Bulls n Bears Daily Market Commentary : 03 July 2020

Mon Jul 6 10:40:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 03 July 2020

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Zimbabwe Stock Exchange Update

Following the statement issued by the Secretary for Information, Publicity
and Broadcasting Services on June 26 2020, the Zimbabwe Stock Exchange
Limited engaged both the Securities and Exchange Commission of Zimbabwe
(SECZ) and the Ministry of Finance and Economic Development. Whilst we await
the guidance from our regulators on the operational modalities going
forward, we notify our stakeholders that trading has been suspended until
further notice.-zse

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting (“AGM”) of the
shareholders of Zimbabwe Stock Exchange Limited will be held on 21 July
2020. Shareholders are advised that that in light of the current regulations
which prohibit gatherings in excess of 50 people and promoting social
distance on account of the COVID-19 pandemic, the Company will endeavour to
facilitate a virtual meeting the details of which will be communicated to
shareholders in due course.-zse

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand slips as COVID-19 and economic clouds gather

(Reuters) - South Africa’s rand weakened on Friday after two days of gains,
weighed down by fears of a rebound in global COVID-19 infections and
concerns about the local economy.

At 1500 GMT the rand was 0.34% weaker at 17.0373 per dollar, rolling back
gains from the previous session that saw the currency rally to a three-week
best of 16.8750.

The Johannesburg Stock Exchange (JSE) also slipped on Friday but ended the
week 1.6% higher.

Losses in the day were also spurred by low liquidity as the U.S. market was
closed for a bank holiday.

The rand has struggled for clear momentum in recent weeks, failing to hold
levels below the key 17 mark with investors unnerved by the mounting fiscal
crisis and an accelerating rate of coronavirus infections.

South Africa reported its biggest daily jump in COVID-19 cases on Thursday,
adding 8,728 confirmed infections and taking the total count to 168,061.
Deaths rose by 95 to 2,844.

Data this week showed Africa’s most advanced economy had contracted in
fourth of the last five quarters, the bleak data coming a week after the
Treasury said public debt would breach 90% in the short term.

“Looking further out, there are signs that the rand could stage a recovery
towards the end of the year,” market economists at ETM Analytics said in a
note.

“There are, however, significant risks to this outlook, with South Africa
still rapidly on its way towards a debt crisis, rendering the local unit
extremely vulnerable to any external shocks or reversals of global stimulus
programmes.”

In stocks, the benchmark FTSE/JSE All Share Index closed down 0.17% to
54,523 points and the Top 40 Companies Index fell 0.26% to 50,180 points.

Bonds also took a hit, with the yield on the benchmark 2030 government issue
rising 15.5 basis points to 9.42%. ''

Nigeria

Nigeria central bank to sell FX to retail clients at 5% above official rate
-traders

(Reuters) - Nigeria’s central bank asked lenders to bid for forex at an
auction at 380 to the dollar from a previous rate of 360, allowing the naira
to weaken, traders said on Friday.

The central bank, Nigeria’s main supplier of dollars, depreciated the forex
rate for retail interventions by 5%, traders said, quoting a message from
the regulator to lenders. 

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asia shares climb as China blue chips hit 5-year peak

(Reuters) - Asian shares scaled four-month peaks on Monday as investors
counted on super-cheap liquidity and fiscal stimulus to sustain the global
economic recovery, even as surging coronavirus cases delayed re-openings
across the United States.

MSCI’s broadest index of Asia-Pacific shares outside Japan climbed 1% to its
highest since February.

Eyes were on Chinese blue chips, which jumped 3%, on top of a 7% gain last
week, to their loftiest level in five years. Even Japan’s Nikkei, which has
lagged with a soft domestic economy, managed a rise of 1.3%.

E-Mini futures for the S&P 500 also firmed 0.8%, while EUROSTOXX 50 futures
added 1.8% and FTSE futures 1.5%.

Most markets had gained ground last week as a raft of economic data from
June beat expectations, though the resurgence of coronavirus cases in the
United States is clouding the future.

In the first four days of July alone, 15 states have reported record
increases in new cases of COVID-19, which has infected nearly 3 million
Americans and killed about 130,000, according to a Reuters tally.

Analysts estimate that reopenings impacting 40% of the U.S. population have
now been wound back.

Two U.S. aircraft carriers conducted exercises in the disputed South China
Sea on Saturday, the U.S. Navy said, as China also carried out military
drills that have been criticised by the Pentagon and neighbouring states.

The risks, combined with unceasing stimulus from central banks, have kept
sovereign bonds supported in the face of better economic data, with U.S.
10-year yields holding at 0.67% and well off the June top of 0.959%.

Analysts at Citi estimate global central banks are likely to buy $6 trillion
of financial assets over the next 12 months, more than twice the previous
peak.

Major currencies have been largely range bound with the dollar index at
97.189 having spent an entire month in a snug band of 95.714 to 97.808.

The dollar was a shade firmer on the yen at 107.72 on Monday, while the euro
edged up to $1.1271.

In commodity markets, gold has benefited from super-low interest rates
across the globe as negative real yields for many bonds make the
non-interest paying metal more attractive.

Spot gold traded at $1,772 per ounce just off last week’s peak of $1,788.96.

Oil prices were mixed in early trade with Brent crude futures up 19 cents at
$42.99 a barrel, while U.S. crude eased 23 cents to $40.42 amid worries the
surge in U.S. coronavirus cases would curb fuel demand.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold ticks higher as virus fears counter gains in equities

(Reuters) - Gold prices edged higher on Monday, supported by worries over
surging coronavirus cases, while an uptick in risk appetite among investors
limited upside for the safe-haven metal.

Spot gold was up 0.1% to $1,776.29 per ounce by 0709 GMT. U.S. gold futures
fell 0.3% to $1,785.

“We’re seeing some big gains in Hong Kong and Chinese share markets,” and
that sort of growth-positive movement is generally expected to weigh on
gold, said Michael McCarthy, chief strategist at CMC Markets.

Asian shares scaled a four-month high on bets for super-cheap liquidity and
fiscal stimulus to sustain the global economic recovery, with investors
awaiting U.S. services sector activity data for June later in the day.

Financial markets have regained lost ground as a raft of positive economic
readings lifted sentiment, although a spike in COVID-19 cases renewed
worries about a swift economic recovery.

However, the huge amount of stimulus and evidence in other markets
signalling a shift in focus back towards infection rates could help gold
“maintain its elevated status,” CMC’s McCarthy said.

In the first four days of July alone, 15 U.S. states reported record
increases in new cases of COVID-19, which has killed around 130,000
Americans.

“With increasing number of U.S. states imposing lockdowns again, it should
result in the Federal Reserve’s balance sheet continuing to grow and
interest rates kept low, which would in turn provide underlying support for
gold markets,” Phillip Futures said in a note.

Lower interest rates and widespread central bank stimulus tend to support
bullion, which has risen nearly 17% so far this year.

On the technical front, spot gold is biased to break a resistance at $1,778
per ounce and rise into $1,788-$1,795 range, said Reuters technical analyst
Wang Tao.

Palladium fell 0.7% to $1,910.61 per ounce, while platinum rose 1.7% to
$813.79. Silver gained 0.2% to $18.07.

Copper rises on hopes of faster recovery in China, more stimulus

(Reuters) - Copper and most other base metals rose alongside equities
markets on Monday, riding on hopes of a pickup in pace of China’s economic
recovery and more stimulus steps to support the global economy.

Three-month copper on the London Metal Exchange rose 1.2% to $6,088 a tonne
by 0724 GMT, while the most-traded August copper contract on the Shanghai
Futures Exchange closed down 0.2% at 49,040 yuan ($6,977.80) a tonne, having
rebounded from sharper losses earlier in the session.

Asian shares hit four-month peaks and Chinese blue chips jumped to their
five-year high, as investors counted on a revival in Chinese activity to
sustain global economic growth, despite surging U.S. coronavirus cases.

Higher commodity prices could be linked to stronger Chinese stock indexes, a
metals trader in China said.

Copper is often used as a gauge of global economic health.

Chile’s Codelco will temporarily halt construction to expand its El Teniente
mine to combat the outbreak, while unions at its Chuquicamata mine voted for
a seven-day on, seven-day off shift schedule to reduce worker exposure to
the virus.

FUNDAMENTALS

* SPREAD: LME cash copper flipped to a premium of $6.50 a tonne over the
three-month contract CMCU0-3, after having stayed in discount since May
2019, indicating tight nearby supplies.

* OTHER PRICES: LME aluminium rose 0.4% to $1,620 a tonne and nickel jumped
1.9% to $13,245 a tonne, while ShFE nickel advanced 2.6% to 107,110 yuan a
tonne and ShFE aluminium was up 0.9% to 14,125 yuan a tonne.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Ariston

AGM

Boardroom, 306 Hillside Road, Msasa Woodlands

07 Jul 2020 : 1100

Dawn Properties

AGM

Ophir Room, Monomotapa Hotel, 54 Park Lane

09 Jul 2020 : 0900

Mash

AGM

Virtual, Boardroom, 19th Floor, ZB Life Towers, 77 Jason Moyo Avenue

09 Jul 2020 : 1200

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opinions expressed and recommendations made are subject to change without
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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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