Bulls n Bears Daily Market Commentary : 14 July 2020

Tue Jul 14 15:23:49 CAT 2020

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Bulls n Bears Daily Market Commentary : 14 July 2020

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ZSE commentary

The Zimbabwe Stock Exchange (ZSE) remains suspended from trading. The ZSE
and regulator, Securities and Exchange Commission are still engaging the
Ministry of Finance to bring to finality the investigations on any illicit
trading that might have taken place on the local bourse. An update on the
trading resumption is possible when the Minister of Finance & Economic
Development presents the Mid Term Economic Review in Parliament on Thursday.

Inflation update

June CPI up 31.66% month-on-month, slows 737.26% year on year

HARARE - Official inflation stood at 31.66% in June 2020 gaining 16.53
percentage points on the May 2020 rate of 15.13%, according to ZimStat. The
year on year inflation rate (annual percentage change) for the month of June
2020 as measured by all items #CPI stood at 737.26% from 785.55% in May.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Uganda

Ugandan shilling firms on low demand for dollars

(Reuters) - The Ugandan shilling strengthened on Friday as scarce appetite
for dollars from large importers like telecoms, energy, manufactures and
others lent support to the local currency.

South Africa

South Africa's rand recovers but caution remains, stocks slip

(Reuters) - South Africa’s rand recovered in afternoon trade on Friday,
after sliding earlier due to concerns about rising COVID-19 cases both at
home and abroad.

At 1505 GMT the rand was 0.42% firmer at 16.7800 per dollar, bouncing back
from a session low of 16.9725 hit earlier.

The United States on Thursday reported the largest one-day increase in
coronavirus cases by any country since the start of the pandemic, while
cases have jumped in major cities such as Melbourne, Tokyo and Hong Kong.

Locally, confirmed COVID-19 cases are also on the rise.

The Johannesburg Stock Exchange (JSE) slipped as investor optimism about a
market recovery was overshadowed by continued worry over coronavirus.

The benchmark FTSE/JSE All Share Index dropped by 0.64% to close the week at
55,431 points while the FTSE/JSE Top 40 Companies’ Index closed down 0.74%
to 51,154 points.

The benchmark index rose 1.67% this week.

Bonds firmed, with the yield on the benchmark 2030 government issue dropping
15.5 basis points to 9.495%. 

 <mailto:info at bulls.co.zw> 

EMERGING MARKETS

Stocks set for worst day in nearly one-month on COVID-19 worries

(Reuters) - Emerging markets stocks were set for their worst day in nearly
one month on Friday due to concerns about rising COVID-19 cases but were
expected to clock their second week of gains on hopes of a gradual,
stimulus-induced pick up in global economic activity.

The mood remained largely off risk in Asia, with Chinese stocks halting a
rally that kicked off on June 29 as state media discouraged retail investors
from pushing the market higher and worries about China-U.S. friction.

The United States on Thursday imposed sanctions on the highest-ranking
Chinese official yet over alleged human rights abuses against the Uighur
Muslim minority.

The MSCI’s index for emerging market stocks fell 1%, on worries of
coronavirus as more than 60,500 new COVID-19 infections were reported across
the United States on Thursday, setting a one-day record.

The index was, however, set to record its second weekly rise as investors
continued to bet on more fiscal and monetary stimulus to steer the global
economy out of the healthcare crisis.

Russia’s rouble fell 0.3%, while South Africa’s rand slipped 0.5%. The
Turkish lira traded flat.

Data showed, Turkey’s unemployment rate fell to 12.8% in the March-May
period from 13.2% a month earlier, falling despite an economic slowdown
driven by measures to counter the coronavirus outbreak.

The Polish zloty edged higher against the euro, remaining in focus for
investors ahead of a presidential election on Sunday.

Analysts at Commerzbank said political environment will elevate risk with
the election deferred from May still underway.

Other central and eastern European currencies including Hungary, Romania and
the Czech Republic were higher against the euro.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper retreats from two-year peak as market eyes virus risks

(Reuters) - Copper prices slipped on Tuesday after a steep rally on worries
about rising coronavirus cases and more friction between the United States
and top metals consumer China.

Copper had soared about 50% from its 45-month lows touched in March to a
two-year peak hit on Monday, largely on supply concerns from the biggest
producer Chile.

But copper stumbled along with stock markets and oil after the most populous
U.S. state California imposed fresh coronavirus restrictions and the United
States rejected China’s disputed claims in most of the South China Sea.

Chile’s copper miners have largely maintained output, although state-owned
Codelco said on Monday it registered a total 3,215 COVID-19 infections and
nine deaths due to the pandemic.

Three-month copper on the London Metal Exchange was down 1.4% to $6,480.50 a
tonne by 1035 GMT.

FUNDAMENTALS

* CHILE STRIKE: Supervisors at Antofagasta Minerals’ Centinela copper mine
in Chile have voted in favour of strike action, pending mediation.

* CHINA: China’s June unwrought copper imports hit a record on strong
domestic demand, scrap shortages and open import arbitrage window.

ADVERTISEMENT

* PRICES: LME aluminium lost 0.8% to $1,677 a tonne, zinc dropped 2.9% to
$2,196.50, nickel fell 1.2% to $13,550, lead shed 1.3% to $1,858 and tin
gave up 0.8% to $17,290.

Gold eases on firm dollar, but holds near $1,800 on virus fears

(Reuters) - Gold inched down on Tuesday as the dollar held firm, but
concerns over surging coronavirus cases globally and renewed US-China
tensions underpinned bullion’s safe haven appeal and kept it near $1,800 an
ounce.

Spot gold eased 0.3% to $1,797.64 per ounce by 1009 GMT. U.S. gold futures
fell 0.8% to $1,799.60.

Weighing on global equities, many parts of Asia are finding cause to pause
the reopening of their economies on a jump in virus cases, while global
cases had crossed the 13 million threshold.

Apart from the pandemic, a growing rift between the U.S. and China over the
South China Sea region also kept investors wary and drove them to safe
havens, with Beijing announcing it will slap sanctions on Lockheed Martin
for involvement in the latest U.S. arms sale to Chinese-claimed Taiwan.

However, some of those safe-haven flows went to the dollar, making gold more
expensive for holders of other currencies.

Reflecting investor appetite for gold, holdings of SPDR Gold Trust, the
world’s largest gold-backed exchange-traded fund, rose 0.3% to 1,203.97
tonnes on Monday.

On the technical front, a bullish target of $1,831 per ounce has been
aborted for spot gold as it is about to break a support at $1,796, said
Reuters technical analyst Wang Tao.

Elsewhere, palladium was steady at $1,980.48 per ounce and platinum dipped
0.3% to $825.79.

Silver dropped 0.7% to $18.95 per ounce, after hitting its highest since
September 2019 on Monday.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

ZPI

AGM

virtual

14 July 2020 | 12pm

GB Holdings

AGM

Cernol Chemicals Boardroom, Willowvale

15 July 2020 | 11:30am

TSL

AGM

virtual

15 July 2020 | 12pm

BAT

AGM

Cresta Lodge, Msasa

16 July 2020 | 10am

African Sun

AGM

Virtual

16 July 2020 | 12pm

Masimba

AGM

Virtual

21 July 2020 | 12pm

Proplastics

AGM

Virtual

23 July 2020 | 10am

NMB

AGM

Virtual

28 July 2020 | 10am

FMP

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

29 July 2020 | 9:30am

FML

AGM

Ground Floor, First Mutual Park, 100 Borrowdale Road, Borrowdale

29 July 2020 | 11:30am

ZBFH

AGM

Board Room, 21 Natal Road, Avondale

30 July 2020 | 10:30am

OK Zimbabwe

AGM

Virtual

30 July 2020 | 3pm

ZHL

AGM

virtual

31 July 2020 |

Delta

AGM

Virtual, Head Office, Northridge Close, Borrowdale

31 July 2020 | 12:30pm

Zimbabwe

National Heroes Day

Zimbabwe

10  August 2020

Zimbabwe

Defence Forces’ Day

Zimbabwe

11  August 2020

CBZ

AGM

Virtual

14  August 2020 | 6pm

 <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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