Bulls n Bears Daily Market Commentary : 18 February 2020

Wed Feb 19 01:56:36 CAT 2020

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Bulls n Bears Daily Market Commentary : 18 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$33,084,299.76 with foreign buys at ZWL$2,195,104.75 and
foreign sales were ZWL$2,678,318.42 Total trades were 328

The All Share index retreated by 9.14 points to close at 516.97 points. OLD
MUTUAL LIMITED  eased another $4.6394 to close at $50.3626, SEEDCO
INTERNATIONAL LIMITED   lost $1.1316 to $4.5834 and CASSAVA SMARTECH  was
$0.2329 weaker at $3.6450. DELTA  also decreased by $0.1646 to settle at
$8.4952 and ZIMPLOW  traded $0.1600 lower at $0.9500.

Trading in the positive was CAFCA  which put on $1.3500 to $8.1000, BAT
gained $0.5000 to settle at $67.5000 and MEIKLES  was $0.2204 stronger at
$8.5029. AFRICAN SUN also added $0.1275 to $0.7725 and DAIRIBORD traded
$0.1125 firmer at $0.6825.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand ticks lower as Moody's stokes downgrade fears

(Reuters) - The rand extended losses on Tuesday to touch a fresh one-week
low after rating agency Moody’s cut its economic growth forecast for South
Africa, raising fears that the country may lose its last investment-grade
rating.

By 1500 GMT, the rand was 0.41% weaker at 15.0420 per dollar, its weakest
level since Feb. 10.

Moody’s on Monday cut its 2020 GDP growth for South Africa to 0.7%, partly
due to the impact of rolling power outages on manufacturing and mining
activity.

The ratings agency left South Africa on the brink of “junk” status in
November last year after it revised the outlook on the country’s last
investment-grade credit rating to “negative”.

Bonds also weakened, with the yield on the 2030 bond up 3 basis points to
8.93%.

Stocks closed down, with the Johannesburg Stock Exchange’s Top-40 Index
falling 0.83% to 51,922 points, and the broader all-share index losing 0.81%
to close at 57,714 points.

Gold stocks were among the only winners of the day on the blue-chip index,
with Goldfields and AngloGold Ashanti rising 3.7% and 2% respectively. 

Uganda

Uganda shilling weakens a touch on uptick in interbank demand

(Reuters) - The Ugandan shilling traded slightly weaker on Tuesday on the
back of an uptick in demand by players in the interbank market.

At 1210 GMT commercial banks quoted the shilling at 3,670/3,680, compared to
Monday’s close of 3,665/3,675.

GLOBAL MARKETS

Stocks slide on Apple's virus warning, euro near three-year low

(Reuters) - Gold rose and global equity markets slid on Tuesday after Apple
Inc said it was unlikely to meet its sales guidance because of the
coronavirus outbreak in China, a warning highlighting the epidemic’s threat
to global growth and corporate profits.

China reported its fewest new coronavirus infections since January and its
lowest daily death toll in a week, but the World Health Organization said
data suggesting the epidemic had slowed should be viewed with caution.

Chinese officials reported 1,886 new cases - the first time the daily figure
has fallen below 2,000 since Jan. 30. The number of deaths, 98, fell below
100 for the first time since Feb. 11.

Apple said on Monday that manufacturing facilities in China that produce its
iPhone and other electronics had begun to reopen, but were ramping up slower
than expected.

The disruption in China will result in fewer iPhones available for sale
around the world, making Apple one of the largest Western firms to be hurt
by the outbreak.

Gold climbed more than 1% to a two-week high as investors sought safety in
the wake of Apple’s warning. The price of Brent, the global crude benchmark,
fell below $57 a barrel but rebounded on reduced supply from oil-rich Libya.

Forecasters, including the International Energy Agency (IEA), have cut 2020
oil demand estimates because of the virus.

Equity markets around the world fell, with MSCI’s all-country world index
slipping 0.47%.

The pan-European STOXX 600 index lost 0.38% and emerging market stocks lost
1.11%.

HSBC Holdings PLC’s announcement that it would shed $100 billion in assets,
shrink its investment bank and revamp its U.S. and European businesses in a
drastic overhaul added to concerns about the impact of the coronavirus.

The UK-based bank, whose huge Asian operations are headquartered in Hong
Kong, said the coronavirus epidemic had significantly impacted staff and
customers. HSBC shares fell 6.35%, leading the FTSE 100 index to close down
0.69%.

On Wall Street, the Dow Jones Industrial Average fell 165.89 points, or
0.56%, to 29,232.19. The S&P 500 slid 9.87 points, or 0.29%, to 3,370.29 and
the Nasdaq Composite rose 1.57 points, or 0.02%, to 9,732.74.

.S. stocks pared losses late in the session and the Nasdaq closed
essentially flat on speculation the hit to global supply chains by the
coronavirus will be temporary.

“We view Apple’s sales warning as more catch-up than canary in the coal mine
for both tech and regional markets,” UBS said in a research note.

Overnight in Asia, China’s CSI300 blue-chip stocks index lost 0.5% after
gaining sharply on Monday, encouraged by a central bank rate cut and
government stimulus hopes.

Japan’s Nikkei lost 1.40%.

The dollar rose to nearly a three-week high against the euro after Germany’s
ZEW survey of economic sentiment showed slumping investor confidence in
Europe’s largest economy.

The euro was down 0.39% to $1.0792, while the dollar index rose 0.43%. The
Japanese yen strengthened 0.01% versus the greenback at 109.88 per dollar.

The ZEW research institute said in its monthly survey that investors’ mood
deteriorated far more than expected in February on worries over the
coronavirus’ effect on world trade.

The survey boosted expectations the German economy will lose more momentum
in the first half as slumping exports keep manufacturers mired in a
recession.

Safe-haven German 10-year bond yields fell to -0.43% at one point. Other
10-year bond yields in Europe fell similarly.

U.S. Treasury yields also fell. The benchmark 10-year note rose 8/32 in
price, pushing its yield down to 1.5627%.

Oil prices slid over the expected impact of the coronavirus on crude demand
and a lack of further action by the Organization of the Petroleum Exporting
Countries and allies to support the market.

Crude rebounded on the collapse of Libyan oil output since Jan. 18 because
of a blockade of ports and oilfields.

Brent crude rose 8 cents to settle at $56.93 a barrel, while U.S. West Texas
Intermediate crude settled flat, or unchanged at $52.05 a barrel.

U.S. gold futures settled 1.1% higher at $1,603.60 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold back above $1,600/oz as Apple's virus warning lifts safety demand

(Reuters) - Gold surged over 1% on Tuesday to fetch more than $1,600 an
ounce as Apple Inc’s surprise warning about the impact of the coronavirus
outbreak fueled concerns about global economic weakness, driving investors
to lower-risk assets.

Palladium notched an all-time high, driven by short supplies of the
auto-catalyst metal.

Spot gold was up 1.3% at $1,601 per ounce as of 1:55 p.m. EST (1855 GMT)
after hitting $1,605.10, the highest since Jan. 8, earlier in the session.

U.S. gold futures settled 1.1% higher at $1,603.60 an ounce.

Apple, the world’s most valuable technology company, said it was unlikely to
meet its March-quarter sales forecast because the coronavirus outbreak was
pressuring its supply chain.

The surprise sales warning knocked global equities off record highs and fed
buying of safe-haven assets.

China’s central bank cut the interest rate on its medium-term loans on
Monday as policymakers sought to reduce the economic shock from the virus
outbreak.

The death toll in China had climbed to 1,868, the National Health Commission
said, and the World Health Organization said “every scenario is still on the
table” in terms of the epidemic’s evolution.

The dollar index climbed to a more than four-month high against key rivals,
also gaining from safe-haven interest.

Palladium gained 2.8% at $2,592 an ounce, after hitting an all-time high of
$2,592.02.

Silver rose 2.2% to $18.16 per ounce, while platinum surged 2.3% to $991.22.

Copper dips as inventory build raises fears of excess supply

(Reuters) - Copper prices fell on Tuesday as deliveries into exchange
warehouses raised fears that demand curbed by the coronavirus outbreak in
China could cause a supply glut.

Warnings from Apple and HSBC that the epidemic was damaging their businesses
sent global equities and most base metals lower, though lead prices rose on
a sharp tightening of nearby supply.

Benchmark copper on the London Metal Exchange (LME) ended 0.7% down at
$5,773 a tonne. The metal used in power and construction has lost 9% since
its January peak but has recovered from the Feb. 3 low of $5,523.

The virus and efforts to contain its spread have slowed Chinese industry,
reducing both consumption and production of metals in the world’s biggest
commodities market.

But increases in LME and Chinese exchange warehouses remained roughly in
line with seasonal norms, he said. “If there is a significant glut building,
it has yet to come into visible locations.”

STOCKS: Headline copper inventories in LME-registered warehouses rose by
5,075 tonnes to 166,475 tonnes, while stocks in Shanghai Futures Exchange
stores have jumped to 262,738 tonnes, the highest in nearly a year.
MCUSTX-TOTAL CU-STX-SGH

SPECULATORS: The net short in LME copper was at 5.8% of open contracts on
Friday, brokerage Marex Spectron said.

CORONAVIRUS: The death toll in China climbed to 1,868, the National Health
Commission said, with 72,436 cases of infection.

SMELTERS: Chinese refined copper production touched its lowest level in 20
months in January, according to an index based on satellite surveillance of
copper plants.

SHIPMENTS: Some overseas buyers of Chinese metal products have stopped
accepting shipments, while others are seeking damages over delays, a China
trade body said.

IMPORTS/PREMIUMS: China’s imports of refined copper are likely to fall this
year, research house Antaike found. Chinese Yangshan copper import premiums,
however, rose to $60 a tonne, up from $55 earlier this month and the highest
since December. SMM-CUYP-CN

GERMANY: The mood among German investors deteriorated far more than expected
in February, a survey showed.

DOLLAR: The U.S. currency strengthened towards last year’s 2-1/2 year high,
pressuring metals by making them costlier for buyers with other currencies.

LEAD: Benchmark lead finished 1.3% up at $1,898 a tonne as the premium for
cash metal over the three-month contract surged to $68 - its highest since
2011 - from only $6 a week ago, suggesting an acute shortage of nearby
metal. MPB0-3

Headline stocks in LME-registered warehouses at 66,725 tonnes are near
decade lows, with a handful of entities controlling the vast majority of LME
warrants and cash contracts. MPBSTX-TOTAL <0#LME-WHC>

PRICES: LME zinc finished 1.2% down at $2,145 a tonne, aluminium slipped
0.1% to $1,720, nickel was down 2.2% at $12,820 and tin closed with a 0.6%
decline at $16,500.

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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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
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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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