Bulls n Bears Daily Market Commentary : 15 April 2020

Thu Apr 16 08:23:10 CAT 2020

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Bulls n Bears Daily Market Commentary : 15 April 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market rebounds as heavies trade mixed

Firming demand in selected heavies helped swing the market into the black.
Gains seen in Old Mutual (+5.32%), Cassava (+2.94%), Econet (+2.74%) and
Padenga (+0.13%) outweighed losses registered in BAT (-6.43%), Delta
(-0.31%) and Simbisa (-0.11%) as the market closed in the positive. The
Fintech group Cassava sustained its glitter as it launched a digital health
mobile platform targeted at improving the healthcare sector. Topping the
risers of the day was milk processor Dairibord that surged 19.46%, taking
its price higher to $0.8601 while, apparel retailer Edgars rebounded 17.65%
to settle at $0.3000. Powerspeed was the session’s worst performer after
sliding 12.69% reversing yesterday’s gains and settling at $0.2650.
Mashonaland Holdings eased 10% to $0.1800 while, Medtech slumped 6.15% to
$0.0366 on waning demand. Axia completed the top five fallers set with a
5.86% drop to see it settling lower at $1.9309. 

Resultantly, the ZSE major indices closed in the positive with the
mainstream All shares Index up 0.47% to 390.27pts. The Industrials added
0.48% to 1555.30pts while, the Top Ten closed 0.92% firmer at 3.9027ts. The
less active Minings remained stable at 723.63pts with no trades registered
in the sector. Activity aggregates slightly declined from prior session as
seen in volumes exchanged which dropped 32.49% to 4.90m, yielding a value
outturn of $16.13m which was 20.02% lower. Retailer OKZIM was the most
soughtafter stock for the day as circa 1.6m shares worth $2.80m were
exchanged. The trade accounted for 17.38% in value and 34.68% on the volume
aggregate. Other notable value contributors were Delta, PPC and Innscor.
Twenty-eight counters were active as nine gained against ten fallers to
leave the market with a negative breadth. -EFE . <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Nigeria

Nigerian naira hits intra-day low of 388 per dollar on official market,
later recovers

(Reuters) - The Nigerian naira eased to an intra-day low of 388 per dollar
on the official market, supported by the central bank on Wednesday, traders
said.

The currency later recovered to close at 361 on thin volumes. The naira has
weakened after the central bank last month adjusted the official exchange
rate.

Uganda

Ugandan shilling strengthens amid coronavirus-induced lockdown

(Reuters) - The Ugandan shilling was stronger on Wednesday as appetite for
hard currency continued to dip amid a national lockdown to stem the spread
of the novel coronavirus, traders said.

At 1009 GMT commercial banks quoted the shilling at 3,750/3,760, compared to
Tuesday’s close of 3,765/3,775. 

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Stocks slide as dire economic outlook weighs

(Reuters) - World stock markets fell on Thursday, while bonds and the dollar
held on to hefty gains, after a coronavirus-driven plunge in U.S. retail
sales and factory production and increasing gloomy economic outlooks for
Asia.

U.S. retail sales fell the most on record last month, while manufacturing
output fell by the most in 74 years, raising fears of a deep recession.

In Asia, growth will grind to zero for the first time in 60 years in 2020,
the International Monetary Fund said on Thursday, as exporters are pounded
by slumping demand and anti-virus measures force consumers to stay home and
shops to shut down.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6%. In
Japan, where a Reuters survey showed most firms feel stimulus measures
announced so far are insufficient, the Nikkei fell 1.3%.

E-mini futures for the S&P 500 were 0.3% lower following a 2.2% drop on Wall
Street overnight.

The relatively modest drop shows some level of optimism about a brisk
re-start, he said, but added: “The problem is, no-one knows how long this
will go for.”

Benchmark indexes in Australia, Korea, Hong Kong and Shanghai also posted
falls between 0.3% and 1.5%. China is expected to report on Friday that the
health crisis likely knocked its economy into its first decline on record.

The dollar rose against most major currencies and the yield on benchmark
10-year U.S. Treasuries held at 0.6348%, near the week-low hit on Wednesday.

Oil prices, a barometer of global growth, crept from overnight lows but
remained weak as poor demand outweighs support from a record output cut
agreed last weekend.

West Texas Intermediate crude rose 60 cents a barrel or 3% from its lowest
close since 2002 to $20.46, and Brent crude rose 80 cents to $28.50 a
barrel.

CURRENCIES CAUTIOUS

The grim outlook was further underscored by warnings from major U.S. banks
Goldman Sachs Group Inc and Citigroup Inc of future loan losses as they
posted drops in profits.

Markets are bracing for more bad news when U.S. weekly jobless claims -
which have been in the millions for the past three weeks - are published at
1230 GMT.

A figure of 5.1 million is expected, according to a Reuters poll, and
trepidation was reflected in currency markets. The safety of the U.S. dollar
was sought with the yen, euro, pound and Antipodean currencies slipping.

The dollar last bought 107.78 yen and hit a week-high $0.6282 per Australian
dollar.

It advanced furthest against the kiwi, rising about 0.7% to $0.5955 after
New Zealand’s central bank governor said negative rates are a possibility.

Adding to traders’ worries, the dire economic news also came with sharp
rises in COVID-19 fatalities.

The United States is the world’s worst-affected country and its coronavirus
death toll topped 30,000 on Wednesday. The fatalities have doubled in a week
and set a record single-day increase for the second day in a row.

New cases are slowing and President Donald Trump said he would announce
guidelines for reopening the economy on Thursday.

However, state governors - especially on the East Coast - seem to be pushing
for a cautious approach.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper falls as recession fear grips markets

(Reuters) - Copper fell on Wednesday as moves by China’s central bank to
bolster the economy were overshadowed by predictions of a deep global
recession, which drove down stock markets and oil prices.

Copper, used in power and construction, has tumbled from above $6,300 a
tonne in mid January to as low as $4,371 in March, but supply disruption and
hopes of recovery in China, the biggest consumer of the metal, have lifted
prices back above $5,000.

The benchmark contract on the London Metal Exchange (LME) was down 1.1% at
$5,106 a tonne at 1602 GMT on Wednesday.

CHINA STIMULUS: China’s central bank cut a key interest rate to a record low
and reduced the amount banks must hold as reserves by about $28 billion.

However, data on Friday is expected to show China’s economy suffered its
first decline since at least 1992 in the first quarter. Factory data is also
expected on Friday.

China reported a decline in new confirmed cases of the coronavirus on the
mainland on Wednesday.

GLOBAL ECONOMY: The International Monetary Fund said this week the global
economy could shrink by 3% this year - the steepest downturn since the Great
Depression of the 1930s.

U.S. FACTORIES: U.S. manufacturing output dropped by the most in just over
74 years in March.

MARKETS: World share indexes fell, oil dived 7% and investors took shelter
in the dollar, driving it higher and making metals priced in the currency
more expensive for non-U.S. buyers.

LME STOCKS/SPREAD: Copper inventories in LME-registered warehouses rose to a
six-month high of 261,225 tonnes. The discount of cash copper against
three-month metal widened to $30, its biggest since January, suggesting
plentiful nearby supply. MCUSTX-TOTAL MCU0-3

CHINA STOCKS: Copper inventories in the Shanghai Futures Exchange (ShFE)
warehouse system touched a four-year high last month above 380,000 tonnes,
but have since fallen to 317,928 tonnes. CU-STX-SGH

CHINA IMPORTS: Yangshan Chinese copper import premiums rose to a seven-month
high of $81.50, from $55 in February, pointing to increased demand. Copper
imports in March rose 13% from a year earlier. SMM-CUYP-CN

PRICES: LME aluminium was up 0.1% at $1,505.50 a tonne, zinc was up 0.3% at
$1,927.50, nickel fell 1% to $11,765, lead rose 0.2% to $1,698.50 and tin
was down 1.9% at $15,165. 

Shanghai aluminium hits near 4-week high as China inventories dip

(Reuters) - Shanghai aluminium futures prices rose to their highest in
nearly four weeks on Thursday as inventories in China fell and as
expectations of supply cuts increased.

The most-traded aluminium contract on the Shanghai Futures Exchange (ShFE)
rose as much as 1.1% to 12,040 yuan ($1,700.11) a tonne, its highest since
March 20.

Three-month aluminium on the London Metal Exchange (LME) was on track for
its fourth straight session of gain, up 0.5% at $1,515 a tonne by 0422 GMT.
The contract touched a two-week high in the previous session at $1,529 a
tonne.

FUNDAMENTALS

* SHFE INVENTORIES: Aluminium stocks in warehouses tracked by ShFE
AL-STX-SGH fell for a third straight week to a five-week low of 511,252
tonnes, as of April 10, latest weekly exchange data showed.

* CHINA SOCIAL STOCKS: China’s social inventories of primary aluminium
ingots in eight consumption areas in China SMM-ALU-CON fell to 1.55 million
tonnes on Monday, their lowest since March 5, data provided by SMM showed.

* LME: However, inventories of aluminium in LME-approved warehouses
MALSTX-TOTAL climbed to 1.26 million tonnes, the highest since Feb. 4, while
the discount of LME cash aluminium over the three-month contract CMAL0-3 was
last at $38.25 a tonne, indicating abundant nearby supplies on the LME.

* OTHER PRICES: LME copper rose 0.2% to $5,120 a tonne, nickel eased 0.8% to
$11,685 a tonne, zinc gained 0.2% to $1,934, lead fell 0.1% to $1,699 a
tonne and tin edged up 0.3% to $15,145 a tonne.

* SHFE PRICES: Copper dipped 0.3% to 41,480 yuan a tonne, nickel fell 1.6%
to 96,040 yuan a tonne, zinc rose 0.4% to 15,940 yuan a tonne, while lead
decreased 0.4% to 13,830 yuan a tonne.

* GLENCORE: Zambia plans to revoke mining licences of Glencore’s subsidiary
Mopani Copper Mines because the company did not give enough notice before
suspending its mining operations in the coronavirus crisis and other
problems.

* For top stories in metals and other news, click or ($1 = 7.0819 Chinese
yuan)

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

 <mailto:info at bulls.co.zw> 

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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