Bulls n Bears Daily Market Commentary : 07 November 2019

Fri Nov 8 00:47:21 CAT 2019

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Bulls n Bears Daily Market Commentary : 07 November 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$9,997,038.85 with foreign buys at ZWL$202,006.00 and
foreign sales were ZWL$50,000.00 Total trades were 204

The All Share index advanced by 1.20 points  to close at 243.59 points. RIO
ZIM  added $0.3935 to $2.5000, MEIKLES increased by $0.1025 to $1.8525 and

BINDURA  rose by $0.0200 to $0.1400. INNSCOR  also added $0.0174 to close at
$3.2815 and SEEDCO  was $0.0169 firmer at $1.7015.

Trading in the negative was OLD MUTUAL  which eased $0.0667 to $36.9037,
ECONET WIRELESS  which dropped $0.0111 to $1.7640. OK ZIMBABWE   and PADENGA
HOLDINGS both traded $0.0020 weaker at $0.7480 and $2.9975 respectively.
FIRST CAPITAL BANK  was $0.0014 lower at $0.1061.

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  Global Currencies & Equity Markets

South Africa

S.Africa's rand boosted by U.S-China trade deal hopes, stocks inch up

(Reuters) - South Africa’s rand resumed its advance on Thursday, brushing
off a batch of depressing economic data amid renewed expectations that China
and the United States will reach a trade deal.

At 1500 GMT the rand was 0.51% firmer at 14.7500 per dollar, a touch off its
session best of 14.7140, after kicking off the session at 14.8200.

An official from the Chinese commerce ministry said Washington and Beijing
have agreed in the past two weeks to cancel tariffs in different phases.

The news rolled back the previous day’s market jitters triggered by a senior
Trump administration official saying a meeting between President Donald
Trump and his Chinese counterpart Xi Jinping to sign an interim trade deal
could be delayed to year-end.

It also helped the rand weather a dip in business confidence and a
contraction in manufacturing that rekindled concern about another poor
quarterly growth print.

Industrial output fell 2.4% year-on-year in September and by the same margin
on a monthly basis.

Bonds were firmer, with the yield on the benchmark paper due in 2026 down 3
basis at 8.39%.

Analysts said, however, that commodity-linked, liquid currencies like the
rand would continue to seesaw as negotiations between the two economic
superpowers drag on.

On the bourse, stocks were flat as a drop in business confidence and
disappointing local manufacturing data hurt local equities, while the
stronger rand pulled dual-listed stocks down.

The benchmark Johannesburg Stock Exchange Top-40 Index was down 0.36% to
51,223.34 points while the broader All-Share Index slipped 0.41% to
57,414.45 points.

Retailer The Foschini Group fell to the bottom of the blue-chip index,
losing 2.87% to 166.72 rand after it warned on a cautious outlook for its
South African business.

Grocer Shoprite followed close behind, dropping 2.43% to 137.99 rand.

Uganda

Ugandan shilling holds steady against the dollar

(Reuters) - The Ugandan shilling        was stable against the dollar on
Thursday after the central bank mopped up excess liquidity from the money
markets.  

At 0942 GMT, commercial banks quoted the shilling at 3,698/3,708, compared
with Wednesday's close of 3,700/3,710.

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Stocks, dollar rally on U.S.-China trade deal hopes

(Reuters) - Oil prices rose and stocks rallied worldwide on Thursday after
China said it had agreed with the United States to cancel tariffs in phases,
a key consideration in reaching a deal to end a trade war that has crimped
economic growth and roiled markets.

But U.S. stocks pared some gains after Reuters reported rolling back
existing tariffs as part of a trade deal faces fierce opposition at the
White House and from outside advisers, multiple sources familiar with the
talks said.

The Dow and S&P 500 closed at record highs, while the Nasdaq missed a record
close by less than two-tenths of a point.

A gauge of global equity performance surged to a 21-month peak, with a
pan-European index at its highest since July 2015 after regional shares rose
for a fifth straight session.

The dollar gained after comments from a Chinese commerce ministry spokesman
about the terms of a potential trade deal prompted investors to dump
perceived safe havens such as the Japanese yen, the Swiss franc, bonds and
gold.

No timetable was indicated, but a “phase one” deal is widely expected to
include a U.S. pledge to scrap tariffs scheduled for Dec. 15 on about $156
billion worth of Chinese imports, including cellphones, laptop computers and
toys.

However, the idea of a tariff rollback was not part of the original October
“handshake” deal between Chinese Vice Premier Liu He and U.S. President
Donald Trump, sources told Reuters.

The initial news from China was positive, said David Kelly, chief global
strategist at JPMorgan Funds in New York. But with operating earnings lower
in a slowing economy, “the fundamental justification for this market
increase is pretty weak.”

Investors have few options outside of equities, with the return in money
markets and long-term government debt below the rate of inflation, Kelly
said. The economy is generating plenty of wealth but it is all going to the
stock market, he said.

MSCI’s gauge of stocks across the globe gained 0.28%, while the pan-European
STOXX 600 index closed up 0.37%. Trade-sensitive German shares rose 0.83% to
close at their highest since February 2018.

Asia had been quiet overnight, with the China news arriving just before
European markets opened. Automakers and miners were among Europe’s top
gainers.

The prospect of a recession diminishes if some tariffs are removed, said
Peter Cardillo, chief market economist at Spartan Capital Securities in New
York. “So that’s positive for stocks.”

On Wall Street, the Dow Jones Industrial Average rose 182.24 points, or
0.66%, to 27,674.8. The S&P 500 gained 8.4 points, or 0.27%, to 3,085.18 and
the Nasdaq Composite added 23.89 points, or 0.28%, to 8,434.52.

The global benchmark for crude climbed above $62 a barrel. Brent crude
settle up 55 cents at $62.29 and West Texas Intermediate added 80 cents to
settle at $57.15 a barrel.

The dollar rose to near three-month highs versus the yen on the trade news,
paring losses earlier in the session, while Australia’s China-sensitive
dollar hit a near four-month high.

The dollar index rose 0.18%, with the euro down 0.15% to $1.1048. The yen
weakened 0.25% versus the greenback at 109.27 per dollar, while the dollar
gained against the Swiss currency, trading up 0.22% at 0.9948 franc.

U.S. Treasury yields rose to eight-week highs.

The benchmark 10-year U.S Treasury note fell 31/32 in price to push its
yield up to 1.919%.

U.S. gold futures settled down 1.8% at $1,466.40 an ounce.

Copper got its customary lift from the China optimism as the country is the
biggest buyer of the metal.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold eases as trade deal hopes whet risk appetite

(Reuters) - Gold fell on Thursday, losing some of its safe-haven appeal as
signs of progress in the U.S.-China trade negotiations rekindled a rally in
stock markets.

China and the United States have agreed to cancel, in phases, the tariffs
imposed during their months-long trade war, the Chinese commerce ministry
said, without specifying a timetable.

Spot gold was down 0.5% at $1,483.07 per ounce at 1028 GMT, while U.S. gold
futures were down 0.6% at $1,484.20.

An interim trade deal is widely expected to include a U.S. pledge to scrap
tariffs scheduled for Dec. 15 on about $156 billion worth of Chinese
imports, including cell phones, laptop computers and toys.

The tit-for-tat tariff war between the world’s two biggest economies for the
past 16 months have roiled financial markets and raised fears of a global
economic slowdown, helping safe-haven bullion rise nearly 16% this year.

The trade deal optimism, coupled with largely positive earnings reports from
a host of companies, drove European shares to their highest level in four
years.

The euro zone economy is likely to grow slower than earlier expected this
year and next, the European Commission forecast on Thursday, because of
global trade conflicts, geopolitical tensions and Brexit.

Last month, the U.S. Federal Reserve cut interest rates for the third time
this year to help sustain American growth, but signalled there would be no
further reductions unless the economy took a turn for the worse.

Lower interest rates reduces the opportunity cost for holding non-yielding
gold.

Spot gold may retest a support at $1,482 per ounce, and a break below this
could lead to a drop to the Oct. 1 low of $1,458.50, according to Reuters
technical analyst Wang Tao.

Among other precious metals, silver dipped 0.4% to $17.55 per ounce;
platinum rose 0.2% to $931.32 per ounce; while palladium was up 0.3% at
$1,798.68 per ounce. 

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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