Bulls n Bears Daily Market Commentary : 16 April 2020

Fri Apr 17 07:45:16 CAT 2020

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Bulls n Bears Daily Market Commentary : 16 April 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$7,195,426.75 with foreign buys at ZWL$897.00 and foreign
sales were ZWL $4.00 Total trades were 67.

The All Share index lost another 2.44 poinst to close at 466.50 points.
MEIKLES eased $0.6776 to $6.4000, RIOZIM dropped $0.4400 to $5.7000 and
DAIRIBORD  was $0.1701 weaker at $0.6900. AFRICAN SUN also decreased by
$0.0950 to $0.4250 and ZPI  was $0.0210 lower at $0.12000.

Trading in the positive; AXIA  added $0.0691 to $2.0000, OLD MUTUAL LIMITED
gained $0.0677 to end at $38.7100 and DELTA traded $0.0310 firmer at
$6.1600. MASH HOLDINGS  rose by $0.0200 to $0.2000 and MASIMBA  was $0.0175
higher at $0.4000.

  Global Currencies & Equity Markets

Uganda

Ugandan shilling little-changed, liquidity mop-up expected to offer support

(Reuters) - The Ugandan shilling traded little-changed on Thursday and the
central bank was expected to mop-up excess liquidity in the market to offer
support.

At 0910 GMT commercial banks quoted the shilling at 3,765/3,775, compared to
Wednesday’s close of 3,750/3,760. 

South Africa

South Africa's rand inches lower in cautious trade, shares down

(Reuters) - South Africa’s rand edged lower on Thursday as investors
digested grim warnings about the global economy and looked ahead to U.S.
jobless claims data which has lately been a barometer of the impact of the
coronavirus.

The rand was as 0.13% weaker at 18.7000 per dollar by 1530 GMT, from an
opening level of 18.6750.

The currency had seen some gains earlier in the session as risk demand
globally crept back, with oil prices stabilising and the International
Monetary Fund (IMF) standing ready to support economies in distress.

That risk appetite waned as the session wore on and the U.S. data release
approached, and investors eyed the greenback and other safe-haven assets.

Forecasts put U.S. weekly jobless claims at 5.1 million, lifting total
filings during the crisis above 20 million, a sign of the depth of distress
in the world’s no. 1 economy that is set to further freeze investors’
willingness to deploy cash to risky bets.

Locally, investors remain on the sidelines in anticipation of a government
announcement of deeper fiscal measures to limit damage to the economy. But
an announcement by President Cyril Ramaphosa set for late Wednesday has been
delayed.

Bonds were firmer, with the yield on the government issue due in 2030 down
13 basis points to 10.46%.

Stocks slipped a little into negative territory after being positive for
most of the day. The FTSE/JSE All Share Index closed down 0.12 percent at
46,245.11 while the top 40 index closed 0.05% down at 44,180 points.

The fall was mainly led by banks, with the banking index down almost 5% at
the close.

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GLOBAL MARKETS

Asia shares up as plans to re-open U.S economy offset record slump in China
GDP

(Reuters) - Asian stocks gained on Friday as President Donald Trump’s plans
to gradually re-open the U.S. economy offset data that showed China suffered
its worst economic contraction on record due to the coronavirus outbreak.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 2.6% after
reaching a five-week high. Shares in China rose 1.8% as the weak GDP data
reinforced expectations that more stimulus is coming, while shares in
Australia were up 2.62%.

E-Mini futures for the S&P 500 index traded 3.38% higher, also close to a
five-week high.

Data from China showed the world’s second-largest economy shrank for the
first time since at least 1992 because of the coronavirus outbreak and tough
containment measures. Gross domestic product contracted 6.8% in the quarter
year-on-year, slightly more than expected, and 9.8% from the previous
quarter.

Retail sales also fell more than expected in March, but industrial output
only dipped slightly, suggesting its manufacturing sector at least is
recovering more quickly.

However, the Chinese data and other forecasts that said the world is in its
worst recession in decades caused barely a ripple in Asian shares as
investors focus instead on whether the pandemic is peaking and how soon
governments will start to ease lockdowns which have crippled business and
consumer activity.

Some analysts cautioned, however, that it is premature to say the health
crisis is under control.

Shares in Asia got off to a bright start, mirroring gains on Wall Street, as
hopes that the United States will roll back restrictions on businesses and
reports about a potential treatment for COVID-19 boosted risk appetite.

Joining a handful of other governments that are restarting their economies
after mass shutdowns to contain the pandemic, U.S. President Donald Trump
said on Thursday U.S. state governors can re-open businesses in a staggered,
three-stage process.

Some analysts remain sceptical of Trump’s plan, but the equity markets took
the comments as a sign that the worst of the pandemic may be over.

Equity markets also took the China data in stride partly because it has
contained the virus and managed to get large parts of its economy back up
and running from a standstill in February.

Japan’s Nikkei stock index rose 2.55% on Friday, while shares in South Korea
gained 3.27%.

Yields on benchmark 10-year U.S. Treasuries rose slightly from a two-week
low in Asia, while Treasury futures fell in another tentative sign of
investor optimism.

The dollar fell against the yen, the euro , and sterling as hope for future
economic growth reduced safe-haven demand for the greenback.

Spot gold fell 0.5% to $1,708.78 per ounce in another sign that investors
felt more comfortable taking on risk.

U.S. crude futures fell to an 18-year low after OPEC’s lowering of its
global demand forecast, but Brent crude rose 1.69% to $28.29 a barrel. 

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Commodities Markets

China March crude steel output slips 1.7% as coronavirus crisis cuts demand

(Reuters) - China’s crude steel output fell 1.7% in March from the same
month a year ago, data showed on Friday, as mills cut back production due to
high stockpiles and thin profit margins amid the coronavirus pandemic.

The world’s top steel producer churned out 78.98 million tonnes of crude
steel last month, down from 80.33 million tonnes in March 2019, data from
the National Bureau of Statistics (NBS) showed on Friday.

Average daily output in March dropped to 2.55 million tonnes, compared with
2.58 million tonnes in the first two months of this year, hitting the lowest
daily average since January-February 2019, according to Reuters calculations
based on the NBS data.

The new coronavirus has battered the steel sector, propelling inventories in
China to at least a 14-year high in mid-March amid slumping demand at home
and abroad.

Some firms cut production as profit margins fell, while measures to contain
the spread of the coronavirus slowed any return to business as normal.

Profit margins at some mills in east China tracked by Jinrui Futures
reversed into negative territory in the second half of February, while some
listed companies posted sharp falls in first-quarter profits.

Still, steel output is not expected to drop dramatically even amid a weak
market, said Richard Lu, an analyst with CRU in Beijing.

In the first quarter of the year, China produced 234.45 million tonnes of
crude steel, up 1.2% from same period in 2019, the NBS data showed.

China March daily aluminium output slips as low prices force smelter cuts

(Reuters) - China’s daily aluminium production fell 1.7% in March from the
previous two months, according to Reuters calculations based on official
data on Friday, as the coronavirus outbreak pushed prices to a four-year low
and prompted smelters to cut supply.

China, the world’s biggest producer and consumer of aluminium, churned out
2.97 million tonnes of the metal last month, up 2.3% year-on-year, the
National Bureau of Statistics said. First-quarter output was up 2.7% at 8.84
million tonnes.

However, on a daily basis, March output was about 95,800 tonnes, according
to Reuters calculations, down from 97,450 tonnes over January and February
combined and the lowest daily rate since October.

The bureau does not typically release industrial output data for January and
February individually due to the distortion of Lunar New Year.

Aluminium demand in China collapsed as a result of the coronavirus outbreak,
with Chinese aluminium processors short-staffed and slow to return to work
after containment measures extended the Lunar New Year holiday into
February.

Coupled with a broad selloff in commodities from panicked investors, this
pushed Shanghai aluminium prices to as low as 11,255 yuan ($1,591.15) a
tonne in March, the lowest since early 2016, leading smelters to put
production lines into maintenance to avoid losses.

China’s output of 10 nonferrous metals - including copper, aluminium, lead,
zinc and nickel – rose 1.6% year-on-year to 4.83 million tonnes in March but
that was the lowest monthly total since May 2019.

First-quarter output was up 2.1% year-on-year at 14.17 million tonnes. The
other non-ferrous metals in this group are tin, antimony, mercury, magnesium
and titanium. ($1 = 7.0735 Chinese yuan renminbi)

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
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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