Bulls n Bears Daily Market Commentary : 24 January 2020

Sun Jan 26 22:51:32 CAT 2020

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Bulls n Bears Daily Market Commentary : 24 January 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$7,400,108.55 with foreign buys at ZWL$1,680.00 and
foreign sales were ZWL$4,471,121.50 Total trades were 172

The All Share index ended the week on a high note adding 3.54 points to
close at 251.26 points in a session solely dominated by gainers. MEIKLES
rose by $0.2422 to close at $3.0522, INNSCOR  increased by $0.1125 to
$3.8225 and PPC  traded $0.0992 higher at $4.5992.

SIMBISA also went up by $0.0718 to settle at $1.4307 and TSL  was $0.0575
firmer at $0.8600. Cement maker LAFARGE  traded unchanged at $2.0000.

  Global Currencies & Equity Markets

Nigeria

Foreign investors bought fewer Nigerian stocks last year -bourse

(Reuters) - Foreign investors bought fewer Nigerian stocks in 2019 than the
previous year, stock exchange data showed, after hopes for reforms that
could lift Africa’s biggest economy faded.

Nigeria has grappled with low growth since recovery from a recession four
years ago. President Muhammadu Buhari, who began a second four-year term in
May, has pledged to revive the economy. But investors have been waiting for
policy signals that could lift growth.

Foreign investors traded a total of 942.55 billion naira worth of stocks
last year, with more than half of the transactions to sell shares, according
to the stock exchange, compared with 1.22 trillion naira at the end of 2018.

Investors increased the pace of outflows last year after Buhari took office
for the second term but failed to appoint a cabinet until months later.
Funds sold out of the banking, consumer and oil sectors as capital flight
worsened, piling pressure on the naira.

The International Monetary Fund (IMF) has projected that Nigeria’s economy
would growth at 2.5% this year and next.

Similar to stocks, investors also cut their participation in Nigerian
government bond auctions last year. Instead, they piled into treasury bills
supported by central bank’s policies.

Buhari has pursued protectionist policies since first taking office in 2015.
He has backed a currency intervention that has seen the central bank pump
billions of dollars into the foreign exchange market and policies aimed at
curbing imports to boost local production.

The stock index has risen 10.2% so far this year, to rank as one of the
world’s best performing, thanks to higher oil prices and as domestic funds
pile into stocks after last year’s ban from central bank’s high-yielding
bills market. The index shed 14.6% in 2019.

Stock Exchange chief Oscar Onyema has said he expects a new law which grants
tax incentives to capital market investment and the implementation of the
country’s 2020 spending plan to boost corporate earnings and consumer
spending.

South africa

South African rand flat as global markets steady

(Reuters) - The South African rand was little changed on Friday, as global
markets steadied after an outbreak of coronavirus in China

At 1506 GMT, the rand traded at 14.4200 versus the dollar, 0.14% weaker than
its previous close.

The rand had tumbled along with currencies and stocks around the world on
Thursday amid worries about virus. Markets steadied on Friday after the
World Health Organisation said the outbreak was an emergency for China but
not yet an epidemic posing an international threat.

South Africa’s Department of Health said on Thursday that port health
authorities had enhanced surveillance for all travellers from Asia.

A weak growth outlook for the South African economy has sapped demand for
rand assets, after the International Monetary Fund and South African Reserve
Bank downgraded their growth predictions.

Stocks also recovered Thursday’s losses, with the Johannesburg Stock
Exchange’s Top-40 index rising 0.72% to 51,212 points and the broader
all-share index rising 0.64% to 57,261 points.

Retailers and financial services rose. Gold and platinum stocks fell as
investors moved out of safe-haven assets; palladium looked set for its first
weekly loss in five.

Steinhoff International’s shares rose 3.66% after its subsidiary, Pepkor
Holdings posted higher revenues for the three months to end-December.

Government bonds strengthened slightly, with the yield on the 2026 bond
falling 4 basis points to 8.095%. 

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

Trump increases tariffs on derivative steel, aluminum products from some
countries

(Reuters) - U.S. President Donald Trump on Friday signed a proclamation
increasing tariffs on derivative steel products by an additional 25 percent
and boosting tariffs on derivative aluminum products by an additional 10
percent.

Trump said Argentina, Australia, Brazil, Canada, Mexico and South Korea are
exempt from the additional tariffs on steel products, and Argentina,
Australia, Canada and Mexico are exempt from the added tariffs on aluminum
articles. 

Armenian PM urges gold mine protesters to lift blockade

(Reuters) - Armenia’s prime minister called on Saturday for environmental
protesters to end their 18-month-old blockade of a foreign-owned gold mine,
saying the protest was not in the national interest.

The Amulsar gold mine, which is located in a remote mountainous region, has
been in development by Anglo-American mining firm Lydian International since
2016, with an investment of nearly $500 million so far.

The company says the project meets all the legal and environmental
requirements, and would generate hundreds of jobs and millions of dollars in
tax revenues.

But a group of local residents and environmental activists have prevented
access to the mine by blocking a road to the site since June 2018, putting
pressure on the government to act in order to safeguard a major foreign
investment.

Pashinyan said he suspected there were some hidden economic interests
stirring up the protest.

Toronto Stock Exchange said earlier this month it would delist Lydian from
Feb. 5 because the company did not meet the necessary requirements. The firm
has been granted temporary protection from creditors’ claims as a result of
the blockade.

Lydian said last year that the blockade had forced it to cut more than 1,000
jobs and caused losses of more than $60 million.

The protest has divided locals. Some say the mine will provide much-needed
employment in Jermuk, a town of about 3,000 people, and to rural communities
in the area about 170 km (105 miles) southeast of the capital, Yerevan.

Minerals and metals make up about half of Armenia’s exports. 

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

 <mailto:info at bulls.co.zw> 

DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
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
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
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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