Bulls n Bears Daily Market Commentary : 03 February 2020

Tue Feb 4 03:17:25 CAT 2020

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Bulls n Bears Daily Market Commentary : 03 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$18,165,874.23 with foreign buys at ZWL$299,604.20 and
foreign sales were ZWL$134,475.00 Total trades were 135

The All Share index ended its winning streak by easing 5.40 points  to close
at 327.50 points. DELTA retreated by $0.6096 to $4.4528, ECONET lost $0.1984
to $2.2902 and OLD MUTUAL LIMITED was $0.1872 weaker at $47.8009. BAT was
also in the negative after dropping off $0.0500 to $60.3000 and SIMBISA was
$0.0448 lower at $2.0650.

Losses were partially offset by SEEDCO which added $0.3980 to $2.4000, AFDIS
gained $0.3495 to $3.9495 and DAIRIBORD traded $0.1146 higher at $0.6988.
PADENGA also increased by $0.1056 to $4.2627 and OK ZIMBABWE traded $0.0806
stronger at $1.2154.

  Global Currencies & Equity Markets

South Africa

South Africa's rand firms following slide on virus fears

(Reuters) - South Africa’s rand firmed to below the key 15.00 per dollar
mark on Monday, rebounding after a steep slide triggered by the coronavirus
outbreak sent the currency to its weakest level in three months.

The stock market closed lower, in line with weakness in global stocks, amid
fears the coronavirus epidemic would hit Chinese demand.

At 1500 GMT the rand was 1.18% firmer at 14.8520 per dollar, having closed
at 15.0300 on Friday.

Investors concerned about the spread of the coronavirus wiped more than $400
billion off the value of China’s stocks in the first trading session in two
weeks, after an extended Lunar New Year holiday break. The death toll from
the outbreak has exceeded 360 people.

The rand has tumbled 5.2% against the greenback since the beginning of the
year, with more than 4% of those losses in the past week, also hit by signs
of weakness in the local economy.

The sharp fall in the rand after positive trading in December that saw the
currency flirt with sub-14.00 levels has seen volatility measures spike,
making holding the rand even tougher for investors.

State power firm Eskom on Friday resumed nationwide load-shedding, or
blackouts, and said they would continue through the week as it carried out
long-delayed maintenance on its creaking fleet of coal plants, threatening
already slack consumer demand and business activity.

On the stock market, the Top-40 index was down 0.34% while the broader
all-share edged down 0.46%.

Bonds firmed, with the yield on the benchmark bond due in 2026 falling 7
basis points to 7.95%. 

Kenya

Kenyan shilling strengthens, remittances help

(Reuters) - The Kenyan shilling strengthened on Monday supported by inflows
from remittances and offshore investors interested in buying government
bonds, traders said.

At 0704 GMT, commercial banks quoted the shilling at 100.35/55 per dollar,
compared with 100.45/65 at Friday's close.

Asia

Asia shares fragile amid China worries, oil sinks

(Reuters) - A fragile calm gripped Asian shares on Tuesday as investors
waited anxiously to see if Beijing could stem the rout in Chinese assets,
while oil hit 13-month lows as the coronavirus throttled demand in the
world’s biggest importer of fuel.

Brent crude futures crashed to $54.11 a barrel, bringing losses for the year
so far to 18%, while U.S. crude sank to $49.99.

China’s central bank has flooded the economy with cash while trimming some
key lending rates, but analysts suspect more will have to be done to offset
the economic fallout from the virus.

The total number of virus deaths in China reached 425 as of Monday, from
20,438 cases.

Shanghai blue chips slid almost 8% on Monday as markets resumed from the
Lunar New Year holiday.

A swath of commodities from copper to iron ore joined oil in the dumpster
amid fears the drag on Chinese industry and travel would sharply curb demand
for fuel and resources.

Early Tuesday, MSCI’s broadest index of Asia-Pacific shares outside Japan
had inched up 0.1%, led by gains in South Korea and Australia. Japan’s
Nikkei pared opening losses to be off 0.2%.

E-Mini futures for the S&P 500 were flat after results from Alphabet Inc
disappointed, though that followed a 0.7% bounce overnight.

Wall Street had taken comfort in a surprisingly solid reading of U.S.
manufacturing and the Dow ended Monday with a rise of 0.51%, while the S&P
500 gained 0.73% and the Nasdaq 1.34%.

Factory activity rebounded in January after contracting for five straight
months amid a surge in new orders.

The ISM index rose to 50.9, the highest since July, from an upwardly revised
47.8, though the survey was taken before the virus spread in earnest.

The upbeat report nudged Treasury yields up from deep lows and gave the U.S.
dollar a modest lift.

The dollar firmed to 108.68 yen, from an overnight low of 108.30, while the
euro faded a fraction to $1.1059 but remained well within recent snug
ranges.

Against a basket of currencies, the dollar bounced back to 97.837 from a
trough of 97.406.

Sterling was nursing a grudge at $1.2990 having shed 1.6% overnight when the
UK government laid out a tough opening stance for future trade talks with
the European Union following its departure from the bloc last week.

The fall erased all the gains made after the Bank of England’s decision last
week to keep interest rates on hold.

Spot gold was off at $1,577.48 per ounce, from a top of $1.591.46, as the
dollar firmed and safe haven demand waned a little.

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Commodities Markets

Shanghai copper plunges to 3-year low as Chinese markets reopen

(Reuters) - Shanghai copper prices dived to a three-year low on Monday as
Chinese markets reopened, giving investors the first opportunity since Jan.
23 to react to a coronavirus outbreak that threatens to damage the economy
of the world’s biggest metals consumer.

Other Shanghai-traded industrial metals also tumbled, following big price
falls on the London Metal Exchange (LME) that took place while Chinese
markets were closed.

China’s equity markets, oil, iron ore and soft commodities contracts and the
yuan plunged despite the central bank’s biggest cash injection into the
financial system since 2004 and moves by regulators to curb selling.

The most traded copper contract on the Shanghai Futures Exchange (ShFE) fell
by its daily limit of 7% to 44,780 yuan a tonne, the lowest since November
2016, before ending down 6.5% at 45,040 a tonne.

Benchmark LME copper ended 0.8% lower at $5,523 a tonne — down around 7.5%
from its close on Jan. 23, 13% from a high in mid-January and near a
two-year low of $5,518 reached last September.

A significant hit to demand was now priced in, he said, and if the virus is
brought under control, demand will likely bounce back later in the year,
lifting prices.

Analysts at Citi said they expected prices to fall to $5,300 over the next
three months but recover to around $6,300 in the third quarter as China
pumps money into its economy.

By Sunday, 361 people had died in China from the coronavirus, compared with
17 on Jan. 23. At least another 171 cases have been reported in more than
two dozen other countries and regions.

Several Chinese cities remain in virtual lockdown with travel severely
restricted.

Data released on Monday showed China’s factory activity expanded at its
slowest pace in five months in January, while industrial firms posted their
first annual decline in profits in four years in 2019.

Looking to head off market panic, China’s central bank injected 1.2 trillion
yuan ($173.8 billion) of liquidity into the markets via reverse repo
operations on Monday.

It also unexpectedly cut the interest rate on those short-term funding
facilities by 10 basis points. An adviser to the central bank said the
chance of a benchmark lending rate cut on Feb. 20 had significantly
increased.

Chinese regulators also asked investment managers to curb short-selling,
sources told Reuters.

The ShFE exchange has suspended night-time trading until further notice.

ShFE most-traded aluminium, nickel, zinc , lead and tin fell by between 3.7%
and 5.8%.

On the LME, benchmark aluminium finished down 2.1% at $1,686.50 a tonne
after hitting its lowest since January 2017.

Zinc fell 2.5% to $2,146, nickel slipped 1% to $12,725, lead tumbled 2.9% to
$1,825 and tin closed 0.9% lower at $16,205.

Gold retreats as China seeks to limit virus damage

(Reuters) - Gold fell 1% on Monday, retreating from its highest level in
nearly four weeks as China’s steps to protect its economy from the impact of
the coronavirus outbreak and a buoyant dollar stemmed some inflows into
safe-haven assets.

Spot gold fell as much as 1% and was down 0.8% at $1,577.11 per ounce as of
1321 GMT.

Prices touched the highest since Jan. 8 earlier in the session. U.S. gold
futures shed 0.4% to $1,581.70.

China’s central bank unexpectedly lowered the interest rates on reverse
repurchase agreements and injected 1.2 trillion yuan ($171 billion) of
liquidity into markets as authorities sought to relieve pressure on the
economy from the rapidly spreading virus.

European and U.S. shares were a little higher, but a gauge of global stocks
hovered near seven-week lows. The U.S. dollar was up about 0.3% against its
main rivals, having recovered from a two-week low touched in the previous
session.

Lower interest rates reduce the opportunity cost of holding the non-yielding
bullion.

Physical gold markets in major Asian hubs saw activity dwindle last week as
the epidemic took a toll on demand, especially with top consumer China out
of action.

People’s anxiety about going out because of the outbreak during the Lunar
New Year holidays in China, usually a strong seasonal driver for bullion
demand, will have a negative impact on the gold market, said Julius Baer’s
Menke.

Speculators cut their bullish positions in COMEX gold contracts in the week
to Jan. 28, data showed on Friday.

Elsewhere, palladium was up 0.6% at $2,290.92 an ounce, silver fell 1.5% to
$17.76, while platinum fell 0.1% to $955.57.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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companies typically involve a higher degree of risk and more volatility than
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for guideline purposes only and sourced from third parties.

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