Bulls n Bears Daily Market Commentary : 14 October 2019

Tue Oct 15 00:49:38 CAT 2019

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Bulls n Bears Daily Market Commentary : 14 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$2,383,459.59 with foreign buys at ZWL$ 849,539.23 and
foreign sales were ZWL$ 880,965.00 Total trades were 120.

The All Share index opened the week on a lower note after losing 0.76 points
to close at 230.77 points. OLD MUTUAL LIMITED lost $0.4606 to close at
$33.4468, INNSCOR AFRICA LIMITED eased $0.0982 to $2.9824 and DELTA  traded
$0.0357 lower at $3.7071. SIMBISA BRANDS  also eased $0.0245 to $1.3975 and
CASSAVA SMARTECH was $0.0106 weaker at $1.5368.

Losses were offset by gains in OK ZIMBABWE  which added $0.0346 to $0.6468,
ARISTON gained $0.0170 to close at $0.1020 and FIRST MUTUAL PROPERTIES
rose by $0.0050 to $0.0800. DAWN PROPERTIES  added $0.0040 to end at $0.0850
and SEEDCO LIMITED gained $0.0004 to close at $2.0004.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand retreats from 3-week high, stocks down

(Reuters) - The South African rand on Monday retreated from a three-week
high it hit in the previous session, as a lack of clarity on U.S.-China
trade relations pushed investors back to safe havens and hurt risk appetite.

Stocks snapped a two-session winning streak, dipping in line with global
stock markets.

At 1520 GMT, the rand was 0.49% weaker at 14.8250 per dollar, retreating
Friday’s rally to 14.7100, which was its firmest level since Sept. 19.

U.S. President Donald Trump on Friday outlined the first phase of a deal to
end the protracted Sino-U.S. trade war and suspended a threatened tariff
hike, the biggest step by the two countries in 15 months.

But optimism was tempered on Monday after a Bloomberg report - that China
wants further talks with the United States before signing Trump’s Phase One
deal - hit risk sentiment in Europe.

A Brexit deal was hanging in the balance on Monday after diplomats indicated
the EU wanted more concessions from Prime Minister Boris Johnson and that a
full agreement was unlikely this week.

In South Africa, with retail sales figures on Wednesday the only major
economic data under the spotlight, positioning will continue to be
influenced to by offshore developments, traders said.

On the bourse, stocks retreated from a three-week high hit in the previous
session, with the Johannesburg All-Share index closing 0.57% lower at 55,219
points and the Top-40 index down 0.59% to 49,110 points.

Last week’s trade optimism pushed the all-share index up to a level last
seen on Sept.23.

BP Bernstein Portfolio Manager Gerhard Parkin said stocks were responding to
the trade headlines at the moment, with Vestact analysts saying in a note:
“Like all good political plans and deals, this phase one trade deal is very
light on details.”

Petrochemicals company Sasol halted a two-session winning streak as oil
prices dived 2% due to caution over the first phase of the trade deal.

Sasol shares closed 3.02% weaker at 274.62 rand.

In fixed income, the yield on the benchmark government paper due in 2026 was
down by a single basis point to 8.225. 

Uganda

Ugandan shilling weakens on uptick in dollar appetite

(Reuters) - The Ugandan shilling traded weaker on Monday on the back of an
uptick in appetite for hard currency from both merchandise importers and
players in the interbank market, traders said.

At 0915 GMT commercial banks quoted the shilling at 3,698/3,708, from
Friday’s close of 3,690/3,700. 

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Global Markets

Stocks meander on caution over trade talks, dollar gains

(Reuters) - The U.S. dollar gained on Monday as initial optimism ebbed over
a potential U.S.-China trade deal that President Donald Trump outlined last
week, but a gauge of global equity markets was little changed as investors
sought details.

Oil prices fell more than 3% as scant details about the first phase of a
Sino-U.S. trade deal undercut optimism over a thaw in the dispute that has
sparked a slowdown in global growth.

A slide in Chinese exports picked up pace in September while imports
contracted for a fifth straight month, evidence of further weakness in
China’s economy as tariffs take their toll.

China’s exports fell 3.2% from a year earlier in September, the biggest fall
since February, customs data showed.

MSCI’s gauge of stocks across the globe shed 0.05% while the FTSEurofirst
300 index of leading regional shares fell 0.43%.

Stocks traded near break-even on Wall Street. The Dow Jones Industrial
Average rose 18.71 points, or 0.07%, to 26,835.3. The S&P 500 lost 1.47
points, or 0.05%, to 2,968.8 and the Nasdaq Composite added 2.25 points, or
0.03%, to 8,059.28.

The U.S. benchmark S&P 500 ended Friday with its first weekly gain in a
month after Trump signaled the two sides had taken the first major step in
easing tit-for-tat measures.

Euro zone bond yields fell as caution regarding the trade talks encouraged
investors back into fixed income after a hefty sell-off on Friday that sent
borrowing costs to 2-1/2 month highs.

Trading in U.S. Treasuries was closed for Columbus Day.

Earlier in Asia, stock markets cheered news of a trade agreement. China’s
blue-chip CSI300 index gained 1.1% while the Shanghai Composite Index rose
1.2%.

Markets in Tokyo were closed.

The greenback, Swiss franc and Japanese yen all weakened as optimism over
the trade talks, together with the European Union and Britain restarting
Brexit negotiations, encouraged investors into riskier assets.

The dollar index rose 0.22%, with the euro down 0.18% at $1.102. The
Japanese yen weakened 0.02% versus the greenback at 108.45 per dollar.

Sterling fell about half a percent to $1.2588, retreating from a 15-week
high of $1.2708 on Friday, on optimism Britain could reach a deal on Brexit
with the European Union.

A Brexit deal was hanging in the balance after diplomats indicated the EU
wanted more concessions from Prime Minister Boris Johnson and that a full
agreement was unlikely this week.

Brent crude dropped $1.67 to $58.84 a barrel, while U.S. West Texas
Intermediate (WTI) crude lost $1.47 to $53.23 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Alamos Gold halts construction at Turkish project amid protests

(Reuters) - Alamos Gold has halted construction work at its Kirazli project
in western Turkey, the Canadian gold miner said on Monday, after its mining
concessions expired on Sunday amid protests against the project.

Thousands of Turks, including opposition lawmakers, have been protesting
against the mine, saying the company would use cyanide to extract gold,
contaminating the soil and waters of a nearby dam. They have also said
Alamos has cut down more trees than it had declared.

Alamos Chief Executive Officer John McCluskey told Reuters in August that
the firm had pre-paid for reforestation at the project, adding that it was
impossible for cyanide to leak into the environment as protesters fear.

Alamos said on Monday that while mining concessions have not been revoked
and can be renewed after the expiration date, no more construction can be
completed until the renewal of the concessions.

The company’s U.S.-listed shares were down 4.8% at $5.42 as it also said the
move would delay the first production from Kirazli from earlier expectations
of late 2020.

Alamos said it had met all regulatory formalities and expected to get the
renewal by the expiration date of Sunday. It is now working with the Turkish
Department of Energy and Natural Resources on getting the concessions
renewed.

The company added it would provide an updated guidance on the construction
schedule and budget for the project after the concessions are renewed.

Copper drops as China trade data reinforces negative mood

(Reuters) - Copper prices fell on Monday as trade data from top consumer
China reinforced concerns about demand for industrial metals while signs of
progress on U.S.-China trade talks elicited a cautious response.

Benchmark copper on the London Metal Exchange was untraded in official rings
but bid down 0.8% at $5,750 a tonne. Prices of the metal used as a gauge of
economic health are down more than 10% since the 2019 high above $6,600 a
tonne.

TALKS: U.S. President Donald Trump on Friday outlined the first phase of a
deal to end the trade war with China and suspended threatened increases to
tariffs, but officials on both sides said much more work needs to be done
before an accord can be agreed.

TRADE: A slide in China’s exports gathered pace in September while imports
contracted for a fifth straight month, pointing to further weakness.

AUTOS: Highlighting the weakness in Chinese growth and demand were September
auto sales that fell 5.2% year on year, representing a 15th consecutive
month of declines.

DATA: Chinese data on loans, investment and industrial production this week
will be closely watched by metals markets for clues on demand prospects.

TECHNICALS: Copper prices are expected to struggle to break above the
100-day moving average of $5,835, while support is at $5,760, where the
50-day moving average currently sits.

PERU: Support for copper came from news that Chinese miner MMG might halt
production at its Las Bambas mine in Peru because protesters are blocking
access to the site.

Also on the radar is the prospect of a strike from next Wednesday at small
Chilean copper mine Antucoya, owned by Antofagasta Minerals, after contract
negotiations broke down.

SPREAD: The premium for cash nickel over the three-month contract closed at
an elevated $187 a tonne CMNI0-3 on Friday, close to the $214 hit on Oct. 1,
its highest since April 2009.

The rise is because of falling stocks of the stainless steel ingredient in
LME-registered warehouses, which have dropped below 100,000 tonnes to their
lowest in more than seven years.

Three-month nickel was down 1.9% at $17,220 a tonne.

PRICES: Aluminium was down 0.4% at $1,715, zinc fell 0.4% to $2,409, lead
slid 2.3% to $2,132 and tin gained 0.2% to $16,550.

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
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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
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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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