Bulls n Bears Daily Market Commentary : 30 January 2020

Thu Jan 30 18:33:18 CAT 2020

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Bulls n Bears Daily Market Commentary : 30 January 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$43,911,773.35 with foreign buys at ZWL$1,329,041.20 and
foreign sales were ZWL$1,405,991.60 Total trades were 199

The All Share index’s bullish trend continues unabated after adding 16.12
points  to close at 295.65 points. OLD MUTUAL LIMITED led the movers with a
significant $3.5164 gain to settle at $47.2171, NATFOODS   rose by $2.0000
to $12.0000 and BRITISH AMERICAN TOBACCO   was $1.2443 stroger at $50.3000.
CAFCA also advanced by $0.4000 to $2.4000 and PADENGA  traded $0.3435 firmer
at $3.5528.

ARISTON  was the only counter trading in negative losing $0.0269 to $0.2831.

  Global Currencies & Equity Markets

Egypt

Egypt's M2 money supply up 13.28% year-on-year in December -c.bank

(Reuters) - Egypt’s M2 money supply growth was up 13.28% year-on-year in
December, data from the central bank showed on Thursday.

The money supply stood at 4.11 trillion Egyptian pounds ($260.95 billion) as
of the end of December compared to 4.05 trillion Egyptian pounds at the end
of November ($1 = 15.7500 Egyptian pounds)

Kenya

Kenyan shilling strengthens against the dollar

(Reuters) - The Kenyan shilling strengthened on Thursday buoyed by dollar
inflows from remittances and offshore investors buying government debt,
traders said.

At 0753 GMT, commercial banks quoted the shilling at 100.60/80 per dollar,
compared with 100.70/90 at Wednesday'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 holds gains on worries of coronavirus impact on world economy

(Reuters) - Gold held onto gains on Thursday, supported by concerns over the
potential impact on global economic growth of a fast-spreading coronavirus
outbreak in China which has killed 170 people.

Spot gold was up 0.2% to $1,579.63 per ounce by 1220 GMT after rising 0.7%
on Wednesday, while U.S. gold futures were 0.6% higher at $1,579.00 per
ounce.

Global equity markets fell, while Germany’s benchmark 10-year Bund yield
dropped to a near three-month low and U.S. 10-year Treasury yields hit their
lowest since Oct. 10.

A Chinese government economist on Wednesday said China’s economic growth may
drop to 5% or even lower due to the outbreak, which has spread to more than
10 countries.

Federal Reserve chair Jerome Powell acknowledged the risks of a short-term
slowdown in China, including to the U.S. economy, following the central
bank’s widely expected decision to keep interest rates unchanged.

Bullion is often seen as a safe store of value during times of political and
economic uncertainty.

The World Health Organisation (WHO) will reconvene on Thursday to decide
whether the coronavirus outbreak constitutes a global emergency.

Gold is being supported by markets’ struggle to understand the “real” impact
of the virus on the global economy, he added.

Elsewhere, palladium lost 0.2% to $2,283.85 per ounce, having hit a record
high of $2,582.19 on Jan. 20 on supply worries.

Russia’s Norilsk Nickel said on Wednesday its Global Palladium Fund would
deliver three tonnes of palladium ingots to the market from its current
stock to provide short-term relief to tight supplies.

Silver gained 1.1% to $17.74, while platinum fell 0.4%, to $970.23. 

Copper slides to five-month low on China demand angst

(Reuters) - Copper prices sank to five-month lows on Thursday as funds sold
on expectations of slowing demand in top consumer China, where a coronavirus
outbreak has raised the prospect of economic slowdown.

Benchmark copper on the London Metal Exchange (LME) traded 0.1% down at
$5,634 a tonne in official rings.

Prices of the metal widely considered a gauge of economic health had dropped
as low as $5,565.50, its weakest since early September and down 12% since
Jan. 16.

Menke said he still expects copper to average $6,150 in the third quarter.

VIRUS: China’s National Health Commission said the total number of deaths
from the coronavirus in China climbed to 170 by late Wednesday while the
number of those infected rose to 7,711.

The epidemic could slow Chinese growth to 5% or even lower, a government
economist said, as authorities extended Lunar New Year holidays and urged
staff to stay home.

China accounts for about half of global consumption of industrial metals.

STOCKS: Copper prices are expected to be sustained by low stocks in LME
warehouses MCUSTX-TOTAL, which at 182,550 tonnes are down more than 45%
since the end of August.

A recent Reuters survey showed analysts on average expect a 160,000 tonne
deficit this year in the copper market , estimated at about 24 million
tonnes.

TECHNICALS: Support for copper is seen at $5,518, the low on Sept. 3. The
first upside barrier is around $5,935, where the 200 and 100-day moving
averages are converging

OTHER METALS: Aluminium was little changed at $1,735, zinc gained 0.3% to
$2,218, lead slipped 0.4% to $1,825, tin ceded 0.1% to $16,190 and nickel
was up 4% at $12,600.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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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
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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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