Bulls n Bears Daily Market Commentary : 27 January 2020

Tue Jan 28 10:08:29 CAT 2020

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Bulls n Bears Daily Market Commentary : 27 January 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$15,573,186.90 with foreign buys at ZWL$5,654.00 and
foreign sales were ZWL$3,513,048.40 Total trades were 157

The All Share index started the week on a high note after adding 2.31 points
to close at 253.57 points.OLD MUTUAL LIMITED  went up by $0.4983 to close at
$39.4983, SEEDCO LIMITED  increased by $0.0952 to $1.8500 and ZIMPLOW
LIMITED  traded $0.0708 higher at $0.8408. ZB FINANCIAL HOLDINGS rose by
$0.0600 to settle at $0.8000 and CASSAVA SMARTECH ZIMBABWE  was $0.0537
firmer at $1.6067.

Gains were offset by losses in INNSCOR AFRICA LIMITED  which traded $0.1097
lower at $3.7128,OK ZIMBABWE LIMITED  being down by $0.0386 to close at
$0.8082 and MASHONALAND HOLDINGS LIMITED  dropping $0.0163 to end at
$0.1350. FIRST CAPITAL BANK  also went down by $0.0010 to end at $0.1000.

  Global Currencies & Equity Markets

South Africa

S.Africa's rand firms slightly but sentiment stays weak on coronavirus

(Reuters) - South Africa’s rand firmed slightly against the dollar early on
Tuesday, after hitting a more than six-week low in the previous session,
although concerns over the fast-spreading coronavirus and weak domestic
economic outlook weighed on sentiment.

At 0640 GMT, the rand traded at 14.5800 per dollar, 0.17% firmer than its
previous close.

The currency slipped to 14.6570 per dollar on Monday, its weakest since Dec.
12, with the selloff largely driven by investors dumping emerging market
assets.

Nedbank analysts wrote in a note the risk-off scenario was “likely to
continue until the coronavirus is brought under control.”

Global markets have tumbled recently on fears the virus could do further
damage to China’s already-weakened economy, an engine of global growth.

The rand is the most fragile among its emerging market peers as investors
are also cautious about South Africa’s poor economic outlook and possible
downgrade to junk by Moody’s.

Finance Minister Tito Mboweni gives his budget speech on Feb. 26, with
Moody’s — the last of the top three agencies to still rate the country at an
investment level — set to review its credit rating a week later.

In fixed income, the yield on the benchmark government bond was down a
single basis point to 8.135%. 

Kenya

Kenyan shilling unchanged as players eye c.bank rate decision

(Reuters) - The Kenyan shilling was broadly stable against the dollar on
Monday with market players eyeing a central bank monetary policy meeting
later in today's

session, traders said.

At 0851 GMT, commercial banks quoted the shilling at 100.85/101.05 per
dollar, the same as Friday's close.  

GLOBAL MARKETS

Stocks crumble as China virus toll mounts, safe havens in favour

(Reuters) - Asian stocks took a battering on Tuesday as the death toll from
a virus in China climbed, leaving investors fretting over the widening
economic fallout from the outbreak and lifting bonds on expectations central
banks would need to keep stimulus flowing.

Outside of Asia, futures pointed to a positive start for Europe and Wall
Street but that followed a hefty sell-off on Monday.

In early European trades, the pan-region Euro Stoxx 50 futures and German
DAX futures each rose 0.3% while futures for London’s FTSE added 0.1%. The
S&P 500 e-mini contracts gained 0.5%.

As the death toll reached 106 in China, the country extended the Lunar New
Year holiday to Feb. 2 nationally, and to Feb. 9 for Shanghai. China’s
largest steelmaking city in northern Hebei province, Tangshan, suspended all
public transit in an effort to prevent the spread of the virus.

With Chinese markets shut investors were selling the offshore yuan and the
Australian dollar as a proxy for risk. Oil was also under pressure as fears
about the wider fallout from the virus mounted, although futures had bounced
from Monday’s lows.

Asian shares too pared some of their early losses on Tuesday but were still
deep in the red.

MSCI’s broadest index of Asia-Pacific shares outside Japan slumped 0.8%.
Japan’s Nikkei, which was down nearly 1% at one point, closed 0.6% lower.
Australian shares ended 1.3% down and South Korea’s Kospi index skidded 3%.

In an indication of the size of losses for Chinese stock markets when they
re-open, iShares China Large-Cap ETF sank 4% on Monday. It is down about 10%
since Jan 17.

Chinese authorities also may have limited room to stimulate the country’s
economy than it had during the 2002-03 outbreak of the Severe Acute
Respiratory Syndrome (SARS) virus, another reason investors were jittery.

Many investors were still trying to figure out the potential impact from the
coronavirus, though travel and tourism sectors are expected to bear the
brunt of the impact.

Analysts at JPMorgan said the coronavirus outbreak was an “unexpected risk
factor” for markets though they see the contagion as a regional rather than
a global shock.

Treasury 10-year note yields came off lows after diving as deep as 1.598% on
Monday, the lowest since Oct. 10. Yields on two-year paper also fell sharply
while Fed fund futures rallied as investors priced in more risk of a rate
cut later this year.

Futures imply around 35 basis points of easing by year end . The Federal
Reserve is widely expected to stand pat at its policy meeting this week, but
markets will be sensitive to any changes to its economic outlook.

JPMorgan said they have not yet altered their developed or emerging markets
forex forecasts though they were taking profits on their “bullish” EUR/USD
positions and remain “considerably long” on Swiss francs which benefits from
safe-haven demand.

Short build-up in the Aussie was another risk hedge. The currency was last
flat at $0.6760 after two straight days of losses.

The euro was a shade firmer at $1.1022.

The yen, which has been rising for the past five sessions, dipped slightly
to 109.01 per dollar.

In commodities, Brent crude was off 12 cents at $59.20 while U.S. crude
eased 2 cents to $53.12.

Spot gold was a shade weaker at $1,579.28.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold jumps 1% as virus fears spur flight to safety

(Reuters) - Gold climbed 1% to a near three-week high on Monday as mounting
concerns over the economic fallout of the coronavirus outbreak sent
investors scurrying for safe havens.

Spot gold was up 0.6% at $1,579.70 per ounce by 10:29 EDT (1529 GMT). The
session high of $1,586.43 was its highest since Jan. 8.

U.S. gold futures rose 0.5% to $1,579.10 per ounce.

The death toll from the coronavirus outbreak has risen to 81 in China, with
2,800 confirmed cases, and the virus has spread to more than 10 countries,
including the U.S. and France.

U.S. stocks opened more than 1% lower, while U.S. 10-year Treasury yields
fell to their lowest in more than three months.

Gold scaled a near 7-year high of $1,610.90 per ounce earlier in the month
after an Iranian general was killed in an U.S. airstrike, but the rally was
short lived.

Investors will be watching the U.S. Federal Reserve’s first policy meeting
of this year on Jan. 28-29, where it is widely expected to keep rates
unchanged.

In other metals, deficit-hit palladium dropped 4.6% to $2,315 per ounce. At
the session low, it was down more than 5%. Platinum fell 1.5% to $986.30.

Silver rose 0.5% to $18.17 per ounce, having earlier touched its highest
since Jan. 8 at $18.33.

Copper in longest losing streak for six years on China virus fears

(Reuters) - Copper fell for a ninth consecutive session on Monday, the
longest losing streak in six years, as investors worried that a spreading
coronavirus outbreak in China would hit demand in the world's biggest metals
consumer.

Copper tumbled to its weakest in three months, with other industrial metals
also sliding as investors took flight. 

The death toll from the virus rose to 81 on Monday as the government
extended the Lunar New Year holiday and more big businesses shut down or
told staff to work from home in an effort to curb the outbreak.     

Copper, regarded as a bellwether of the global economy, has given up all of
its gains since early December when a rally pushed prices up nearly 10% to
eight-month highs as investors welcomed the first phase of a U.S.-China
trade deal and hoped for a rebound in economic growth. 

Wood-Dow added that Chinese economic growth could still hit 6% this year if
the virus is contained, aided by the government's determination to bolster
the economy. 

Benchmark three-month copper on the London Metal Exchange (LME)
dropped 3.1% in final open-outcry trading to $5,743 a tonne, its lowest
since Oct. 18.

LME copper last week posted its steepest weekly loss in five years, falling
5.5%, as the virus spread.

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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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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