Bulls n Bears Daily Market Commentary : 17 January 2020

Mon Jan 20 01:19:57 CAT 2020

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Bulls n Bears Daily Market Commentary : 17 January 2020

Zimbabwe Stock Exchange Update

Market Turnover ZWL$23,088,546.93 with foreign buys at ZWL$3,093,145.80 and
foreign sales were ZWL$13,493,562.83 Total trades were 139

The All Share index ended higher with additional 1.15 points  to close at
238.19 points. ZIMPLOW HOLDINGS LIMITED  gained $0.1200 to end at $0.7250,
OK ZIMBABWE LIMITED advanced by $0.0637 to settle at $0.7752 and POWERSPEED
ELECTRICAL LIMITED traded higher at $0.0490 to close at $0.2940. ARISTON
HOLDINGS LIMITED  was $0.0375 firmer at $0.2270 and INNSCOR AFRICA LIMITED
added $0.0312 to end at $3.6358.

Trading in negative were OLD MUTUAL LIMITED  which further retreated by
$1.1215 to $34.0146, DELTA CORPORATION LIMITED  which slumped by $0.0127 to
end at $3.4898, PADENGA HOLDINGS LIMITED  which lost $0.0012 to close at
$2.4500. MASHONALAND HOLDINGS LIMITED  was $0.008 lower at $0.0822 while
SEED CO INTERNATIONAL LIMITED  dropped $0.0006 to settle at $3.1050

  Global Currencies & Equity Markets

South Africa

S.African stocks hit near 7-month highs, led by Richemont, miners

(Reuters) - South African stocks rose to near seven-month highs on Friday,
underpinned by gains in heavyweight Richemont and mining firms, while the
rand fell against a broadly stronger dollar.

Richemont led the To-40 index higher, surging 5.82% after the world’s
second-biggest luxury goods group, reported a 4% rise in third quarter
sales, helped by double-digit growth in China and South Korea.

Resources continued to do some heavy lifting, with the mining index 2.66%
firmer amid gains in gold, platinum and iron ore producers.

Gold edged higher on Friday but was on track to post its first weekly
decline in six as solid Chinese data and a preliminary U.S.-China trade deal
improved risk appetite.

Palladium jumped over 9% to register a record high as the market grapples
with deep supply shortages, while platinum rose 1.01%.

This boosted Sibanye-Stillwater by 5.32%, African Rainbow Minerals by 4.54%,
Impala Platinum by 3.11% and Glencore by 1.32%.

The bourse also got a lift from improved global risk appetite following
Chinese growth figures that suggested the world’s second-biggest economy was
stabilising.

The Johannesburg All-Share index rose 1.35% to 59,001 points, a level last
seen on June 24, while the Top 40 index climbed 1.48% to 52,735 points.

In the currency market, the rand gave up morning gains as rate cut momentum
gave way to the impact of a broadly stronger dollar. At 1603 GMT, the rand
traded at 14.4650 per dollar, 0.4% weaker than its previous close.

Market participants were also cautious as the ruling African National
Congress started a four-day National Executive meeting and the party’s
Lekgotla gathering.

The ANC is expected to discuss options for struggling state-owned firms such
as power utility Eskom and South African Airways, as well as trying to unify
dividing voices on proposals to nationalise the central bank.

Finance Minister Tito Mboweni came out against that plan this week on
Twitter.

In fixed income, the yield on the benchmark government bond was down 1 basis
points at 8.18%. 

Nigeria

Nigerian inflation climbs for fourth month as prices rise across board

(Reuters) - Annual inflation in Nigeria rose for the fourth straight month
in December, marking the longest run of increases in almost two years as
prices climbed across all categories measured by the statistics bureau.

Nigeria closed parts of its borders in August to fight smuggling of rice and
other goods, a move that has exacerbated inflation, according to economists.
In October, the head of customs confirmed that all trade in goods via land
borders had been halted indefinitely.

Annual inflation rose to 11.98% in December, up from 11.85% in November, the
National Bureau of Statistics said on Friday, citing broad price increases.

That makes the four-month inflationary run the longest since January 2017,
and the rate the highest since April 2018. Consumer inflation had dropped to
its lowest in almost four years in August.

The central bank expects to keep monetary policy tight in 2020 to combat
inflation and support the currency amidst slow growth, its governor has
said.

The bank is due to set its benchmark interest rate next Friday. The bank,
which has targeted single-digit inflation, held its main interest rate at
13.5% at its last meeting, in November.

A separate food price index showed annual inflation at 14.48% in November,
compared with 14.09% a month earlier. 

 <mailto:info at bulls.co.zw> 

Asia

Asian shares firm as China data show signs of easing economic strains

(Reuters) - Asian shares rose on Friday after data in China showed pressure
on the world’s second biggest economy may be starting to diminish.

The news along with easing trade tensions with the United States underpinned
riskier assets, even as some markets took a breather in late afternoon
trade.

European bourses were expected to extend the global rally after Wall Street
posted more records. In early European trades, pan-region Euro Stoxx 50
futures were up 0.4%, German DAX futures gained 0.54% and FTSE futures added
0.28%.

China’s economy grew 6.0% in the fourth quarter of 2019 from a year earlier,
and 2019 growth of 6.1% was the slowest in 29 years, held back by anaemic
domestic demand and the damaging trade war with the United States.

The data largely reinforced recent signs of an improvement in Chinese
business confidence as trade tensions eased, with Beijing and Washington
sealing an initial deal on Wednesday to defuse their damaging tariff war.

Beijing is widely expected to introduce more stimulus measures in 2020 amid
sluggish investment and demand.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.18% in
afternoon trade, trimming earlier gains of as much as 0.4%.

China’s blue-chip CSI300 index ended 0.14% higher, down from an earlier rise
of as much as 0.67%. The index has rallied more than 8.5% since the
beginning of December, fuelled by hopes for improved trade relations with
the United States.

Australian shares added 0.32% to a fifth consecutive record high close, and
Seoul’s KOSPI rose 0.11%. Japan’s Nikkei finished up 0.45% after reaching
15-month highs earlier in the session.

MSCI’s global share index touched record highs and was last up 0.05%.

Analysts say global equities may find it difficult to maintain momentum from
their recent rally as optimism over the U.S.-China trade truce gives way to
uncertainty over the next steps in trade talks.

While a Phase 1 deal signed by China and the United States on Wednesday is
seen as defusing the 18-month row that has hit global growth, experts say it
is unlikely to provide much balm for broader frictions between the two
countries. Most of the tariffs imposed during the dispute remain in place
and a number of thorny issues that sparked the conflict are still
unresolved.

“The challenge from here is how long we can maintain these improvements,”
said Steven Daghlian, market analyst at CommSec in Sydney.

In the United States on Thursday, a combination of upbeat earnings from
Morgan Stanley, rising U.S. retail sales, a strong labour market and robust
manufacturing data helped to lift Wall Street to record highs.

The Phase 1 deal and the U.S. Senate’s approval of a revamp to the
26-year-old North American Free Trade Agreement also boosted investor
spirits.

The Dow Jones Industrial Average rose 0.92% to 29,297.64, the S&P 500 gained
0.84% to 3,316.81 and the Nasdaq Composite added 1.06% to 9,357.13.

The U.S. data supported the dollar, which held steady on Friday. The
greenback hit eight-month highs against the yen before trimming its advance
to rise 0.09% to 110.24. The euro was up 0.04% to buy $1.1140.

The dollar index, which tracks the greenback against a basket of six major
rivals, was lower at 97.292.

The rally in equities was mirrored in U.S. benchmark 10-year Treasury notes,
which saw yields rise to 1.8285% from their close on Thursday at 1.809%.
Yields rise as prices fall.

Commodity markets were quiet, with Brent crude futures falling 4 cents to
$64.58 per barrel. U.S. West Texas Intermediate crude futures fell 6 cents
to $58.46 per barrel.

Gold was 0.12% higher on the spot market at $1,554.38 per ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

China's annual aluminium output slips for first time in decade

(Reuters) - China’s annual aluminium production fell for the first time in
10 years in 2019, official data showed on Friday, hit by softer demand amid
the Sino-U.S. trade row and large-scale smelter outages.

Aluminium output dropped to 35.04 million tonnes last year, down 0.9% from
record levels a year earlier, the National Bureau of Statistics (NBS)
reported.

China’s full-year aluminium output last fell in 2009, according to annual
data on the NBS website, although estimates from the International Aluminium
Institute show production rising every year this century.

The drop in annual output came as major smelters suffered unplanned outages
from August. Top producer China Hongqiao Group closed some lines because of
flooding in Shandong province and Xinfa Group had an explosion at a site in
Xinjiang.

But it also highlights the impact of China’s economic slowdown on the
sector, ending a decade of break-neck expansion that saw China increase its
dominance of global aluminium production and consumption.

China’s annual aluminium consumption was set to fall for the first time in
30 years in 2019, research house Antaike said in November.

December aluminium output came in at 3.04 million tonnes, the NBS said, up
4.9% from the previous month thanks to a wave of restarts at smelters. It
was down 0.7% from the all-time high hit in December 2018 but still the
second-highest monthly figure on record.

Output averaged about 98,000 tonnes per day last month, according to Reuters
calculations, up from around 96,600 tonnes per day in November.

Almost 1 million tonnes of annual aluminium smelting capacity restarted in
December, mostly in western regions such as Qinghai and Xinjiang, said Lu
Chen, a Beijing-based analyst for CM Group.

The restarts were due to a combination of higher prices and completed
repairs, said Lu, who expects January output to rise following the start-up
of Henan Shenhuo’s new plant in Yunnan on Dec. 31 and the second phase of
Yunnan Aluminium’s Heqing smelter earlier this month.

Lu forecasts China will bring a total of 2 million tonnes of additional
capacity on line in 2020.

Output of 10 nonferrous metals - including copper, aluminium, lead, zinc and
nickel - came in at 5.31 million tonnes in December. That beat the previous
monthly record of 5.11 million tonnes in November and was up 4.7%
year-on-year.

Total 2019 output for this group of metals, which also includes tin,
antimony, mercury, magnesium and titanium, rose 3.5% year-on-year to a new
annual record of 58.42 million tonnes.

Copper edges up as key China data lifts sentiment

(Reuters) - London copper prices edged up on Friday after two sessions of
losses, lifted by better-than-expected data from China - the world's biggest
consumer of the malleable metal.

China on Friday announced a slew of economic data for 2019, including gross
domestic product, industrial production and fixed-asset investments, which
are closely tracked by industrial metals participants.

Benchmark three-month copper on the London Metal Exchange (LME)  was up 0.4%
at $6,300 a tonne, as of 0703 GMT. 

The most-traded copper contract on the Shanghai Futures Exchange (ShFE)
recovered from early losses to trade flat at 49,250 yuan ($7,180.03) a tonne
following the release of the key economic data.

Capping gains were concerns whether China's recovery phase would sustain.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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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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