Bulls n Bears Daily Market Commentary : 10 January 2020

Mon Jan 13 01:26:10 CAT 2020

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Bulls n Bears Daily Market Commentary : 10 January 2020

Zimbabwe Stock Exchange Update

Market Turnover ZWL$6,479,435.19 with foreign buys at ZWL$960.00 and
foreign sales were ZWL$1,394,471.40 Total trades were 120

The All Share index ended the week on a higher note after adding 0.75 points
to close at 234.10 points. AFRICAN DISTILLERS LIMITED  added $0.1900 to
$3.1900, SEEDCO LIMITED   gained $0.1075 to $1.6075 and POWERSPEED   was
$0.0400 higher at $0.2400. AXIA CORPORATION  rose by $0.0250 to $0.6525 and
ECONET WIRELESS traded $0.0040 stronger at $1.5050.

Trading in the negative SIMBISA BRANDS  eased $0.0070 to close at $1.2525
and OLD MUTUAL LIMITED  was $0.0007 lower at $35.9993. 

  Global Currencies & Equity Markets

South Africa

South African rand weakens as power cuts weigh

(Reuters) - South Africa’s rand weakened against the dollar on Friday as
power cuts weighed on the economy, while investors awaited a key interest
rate decision from the central bank next week.

The rand was trading at 14.2700 per dollar at 1444 GMT, 0.67% weaker than
its previous close.

Many financial markets were rapidly reversing sharp falls seen at the start
of the week following the killing of Iran’s top general in a U.S. air
strike, as fears of imminent conflict in the Middle East abated.

The rand also regained some ground, but it was held back by troubled state
utility Eskom’s scheduled power cuts, which have dragged on efforts to
revive growth in the continent’s most industrialised economy.

Weak domestic data throughout the week has also failed to provide a basis
for optimism, NKC African Economics said in a note. “Recent manufacturing
and upcoming mining data may be a precursor to a dismal Q4 GDP reading,” it
said.

Investors were waiting for the outcome of the South African Reserve Bank’s
monetary policy meeting next Thursday, when it will announce its interest
rate decision after keeping rates on hold at 6.5% at its last meeting.

Kieran Siney from ETM Analytics said this would be the key event to watch in
the coming week, predicting the central bank would remain cautious amid a
“precarious” fiscal situation in South Africa.

Stocks, however, received a boost from the easing of concerns over U.S.-Iran
tensions eased. The Johannesburg Stock Exchange’s Top-40 index rose 0.65% to
51,245 points and the broader all-share index closed up 0.62% at 57,485
points.

Africa’s largest mobile operator by subscribers, MTN , was the biggest
winner on the blue-chip index, rising over 5% after Nigeria withdrew a $2
billion tax demand in a closely watched case.

In fixed income, the yield on the benchmark government bond due in 2026 was
down 2.5 to 8.215%. 

Kenya

Kenya's tourism earnings, arrivals rise in 2019

(Reuters) - Kenya’s earnings from tourism rose 3.9% last year to 163.56
billion shillings ($1.61 billion), thanks to a slight increase in the number
of visitors, its tourism minister said on Friday.

The East African nation, which relies on tourism as a major source of
foreign exchange and jobs, had 2.05 million tourists last year, an increase
of 1%, said Najib Balala.

An attack on a hotel and office complex in Nairobi last January, and a
general slowdown in the global tourism business, were to blame for the low
growth in arrival numbers, he said.

Along with agricultural exports and money sent home by Kenyans living
abroad, tourism is one of the top foreign exchange earners.

Kenya has a variety of products, from beach holidays at the coast to Safaris
in the Maasai Mara wildlife reserve, but it attracts fewer visitors than
African competitors like South Africa due to frequent political upheavals
and insurgent attacks.

Between 2012 and 2015, visitor numbers and tourism earnings fell after a
spate of attacks claimed by Somalia’s al Qaeda-linked al Shabaab, which
wants Nairobi to pull its troops out of Somalia.

A reduction in attacks in the years that followed allowed the sector to
rebound.

       <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Dollar, stocks slide on renewed Middle East tensions

(Reuters) - The dollar fell and global equity markets retreated from fresh
highs on Friday, as signs of renewed U.S.-Iranian tensions scuttled a rally
triggered by a U.S. labor report showing a strong economy despite slowing
job growth in December.

The United States said it was imposing additional sanctions on Iran as a
result of its missile attack on U.S. troops in Iraq this week, and
Washington rebuffed an Iraqi request to pull out its troops.

Iraq appears set to bear the brunt of any further violence between
neighboring Iran and the United States, sparked by the U.S. killing of
Qassem Soleimani, Iran’s top general, in a drone strike on Jan. 3. Iran’s
firing of missiles at U.S. forces in Iraq on Wednesday was in response to
the general’s killing.

A gauge of equity performance in 49 countries and the major Wall Street
indexes hit records in early trade after the Labor Department’s jobs report
showed the pace of hiring last month was sufficient to keep the U.S.
economic expansion on track.

But stock markets later slid as investors eyed the longer-term risks of
Middle East conflict. The dollar fell from four-week highs against the
safe-haven yen and slid versus the Swiss franc, another safe haven.

“The fact that the U.S. is still sort of acting aggressively toward Iran and
still taking a hard line helped create demand for safe havens,” said Karl
Schamotta, chief market strategist at Cambridge Global Payments in Toronto.

MSCI’s all-country world index shed 0.03%, paring an early advance that
lifted it to an all-time high.

Stocks on Wall Street retreated after the Dow Industrials earlier crossed
the 29,000 mark for the first time, helped by gains in technology and
healthcare stocks.

The Dow Jones Industrial Average fell 133.13 points, or 0.46%, to 28,823.77,
the S&P 500 lost 9.35 points, or 0.29%, to 3,265.35 and the Nasdaq Composite
dropped 24.57 points, or 0.27%, to 9,178.86.

European shares also retreated. The pan-European STOXX 600 index lost 0.12%
and Germany’s DAX fell 0.09%, while Britain’s FTSE 100 closed down 0.14%.

The Labor Department said the U.S. jobless rate held steady at near a
50-year low of 3.5% last month and nonfarm payrolls increased by 145,000
jobs, above the 100,000 mark needed to keep up with population growth but
below expectations.

A Reuters poll showed the market expected job growth of 164,000.

The soft U.S. payrolls number, following a batch of strong economic figures,
was unlikely to sway the Federal Reserve from its current neutral stance on
rates, analysts said.

The dollar index fell 0.09%, with the euro up 0.13% to $1.1119. The Japanese
yen strengthened 0.03% versus the greenback at 109.49 per dollar.

MSCI’s emerging market currency index, was little changed on Friday after
hitting a 1-1/2-year high on Thursday, but was still likely to post its
sixth straight week of gains.

Oil fell below $65 a barrel in its first weekly loss since late November,
erasing the week’s risk premium sparked by Soleimani’s killing as investors
focused on rising U.S. inventories and other signs of ample supply.

Worries over the longer-term risks of conflict could potentially push prices
higher, however.

Brent crude, the global benchmark, slid 39 cents to settle at $64.98 a
barrel, its first weekly decline in six weeks. West Texas Intermediate crude
settled down 52 cents to $59.04.

U.S. gold futures settled up 0.4% at $1,560.1 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Strengthening dollar curbs copper rebound

(Reuters) - Copper was up by more than 1% for the week on Friday as fears of
conflict in the Middle East diminished and exchange inventories continued to
dwindle, though prices were kept in check by a stronger dollar.

Benchmark copper on the London Metal Exchange (LME) rose 0.3% to $6,198 a
tonne in final open-outcry trading and had gained 1.1% this week. It had
dropped 1.4% the previous week after a U.S. air strike killed an Iranian
commander and Tehran threatened revenge.

The dollar was up 0.6% this week against a basket of major currencies,
making metals priced in the greenback more expensive for buyers with other
currencies and potentially weakening demand.

EQUITIES MARKETS: Global shares set record highs on Friday as investors
cheered an apparent de-escalation in U.S.-Iran tensions and looked instead
to prospects of improved economic growth.

DOLLAR: The U.S. dollar is likely to remain strong this year, Reuters
polling of FX strategists found.

TRADE: U.S. President Donald Trump said on Thursday a phase one trade deal
with China could be signed shortly after Jan. 15.

PAYROLLS: U.S. job growth slowed more than expected in December, but the
pace of hiring remains more than enough to keep the longest economic
expansion in history on track despite a deepening downturn in manufacturing.

FEDERAL RESERVE: The jobs data will probably not change the Federal
Reserve’s assessment that both the economy and monetary policy are in a
“good place.” Fed officials had said the economy may have weathered the
worst.

JAPAN: Core machinery orders in Japan are likely to have risen in November
after four months of decline, a Reuters poll showed.

COPPER STOCKS: Headline inventories in LME-registered warehouses fell by
3,100 tonnes to 132,725 tonnes, down from nearly 340,000 tonnes in August.
MCUSTX-TOTAL

Stocks in warehouses monitored by the Shanghai Futures Exchange fell 5.4%
from last Friday to 133,745 tonnes. CU-STX-SGH

POSITIONING: Speculators reduced their bets on lower prices. Their net short
in LME copper had fallen to 6.5% of open contracts by Tuesday, from 17% late
last month, broker Marex Spectron said.

TIN: Indonesia’s December exports of refined tin rose 23% year-on-year to
6,447 tonnes, data showed.

NORSK: Metals maker Norsk Hydro said it expected its sales of low-carbon
aluminium made from recycled drink cans and other scrap to more than double
this year and to increase further in 2021 and beyond.

OTHER METALS: LME aluminium rose 0.1% in closing rings to $1,806 a tonne;
zinc eased 0.1% to $2,375; lead added 0.1% to $1,931; nickel advanced 0.8%
to $14,190; and tin, untraded in rings, was bid down 0.2% at $17,225.

All but aluminium were up over the week.

Asia Gold-Price dip revives Indian gold demand

(Reuters) - Physical gold demand improved in India in the second half of
this week as domestic prices slipped from a record high, though demand in
other Asian regions was dented by a spike in global prices to their highest
in nearly seven years.

Benchmark spot gold prices surged on Wednesday after Iran’s retaliatory
attacks on U.S. troops in Iraq.

In top consumer China, premiums shot up to $7-$7.50 over the benchmark
price, against $3.50-$4.50 the previous week, as investors rushed into the
safety of the bullion amid concern over the potential for wider conflict in
the Middle East.

Indian demand improved in the second half of the week after prices corrected
from the record high of 41,293 rupees hit on Wednesday.

Dealers in India were offering a discount of up to $7 an ounce to official
domestic prices, compared with a discount of $13 last week. The domestic
price includes a 12.5% import tax and 3% sales tax.

However, the price rally was brief and prices have retreated 4% from this
week’s highs.

Traders in Japan and Singapore took profits as prices surpassed the $1,600
an ounce level for the first time since April 2013.

In Singapore, premiums fell to $0.50-$0.60 an ounce from last week’s
$0.60-$0.80.

In Japan, gold was sold at a premium of about $0.50 an ounce, while premiums
in Hong Kong stood at $0.30-$0.40, unchanged from last week.

Gold prices in Bangaldesh surged to a six-year high this week, with the best
quality gold priced at 60,361 taka ($710) per Bhori, or 11.664 grams, the
Bangladesh Jewellers Association said on Saturday. 

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
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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