Bulls n Bears Daily Market Commentary : 20 January 2020

Mon Jan 20 23:44:07 CAT 2020

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Bulls n Bears Daily Market Commentary : 20 January 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$1,589,042.56 with foreign buys at NIL and   foreign
sales were ZWL$801,029.95 Total trades were 133

The All Share index opened the week on a positive note by adding 0.50 points
to close at 238.69 points. MEIKLES gained $0.0500 to $2.8000, INNSCOR rose
by $0.0166 to $3.6524 and ECONET  was $0.0161 higher at $1.5761. TURNALL
also increased by $0.0150 to end at $0.1300 and MASHONALAND HOLDINGS was
$0.0128 firmer at $0.0950.

Trading in the negative; PPC lost $0.1593 to $3.9264, POWERSPEED eased
$0.0490 to close at $0.2450 and AMALGAMATED REGIONAL TRADING traded $0.0220
weaker at $0.1230. OLD MUTUAL LIMITED 

  Global Currencies & Equity Markets

South Africa

S.African rand falls on domestic woes as stock rally ends

(Reuters) - South Africa’s rand fell to a five-week low against the dollar
on Monday as domestic woes hurt the currency’s carry yield attraction and
stocks ended a six-session winning streak.

At 1645 GMT, the rand traded at 14.5100 per dollar, 0.35% weaker than its
previous close, with the currency trading at its weakest levels since Dec.
12.

The currency has weakened 3.5% since the beginning of the year, as the
country grapples with nationwide power cuts that have dented economic output
and sapped investor confidence.

The International Monetary Fund cut its growth forecasts for South Africa in
2020 and 2021 on Monday, citing structural constraints and deteriorating
public finances.

Africa’s most industrialised economy is ranked sub-investment grade by S&P
and Fitch, two of the three main ratings firms, and narrowly dodged a
downgrade to junk by Moody’s last year when the firm opted to only lower its
outlook to negative.

The ruling African National Congress was due to wrap up four days of
meetings on Monday, with the flagging economy and struggling state-owned
enterprises taking centre stage.

On the bourse, stocks took a breather, ending a six-session winning streak
on thin volumes. The Johannesburg All-share index dipped 0.26% to 58,850
points, while the Top-40 index fell 0.18% to 52,638 points.

Leading the decliners was heavyweight Richemont, down 3.26%. Telecoms firm
Telkom also took a breather on Monday, weakening 5.46% after gaining last
week when it announced its intention to cut 3,000 jobs.

Gold stocks bucked the downward trend, with the index jumping 3.22% on
heightened safe-haven interest.

Sibanye-Stillwater rose 4.85%, while Gold Fields gained 4%.

In fixed income, the yield on the benchmark 2026 instrument was down 3 basis
points at 8.150%.

Egypt

Egypt's debt ratio to beat target this year, minister says

(Reuters) - Egypt is on track to reduce its total debt to a
lower-than-expected 83% of GDP by the end of the fiscal year in June, helped
by a widening of its primary budget surplus in the last half of 2019,
Finance Minister Mohamed Maait said on Monday.

The primary budget surplus widened to 0.5% of GDP, or 30 billion Egyptian
pounds ($1.91 billion), in the final six months of 2019 from 0.4% a year
earlier, Maait told a news conference.

Egypt has said it aims to reduce its primary deficit to 2% of GDP for the
whole of the 2019/20 fiscal year.

The overall budget deficit, which includes interest payments, rose to 3.8%
of GDP in the last six months of 2019 from 3.6% a year earlier, partly due
to an early interest payment on debt that matures in April and a 33 billion
pound payment to top up the state pension fund, he said.

The improvement in the primary surplus was helped by reductions in fuel
subsidies, long a heavy burden on the budget, which were implemented as part
of a three-year IMF programme that ended in November.

The oil ministry sent a net 3 billion pounds to the finance ministry in the
July-Sept quarter, the first time in years it has provided a surplus, Maait
said.

Oil ministry payments are expected to increase over the next five months,
Deputy Finance Minister Ahmed Kouchouk said. The oil ministry expects fuel
subsidy spending will fall to 30 billion pounds in 2019/20 compared to the
original 52 billion pounds forecast in the budget, he added.

GDP is expected to grow by 5.8%-5.9% in the 2019/20 fiscal year, up from a
previously projected 5.6%, Maait said. ($1 = 15.7300 Egyptian pounds) 

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.

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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opinions expressed and recommendations made are subject to change without
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