Bulls n Bears Daily Market Commentary : 03 April 2020

Mon Apr 6 07:15:42 CAT 2020

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Bulls n Bears Daily Market Commentary : 03 April 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$1,516,241.25 with foreign buys at ZWL$5,020.00 and
foreign sales were ZWL$779,410.00 Total trades were 29

The All Share index closed the week on a positive note gaining 0.75 points
to close at 461.73 points. INNSCOR added $0.1478 to $7.6480, DELTA rose by
$0.1053 to end at $6.3600 and MEIKLES  was $0.0102 firmer at $8.0000. ECONET
also increased by a marginal $0.0005 to $2.6505.

Trading in the negative; OLD MUTUAL LIMITED eased $1.0000 to $37.000, HIPPO
lost $0.3284 to $5.0200 and ARISTON was $0.0023 weaker at $0.4975.

   . <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Zambia

Zambia's central bank establishes medium-term facility to ease liquidity
crunch

(Reuters) - Zambia’s central bank said on Friday it has established a 10
billion Zambian kwachas ($533.33-million) medium-term refinancing facility
for financial service providers (FSP) as part of emergency policy measures
aimed at easing a liquidity crunch triggered by the coronavirus.

The three to five years facility will be available to eligible FSPs to
enable them to restructure or refinance qualifying facilities or lend to
eligible clients, the bank said in a statement issued by Governor Denny
Kalyalya.

The bank has also “scaled up open market operations” to provide short-term
liquidity support to commercial banks on more flexible terms than before the
coronavirus outbreak that has infected 39 people and killed one person in
the southern African country.

Rules governing the operations of the interbank foreign exchange market will
be revised to provide a system for addressing heightened volatility in the
exchange rate in periods of stress, it added.

The bank said although the full impact of the virus on the economy cannot be
determined at the moment, “indications are that it will be unprecedented.”

African governments including Zambia have become heavily indebted in the
past decade and are seeking support from the International Monetary Fund,
World Bank and European Union for wide-ranging debt relief.

Africa’s No. 2 copper producer’s economic activity has also been hampered by
widespread power shortages.

On Tuesday, Zambia’s ministry of finance said the government is looking for
financial advisors to help ensure the sustainability of its debt and manage
any loans maturing from next year and beyond.

Other measures implemented by the bank on Friday include revising loan
classification and provisioning rules to allow FSPs “to better accommodate
lending, refinancing and restructuring of facilities to critical sectors.”
($1 = 18.7500 Zambian kwachas)

Lebanon

Lebanon banks to work with central bank to set daily FX rate - banking
association

(Reuters) - Lebanon’s commercial banks will work with the central bank to
determine a daily exchange rate for dollars under a new FX trading system
being launched, the banking association said on Sunday.

Lebanon’s central bank said on Friday it was launching a new FX trading
platform that will unify the parallel market rate for money changers, where
the slumping local currency has weakened by about 50% from the peg since
October.

 <mailto:info at bulls.co.zw> 

EMERGING MARKETS

Stocks, FX down as surging COVID-19 spells disaster for global growth

(Reuters) - Emerging market stocks and most currencies slipped on Friday as
the number of global coronavirus cases exceeded 1 million, while doubts
about a U.S.-brokered deal between Russia and Saudi Arabia regarding oil
prices also lingered.

On course to end their third in week in four in the red, MSCI’s index of
emerging market shares fell 0.5%, while its currency counterpart traded
flat.

Most Asian currencies made muted moves against a stronger dollar, while the
Turkish lira and South Africa’s rand both lost 1%. Most central and eastern
currencies traded lower against a weaker euro.

Surging numbers of infections signal a prolonged period of significantly
subdued economic activity as more containment measures may be required to
curb the virus.

Recent economic indicators around the globe have already made a sharp turn
lower.

EM currencies have made hefty losses so far this year as investors rush to
safer assets, pushing many such as the rand and most Latin American
currencies to all-time lows.

Russia’s rouble, sensitive to oil prices, shed early losses to trade firmer
as crude edged up. Oil prices had tanked after a surge overnight when U.S.
President Donald Trump said Russia and Saudi Arabia had agreed to output
cuts. But the ambiguity regarding the amount of cuts saw analysts cast a
sceptical eye on the deal.

Russia’s central bank said it will continue selling foreign currency from
state reserves on a daily basis in April. The bank has sold a little more
than $2 billion worth of foreign currency since March - a cause of worry as
analysts warn of depleting reserves.

Amid similar worries in Turkey, the lira weakened with the number of daily
rise in coronavirus cases in late double digits. While spending and trade
data make the case for a second recession in less than two years for Turkey,
some respite came as data on Friday showed inflation dipped below 12%.

While recent measures by the U.S. Federal Reserve to ease the dollar crunch
offers some relief, the outlook for developing market currencies remains
glum without a tangible improvement in investment and trade flows. If the
pandemic subsides, strategists in a Reuters poll see some EM currencies
paring losses only by this time next year.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper, aluminium slide on demand fears after dire U.S. jobs data

(Reuters) - Copper prices slipped and aluminium carved out a four-year low
on Friday on worries about an extended erosion in global demand for metals
due to the coronavirus pandemic after dire U.S. employment data.

Traders and fund managers have been concerned about sliding metals demand as
industry shuts down in many areas, while trying to balance that against
weaker production because of mine closures.

Three-month copper on the London Metal Exchange (LME) was down 1% to $4,847
a tonne at 1700 GMT, holding well above a four-year low of $4,371 touched
about two weeks ago.

On a weekly basis, London copper was on track for a rise of about 1.2%, its
first gain in six weeks, after better than expected factory data from China
boosted prices earlier in the week.

Low copper prices and lockdowns at major suppliers have raised concerns over
supply disruptions of copper, used widely in construction, power and
manufacturing.

The outlook for industrial metals demand, however, remains grim after the
coronavirus pandemic surpassed one million cases globally and data showed
the U.S. economy shed 701,000 jobs in March, seven times the forecasted
drop.

* ALUMINIUM POSITION: The net speculative short position in LME aluminium
had grown to 54% of open interest by Tuesday, the highest since July 2012,
according to estimates by broker Marex Spectron.

LME aluminium lost 0.4% to $1,484.50 a tonne after hitting $1,479.50, the
weakest since March 2016.

* LEAD STOCKS: Lead inventories monitored by the Shanghai Futures Exchange
(ShFE) fell for a sixth straight week to a 28-month low as buyers sought
stocks in exchange warehouses because of a lack of recycled metal in China,
data released on Friday showed.

That data, however, failed to help LME lead prices, which slid 2.4% to
$1,657 a tonne.

* TIN: LME tin fell 1.7% to $14,135 a tonne after LME inventories
MSNSTX-TOTAL jumped 24% to 7,590 tonnes, their highest since Feb. 26,
according to daily LME data.

* RIO TINTO: Miner Rio Tinto said it could not supply contracted copper to
customers after an emergency shutdown at its Kennecott smelter in the United
States following an earthquake last month.

Swiss gold refiners to resume work, easing supply constraints

(Reuters) - Three of the world’s biggest gold refineries said they will
partially reopen after a two week closure that disrupted global supply of
the metal.

Valcambi, Argor-Heraeus and PAMP, located near the Swiss border with Italy,
were shut by a local government order on March 20 which closed non-essential
industry to contain the spread of the coronavirus.

Together they process about 1,500 tonnes of gold a year — equivalent to a
third of global supply — and are a key transit point, purifying mined
material and reshaping metal moving between markets that require gold in
different sizes and shapes.

Fears that it would be impossible to turn enough 400 ounce bars stored in
London into 100 ounce bars used in New York drove U.S. gold futures sharply
above London prices after the refiners closed.

Valcambi and Argor said on Sunday they had received government approval to
partially reopen on April 6. PAMP said on Friday it had permission to
restart.

They said this was on condition that they observe more stringent hygiene and
safety measures.

Valcambi and PAMP said this meant they would operate at less than 50%
capacity. Argor said it would have a “reduced work regime”, splitting staff
into three groups working separate shifts.

The economic shock caused by the coronavirus outbreak is pushing up demand
for gold from retail and financial investors.

Gold is traditionally seen as a ‘safe-haven’ asset which holds value better
than others through times of turmoil.

The three refineries also process silver and other precious metals.

INVESTORS DIARY 2020

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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