Bulls n Bears Daily Market Commentary : 06 April 2020

Tue Apr 7 08:55:51 CAT 2020

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Bulls n Bears Daily Market Commentary : 06 April 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$11,457,349.10 with foreign buys at ZWL$1,077,521.80 and
foreign sales were ZWL$1,827,282.80 Total trades were 130

The All Share index opened the week on a lower note dropping 1.41 points to
close at 460.32 points. TSL led the shakers with a $0.3043 loss to close at
$1.2275, PPC  eased $0.2364 to $3.7000 and DELTA traded $0.1504 weaker at
$6.2096. INNSCOR also decreased by $0.1288 to $7.5192 and ARISTON was
$0.0950 lower at $0.4024.

Trading in the positive; ECONET added $0.1023 to $2.7528, CASSAVA SMARTECH
gained $0.1010 to close at $2.7573 and DAIRIBORD was $0.0625 firmer at
$0.6025. SIMBISA  also increased by $0.0250 to $3.0250 and MASIMBA traded
$0.0200 to $0.3800.

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

  Global Currencies & Equity Markets

South Africa

South Africa's rand firmer as risk takers return, stocks up 3.29%

(Reuters) - South Africa’s rand powered to its firmest in almost a week on
Monday, climbing down from an all-time low as some investors banked profits
while risk sentiment was cheered by signs the spread of the novel
coronavirus was easing.

At 1500 GMT the rand was 1.84% firmer at 18.7000 per dollar, having
kicked-off the session at 19.0900 and looking poised for further falls after
Fitch slashed the country’s debt deeper into sub-investment-grade late on
Friday.

The Johannesburg Stock Exchange’s Top-40 index rose 3.63% to 42,356.59
points and the All-Share index climbed 3.29% to 46,066.94 points.

The currency crashed to an all-time low of 19.3590 between late Friday and
early Monday as the shock of the second ratings downgrade in as many weeks
rippled through markets, but saw some strong bids late in the session as
investors eyed high-yielders. Risk sentiment was soothed by signs that the
spread of the novel coronavirus in the United States and Europe could be
tapering.

France’s daily death toll fell in the past 24 hours, Italy reported its
lowest daily COVID-19 death toll for more than two weeks and Spain’s pace of
new deaths slowed.

Bonds also firmed, with the yield on the benchmark issue due in 2030 down 12
basis points to 11.315%.

The central bank said on Monday growth in 2020 could contract by as much 4
much due to the coronavirus lockdown. 

Uganda

Uganda slashes main interest rate to 8% as coronavirus hurts economy

(Reuters) - Uganda’s central bank cut its policy rate by 100 basis points on
Monday to 8% to support the economy which has been hit by the impact of the
coronavirus outbreak.

The bank also said it now expected economic growth to “slow down
drastically”, to between 3 and 4% for the financial year to June, from a
previous projection of 5.5-6%.

Sectors such as manufacturing, entertainment and trade had taken a huge blow
from the disruptions caused by the coronavirus and forced them to revise
down growth projections, the bank said.

The bank’s benchmark interest rate is now at its lowest level since
authorities introduced an inflation-targeting monetary policy in 2011. The
rate had been steady at 9% since October when it was cut from 10%.

Uganda has recorded 52 cases of COVID-19, but no deaths so far. The
government has imposed drastic measures to help curb the disease’s spread
including a ban on public transport and public gatherings, and shutting down
all businesses except the most essential.

Schools too were closed while authorities also imposed a dusk-to-dawn
curfew.

As part of measures to help cushion the economy from the impact of COVID-19,
Bank of Uganda also said it “directed” commercial banks to defer all
discretionary payments such as dividends and bonus payments for at least 90
days from March.

Manufacturing activity had declined due to disruptions to the inflow of raw
materials, while trade had also taken a hit from a decline in external
demand and supply chain disruptions, the bank said. 

 <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

Stocks jump on less dire virus data, oil falls after OPEC+ delay

(Reuters) - World stock markets jumped on Monday, encouraged by slowdowns in
coronavirus-related deaths and new cases in some global hot spots, while oil
prices tumbled again due to a delay in talks between Saudi Arabia and Russia
to cut supply.

The U.S. dollar was little changed against a basket of peers and sterling
turned negative versus the greenback and euro after news that UK Prime
Minister Boris Johnson was moved to intensive care as he grew sicker with
COVID-19.

Equity investors were encouraged as the death toll from the virus slowed
across major European nations, including France and Italy.

In New York State, Governor Andrew Cuomo said that despite an increase in
the number of cases and deaths, a daily decline in new hospitalizations and
other data suggested a possible plateau in the crisis.

U.S. officials have braced the country for a “peak death week” from the
pandemic, with the death toll topping 10,000.

The global economy will continue to feel the effects of the measures taken
to slow the spread of the virus. Investor morale in the euro zone fell to an
all-time low in April and the currency bloc’s economy is in deep recession
due to the coronavirus, which is “holding the world economy in a
stranglehold,” a Sentix survey showed.

The Dow Jones Industrial Average rose 1,627.46 points, or 7.73%, to
22,679.99, the S&P 500 gained 175.03 points, or 7.03%, to 2,663.68 and the
Nasdaq Composite added 540.16 points, or 7.33%, to 7,913.24.

The pan-European STOXX 600 index closed up 3.73% and MSCI’s gauge of stocks
across the globe gained 5.49%.

Emerging market stocks rose 2.66%. Japan’s Nikkei futures rose 6.77%.
Markets in mainland China were closed for a public holiday.

Despite the day’s strong equities gains, caution was not cast aside.

OIL RESUMES DECLINE

U.S. crude dropped sharply following two sessions of double-digit gains
after Saudi Arabia and Russia, at odds over production, postponed a meeting
of the Organization of the Petroleum Exporting Countries and its allies, or
OPEC+, until Thursday instead of Monday.

The market was further weighed down by a report from data provider Genscape
that inventories at the Cushing storage hub in Oklahoma, the delivery point
for WTI, rose by about 5.8 million barrels last week, traders said.

U.S. crude recently fell 7.3% to $26.27 per barrel and Brent was at $33.13,
down 2.87% on the day.

JAPAN IN STATE OF EMERGENCY

In currency markets, the yen weakened 0.60% versus the greenback at 109.16
per dollar and also slipped against other major currencies as Japanese Prime
Minister Shinzo Abe said the government would declare a state of emergency
as early as Tuesday to curb a spike in coronavirus infections.

The dollar gained ground against the euro while the pound slipped after news
of Johnson’s move to the ICU. British Foreign Secretary Dominic Raab is
designated to take over leadership of the country if Johnson is unable to
fulfill his role.

The euro was down 0.12% to $1.0795 and Sterling was last trading at $1.2239,
down 0.17% on the day.

The dollar index fell 0.03%.

Yields on safe-haven U.S. government bonds crept higher in fixed income
markets, reflecting the slightly brighter tone in world stock markets.

Lou Brien, a strategist at DRW Trading in Chicago, said Wall Street’s upward
trajectory was “the first and last reason why Treasuries are lower in price
and higher in yield this morning.”

Benchmark 10-year notes last fell 25/32 in price to yield 0.6666%, from
0.589% late on Friday. The 30-year bond last fell 1-14/32 in price to yield
1.2676%, from 1.216%.

Despite the stocks rally, gold prices touched a more than three-week high.
Spot gold added 2.8% to $1,660.84 an ounce.

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
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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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for guideline purposes only and sourced from third parties.

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