, slipped 0.15%
to $0.6873. The currency had suffered losses the previous day when the
country’s central bank governor said interest rates might be cut as soon as
next month.

In commodities, U.S. West Texas Intermediate (WTI) crude futures were down
0.59% at $62.76 per barrel after American Petroleum Institute data showed
that U.S. crude stockpiles rose unexpectedly last week. 

  <mailto:info at bulls.co.zw> 

Commodities Markets

Trade war worries drag copper to 4-month lows

(Reuters) - Copper prices hit a four-month low on Wednesday as an
intensifying trade dispute between the United States and China took its toll
on industrial metals with investors fearing damage to economic growth and
weakened demand.

Aluminium also hit its lowest since January 2017 after a Brazilian court
lifted production restrictions on a major alumina plant.

Benchmark copper on the London Metal Exchange (LME) closed down 1.1% at
$5,928 a tonne after reaching $5,913.50, the lowest since Jan. 24.

The metal used in power and gas has fallen for four consecutive sessions and
is down around 20% from highs in early June 2018, before the trade conflict
began.

Societe Generale analyst Robin Bhar said the worsening macro-economic
backdrop and trade situation were pushing metals lower, with speculative
investors leading the selling.

“Physical buyers are few and far between with all this uncertainty,” he
said.

TRADE WAR: China must prepare for difficult times, President Xi Jinping said
on Wednesday after China’s ambassador to the United States said Beijing was
ready to resume trade talks.

Media reports said Washington was considering Huawei-like sanctions on
Chinese video surveillance firm Hikvision, potentially inflaming the
confrontation.

U.S. Treasury Secretary Steven Mnuchin said Washington was considering
further tariff increases and is at least a month away from enacting them.

JAPAN: Japanese exports contracted for the fifth month in April, underlining
the threat from the trade dispute.

COPPER POSITIONING/TECHNICALS: Speculators’ net short in LME copper has
expanded to 6.2% of open contracts, the most since October, brokers Marex
Spectron said.

SPREADS: The discount of cash copper and aluminium on the LME to the
three-month contracts has grown, suggesting ample supply of nearby metal.
MCU0-3 MAL0-3

PERU STRIKE: Chinese miner MMG said operations at its Las Bambas copper mine
in Peru had not been disrupted by a road blockade.

ALUMINIUM/NORSK HYDRO: The Albras aluminium smelter in Brazil, partly owned
by Norsk Hydro, began to ramp up its output after a Brazilian federal court
lifted production restrictions at the Alunorte alumina plant.

LME aluminium ended down 1% at $1,779 a tonne after hitting a more than
two-year low of $1,776.50 a tonne.

OTHER METALS: Benchmark zinc fell 1.3% to $2,543 a tonne, lead lost 0.3% to
$1,800 and tin finished down 0.6% at $19,325. Nickel was not included in
closing rings, but had slipped 0.7% to $11,980 in electronic trading.

Gold steadies as dollar, stocks pull back; Fed minutes in focus

(Reuters) - Gold steadied on Wednesday, edging off a two-week low touched in
the previous session, as the dollar retreated and equity markets fell on
fresh trade fears ahead of the U.S. Federal Reserve’s release of minutes
from its last meeting.

Spot gold inched up 0.1% to $1,275.65 per ounce as of 1324 GMT, having
fallen to its lowest level since May 3 on Tuesday at $1,268.97.

U.S. gold futures were 0.2% higher at $1,275.40 an ounce.

The dollar index was down 0.1% after hitting a near one-month peak on
Tuesday, boosted by higher U.S. Treasury yields after Washington temporarily
eased trade restrictions imposed last week on Chinese telecom equipment firm
Huawei.

Global stocks pulled back as relief over the Huawei move evaporated on
reports that the White House was considering further sanctions on Chinese
video surveillance firm Hikvision.

Gold is now more than 5% below its late February peak of $1,346.73 per
ounce.

Markets are looking to the release at 1800 GMT of the minutes of the U.S.
Federal Reserve’s latest meeting that might give more clues on the interest
rate outlook.

Earlier this week, Fed Chair Jerome Powell said it would be premature to
make a judgement about the impact of trade and tariffs on monetary policy.

Meanwhile, holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, rose 0.4% to 739.69 tonnes on Tuesday.

However, holdings have declined nearly 7% so far this year, indicating
subdued investor interest in bullion.

On the technical side, spot gold may now test support at $1,264 per ounce, a
break below which could open the way towards $1,244, according to Reuters
technical analyst Wang Tao.

Among other precious metals, silver was up 0.1% at $14.46 per ounce, while
palladium lost 0.9% to $1,307.35.

Platinum slipped 1.3% to $803.10 an ounce, having touched its lowest since
Feb. 18 at $800.50 earlier on Wednesday.

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
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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
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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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