Bulls n Bears Daily Market Commentary : 06 November 2019

Thu Nov 7 00:54:02 CAT 2019

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Bulls n Bears Daily Market Commentary : 06 November 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$15,645,991.34 with foreign buys at ZWL$4,822,309.20 and
foreign sales were ZWL$2,937,596.64 Total trades were 199

The All Share index retreated by 0.04 points to close at 242.39 points.
POWERSPEED  eased $0.0708 to $0.3900, CASSAVA SMARTECH  dropped $0.0415 to
$1.5085 and BRITISH AMERICAN TOBACCO  was $0.0400 weaker at $50.0000.
PADENGA went further down by $0.0156 to $2.9995 and ECONET  was $0.0025
lower at $1.7751.

Losses were partially offset by gains in PPC  which added $0.4800 to $5.300,
OLD MUTUAL LIMITED   increased by $0.0912 to $36.9704 and INNSCOR   rose by
$0.0516 to $3.2641. SEEDCO  also added $0.0282 to close at $1.6846 and OK
ZIMBABWE  was $0.0277 firmer at $0.7500.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand inches lower while stocks reach 2 month highs

(Reuters) - The South African rand inched weaker on Wednesday, backing away
from a four-session peak as cautious investors awaited clues on the economy
ahead of key manufacturing data and developments in U.S.-China trade talks.

The statistics agency publishes manufacturing data on Thursday, the first
set of key indicators since last week’s dismal budget speech where the
finance minister slashed the 2019 economic growth forecast to 0.5% for 2019.

A Reuters survey of economists sees the sector contracting 0.6% year-on-year
after August’ s 1.8% contraction. Foreign reserves and monthly business
confidence survey data is also due on Thursday.

At 1500 GMT, the rand was 0.61% weaker at 14.835 per dollar, weaker than the
overnight close of 14.7500.

The rand has gained nearly 3% since Friday after ratings firm Moody’s kept
the country’s credit status at investment level, while a global bout of
demand for risk assets also supported the currency.

Volumes have since cooled and investors have avoided big bets as they scour
the economic data to gauge the country’s chances of avoiding a full
downgrade to junk when Moody’s re-valuates its credit in March.

President Cyril Ramaphosa said on Thursday at an investment summit in
Johannesburg that the 200 billion rand ($13.5 billion) of investment pledges
secured for 2019 would help ease pressure on the economy, although the rand
hardly budged on the announcement.

On the bourse, stocks reached 2-month highs along with global equities as
investors digested a corporate earnings season that has seen the bulk of
U.S.-listed firms best analysts’ expectations.

The benchmark JSE Top-40 Index was up 0.86% to 51,424.22 points, while the
broader All-Share Index rose 0.71 to 57,653.89, both reaching their highest
rallies since mid September.

Mining heavyweights Impala Platinum Holdings and Anglo American Platinum
(Amplats) were the biggest winners on the blue-chip index despite a slightly
weaker platinum price. Impala Platinum was up 6.56% to 6.64 rand while
Amplats rose 5.77 to 64.28 rand.

Bonds weakened slightly, with the yield on the benchmark paper due in 2026
adding 1 basis point to 8.405%. 

Kenya

Kenyan shilling stronger after parliament removes lending rate cap

(Reuters) - The Kenyan shilling strengthened against the dollar on Wednesday
due to dollar inflows from offshore investors buying banking stocks after

parliament removed a cap on commercial lending rates, traders said. 

At 0850 GMT, commercial banks quoted the shilling at 103.00/20 per dollar,
compared with 103.25/45 at Tuesday's close.   

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Trade hopes lift dollar, crude; doubts slow stock rally

(Reuters) - The U.S. dollar and crude prices rose on Tuesday, spurred by
optimism that a U.S.-China trade deal may be near, but a rally in global
equity markets paused after China pressed U.S. President Donald Trump to
remove recently imposed tariffs.

MSCI’s gauge of global stock markets set a 21-month intraday high but pared
gains to close lower while the Nasdaq and Dow Jones industrial average eked
out record closing highs.

U.S. and European government bond yields climbed on trade hopes and upbeat
economic data. China’s push to remove more U.S. tariffs imposed in September
as part of a “phase one” trade deal mostly boosted optimism.

A trade deal is far from certain, Fawad Razaqzada, technical analyst at
FOREX.com, said in an investor note. “If the talks collapse, then so too
could the markets,” he said.

Solid corporate earnings and upbeat data gave equities a lift. More than
three-quarters of the S&P 500 companies that have reported so far have
beaten profit expectations, Refinitiv data showed.

ISM’s services data showed a reading of 54.7 in October from 52.6 the prior
month, exceeding expectations of economists polled by Reuters for 53.4. It
was the latest data to ease concerns the U.S. economy.

MSCI’s gauge of stock indexes in 47 countries edged lower by 0.01%. The
pan-European STOXX 600 index of small, mid-sized and large stocks and the
FTSEurofirst 300 index of leading regional shares both rose 0.2%.

On Wall Street, the Dow Jones Industrial Average rose 30.52 points, or
0.11%, to 27,492.63. The S&P 500 lost 3.65 points, or 0.12%, to 3,074.62 and
the Nasdaq Composite added 1.48 points, or 0.02%, to 8,434.68.

In Asia, optimism was fueled by the People’s Bank of China’s first cut in
its medium-term lending rate since early 2016. It was only a token 5 basis
points to 3.25%, but it underscored Beijing’s desire to support the economy.

Oil prices rose more than 1% on trade hopes. Oil was also supported when
OPEC Secretary-General Mohammad Barkindo said the market outlook for 2020
may be brighter than forecast, appearing to downplay any need for deeper
production cuts.

Brent crude futures for January delivery settled 83 cents higher at $62.96 a
barrel. U.S. West Texas Intermediate (WTI) crude futures rose 69 cents to
settle at $57.23 a barrel.

The safe-haven yen and Swiss franc slid. Gold fell almost 2%, en route to
its biggest daily slide in over a month.

The dollar index rose 0.43%, with the euro down 0.48% to $1.1073. The
Japanese yen weakened 0.52% versus the greenback at 109.16 per dollar.

U.S. gold futures settled down 1.8% at $1,483.70.

Benchmark 10-year U.S. Treasury notes fell 19/32 in price to yield 1.8548%.
That boosted financial stocks. The S&P financial sector was the
second-biggest gainer of the 11 sectors, edged out by the rising energy
sector.

A steady rise in bond yields has been a big tailwind for financial stocks
and one of the biggest contributors to the continued strength in equities,
James said.

The 10-year U.S. Treasury barely yielded 1.5% in early October.

Germany’s 10-year bond yield rose as high as -0.308% , while the French
10-year hit -0.006% to within striking distance of positive territory.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Barrick Gold beats forecasts, raises dividend

(Reuters) - Barrick Gold Corp on Wednesday reported higher third-quarter
profits that beat analysts’ estimates and raised its dividend while
reiterating a five-year production plan.

The world’s second largest gold producer also said it would be at the top
end of its production targets for the year and the lower end of cost
estimates.

In its five-year plan, Barrick plans to mine 5.1-5.6 million ounces of gold
annually at an all-in-sustaining cost of at between $850-$950 per ounce.

Helped by a stronger gold price, Barrick raised its quarterly dividend by
25% to $0.05 per share, pushing its Toronto-listed shares up around 4%.
Shares in Barrick are up 20% so far this year.

Barrick, which merged with Africa-focused Randgold earlier this year, has
also formed a joint venture in Nevada with the world’s largest gold
producer, Newmont Goldcorp. Barrick has also completed a takeover of its
African business Acacia Mining.

Gold production rose to 1.31 million ounces from 1.15 million ounces a year
earlier.

Spot gold prices have surged 16% so far this year, fueled by investors
shifting to safe-haven assets as a prolonged U.S.-China trade war roiled
financial markets and weighed on global economic growth.

In Tanzania, where Barrick is awaiting final approval on a deal to settle a
tax dispute with the government, the gold miner plans to spend $200 million
over the next two years, Bristow said.

Adjusted profit rose to $264 million, or 15 cents per share, in the quarter
ended Sept. 30, from $89 million, or 8 cents per share, a year earlier.

Analysts on average expected it to earn 11 cents per share, according to
IBES data from Refinitiv.

Barrick cut net debt by 14% in the third quarter to $3.2 billion.

Elsewhere in the sector, Newmont missed profit estimates and cut its annual
output target on Tuesday. 

INVESTORS DIARY 2019

Company

Event

Venue

Date & Time

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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
report shall be solely responsible for making their own independent
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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