Bulls n Bears Daily Market Commentary : 04 June 2020

Fri Jun 5 06:12:30 CAT 2020

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Bulls n Bears Daily Market Commentary : 04 June 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$241,125,344.00 with foreign buys at ZWL$19,214,478.11
and foreign sales were ZWL $150,683,497.00 Total trades were 299.

The All Share index ended its 20 day winning streak with a 9.72 points loss
to close at 1,505.03 points. BAT  retreated by $3.0000 to $143.000, INNSCOR
eased $2.2839 to close at $25.9679 and DELTA was $0.8688 lower at $25.0056.
CASSAVA SMARTECH  also decreased by $0.4276 to end at $9.5099 and PADENGA
traded $0.1932 weaker at $13.1360.

Trading in the positive; SEEDCO INTERNATIONAL LIMITED gained $4.1000 to
$24.7000, SEEDCO added $1.7814 to $19.5314 and HIPPO VALLEY ESTATES  was
$1.1682 stronger at $13.3182. PPC  also increased by $0.9670 to $5.9755 and
MEIKLES was $0.3684 higher at $13.8684.

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Global Currencies & Equity Markets

South Africa

South Africa's rand climbs to 11-week peak, markets rally

(Reuters) - South Africa’s rand extended gains to a fresh 11-week high on
Wednesday in a broad emerging market rally spurred by investor bets that a
global economic recovery was taking hold after the coronavirus fallout.

The stock market mirrored the upbeat sentiment of the currency to scale a
13-week peak on Wednesday.

At 1515 GMT the rand was 1.64% firmer at 16.8900 per dollar, it best level
since March 18, crossing the key 17.00 psychological threshold towards
pre-coronavirus levels, having opened trade at 17.1400.

The day brought the local currency’s gains this week to around 4%, in-line
with majority of emerging market currencies, with rising appetite for risk
assets outweighing signs of an ailing local economy.

South Africa’s Purchasing Managers’ Index (PMI) contracted again in May,
reaching a record low, as output and new sales collapsed during the
nationwide coronavirus lockdown that began in March.

Governments and central banks around the world have unleashed unprecedented
fiscal and monetary stimulus and other support for economies floored by the
coronavirus pandemic.

The stimulus action has also overshadowed simmering tensions between Beijing
and Washington over Hong Kong, and ongoing protests in the U.S. over recent
police killings.

The FTSE/JSE top 40 companies index surged 2.03% to close the day’s trading
at 49,300 points. The FTSE/JSE all share index closed up 2.19% to 53,645
points.

The market rally was led by the country’s banks which jumped on hopes that a
faster economic recovery will boost loan growth in a low interest rate
environment. The banking index was up 10.42%.

Bonds also firmed, with the yield on the 10-year instrument down 7 basis
points to 8.665%. 

Kenya

Kenyan shilling gains ground, agricultural exports help

(Reuters) - The Kenyan shilling gained ground on Wednesday, helped by
inflows from agricultural exports and low dollar demand from merchandise
importers, traders said. 

At 0822 GMT, commercial banks quoted the shilling at 106.45/65 per dollar,
compared with 106.55/75 at Tuesday's close. 

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GLOBAL MARKETS

Asian shares hit two-month high as economic optimism spreads

(Reuters) - Asian shares rose to a two-month high on Thursday as government
stimulus expectations supported investor confidence in an economic recovery
from the global coronavirus pandemic.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4%,
earlier touching the highest since March 9.

Shares in Australia rose 0.66% after the country’s prime minister unveiled a
fourth stimulus package to repair the economy.

Chinese shares were little changed due to lingering worries about diplomatic
tension between the United States and China, while U.S. stock futures fell
0.23%.

The euro held onto gains before a European Central Bank meeting later on
Thursday, where policymakers are expected to increase debt purchases to
support the bloc’s weakest economies.

Oil prices fell, reversing gains made the previous session, due to
uncertainty about supply cuts by major producers.

Markets for risk assets have been on a tear, carrying some stock market
indexes to within sight of levels before the coronavirus outbreak.

The Nasdaq Composite,, the S&P 500, and the Dow Jones Industrial Average are
close to overtaking all-time closing highs registered in February.

Elsewhere in Asia, Japanese shares snapped a three-day winning streak and
fell 0.06%.

Hong Kong’s stock market gave up early gains and traded 0.12% lower due to
concerns about Beijing’s plans for a new national security law for the
former British colony.

The euro held near multi-month highs in Asia amid growing expectations the
ECB will increase the size of its 750 billion euro ($669 billion) Pandemic
Emergency Purchase Programme, when it meets on Thursday.

The yield on the benchmark 10-year eased slightly to 0.7425% in Asia on
Thursday.

A closely watched part of the U.S. Treasury yield curve measuring the gap
between yields on two- and 10-year Treasury notes, reached 55 basis points
on Wednesday, the steepest level since mid-March. A steepening curve often
points to a stronger economy.

Governments around the world have gradually started to lift tough lockdown
measures imposed to contain the coronavirus which has infected nearly 6.4
million people and killed over 379,000.

Markets await Friday’s U.S. Labor Department May jobs report, which is
expected to show the unemployment rate soaring to a post-World War Two high
of nearly 20% from 14.7% in April.

On Wednesday, a report showed U.S. private payrolls fell less than expected
in May, suggesting layoffs were abating as businesses reopen.

U.S. crude dipped 1.85% to $36.60 a barrel. Brent crude fell 1.18% to $39.32
per barrel.

Spot gold rose 0.4% to $1,704.31 an ounce early on Thursday after losing 1.6
% on Wednesday.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper inches higher as Europe redoubles stimulus

(Reuters) - Copper prices rose on Thursday towards 2-1/2 month highs reached
in the previous session as the European Central Bank and German government
announced big stimulus packages and U.S. data showed unemployment growth
slowing sharply.

Benchmark copper on the London Metal Exchange (LME) was up 0.1% at $5,528 a
tonne at 1600 GMT after touching $5,552 on Wednesday.

The metal used in power and construction has risen 25% from a low in March
as economies - most importantly China, the biggest consumer - begin to
reopen and stock markets rally.

But it remains more than 10% below its January high.

Copper has hit an important technical barrier around $5,540, the low point
for prices in 2017, 2019 and January this year, said Saxo Bank strategist
Ole Hansen.

“We came to a crossroads ... prices hit that old floor, which has now become
a ceiling,” he said.

Market fundamentals do not justify a move higher, but a break above this
level could fuel speculative and technical buying and push prices towards
$6,000, Hansen said.

MARKETS: Global equities slipped while the euro gained against the dollar.

ECB: The European Central Bank raised bond purchases by 600 billion euros
($674 billion) to 1.35 trillion euros and extended their duration.

GERMANY: The government presented additional stimulus measures worth 130
billion euros ($146 billion).

UNITED STATES: Benefit claims dropped below 2 million last week for the
first time since mid-March.

COPPER STOCKS: On-warrant stocks in LME-registered warehouses fell to
165,175 tonnes, their lowest since March 13, after 20,275 tonnes of
cancellations. MCUSTX-TOTAL

Inventories in Chinese visible warehouses have also fallen since March.
CU-STX-SGH SMM-CUR-BON

NICKEL: Indonesia will keep in place a ban on the export of nickel ore even
as it relaxes exports of some other minerals, an official said.

OTHER METALS: LME aluminium was down 0.1% at $1,566.50 a tonne, zinc rose
0.1% to $2,025, nickel fell 0.8% to $12,765, lead gained 1% to $1,738.50 and
tin was up 0.3% at $16,055.

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
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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