Bulls n Bears Daily Market Commentary : 22 October 2019

Tue Oct 22 20:41:37 CAT 2019

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Bulls n Bears Daily Market Commentary : 22 October 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$7,990,990.66 with foreign buys at ZWL$ 102,776.60 and
foreign sales were nil Total trades were 185

The All Share index retreated by 2.12 points  to close at 227.19 points.
RIOZIM LIMITED  slipped by $0.4800 to $2.6000, SEEDCO  dropped by $0.1919 to
end at $2.0056 whilst CBZ  was $0.0600 lower at $0.6000. INNSCOR  also
decreased by $0.0548 to end at $2.8155 and CASSAVA SMARTECH  traded $0.0463
weaker at $1.4009.

Trading in the positive; OLD MUTUAL LIMITED   added $0.2296 to $33.3066,
PROPLASTICS   rose by $0.1300 to $0.8800 and DAIRIBORD   traded $0.0400
higher at $0.5500. ZIMPAPERS   also gained $0.0040 to $0.1000 and BINDURA
was $0.0026 firmer $0.1350.

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  Global Currencies & Equity Markets

South Africa

South African rand rallies 1% to one-month best, stocks weaker

(Reuters) - South Africa’s rand powered to a one-month best on Tuesday,
lifted by a brightening outlook on a trade deal between China and the United
States and locally by a second day without electricity blackouts.

Stocks slipped despite grocer Pick n Pay’s shares climbing by their most in
18 years, with the bourse dragged down by resource miners and rand hedges.

At 1630 GMT the rand was 1.05% firmer at 14.6150 per dollar, its best level
since Sept. 19, compared to an open of 14.7550.

The rand marked a fourth consecutive session of gains, shaking off lingering
concerns about electricity supply after shock outages last week as state
firm Eskom said failures at some of its stations had throttled capacity.

On Tuesday Eskom had not cut power since Saturday, and was further boosted
by parliament’s decision to greenlight a 59 billion rand bailout proposed by
the treasury in July.

Progress in trade talks between Beijing and Washington has also helped the
rand as emerging market risk appetite picked up globally.

Government bonds also rallied, with the yield on the benchmark 2026 bond
down 7 basis point to 8.205%.

In stocks, the Johannesburg All-Share index fell 0.31% to 55,936 points,
while the Top-40 index dipped 0.45% to 49,610 points, with gold miners the
main drag on the bourse.

Supermarket chain Pick n Pay Stores Ltd led the All-Share, up more than
10.54% to 67.96 rand after a .5% rise in first-half earnings. 

Uganda

Ugandan shilling unchanged as charity flows lend support

(Reuters) - The Ugandan shilling was stable on Tuesday, underpinned by some
hard currency inflows from non-governmental organisations weighing against
sagging demand.

At 0922 GMT commercial banks quoted the shilling at 3,685/3695, same level
as Monday’s close.

       <mailto:info at bulls.co.zw> 

China

China's central banker says yuan level "appropriate", trade tensions risk to
global economy

(Reuters) - China’s top central banker said on Saturday that potential
escalation of trade tensions and policy uncertainty were the major risk
factors facing the world economy, and market forces were keeping China’s
yuan at an appropriate level.

Yi Gang, the governor of the People’s Bank of China, said in a statement to
the International Monetary Fund’s steering committee that Beijing is “deeply
disappointed” in the IMF’s failure to realign its shareholding structure to
recognize the rising influence of China and other fast-growing economies.

Yi pushed back against the U.S. Treasury’s Aug. 5 designation of China as a
currency manipulator after China’s yuan fell below the psychologically
important level of 7 to the dollar.

His statement said that the depreciation in the yuan since the beginning of
August has been driven by market forces, including volatility prompted by
escalating trade tensions. Yi added that there was “growing market
acceptance for two-way exchange rate fluctuations” in the yuan, also known
as the renminbi or RMB.

In a dig at the Trump administration’s “America First” trade stance, Yi
said: “the wave of populism and protectionism in some countries has
undermined mutual trust, reducing their willingness to cooperate on a
multilateral basis.”

Yi’s statement did not mention the “Phase 1” trade deal that U.S. President
Donald Trump announced on Oct. 11, but warned of the problems that trade
tensions have caused for the global economy.

On IMF quotas, Yi said that IMF members needed to honor previous commitments
to adjust the IMF’s shareholding to reflect the growing power of dynamic
emerging market economies and said that China supported an adequately
resourced IMF based on quota resources, not temporary lending arrangements.

The IMF on Friday announced that members had agreed to keep IMF lending
resources at $1 trillion, through extension and a doubling of its crisis
lending fund and a corresponding reduction in bilateral borrowing
arrangements. But in a move that preserves U.S. veto power over major Fund
decisions for four more years, IMF members delayed the next quota review
until December 2023. “The failure to adjust quota shares undermines the
representation, governance, and legitimacy of the IMF,” Yi said. “China
will, along with the other parties, continue to push for reforms of the
IMF’s quotas that will strengthen the voice and representation of emerging
market economies.” 

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Commodities Markets

Gold holds tight range ahead of key Brexit vote, focus on Fed

(Reuters) - Gold steadied in a tight range on Tuesday as investors adopted a
cautious approach ahead of a crucial Brexit vote, while focus shifted to the
U.S. Federal Reserve’s stance on interest rate cuts.

Spot gold was steady at $1,484.60 per ounce as of 1:41 p.m. EDT (1741 GMT).
U.S. gold futures settled mostly unchanged at $1,487.5.

British Prime Minister Boris Johnson faces two pivotal votes in parliament
that will decide whether he can deliver on his pledge to lead Britain out of
the EU in nine days’ time.

Lawmakers vote around 1800 GMT on the 115-page Withdrawal Agreement Bill and
then on the government’s extremely tight timetable for approving the
legislation.

Investors are also awaiting the Federal Reserve’s month-end monetary policy
meeting for further clarity on rates cuts this year.

Federal fund futures imply that traders see a 89% chance for a 25
basis-point rate cut by the U.S. central bank in its month-end monetary
policy meeting.

However, amid mixed signals from Fed policymakers it is unclear if they,
overall, will support a cut.

Meanwhile, equities eked out small gains after some upbeat corporate results
and talk of progress in the China-U.S. trade.

China and the United States have achieved some progress in their trade
negotiations, Chinese Vice Foreign Minister Le Yucheng said on Tuesday.

Those comments came a day after U.S. President Donald Trump spoke of
optimism about a deal, while White House adviser Larry Kudlow said tariffs
on Chinese goods scheduled for December could be withdrawn if talks went
well.

Optimism surrounding the U.S.-China trade is slightly pressuring bullion,
said George Gero, managing director at RBC Wealth Management.

Reflecting sentiment, holdings of gold in exchange traded funds tracked by
Refinitiv have jumped to their highest since mid-2013.

Elsewhere, silver slipped 0.5% to $17.48 an ounce. Platinum was up 0.3% at
$890.50 and palladium was 0.1% lower at $1,756.03 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
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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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