Bulls n Bears Daily Market Commentary : 06 January 2020

Tue Jan 7 02:41:47 CAT 2020

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Bulls n Bears Daily Market Commentary : 06 January 2020

Zimbabwe Stock Exchange Update

Market Turnover ZWL$5,625,902.13 with foreign buys at ZWL$8,664 and
foreign sales were ZWL$858,416 Total trades were 135

The All Share index started the week on a higher note by adding 1.37 points
to close at 233.54 points. OLD MUTUAL LIMITED gained $0.7387 to end at
$36.7854, RIO ZIM LIMITED was $0.3540 higher to close at $2.7000 and CASSAVA
SMARTECH ZIMBABWE LIMITED advanced by $0.0396 to settle at $1.4799. AXIA
CORPORATION traded $0.0142 firmer at $0.6185 and ZIMPAPERS LIMITED  was
$0.0140 stronger at $0.1340.

Trading in the negative; PADENGA HOLDINGS LIMITED lost $0.0543 to close at
$2.4807, FIRST MUTUAL LIMITED dropped $0.0350 to end at $0.2950 and CBZ
HOLDINGS LIMITED traded $0.0071 weaker at $0.6900. Other counters to lose
ground were WILLDALE  which was $0.0062 lower at $0.0301 and SIMBISA BRANDS
which eased $0.0010 to end at $1.2603.

  Global Currencies & Equity Markets

Uganda

Ugandan shilling weakens due to increased dollar demand from banks

(Reuters) - The Ugandan shilling weakened on Monday, undercut by a surge in
dollar demand from commercial banks, traders said.

At market close at 1330 GMT, commercial banks quoted the shilling at
3,705/3,715, weaker than Friday's close of 3,685/3,695.

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling was stable on Monday with remittances and
non-governmental organizations helping the supply of dollars, traders said.

At 0836 GMT, commercial banks quoted the shilling at 100.95/101.15 per
dollar, the same as Friday's close.

       <mailto:info at bulls.co.zw> 

Oil price gains turn up the heat on emerging market oil importers

(Reuters) - Oil prices topping $70 a barrel due to rising geopolitical
tensions are piling the pressure on emerging market crude consumers such as
South Africa, Turkey and India, already struggling to boost their fragile
economic growth.

Emerging markets have had a tumultuous time over the past couple of years,
with pressure from a strong dollar and the fallout from the China-U.S. trade
war adding to reverberations from individual crises in countries like Turkey
and Argentina.

More than half of the largest emerging market economies are crude oil
importers with China and India near the top of the list. But much of the
focus will be on sizeable emerging markets, which depend heavily on foreign
money flows and have currencies that have struggled in recent months and
years.

Trouble could be brewing for those emerging economies in particular that
have been hit by a combination of currency weakness, heavy reliance on
dollar-denominated energy imports and external funding flows.

Turkey, South Africa and India have all seen imports as a share of GDP rise
over the past two years, with fuel making up an ever larger chunk.

And currency weakness has amplified the woes. While Brent prices — bar some
ups and downs — are trading broadly close to levels seen two years ago, many
emerging market countries have seen prices jump in their own currencies.

When oil prices gain, analysts also closely watch how another oil shock
might affect a country’s import cover and the adequacy of central banks’
foreign currency reserves.

Importers such as India, China and Turkey are exposed to any combination of
a jump in import prices and higher domestic demand, said Simon
Quijano-Evans, chief economist at Gemcorp Capital LLP.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper resilient despite weaker China data and Mideast tensions

(Reuters) - Copper edged higher on Monday as a rise in oil prices offset
softer Chinese economic data and an escalation in tension between the United
States and Iran, analysts said.

Commerzbank analyst Daniel Briesemann said the jump in oil prices since the
United States killed Iranian general Qassem Soleimani would push up miners’
costs and this was leaving base metals relatively resilient to increased
geopolitical tension.

Benchmark copper on the London Metal Exchange (LME)ended 0.1% higher at
$6,138 a tonne, climbing towards an eight-month high.

Iran said it would retaliate against the United States after the killing of
Soleimani last week, prompting some investors to shed riskier stocks and
move into safe-haven assets such as gold, government bonds and the yen.

A weaker dollar on Monday also helped commodities prices to firm.

The downbeat reading of China’s services sector, which accounts for more
than half of the top metal consumer’s economy, highlighted corporate
concerns over subdued economic conditions The services report came on top of
data last week that showed activity in the construction sector had pulled
back.

POSITIONING: The net speculative long in copper was 11% of open interest as
at Thursday’s close, estimates by Marex Spectron showed.

TRADE DEAL: A Chinese delegation plans to visit Washington on Jan. 13 for
the signing of a U.S.-China Phase 1 trade deal, the South China Morning Post
reported on Sunday.

A thawing in trade relations between the two economic giants helped copper
to climb more than 5% in December, though Commerzbank analysts said
subsequent negotiations on further partial agreements will prove “far more
difficult because they will address sensitive issues”.

COPPER: First Quantum Minerals Ltd fell as much as nearly 4% on Monday after
the copper miner said it had adopted a poison pill takeover defense, nearly
a month after China’s Jiangxi Copper Co Ltd, agreed to pay $1.1 billion to
become its largest shareholder.

MIDDLE EAST: Copper prices have been hit by the U.S.-Iran situation and
flight from market risk, Goldman Sachs said.

“Further escalation of geopolitical tensions has the potential to dampen
economic activity and weaken base metals demand,” the bank’s analysts said,
though they remain bullish on copper owing to depressed margins at smelters.

ALUMINIUM SPREADS: Cash aluminium deepened its discount to the three-month
contract, pointing to plentiful supply. It stood at $33 a tonne, the deepest
discount since mid-September. CMAL0-3

On-warrant inventories of aluminium in LME-approved warehouses rose to
938,650 tonnes. MALSTX-TOTAL

Aluminium rose 0.5% to $1,833 a tonne, after touching its highest since July
22.

OTHER METALS: Zinc climbed 0.8% to $2,324.50 a tonne, its highest in two
weeks, lead ended at a steady $1,920, tin rose 0.3% to $16,850 and nickel
edged up by 0.5% to $13,820 after touching its lowest in nearly four weeks. 

Gold surges on Mideast risk but stocks pare losses

(Reuters) - Gold prices shot to almost seven-year highs on Monday as a spike
in U.S.-Iranian tensions spurred demand for safe-haven assets and pushed a
gauge of global equity markets lower, but shares on Wall Street rebounded on
a less worrisome view of events.

Oil rose and the dollar weakened after the U.S. killing last week of General
Qassem Soleimani, the architect of Iran’s drive to extend its influence
across the Middle East. The death raised concerns around the world that a
regional conflict could erupt.

Iran’s supreme leader wept in grief with thousands of mourners thronging
Tehran’s streets for Soleimani’s funeral, and the slain military commander’s
successor vowed to expel U.S. forces from the region in revenge.

MSCI’s gauge of stocks across the globe shed 0.19%, while European shares
extended losses. The pan-European STOXX 600 index lost 0.41%.

On Wall Street, the benchmark S&P 500 and Nasdaq turned positive after early
declines, a sign investors were taking a cautious approach to the potential
for rising hostilities.

The market should be jittery but the recovery from the 9/11 attacks in 2001
and the financial crisis a decade ago have made it easier to take lesser
events in stride, said David Kelly, chief global strategist at JPMorgan
Asset Management.

However, it is important not to get lulled into complacency because there is
some additional risk in the equity market after Soleimani’s death and high
stock valuations, Kelly noted.

The Dow Jones Industrial Average fell 0.93 points, or -0%, to 28,633.95. The
S&P 500 gained 5.46 points, or 0.17%, to 3,240.31 and the Nasdaq Composite
added 30.48 points, or 0.34%, to 9,051.25.

Emerging market stocks lost 1.03%, while earlier in Asia, China’s blue-chip
CSI300 index ended 0.4% lower and Tokyo’s Nikkei average fell 1.91% to a
one-month low.

Adding to tensions, Iran said it was taking another step back from its
commitments under a 2015 nuclear deal with six powers that Washington
withdrew from in 2018.

Spot gold hit $1,582.59 an ounce, its highest since April 2013, but the
precious metal later pared some gains.

U.S. gold futures settled 1.2% higher at $1,568.80.

The Swiss franc rose against the dollar on worries about a broader
escalation of Mideast conflict and the safe-haven Japanese yen surged to a
three-month high before weakening against the greenback.

Edward Moya, senior market analyst at OANDA in New York, said the market is
still digesting the implications.

The dollar index fell 0.16%, with the euro up 0.29% to $1.119.

The yen weakened 0.34% versus the greenback at 108.45 per dollar, while the
dollar fell 0.28% to 0.9701 franc.

The Treasury yield curve was flatter as the heightened U.S.-Iranian tensions
boosted demand for safe-haven assets.

The yield on the benchmark 10-year U.S. Treasury note has fallen more than
5.0% since the close on Jan. 2, just before an overnight U.S. air strike in
Baghdad killed Soleimani.

The 10-year U.S. Treasury note fell 7/32 in price to yield 1.8125%.

The yield on Germany’s 10-year bond dropped to its lowest in over three
weeks. The bond, a safe-haven that usually gains during global uncertainty
or risk, briefly fell to -0.31% .

Yields later pulled back to -0.292%, flat on the day.

Oil prices jumped, pushing Brent above $70 a barrel, as rhetoric from the
United States, Iran and Iraq fanned tensions in the Middle East.

Brent crude futures jumped more than 3% to a high of $70.74 a barrel at one
point but pared gains to settle up 31 cents at $68.91.

U.S. West Texas Intermediate crude gained 22 cents to settle at $63.27 a
barrel.

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
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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
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for guideline purposes only and sourced from third parties.

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