Bulls n Bears Daily Market Commentary : 24 February 2020

Tue Feb 25 02:05:16 CAT 2020

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Bulls n Bears Daily Market Commentary : 24 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$10,265,470.85 with foreign buys at ZWL$304,425.00 and
foreign sales were ZWL$2,020,00 Total trades were 141

The All Share index opened the week on a positive note adding 0.27 points to
close at 485.32 points. HIPPO  rose by $0.9600 to $5.7600, RIOZIM  gained
$0.6775 to end at $4.0650 and DAIRIBORD  was $0.1617 firmer at $0.9775.
NATFOODS also increased by $0.1500 to settle at $19.1500 and POWERSPEED
closed $0.0850 stronger at $0.5110.

Gains were offset by losses in OLD MUTUAL LIMITED which dropped by $0.8948
to $43.1056, TSL eased $0.2500 to close at $1.2000 and ECONET  was $0.0464
weaker at $3.0002. CASSAVA SMARTECH also decreased by $0.0353 to $3.0003 and
DAWN  traded at $0.1400 after losing $0.0343.

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

  Global Currencies & Equity Markets

South Africa

S.Africa's rand, stocks tumble as coronavirus adds to budget worries

(Reuters) - South Africa’s rand tumbled more than 1% while stocks plunged to
a two-month low as a sharp rise coronavirus cases overseas combined with
concerns about the upcoming budget speech knocked down local assets.

Bonds, however, held firm with investors treading cautiously and happy to
hold the country’s high-yielding debt.

Local bonds trade at a favourable differential, or carry trade, to those of
developed countries offering zero or negative yields, largely due to low
inflation and high lending rates.

But the currency, down around 9% since January, has not been able to escape
the cocktail of weak economic growth and heightened risk aversion stoked by
the increasing number of coronavirus cases outside China.

Italy, South Korea and Iran reported sharp increases in coronavirus cases
over the weekend, giving global markets a scare.

Bianca Botes, an analyst at Peregrine Treasury, said the toll on global
growth of the virus outbreak was likely to be larger than initial forecasts,
pushing investors out of emerging markets even as they were still on the
hunt for yields.

At 1530 GMT the was 1.02% weaker at 15.1650 per dollar.

The selloff in equities, with the Top-40 index down 4.5% to 49,267 points
and the All-Share sliding 4.3% to 54,880 points, was led by miners, consumer
goods firms and telecoms.

Miners Amplats, AngloGold Ashanti and Impala Platinum all fell more than 8%
as the virus-related risk-off mood paired with a pullback in global platinum
and palladium prices.

Retailers also suffered, with clothes seller Foschini shedding 7.5%, while
consumer goods firms Tiger Brands and Woolworths tumbled more than 4%,
worsened by the negative growth outlook.

A Reuters poll this month forecast 2020 GDP growth of 0.8%, while a survey
last week suggested the Treasury will raise taxes in the Feb. 26 budget to
increase revenues and ward off a ratings downgrade to junk status by
Moody’s.

Uganda

Hard currency inflows support Ugandan shilling

(Reuters) - The Ugandan shilling was stable on Monday, supported by dollar
inflows from aid agencies and commodity exporters.

At 0753 GMT, commercial banks quoted the shilling at 3,665/3,675, same level
as Friday's close. 

Europe

Europe suffers worst day since 2016 as virus spreads, Wall Street opens ugly

(Reuters) - European shares suffered their biggest slump since mid-2016 on
Monday and oil plunged almost 5%, as a jump in coronavirus cases in Italy,
South Korea, Japan and Iran sent investors scrambling to the security of
gold and government bonds.

Wall Street dived around 3% after it opened as the ugly sell-off spread.

Europe had seen Milan’s stock market plummet over 5.5% after a spike in
cases of the virus left six dead in Italy and parts of the country’s
industrial north in virtual lockdown.

Frankfurt and Paris both fell more than 4% and London’s FTSE dropped 3.8%,
wiping at least $400 billion off the region’s market value in a few short
hours.

The flight to safety was just as resounding, gold surging 2.5% to a
seven-year high of $1,680 an ounce.

Bonds rallied too. Ten-year U.S. Treasury yields dropped below 1.36% for the
first time since July 2016. The 30-year Treasury touched a record low at
just under 1.81% and German yields dropped to -0.48%, their lowest in more
than four months.

Wall Street’s initial fall swiped more than 800 points off the Dow, shoved
the benchmark S&P 500 below its 50-day moving average — a key technical
level for chart watchers — and took MSCI’s world index negative for the
year.

In Asia overnight, South Korea’s KOSPI had slumped 3.9% after the government
declared a high alert. The number of cases rose to 763 and deaths to seven.

Japanese markets were closed, but Australia’s benchmark index slid 2.25% and
New Zealand fell about 1.8%. . China’s blue-chip CSI300 closed down 0.4%,
taking MSCI’s broadest index of Asia-Pacific shares outside Japan to its
lowest since early February.

The virus has now killed 2,592 people in China, which has reported 77,150
cases, and spread to some 28 other countries and territories, with a death
toll outside of China around two dozen, according to a Reuters tally.
[nL8N2AB5TN

Iran, which announced its first infections last week, said it had confirmed
43 cases and eight deaths, with most cases in the holy city of Qom. Saudi
Arabia, Kuwait, Iraq, Turkey and Afghanistan imposed travel and immigration
restrictions on the Islamic Republic.

SURGE TO SAFETY

As well as the early whack to Wall Street, CBOE’s VIX volatility index, the
so-called fear gauge, reached its highest since August.

U.S. fed fund futures signalled more rate cuts later this year and a near
20% chance of a cut next month.

FX markets reacted by pushing up the safe-haven Japanese yen to 111.34 yen
per dollar. But against the rest of the world, the dollar was again showing
its strength.

The euro was squeezed towards $1.08 and the Australian dollar, often traded
as a proxy for China risk, fell to an 11-year low of $0.6585.

Korea’s won was down 1% at 1,219.06 after falling to its weakest since
August 2019. Emerging-market currencies from Mexico’s peso and Turkey’s lira
to Poland’s zloty and Russia’s rouble were all in the red.

In commodity markets, Brent crude fell 3.5%, or $2.1, to $56.35 a barrel.
U.S. crude dropped 3%, or $1.64, to $51.74 a barrel. Among the main
industrial metals, copper fell 1.4% and zinc was down 2.5%.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Stocks tumble, oil falls, gold spikes as virus fears grip markets

(Reuters) - Stocks across the globe fell by the most since mid-2016 on
Monday and oil prices tumbled as a jump in coronavirus cases outside of
China drove investors to the perceived safety of gold and government bonds
on fears of the impact on the global economy.

Spot gold prices rose for a fifth straight session and touched a 7-year high
while the U.S. 30-year Treasury bond yield set a record low. MSCI’s global
gauge of stocks fell 3% and the three major U.S. indexes also fell more than
3%.

Despite the spike in coronavirus cases reported in Italy, South Korea and
Iran, the head of the World Health Organization said that “using the word
‘pandemic’ now does not fit the facts but may certainly cause fear.

Concerns over the hit to economic growth and uncertainty over the stress to
supply chains triggered selling in stocks and other high-risk assets.

The Dow Jones Industrial Average fell 1,031.61 points, or 3.56%, to
27,960.8, the S&P 500 lost 111.86 points, or 3.35%, to 3,225.89 and the
Nasdaq Composite dropped 355.31 points, or 3.71%, to 9,221.28.

The pan-European FTSEurofirst 300 index lost 3.76% with Milan’s stock market
down more than 5% after a spike in cases of the virus left six dead in Italy
and parts of the country’s industrial north in virtual lockdown.

MSCI’s gauge of stocks across the globe shed 2.97%, its biggest single-day
decline since June 24, 2016.

Emerging market stocks lost 2.67%. MSCI’s broadest index of Asia-Pacific
shares outside Japan closed 2.52% lower, while futures in Japan’s Nikkei
fell over 4%.

The virus has now killed more than 2,500 people in China, which has reported
some 77,000 cases, and spread to 29 other countries and territories, with a
death toll of more than two dozen outside of China, according to a Reuters
tally.

Iran, which announced its first infections last week, said it had confirmed
61 cases and 12 deaths, with most cases in the holy city of Qom. Kuwait,
Bahrain, Oman, Afghanistan and Iraq reported their first new coronavirus
cases, all in people who had been to Iran.

“The idea that the coronavirus has been fully contained has been firmly
banished,” said Chris Beauchamp, chief market analyst at IG. “This means the
economic forecasts of the impact, such as they are, will need to be revised,
with a greater impact now to be expected.”

SURGE TO SAFETY

Benchmark 10-year notes last rose 29/32 in price to yield 1.3738%, from
1.47% late on Friday. The 30-year bond touched a record low yield of 1.811.

In currency markets the Japanese yen strengthened 0.77% to 110.74 per
dollar. The dollar index fell 0.13%, with the euro up 0.08% to $1.0852.

Korea’s won was down 1% and emerging-market currencies, from Mexico’s peso
and Turkey’s lira to Poland’s zloty and Russia’s ruble, were all in the red.

Oil pared some of its early losses. U.S. crude fell 3.8% to $51.35 per
barrel and Brent was last at $56.18, down 3.97% on the day. Both had fallen
more than 5% during Monday’s session.

Among the main industrial metals, copper lost 1.33 percent to $5,688.50 a
tonne.

Yields on top-rated, tax-exempt U.S. municipal bonds fell to all-time lows
of 1.01% in 10-year paper and 1.6% in 30-year debt, according to Municipal
Market Data.

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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