Bulls n Bears Daily Market Commentary : 18 June 2020

Fri Jun 19 05:13:34 CAT 2020

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Bulls n Bears Daily Market Commentary : 18 June 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$58,922,739.50 with foreign buys at ZWL$621,100.00 and
foreign sales were ZWL $25,591,024.55 Total trades were 298.

The All Share index picks up another 51.57 points to close at 1,659.47
points. BAT added $29.5000 to $201.50000, CBZ rose by $5.0129 to close at
$34.6629 and FBC HOLDINGS traded $1.7187 higher at $10.3300. OLD MUTUAL
LIMITED recovered $0.9716 to $84.9994 and MEIKLES  was $0.9500 stronger at
$16.0000.

Gains were offset by losses in CASSAVA SMARTECH which lost $0.0561 to
$8.5803, ECONET eased $0.0267 to $8.4453 and MEDTECH was $0.0096 weaker at
$0.1304. SEEDCO INTERNATIONAL LIMITED  also decreased by $0.00700 to end at
$21.0000 and WILLDALE traded $0.0041 lower at $0.2588.

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Global Currencies & Equity Markets

South Africa

S.Africa's rand, stocks slide as second wave coronavirus fears resurface

(Reuters) - South Africa’s rand tumbled on Thursday despite the country
loosening coronavirus restrictions as global risk sentiment was hurt again
by fears of a second wave of infections.

At 1530 GMT the rand was 1.59% weaker at 17.4625 per dollar, a two-week low
after opening at 17.1900, with losses coming during the New York session
after low volumes in the local session as most traders awaited next week’s
emergency budget.

President Cyril Ramaphosa said on Wednesday casinos, cinemas, personal care
services and certain forms of accommodation would be allowed to operate as
the country further eases coronavirus lockdown restrictions.

But a surge in new coronavirus infections in several U.S. states and the
imposition of travel curbs in Beijing to stop a new outbreak there have
served as a reminder of the risks of reopening economic activity before a
vaccine has been developed.

That triggered an investor march to safe havens such as the dollar and the
Japanese yen, although the move was not unanimous as declining jobless
claims in the United States on Thursday kept some investors bullish on the
global economic recovery.

That sentiment was reflected in local bonds, with the yield on the
government issue due in 2030 falling 18 basis points to 9.33%.

The stock market was also down despite the new rules allowing the opening up
restaurants, casinos and theatres.

The Top-40 companies index closed down 0.25% to 49,535 points while the
All-Share index was down 0.27% to end the day at 53,881 points.

Shares of casinos and hotel companies such as Tsogo Sun Gaming Ltd, Tsogo
Sun Hotels Ltd and Sun International Ltd rallied, but financials led the
slide with the banking index down 3%.

South Africa’s banking association said bad debts could go up to 10% this
year due to coronavirus, up from 6% seen during the 2008/09 financial
crisis. 

AFRICA FX - Uganda, Kenya shilling, Zambia Kwacha to be stable

(Reuters) - The Kenyan and Ugandan shillings are expected to hold steady
against the dollar in the next week to Thursday, as will Zambia’s kwacha,
traders said.

KENYA

The Kenyan shilling is seen remaining steady due to tightening liquidity in
the local money market and inflows from horticulture exports offsetting
dollar demand from merchandise importers and manufacturers.

Commercial banks quoted the shilling at 106.35/55 per dollar, compared with
106.45/65 at last Thursday’s close.

UGANDA

The Ugandan shilling is expected to be little changed on the back of the
central bank mopping up excess liquidity in money markets.

Commercial banks quoted the shilling at 3,720/3,730, compared with last
Thursday’s close of 3,725/3,735.

On Thursday the Central Bank of Uganda absorbed excess liquidity from the
money market.

TANZANIA

Tanzania’s shilling is likely to weaken slightly due to dollar demand from
the manufacturing sector.

Commercial banks quoted the local currency at 2,309/19 on Thursday, the same
levels recorded a week earlier.

NIGERIA

Nigeria’s naira is seen unchanged despite a build-up of dollar demand, as
the central bank rations foreign exchange supplies to protect its dwindling
reserve and support the currency.

The naira opened weaker at 385 against the dollar on Thursday for the second
time in a row on the official market, backed by the central bank, but
recovered to 361 after two trades.

Dollar demand has ballooned on the money market with payment obligations
accumulating amid hard currency shortages triggered by an oil price crash.
This has funnelled demand to the black market, where the naira traded at
around 453 on Thursday.

Finance Minister Zainab Ahmed said this week the country will seek to unify
its multiple exchange rate regime to generate more local currency from its
dollar inflows and manage the rate in a sustainable manner.

ZAMBIA

The kwacha is likely to hold its own against the dollar next week with the
market mainly driven by matching demand and supply.

On Thursday, commercial banks quoted the currency of Africa’s second largest
copper producer at 18.2140 per dollar, the same level it traded at the close
a week ago.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asian stocks set to rise after mixed Wall St session

(Reuters) - Asian stocks were set for gains on Friday although trade was
likely to be choppy after a mixed Wall Street session with investor focus
swinging between concerns about a second pandemic wave and more upbeat hopes
about an economic recovery.

Fresh contagion concerns have dominated the market focus this week with
mixed data on infections jolting sentiment.

On Thursday around 400 workers at a slaughterhouse in northern Germany
tested positive for the virus. At the same time, gold prices eased a bit
after a Chinese medical expert said Beijing has brought a recent outbreak
under control.

All three major U.S. stock indexes were range-bound and oscillated through
much of the day as investors struggled to interpret the impact of U.S.
employment data without any guidance from corporations on their earnings.

Cleveland Federal Reserve Bank President Loretta Mester said it could take a
year or two for the U.S. economy to return to pre-pandemic levels, with the
gross domestic product declining by 6% in 2020 and the unemployment rate
still around 9% by year’s end.

Australian S&P/ASX 200 rose 0.5%, while Japan’s Nikkei 225 was up 0.7%.
South Korea’s KOSPI rose 0.3%.

Hong Kong’s Hang Seng index futures were mostly unchanged.

MSCI’s gauge of stocks across the globe shed 0.08% while emerging market
stocks rose 0.06%.

On Wall Street, The Dow Jones Industrial Average fell 0.15%, but the S&P 500
added 0.06%.

The Nasdaq Composite rose 0.33% after spending much of the session lower.

China’s markets have provided investors with some cheer with the blue-chip
CSI300 shares adding 0.7% on Thursday, helped by reassurances from its
central bank governor that the world’s second-largest economy would maintain
ample financial liquidity this year.

In currency markets, the Japanese yen strengthened 0.01% versus the
greenback at 106.96 per dollar, while sterling was last trading at $1.2425,
up 0.01% on the day.

U.S. Treasury yields rose as did crude oil as worries about fuel demand in
light of rising coronavirus cases were offset by data showing lower U.S.
inventories of gasoline and distillates, indicating higher demand.

Benchmark 10-year U.S. Treasury notes fell in price to yield to 0.7068%,
from 0.694% late on Thursday.

U.S. crude recently rose 0.77% to $39.14 per barrel and Brent was little
changed on the day

U.S. gold futures settled down $1,724.80 an ounce.

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Commodities Markets

China's Shandong Gold to buy Ghana-focused Cardinal Resources for $221 mln

(Reuters) - Shandong Gold Mining Co , one of China’s biggest gold producers,
said on Thursday it would buy Ghana-focused miner Cardinal Resources Ltd for
around A$321 million ($221 million) in cash.

The deal continues a recent M&A flurry by Chinese gold firms after spot
prices for the precious metal hit their highest in more than 7-1/2 years at
$1,764.55 an ounce last month, propelled by recession fears and Sino-U.S.
tensions amid the novel coronavirus outbreak.

Shandong Gold, which in April agreed to splash out C$230 million ($170
million) on Canada’s TMAC Resources, said in a filing to the Shanghai Stock
Exchange it had signed an agreement with Australia-listed Cardinal to pay
A$0.60 per share and would acquire all the target’s equity for AS$309
million.

The Chinese miner will also subscribe for 26 million new shares to be issued
by Cardinal at a price of A$0.46 per share for a total A$12 million.

Cardinal did not immediately respond to a request for comment outside of
normal business hours.

Its website says it is focused on the Namdini gold deposit in Ghana, which
has 5.1 million ounces of proved and probable ore reserves, and has other
exploration projects in the West African country.

Cardinal’s shares closed down 3.1% at A$0.47 on Thursday.

Shandong Gold, whose shareholder Barrick Gold Corp this week said it had
sold off most of its 17.9% stake in the company, noted the Cardinal deal was
subject to regulatory approvals, including from the Australian Foreign
Investment Review Board. ($1 = 1.4548 Australian dollars) ($1 = 1.3553
Canadian dollars) 

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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