Bulls n Bears Daily Market Commentary : 04 February 2020

Wed Feb 5 10:09:19 CAT 2020

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Bulls n Bears Daily Market Commentary : 04 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$5,852,000.23 with foreign buys at ZWL$37,090.00 and
foreign sales were ZWL$851,673.70 Total trades were 148

The All Share index ended the day on a lower note after loosing 6.04 points
to close at 321.46 points. OLD MUTUAL  traded $7.1904 lower at $40.6105, BAT
eased $0.3000 to $60.0000 and CASSAVA SMARTECH LIMITED  was $0.1576 weaker
at $2.3848. Two more counters to lose ground were INNSCOR AFRICA  which
dropped $0.1015 to $4.3885 and ZIMPLOW which was $0.0991 lower at $1.0032.

Trading in the positive was NATIONAL FOODS  which added $0.7500 to $12.7500,
CAFCA LIMITED  gained $0.4800 to $2.8800 and SEEDCO LIMITED  which traded
$0.3313 higher at $2.7313. AXIA CORPORATION  also increased by $0.0674 to
$0.9999 and DELTA CORPORATION traded $0.0472 stronger at $4.5000.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand firms as risk appetite picks up

(Reuters) - South Africa’s rand firmed against the dollar on Tuesday as risk
appetite picked up after China announced measures to minimise the economic
impact from the coronavirus epidemic, but the unit remained vulnerable to
concerns over a weak local economy.

At 1505 GMT, the rand traded at 14.7330 per dollar, 0.93% firmer than its
previous close.

China’s central bank said on Tuesday that its huge liquidity injections
through open market operations this week showed its determination to
stabilise financial market expectations and restore market confidence.

The measures came after a coronavirus-led rout that erased almost $400
billion of market value from Shanghai’s benchmark index on Monday..

The rand has tumbled 5.3% against the greenback since the beginning of the
year, also hit by signs of weakness in the local economy.

The currency remained vulnerable as problems at state power utility Eskom
pile pressure on an already ailing economy.

Eskom last week resumed nationwide 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 bourse, stocks rose to a more than one-week high, with retailer
Steinhoff International topping the gainers following a report of a possible
takeover bid for its European retail group Pepco.

Steinhoff soared to a more than seven-month high to record its biggest
one-day rise in more than two years. It closed 47.22% firmer at 1.59 rand.

Sky News reported that Advent International, which offloaded Poundland for
200 million pounds ($260.36 million) a decade ago, has teamed up with
Hellman & Friedman and Mid Europa Partners to prepare a blockbuster bid that
could value Pepco Group at more than 4.5 billion euros ($4.97 billion).

If the deal is to go ahead, it will provide parent firm Steinhoff with
much-needed liquidity after it was forced to write off billions after the
revelations of an accounting scandal worth an estimated $7 billion.

The Johannesburg All-Share index jumped 1.77% to 56,817 points, while the
Top-40 index climbed 1.98% to 50,892 points as risk appetite returned.

Strong precious metal prices such as palladium, up 2.66% at $2,381, also
helped boost platinum miners which were among the top gainers on the bourse.

Impala Platinum jumped 6.98%, Anglo Platinum rose 6.53%, while Royal
Bafokeng Platinum climbed 4.55% and Northam Platinum gained 4.48%.

In fixed income, the yield on the benchmark bond was down 1.7 basis points
to 7.943%.

Uganda

Ugandan shilling holds steady due to lower demand for dollars

(Reuters) - The Ugandan shilling was broadly stable on Tuesday as restricted
travel to China due to the outbreak of a new coronavirus curbed importer
demand for hard currency. 

At 1048 GMT, commercial banks quoted the shilling at 3,670/3,680, the same
level as Monday's close.

EMERGING MARKETS

EM stocks stage rebound, set to snap eight-day losing streak

(Reuters) - Stocks across the developing world staged a comeback on Tuesday,
rising for the first time in nine sessions as China’s pledge to use monetary
policy tools calmed some nerves around the coronavirus epidemic.

In efforts to ease concerns, the People’s Bank of China said it was
injecting 1.2 trillion yuan ($174 billion) worth of liquidity into the
markets via reverse repo operations on Monday.

A basket of emerging market equities rose 1.7%, after losing more than 6% in
the last eight sessions, as risk appetite was battered by the fast spreading
virus in China.

Hong Kong reported its first death from the coronavirus on Tuesday, the
second outside mainland China from an outbreak that has killed over 420
people so far.

Turkish stocks climbed more than 1%, with shares in state-owned Halkbank
leading gains as it jumped more than 7% after a federal U.S. appeals court
on Monday agreed to pause proceedings while a three-judge panel reviews a
motion by the bank to dismiss charges against it.

Stocks in Russia stabilized, while the rouble gradually firmed after hitting
two-month lows in the previous session. The commodity-linked currency also
tracked a slight recovery in oil prices.

Currencies in central and eastern European economies including Hungary, the
Czech Republic and Romania strengthened versus the euro.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold falls as China's virus measures boost risk appetite

(Reuters) - Gold fell to its lowest in nearly a week on Tuesday as the
dollar firmed and equities gained after Chinese measures to minimise the
economic impact from the coronavirus epidemic stoked investors’ risk
appetite.

Spot gold fell 0.4% to $1,570.41 an ounce by 1055 GMT, its lowest since Jan.
29. U.S. gold futures fell 0.5% to $1,574.70.

World markets bounced as Chinese stocks reversed some of the previous
coronavirus-related plunge, buoyed by official efforts to soothe nerves over
the outbreak that has claimed 427 lives so far.

The dollar strengthened, making gold more expensive for buyers using other
currencies, having gained by 0.4% the previous day on a January rebound in
U.S. factory activity after five months of contraction.

The virus outbreak, which coincided with the Lunar New Year holidays, has
stifled economic activity in the country as cities have been locked down,
with travel restricted and businesses shut.

However, investors remain uncertain about the magnitude of the impact on
Chinese and global growth.

Some traders have also started to price in a cut to U.S. interest rates by
June.

Gold could find strong support at the $1,565 level, ActivTrades chief
analyst Carlo Alberto De Casa said in a note.

Among other precious metals, palladium jumped 3.2% to $2,394.56 an ounce
after touching its highest since Jan. 27 at $2,407.51.

Silver rose 0.5% to $17.74 and platinum jumped by 1.2% to $977.91.

Congo's 2019 copper output up 17%, cobalt production falls 20%

(Reuters) - Copper production in the Democratic Republic of Congo rose 17%
year-on-year to 1.433 million tonnes in 2019, central bank figures showed on
Tuesday.

Cobalt production fell 19.86% to 87,676 tonnes, while gold output slid 5.76%
to 34,657 kilograms.

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
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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
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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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