Bulls n Bears Daily Market Commentary : 09 January 2020

Fri Jan 10 05:15:27 CAT 2020

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Bulls n Bears Daily Market Commentary : 09 January 2020

Zimbabwe Stock Exchange Update

Market Turnover ZWL$1,718,147.501 with foreign buys at NIL and   foreign
sales were ZWL$773,190.00 Total trades were 24

The All Share index retreated by 0.45 points to close at 233.35 points. OLD
MUTUAL LIMITED dropped by $0.4885 to $36.0000, NMB eased $0.0375 to close at
$0.3700 and DELTA  was $0.0076 lower at $3.4500. WILLDALE also decreased by
$0.0049 to end at $0.0255.

Losses were offset by gains in CAFCA  which added $0.2198 to $2.0000, AXIA
gained $0.0042 to $0.6275 and OK ZIMBABWE  was $0.0029 higher at $0.6550.
CASSAVA  rose by $0.0004 to $1.5000 and ZPI  traded $0.0002 stronger at
$0.0566.

  Global Currencies & Equity Markets

South Africa

Power cuts, weak data hold back South African rand

(Reuters) - The South African rand weakened slightly against the dollar on
Thursday, as power cuts, weak manufacturing data and a trimmed World Bank
growth forecast weighed.

The currency had steadied against the dollar earlier in the day as fears of
a fresh conflict in the Middle East following the killing of Tehran’s top
general in a U.S. drone strike abated.

At 1510 GMT, the rand traded at 14.2130 per dollar, 0.26% weaker than its
previous close.

Wichard Cilliers, chief currency dealer at TreasuryOne, said easing tension
in the Middle East was the main factor driving the currency market, but
disappointing local news hurt the rand’s ability to capitalise on positive
sentiment.

South Africa’s troubled state power utility Eskom said it would extend power
cuts until Friday morning, the latest round of blackouts that have hurt the
continent’s most industrialised economy.

The World Bank cited concerns over electricity supply as its reason for
trimming the country’s growth forecast to 0.9% in 2020.

Statistics South Africa said manufacturing output contracted by 3.6%
year-on-year in November. Cilliers said this had been expected, so its
impact on the rand was not significant.

In fixed income, the yield on the benchmark government bond due in 2026 fell
1 basis point to 8.24%.

Stocks closed weaker, with the Johannesburg Stock Exchange’s Top-40 index
down 0.34% to 50,916 and the broader all-share index down by the same amount
to 57,129 points.

Gold producers like Goldfields, Anglo American Platinum and
Sibanye-Stillwater lost some of the gains made in the past week as investors
flocked to safe haven assets amid heightened tension between the United
States and Iran. Goldfields, the biggest loser on the blue-chip index,
dropped 4.3%.

At the other end were a number of financial firms and retailers that benefit
from a stronger rand. 

Kenya

Kenyan shilling holds steady against importer demand

(Reuters) - The Kenyan shilling held steady on Thursday with inflows from
remittances offering support against dollar demand from merchandise
importers and the

manufacturing sector, traders said.

At 0912 GMT, commercial banks quoted the shilling at 101.40/60 per dollar,
compared with 101.30/50 at Wednesday's close.

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

World stocks hit record high as techs lead relief rally

(Reuters) - The world’s shares hit a record high on Friday as a relief over
de-escalation of U.S.-Iranian tensions quickly prompted investors to bet on
faster global growth, especially in the technology sector.

MSCI’s broadest gauge of the world’s stocks in 49 countries rose a tad to
hit an all-time high and its index of Asia-Pacific shares outside Japan rose
0.18%.

Japan’s Nikkei rose 0.34% while Australian stocks rallied 0.7% to a record
high. Chinese shares were little changed.

Asia’s gains followed record-setting in the pan-regional STOXX 600 index in
Europe and the three major stock indexes on Wall Street.

The S&P 500 gained 0.67%, with its technology sector rising more than 1%.
Apple gained 2.1%, helped by news that sales of its iPhones in China in
December jumped more than 18% year-on-year.

Investors welcomed the report as a prelude to the upcoming visit by China’s
Vice Premier Liu He, head of the country’s negotiation team in Sino-U.S.
trade talks, to Washington next week to sign a trade deal with the United
States.

Global shares quickly erased losses that followed missile attacks from Iran
targeting U.S. forces in Iraq, as the two countries moved to defuse the
tension.

While analysts expect slight declines in profits for S&P 500 companies in
the last quarter, they see a solid recovery this year.

Waning worries about all-out war in the Middle East pushed down gold,
safe-harbour currencies and oil.

Gold eased 0.3% to $1,547.8 per ounce from a seven-year high of $1,610.90
hit right after Iran’s missile attack on Wednesday.

Against the yen, the U.S. dollar traded at 109.52 yen , having hit a
two-week high of 109.58 in U.S. trade on Thursday.

The euro stood little changed at $1.1105, having fallen to $1.10915 in the
U.S. trade, its lowest in about two weeks.

Sterling fell to a near two-week low against the U.S. dollar after Bank of
England Governor Mark Carney said there could be a “relatively prompt
response” from the bank if the current spell of economic weakness persisted.

The pound last stood at $1.3069, having fallen to as low as $1.3014 in the
previous session.

Oil prices were sharply lower from their highs hit in the wake of Iran’s
missile attack.

U.S. West Texas Intermediate (WTI) crude fell to as low as $58.66 per barrel
on Thursday and last stood at $59.38, down 0.3% on the day, compared to
Wednesday’s peak of $65.65.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Sudan opens up gold market in bid to raise revenue

(Reuters) - Sudan has begun allowing private traders to export gold, a
measure designed to crack down on smuggling and attract foreign currency
into the country’s cash-strapped treasury.

Until now Sudan’s central bank has been the sole body legally allowed to buy
and export gold and set up centres to buy the metal from small-scale miners.

Acting central bank governor Badr al-Din Abdel Rahim Ibrahim said on Jan. 1
the bank would end its gold purchases entirely.

Last week, a little-known private company founded in 2015, al-Fakher, became
the first to take advantage of the new regulations, exporting an initial 155
kg.

Any added revenue from the new system would help Sudan’s government cope
with severe economic pressure as it tries to navigate a three-year political
transition. The government is serving under a military-civilian
power-sharing deal struck after president Omar al-Bashir was ousted last
year.

Sudan produced an estimated 93 tons of gold in 2018, Energy and Mining
Minister Adil Ibrahim told Reuters in November, which would make it Africa’s
third biggest producer after South Africa and Ghana, according to the U.S.
Geological Survey.

In new regulations circulated on Jan. 1, the central bank said private
mining companies could now export up to 70% of their production provided
they deposited proceeds in local banks. They had to sell the other 30% to
the central bank.

The companies would also have to sell any foreign currency they earned,
unless used for their mining business, directly to the central bank at the
official exchange rate, now 45 Sudanese pounds to the dollar. The black
market rate is 88 pounds to the dollar.

Gold traders in Sudan welcomed the central bank’s move to open up exports
but said the government-set exchange rate and the requirement to turn
production over to the bank make the trade unattractive.

SMUGGLING

Before the new regulations, the central bank bought gold at a discount to
the international price. As a result, an estimated 70-80% of it was smuggled
abroad, according to government officials.

The smuggling has hurt. The government lost its main source of foreign
exchange when South Sudan seceded from Sudan in 2011, taking most of the
country’s oil with it.

Gold production in the north began soaring just as oil income fell off, but
because so much was smuggled abroad, the state was deprived of foreign
exchange.

The central bank has been printing Sudanese pounds equivalent to $200
million a month to buy and export gold to finance subsidised commodities,
mainly fuel and wheat, the finance ministry said in a 2020 budget statement
last week.

Any company can export gold under the same conditions al-Fakher followed,
finance minister Ibrahim Elbadawi told the Sudanese News Agency.

One banker said the new system could ultimately succeed. “If they stick to
it without changing the rules every now and then, and the players are truly
private sector, then yes, it will work.” 

Stocks scale records, oil dips as investors hail easing of Mideast tensions

(Reuters) - Crude oil prices slid and equity markets around the world set
new highs on Thursday as investors took on greater risk in a relief rally
after the United States and Iran moved to defuse escalating tensions in the
Middle East.

Gold prices retreated further from a near seven-year peak scaled after
Iran’s missile strike on military bases housing U.S. troops in Iraq early on
Wednesday. The attack came in response to last week’s U.S. drone strike that
killed a top Iranian general and raised fears of a greater regional
conflict.

The safe-haven yen fell to more than a one-week low against the dollar while
yields on U.S. government debt initially fell, pushed lower by a strong
weekly jobless report.

Equities rallied on the de-escalation of U.S.-Iranian tensions and also got
a boost from China’s commerce ministry saying Vice Premier Liu He will sign
a long-awaited Phase 1 trade deal in Washington next week.

MSCI’s gauge of equity indexes in 49 countries hit an all-time high, as did
the pan-regional STOXX 600 index in Europe and the three major stock indexes
on Wall Street. The benchmark index in Australia set a record closing high
and the main Canadian stock index hit an all-time high.

U.S. President Donald Trump refrained from ordering more military action and
Iran’s foreign minister said the missile strikes had “concluded” Tehran’s
response.

Trump’s decision helped to soothe markets and increase demand for risk
assets, said Brad Bechtel, managing director, Jefferies in New York.

“Trump completely downplayed the idea of going to war with Iran or even any
sort of retaliatory measures,” Bechtel said.

Traders said neither the United States nor Iran wanted to further escalate
tensions.

MSCI’s all-country world index gained 0.68%, while the STOXX 600 index rose
0.31%. The MSCI emerging markets index rose 1.62rose 1.62%.

Germany’s trade-sensitive DAX jumped 1.3%, helped by data showing
better-than-expected industrial output in November that dispelled lingering
worries about a recession in Europe’s economic powerhouse.

On Wall Street, the Dow Jones Industrial Average rose 211.81 points, or
0.74%, to 28,956.9. The S&P 500 gained 21.65 points, or 0.67%, to 3,274.7
and the Nasdaq Composite added 74.18 points, or 0.81%, to 9,203.43.

Crude prices slid as the market shifted focus toward a rising inventory of
U.S. crude stocks as prices receded to pre-crisis levels of mid-December.
Oil prices later pared losses to trade near break-even.

Brent crude futures fell 7 cents to settle at $65.37 a barrel, while West
Texas Intermediate settled down 5 cents at $59.56 after tumbling nearly 5%
on Wednesday.

Crude oil stocks were up 1.2 million barrels in the week ended Jan. 3 at
431.1 million barrels, the Energy Information Administration said on
Wednesday.

The yen, seen as a safe haven in times of geopolitical turmoil because of
its deep liquidity, as well as Japan’s current account surplus, quickly
reversed gains made after the Iranian missile strike.

Another safe currency, the Swiss franc, also fell against both the dollar
and the euro..

The yen weakened 0.33% versus the greenback at 109.50 per dollar. The dollar
index, tracking the unit against six peers, rose 0.15%, with the euro up
0.01% to $1.1104.

Greater risk appetite was also evident in emerging markets. China’s
trade-exposed yuan reached a five-month high of 6.9281 per dollar, while
South Africa’s rand and Turkey’s lira, which had been buffeted this week,
rebounded.

U.S. Treasury yields fell after strong demand at a $16 billion auction of
30-year bonds drove their price higher. The benchmark 10-year note rose 6/32
in price to yield 1.8545%.

U.S. gold futures were down 0.4% at $1,551.80

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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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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