Bulls n Bears Daily Market Commentary : 24 May 2019

Sun May 26 22:05:31 CAT 2019

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Bulls n Bears Daily Market Commentary : 24 May 2019

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Zimbabwe Stock Exchange Update

The All Share index closed the week on a positive note adding 4.88 points
to close at 159.74 points. CASSAVA SMARTECH  gained $0.1109 to end at
$1.4103, SIMBISA  rose by $0.1095 to settle at $1.0000 and MEIKLES   was
$0.0600 stronger at $0.7000.  ECONET  went further up by $0.0554 to $1.3860
and DELTA was $0.0405 firmer at $3.0000.

Trading in the negative; OLD MUTUAL LIMITED  retreated by $0.0302 to settle
at $11.7544, FIRST MUTUAL LIMITED  dropped $0.0200 to close at $0.1400 and
TURNALL  was $0.0149 weaker at $0.0851. Seed maker SEEDCO  eased $0.0092 to
end at $1.4508 and INNSCOR   was $0.0007 down at $2.0000.

Week on week changes

All Share Index added 14.09 points, Industrial index increased  by 47.48
points ,Top 10 index gained 15.23 points ,Mining Index rose by 2.24  points
.

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  Global Currencies & Equity Markets

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling held steady against the dollar on Friday
with inflows from offshore investors buying government debt helping meet
end-month dollar demand from oil importers, traders said. 

At 0940 GMT, commercial banks quoted the shilling at 101.15/35 per dollar,
little-changed from Thursday's close of 101.20/40. 

South Africa

South Africa's rand recovers as lending rates seen steady for longer

(Reuters) - South Africa’s rand firmed early on Friday, regaining some
ground after dropping a day earlier, when the central bank kept lending
rates unchanged in a decision that divided policymakers.

At 0630 GMT the rand was 0.48% firmer at 14.4200 per dollar compared to a
close of 14.4900 overnight in New York.

The Reserve Bank’s five-member policy committee voted 3-2 to keep rates
steady at 6.75%, saying that while inflation and inflation expectations were
close to the middle of the bank’s 3% to 6% target range, they had not yet
settled there.

Despite moderating inflation, the rand and South African bonds continue to
offer a relatively healthy yield return.

Bonds were also firmer on Friday, with the yield on the benchmark paper due
in 2026 down 4 basis points to 8.34%. 

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America

Stocks climb on muted trade hopes, dollar slips

(Reuters) - World equity markets rebounded on Friday from the previous day’s
sharp fall, after U.S. President Donald Trump said complaints against
China’s Huawei Technologies Co Ltd might be resolved within the framework of
a Sino-U.S. trade deal.

Tensions remained high, with China accusing U.S. Secretary of State Mike
Pompeo of fabricating rumors after he said Huawei’s chief executive was
lying about the telecom network gear maker’s ties to the Chinese government.

On Thursday, Trump said a trade deal could resolve U.S. complaints against
Huawei, but he also called the company “very dangerous.”

Investments remain highly susceptible to headline risk, Shah said, though
investors took in stride a U.S. Commerce Department report that said new
orders for domestic capital goods fell more than expected in April.

The report also showed March orders were not as strong as previously
thought, and shipments were weak over the last two months, further evidence
that manufacturing and the U.S. economy were slowing.

MSCI’s gauge of stock performance across 47 countries gained 0.39%, while
the pan-European STOXX 600 index closed up 0.56%.

Investors appeared unfazed by British Prime Minister Theresa May’s
resignation as Conservative party leader after failing in a final attempt to
win parliamentary support for her deal to exit the European Union.

On Wall Street, the Dow Jones Industrial Average rose 95.22 points, or
0.37%, to 25,585.69. The S&P 500 gained 3.82 points, or 0.14%, to 2,826.06
and the Nasdaq Composite added 8.73 points, or 0.11%, to 7,637.01.

For the week, the Dow fell 0.68%, the S&P 500 slid 1.16% and the Nasdaq
declined 2.29%.

The dollar edged off two-year highs set on Thursday, pressured as the weak
U.S. manufacturing activity data sparked worries the trade conflict with
China may hurt the world’s largest economy.

Against a basket of six major currencies, the dollar was down 0.29% at
97.575, well off the two-year high of 98.371 the previous session.

The euro rose 0.24% to $1.1207 while the Japanese yen strengthened 0.27%
versus the greenback at 109.29.

U.S. Treasury yields rose, as Trump’s remarks about Huawei encouraged
investors to book profits a day after a surge in government bond prices and
ahead of a long U.S. holiday weekend.

Benchmark 10-year U.S. Treasury notes fell 8/32 in price to push yields up
to 2.3237%.

U.S. markets will close on Monday for Memorial Day, a federal holiday.

May’s resignation briefly sent sterling fluctuating wildly, rising nearly
half a percent against the dollar after the announcement and traded near
those gains at $1.2714. Against the euro, sterling snapped a 14-day losing
streak.

Oil prices climbed 1% but still posted their biggest weekly drop of the
year, pressured by rising inventories and worries about the global economy.

U.S. crude inventories rose to their highest since July 2017, suggesting
ample supplies in the world’s top consumer . Brent crude, the global
benchmark, rose 93 cents to settle at $68.69 a barrel. For the week, it fell
almost 5%.

U.S. West Texas Intermediate crude traded up 72 cents to settle at $58.63.
For the week WTI fell 6.5%.

Gold steadied, under pressure from the equities rebound but supported by a
weaker dollar and growing expectations for a U.S. interest rate cut.

U.S. gold futures for June settled down 0.1% at $1,283.60 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Nickel jumps to 2-week peak on short covering, China hopes

(Reuters) - Nickel spiked to its highest level in over two weeks on Friday
as bearish investors covered positions, while other industrial metals gained
on a weaker dollar and hopes for a U.S.-China trade deal.

World stocks edged higher and oil prices also recovered from bruising falls
this week after U.S. President Donald Trump nurtured hopes of progress in
U.S.-China talks.

Benchmark nickel on the London Metal Exchange surged nearly $500 in about 10
minutes in the morning, spurred by Chinese investors covering short
positions, traders said, continuing the rally in the afternoon.

That sent nickel surging 5% to a peak of $12,495 a tonne, the highest since
April 30, before paring gains in closing open outcry activity to a bid of
$12,370, a rise of 4%.

The move higher in nickel gained steam as it broke through its 200-day
moving average, a key technical level, traders said.

* COPPER: Three-month LME copper climbed 0.5% to finish at $5,955 a tonne in
closing rings, but on a weekly basis it marked a sixth consecutive decline.

* DOLLAR: The dollar index edged away from two-year highs on Friday after
weak U.S. manufacturing activity data. A weaker dollar makes
dollar-denominated metals cheaper to importers using other currencies.

* NICKEL FORECAST: Fitch on Friday revised down its London three-month
nickel average price forecast for 2019 to $13,250 a tonne, from $14,500
estimated earlier, on rising global economic risks, an escalating trade
dispute and disappointing refined nickel demand from China so far this year.

* TIN SPREAD: The premium of cash LME tin over the three-month contract
CMSN0-3 jumped to $320 a tonne, the highest since April last year,
indicating tight availability of immediate supplies.

* ZINC: LME zinc climbed 1.6% to end at $2,560 a tonne. The net speculative
short position on the LME had expanded to 7.2% of open interest by the close
on Wednesday, back to levels not seen since October 2018, according to
Alastair Munro at broker Marex Spectron.

* ALUMINIUM: Strong aluminium output is expected for the rest of the year
due to falling costs, Commerzbank said in a note. “We believe that the
continuing high supply, coupled with the decline in demand dynamism, argues
against any sustained and significant recovery of the aluminium price.”

* PRICES: LME aluminium added 0.1% to close at $1,800 a tonne, lead gained
0.9% to $1,825 and tin , untraded in closing rings, was bid down 0.1 percent
at $19,300 a tonne.

Copper rises but heading for 6th week of declines

(Reuters) - Copper rebounded on Friday on weaker U.S. dollar, but was
heading for its sixth straight week of losses on a prolonged U.S.-China
trade war.

China said the United States needs to correct its “wrong actions” in order
to continue trade talks, while U.S. President Donald Trump said Huawei could
be included in the trade deal after banning U.S. firms to work with the
Chinese telecoms giant.

Three-month copper on the London Metal Exchange rose 0.5% to $5,957 a tonne
by 0851 GMT, but on a weekly basis, London copper is heading for its sixth
consecutive decline.

The metals market gained some support as the dollar fell from a two-year
high overnight on fears that a trade war with China will hurt the U.S.
economy more than expected and on expectations of a rate cut.

A weaker dollar makes dollar-denominated metals cheaper to importers using
other currencies.

London nickel jumped as much as 4.7% to $12,460 a tonne, its highest since
April 30, and Shanghai nickel also touched a six-week high of 102,830 yuan a
tonne during trading hours before easing slightly to end at 99,990 yuan.

London nickel surged after a break of the 200-day moving average around
$12,275. Traders and an analyst said short covering on ShFE and the LME
fuelled upward momentum.

FUNDAMENTALS

* NICKEL: Fitch on Friday lowered their London three-month nickel average
price forecast for 2019 to $13,250 a tonne, from $14,500 estimated earlier,
on rising global economic risks, an escalating trade dispute and
disappointing refined nickel demand from China so far this year.

* CHINA: China’s commerce ministry said that more efforts should be made to
achieve the goal of stabilising trade while improving its quality, adding
that the trade environment is growing more uncertain and challenging.

* SQM: Chile’s SQM, the world’s No. 2 producer of lithium, said it would
delay a key expansion of production capacity from the Atacama salt flat
until the end of 2021 amid a slump in prices for the coveted battery metal.

* ALUMINIUM: Zhang Shipping, who oversaw the rise of China Hongqiao Group
into the world’s biggest aluminium producer, died on Thursday at the age of
73, the company said.

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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
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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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