Bulls n Bears Daily Market Commentary : 09 July 2020

Fri Jul 10 04:54:54 CAT 2020

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Bulls n Bears Daily Market Commentary : 09 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

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Global Currencies & Equity Markets

Kenya's shilling under pressure, Tanzania's stable

(Reuters) - Kenya’s shilling will come under pressure over the next week,
while Tanzania’s will likely hold firm, traders said. Uganda’s shilling was
seen strengthening, Zambia’s kwacha holding ground and Nigeria’s naira
weakening.

KENYA

The Kenyan shilling will likely come under pressure due to increased dollar
demand from the energy sector and from importers as COVID-19 restrictions
ease and economic activity resumes, traders said.

President Uhuru Kenyatta announced a phased reopening of the country on
Monday. Domestic flights are due to resume on July 15, and international
ones from Aug. 1.

Commercial banks quoted the shilling at 106.75/95 per dollar on Thursday,
marginally weaker than last Thursday’s close.

TANZANIA

Tanzania’s shilling is expected to hold steady due to the strong support of
inflows from exports since the easing of coronavirus-related restrictions,
traders said.

Commercial banks quoted the shilling at 2,312/20 levels against the
greenback on Thursday, unchanged from last week.

UGANDA

The Ugandan shilling is seen strengthening as appetite for hard currency
continues to take a hit from slumping consumer spending caused by the impact
of the coronavirus, traders said.

At 0934GMT on Thursday, commercial banks quoted the shilling at 3,705/3,715,
compared with last Thursday’s close of 3,720/3,730.

He said the shilling would probably strengthen below the key psychological
level of 3,700 in the coming week as importer demand continues to drop.

NIGERIA

Nigeria’s naira is expected to trade at the weaker rate after the central
bank this week unified its multiple exchange rates in a bid to ease dollar
shortages that have plagued the country for months, traders said.

The naira was quoted at 381 on the official market on Wednesday after it
lost 5.5% from its previous rate to trade close to the over-the-counter spot
market, widely used by investors and importers.

The central bank has been under pressure from the World Bank and the
International Monetary Fund to carry out currency reforms in order to
qualify for budget-support loans, and from the Nigerian government to get
more naira for its crude oil receipts.

ZAMBIA

The Zambian kwacha is likely to hold firm against the dollar next week as
declining imports limit demand for hard currency.

On Thursday, commercial banks quoted the currency of Africa’s second-largest
copper producer at 18.0500 per dollar from a close of 17.9500 a week
earlier.

South Africa

South Africa's rand firmer despite poor manufacturing data

(Reuters) - South Africa’s rand firmed against the dollar on Thursday thanks
to a rally in riskier assets globally even as poor manufacturing data at
home highlighted the blow to the economy from a coronavirus lockdown.

At 1540 GMT the rand was 0.12% firmer at 16.9000 per dollar, after hitting a
four-week high of 16.7975 earlier.

The rand largely ignored data showing South Africa’s manufacturing output
fell 49.4% year on year in April, reflecting the impact of a nationwide
lockdown on the recession-hit economy.

The Johannesburg Stock Exchange (JSE) lost steam after surging for three
consecutive trading days this week as poor manufacturing data and a global
surge in coronavirus cases caught up with the market.

The benchmark FTSE/JSE All Share Index closed down 0.15% to 55,788 points
while the FTSE/JSE Top 40 Companies Index slipped 0.04% to end the day at
51,537 points.

The JSE’s gold index, which represents 5 top gold mining companies, was at
an all-time high on the back of rise in gold prices globally as investors
shunned equities and parked money in safe haven. The index went up 3.5%, but
pared some gains to settle down 0.4% from the previous close at 1600 GMT.

In fixed income, the yield on the benchmark 2030 government issue was down
3.5 basis points to 9.650%. 

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GLOBAL MARKETS

Asian stocks fall on virus worry, China stock rally pauses

(Reuters) - Asian shares and U.S. stock futures fell on Friday as
record-breaking new coronavirus cases in several U.S. states stoked concerns
that new lockdowns could derail an economic recovery, while investors looked
forward to earnings season.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.76%.
Australian stocks dropped 0.42%, while Japanese stocks declined by 0.4%.

Shares in China fell 0.72%, the first decline in more than a week, as
investors booked profits on a surge in equities to a five-year high.

E-mini futures for the S&P 500 erased early gains to trade down 0.01%.

The Antipodean currencies fell and the yen rose as traders shunned risk and
sought safe havens.

More than 60,500 new COVID-19 infections were reported across the United
States on Thursday, the largest single-day tally of cases by any country
since the virus emerged late last year in China.

That heightened concerns that renewed lockdowns could hurt the economic
recovery.

The number of Americans filing for jobless benefits dropped to a near
four-month low last week, data showed.

But investors remained cautious as the report also said a record 32.9
million people were collecting unemployment checks in the third week of
June, supporting expectations the labor market would take years to recover
from the COVID-19 pandemic.

On Thursday, the Dow Jones Industrial Average fell 1.39% and the S&P 500
dropped 0.56%, but the tech-heavy Nasdaq rose 0.53% to its fifth record
closing high in six days.

Mainland China shares fell on Friday for the first time since June 29.
Shares had surged to the highest since 2015 on Thursday, fueled by retail
investor enthusiasm and policy support, even as regulators cracked down on
margin financing and as state media warned of market risks.

The rise in China’s mainland equities has some similarities to the bubble
there five years ago, but it is not yet close in scale, and prices could
continue to inflate for some time, said Capital Economics economist Oliver
Jones.

Fueled by illegal margin lending, the 2015-16 market bubble saw the
benchmark Shanghai index fall more than 40% from its peak in just a few
weeks.

In the currency market, the yen edged up against the dollar and the euro as
investors bought the traditional safe haven.

The Australian and New Zealand dollars , which are often traded as a liquid
proxy for risk because of their close ties to China’s economy, both fell
against the greenback.

The Aussie also fell as local officials use lockdowns and border
restrictions to contain a sudden increase in coronavirus cases.

U.S. crude fell 0.23% to $39.53 a barrel, while Brent crude edged 0.02%
lower to $42.34 per barrel due to concerns about a long-term decline in
global energy demand.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold's rally loses steam as dollar rebounds

(Reuters) - Gold prices retreated on Thursday, a day after vaulting to
nearly nine-year highs, as investors embraced the safe-haven greenback in
the face of record U.S. coronavirus cases.

Spot gold fell 0.5% to $1,800.35 per ounce by 12:01 p.m. ET (1601 GMT),
having surged to its highest since September 2011 at $1,817.71 on Wednesday.
U.S. gold futures dipped 0.8% to $1,806.20.

The dollar rallied from a four-week low as U.S. stocks fell with market
sentiment turning cautious as the United States hit another record high on
new coronavirus cases.

U.S. Federal Reserve officials on Wednesday raised fresh doubts about the
durability of the U.S. recovery, while new business surveys highlighted
developing risks from the relentless coronavirus pandemic.

Central banks worldwide have slashed interest rates in recent months,
providing in some cases unprecedented amounts of stimulus to help soften the
blow to the economy from the pandemic.

Stimulus tends to boost gold, which is considered a hedge against inflation
and currency debasement.

Among other metals, silver declined 0.9% to $18.61 an ounce having earlier
hit its highest since September 2019 at $19.02.

Palladium climbed 1.4% to $1,942.63, while platinum slid 2.2% to $825.29. 

Copper hits 14-month high on China demand, Chile supply cuts

(Reuters) - Copper prices hit their highest in over a year on Thursday,
spurred by hopes of a faster recovery in top consumer China and supply
concerns in the world’s biggest producer Chile.

Three-month copper on the London Metal Exchange (LME) was up 0.9% to $6,290
a tonne at 1617 GMT, after touching its highest since May 2019 at $6,360.

The metal, used as a gauge of economic health, is up 2.7% so far this year
and has largely recovered from a sell-off sparked by the COVID-19 pandemic.

CHINA DATA: China’s factory gate prices fell for a fifth straight month in
June, although signs of a pickup in some parts of the sector suggest a slow
economic recovery remains intact.

POSITIONING: Speculators have bet prices for LME copper will rise, with the
net long position climbing to 11% of contracts as of Tuesday, estimates from
broker Marex Spectron showed.

INVENTORIES: On-warrant stocks of copper in LME-registered warehouses
continued a downward trend, shedding 4,000 tonnes to 94,800 tonnes, the
weakest since January. MCUSTX-TOTAL.

SPREADS: This has helped drive the premium for cash over the three-month
contract MCU0-3 to its highest since April 2019 this week compared with a
discount for the last 14 months.

The premium stood at just under $1 on Thursday.

CHINA OUTPUT: China’s major copper smelters boosted cathode production in
June by 0.6% year on year to 699,000 tonnes, Antaike, the research arm of
the country’s nonferrous metal association, said.

PRICES: LME aluminium hit a four-month high, but was later down 0.3% to
$1,665 a tonne, zinc gained 0.8% to $2,147, lead added 1.3% to $1,836.50,
while nickel eased 2.2% to $13,200. Tin was up 1.5% to $17,328 a tonne,
after touching its highest since Jan. 23.  

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
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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
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
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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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