Bulls n Bears Daily Market Commentary : 17 April 2020

Fri Apr 24 11:47:06 CAT 2020

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Bulls n Bears Daily Market Commentary : 17 April 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$14,713,171.75 with foreign buys at NIL and foreign sales
were ZWL $1,459,264.00 Total trades were 129.

The All Share index closed the week higher at 466.68 points after adding
0.18 points . OLD MUTUAL LIMITED added $0.2979 to $39.0079, AFRICAN SUN
LIMITED  gained $0.0850 to end at $0.5100 and ZIMRE HOLDINGS traded $0.0500
firmer at $0.4400. ARISTON HOLDINGS rose by $0.0500 to $0.4500 and ART
HOLDINGS  was $0.0380 higher at $0.5200.

Trading in the negative: MEIKLES and RIOZIM both lost $0.6000 to close at
$5.8000 and $5.1000 respectively.MASIMBA HOLDINGS LIMITED  was $0.0475
weaker at $0.3525 and PROPLASTICS was down by $0.0408 to $1.6021 and EDGARS
was $0.0325 lower at $0.2675.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South African rand opens weaker as growth fears hurt riskier assets

(Reuters) - The South African rand opened weaker on Monday, mirroring moves
elsewhere in emerging markets as fears over global economic growth dented
appetite for riskier assets.

At 0600 GMT, the rand traded at 18.9100 versus the U.S. dollar, roughly 0.6%
weaker than its close on Friday.

The rand fell more than 4% versus the dollar last week, hurt by a surprise
central bank interest rate cut and predictions that the domestic economy
would suffer a severe contraction because of the COVID-19 pandemic.

On Monday, President Cyril Ramaphosa’s cabinet is due to meet to discuss new
measures to contain the economic impact of COVID-19, including whether to
close ailing state airline South African Airways, which has been a major
drain on state resources.

South Africa’s public finances were in bad shape before it detected its
first case of the new coronavirus in March, constraining its ability to
provide stimulus.

The country had recorded 3,158 coronavirus cases and 54 deaths as of Sunday.

South African government bonds were mixed in early trade, with the yield on
the 2030 instrument down 6 basis points to 10.29% after rising earlier. 

Uganda

Ugandan shilling trades flat on depressed appetite from importers, banks

(Reuters) - The Ugandan shilling was unchanged on Friday amid sagging
appetite for hard currency from both importers and players in the interbank
market, traders said.

At 0925 GMT commercial banks quoted the shilling at 3,760/3,770, same level
as Thursday’s close.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asia shares turn cautious, U.S. crude crushed

(Reuters) - Caution gripped Asian share markets on Monday amid expectations
a busy week of corporate earnings reports and economic data will drive home
the damage done by the global virus lockdown, while a glut of supply sent
U.S. crude spiralling to 20-year lows.

Japan reported its exports fell almost 12% in March from a year earlier,
with shipments to the United States down over 16%. Readings on April
manufacturing globally are due on Thursday and are expected to hit
recession-era lows.

Better news came from New Zealand where success in containing the virus
allowed the government to announce an easing in the country’s strict
lockdown from next week.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2% in
slow trade, with a pause needed after five straight weeks of gains.

Japan’s Nikkei fell 1.1%, but Chinese shares edged up 0.3% as a benchmark
lending rate was lowered.

EUROSTOXX 50 futures rose 1.4% and FTSE futures 1.2%. E-Mini futures for the
S&P 500 slipped 0.2%, having jumped last week on hopes some U.S. states
would soon start re-opening their economies.

U.S. President Donald Trump said on Sunday that Republicans were “close” to
getting a deal with Democrats on a support package for small business.

The United States has by far the world’s largest number of confirmed
coronavirus cases, with more than 750,000 infections and over 40,500 deaths,
according to a Reuters tally.

The S&P 500 has still rallied 30% from its March low, thanks in part to the
extreme easing steps taken by the Federal Reserve. The Fed has bought nearly
$1.3 trillion of Treasuries alone, and many billions of non-sovereign debt
it would historically have never gone near.

MARKET CONCENTRATION

Yet the particular composition of the S&P 500 was also a major factor, he
added, as three sectors relatively resilient to a virus-induced lockdown —
IT, communications services and healthcare — make up around 50% of the
index.

Indeed, Microsoft, Apple, Amazon, Alphabet and Facebook account for more
than a fifth of the index.

The rebound in the S&P 500 therefore likely overstated optimism on the
economy, Jones argued, noting European benchmark equities indices and U.S.
small cap indices were still in bear market territory.

Bond markets suggested investors expected tough economic times ahead with
yields on U.S. 10-year Treasuries steady at 0.64%, from 1.91% at the start
of the year.

That decline has shrunk the U.S. dollar’s yield advantage over its peers and
left it rangebound in recent weeks. So far in April, the dollar index has
wandered between 98.813 and 100.940 and was last at 99.837.

The dollar was a fraction firmer on the yen on Monday at 107.82 but again
well within recent ranges, while the euro idled at $1.0868.

Gold had recoiled to $1,681 per ounce, having touched a 7-1/2 peak of
$1,746.50 last week.

Oil prices remained under pressure as the global lockdown saw fuel demand
evaporate, leaving so much extra supply countries were finding it hard to
find space to store it.

So great was the near-term glut that the May futures contract for U.S. crude
was trading down almost 20% at $14.68 a barrel, while June shed 5% to
$23.65.

Brent crude does not have the same storage problems and its June contract
was off only 45 cents at $27.62 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper gains as top consumer China cuts lending rates

(Reuters) - Copper prices advanced on Monday as China, the world’s biggest
consumer of the red metal, announced rate cuts to cushion the economic
fallout of the coronavirus pandemic.

China cut its benchmark one-year loan prime rate (LPR) by 20 basis points
(bps) to 3.85%, while the five-year LPR was cut by 10 bps to 4.65%, in line
with market expectations.

The most-traded copper contract on the Shanghai Futures Exchange was up 0.3%
at 42,310 yuan ($5,976.66) a tonne, as of 0150 GMT, while benchmark
three-month copper on the London Metal Exchange (LME) rose 0.1% to $5,213.50
a tonne.

China’s economy shrank 6.8% in the first quarter from a year earlier, the
first contraction since at least 1992 when the government began publishing
quarterly records.

FUNDAMENTALS

* OTHER PRICES: LME aluminium rose 0.4% to $1,513 a tonne, nickel advanced
0.2% to $12,070 a tonne, while zinc fell 0.6% to $1,947 a tonne. In
Shanghai, aluminium rose 0.9% to 12,360 yuan a tonne, nickel climbed 1.9% to
99,580 yuan a tonne while lead dropped 1.3% to 13,590 yuan a tonne.

* VALE NICKEL: Brazilian miner Vale SA said it slashed its 2020 output
forecasts for copper to 360,000-380,000 tonnes from 400,000 tonnes and for
nickel to 180,000-195,000 tonnes from 200,000-210,000 previously.

* NICKEL: Dwindling nickel ore supply from the Philippines amid measures to
contain the new coronavirus has boosted nickel prices in China despite weak
demand from the stainless steel sector.

* ZINC: Collapsing demand for zinc caused by the novel coronavirus will
swamp supply cuts from major producers Peru and India this year and leave
the market with a massive surplus that will weigh on prices of the material
used to galvanise steel.

* For the top stories in metals and other news, click or

MARKETS NEWS

* Caution gripped Asian share markets on expectations a busy week of
corporate earnings reports and economic data will drive home the damage done
by the global virus lockdown, while U.S. crude prices took an early spill.

Shanghai nickel jumps over 4% as Vale cuts output forecast

(Reuters) - Shanghai nickel prices rose to their highest in nearly six weeks
on Monday as major producer Vale trimmed its output forecast of the metal
this year, while China’s rate cuts also boosted sentiment.

Brazilian miner Vale SA on Friday slashed its 2020 production forecast for
nickel to 180,000-195,000 tonnes from 200,000-210,000, excluding its unit in
New Caledonia, due to the coronavirus outbreak.

The most-traded nickel contract of the Shanghai Futures Exchange (ShFE)
climbed as much as 4.2% to 101,800 yuan ($14,387.07) a tonne, its highest
since March 11.

Benchmark three-month nickel on the London Metal Exchange (LME) rose as much
as $12,345 a tonne, a five-week high, before easing to $12,320 a tonne at
0510 GMT, adding 2.3%.

Vale’s cut worsened worries over supply shortages after the Philippines, a
major nickel producer, shut down some mining activities to curb coronavirus
transmission, while demand has picked up slightly as China reopened its
economy.

China, the world’s biggest nickel user, on Monday cut its benchmark one-year
and five-year loan prime to cushion the economic fallout of the coronavirus
pandemic, providing some support to prices of the metal used in making
stainless steel.

FUNDAMENTALS

* LEAD: ShFE lead dropped as much as 1.5% to 13,555 yuan a tonne, its lowest
since April 2, after weekly ShFE inventories data on Friday showed the pace
of lead stocks declining has been slowing.

* PRICES: LME copper rose 0.4% to $5,229 a tonne, aluminium was up 0.5% to
$1,514.50 a tonne, while zinc fell 0.1% to $1,957 a tonne.

* SHANGHAI PRICES: ShFE copper advanced 0.7% to 42,510 yuan a tonne,
aluminium rose 0.7% to 12,345 yuan a tonne and zinc rose 0.2% to 16,145 yuan
a tonne.

* VALE COPPER: Vale also cut its 2020 for copper to 360,000-380,000 tonnes
from 400,000 tonnes.

* ZINC: Collapsing demand for zinc caused by the novel coronavirus will
swamp supply cuts from major producers Peru and India this year and leave
the market with a massive surplus that will weigh on prices of the material
used to galvanize steel.

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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