Bulls n Bears Daily Market Commentary : 11 June 2020

Fri Jun 12 04:47:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 11 June 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$75,276,450.75 with foreign buys at ZWL$13,498,361.00 and foreign sales were ZWL $12,248,350.00 Total trades were 281.

The All Share index dropped further by 6.82 points to close at 1,533.48 points. BAT lost $5.2500 to $166.75000, SEEDCO INTERNATIONAL LIMITED retreated by $1.4909 to close at $21.0000 and PROPLASTICS was $1.0000 weaker at $6.2000. SEEDCO also decreased by $1.0000 to end at $18.0000 and TSL  traded $0.7091 weaker at $4.6000.

Losses were offset by gains in CBZ  which added $3.4982 to $21.0000, HIPPO VALLEY ESTATES  which increased by $1.6770 to $18.6968 and FBC HOLDINGS  was

$0.9500 firmer at $5.7075. RIOZIM  also went up by $0.9212 to $12.0000 and ZIMPLOW traded $0.4200 higher at $2.5200.

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Global Currencies & Equity Markets

Kenya

Kenyan shilling loses ground as importers exert demand

(Reuters) - The Kenyan shilling was under pressure on Thursday from healthy demand exerted by merchandise importers, traders said. 

At 0931 GMT, commercial banks quoted the shilling at 106.70/90 per dollar, compared with 106.65/85 at Wednesday's close.   

South Africa

South African rand tumbles on Fed, dismal domestic data

(Reuters) - South Africa’s rand was on track for its biggest daily fall since November 2016 on Thursday, as global investors dumped riskier assets and dismal domestic data drove home the economic impact of the COVID-19 pandemic.

The rand is seen by some as a proxy for emerging market risk, so it tends to swing wildly at times of market volatility.

And Thursday was a brutal day for global markets, after the U.S. Federal Reserve painted a bleak picture of the health of the world’s biggest economy and investors worried about new coronavirus infections as lockdowns aimed at curbing the virus ease.

The rand’s decline of more than 3% against the U.S. dollar was steeper than for other emerging market units like the Russian rouble or Turkish lira.

The South African Reserve Bank has cut rates by 275 basis points so far this year, to 3.75%, bringing them below the level of annual inflation in March, the latest month for which data is available.

The rand’s sharp move weaker, which took it above 17 per dollar, marked a relapse for a currency that had gained some 11% against the dollar from the start of May to Wednesday’s close.

Mining data on Thursday highlighted how South Africa’s strict lockdown crippled output in April, and manufacturing data showed the sector was in bad shape even before the lockdown.

Africa’s most industrialised economy could contract by 7% this year, according to a central bank prediction.

On the local bourse, stocks slid for a fourth session this week, mirroring falls in global equities markets.

The benchmark All-share Index closed down 0.7% at 53,295 points, while the Top-40 Index fell 0.6% to 48,892 points. Banks led decliners, with the banking index down 2%.

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Asia

Asian stocks set to fall sharply as Wall Street tumbles

(Reuters) - Asian equities are set to fall sharply on Friday after Wall Street stocks and oil tumbled over growing concerns that a resurgence of coronavirus infections could stunt the pace of reopening economies.

The three major U.S. stock indexes fell more than 5%, posting their worst day since mid-March, when markets were sent into freefall by the abrupt economic lockdowns put in place to contain the pandemic.

Australian S&P/ASX 200 futures were down 3.04% at 20:59 GMT, while Japan’s Nikkei 225 index closed down 2.82% at 22,472.91 on Thursday. Hong Kong’s Hang Seng index futures were down 2.06%.

Cases of the disease have jumped in several U.S. states in recent days, raising concern among experts who say authorities have loosened restrictions put in place to contain the spread too early.

Cases in New Mexico, Utah and Arizona rose by 40% for the week ended Sunday, a Reuters tally shows. Florida and Arkansas are other hot spots.

The U.S. Federal Reserve released a gloomy economic outlook at the end of its two-day monetary policy meeting on Wednesday. Chair Jerome Powell warned of a “long road” to recovery.

Economic data appeared to back up the Fed’s projections, with jobless claims still more than double their peak during the Great Recession and continuing claims at an astoundingly high 20.9 million.

On Wall Street, the Dow Jones Industrial Average dropped 6.9%, the S&P 500 lost 5.89%, while the Nasdaq Composite shed 5.27%.

Oil prices tumbled on renewed concerns about demand, as new cases of the coronavirus disease rise globally, and a large buildup of U.S. crude inventories.

Benchmark Brent crude futures settled 7.62% lower at $38.55 a barrel in U.S. trading hours, before sliding further in Asia on Friday. U.S. crude oil futures settled at $36.34 a barrel, down $3.26, or 8.23%.

U.S. Treasury and euro zone government bonds rallied after the Fed on Wednesday signaled it plans years of extraordinary support to counter the economic fallout from the pandemic.

Yields on 10-year Treasury notes dropped sharply from last week’s peak of 0.96%.

The 10-year Treasury note fell 8.6 basis points to yield 0.6625%, while Germany’s 10-year benchmark fell 10 basis points to a nine-day low of -0.43%.

Gold futures settled more than 1% higher and the dollar, yen and Swiss franc all benefited from safe-haven flows.

The yen rose to a one-month high against the dollar, while the Swiss franc climbed to a three-month peak. The dollar also rose 0.4% to 96.556 against a basket of currencies.

The euro fell 0.63% to $1.1297, and the yen slid 0.22% to $106.8500.

U.S. gold futures settled up 1.1% at $1,739.80 an ounce.

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Commodities Markets

Copper glides to highest since January on technicals, demand uplift

(Reuters) - Copper prices rose for a fifth straight session on Wednesday to their highest since January, supported by firm demand and an improved technical picture.

Benchmark copper on the London Metal Exchange (LME) was up 2.1% to $5,893 per tonne by 1600 GMT, after touching its loftiest since Jan. 24 at $5,913.50.

The metal broke through the 100- and 200-day moving averages recently, prompting further buying.

The next area of resistance for LME copper lies at $6,050, Hansen said.

GOLDMAN SACHS: The investment bank raised its copper and aluminium forecasts, and lifted its 12-month commodity returns forecast to 13.1%.

INVENTORIES: On-warrant LME copper stocks MCUSTX-TOTAL fell to their lowest since Feb. 24 at 130,225 tonnes, while Shanghai Futures Exchange copper inventories CU-STX-SGH were at their lowest since Jan. 17.

Bonded warehouse stockpiles in China SMM-CUR-BON were last at 213,000 tonnes, near record lows hit last month.

Analysts and traders say the drawn-down LME stocks are headed for China, where prices are higher.

CHINA COPPER: Chinese domestic spot prices of refined copper SMM-CU-REF rose to 46,350 yuan a tonne, their highest since Jan. 23, indicating strong demand in top consumer China.

POSITIONING: “Net positioning on CME copper is on the verge of turning long, with the net short position shrinking from over 40,000 contracts in February to just 895 contracts as of early June,” said BMO analyst Timothy Wood-Dow.

U.S. DOLLAR: The dollar is trading at its weakest in three months, supporting prices of dollar-denominated commodities.

OTHER PRICES: LME aluminium rose to its highest since March 20, up 1.4% to $1,628 a tonne, zinc added 0.6% to $2,028.50, lead shed 1.3% to $1,742.50, tin gained 1.6% to $17,200, and nickel rose 0.8% to $13,010. 

Mali's 2019 gold mining revenue boosted by strong output, prices

(Reuters) - State revenue from gold mining companies in Mali surged 63.5% to 403.6 billion CFA ($702 million) in 2019 compared with 2018, boosted by a strong turnover from companies operating in the West African nation, the government said on Wednesday.

Mali’s mines ministry said the gold mining sector generated a turnover of 1.65 trillion CFA in 2019 compared with the previous year, up 19%, due the increase output and a rise in global gold prices.

Spot gold is currently trading at around $1,717 per ounce up from around $1,280 per ounce at the end of 2018.

Mali’s gold output rose to 71.1 tonnes in 2019 compared with 66.8 tonnes the previous year.

Industrial gold production is expected to fall by 8.3% year on year to 59.77 tonnes this year compared with 2019 due to falling output at several mines, the mines ministry said on June 3.

The ministry said in the statement on Wednesday that the 403.6 million revenue contribution included taxes, and other royalties. It represented around 25% of the Mali’s total fiscal resources in 2019, according to the finance ministry.

The mining sector accounted for around 9.7% of Mali’s gross domestic product in 2019, with gold as the country’s main export revenue earner, the finance ministry said.

Thirteen industrial gold mining firms operate in Mali including Barrick Gold Corp, Resolute Mining Ltd , B2GOLD, AngloGold Ashanti Ltd, and Endeavour Mining Corp. The country also has some 350 artisanal gold mining sites. ($1 = 574.4800 CFA francs)

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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