Bulls n Bears Daily Market Commentary : 17 August 2020

Mon Aug 17 16:17:07 CAT 2020

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Bulls n Bears Daily Market Commentary : 17 August 2020

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ZSE commentary

ZSE bearish sentiment prevails

The bearish sentiment on the ZSE continued in week opener to see all the
measures closing pointing southward. The mainstream All Share Index was
1.18% down to end at 1353.11pts with the Industrials sliding 1.14% to
4451.05pts. The Top Ten Index was 1.05% softer at 857.89pts while, the
Mining Index dropped 2.74% to settle at 2878.08pts as Bindura continued to
drag the Index. Activity aggregates dropped as reflected in volumes which
were 60.01% down from prior session, yielding a value outturn of $41.93m
which was a 39.24% drop from prior session. Padenga, Innscor and OKZIM drove
the value aggregates with respective contributions of 20.82%, 15.95% and
13.72%. OKZIM Padenga and Econet propelled volumes after claiming a combined
contribution of 50.49%. Overall, twenty-six counters were active in the
session, as eighteen fell against eight risers, leaving the remainder of
three to sail stable.

Willdale led the risers of the day with a 19.96% surge to see it rebounding
to $22.9000, while Fidelity added 16.96% to $0.3269. Apparel retailer
Truworths rose 16.66% to $0.1800 with banking group CBZH, putting on a
further 6.85% to close at $21.0000 on resurgent demand. Masimba was 1.79% up
at $1.0200 and completed the top five gainers. Lafarge was the worst
performer after slumping 15.82% to $4.9500 while, hotelier African Sun lost
14.72% to end pegged at $1.1218. Edgars was 12.79% softer at $0.7500 as
Ariston dropped 12.41% to $1.4014 on selling pressure. Other losses were
recorded in Econet (-7.45% to $5.0792), Innscor (-4.01% to $15.3496) and
Cassava (3.78% to $5.3698). efesecurities

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Global Currencies & Equity Markets

South Africa

South Africa's rand set to end week firmer but stocks drop

(Reuters) - South Africa’s rand was set to end the week on a firmer footing,
even though its recent rally has been slowed by the return of rolling
nationwide power cuts and more signs that the domestic economy remains under
pressure.

At 1515 GMT the rand was 0.26% firmer at 17.3725 per dollar, and was on
track for weekly gains of more than 1.5% as it benefited from a weaker U.S.
dollar.

The currency hit a one-week high of 17.3325 before trimming the gains, with
market sentiment weighed by concerns over the return of power cuts at a time
when economic activity is being stifled by the COVID-19 pandemic.

On Friday, state power utility Eskom implemented nationwide rolling
electricity blackouts for a second day, cutting up to 2,000 MW from the
national grid, after a number of generating units broke down.

Stocks fell, with the Johannesburg Stock Exchange’s Top-40 Index slipping
0.65% to 52,737 points, and the broader All-Share Index dropping 0.6% to
57,077 points.

The heaviest faller on the blue-chip index was Sasol , the world’s top
producer of motor fuel from coal, as oil prices gave up much of the rise
over the week on doubts over a recovery in demand due to the COVID-19
pandemic as well as rising supplies. Its shares closed 7.36% lower.

Retailer Woolworths lost 1.11% after warning that its annual profit could
plunge by as much as 70%.

Government bonds firmed, and the yield on the benchmark paper due in 2030
dropped 10.5 basis points to 9.16%. 

Libya

Libya sovereign fund to ask UN for freedom to invest billions

(Reuters) - Libya’s sovereign wealth fund head plans to ask the United
Nations to allow it to invest billions of dollars sitting idle in its
accounts, after missing out on some $4.1 billion in potential equity returns
during nearly a decade of sanctions.

The Libyan Investment Authority (LIA) was blacklisted in March 2011 because
it was then controlled by the family of toppled ruler Muammar Gaddafi. Its
assets were valued at $67 billion in 2012, but LIA plans to update that in
October after a review by its financial adviser Deloitte.

Sanctions have had a heavy toll on the LIA, with investment curbs meaning it
had missed out on around $4.1 billion in potential returns if it had
invested in line with the market average, chairman Ali Mahmoud Hassan
Mohamed told Reuters.

The LIA also wanted to avoid negative interest rate charges, which had cost
it around $23 million since 2011, he said.

Libya had previously asked the U.N. Security Council to approve a sanctions
exemption for the LIA in 2016, but this request was turned down as the U.N.
wanted to see a stable government in place before doing so.

Although the LIA is not pushing for a full rollback, it is aiming to apply
to the U.N. Sanctions Committee for adjustments to enable it to invest, via
a custodian, some of the $12.7 billion frozen cash held by its investment
managers.

This includes some of the proceeds from 796 bond holdings, with a value of
$4.8 billion, that have matured since 2011.

Any investments the LIA tried to make at present were hampered by a lengthy
process that required it to gain approval from the sanctions committee as
well as within Libya.

Market volatility during the coronavirus crisis has hit the LIA, cutting the
value of its stock holdings by about 5% and prompting a potential debt
restructuring for some of its hundreds of subsidiaries.

Libya slipped into chaos after the NATO-backed overthrow of Gaddafi and has
been split since 2014, with an internationally recognised government
controlling the capital Tripoli and the northwest of the country, while
military leader Khalifa Haftar in Benghazi rules the east.

The government supervises the LIA through the board of trustees, he said. It
aims to improve its governance in line with other sovereign funds by the end
of 2020, including complying with the Santiago Principles and appointing an
external auditor to review its financial results, he added. 

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Asia

Malaysia current account surplus falls to 7.6 bln ringgit in Q2

(Reuters) - Malaysia’s current account surplus fell to 7.6 billion ringgit
($1.81 billion) in the second quarter from 9.5 billion ringgit in the
previous three months, the Department of Statistics said on Friday.

Portfolio investment saw a net inflow of 22.2 billion ringgit, compared with
41.3 billion ringgit in outflows in the first quarter. ($1 = 4.1940 ringgit)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Nickel rises as ore supply from Philippines falls

(Reuters) - Nickel prices jumped on Monday, with Shanghai futures of the
metal on track for their third straight session of gains, as ore output in
the Philippines slumped due to the COVID-19 crisis.

The most-traded October nickel contract on the Shanghai Futures Exchange
climbed 1.9% to 115,290 yuan ($16,613.59) a tonne by 0532 GMT, while
three-month nickel on the London Metal Exchange rose 1.1% to $14,520 a
tonne.

Nickel content of ores extracted by miners in the Philippines, the world’s
biggest exporter of the material, dropped 28% year-on-year to 102,310 tonnes
in the first half of 2020, data from the Mines and Geosciences Bureau
showed.

However, the two biggest nickel miners in the Philippines said they do not
expect further major disruptions to their operations for the remainder of
the year, even as coronavirus cases surge in the country.

A series of upbeat economic data released this month from top consumer China
also supported prices, with rising auto sales and factory activity
suggesting that the economy was recovering from coronavirus-driven lows.

Nickel ore prices at Philippine ports SMM-NIC-NLOLYGP were hovering at their
highest level in eight and a half months at $10.25 a tonne, data from metals
prices provider SMM showed.

FUNDAMENTALS

* ShFE stainless steel futures climbed as much as 4.2% to 14,775 yuan a
tonne.

* China’s Contemporary Amperex Technology Co Ltd is developing a new type of
electric vehicle battery that contains no nickel or cobalt.

* LME copper advanced 0.6% to $6,402.50 a tonne, aluminium rose 0.2% to
$1,749.50 a tonne, while ShFE copper increased 1.2% to 50,490 yuan a tonne
and ShFE aluminium eased 0.5% to 14,305 yuan a tonne.

Oil, precious metals drifting in Asia trade

Oil markets had a quiet Friday session in directionless trade. Brent crude
fell 0.25% to USD44.90 a barrel and WTI fell 0.30% to USD42.30 a barrel. A
weaker US dollar this morning has supported oil, with both contracts edging
20 cents higher to USD45.10 and USD42.50 a barrel respectively.

WTI continues to flirt with its 200-day moving average (DMA) at these
levels, but also now has firm resistance at USD43.00 a barrel just above.
Support lies at USD41.00 a barrel. Brent crude has resistance at USD46.40 a
barrel, followed by its 200-DMA at USD46.60 a barrel. Short-term support
lies at USD44.30 a barrel.

Oil markets continue to be in a state of equilibrium at these levels. We
note that speculative interest in the futures has also fallen, suggesting
that short-term traders’ eyes are looking at opportunities elsewhere. The
resurgence of Covid-19 around the world, notably Europe, appears to be
crimping consumption expectations, meaning that oil has not caught the full
tailwind of a falling US dollar. We are likely to experience range-trading
for some time to come.

Both gold and silver continue to lick their wounds

The frenzied volatility of last week on gold and silver has clearly
inflicted a lot of pain on the FOMO crowd. Both metals eased into the week’s
end, in consolidative price action as traders licked their wounds. Gold fell
0.45% to USD1944.50 an ounce, and silver fell 3.80% to USD26.4500 an ounce.

Today’s session in Asia has been quiet so far, with both metals almost
unchanged at USD1942.00 and USD26.2950 an ounce, respectively. Asian traders
are unlikely to rock the boat today, with financial markets, in general,
drifting aimlessly. The present levels give no clue to the next direction
for precious metals, and the wise would be best to wait on the side-lines
for the gnomes of Wall Street to arrive at their desks.

This article is for general information purposes only. It is not investment
advice or a solution to buy or sell securities. Opinions are the authors;
not necessarily that of OANDA Corporation or any of its affiliates,
subsidiaries, officers or directors. Leveraged trading is high risk and not
suitable for all. You could lose all of your deposited funds.--marketpulse

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
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companies typically involve a higher degree of risk and more volatility than
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