Bulls n Bears Daily Market Commentary : 16 October 2019

Thu Oct 17 01:13:18 CAT 2019

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Bulls n Bears Daily Market Commentary : 16 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$7,864,530.01 with foreign buys at ZWL$ 3,519,905.50 and
foreign sales were ZWL$ 2,999,177.00 Total trades were 217.

The All Share index eased a marginal 0.02 points to close at 228.19 points.
PPC dropped $0.2600 to $3.1000, INNSCOR lost $0.0410 to $2.7928 and OLD
MUTUAL LIMITED  was $0.0325 weaker at $33.0000. SIMBISA  also decreased by
$0.0085 to settle at $1.3886 and CASSAVA SMARTECH traded $0.0057 lower at
$1.4894.

Losses were countered by gains in RIOZIM  which added $0.3903 to $2.5703,
DAIRIBORD  added $0.0100 to $0.4900 and LAFARGE  traded $0.0056 higher at
$1.7200. AFRICAN SUN  and SEEDCO INTERNATIONAL LIMITED  both increased by
$0.0050 to close at $0.5075 and $2.7650 respectively.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand rattled by power cuts, stocks led higher by Sibanye

(Reuters) - The rand fell on Wednesday as power cuts by state utility Eskom
highlighted the challenges facing South Africa’s ailing economy.

But the weaker currency and strong palladium prices lifted the main South
African stock indexes to a 3-1/2-week high.

At 1505 GMT, the rand was 0.47% weaker at 14.9600 per dollar, after earlier
hitting a one-week low of 15.0550.

Wednesday’s power cuts, after a number of Eskom generating units broke down,
put more pressure on the country’s weak economy ahead of a review by Moody’s
on Nov. 1.

Moody’s is the last of the big three credit rating agencies to have an
investment grade rating on South Africa.

Debilitating power cuts in February and March pushed first-quarter economic
growth into contraction and raised the likelihood of South Africa losing an
investment-grade rating.

On the stock market, Sibanye-Stillwater led the Top-40 index higher as the
precious metals miner benefited from deficit-hit palladium.

The metal used in vehicle exhausts to reduce harmful emissions rose 2.4% to
$1,774.32 an ounce, after hitting a record high of $1,779.23 earlier.

This pushed Sibanye up 5.44% to 25.01 rand.

The weaker currency also sent commodity stocks such as Harmony Gold up 2.99%
to 44.49 rand, AngloGold Ashanti up 2.11% to 300.19 rand and Sibanye.

A weaker rand is beneficial for commodity companies because their exports,
sold in dollars, are more affordable.

Healthcare group Mediclinic International rose to its highest level in
almost a year, closing 3.83% higher at 70.50 rand after saying it expects
higher first-half core earnings.

The Johannesburg All-Share index rose 0.93% to 56,090, while the Top-40
index gained 0.94% to 49,855 points.

In fixed income, the yield on the benchmark government bond due in 2026 was
up 3.5 basis points to 8.27%. 

Kenya

Kenyan shilling strengthens against the dollar

(Reuters) - The Kenyan shilling strengthened against the dollar on Tuesday
with inflows from diaspora remittances and tightening liquidity in the local
money

market easing dollar demand from merchandise importers, traders said. 

At 0952 GMT, commercial banks quoted the shilling at 103.55/75 per dollar,
compared with 103.65/85 at Monday's close.

       <mailto:info at bulls.co.zw> 

London

Brexit countdown is sending the pound on a wild ride. There's more to come

London (CNN Business), The next day or two will be crucial for the pound,
which has shot up in the past week but remains highly volatile.

A Brexit agreement "feels unlikely" to be reached on Wednesday during crunch
talks between UK and EU negotiators, a government source has told CNN. The
source says 10 Downing St is "guiding operationally not to expect anything
tonight."

Traders remain on edge as British Prime Minister Boris Johnson races to
hammer out an agreement to take the United Kingdom out of the European Union
before the October 31 deadline. Johnson needs to come up with a deal before
EU leaders meet on Thursday, and before the UK parliament convenes for an
extraordinary session on Saturday.

The pound was trading just above $1.28 at 3:26 p.m. ET on Wednesday, and
analysts believe it could jump as high as $1.35 or even $1.40 if Johnson is
able to secure a deal that avoids a chaotic Brexit that ruptures trade and
economic ties. One week ago, the pound was trading close to $1.22.

The Brexit process has already wreaked havoc on the pound, one of the most
traded currencies in the world.

Before the 2016 vote to leave the European Union, the pound was worth nearly
$1.50. The value of the currency dropped sharply following the referendum
and spent most of the next three years trading below $1.35.

Economists say Brexit uncertainty has already damaged the country's economy
by hitting business investment and manufacturing. According to the Centre
for European Reform, the UK economy is 2.9% smaller that it would have been
if Brits had voted to remain in the European Union.

For investors, the big problem right now is the lack of clarity at a
high-stakes moment.

The United Kingdom and European Union are locked in secret negotiations
ahead of the EU summit in Brussels on Thursday. Johnson needs a green light
from the leaders of the other 27 EU member states to move forward.

The pound has gained six cents against the dollar over the past week amid
signs of significant progress. But it will be difficult for the United
Kingdom and the European Union to iron out their differences in time.
Johnson is attempting a tough balancing act: he needs to make concessions to
Europe over the land border with Ireland without alienating lawmakers back
home.

That may not be possible.

What happens next with Brexit could make or break the UK economy 

Craig Erlam, senior market analyst at Oanda, a currency broker, thinks that
a big move for the pound could come late on Wednesday as the outcome of the
talks becomes evident. The other option, he said, is that the currency
reacts strongly on Sunday in Asia, the first time markets will have an
opportunity to trade the pound after Saturday's parliamentary session.

But, he cautioned, it's impossible to say for sure.

Without an agreement that's palatable to both Europe and UK lawmakers,
Johnson could be forced to ask for another extension to the Brexit deadline.
Or, with the approval of the opposition Labour Party, Johnson's government
could trigger a general election.

Mark McCormick, global head of foreign exchange strategy at TD Securities,
has warned that the pound's rise in the past week makes it more exposed to
bad news.

Goldman Sachs, meanwhile, has advised clients to bet that the pound will
rise against the dollar, predicting that sterling will jump to $1.30 when a
deal happens.

The only consensus, really, is that the pound could face considerable
pressure — in either direction.--cnn

 <mailto:info at bulls.co.zw> 

Commodities Markets

Australia's South32 coking coal output rises 8% on Illawarra ramp-up

(Reuters) - South32 Ltd on Thursday reported an 8% rise in coking coal
production for the first quarter, as the miner ramped up output at its
Illawarra project in New South Wales.

Production of the steel-making ingredient, known as metallurgical or coking
coal, was about 1.7 million tonnes in the September quarter, compared with
1.5 million tonnes a year earlier. (bit.ly/33CYBEU)

The Illawarra operations, which account for nearly all of the company’s
coking coal output, rose 9% in the quarter.

The miner maintained its fiscal 2020 production forecast across all of its
operations, with Illawarra expected to produce 7 million tonnes of coal for
the year.

The company, spun off from mining giant BHP Group in 2015, saw output from
its Dendrobium and Appin mines at Illawarra rise following infrastructure
improvements.

Meanwhile, the miner’s aluminium production during the quarter was largely
unchanged from last year, while Alumina production ticked up slightly.

In August, South32 announced a 25% decline in annual profit as the trade war
between China and the United States hurt aluminium prices. 

Gold climbs, eyes U.S.-China ties; palladium bolts to record

(Reuters) - Gold rose on Wednesday on concerns that Washington’s stance on
Hong Kong could hamper trade negotiations between the United States and
China and as investors awaited a key Brexit summit, but bullion’s gains were
dwarfed by deficit-hit palladium as it smashed new records.

Spot gold rose 0.5% to $1,487.73 per ounce at 12:01 p.m. EDT (1601 GMT).
U.S. gold futures were up 0.6% to $1,491.60.

In a move that soured ties between the United States and China on Tuesday,
the U.S. House of Representatives passed four pieces of legislation taking a
hard line on Beijing, three related to pro-democracy protests in Hong Kong,
drawing opposition from China.

Analysts are also wary of the situation in Europe as they await the outcome
of the Brexit summit in Brussels on Thursday and Friday which will determine
whether Britain is headed for a deal to leave the bloc on the due date, a
disorderly no-deal exit or a delay.

Also helping gold, U.S. equity markets opened lower as positive earnings
offset cautious traders worried about the legislation targeting Hong Kong.

Investors also await the U.S. Federal Reserve meeting at the end of the
month for clarity on further interest rate cuts.

Indicative of sentiment, holdings of the world’s largest gold-backed ETF,
SPDR Gold Shares, fell on Tuesday to 919.66 tonnes, but held close to their
highest level in nearly three years.

Elsewhere, palladium rose 2.2% to $1,770.67 an ounce, after hitting a record
high of $1,779.23 earlier.

The metal used in vehicle exhausts to reduce harmful emissions has climbed
about 40% so far this year on a sustained supply crunch.

However, U.S. Global Investors’ Matousek said palladium’s recent jump has
been more technical than anything else.

Silver edged 0.1% higher to $17.39 per ounce and platinum fell 0.4% to
$885.38.

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
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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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