Bulls n Bears Daily Market Commentary : 30 August 2019

Mon Sep 2 04:11:49 CAT 2019

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Bulls n Bears Daily Market Commentary : 30 August 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 7,306,209.32 with foreign buys at ZWL$862,750 and
foreign sales were ZWL$ 900,500 Total trades were 90.

The All Share index recovered 0.36 points to close the week at 166.36
points. ECONET gained $0.0559 to $1.2573, NMB added $0.0350 to close at
$0.3150 and SEEDCO INTERNATIONAL LIMITED was $0.0260 firmer at $2.2000. OK
ZIMBABWE also gained by $0.0052 to $0.2950 and MASIMBA traded $0.0037
stronger at $0.0837.

Gains were offset by losses in MEIKLES which lost $0.1000 to $1.2000, PPC
eased $0.0959 to end at $2.0041 and INNSCOR traded $0.0239  lower at
$1.8607. DAIRIBORD also decreased by $0.0200 to $0.2900 and POWERSPEED
retreated by $0.0159 to settle at $0.2500.

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  Global Currencies & Equity Markets

Uganda's shilling weaker, Kenya's under pressure

(Reuters) - The Ugandan shilling is expected to weaken next week and Kenya’s
to come pressure amid month-end dollar demand.

UGANDA

The Ugandan shilling is expected to weaken on demand from retailers who need
to pay for goods.

At 0949 GMT, commercial banks quoted the shilling at 3,683/3,693, compared
with last Thursday’s close of 3,683/3,693.

TANZANIA

Tanzania’s shilling is expected to gain as inflows increase from tourism and
agriculture.

Commercial banks quoted the shilling at 2,292/2,302 on Thursday, up from
2,293 to 2,303 recorded last week, a trader in at Dar es Salaam told
Reuters.

He also expects demand side to be driven by energy and manufacturing.

KENYA

The Kenyan shilling will be under pressure in the coming week amid demand
for dollars from energy and manufacturing companies, traders said.

At 1048 GMT, commercial banks quoted the shilling at 103.45/65 per dollar,
compared with 103.10/30 at last Thursday’s close.

NIGERIA

The Nigerian naira is expected to gain next week following the end of loan
repayments and dividend repatriation season and improvement in dollar
liquidity as the central bank auctions debt.

Traders said the currency was quoted at 362.85 on Thursday, up from last
week’s 364, as investors curtailed their exit from local debt and demand for
the currency waned.

Central Bank Governor Godwin Emefiele met with investors in London last week
to discuss the currency after the naira weakened and as yields on local debt
declined.

The central bank plans to auction 400 billion naira in open market bills on
Thursday, to roll over existing debt, traders said.

ZAMBIA

The kwacha is expected to continue trading within the current range against
the U.S. dollar, supported by improved liquidity in the market.

On Thursday, commercial banks quoted the currency of Africa’s second-largest
copper producer at 13.0300 per dollar from a close of 13.0700 a week ago.

South Africa

South Africa's rand firmer, trade hopes lift stocks to 3-week high

(Reuters) - South Africa’s rand firmed against the U.S. dollar in late trade
on Friday, as hopes for a rapprochement on trade between Beijing and
Washington calmed investors’ nerves.

The currency had suffered through much of August, sliding nearly 6% on fears
of a downgrade to junk by Moody’s, and concerns about the trade dispute
between the two major buyers of South Africa’s exports.

But the mood lifted across world markets after U.S. President Donald Trump
said some trade discussions were taking place with China on Thursday, with
more talks scheduled.

At 1520 GMT the rand was 0.77% firmer at 15.2075 per dollar. Stocks climbed
to a three-week high.

The Johannesburg All-share index gained 1.56% to 55,259 points, while the
benchmark Top-40 index rose 1.56% to 49,320 points, to levels last seen on
Aug. 13.

Insurer Discovery closed 6.64% firmer to 115.17 rand as investors looked
beyond a warning that full-year profits would fall.

Greg Davies, trader at Cratos Capital, said the firm’s trading statement
likely gave some comfort to investors who had been concerned after analysts
had flagged accounting assumptions at Discovery that they considered
optimistic.

Retailer Massmart continued to gain after it outlined plans on Thursday to
arrest a decline in profits and margins, and closed up 5.39% at 45.17 rand.

In fixed income, the yield on the benchmark 10-year government issue rose
3.5 basis points to 8.23%.

$1 = 15.2369 rand

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America

Stocks edge higher but post monthly loss; yuan weakens as tariffs loom

(Reuters) - Hopes for a thaw in the U.S.-China trade war helped a gauge of
global stocks rise on Friday despite a tepid performance on Wall Street,
though caution over pending American tariffs on Chinese goods put the yuan
on track for its biggest monthly decline in 25 years.

Statements from U.S. President Donald Trump and China’s commerce ministry on
Thursday that the countries were scheduling trade talks brought some respite
to equities, which have been roiled by the escalating trade war.

The pan-European STOXX 600 ended 0.7% higher, helped by a surge in German
real estate shares. The MSCI All-Country World Index rose 0.35%. Emerging
markets shares also jumped 1.5%, posting their biggest daily percentage gain
since June.

On Wall Street, the Dow Jones Industrial Average rose 41.03 points, or
0.16%, to 26,403.28, the S&P 500 gained 1.88 points, or 0.06%, to 2,926.46
and the Nasdaq Composite dropped 10.51 points, or 0.13%, to 7,962.88.

Despite the day’s gains, MSCI’s gauge of global stocks posted its second
monthly loss of the year and its biggest August percentage decline since
2015.

Some market watchers expressed caution given the fluctuating rhetoric and
said U.S. markets, which will be closed on Monday for the Labor Day holiday,
could be especially vulnerable if trade tensions re-escalate over the long
weekend. The Trump administration on Sunday is scheduled to begin collecting
15% tariffs on more than $125 billion in Chinese imports, including smart
speakers, Bluetooth headphones and many types of footwear.

China’s yuan fell 0.27% to 7.1616 per dollar and was on track for its
weakest month since Beijing’s currency reform in 1994.

Benchmark U.S. Treasury yields fell, with the yield curve between 2-year and
10-year notes still inverted, seen as a signal that a recession is likely in
one to two years.

Ten-year Treasury notes last rose 4/32 in price to yield 1.5028%, from
1.516% late on Thursday.

Italian bond yields registered one of their biggest monthly decline in more
than six years after the anti-establishment 5-Star Movement and opposition
Democratic Party reached an agreement on a coalition government.

Among currencies, the euro reached its weakest level since May 2017 as
expectations grew for aggressive easing by the European Central Bank
following weak economic data on Thursday. The euro was last 0.57% lower at
$1.10.

Argentina’s peso slumped 2.8% on Friday after Standard & Poor’s cut the
country’s long-term credit rating. In August, the peso logged its
biggest-ever monthly percentage drop.

The dollar index rose 0.31%.

The safe-haven Japanese yen rose 0.24% to 106.24 per dollar and was on track
for its biggest monthly gain since May.

Sterling fell 0.18% to $1.2166 ahead of a crucial period for the British
parliament before it is suspended ahead of Britain’s scheduled exit from the
European Union on Oct. 31.

In commodities, spot gold fell 0.25% to $1,523.55 an ounce but was set for
its fourth straight month of gains. Silver rose 0.59% to $18.35 per ounce
and was on track for its biggest monthly percentage gain since June 2016.

Oil prices fell on concerns that disruption from Hurricane Dorian, headed
for Florida, could dampen demand. U.S. crude settled 2.84% lower at $55.10 a
barrel, while Brent settled at $60.43 a barrel, down 1.06% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Global producer seeks Q4 aluminium premium of $110/T from Japan buyers

(Reuters) - A global aluminium producer has offered Japanese buyers a
premium of $110 per tonne for October-December primary metal shipments, up
2% from the current quarter, five sources directly involved in quarterly
pricing talks said on Friday.

Japan is Asia’s biggest importer of the metal and the premiums for primary
metal shipments it agrees to pay each quarter over the London Metal Exchange
(LME) cash price set the benchmark for the region.

For the July-September quarter, Japanese buyers agreed to pay a premium of
$108 per tonne PREM-ALUM-JP, up 3% from the prior quarter, marking a second
straight quarterly increase.

The latest quarterly pricing negotiations began this week between Japanese
buyers and global producers, including Rio Tinto and South32 Ltd, and are
expected to continue until later next month.

Another increase in the premiums would be the third quarterly increase in a
row.

The producer said the higher offer reflected tighter shipments as some
supplies from Australia might continue heading to the United States as
Australia is exempted from the 10% import tariffs on the light metal imposed
by Washington in March 2018, one of the sources said.

Buyers view the offer as too high as demand in Asia is weakening amid
prolonged U.S.-China trade war while there are enough supplies in the
region, the sources said.

Aluminium stocks held at three major Japanese ports AL-STK-JPPRT at the end
of July rose 2.9% to 308,800 tonnes from the previous month, according to
Marubeni Corp.

The sources declined to be named due to the sensitivity of the talks.

Iron ore rebounds from selloff on hopes of China demand

(Reuters) - Iron ore futures in China rallied more than 4% on Friday, lifted
by restocking demand for the steel-making material, but posted their first
monthly decline since November 2018 on rising supply and a cloudy demand
outlook.

The most-traded January 2020 iron ore on the Dalian Commodity Exchange ended
4% higher at 607.50 yuan ($85.65) a tonne, near the day’s high of 608.50
yuan. The benchmark hit its lowest in nearly three months earlier in the
week, in another selloff that some analysts said was overdone.

On the Singapore Exchange, the front-month October 2019 iron ore contract
was up 5.1% at $81.60 in late trade.

In a sharp reversal of fortune, Dalian iron ore plunged 23% in August, after
a dramatic rally triggered by disruptions in supply from top exporters
Brazil and Australia.

Spot prices of the commodity headed for China have also pulled back from
five-year peaks hit in early July.

Some steel mills were seen beefing up their iron ore stocks before the week
ends as they expect production curbs in China’s top steelmaking city of
Tangshan to be eased in September, and also to prepare for a possible
buildup in steel demand.

FUNDAMENTALS

* Benchmark spot 62% iron ore for delivery to China was steady at a
5-1/2-month low of $85 a tonne on Thursday, sliding from its July 3 peak of
$126.50, based on SteelHome consultancy data.

* Imported iron ore inventories at China’s ports rose steadily for six
straight weeks, to a three-month high at 124.65 million tonnes, as of Aug.
23 SH-TOT-IRONINV, SteelHome data showed.

* Construction steel rebar on the Shanghai Futures Exchange was up 1.4% at
3,350 yuan, recovering after selloffs sparked by worries about demand amid
an intensifying U.S.-Sino trade war. Hot-rolled coil, used in cars and home
appliances, edged up 0.9% to 3,407 yuan.

* Coking coal was 0.7% higher at 1,308 yuan, while coke rose 0.9% to 1,891
yuan.

* Fitch Solutions revised its 2019 coking coal price forecast to $185 a
tonne from $195 previously amid weak demand in China and improved supply
from Australia, factors seen as temporary. It expects prices to stabilise
and rise in 2020.

($1 = 7.0928 yuan)

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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