Bulls n Bears Daily Market Commentary : 15 October 2019

Wed Oct 16 01:10:04 CAT 2019

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Bulls n Bears Daily Market Commentary : 15 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$10,389,616.89 with foreign buys at ZWL$ 3,470,138.00 and
foreign sales were ZWL$ 3,659,525.00 Total trades were 215.

The All Share index dropped another 2.56 points to close at 228.21 points.
OLD MUTUAL LIMITED lost $0.4143 to close $33.0325, INNSCOR AFRICA LIMITED
eased $0.1486 to $2.8338 and ECONET   traded $0.0425 lower at $1.6999.
CASSAVA SMARTECH   also decreased by $0.0417 to end at $1.4951 and PADENGA
traded $0.0166 weaker at $2.8916.

Trading in the positive; MASIMBA   added $0.0066 to $0.1400, DAIRIBORD
gained $0.0050 to close at $0.4800 and OK ZIMBABWE   was $0.0032 firmer at
$0.6500. SEEDCO INTERNATIONAL LIMITED   also increased by $0.0025 to $2.7600
and SEEDCO  rose by $0.0021 to end at $2.0025.

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  Global Currencies & Equity Markets

Kenya

IMF cuts Kenya's economic growth forecast for 2019 and 2020

(Reuters) - Kenya’s economy is expected to expand by 5.6% this year and 6.0%
in 2020, the International Monetary Fund said on Tuesday, lowering its
forecasts from earlier this year.

The Fund did not say what was behind the lower projections in its latest
World Economic Outlook. In April it forecast growth of 5.8% for 2019, and
5.9% for next year.

With a well-diversified economy that does not depend on a single commodity
or sector, Kenya has enjoyed rapid growth in recent years, but critics say
it is not enough to lift many citizens out of poverty.

The IMF’s latest forecast is also lower than the government’s.

In September, Kenya’s Finance Ministry forecast the economy would grow by
6.0% this year after 6.3% in 2018.

Data from the Kenya National Bureau of Statistics last month showed the
economy grew by 5.6% in the second quarter of this year, down from 6.4% in
the same period a year earlier.

It attributed this to a slowdown in the farming sector, which accounts for
nearly a third of output, manufacturing and transport.

As well as runaway spending, President Uhuru Kenyatta’s government has been
criticised for failing to stamp out widespread corruption.

Critics also accuse the government of saddling future generations with too
much debt. The government says higher borrowing is required to fund
infrastructure.

South Africa

South Africa's rand steadies, Sasol leads stocks higher

(Reuters) - South Africa’s rand steadied in late trade on Tuesday,
struggling for momentum as fading optimism over the latest China-U.S. trade
truce weighed on risk appetite, while stocks rose, led by chemicals firm
Sasol .

At 1510 GMT, the rand traded at 14.8450 per dollar, not far off its close of
14.8350 on Monday.

The United States on Friday outlined the first phase of a trade deal and
suspended this week’s scheduled tariff hikes on Chinese goods. Bloomberg
reported on Monday that China wanted more talks to hammer out the details of
the phase-one deal before signing it.

Focus in markets was also on the Brexit talks, in the absence of domestic
catalysts.

Officials from Britain and the EU will meet at a make-or-break summit on
Thursday and Friday that will determine whether Britain is headed for a deal
to leave the bloc on Oct. 31, a disorderly no-deal exit or a delay.

In the equities market, Sasol jumped to a more than three-week high after it
gave a definite date on which its 2019 results will be released and said it
had completed its review into cost overruns at its Lake Charles project in
the U.S.

Sasol, whose share price has lost a third of its value so far in 2019,
closed 4.85% firmer at 287.93 rand.

Technology service provider EOH Holdings Ltd ended the session up 4.40% at
12.52 rand after it said it had blacklisted and suspended payments to 50
enterprise development partners it says were implicated in nearly 1 billion
rand ($67.36 million) of suspicious transactions.

The Johannesburg-based company’s chief executive officer, Stephen van
Coller, has been trying to clean up the firm from alleged corrupt dealings
by EOH employees and fix a number of governance issues mentioned in a
wide-ranging probe by law firm ENSafrica.

The Johannesburg All-Share index rose 0.57% to 55,532 points, while the
Top-40 index climbed 0.57% to 49,391.

In fixed income, the yield on the benchmark government bond due in 2026 was
up 0.5 basis points at 8.23%. ($1 = 14.8463 rand)

       <mailto:info at bulls.co.zw> 

Global Markets

Stocks jump on report Brexit deal may be close, oil slips

(Reuters) - Stocks in Europe and on Wall Street jumped about 1% on Tuesday
on strong U.S. corporate results and a possible deal to avoid a disorderly
British exit from the European Union, while oil prices fell as weak China
data kindled global economic fears.

Media reports quoting EU officials as saying negotiators were close to a
Brexit deal triggered a late afternoon rally across European equity markets
and helped further lift Wall Street gains built on strong earnings reports.

Sterling rose to its highest level against the dollar and the euro since May
after Bloomberg said British and EU negotiators were closing in on a draft
Brexit deal.

Optimism over a Brexit breakthrough led the benchmark FTSE 100 stock index
in London, which usually suffers from a pound rally, to pare most losses and
end a tad lower.

The pound has strengthened nearly 5% over the past week as investors rushed
to reprice the prospect of a last-minute Brexit deal before the Oct. 31
deadline.

The jump in stocks eased ongoing concerns about the impact of the prolonged
U.S.-China trade war on global growth though investors held out hope the
dispute could also be unwound.

MSCI’s gauge of stocks across the globe gained 0.87% while the FTSEurofirst
300 index of leading European regional shares closed up 0.93%. The broad
pan-European STOXX 600 index rose 1.11%.

The market is at an inflection point and may get good news from two major
headwinds, the U.S.-China trade war and Brexit, said David Joy, chief market
strategist at Ameriprise Financial.

Optimism over a potential Brexit deal helped allay concerns about a slowing
economy brought on by the U.S.-China trade war, which has crimped German
exports.

But the mood among German investors worsened less this month than analysts
had expected, a ZEW survey showed, amid concern that Europe’s biggest
economy might be headed for recession.

ZEW’s headline economic sentiment index, which in August touched its lowest
in almost seven years, appears to have stabilized. Investor assessment of
German’s current economic condition in October was as pessimistic as it was
in 2010.

Upbeat results from JPMorgan Chase & Co, UnitedHealth Group Inc and Johnson
& Johnson eased concerns about the impact from a prolonged U.S.-China trade
war on corporate America.

JPMorgan hit a record high and rose 3.01%, while UnitedHeath jumped 8.16%
and J&J added 1.62%.

The Dow Jones Industrial Average rose 237.44 points, or 0.89%, to 27,024.8.
The S&P 500 gained 29.53 points, or 1.00%, to 2,995.68 and the Nasdaq
Composite added 100.06 points, or 1.24%, to 8,148.71.

Chinese stocks snapped a five-day winning streak after the latest factory
gate data added to China’s economic woes and the end of the trade war
remained elusive.

The dollar index fell 0.15%, with the euro up 0.04% to $1.1032. The Japanese
yen weakened 0.40% versus the greenback at 108.86 per dollar.

Sterling rose to $1.2774, up 1.33% on the day.

Oil futures closed lower. Brent crude fell 61 cents to settle at $58.74 a
barrel, while U.S. West Texas Intermediate (WTI) crude dropped 78 cents to
settle at $52.81 a barrel.

Prices for the benchmark U.S. Treasury’s 10-year note fell 4/32, pushing its
yield up to 1.7692%.

Euro zone government bonds sold off after media reports that UK and EU
negotiators were close to a draft deal on Brexit boosted investors’ risk
appetite.

Irish government bonds outperformed euro zone peers on Brexit hopes. Yields
on Irish 10-year bonds were back in negative territory at -0.02% after
sliding 6 basis points on the day.

Dublin-listed shares surged 2.6% to the highest since September 2018.

Britain is Ireland’s largest trading partner and its border with the British
province of Northern Ireland has been the thorniest issue in Brexit
negotiations.

Gold fell as growing risk appetite boosted investor demand for equities.

U.S. gold futures settled down 0.9% at $1,483.50 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Nickel bounces after heavy selling; copper in doldrums

(Reuters) - Nickel prices rebounded on Tuesday after heavy losses a day
earlier, while copper was weighed down by worries about weak economic
growth.

Traders said it was unclear who was behind the selling during final open
outcry trading on Monday on the London Metal Exchange that fuelled a $825
tumble of nickel in less than five minutes.

Broker Marex Spectron said in a note that over 1,000 lots were sold in the
closing ring, which resulted in LME benchmark nickel ending with losses of
more than 5% on Monday.

It pared some of those losses on Tuesday. Nickel failed to trade in official
open-outcry activity, but was bid up 1.8% to $16,900 a tonne.

The breach of support at $17,000 also sparked further selling, he added.

FUNDAMENTALS

* SPREAD: LME cash nickel’s premium over the three-month contract MNI0-3
dipped slightly on Monday to close at $135 a tonne, having hit a peak of
$214 two weeks ago, indicating tightness in prompt supplies was easing
somewhat.

* STOCKS: Nickel stocks in LME-approved warehouses MNISTX-TOTAL rose for the
first time in over two weeks after falling to the lowest for more than seven
years, daily LME data showed on Tuesday.

* CHINA DATA: China’s factory gate prices declined at their fastest pace in
more than three years in September, data showed.

* COPPER: LME three-month copper was bid down 0.7% in official rings at
$5,778 a tonne on concerns about economic growth following the weak Chinese
data.

* CODELCO: Chile’s Codelco, the world’s largest copper producer, said on
Monday it was evaluating the closure of its Ventanas copper smelter in a
polluted coastal region.

* PRICES: LME aluminium was bid down 0.4% in official activity to $1,714 a
tonne, zinc rose 0.1% to trade at $2,421.50, lead gained 0.8% to trade at
$2,147.50 while tin added 0.03% to $16,525.

LME nickel recovers on tight stockpiles

(Reuters) - Nickel prices in London jumped on Tuesday, recouping some of the
previous session’s sharp losses, as stockpiles remained at a multi-year low.

Three-month nickel on the London Metal Exchange (LME) rose as much as 4.4%
to $17,285 a tonne after a 5.7% slump in the previous session. It was up
1.7% at 0705 GMT.

The most-traded nickel contract on the Shanghai Futures Exchange (ShFE) fell
as much as 3.8% to 132,480 yuan ($18,730.91) a tonne and was down 3.4% at
the close.

FUNDAMENTALS

* SPREAD: LME cash nickel’s premium over the three-month contract MNI0-3
dipped slightly on Monday to $135 a tonne but still stayed in the premium
zone where it has been since the middle of August, indicating tight prompt
supplies.

* STOCKS: Nickel stocks in LME-approved warehouses MNISTX-TOTAL fell to
94,134 tonnes, the lowest since January 2012, the latest data showed.

* PRICES: LME copper fell 0.3%, aluminium dipped 0.2%, lead rose 0.2% while
tin edged down 0.2%. In Shanghai, copper fell 0.2%, lead dropped 0.9% and
aluminium rose 0.2%.

* HONGQIAO: Top aluminium producer China Hongqiao Group is in discussion
with local authorities in Yunnan province to build an aluminium plant, a
provincial government official said on Tuesday.

* CODELCO: Chile’s Codelco, the world’s largest copper producer, said on
Monday it is evaluating the closure of its Ventanas copper smelter in a
polluted coastal region.

* NYRSTAR: Nyrstar’s Langlois mine in Canada, which produced 24,000 tonne of
zinc content in concentrate last year, will cease production in December due
to rock conditions having deteriorated to an extent to which the company
considers it uneconomic, the company said in a release on Monday.

* LITHIUM: London-listed Bacanora Lithium plans to raise $300 million in
capital early next year and says a deal with China’s Ganfeng Lithium Co Ltd
puts it in a better position to raise the money than when it cancelled a
smaller share sale last year.

* COLUMN: Trump’s non-deal deal with China is mainly significant for
sentiment: Russell

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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