Bulls n Bears Daily Market Commentary : 18 September 2019

Thu Sep 19 00:46:35 CAT 2019

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Bulls n Bears Daily Market Commentary : 18 September 2019

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$ 5,054,959.79 with foreign buys at ZWL$1,308,447.05 and
foreign sales were ZWL$1,696,954.72 Total trades were 130.

The All Share index added 1.73 points ending at 173.52 points. OLD MUTUAL
LIMITED gained a further $0.4946 to end at $28.1000, AFRICAN SUN traded
$0.0500 higher at $0.4000 while INNSCOR AFRICA  gained $0.0247 to end at
$1.9000. Other counters trading in the positive were OK ZIMBABWE  which
advanced by $0.0230 to close at $0.3414 and DELTA CORPORATION  which gained
$0.0189 to close at $3.1012.

There was no counter that lost ground. 

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South  Africa

South Africa's rand steadies as investors wait on U.S fed rates, stocks down

(Reuters) - South Africa’s rand steadied on Wednesday as fears of an oil
price spike eased and investors waited for a U.S. Federal Reserve
interest-rate decision.

At 1500 GMT the rand was 0.37% firmer, after two consecutive sessions of
losses as a spike in global oil prices and fears tensions in the Middle East
would further dampen local business conditions pushed the currency to a
2-week low.

Brent crude oil futures fell 0.36%, to $64.32 a barrel by 1530 GMT, after
tumbling 6.5% the previous session.

Saudi Energy Minister Prince Abdulaziz bin Salman said on Tuesday average
oil production in September and October would be 9.89 million barrels per
day, and that the world’s top oil exporter would ensure full oil supply
commitments to its customers this month.

Expectations that the U.S Federal Reserve will lower lending rates on
Wednesday also boosted risk sentiment

Local inflation figures for August showed a 0.3% increase to 4.3%, slightly
higher than a Reuters survey of economists which predicted a slight uptick
in year-on-year price growth to 4.2% from 4% in the previous month.

In equities, stocks fell for a second session, with the Johannesburg
All-share index down 1.19% to 56,220 points, while the blue-chip Top-40
index declined 1.45% to 50,134 points.

Dragging the bourse downwards were luxury goods company Richemont, down
5.95% to 109.44 rand, while Naspers shed 3.36% to 2475.00 rand, and insurer
Discovery slipped 2.38% to 125.36 rand. “All the big rand hedge shares were
down today...the local market was heavily influenced by the rand and the
prospects for the rand,” McCurrie said.

Bonds also firmed, with the yield on the benchmark paper due in 2026 down 1
basis point to 8.220%. 

Uganda

Ugandan shilling steady, commodity flows to offer support

(Reuters) - The Ugandan shilling was unchanged on Wednesday, and was
expected to gain ground due to dollar from exporters of commodities like
coffee, tea and gold.

At 0948 GMT, commercial banks quoted the shilling at 3,665/3,675, same level
as Tuesday’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

Stocks reverse losses, Treasury yields dip following remarks by Fed's Powell

(Reuters) - The S&P 500 and the Dow reversed losses to close higher on
Wednesday and U.S. Treasury yields slipped after remarks by Federal Reserve
Chair Jerome Powell tempered the market’s initial reaction to the U.S.
central bank’s policy statement.

All three major U.S. stock indexes initially extended earlier losses
following the release of the Fed’s policy decision after the close of a
two-day meeting, which dimmed hopes for further rate cuts and fell short of
the more aggressive reduction in borrowing costs that President Donald Trump
had demanded.

But stocks reversed their slide during Powell’s news conference following
the policy decision, during which he said the Fed is closely monitoring
economic data, trade and global growth risks, but did not see imminent
recession, or think the central bank would cut rates to negative territory.

“This type of reaction we see almost every time from the Fed decisions,”
said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New
Jersey. “The first move is from the people who think it’s not enough, and at
the end of the day people conclude that they did exactly what investors
expected them to do. Those people who got what they expected used the
selloff to buy, and I think that’s what happened here.”

The Dow Jones Industrial Average rose 36.28 points, or 0.13%, to 27,147.08,
the S&P 500 gained 1.03 points, or 0.03%, to 3,006.73, and the Nasdaq
Composite dropped 8.62 points, or 0.11%, to 8,177.39.

The MSCI world equity index, which tracks shares in 47 countries, fell
0.06%.

U.S. Treasury yields dipped following Powell’s remarks.

Benchmark 10-year notes last rose 7/32 in price to yield 1.7909%, from
1.814% late on Tuesday. The 30-year bond last rose 23/32 in price to yield
2.2471%, from 2.28% late on Tuesday.

The dollar strengthened following the Fed’s rate cut. The dollar index rose
0.28%, with the euro down 0.36% to $1.1031.

The Japanese yen weakened 0.26% versus the greenback at 108.44 per dollar,
while sterling was last trading at $1.2483, down 0.14% on the day.

Oil prices edged lower after Saudi Arabia said it would quickly restore full
production following last week’s attack on its facilities and as U.S. crude
stockpiles unexpectedly increased.

Tension in the Middle East remained elevated, however. Saudi Arabia on
Wednesday displayed remnants of what it described as Iranian drones and
cruise missiles used in the attack, calling them “undeniable” evidence of
Iranian aggression. Trump ordered a major increase in sanctions on Iran on
Wednesday, following repeated U.S. assertions that Iran was behind the
attack.

U.S. crude oil futures settled down 2.07% at $58.11 per barrel, while Brent
crude oil futures settled at $63.60 per barrel, a 1.47% decline.

Spot gold reversed early gains after the Fed released its statement. Spot
gold dropped 0.6% to $1,492.81 an ounce.

Copper lost 0.27% to $5,805.00 a tonne.

Gold slides 1% after Fed cuts rates, but policy outlook uncertain

(Reuters) - Gold prices fell over 1% to a one-week low on Wednesday, pulled
down by a lack of clarity on future monetary policy decisions after a widely
anticipated interest rate cut by the U.S. Federal Reserve.

The U.S. central bank went ahead with an expected interest rate cut of
25-basis points for the second time this year, but gave mixed signals about
what may happen next.

Spot gold dropped to $1,487.35 per ounce at 02:50 p.m. EDT (1850 GMT). U.S.
gold futures settled up over $2, or 0.2%, at $1,515.80.

Lower interest rates decrease the opportunity cost of holding non-yielding
bullion.

The dollar index gained 0.4% versus major currencies, further pressuring the
precious metal.

Investors are now focused on the Bank of Japan’s policy meeting on Thursday.

Meanwhile, safe-haven buying of bullion was limited when oil prices slid
after Saudi Arabia said it would restore crude production hit by attacks on
facilities that prompted oil prices to spike earlier this week.

Gold is considered a hedge against oil-led inflation.

Among other precious metals, silver fell 2.3% to $17.60 an ounce, while
platinum fell about 2% to $924.40.

Palladium fell 0.9% to $1,584.06 after it hit a record of $1,626.81 on
Monday.

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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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
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