Bulls n Bears Daily Market Commentary : 11 February 2020

Wed Feb 12 02:10:03 CAT 2020

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Bulls n Bears Daily Market Commentary : 11 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$14,733,496.25 with foreign buys at ZWL$640,914.70 and
foreign sales were ZWL$7,933,644.33 Total trades were 161

The All Share index added a significant 19.41 points  to close at 367.25
points. OLD MUTUAL LIMITED gained $2.2024 to end at $45.4802, AFDIS  rose by
$0.7750 to end at

$5.0850 and CAFCA  was $0.5750 firmer at $3.4550. DELTA  also increased by
$0.5517 to end at $5.7996 and PADENGA  traded $0.4986 to settle at $5.0000.

Trading in the negative was ZIMPAPERS which eased $0.0656 to $0.3000 and FBC
HOLDINGS which dropped by $0.0578 to $0.8517.

 <http://www.nicozdiamnond.co.zw/> 

  Global Currencies & Equity Markets

Nigeria

Nigerian central bank injects $210 mln into currency market

(Reuters) - Nigeria’s central bank said on Tuesday it had injected $210
million into the interbank foreign exchange market, extending efforts to
boost liquidity and alleviate dollar shortages.

Dollar inflows have dwindled as weak sentiment has been worsened by fears
that the coronavirus outbreak in China will hit demand in one of Nigeria’s
major trading partners, traders said.

The central bank said in a statement that it had released $100 million for
the wholesale currency market, $55 million for small businesses and
individuals, and $55 million for certain dollar expenses such as school fees
and medical bills.

A spokesman said the central bank on Friday injected $218.41 million and 18
million Chinese yuan into the currency market. 

South Africa

South Africa's rand climbs, stocks recover in global return to risk

(Reuters) - South Africa’s rand rallied more than one percent on Tuesday,
shrugging off still-high unemployment figures and a plunge in manufacturing
output to hit a three-session high, as a bounce in risk demand globally was
spurred by easing coronavirus fears.

At 1545 GMT the rand traded 1.05% firmer at 14.8100 per dollar, with most of
the gains coming late in session as New York traders came online and lapped
up the high yielding unit.

Unemployment remained at an 11-year peak of 29.1% in the fourth quarter
while manufacturing output for December shrank 5.9% year-on-year - further
indications of South Africa’s economic growth being in dire straits.

But traders overlooked weak fundamentals and bagged the currency on the
cheap after the unit’s 8% slide since the beginning of the year.

The dollar retreated from a four-month high against the euro on Tuesday as
risk appetite improved, helped by a slowing rate of new coronavirus
infections.

Comments by Federal Reserve Chairman Jerome Powell on Tuesday affirmed the
view that the U.S. central bank is unlikely to change interest rates in the
near term, adding to the attractiveness of high-yielding currencies like the
rand.

The South African central bank cut interest rates to 6.25% in January and
analysts are pencilling-in at least one other cut by year-end while
inflation remains near multi-year lows, making the real return on local
assets relatively high.

Bonds were flat, with the yield on the 2030 government issue steady at
8.865%.

On the stock market, the Top-40 index rose 0.38% to 51,201 points, while the
broader all-share was up 0.23% to 56,891 points, with the blue-chip index
led higher by a near 4% bounce in fuel-maker Sasol almost wiping out the
previous session’s slide.

Miners Sibanye and Impala Platinum were also on the up, by 1.72% and 1.53%
respectively.

Spar however, saw shares down 3.77% by the close, after the grocer released
a modest 18-week trading statement showing sales in Southern Africa
increased by only 4.9%, due to weaker consumer spending.

GLOBAL MARKETS

Stocks surge to record highs on hopes virus is peaking, gold ebbs

(Reuters) - Major U.S. and European stock indexes surged to fresh records on
Tuesday after China’s senior medical adviser suggested the deadly
coronavirus may be over by April, an outlook that also helped crude prices
gain on hopes of renewed Chinese demand.

China’s foremost medical adviser on the outbreak told Reuters the number of
new cases was falling in some places and forecast the epidemic would peak
this month.

But the World Health Organization warned of a global threat potentially
worse than terrorism ,and the WHO’s chief said the world must “wake up and
consider this enemy virus as public enemy number one.”

The WHO said 1,017 people had died in China, where there were 42,708 cases.

Gold fell and the dollar retreated from a four-month high against the euro
as risk appetite improved, helping lift bond yields. Chinese shares closed
higher for a sixth straight session as a decline in new coronavirus cases in
China lifted investor sentiment around the world.

MSCI’s all-world stock index gained 0.44% to hit a record high, as did the
pan-regional STOXX 600 index in Europe, the blue-chip DAX in Germany and the
S&P/TSX Composite in Canada.

The Dow industrials, S&P 500 and Nasdaq also set records but pared most of
their gains on media reports that the Federal Trade Commission demanded data
from Alphabet Inc’s Google unit, Amazon.com Inc, Apple Inc, Facebook Inc and
Microsoft Corp.

The FTC said it would study “hundreds” of small acquisitions by the large
tech companies and that its special orders were designed to identify areas
that need more antitrust enforcement.

The market’s retreat “has more to do with the midday weakness in the
large-cap tech names from the FTC story,” said Michael James, managing
director of equity trading at Wedbush Securities in Los Angeles.

The five companies have driven much of the recent rally in large-cap U.S.
stocks.

Investors are not euphoric and the coronavirus has added a dose of healthy
skepticism in the marketplace, said Rahul Shah, chief executive of Ideal
Asset Management in New York.

Federal Reserve Chair Jerome Powell told Congress that the U.S. economy is
in a good place, even as he cited the potential threat from the coronavirus
in China and concerns about the economy’s long-term health.

On Wall Street, the Dow Jones Industrial Average fell 0.48 points, or -0%,
to 29,276.34. The S&P 500 gained 5.66 points, or 0.17%, to 3,357.75 and the
Nasdaq Composite added 10.55 points, or 0.11%, to 9,638.94.

The pan-European STOXX 600 closed up 0.90%, and emerging market stocks rose
1.11%. The blue-chip CSI300 index in Shanghai gained 0.9%.

German shares rallied after Deutsche Telekom jumped 3.8% as a U.S. judge
approved T-Mobile’s takeover of wireless carrier Sprint Corp in a merger
initially valued at $26 billion. The German telecom giant owns 63% of
T-Mobile, whose shares rose 10.8%. Sprint gained 74%.

Concerns about the economic impact of the coronavirus have recently added a
safety bid for the dollar, while economic data has backed the view that the
U.S. economic outlook is stronger than the euro zone’s.

The dollar has also gained as investors turn to carry trades, where they
borrow in low-yielding currencies such as the euro and the Swiss franc and
invest in dollars or other high-yielding currencies.

The dollar index fell 0.08%, with the euro up 0.08% to $1.0918. The Japanese
yen was flat versus the greenback at 109.79 per dollar.

A Labor Department report said U.S. job openings dropped for a second
straight month in December to hit their lowest in two years, while hiring
increased marginally, suggesting a recent acceleration in job growth was
unlikely to be sustained.

Oil prices edged up from 13-month lows. Investors, however, remain wary that
Chinese demand could slip further if the coronavirus spreads more than
expected and if the Organization of the Petroleum Exporting Countries and
its allies fail to agree on support measures.

Brent crude settled up 74 cents at $54.01 a barrel, while U.S. West Texas
Intermediate crude rose 37 cents to settle at $49.94 a barrel.

U.S. gold futures settled down 0.6% at $1,570.10 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips as stronger dollar, risk-on sentiment weighs

(Reuters) - Gold prices dipped on Tuesday as the dollar held firm and
investors opted for riskier assets after a fall in the number of new
confirmed cases of coronavirus eased some of fears over global economic
impact.

Spot gold was down 0.4% at $1,565.09 per ounce by 11:44 a.m. EST (1644 GMT),
having touched its highest since Feb. 4 at $1,576.76 on Monday.

U.S. gold futures shed 0.7% to $1,568.40 an ounce.

However, “dips in gold are still been fairly bought very readily... given
the strength seen in global equities and the fact that gold continues to
hold up so well.”

Global financial markets scaled new highs as the number of new coronavirus
cases slowed in China and the country’s factories slowly returned to work.

After more than 1,000 deaths, the China’s foremost medical adviser on the
epidemic said infections may be over by April, with the number of new cases
already declining in some places.

Further limiting gold’s appeal, the dollar hit a four-month high against a
basket of rivals on safety buying and Federal Reserve Chair Jerome Powell’s
upbeat view of the U.S. economy.

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

Powell also cited a potential threat from the virus and concerns about the
economy’s long-term health in his latest testimony to the house panel.

“Gold’s longer-term bullish backdrop will remain primarily supported on
physical demand from central banks and rising risks to the global growth
that will trigger another wave of worldwide stimulus,” Edward Moya, a senior
market analyst at broker OANDA, said in a note.

Gold, which is used as an insurance against economic risks, tends to
appreciate on expectations of lower interest rates, which reduce the
opportunity cost of holding non-yielding bullion.

Among other precious metals, palladium fell 0.8% to $2,334.75 an ounce,
silver dropped 0.9% to $17.59, while platinum rose 0.8% to $967.97.

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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