Bulls n Bears Daily Market Commentary : 10 February 2020

Mon Feb 10 18:03:42 CAT 2020

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Bulls n Bears Daily Market Commentary : 10 February 2020

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Zimbabwe Stock Exchange Update

ZSE surges in week-opener

Market gains persisted into the new week with the primary All Share Index
putting on 3.93% to 347.84pts while, the Industrial Index gained 3.96% to
close at 1162.31pts. The ZSE Top Ten Index advanced 4.38% to close higher at
317.29pts while, the Mining Index went up 0.67% to 354.98pts on the back of
gains in Bindura that rose 1.45% to settle at $0.2100. ZHL led winners of
the day on a 20% surge to $0.2400, trailed by Powerspeed which jumped 19.90%
to $0.3525. Hotelier African Sun added 19.87% to $0.3740 while, TSL improved
18.96% to $0.9600 on constrained supply. Insurance group FMHL wrapped the
top five gainers of the day on a 14.70% lift to $0.5345. Two fallers of the
day were NMB and Delta which trimmed 16.67% and 0.56% to end pegged at
respective prices of $0.5000 and $5.2479.

Advancers outstripped decliners by a count sixteen to set a positive breath
for the day. Activity aggregates faltered in week-opener with volumes
shedding 75.06% to 0.86m shares while, turnover dipped 68.41% to $1.89m.
Volume leaders of the day were Econet (15.40%), First Capital (14.54%),
Delta (13.75%), Zimpapers (13.29%) and Powerspeed (11.66%). Value outturn
was anchored by Delta, Old Mutual, Econet and Cassava which claimed a
combined 81.53%.-EFE Securities

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  Global Currencies & Equity Markets

Egypt

Egyptian pound strengthens to three-year high

(Reuters) - The Egyptian pound gained on Monday to its strongest against the
dollar since the week after Egypt allowed the currency to weaken as part of
an economic reform plan backed by the International Monetary Fund more than
three years ago.

The pound traded as strong as 15.66 to the dollar on Monday compared with
15.69 on Sunday.

The pound last traded as strong on Nov. 17, 2016, six days after it signed a
$12 billion, three-year loan agreement with the IMF.

Remittances from Egyptians working abroad rose to $6.71 billion in the
July-to-September quarter, the most recent for which figures are available,
from $5.91 billion a year earlier.

Tourism receipts climbed to $4.19 billion in the same quarter from $3.93
billion a year before.

Uganda

Ugandan shilling unchanged on lacklustre dollar demand

(Reuters) - The Ugandan shilling was unchanged on Monday, with demand from
both importers and commercial banks being lacklustre, traders said.

At 0916 GMT, commercial banks quoted the shilling at 3,670/3,680, same level
as Friday's close.

China

Hong Kong dollar rises to 7.7598 per U.S. dollar, hits fresh 3-year high

(Reuters) - The Hong Kong dollar rose to its highest in nearly three years
against the U.S. dollar on Friday.

The currency is pegged to the greenback in a tight range of 7.75 to 7.85 per
U.S. dollar.

The Hong Kong currency rose on Friday to 7.7598 per U.S. dollar, its
strongest level since March 2017, before closing at 7.7600. 

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Commodities Markets

Gold hits 1-week high as virus concerns boost safety demand

(Reuters) - Gold rose to its highest in one week on Monday as the death toll
from the coronavirus outbreak rose further and investors sought safe havens
from the economic impact.

Spot gold was up 0.2% at $1,573.14 per ounce by 09:53 a.m. EST (1453 GMT).
Its session high was the highest since Feb. 4 at $1,576.21. U.S. gold
futures were 0.2% higher at $1,576.80.

Safe-haven gains for the U.S. dollar capped gold’s gains, as the dollar
index scaled a four-month peak.

The death toll from the epidemic has surpassed that of Severe Acute
Respiratory Syndrome (SARS) from 2002-2003 and the World Health Organization
said the number of cases outside China could be just “the tip of the
iceberg”.

Investors remained cautious even though Chinese authorities lifted some work
and travel curbs, helping businesses to resume operations.

Since late last month, the world’s second-largest economy has suffered
prolonged business closures, lockdowns and travel restrictions due to the
outbreak that hit around the Lunar New Year holidays, a peak time for travel
and business.

Bullion, seen as a safe investment during crisis, is off to a solid start
this year, gaining nearly 4% so far in 2020 after an annual rise of about
18% in 2019.

Markets are looking forward to Federal Reserve Chair Jerome Powell’s two-day
address to the U.S. Congress starting Tuesday, especially for commentary
related to the China-linked virus.

The U.S. Federal Reserve kept benchmark interest rates unchanged at its
January policy meeting, citing moderate economic growth and a strong jobs
market.

Lower interest rates decrease the opportunity cost of holding non-yielding
bullion and weigh on the dollar, making gold cheaper for investors holding
other currencies.

On the technical front, “gold now faces the resistance level of $1,575, and
a clear surpass of this level could open space for further rallies, with a
first target of $1,600,” ActivTrades chief analyst Carlo Alberto De Casa
said in a note.

Palladium rose 1.3% to $2,347.50 an ounce, silver gained 0.4% to $17.74,
while platinum fell 0.9 to $956.18. 

Zinc sinks to multi-year low on inventory jump and China fears

(Reuters) - Zinc prices lurched on Monday to their lowest since July 2016
after a surge in inventories and worries over demand in China as cases of
the coronavirus grow in number.

Zinc stocks in warehouses certified by the London Metal Exchange (LME) hit
their lowest in nearly three decades last week, but analysts said this was
deceptive because a lot of metal was being held in other depots.

Annual contract negotiations had constrained metal flows but those have now
been concluded, said Oliver Nugent, an analyst at Citigroup in London.

Three-month LME zinc slid to $2,123.50 a tonne, the lowest since July 8,
2016. It failed to trade in official open-outcry activity and was bid down
0.7% to $2,131.

With the coronavirus death toll rising to 908, the World Health Organization
said the number of cases outside China could be “the tip of the iceberg”.

Citibank has become more cautious about the impact of the virus on demand in
China, the world top consumer of metals, Nugent said.

Air conditioning units require large amounts of copper.

* ZINC STOCKS: LME zinc inventories MZNSTX-TOTAL shot up on Monday to 71,150
tonnes, the highest since August last year, bringing the gains over the past
week to 43%.

* ZINC SPREAD: The discount of cash LME zinc to the three-month contract
CMZN0-3 rose to $4.50 a tonne, its highest since last August and compared
with a premium of $23.75 about three weeks ago. This indicates a rise in
supplies of metal in the LME system.

* COPPER: LME copper rose 0.1% to trade at $5,668 a tonne in official rings,
but Nugent expects further losses. Citibank forecasts that copper will touch
a low of $5,300 during the first quarter before recovering later in the
year.

* CHINA: Factory gate prices in China snapped six months of year-on-year
declines in January, though prolonged business closures from the virus
outbreak mean positive momentum is unlikely to persist.

* TIN: Indonesian state miner PT Timah plans to increase its 2020 refined
tin output by 5%, a senior official said.

* PRICES: LME aluminium was bid 1.3% lower at $1,704 a tonne, nickel was bid
up 1.5% at $12,960, lead shed 0.6% to trade at $1,806 and tin was bid up
1.1% to $16,350.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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