Bulls n Bears Daily Market Commentary : 28 April 2020

Wed Apr 29 07:22:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 28 April 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$9,322,179.15 with foreign buys at ZWL$1,137,520.00 and
foreign sales were ZWL $1,517,055.60 Total trades were 171.

The All Share index ended the day on a higher note after adding 1.11points
to close at 480.73 points. OLD MUTUAL LIMITED rose by $0.7338 to $42.7338,
ECONET WIRELESS LIMITED  gained $0.1442 to settle at $3.2515 and AFRICAN
DISTILLERS traded $0.1000 firmer at $6.0000. Two more counters to advance
were NMB LIMITED  which added $0.0800 to end at $0.7800 and CBZ HOLDINGS was
$0.0475 higher at $2.0500.

Trading in the negative was OK ZIMBABWE LIMITED which lost $0.2793 to
$1.7007, DELTA LIMITED  eased $0.0517 to $5.8983 and CASSAVA SMARTECH
LIMITED   dropped $0.0019 to $3.2322. PPC LIMITED was down by $0.0001 to
$3.6500.

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  Global Currencies & Equity Markets

South Africa

S.Africa's rand, stocks rally as stimulus, easing lockdowns lift sentiment

(Reuters) - The South African rand firmed on Tuesday as risk sentiment
globally improved, spurred by stimulus measures and talk by leaders around
the world about easing lockdown measures.

At 1545 GMT the rand was 0.8% firmer at 18.6340 per dollar from an opening
level of 18.7750, extending its recent rally to three sessions as investors
were soothed by last week’s announcement of plans to ease some coronavirus
lockdown restrictions in South Africa.

Countries from Italy to New Zealand and Brazil have in recent days announced
the easing of coronavirus lockdowns, looking to follow in the footsteps of
China which has already embarked on restarting its economy, but with mixed
results.

The rand’s gains, however, were curbed by lingering concerns about South
Africa’s credit rating after Moody’s on Friday warned about ballooning debt
and the effectiveness of the stimulus. “Moody’s latest credit rating warning
implies a credit rating downgrade will materialise,” Bishop said. “South
Africa’s government bonds exit from the FTSE Russel WGBI at the end of
April, that’s also weighing on market sentiment for the rand.”

Bonds firmed, with the yield on the 2030 bond down 17.5 basis points to
10.780%.

South African shares rose, helped by gains in retailers’ shares on the
prospect that easing restrictions will see the return of shoppers to stores
that have been empty for five weeks. The JSE Top-40 index climbed 1.11% to
46,100 points, while the broader All-share index was up 1% at 50,029 points.

The momentum was slowed by a fall in gold prices, reflected in a 8.8% slide
in the bourse’s gold index, led by AngloGold Ashanti Ltd and Gold Fields
Ltd, which were both down nearly 10%.

In response to the easing lockdown measures mining companies in South Africa
are setting up shared quarantine facilities for miners testing positive for
COVID-19 and are discussing other ways to cooperate. ($1 = 18.6544 rand)

Nigeria

Nigeria switches to domestic naira markets to finance 2020 budget

(Reuters) - Nigeria will shelve plans to borrow 850 billion naira ($2.36
bln) from international markets and instead tap domestic markets to finance
its 2020 budget, President Muhammadu Buhari said after the new coronavirus
pandemic triggered an oil price plunge.

Nigeria relies on crude oil sales for around 90% of foreign exchange
earnings and they make up the bulk of government revenues.

In total, the government had planned to borrow $3.3 billion from
international markets this year to finance its 2020 budget and to refinance
a $500 million eurobond due in January.

The Senate had previously approved 744.9 billion naira in domestic
borrowings for 2020 and another 850 billion naira from offshore sources.
Buhari said he preferred to tap local markets in naira to ensure adequate
funds for the budget.

He said the money is needed to replace previously approved external loans,
as conditions on offshore markets are “not conducive” to borrowing. The
government would refinance the new naira loan into U.S. dollars once
conditions improve, Buhari said.

Nigeria, Africa’s largest crude oil producer, has cut nearly $5 billion from
its 2020 budget as oil prices collapsed. The revised version uses a
benchmark of $30 per barrel oil, though Brent crude was trading at just
under $20 on Tuesday.

President Buhari sent a request to the Senate to approve the naira
borrowings, a letter read out in the Senate on Tuesday said.

The move signals a policy shift for a government that has touted private
sector investment and pushed for low interest rates to channel funds into
the development of rail and road infrastructure.

The central bank has kept liquidity tight to lure foreign investors into
high-yielding government securities to support the naira currency, which has
hit new lows on the black market in recent weeks.

Lockdowns caused by the new coronavirus pandemic have crushed global
economic growth and reduced oil consumption by roughly a third.

The Senate, the upper house of parliament, had approved foreign borrowings
of $22.7 billion for infrastructure projects before the coronavirus outbreak
forced countries around the world, including Nigeria, into lockdown.

Nigeria is also seeking almost $7 billion in emergency loans from
multilateral institutions, including the International Monetary Fund, the
World Bank and the African Development Bank.

Tuesday is the first day that lawmakers have conducted a full session since
late March, when the capital Abuja went into lockdown.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asia shares extend gains as economies slowly re-open, oil rallies

(Reuters) - Asian shares rose for a third session on the trot on Wednesday
as investors took heart from easing coronavirus lockdowns in some parts of
the world while oil prices jumped on hopes demand will pick up.

Risk assets including equities have rallied for most of this month thanks to
heavy doses of fiscal and monetary policy stimulus around the globe aimed at
softening the economic blow from the COVID-19 pandemic.

Positive news around potential treatments for the infection as well as
progress in developing a vaccine have also boosted sentiment recently.

Moreover, investors have regained some confidence as parts of the United
States, Europe and Australia are gradually easing restrictions while New
Zealand this week allowed some businesses to open.

These factors helped lift MSCI’s broadest index of Asia-Pacific shares
outside Japan by 0.9% on Wednesday, having rallied 3.3% already this week.

Japan’s markets were closed for a public holiday.

Australian shares rose 1.2% led by energy and resources firms while South
Korea added 1.2%.

Chinese markets opened in the black with the blue-chip index up 0.6%.

All the same, analysts were circumspect about the rally.

Darby said the number of stocks above their 260-day moving average was still
very low across emerging market and developed market indexes while the
number of stocks making new highs versus new lows is about equal.

The equity gains have come even as analysts predict a sharp contraction in
world growth.

Moody’s expects economies of the group of 20 advanced nations (G-20) to
shrink 5.8% this year with momentum unlikely to recover to pre-coronavirus
levels even in 2021.

Markets were next looking for any guidance from the U.S. Federal Reserve,
which is due to issue a policy statement at the close of its two-day meeting
on Wednesday. The European Central Bank meets on Thursday.

Analysts said it was unlikely the Fed would make further major policy moves,
given the scope and depth of its efforts to counter the economic damage
caused by the coronavirus.

On Wall Street overnight, investors dumped tech giants despite an earnings
beat from Alphabet Inc’s Google, driving all three major U.S. stock indexes
into the red.

The Dow Jones Industrial Average fell 0.3%, the S&P 500 lost 0.5% and the
tech-heavy Nasdaq Composite dropped 1.4%.

Investors are now watching out for the other major tech firms - Facebook,
Amazon and Apple.

In currencies, the dollar weakened against the Japanese yen to 106.52 on
concerns the coronavirus could spread further than previously thought if
businesses reopened prematurely.

The euro was up 0.3% at $1.0848 though the euro index eased after Fitch cut
Italy’s credit rating to BBB-, just one notch above “junk” status.

The dollar index against a basket of currencies fell 0.2%.

In commodities, U.S. crude jumped 15.7% to $14.29 per barrel, and Brent was
up 4% at $21.28 after U.S. stockpiles rose less than expected.

U.S. crude was trading above $50 a barrel just in February.

Gold was a touch higher at $1,710.61 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Base metals rise as risk sentiment improves; Fed decision in focus

(Reuters) - Most base metals rose on Wednesday amid improved risk appetite
as crude oil and equities gained on partial easing of coronavirus
restrictions, while eyes were on the outcome of the U.S. central bank’s
meeting later in the day.

The Fed meeting’s results could help clarify how long the central bank
intends to leave rates near zero and offer a glimpse of how its key
officials feel the economy will evolve.

Three-month copper on the London Metal Exchange (LME) rose 0.1% to $5,230 a
tonne by 0218 GMT, and the most-traded June copper contract on the Shanghai
Futures Exchange (ShFE) advanced 0.8% to 42,630 yuan ($6,021.70) a tonne.

FUNDAMENTALS

* PRICES: LME aluminium rose 0.6% to $1,513 a tonne, nickel was almost flat
at $12,295 a tonne, zinc climbed 0.7% to $1,943.50 a tonne and lead was up
0.2% to $1,647 a tonne.

* SHFE PRICES: Shanghai aluminium increased 1.2% to 12,615 yuan a tonne,
nickel was up 0.5% to 101,000 yuan a tonne, zinc climbed 1.3% to 16,290 yuan
a tonne while lead eased 0.7% to 13,740 yuan a tonne.

* MINING: As South Africa and Peru move to lift lockdowns, mining workers
are resisting returning to work without adequate protective gear and
information about cases at sites.

* RESULTS: Jiangxi Copper Co,, China’s top copper producer, said
first-quarter profits fell 78.4% year-on-year while Aluminum Corp of China
Ltd, reported a slump of 93.1% in January-March net profit from the same
time last year.

Gold ticks up on weaker dollar; Fed decision awaited

(Reuters) - Gold prices inched higher on Wednesday as the dollar weakened
amid plans to ease major economies out of coronavirus lockdowns, while
investors awaited any forward guidance from the U.S. Federal Reserve's
policy statement due later in the day. 

    FUNDAMENTALS

* Spot gold        rose 0.1% to $1,708.53 per ounce by 0126 GMT. U.S. gold
futures        climbed 0.2% to $1,725.50 per ounce.

* The dollar        slipped, having touched a two-week low in the previous
session, as the slowing spread of the coronavirus and moves to re-open
economies supported the investor mood, ahead of major central bank meetings.

* Many countries tiptoed out of lockdowns, while more parts of the United
States looked set to restart business after restrictions to curb the spread
of virus dented the economy.

* Asian equities made cautious gains in early trade following mixed U.S.
corporate earnings.                  

* The Fed, which has responded to the current crisis by slashing interest
rates, resuming bond-buying and backstopping credit markets, is scheduled to
issue a policy statement at 1800 GMT and could begin to clarify how long it
intends to leave rates near zero.

* Gold tends to benefit from widespread stimulus measures as it is often
seen as a hedge against inflation and currency debasement.

* U.S. consumer confidence tumbled to near a six-year low in April as tough
coronavirus restrictions sharply disrupted economic activity and threw
millions of Americans out of work.

* The U.S. coronavirus death toll reached a grim milestone on Tuesday,
surpassing the number of American lives lost in the Vietnam War, as
Florida's governor met with President Donald Trump to discuss easing
shutdowns.  

* Bank of Nova Scotia (Scotiabank) told staff on Tuesday it would close its
metals business, drawing the curtain on one of the most venerable names in
precious metals trading, two sources familiar with the matter told Reuters.

* Palladium        rose 0.3% to $1,921.81 an ounce and  platinum
climbed 0.2% to $773.67 per ounce, while silver        fell 0.3% to $15.15
per 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
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
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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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