Bulls n Bears Daily Market Commentary : 23 January 2020

Fri Jan 24 00:38:07 CAT 2020

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Bulls n Bears Daily Market Commentary : 23 January 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$9,231,312.50 with foreign buys at NIL and   foreign
sales were ZWL$3,169,447.78 Total trades were 132

The All Share index added a further by 2.18 points to end at 247.72 points.
NATFOODS led the movers with a $0.5000 gain to end at $10.0000,BRITISH
AMERICAN TOBACCO  gained $0.2778 to $50.2778 and LAFARGE added $0.2025 to
$2.0000. PPC was up by $0.1000 to end at $4.5000 and SEEDCO rose by $0.0703
to close at $1.7500.

Only one counter lost ground: MEIKLES LIMITED  traded $0.1900 weaker at
$2.8100. 

  Global Currencies & Equity Markets

AFRICA-FX-Uganda's shilling and Zambia's kwacha to firm

(Reuters) - Uganda’s shilling and Zambia’s kwacha are both expected to
strengthen slightly against the U.S. dollar in the next week while Kenya’s
shilling and the Nigerian naira will hold steady, traders said.

KENYA

The Kenyan shilling is expected to remain stable in the week ahead, with
commercial banks quoting the currency at 100.85/101.05 per dollar, compared
with 100.95/101.15 at last Thursday’s close.

UGANDA

The Ugandan shilling is seen trading with a strengthening bias on the back
of month-end hard currency inflows from non-governmental organisations
looking to pay salaries and other expenses.

At 0805 GMT commercial banks quoted the shilling at 3,670/3,680, unchanged
from last Thursday’s close.

A trader at a leading commercial bank said the market was expecting flows of
hard currency from charities and some commodity exporters that typically
come in the last days of the month.

The local currency, he said, is likely to swing in the 3,650-3,670 range in
the coming week.

ZAMBIA

The kwacha is likely to make some marginal gains against the U.S. dollar as
companies buy the local currency to meet month-end obligations. On Thursday
commercial banks quoted the currency of Africa’s second-largest copper
producer at 14.5000 per dollar, against a close of 14.6250 a week ago.

NIGERIA 

naira is seen stable next week as traders await the result of a central bank
treasury auction on Wednesday which could impact market liquidity, traders
said.

The naira was quoted at around 361 to the dollar on Thursday, the same level
it fetched in the over-the-counter market last week. The currency was quoted
at 306.95 on the official market, supported by the central bank.

Traders said the market has been on bid this week but that dollar sales by
exporters has provided some support.

Asia

Asian shares wilt, oil tumbles as China virus spreads

(Reuters) - Asian shares and U.S. stocks fell on Thursday as investors
remained anxious about the spread of a new flu-like virus in China just as
millions prepared to travel for the Lunar New Year.

Oil futures tumbled to seven-week lows as the contagion was expected to hit
airline travel, while the International Energy Agency’s warning of an oil
surplus and a larger-than-expected increase in U.S. crude inventories
re-kindled fears of excess supply.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.45%.

Blue chip Chinese shares slumped 0.91%. Australian shares were down 0.57%,
while Japan’s Nikkei stock index slid 0.6%.

The Chinese yuan fell toward a two-week low, while safe-havens such as the
Japanese yen, gold, and U.S. Treasuries rose before a travel blockade of the
Chinese city, Wuhan, at the centre of the outbreak starts later on Thursday.

Deaths in China from the new coronavirus rose to 17 on Wednesday, with
nearly 600 cases confirmed. The outbreak has evoked memories of Severe Acute
Respiratory Syndrome (SARS) in 2002-2003, another coronavirus which broke
out in China and killed nearly 800 people in a global pandemic.

U.S. stock futures fell 0.02% on Thursday in Asia.

The S&P 500 eked out a 0.03% gain on Wednesday, but the overall tone on Wall
Street was mixed as investors assessed the impact of the virus and braced
for the corporate earnings season.

Cases have been detected in Beijing, Shanghai, Macau, Hong Kong, Japan, and
the United States. Wuhan’s local government said it would close all urban
transport networks and suspend outgoing flights as of 10 a.m. on Thursday
(0200 GMT). Citizens have been urged not to leave the city.

However, there are fears the virus could spread rapidly, because millions of
Chinese travel domestically and abroad during the week-long Lunar New Year
holidays, which start on Friday.

Air China, China’s flagship carrier, skidded 2.78% to the lowest in more
than eight weeks. Shares of Australia’s Qantas Airways Ltd fell 1.55%, while
Japan Airlines Co dropped 1.4% and rival air carrier ANA Holdings Inc
declined 1.17%.

In the onshore market, the yuan edged down 0.1% to 6.9160 per dollar,
approaching the lowest since Jan. 10.

The yen rose 0.2% to 109.64 versus the dollar, while the Swiss franc traded
at 0.9679 against the greenback.

Gold, another asset that is often bought as a safe haven, rose 0.07% to
$1,559.17 per ounce.

The yield on benchmark 10-year Treasury notes fell slightly to 1.7551% in
Asia as some investors sought the safety of government debt.

U.S. crude fell 1.69% to $55.78 a barrel, briefly touching the lowest since
Dec. 3. Brent crude slumped by 1.55% to $62.26 per barrel to reach the
lowest since Dec. 4.

The American Petroleum Institute said U.S. crude inventories rose 1.6
million barrels last week, compared with analysts’ expectations for 1
million-barrel draw.

Markets took Republican U.S. President Donald Trump’s impeachment trial in
stride, as he is widely expected to be acquitted in the
Republican-controlled Senate.

Democrats accused Trump at the start of his impeachment trial on Wednesday
of a corrupt scheme to pressure Ukraine to help him get re-elected.

Trump told reporters in Switzerland the Democrats did not have enough
evidence to find him guilty and remove him from office

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips on profit-taking, rate expectations cap losses

(Reuters) - Gold eased on Thursday as investors booked profits from recent
rallies but held above the $1,550 technical support level on continuing low
interest rates and a drop in risk appetite.

Spot gold was down 0.2% to $1,556.05 per ounce by 1340 GMT. U.S. gold
futures were little changed at$1,555.70 per ounce.

“From the beginning of the year, gold has rallied and that had led investors
to take positions and now in the absence of any major news (on
fundamentals), they are booking some profit,” said Frederic Panizzutti,
managing director at MKS Dubai.

Gold broke above the psychological barrier of $1,500 an ounce in late
December on uncertainty surrounding the U.S.-China trade deal and the global
economy.

Bullion climbed further to a near-seven-year peak of $1,610.90 on Jan. 8
after an escalation in U.S.-Iran tensions and has held above $1,550 for the
most part ever since.

The European Central Bank kept interest rates unchanged at its latest policy
meeting on Thursday and launched a “strategic review” of its inflation goal
and tools.

The U.S. Federal Reserve’s first meeting of the year is scheduled for Jan.
28-29.

Limiting gold’s losses, global stock markets were in the red, led by the
biggest decline in Chinese stocks in more than eight months as concern
mounted over the spread of a virus outbreak in China.

Traders remained anxious about the spread of the coronavirus as China gears
up to celebrate the Lunar New Year from this weekend, a peak period for
travel and gold demand in the region.

Gold is considered a safe asset in times of political and economic
uncertainty.

However, OANDA analyst Jeffrey Halley said the virus fears appear to have
been overlooked by the gold market.

Spot gold is biased to revisit its Jan. 21 low of $1,545.96, looking shaky
around a resistance at $1,564, said Reuters technical analyst Wang Tao.

Among other precious metals, palladium fell 1.2% to $2,443.29, silver dipped
0.5% to $17.73 and platinum was also down 0.8% at $1,003.95. 

Copper slides further as China virus fears grow

(Reuters) - Copper prices fell to their lowest in six weeks on Thursday due
to the potential impact of the deadly coronavirus outbreak on economic
activity in China as the death toll rises.

Other industrial metals also slipped, oil prices fell more than 1% and
Chinese shares had their worst day since May while the yuan also suffered as
China put two cities at the epicentre of the outbreak on lockdown.

Investors recalled the Sudden Acute Respiratory Syndrome (Sars) epidemic in
2002-2003, which also started in China, dented economic growth and caused a
slump in travel.

Benchmark copper on the London Metal Exchange (LME) was down 0.4% at $6,081
a tonne at 1151 GMT, taking losses this week to around 3%.

TECHNICALS/POSITIONING: Speculators were liquidating long positions in
copper and the price decline was triggering pre-set sell orders, brokers
Marex Spectron said.

Copper was holding just above its 50-day moving average at $6,067. A move
below this level would encourage technical selling.

STOCKS: Also weighing on prices is a sharp rise in stocks. On-warrant
inventories in LME-registered warehouses rose to 162,875 tonnes from less
than 90,000 tonnes last week. Stocks in China have also begun to rise
MCUSTX-TOTAL CU-STX-SGH SMM-CUR-BON

SPREAD: Higher inventories barely shifted spreads, however, with the
discount for LME cash copper against the three month contract fairly stable
around $30. MCU0-3

CHINA HOLIDAYS: Chinese markets will be closed from Friday, to Jan. 31 for
the Lunar New Year, reducing liquidity.

PBOC: China’s central bank kept the interest rate on its targeted
medium-term lending facility (TMLF) unchanged on Thursday, confounding
expectations for a cut.

CHINA SCRAP IMPORTS: China’s scrap metal imports in 2019 fell 41.5% from a
year ago, with the December intake sinking by 75.2%, customs data showed.

SUPPLY: Anglo American said its copper output fell 13% in the fourth
quarter. A copper and cobalt refinery in Zambia and copper mine in Namibia
are set to halt activity in the next two months, union official said.

NICKEL: Indonesia’s nickel ore output more than doubled in 2019 to 52.8
million tonnes, an official said.

LEAD SPREAD: LME cash lead moved to a $4.75 premium against three-month
metal from a discount of more than $20 earlier this month, pointing to
tighter nearby supply. One entity controls between 80% and 90% of warrants.
MPB0-3 <0#LME-WHL>

OTHER METALS: LME lead was down 0.1% at $1,984.50 a tonne, aluminium was
0.8% lower at $1,796.50, zinc fell 0.7% at $2,379.50, nickel slipped 1.9% to
$13,385 and tin was down 1.4% at $17,185.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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for guideline purposes only and sourced from third parties.

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