Bulls n Bears Daily Market Commentary : 10 October 2019

Fri Oct 11 00:49:41 CAT 2019

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Bulls n Bears Daily Market Commentary : 10 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$4,165,005.55 with foreign buys at ZWL$ 1,281,146.28 and
foreign sales were ZWL$ 1,703,821.60Total trades were 148.

The All Share index retreated by 0.08 points to close at 233.30 points.
Cement maker PPC eased $0.6969 to $3.5433, DELTA dropped $0.0454 to end at
$3.7500 and ECONET   was $0.0423 down at $1.7871. SIMBISA  also decreased by
$0.0347 to close at $1.4432 and OLD MUTUAL LIMITED  went further down by
$0.0183 to $34.0000.

Trading in positive; ZB FINANCIAL HOLDINGS   added $0.0700 to $0.7200, OK
ZIMBABWE   gained $0.0480 to settle at $0.6518 and POWERSPEED  was $0.0405
firmer at $0.3205. TSL   also added $0.0400 to $0.7000 and FIRST MUTUAL
LIMITED   was $0.0300 stronger at $0.2400.

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  Global Currencies & Equity Markets

South Africa

South African rand stronger as dollar dips, stocks up

(Reuters) - South Africa’s rand firmed on Thursday, as the dollar retreated
on global markets, with safe-haven demand for the U.S. currency waning as
investors grew optimistic about a trade deal between the United States and
China.

At 1530 GMT, the rand traded at 15.0650 versus the dollar, 0.72% stronger
than its previous close.

The dollar index, a gauge of the greenback’s value against six major
currencies, was on track for its biggest daily drop in five weeks.

Chinese Vice Premier Liu He said on Thursday China is willing to reach an
agreement with the United States on matters that both sides care about so as
to prevent friction from leading to any further escalation.

Trade talks between the two countries started on Thursday.

On the stock market, the Top-40 index closed 1.49% higher at 49,032 points
while the broader all-share was up 1.33% to 55,060.

Shares in cement company PPC Ltd jumped more than 6% to 3.80 rand after the
firm said that Chief Financial Officer Tryphosa Ramano, who was also an
executive director, will step down on Oct. 31.

In fixed income, the yield on the benchmark government bond due in 2026
dipped 1.5 basis points to 8.225%. 

Nigeria

IMF sees higher Nigeria inflation in 2020 on minimum wage, tax rises

(Reuters) - Nigeria’s government may drive up inflation when it increases a
sales tax to partly finance its record 2020 budget and implements a new
minimum wage, the International Monetary Fund (IMF) warned.

The country, Africa’s top oil producer and the continent’s largest economy,
is faced with the choice of boosting growth in the face of lower oil
revenues or fixing its dilapidated road and rail networks, while paying off
debts and funding the higher minimum wage.

President Muhammadu Buhari on Tuesday presented a record 10.33
trillion-naira ($33.8 billion) budget for 2020 to lawmakers as he aimed to
spur growth at the start of his second term in office.

The spending plan includes a value-added tax increase from 5% to 7.5% and a
minimum monthly wage increase to 30,000 naira ($98) from 18,000 to implement
a change that was signed into law in April.

Inflation, which has fallen steadily since May, dropped to a 3-1/2 year low
in August on lower food prices, increasing the chances of an interest rate
cut. However, the central bank has kept rates tight to support the naira.

The price index peaked at 18.7 percent in January last year, and has been in
double digits for three years, outside a central bank’s target of 6-9%. The
bank has said it would maintain its tight stance in 2019, and sees inflation
at 11.31 percent, rising to 12 percent this year before moderating.

The budget unveiled on Tuesday tops the previous record spending plan, which
was the 9.12 trillion-naira budget for 2018.

Buhari’s government has repeatedly rolled out record spending plans but
struggled to fund them due to lower oil output and an inability to boost
non-oil exports. This has kept the government dependent on expensive
borrowing, the IMF said.

The IMF said Nigeria’s economy was recovering, albeit slowly after a 2016
recession, with its dollar buffers declining due to rising capital flight.
It said bigger deficits make monetary policy complex owing to the
government’s reliance on central bank for funding.

Economic growth slowed to 1.94% in the three months to the end of June, the
second quarter in a row to see deceleration. The Fund said growth could pick
up this year to 2.3% on the back of a good harvest and as the oil sector
recovery continues. ($1 = 306.0000 naira) 

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Stocks rise with eyes on trade talks; pound rallies

(Reuters) - Stocks rose on Thursday after U.S. President Donald Trump said
he would meet with China’s top trade negotiator on Friday, while the British
pound rallied after the prime ministers of Britain and Ireland revived hopes
of a possible Brexit deal.

A drop in the U.S. currency, also tied to trade talks, supported
dollar-denominated commodity prices, including oil, which rose after OPEC
pledged to make a decision on supply in December.

Markets were expected to remain highly volatile as high-level U.S.-China
trade negotiations were due to continue through Friday. Trump’s comments
after the close on Wall Street, calling negotiations “very, very good,” sent
S&P 500 futures higher.

The euro hit its highest since Sept. 20 versus the dollar as the greenback
turned weaker across the board, partly due to a Bloomberg report about a
U.S.-China currency pact to stop the yuan’s devaluation. China’s offshore
yuan hit its strongest levels in more than two weeks.

Sterling jumped just shy of 2%, on track for its largest gain against the
dollar in seven months, after Irish Prime Minister Leo Varadkar said a
Brexit deal could be clinched by the end of October after what he called a
very positive meeting with Boris Johnson.

The risk-on environment weighed on the greenback, and even harder on Japan’s
yen.

The dollar index fell 0.4%, with the euro unchanged at $1.1004.

Sterling settled at $1.2440, up 1.9% on the day. The safe-haven yen suffered
through a risk-on session and dropped 0.46% to the greenback at 107.96 per
dollar.

TRADE THE TWEETS

Trump’s tweet announcing his Friday meeting with Liu gave “market
participants a reason to believe that perhaps a trade deal or at least a
partial trade deal might be announced as early as tomorrow,” said Robert
Pavlik chief investment strategist at SlateStone Wealth LLC in New York.

Separately, Chinese state news agency Xinhua reported Liu said Beijing was
willing to reach an agreement with Washington to prevent any further
escalation of the trade war.

The Dow Jones Industrial Average rose 150.66 points, or 0.57%, to 26,496.67,
the S&P 500 gained 18.73 points, or 0.64%, to 2,938.13 and the Nasdaq
Composite added 47.04 points, or 0.6%, to 7,950.78.

The pan-European STOXX600 index rose 0.65% and MSCI’s gauge of stocks across
the globe gained 0.56%.

Emerging market stocks rose 0.35%. MSCI’s broadest index of Asia-Pacific
shares outside Japan closed 0.17% higher, while Nikkei futures rose 0.74%.

Treasury yields also rose on hopes of a trade resolution between the United
States and China. However, some investors highlighted the difficulty of
using the rapidly shifting headlines on trade to direct investment strategy.

Benchmark 10-year notes last fell 24/32 in price to yield 1.6698%, from
1.587% late on Wednesday.

The two-year note <US2YT=RR last fell 5/32 in price to yield 1.5464%, from
1.474% late on Wednesday.

Safe-haven gold fell; spot gold dropped 0.8% to $1,493.85 an ounce.

Copper posted its largest daily gain in a month, up 1.70% to $5,780.50 a
tonne.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips from one-week peak on trade deal prospects

(Reuters) - Gold prices fell from a one-week high on Thursday after a
Chinese state media report suggested that China wants to reach an agreement
with the United States to avoid any escalation in a protracted trade row,
soothing investor concerns.

Spot gold fell 0.7% to $1,494.51 per ounce, as of 10:50 a.m. EDT (1450 GMT),
having hit a one-week peak early in the session. U.S. gold futures were down
0.9% at $1,499.20.

Chinese Vice Premier Liu He said that Beijing is willing to reach an
agreement with the Washington on matters both sides care about, China’s
Xinhua state news agency reported.

Earlier in the session, gold rose to $1,516.77 - its highest since Oct. 3 -
on a report that the Chinese delegation was planning to leave Washington
after just a day of minister-level meetings, a day earlier than expected.

Trade talks between the two countries started on Thursday.

Markets have been on edge for weeks over the U.S.-China trade tensions and
recent data has pointed to further weakening in global growth.

If negotiations break down again, nearly all Chinese goods imports into the
United States - more than $500 billion - could be subject to punitive
tariffs by Dec. 15.

Bullion is often used by investors as a hedge against political and
financial uncertainty and has risen nearly 18% since hitting this year’s low
of $1,265.85 in May, predominantly on trade tensions, dovish monetary policy
by major central banks and gloomy economic growth outlook.

Among other precious metals, silver fell 1% to $17.52 per ounce.

Palladium rose 1% to $1,698.92, while platinum eased 0.2% to $890.29 an
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
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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
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