Bulls n Bears Daily Market Commentary : 24 April 2020

Mon Apr 27 07:49:58 CAT 2020

 <http://www.bulls.co.zw/> Bulls.co.zw        <mailto:bulls at bulls.co.zw>
Views & Comments        <http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 24 April 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$18,477,700.70 with foreign buys at ZWL$405,834.00 and
foreign sales were ZWL $5,132,442.09 Total trades were 176.

The All Share index closed the week on a higher note after adding 0.62
points to close at 476.56 points. TSL LIMITED rose by $0.1196 to $1.3000,
AFRICAN SUN LIMITED   gained $0.0820 to settle at $0.4920 and OK ZIMBABWE
traded $0.0126 firmer at $1.6651. Two more counters to advance were WILLDALE
which added $0.0100 to end at $0.0600 and AXIA CORPORATION was $0.0074
higher at $2.0700.

Gains were offset by losses in OLD MUTUAL LIMITED  which lost $0.0500 to
$43.0000, PHL LIMITED eased $0.0402 to $5.3871 and DELTA CORPORATION
dropped $0.0365 to $5.9739. CASSAVA SMARTECH ZIMBABWE LIMITED  was down by
$0.0047 to $3.2219 and SIMBISA traded $0.0043 lower at $2.7900.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Nigeria

Nigeria levies $3.9 bln on banks to soak up liquidity, support naira

(Reuters) - Nigeria’s central bank has collected 1.4 trillion naira ($3.9
billion) from banks with excess cash holdings as part of measures to support
the currency, banking sources told Reuters.

The naira has been hitting new lows on the over-the-counter spot and black
markets since last month after the central bank adjusted its official rate,
implying a 15% devaluation, to absorb the impact of an oil price crash
triggered by the coronavirus pandemic.

The naira this week touched 420 per dollar on the black market for the first
time since February 2017, 14% weaker than the official market rate. The
currency was quoted at 386.33 naira on the spot market on Friday.

On the non-deliverable forward market, one-year dollar/naira forwards
crossed 500 naira per dollar this week.

The central bank in January raised the cash reserve ratio (CRR) that banks
must hold by 500 basis points to 27.5%, the first rise in four years to curb
excess liquidity in the banking system, which it said was contributing to
inflation.

Bankers on Friday said the CRR debit was more than 27.5% and that it was not
related to a penalty set for lenders that failed to meet a regulatory
loan-to-deposit target.

Banking credit totalled 260.17 billion naira at Friday’s open from 817.69
billion naira the previous session, central bank data showed. Banks have
been awash with cash after the government on Wednesday released 780.9
billion naira to states under a March budget payment.

Nigeria’s 28 commercial and merchant banks were affected by the higher
debit. Zenith Bank had the highest amount parked at the central bank at
355.95 billion naira, followed by First Bank with 208.1 billion and United
Bank for Africa with 204.75 billion. Standard Chartered Bank was charged
120.65 billion naira and Stanbic IBTC 143.97 billion.

The central bank did not respond to request for comment.

The bank uses cash reserve levies to mop up liquidity. It often re-injects
the liquidity to stabilise markets.

It was not immediately clear the reason for the levy, especially at a time
when lenders are dealing with the fallout of the new coronavirus on Africa’s
biggest economy.

Nigeria has reported 981 cases of the coronavirus and 31 deaths, the
country’s Centre for Disease Control said on Friday.

The central bank has rolled out a 1 trillion naira stimulus to boost the
economy and cut rates on soft loans granted to some sectors but has not said
how it would fund the interventions.

The government has also requested $3.4 billion in emergency financing from
the IMF to combat the impact of the coronavirus.

Money market rates spiked up to 35% on Friday following the debit, from just
2% the previous session.

In October, the central bank levied a charge of more than 400 billion naira
on 12 banks for failing to increase loans to meet a regulatory target.

The central bank at the time asked lenders to maintain a minimum
loan-to-deposit ratio or face a higher cash reserve levy, part of measures
aimed at getting credit flowing. ($1 = 360.00 naira)

South Africa

S.Africa seeking $5 bln from multilateral lenders to fight virus -Treasury
official

(Reuters) - South Africa is seeking 95 billion rand ($4.99 billion) from
multilateral lenders to help it fight the COVID-19 pandemic, a senior
Treasury official said on Sunday.

Africa’s most advanced economy is talking to the International Monetary Fund
(IMF), World Bank, New Development Bank of the BRICS and African Development
Bank to source funding to contribute to a 500 billion rand rescue package
aimed at cushioning the impact of the new coronavirus on businesses and poor
households.

The IMF has said South Africa is entitled to apply for up to $4.2 billion in
response to the crisis, and Finance Minister Tito Mboweni said on Friday the
government could negotiate for a facility of “maybe between $55 and $60
million” at the World Bank.

Dondo Mogajane, director general of the National Treasury, said in an
interview with eNCA television on Sunday that South Africa “will certainly
go” for the IMF funding.

Mogajane said the government has to do everything at its disposal to make
sure the coronavirus is contained, including reprioritising money from
projects that are not a priority for now and looking for new cheap money.

Mboweni on Friday played down worries in some governing party circles and
within the influential trade union movement that the money would come with
onerous conditions.

An IMF official told Reuters that the emergency funds on offer came with no
requirement for a structural adjustment programme.

The economy was in recession when the virus outbreak hit South Africa and
public finances were already strained as the government bailed out
struggling state firms.

South Africa had recorded 4,361 cases, including 86 deaths, with 161,004
people tested for the virus as of Saturday.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asia shares rally as BOJ buys more bonds; U.S. crude skids

(Reuters) - Asian shares bounced on Monday as the Bank of Japan (BOJ)
announced more stimulus steps to help cushion the economic impact of the
coronavirus, while oil took another spill as the world ran short of space to
store it.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.8%, taking
back a chunk of last week’s 2.6% decline. Japan’s Nikkei gained 2.6%, and
Chinese blue chips 1%.

After a soft start, E-Mini futures for the S&P 500 climbed 1%, while
EUROSTOXX 50 futures added 2.6% and FTSE futures 1.5%.

The BOJ matched market speculation by pledging to buy unlimited amounts of
government bonds, removing its previous target of 80 trillion yen per year.

It sharply raised purchases of corporate and commercial debt, and eased
rules for what debt would qualify.

The Federal Reserve and the European Central Bank meet later in the week,
with the latter likely to do more bond buying.

On the data front, the United States and European Union release GDP for the
first quarter and the influential U.S. ISM survey on manufacturing.

Earnings season will be in full swing with around 173 companies in the S&P
500 reporting this week, including Apple, Amazon <AMZN.O, Facebook,
Microsoft, Caterpillar , Ford, General Electric and Chevron .

Analysts expect a 15% decline in S&P 500 first-quarter earnings, with
profits for the energy sector estimated to slump more than 60%, raising
fears of debt defaults, layoffs and possible bankruptcies.

Bond markets remain well supported by the truly massive easing under way
from major central banks, which have seen U.S. 10-year yields trade around
0.6% for a week or more.

The dollar has been generally well bid thanks to its safe haven status as
the world’s most liquid currency at times of stress, although moves have
been relatively mild in recent weeks.

The dollar index touched a three-week high at 100.860 on Friday before
easing back to 100.150 on Monday amid an improvement in risk appetite.

The euro edged up to $1.0843, having hit a one-month low of $1.0725 on
Friday, while the dollar eased slightly on the yen to 107.24.

Gold held at $1,722 per ounce, after gaining 2.5% last week.

Oil prices looked set for another volatile week, having fallen in eight of
the last nine weeks. U.S. crude even traded below zero last week as demand
collapsed 30% due to the pandemic, leaving more oil than could be stored.

U.S. crude slid $1.61 to $15.33, while Brent crude futures slipped 46 cents
to $20.98 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

London copper nears 6-week high as economies reopen; stimulus measures eyed

(Reuters) - London copper prices touched their highest level in nearly six
weeks on Monday as some major economies plan to reopen businesses, while
more stimulus from Japan also helped sentiment.

Benchmark three-month copper on the London Metal Exchange (LME) rose as much
as 2.3% to $5,260 a tonne, its highest since March 17.

The most-traded June copper contract on the Shanghai Futures Exchange (ShFE)
rose as much as 2.6% to 42,880 yuan ($6,058.81) a tonne, a level unseen
since April 17.

More U.S. states prepared to ease their coronavirus restrictions this week,
while Italy will allow factories and building sites to reopen from May 4.
South Africa also plans to allow some manufacturing and retail activities to
resume.

The Bank of Japan expanded monetary stimulus for the second straight month
to ease corporate funding strains and finance huge government spending aimed
at combating the deepening economic fallout from the coronavirus pandemic.

Prices were also supported by news that China’s Yunnan province will set
aside 1 billion yuan to help businesses stockpile 800,000 tonnes of base
metal to boost its real economy after the outbreak, which another trader
said would be bullish for the metals market in the short-term.

China is the world’s biggest consumer of metals and accounts for around half
of the global copper consumption.

FUNDAMENTALS

* OTHER PRICES: LME nickel was up 2% at $12,485 a tonne, as of 0444 GMT,
aluminium rose 0.3% to $1,519 a tonne and tin climbed 3.1% to $15,350 a
tonne.

* SHFE PRICES: Zinc climbed 2.7% to 16,190 yuan a tonne, nickel advanced
2.6% to 102,980 yuan a tonne and tin jumped as much as 5.1% to 134,780 yuan
a tonne, its highest since March 12.

* COPPER: Total imports of copper concentrate into China in March edged up
1.03% to 1.78 million tonnes year-on-year, as the country boosted imports
from alternative sources amid a slump in shipments from top suppliers Peru
and Chile.

* TRADE: China’s nickel ore imports in March fell 42.3% to a 25-month low
from a year ago.

* CHINA: Profits earned by China’s industrial firms in March fell 34.9% to
370.66 billion yuan from a year earlier, official data showed.

* For the top stories in metals and other news, click or ($1 = 7.0773 yuan)

China's Yunnan launches 800,000 T metals stockpiling drive

(Reuters) - China’s Yunnan province said on Sunday it would set aside 1
billion yuan ($141.22 million) to help businesses stockpile 800,000 tonnes
of nonferrous metal as part of efforts to boost its real economy following
the novel coronavirus outbreak.

The funds will be used to cover interest on bank loans taken out for the
one-year stockpiling drive, which will include copper, aluminium, lead,
zinc, tin, as well as minor metals germanium and indium and other nonferrous
metals, the provincial government said on its website.

Stockpiling has been suggested by the China Nonferrous Metals Industry
Association as a way to ease pressure on smelters hit by a slump in demand
and plunging metals prices.

Yunnan, in southwest China, is home to major metal producers Yunnan Copper,
Yunnan Aluminium and Yunnan Chihong Zinc & Germanium, all of which are under
state-owned group Chinalco, as well as Yunnan Tin , the world’s biggest
refined tin producer.

The money pledged will cover 80% of the interest on loans taken out to
stockpile tin, germanium and indium, and 60% of the interest on loans to buy
copper, aluminium, lead and zinc, the statement said.

Among other economic support measures outlined by the Yunnan government was
a reduction in the cost of electricity and gas for some sectors - except
high power-consuming industries - from Feb. 1 until the end of the year.

Hydropower-rich Yunnan has become a popular destination for Chinese
aluminium smelters looking to use a cleaner source of electricity for the
energy-intensive smelting process.

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.

(c) 2020 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

Invest Wisely!

Bulls n Bears 

Telephone:      <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

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

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 3653 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 30155 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 30147 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0009.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 30149 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0010.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0011.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 30150 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0012.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image007.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200427/789bdd2d/attachment-0013.jpg>