Bulls n Bears Daily Market Commentary : 16 September 2019

Tue Sep 17 01:30:59 CAT 2019

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Bulls n Bears Daily Market Commentary : 16 September 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 2,901,739.46 with foreign buys at ZWL$450,565.00 and
foreign sales were ZWL$194,680.00 Total trades were 152.

The All Share index gained 0.48 points ending at 167.23 points. DELTA
CORPORATION added $0.0964 to close at $2.9964, PADENGA HOLDINGS LIMITED
advanced by $0.0380 to close at $1.5900 and ECONET WIRELESS LIMITED rose by
$0.0159 ending at $1.1860. Other counters trading in the positive were
INNSCOR AFRICA LIMITED   which traded $0.0105 higher at $1.8613 and TURNALL
which increased by $0.0052 to end at $0.0772.

Trading in the negative; OLD MUTUAL LIMITED traded $0.7491 lower at
$24.2927, MEIKLES shed $0.0625 ending at $1.1375 and AXIA lost $0.0246 to
close at $0.3604. Two more counters to lose ground were CASSAVA SMARTECH
ZIMBABWE LIMITED  which eased $0.0082 to close at $1.2124 and OK ZIMBABWE
which dropped $0.0055 ending at $0.3160. <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand slips as Saudi attacks knock risk appetite

(Reuters) - South Africa’s rand weakened on Monday, with global risk
appetite dented by a weekend attack on Saudi Arabian refining facilities
that hit global oil supplies and saw prices spike.

At 1535 GMT, the rand was down 0.22% at 14.6125 per dollar, having hit a
session low of 14.7125.

The rand, along with other emerging market assets, last week benefited from
increased risk appetite after Washington and Beijing officials made
concessions on retaliatory tariffs.

The European Central Bank’s (ECB) decision to cut interest rates and its
promise of more stimulus also lent support.

However, the risk-on mood soured after an attack on Saudi Arabian refining
facilities, leading investors to seek out safe-haven assets like the
Japanese yen and Swiss franc.

Oil prices surged nearly a fifth following the strikes, which knocked out
more than 5% of global oil production. The currencies of major oil
importers, such as the rand and Turkey’s lira, weakened.

Bonds also weakened, with the yield on the benchmark instrument due in 2026
adding 1 basis points to 8.225%.

On the bourse, stocks strengthened, with the Johannesburg All-share index up
1.3% to 57,854 points, while the benchmark Top-40 index rose 1.3% to 51,802
points.

Leading the blue chips was petrochemicals firm Sasol , which gained nearly
10% to 306.00 rand on rising oil prices.

U.S. crude climbed 11.4% to $61.12 per barrel and Brent was last at $67.26,
up 11.7% on the day.

Financials were also in the black, with the banking index up 3.7%, just shy
of a two-month high.

Nedbank rose 5.3% to 251.24 rand and FirstRand gained 4.6% to 67.75 rand,
while Absa gained 3% to 170.15 rand and Standard Bank ticked up 2.9% to
193.30 rand. 

Uganda

Ugandan shilling unchanged as tax payments curb dollar appetite

(Reuters) - The Uganda shilling        was unchanged on Monday due to
reduced demand for dollars as most firms reserved their local currency
holdings to meet mid-month tax payments.

At 0937 GMT commercial banks quoted the shilling at 3,665/3,675, same level
as Friday's close. 

       <mailto:info at bulls.co.zw> 

Europe

Global daily FX trading at record $6.6 tln as London extends lead

(Reuters) - Global daily currency turnover surged to a record $6.6 trillion,
with London shrugging off Brexit uncertainty to extend its lead as the
world’s dominant trading hub, the Bank for International Settlements (BIS)
said on Monday.

Foreign exchange markets had been shrinking when the BIS released its last
triennial forex survey - considered the most comprehensive take on what is
the world’s largest financial market - in 2016 as banks and hedge funds
pulled back from trading.

The latest edition, however, shows the market has bounced back with a hefty
29% jump in daily trading volumes from the $5.1 trillion recorded in 2016,
lifted by huge growth in FX swaps activity, the rise of new proprietary and
high-speed trading firms and more demand for emerging market currencies.

But the topline increase in daily global FX turnover hides growing headwinds
facing the industry. Among them is the rise of FX swaps used by banks and
investors to hedge their currency exposure and which typically generate less
revenue than plain old cash trading or highly complex and structured deals.

The survey by the BIS, a central bank umbrella group, showed that spot, or
cash, volumes continued to decline, slipping to 30% of all daily volumes
from a peak of 38% in 2013. FX swaps, meanwhile, gained market share and
totalled 49% of all volumes in April 2019, up from 47% in the previous
survey.

The BIS collated the data from volumes reported in April by nearly 1,300
financial institutions across 53 jurisdictions.

In a separate survey, the BIS said the market for over-the-counter interest
rate derivatives more than doubled to $6.5 trillion from $2.7 trillion in
2016, driven mainly “by increased hedging and positioning amid shifting
prospects for growth and monetary policy”.

The BIS said improved reporting contributed to the rise. Britain recorded
the biggest share of daily turnover, accounting for $1 in every $2 of
interest rate derivatives traded.

LONDON DOMINANCE

The survey also showed the United Kingdom extending its dominance of the FX
trading industry, defying sceptics who had predicted Britain’s 2016
referendum vote to leave the European Union would damage London’s financial
services sector.

Foreign exchange is the crown jewel of London’s financial sector. Industry
experts say the city’s convenient time zone and its grip on FX trading
infrastructure and personnel mean the sector could emerge unscathed from all
the Brexit uncertainty.

The BIS said London’s share of daily volumes rose to 43%, up from 37% in
2016, while the United States’ share shrank to 17% from 20%. In Asia,
growing volumes in Hong Kong offset weakness in Singapore and Tokyo.

Notably, mainland China registered an 87% increase in trading activity to
become the eighth-largest forex trading centre, up from 13th in 2016.

EMERGING ASIA GAINS, YEN SHARE SHRINKS

The dollar remained the world’s most dominant currency and was on one side
of 88% of all trades.

There was little change in the ranking of the major currencies and market
shares, though lower volatility in dollar-yen trading led to a drop of 5
percentage points in the Japanese yen’s share to 17%, keeping it in third
place behind the euro.

Sterling’s share stood at 13%, unchanged from three years earlier despite
prolonged bouts of Brexit-induced volatility, remaining ahead of the
Australian and Canadian dollars.

Emerging market currencies raised their share to 25%, up from 21% in 2016.
The growth came from a jump in Hong Kong dollar trading, as well as in the
Korean won, Indian rupee and Indonesian rupiah, the BIS said.

Despite Beijing’s push to broaden international use of the Chinese currency
in recent years, the survey showed the yuan rising in line with overall
market growth, leaving it with a 4.3% market share behind the Swiss franc.

The Mexican peso and Turkish lira - the latter suffering a currency crisis
in 2018 - dropped in the rankings.

Banks trading with “other financial institutions” - including nonreporting
banks, hedge funds, proprietary trading firms, institutional investors and
official sector financial institutions - grew significantly to $3.6
trillion, 55% of the global total, BIS said.

That included growing activity by smaller regional banks - reflecting their
strength in FX swap activity - and hedge funds. Institutional investor
participation, however, declined to 12% of global FX turnover from 16% three
years earlier.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil soars after attack on Saudi facilities, stocks dip

(Reuters) - Oil prices soared on Monday after attacks on crude facilities in
Saudi Arabia cut the kingdom’s production in half and sparked worries over
the impact of an oil shock on economic growth, halting a positive run in
world stock markets as investors reached for less-risky assets.

Increased demand for safe-haven U.S. debt pushed Treasury yields lower and
the price of gold rose.

The attack on Saudi Arabia shut down 5% of global crude output. U.S.
officials blamed Iran and President Donald Trump said Washington was “locked
and loaded” to retaliate.

Oil prices surged nearly 20% at one point on Monday, with Brent crude
posting its biggest intraday gain since the 1990-1991 Gulf crisis, before
paring gains.

Trump approved the use of U.S. emergency oil reserves to ensure stable
supply, helping steady prices some.

Brent crude futures settled at $69.02 a barrel, up $8.80, or 14.6%, its
largest on-day gain since at least 1988. WTI crude futures settled at $62.90
a barrel, up $8.05, or 14.7%, the largest on-day percentage gain since Dec
2008.

Saudi Arabia officials were discussing delaying Aramco’s initial public
offering, the Wall Street Journal reported on Monday, citing people familiar
with the matter.

The upheaval in the oil market, coupled with poor economic data from China,
served to sour investors’ appetite for risky assets.

The MSCI world equity index, which tracks shares in 47 countries, snapped a
five-day winning streak to trade down 0.39%.

On Wall Street, energy stocks spiked while the rest of the market fell as
the attacks on Saudi Arabia’s oil facilities added to investors’ concerns
about geopolitical risk and a slowing global economy.

Higher oil prices boosted beaten-down energy stocks, with S&P 500 energy,
one of the worst performing sectors so far this year, rising 3.29%.

Monday’s rapid spike in crude prices came at a time when central banks in
the United States, Europe and Asia are easing monetary policy to fight a
slowdown in the global economy amid a drawn-out trade war between Washington
and Beijing.

The U.S. Federal Reserve is due to hold its next policy meeting on
Wednesday, at which it is widely expected to ease interest rates and signal
its future policy path.

The Dow Jones Industrial Average fell 142.7 points, or 0.52%, to close at
27,076.82, the S&P 500 lost 9.43 points, or 0.31%, to end at 2,997.96 and
the Nasdaq Composite dropped 23.17 points, or 0.28%, to finish at 8,153.54.

The pan-European STOXX 600 index finished down 0.58%.

U.S. Treasury yields slipped, with benchmark 10-year notes up 15/32 in price
to yield 1.845%.

In FX markets, the dollar rose against a basket of currencies after
President Donald Trump’s authorization of the use of an emergency crude
stockpile helped temper the surge in oil prices.

The dollar index was up 0.41% at 98.658.

Gold rose after the attack on oil facilities in Saudi Arabia inflamed
worries over the stability of the Middle East, boosting demand for assets
seen as a haven from risk. Spot gold was up 0.63% at $1,497.8 per ounce.

Copper drifts lower on concern about fragile China data

(Reuters) - Copper slipped on Monday after weak Chinese data fuelled worries
about demand, but lead and zinc hit multi-months peaks after a mine
suspension.

China’s industrial production grew at the weakest pace in 17-1/2 years last
month and fixed-asset investment in January-August increased at a slightly
lower rate than expected, data showed.

China is the biggest user of copper, which is used widely in power and
construction.

Chinese Premier Li Keqiang said it is “very difficult” for the world’s
second-largest economy to keep growing at a rate of 6% or more, after a 6.3%
expansion in the first half of the year.

Three-month copper on the London Metal Exchange (LME) slipped 1.8% to $5,870
a tonne in final open-outcry trading after hitting a 1-1/2-month high in the
previous session.

At its peak on Friday, copper had rebounded 8% since touching a two-year low
on Sept. 3.

* PENASQUITO MINE: Lead hit a six-month peak of $2,121 a tonne and zinc a
1-1/2 month high of $2,404.50 after Newmont Goldcorp said on Sunday it had
suspended operations at its Penasquito gold mine in Mexico due to an illegal
blockade.

The metals later gave up their gains, with LME lead ending the day down 0.4%
at $2,098, while zinc shed 0.8% to $2,365.

Penasquito was expected to produce 245 million lbs or 111,130 tonnes of zinc
this year, plus 180 million lbs or 81,647 tonnes of lead as a byproduct, the
company said in a presentatihere(1).pdf this month.

* CHINA ALUMINIUM: LME aluminium dropped 0.9% to close at $1,793 a tonne
despite data showing that China’s primary aluminium output in August fell
0.5% from the previous month as unexpected outages at two key smelters
dented production.

“Everyone’s been so scared that Chinese output is going to ramp up, but it
hasn’t,” BMO’s Hamilton said.

* ALUMINIUM STOCKS: LME inventories fell to 908,425 tonnes, the lowest since
November 2007. MALSTX-TOTAL

* CHINESE NPI: LME nickel slid 2.1% to finish at $17,375 a tonne, after
touching $17,105, the weakest since Aug. 30, after data showed China’s
nickel pig iron (NPI) output hit a record 53,200 tonnes of contained nickel
in August.

* PHILIPPINES NICKEL: A nickel mining hub in the southern Philippines has
suspended extraction operations indefinitely as the regional government
conducts an industry audit.

* PRICES: Tin bucked the weaker trend, climbing 4.1% to end at $17,150.

Lead climbed 1.4% to end at $2,106 after hitting $2,118 a tonne, the
strongest since March 15, and tin slid 3.8% to $16,475, the biggest one-day
fall since July 2.

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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