Bulls n Bears Daily Market Commentary : 08 October 2019

Wed Oct 9 00:31:47 CAT 2019

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Bulls n Bears Daily Market Commentary : 08 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$11,017,823.63 with foreign buys at ZWL$ 4,201,991.00 and
foreign sales were ZWL$ 1,265,586.25 Total trades were 186.

The All Share index closed the day unchanged at 232.78 points in a mixed
trading session. PADENGA added $0.0500 to $2.8000, OLD MUTUAL LIMITED
gained $0.0333 to close at $34.5564 and DAIRIBOARD ZIMBABWE LIMITED  traded
$0.0205 stronger at $0.4705. MEIKLES also increased by $0.0142 to end at
$1.5675 and CASSAVA SMARTECH  was $0.0082 firmer at $1.6003.

Gains were equally offset by losses in TSL which dropped by $0.0900 to
settle at $0.6500, DELTA eased $0.0264 to $3.8033 and INNSCOR traded $0.0090
weaker at $3.1010. ECONET  also went down by $0.0024 to settle at $1.8025
and SIMBISA traded $0.0021 lower at $1.4804.

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  Global Currencies & Equity Markets

Uganda

Ugandan shilling biased on weaker side as rate cut triggers pressure

(Reuters) - The Ugandan shilling was inclined to the weaker side on Tuesday,
undermined by negative sentiment after the central bank made an unexpected
cut by 100 basis points to its policy rate this week.

At 0949 GMT commercial banks quoted the shilling at 3,688/3,698, compared to
Monday’s close of 3,685/3,695.

South Africa

South Africa's rand, stocks fall as risk sentiment wanes

(Reuters) - South Africa’s rand and stocks weakened on Tuesday as concerns
over the upcoming U.S.-China trade talks and escalating tensions between
London and Brussels sparked a flight to safety, denting appetite for riskier
but high-yielding assets.

At 1527 GMT the rand was 0.66% weaker at 15.2900 per dollar.

Top-level trade discussions between the United States and China are
scheduled for Oct. 10-11, with reports that the Trump administration was
moving ahead with discussions on curbing capital flows into China keeping
investors on edge.

Washington also blacklisted eight Chinese tech companies, while U.S.
President Donald Trump suggested a deal to end the trade dispute may not yet
be quite in the offing.

Elsewhere reports that Brexit talks between Britain and Brussels were close
to breaking down added further uncertainty.

Investors are also awaiting the minutes from the U.S. Federal Open Market
Committee’s September meeting on Wednesday for clues on whether the central
bank will cut rates at its October session.

On the bourse, the benchmark Top-40 index fell 0.35% to 48,465 points, while
the All-Share index dropped 0.48% to 54,454 points.

Among the fallers on the Top-40 index, Absa slid 2.20% to 149.00 rand and
Shoprite weakened 1.81% to 124.97 rand.

Curbing further losses were gold shares, which rose 1.82% as global
uncertainty sparked a flight to safe-haven assets.

Harmony Gold rose 2.7% 48.35 rand, Gold Fields gained 1.86% to 83.84 rand
and AngloGold Ashanti closed up 1.47% at 315.55 rand.

In fixed income, the yield on the benchmark government bond due in 2026
added 6.5 basis points to 8.28%.

       <mailto:info at bulls.co.zw> 

Europe

Stocks fall as trade tensions rise further; Brexit battle hurts pound

(Reuters) - Stocks fell on Tuesday as U.S.-China tensions rose further ahead
of high-level trade talks, while the British pound sank on reports that
Brexit negotiations were close to breaking down.

Gold and the yen rose, indicating an increased appetite for safe-haven
assets.

Wall Street stocks closed at session lows after Washington imposed visa
restrictions on Chinese government and Communist Party officials over abuses
of Muslim minorities. The move came only hours after the Trump
administration widened its trade blacklist to include some of China’s top
artificial intelligence startups.

High-level talks between the world’s top two economies on trade are due to
resume on Thursday. The negotiations, the stock market’s most important
catalyst for months, have weighed on investor sentiment.

An increase to 30% from 25% in U.S. tariffs on $250 billion worth of Chinese
goods is scheduled for Oct. 15.

The Dow Jones Industrial Average fell 313.98 points, or 1.19%, to 26,164.04,
the S&P 500 lost 45.73 points, or 1.56%, to 2,893.06 and the Nasdaq
Composite dropped 132.52 points, or 1.67%, to 7,823.78.

The pan-European STOXX 600 index lost 1.10% and MSCI’s gauge of stocks
across the globe shed 1.14%.

Emerging market stocks ended 0.18% lower despite gains overnight in Asia.
Japan’s Nikkei futures lost 0.74%.

Investors of Chinese mainland stocks returned from a week-long holiday to
boost the index by 0.3%, but a private survey showed growth in China’s
services sector at its slowest in seven months in September.

With the focus turning to trade talks, U.S. President Donald Trump said he
hoped Beijing would find a humane and peaceful resolution to political
protests in Hong Kong, adding that situation had the potential to hurt the
trade discussions.

GLOBAL GROWTH CONCERNS

The U.S. Treasury yield curve steepened, driven by a falling two-year yield
after Federal Reserve Chairman Jerome Powell flagged openness to further
rate cuts and said the Fed would expand its balance sheet to ensure money
markets function smoothly.

Benchmark 10-year Treasury notes last rose 6/32 in price to yield 1.534%,
from 1.553% late on Monday.

Markets have been waiting for the Fed to put in place policies to avoid the
sort of reserve shortages that occurred recently and could disrupt the Fed’s
policy goals if they were to become a regular feature of financial markets.

Despite expectations for lower rates, the U.S. dollar rose against a basket
of six peers.

The dollar index rose 0.17%, with the euro down 0.15% to $1.0953.

Sterling tumbled after reports that Brexit talks between Britain and
Brussels were close to breaking down.

The EU accused Britain of playing a “stupid blame game” after a Downing
Street source said a deal was essentially impossible because German
Chancellor Angela Merkel had made unacceptable demands.

Sterling last traded at $1.2212, down 0.63% on the day.

The safe-haven yen strengthened 0.21% versus the greenback at 107.08 per
dollar.

The Turkish lira gained 0.06% versus the U.S. dollar at 5.83 after falling
more than 2% on Monday.

Meanwhile in Washington, the new IMF Managing Director Kristalina Georgieva
said trade tensions could mean a loss of around $700 billion to the world
economy by 2020, or about 0.8%of global GDP.

Worries over the health of the world economy sent oil prices lower even as
anti-government protests resumed overnight in Iraq, OPEC’s second-largest
producer.

U.S. crude fell 0.34% to $52.57 per barrel and Brent was last at $58.17,
down 0.31% on the day.

The U.S. Energy Information Administration cut its 2020 world oil demand
growth forecast by 100,000 barrels per day to 1.30 million bpd, or about 7%.

Spot gold added 0.8% to $1,505.47 an ounce. U.S. gold futures fell 0.02% to
$1,497.20 an ounce.

Copper lost 0.67% to $5,683.50 a tonne.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper slips on U.S.-China concerns, but vulnerable to squeeze

(Reuters) - Copper prices slipped on Tuesday as investors feared that
U.S.-Chinese trade talks would make little progress, but the metal was
vulnerable to a squeeze higher due to heavy bearish positions, an analyst
said.

Washington blacklisted Chinese companies over Beijing’s treatment of
predominantly Muslim ethnic minorities while President Donald Trump said a
quick trade deal was unlikely.

The net speculative short position for LME copper has risen to 12% of open
interest, the highest in a year, while for LME aluminium it has climbed to
31%, according to estimates by Marex Spectron, the broker’s Alastair Munro
said in a note.

Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin, will begin trade talks in Washington on
Thursday, the first minister-level negotiations in several months.

Three-month copper on the London Metal Exchange (LME) failed to trade in
official open-outcry activity but was bid down 0.6% at $5,687.50 a tonne,
trimming gains of 1.4% in the previous session.

* ANTOFAGASTA: Chile’s Antofagasta has requested government mediation to
resolve a contractual dispute with supervisors at its flagship Los Pelambres
copper mine, the supervisors’ union said.

* COPPER SPREAD: The discount of LME cash copper to the three-month contract
CMCU0-3 increased to $36.90 a tonne by Monday’s close, the highest since
August 2018, indicating plentiful supplies in the LME system. It was last at
$36.65 on Tuesday morning.

* NICKEL STOCKS: LME nickel inventories MNISTX-TOTAL continued to fall on
Tuesday to 117,522 tonnes, the lowest since August 2012.

Three-month LME nickel fell as much as 3.3% to a one-week low of $17,135 a
tonne, but later pared the losses to a bid of $17,470 in official activity,
a decline of 1.4%. It slipped for a second day after jumping 3.4% last week
amid a drawdown in stocks.

* PRICES: LME aluminium was bid down 0.5% in official rings at $1,738 a
tonne, zinc shed 0.7% to trade at $2,273.50, lead lost 0.6% to a bid of
$2,176, while tin added 0.7% to trade at $16,445.

Gold dips as dollar holds strong ahead of Sino-U.S. trade talks

(Reuters) - Gold prices slipped to a near one-week low on Tuesday, declining
for a third straight session, weighed down by a firmer dollar ahead of the
upcoming trade talks between China and the United States.

Spot gold was down 0.3% at $1,489.32 per ounce, as of 0627 GMT. Prices had
dropped 1% in the previous session.

U.S. gold futures fell 0.6% to $1,494.60 per ounce.

Top-level trade talks are scheduled to resume on Thursday, when Chinese Vice
Premier Liu He meets with U.S. Trade Representative Robert Lighthizer and
Treasury Secretary Steven Mnuchin.

Asian shares inched up in early trade, though caution prevailed as
expectations of a trade deal dimmed after Washington blacklisted Chinese
companies over Beijing’s treatment of predominantly Muslim ethnic minorities
and President Donald Trump said a quick trade deal was unlikely.

The uncertainty regarding the outcome of trade talks had pushed the dollar
index higher overnight. A stronger U.S. currency makes dollar-denominated
gold more expensive for holders of other currencies, which could subdue
demand.

The talks are to proceed ahead of a scheduled increase in U.S. tariffs on
$250 billion worth of Chinese goods to 30% from 25% on Oct. 15. Trump has
said the tariff increase will take effect if no progress is made in the
negotiations.

Data from China on Tuesday did little to cheer markets after the services
sector grew at its slowest pace in seven months in September, despite a
strong increase in new orders.

“For the moment we are fairly in a trading range. There is support between
$1,480 and $1,490, and resistance around $1,525 to $1,530,” McCarthy added.

Investors now await the U.S. Federal Open Market Committee’s minutes from
its September meeting, due on Wednesday, for clues on whether the Fed will
cut rates at its October meeting, in what could be its third interest rate
cut for the year.

Spot gold may break a support at $1,488 per ounce and fall towards the range
of $1,446-$1,462, Reuters technical analyst Wang Tao said.

Among other precious metals, silver dropped 0.6% to $17.34 an ounce, while
platinum and palladium rose 0.4% each to $880.25 and $1,665.93 respectively.

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
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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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