Bulls n Bears Daily Market Commentary : 17 October 2019

Fri Oct 18 00:46:52 CAT 2019

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Bulls n Bears Daily Market Commentary : 17 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$8,655,872.65 with foreign buys at ZWL$ 2,676,825.00 and
foreign sales were ZWL$ 3,135,184.73 Total trades were 191

.

The All Share index closed the day on a higher note,recovering 0.15 points
to close at 228.34 points. POWERSPEED added $0.0290 to $0.3500, OLD MUTUAL
LIMITED  added $0.0274 to $33.0274 and DAIRIBOARD  traded $0.0200 higher at
$0.5100. MASIMBA HOLDINGS  advanced by $0.0200 to end at $0.1600 and ARISTON
LIMITED increased by $0.0188 to close at $0.1240.

Gains were countered by losses in CASSAVA SMARTECH which dropped $0.0115 to
$1.4779, ECONET WIRELESS  which lost $0.0059 to $1.6891 and DAWN PROPERTIES
was $0.0047 weaker at $0.0803. OK ZIMBABWE LIMITED  also decreased by
$0.0029 to settle at $0.6458 and SIMBISA BRANDS  traded $0.0011 lower at
$1.3875.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Ugandan shilling seen firmer, Tanzania's to soften

(Reuters) - Traders expect Uganda’s shilling to strengthen against the
dollar next week, but predict a weakening of the Tanzanian currency and
those of Kenya and Zambia to hold steady.

UGANDA

The Ugandan shilling is forecast to strengthen against the U.S. dollar next
week, helped by hard currency inflows from investors buying government debt.

At 0949 GMT commercial banks quoted the shilling at 3,685/3,695 per dollar,
compared to last Thursday’s close of 3,680/3,690.

Uganda’s central bank is next week expected to auction a total of 120
billion shillings ($32.56 million) worth of Treasury bills of various
maturities.

TANZANIA

Tanzania’s shilling is likely to face pressure, with traders forecasting
more demand for U.S. dollars from importers.

Commercial banks quoted the shilling at 2,297/2,307 on Thursday, slightly
lower from 2,294/2,304 a week earlier.

KENYA

The Kenyan shilling is seen stable against the dollar in due to tightening
liquidity in the local money market as banks buy shillings to meet local
reserve ratio requirements, traders said.

Commercial banks quoted the shilling at 103.65/75 per dollar, compared with
103.70/90 at last Thursday’s close.

ZAMBIA

Zambia’s kwacha is expected to continue trading sideways next week as tight
liquidity curtails U.S. dollar demand from importers and buyers.

On Thursday, commercial banks quoted the currency of Africa’s No.2 copper
producer at 13.1700 per dollar from a close of 13.1500 a week ago.

South Africa's rand firms as cabinet approves power plan

(Reuters) - South Africa’s rand firmed on Thursday after the country’s
cabinet approved the promulgation of its long-delayed plan for electricity
generation amid nationwide power cuts by state utility Eskom.

At 1535 GMT, the rand was 1% firmer at 14.7900 per dollar.

The Integrated Resource Plan (IRP 2019) will replace a previous blueprint
not updated for almost a decade, and deals with electricity generation and
the energy mix South Africa will rely on in the immediate future.

South Africa was hit by power cuts for a second day on Thursday with Eskom
saying a number of generating units were still out of service and some would
not be back up and running for a few days.

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.

Moody’s is the last of the big three credit rating agencies to have an
investment grade rating on South Africa and is due to deliver its latest
credit review on Nov. 1.

Equities fell, with the broader Johannesburg All-share index down 0.17% to
55,993 points, while the blue chip Top-40 index edged 0.28% lower to 49,715
points.

Diversified miners were among the losers, with Anglo American down 1.27% to
360.54 rand, while BHP Group shed 2.010% to 305.93 rand.

Bucking the trend were gold miners, with bullion edging up as investors
focused on lingering uncertainties over U.S.-China trade ties.

DRDGOLD gained 2.5% to 6.95 rand, Harmony rose 2.070% to 45.41 rand, and
Sibanye-Stillwater was up 1.96% at 25.45 rand.

The yield on the benchmark government bond due in 2026 fell 1.3 basis points
to 8.26%. 

Burundi

Burundi arrests dozens in currency market crackdown

(Reuters) - More than 40 people have been arrested in Burundi since the
penalties for black market trading were increased last month, the ministry
of public security has said.

The central African country has been short of foreign currency since foreign
aid was frozen in 2016, after President Pierre Nkurunziza ran for a third
term despite protests from opponents who said he was violating the terms of
a deal that ended a civil war.

A ministry spokesman said on Wednesday that those who had been arrested were
accused of “breaching the central bank regulation on foreign exchange”.

The dollar fetches about 2,900 Burundian francs on the streets of the
capital Bujumbura, nearly double the official rate of 1,876, traders said.

The central bank said in October that official reserves in the first quarter
of the year covered only three weeks of imports, and has not answered
requests for more recent information.

Dollars are sold at the official rate only to importers of essential goods
such as fuel and fertiliser.

Many businesses say they are unable to import merchandise and could be
forced to shut down. One woman who imports decorations for weddings said she
could no longer pay for supplies.

A dozen foreign exchange traders in Bujumbura said that, because they could
not buy dollars at the official rate, they purchased them from neighbouring
Democratic Republic of Congo to sell on the black market.

       <mailto:info at bulls.co.zw> 

LONDON/NEW YORK

Stocks, sterling rise on long-awaited Brexit deal

(Reuters) - A deal on Britain’s departure agreed with the European Union
sent sterling to a five-month high on Thursday and hoisted European stocks
to a 1-1/2-year peak before doubts about UK parliamentary support brought
them back to earth.

Wall Street rose as upbeat earnings from Netflix and Morgan Stanley affirmed
a strong start to the U.S. reporting season, while the dollar fell against
the euro as the common currency got a lift on the long-awaited Brexit deal.

But the Irish border riddle remained a Brexit sticking point for Northern
Ireland’s Democratic Unionist Party (DUP), which withheld its backing for
the deal with the EU and created doubt among investors.

The DUP’s opposition reduces the chances of British Prime Minister Boris
Johnson winning parliamentary ratification at the extraordinary session of
parliament on Saturday. But after weeks of negotiations, British and EU
leaders welcomed an agreement being struck.

Sterling, the key gauge of Brexit sentiment, jumped as much as a 1% against
the dollar, putting it on course for its best six-day gain in more than 30
years before the doubts and grumbles set in.

But market optimism faltered when the Northern Ireland party said it could
not support the agreement.

Having run up as far as $1.2988, sterling fell well under $1.28 before
regaining momentum to trade at $1.2863, up 0.26% on the day.

European shares edged lower, even as fading optimism over the Brexit deal
was offset by strong earnings from Sweden’s Ericsson.

MSCI’s gauge of stocks across the globe gained 0.34%.

France’s CAC 40 index eased 0.4% after hitting a fresh 12-year high earlier,
while Germany’s DAX closed down 0.1%, though near its strongest level in
over a year.

Shares in domestically focused British companies and Irish firms, which have
been seen as a barometer on Brexit sentiment, also gave up initial gains.

London’s benchmark FTSE index closed up 0.2% and the broad-market
pan-European STOXX 600 fell 0.1%, while the FTSEurofirst index of leading
regional European shares slid 0.12%.

UK Gilts, German Bunds, gold and most other safe havens also rebounded after
selling off.

On Wall Street, Netflix Inc shares rose 2.47% in heavy trade after the video
streaming service provider added slightly more paying subscribers than Wall
Street expected in the third quarter.

Morgan Stanley gained 1.52% after the big lender beat analysts’ expectations
for quarterly profit, buoyed by higher revenue from bond trading and M&A
advisory fees.

Earnings season is dictating U.S. market moves, which has historically been
the case, said Kristina Hooper, chief global market strategist at Invesco.

Once the third-quarter earnings season winds down macro factors are likely
to play a bigger role, such as the U.S.-China trade talks, and price swings
will pick up, she said.

The Dow Jones Industrial Average rose 23.9 points, or 0.09%, to 27,025.88.
The S&P 500 gained 8.26 points, or 0.28%, to 2,997.95 and the Nasdaq
Composite added 32.67 points, or 0.4%, to 8,156.85.

Emerging-market stocks also gained for a sixth day - their longest winning
streak since early April - after U.S. Treasury Secretary Steven Mnuchin said
U.S. and Chinese trade negotiators were nailing down a Phase 1 trade deal
text for their presidents to sign next month.

The dollar index fell 0.39%, with the euro up 0.49% to $1.1124. The Japanese
yen strengthened 0.12% versus the greenback at 108.66 per dollar.

Oil prices rebounded after draw-downs in U.S. fuel inventories, but the
gains were capped by a larger-than-expected rise in crude stockpiles and a
series of weak economic figures.

Brent crude futures settled up 49 cents at $59.91 a barrel. U.S. West Texas
Intermediate crude rose 57 cents to settle at $53.93.

Gold rose as weak U.S. retail sales rekindled fears of an economic slowdown
and concerns about possible risks to the Brexit deal supported bullion.

U.S. gold futures settled 0.3% higher at $1,498.30 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices gain as trade negotiators firm up U.S.-China deal

(Reuters) - Copper inched higher on Thursday as negotiators from the United
States and China worked on firming up the first phase of a trade deal as
part of efforts to end a protracted dispute.

The tit-for-tat trade war has rocked global markets, disrupted supply chains
and sapped demand for metals. China accounts for nearly half of global
copper consumption.

U.S. Treasury Secretary Steven Mnuchin said late on Wednesday that U.S. and
Chinese trade negotiators were working on nailing down the text of the Phase
1 deal for their presidents to sign next month.

Meanwhile, China’s Commerce Ministry said on Thursday it sought a phased
agreement in the 15-month-long dispute and hoped to cancel tariffs as soon
as possible.

Three-month copper on the London Metal Exchange gained 0.2% to $5,739 a
tonne in final open-outcry trading.

U.S. MANUFACTURING: U.S. manufacturing output fell more than expected in
September, hampered by a strike at General Motors, and the outlook for
factories remained weak amid slowing global growth and unresolved trade
tensions.

COPPER: China’s top copper smelters on Thursday lifted their floor treatment
and refining charges for the fourth quarter of 2019 by 20% from the previous
quarter.

COPPER SUPPLY: MMG Ltd said copper production from its Las Bambas operation
in Peru would be marginally below guidance due to a blockade by locals.

CODELCO: The world’s largest copper producer has dropped a 2017 plan to sell
“green copper” at a premium price to customers using more sustainable
practices like renewable energy and recycled water to cut its carbon
footprint.

STOCKS: LME nickel inventories slid to their lowest in more than seven
years, with headline stocks falling 2,760 tonnes to 88,302 tonnes, the
lowest since December 2011. MNISTX-TOTAL

NICKEL: The global nickel market deficit narrowed to 100 tonnes in August
from a shortfall of 7,000 tonnes in the previous month, the International
Nickel Study Group said.

LME nickel ended 1.1% lower at $16,270 a tonne, its lowest since Aug. 29.

TREATMENT CHARGES: Zinc treatment and refining charges are expected to
remain at high levels due to rising mine supply from Australia and South
Africa, industry participants said this week at a gathering in China.

TIN CLOSURE: China’s Yunnan Tin said its smelting unit will halt production
from Oct. 21 for up to 50 days for maintenance, hitting about 10% of output.

LME tin ended 1.8% higher at $17,150 a tonne, after touching a near
one-month high.

PRICES: LME aluminium ended 0.1% lower at $1,727 a tonne, zinc added 0.2% to
$2,439 and lead rose 1.4% to $2,190.

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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