Bulls n Bears Daily Market Commentary : 22 June 2020

Tue Jun 23 04:44:51 CAT 2020

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Bulls n Bears Daily Market Commentary : 22 June 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$34,381,236.00 with foreign buys at ZWL$44,800.00 and
foreign sales were ZWL $8,517,136.00 Total trades were 240.

The All Share index opened the new week solid at 1,772.97 points after
gaining 59.34 points . SEEDCO INTERNATIONAL LIMITED led the movers with a
$4.1981 gain to close at $28.5481, FBC HOLDINGS rose by $2.4500 to $14.8000
and OLD MUTUAL LIMITED traded $2.1116 firmer at $87.1116. OK ZIMBABWE also
inceased by $0.7976 to end at $6.1576 and DELTA was $0.7028 stronger at
$25.5291.

Trading in the negative; MEIKLES lost $0.0105 to $16.0395, PROPLASTICS eased
$0.0092 to $7.1908 and DAWN  was $0.0042 weaker at $1.1300. CASSAVA SMARTECH
also decreased by $0.0024 to $8.5745 and FIRST CAPITAL BANK traded $0.0003
weaker at $0.9997.

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Global Currencies & Equity Markets

South Africa

S.Africa rand steadies as focus shifts to budget

(Reuters) - South Africa’s rand steadied against the dollar in late trade on
Monday as investors waited for a supplementary budget due on Wednesday that
is expected to show a markedly wider budget deficit.

At 1525 GMT the rand traded at 17.3200 per dollar, unchanged from its
previous close.

Finance Minister Tito Mboweni is expected to paint a bleak picture in the
revised budget almost three months after the government announced a 500
billion rand ($28.87 billion) stimulus package leaning heavily on new
borrowing.

A Reuters poll on Monday showed that South Africa’s consolidated budget
deficit is expected to widen to a record 14% of gross domestic product this
year, with the National Treasury struggling to squeeze it back to levels it
anticipated before the pandemic.

South African stocks showed some signs resilience on hopes of a rebound in
economic activity in the country.

The benchmark FTSE/JSE all share index was up 0.01% to close at 54,230.17
points and the top 40 companies index closed up 0.13% to 49,878 points.

As money moved globally from equities to safe haven gold, its price surged
by 0.86% on Monday pushing the JSE gold index , the index of the top five
gold mining companies in South Africa, up 3.41%.

In fixed income, the yield on the 10-year government bond was up 6 basis
points to 9.280%.

Uganda

Ugandan shilling trades unchanged amid flat appetite

(Reuters) - The Uganda shilling traded unchanged on Monday amid subdued
appetite from merchandise importers and commercial banks.

At 0932GMT commercial banks quoted the shilling at 3,725/3,735, compared to
Friday’s close of 3,720/3,730.

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GLOBAL MARKETS

Asian stocks set to track upbeat Wall Street despite rising infections

(Reuters) - Asian stocks were set to edge up on Tuesday after oil prices
rose and technology firms pushed Wall Street higher, although investors
remained worried about fresh coronavirus outbreaks across the globe.

New infections spiked in Latin America, in Brazil in particular, while New
York City, the epicenter of the U.S. outbreak, eased restrictions after 100
days of lockdown.

McCarthy added that data on manufacturing will impact the markets in the day
ahead, adding that the data may be much worse than expected.

Australian S&P/ASX 200 futures rose 0.58% in early trading. Japan’s Nikkei
225 futures added 1.34% and Hong Kong’s Hang Seng index futures were up
0.80%.

In a sign there was still some demand for safe havens, spot gold added 0.1%
to $1,755.53 an ounce.

On Wall Street, the Dow Jones Industrial Average rose 0.59%, the S&P 500
gained 0.65% and the tech-heavy Nasdaq Composite added 1.11% to set a record
closing high.

The firmer sentiment helped riskier currencies such as the Australian dollar
push higher, even as investors saw signs of rising coronavirus outbreaks.
The dollar index fell 0.77%, with the euro up 0.13% to $1.1273. The
Australian dollar rose 0.33% versus the greenback at $0.693.

U.S. crude rose 0.88% to $41.09 per barrel and Brent was at $43.02, up 1.97%
on the day. Tighter supply from major producers led to the rise.

MSCI’s gauge of stocks across the globe gained 0.34%.

Outside of New York, other U.S. states saw rising coronavirus cases.

In a research note, Commonwealth Bank of Australia (CBA) said a second wave
of infections in the U.S. would “elicit a different response to the first
wave.”

Credit rating agency Moody’s warned that the stimulus measures would leave
advanced economies with much higher debt than they accumulated during the
last financial crisis.

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Commodities Markets

Oil, stocks gain, but rising infection rates spark concerns

(Reuters) - Crude oil prices and a gauge of global equity markets edged
higher on Monday as lockdowns eased, with the Nasdaq setting a record
closing high, but sentiment remained tenuous as coronavirus infections
continued to rise.

The dollar fell and higher risk currencies, including the Australian dollar,
jumped as investors weighed improving economic data against the prospect of
new business shutdowns if a second wave of the pandemic gains force.

Gold prices climbed 1% to hit the highest in more than a month as investors
took refuge in the safe-haven.

Coronavirus cases are soaring in several major countries, with “worrying
increases” in Latin America, especially Brazil, the World Health
Organization said. More than 183,000 new cases around the world were
reported on Sunday, the biggest daily tally since the outbreak started in
December, WHO chief Tedros Adhanom Ghebreyesus said.

Bullish investors have a lot to prove in terms of further gains in the
absence of continued good news in economic data, said Carlton Neel, chief
executive officer of investment research firm Chaikin Analytics in
Philadelphia.

MSCI’s broadest index of shares across the globe rose 0.36% and has gained
more than 40% since its March lows on hopes that the worst of the pandemic
was over.

But emerging market stocks lost 0.08% and the pan-European STOXX 600 index
closed down 0.76% on signs of a resurgence in coronavirus cases in Germany.

The German reproduction rate jumped to 2.88 on Sunday, taking infections
above the level needed to contain it over the longer term. The number was a
sharp increase from 1.06 on Friday, according to the Robert Koch Institute.]

The number of patients in U.S. hospitals being treated for COVID-19 has been
on a consistent decline since its peak in April, dropping to fewer than
30,000 from more than double that two months ago, asset manager Glenmede
said.

On Wall Street, the Dow Jones Industrial Average rose 153.5 points, or
0.59%, to 26,024.96 and the S&P 500 gained 20.12 points, or 0.65%, to
3,117.86. The Nasdaq Composite added 110.35 points, or 1.11%, to 10,056.48,
a record close, as shares of Apple Inc hit an all-time peak.

Investors nonetheless edged into perceived safe-haven assets like U.S.
government bonds. Benchmark 10-year U.S. Treasury notes rose 0.1 basis point
to yield 0.7102%.

The dollar index fell 0.659%, with the euro up 0.75% to $1.1259. The
Japanese yen strengthened 0.07% versus the greenback at 106.91 per dollar.

Credit rating agency Moody’s warned that the stimulus measures will leave
advanced economies with much higher debt than they accumulated during the
last financial crisis.

Oil rose about 2% on tighter supplies from major producers and as
coronavirus lockdowns continued to ease, but gains were capped by worries
that a worldwide rise in new infections might stall a recovery in fuel
demand.

Brent oil futures, the international benchmark, rose 89 cents to settle at
$43.08 a barrel. U.S. crude futures settled up 71 cents at $40.46.

U.S. gold futures settled 0.8% higher at $1,766.40 an ounce.

Venezuela's rival leaders begin tug-of-war over London gold

(Reuters) - Venezuela’s rival leaders, President Nicolás Maduro and his
western-backed opponent Juan Guaido, began a legal tug-of-war on Monday over
$1 billion of the country’s gold stashed deep under the Bank of England in
London.

In a High Court hearing due to last four days, the Venezuelan central bank
(BCV), controlled by Maduro’s government, is seeking an order to force the
Bank of England to release the bullion that, like many countries, it stores
there for safe keeping.

Lawyers representing the BCV say selling the gold, which amounts to around
15% of Venezuela’s foreign currency reserves, would fund the response to the
coronavirus and bolster a health system gutted by six years of economic
crisis.

Guaido’s lawyers meanwhile say the bullion is his to control as the British
government, along with around 60 others around the world, recognise him as
leader after claims Maduro rigged Venezuela’s last presidential election two
years ago.

Monday’s start of the hearing saw the two legal teams lock horns over who is
recognised as the legitimate leader.

BCV representative Nick Vineall QC argued a statement by the UK government
in February 2019 that Guaido was interim president had been carefully
nuanced and that diplomatic action since then had shown that Maduro was
still seen as in charge.

He gave examples of how economic sanctions had referred to Maduro and how
Maduro’s embassy staff had received correspondence on Queen Elizabeth II’s
birthday last June.

Guaido’s designated representative to the UK, Vanessa Neumann, a former
London socialite who once dated Rolling Stones singer Mick Jagger, had
meanwhile been told that while she would be received in London, she would
not receive a diplomatic visa, diplomatic immunity or have access to
Venezuela’s diplomatic properties there.

Andrew Fulton, Guaido’s representative in the London case on Monday
responded by saying that the UK’s statement in February 2019 had been clear.

The Bank of England has yet to comment on the case.

It holds roughly 400,000 bars of gold worth more than 200 billion pounds
($250 billion) in its vaults under the City of London and is the second
largest keeper of gold in the world after the New York Federal Reserve,
according to its website.

The dispute over Venezuela’s gold began in May 2018 when Maduro secured
re-election in a vote the opposition coalition boycotted and called a sham.
Afterwards, Boris Johnson, then the British foreign minister, said: “We may
have to tighten the economic screw on Venezuela.”

Concerned by mounting U.S. sanctions against the Maduro government, the BCV
subsequently told the BOE it wanted to bring home 14 tonnes of gold it had
stored there.

Around the year’s end, Calixto Ortega, the BCV president, travelled to
London to discuss the move with BOE officials, according to Sarosh Zaiwalla,
a London-based lawyer representing the BCV.

In its latest claim, the BCV has changed tack. It says that the funds from a
sale would be funnelled into the United Nations Development Programme (UNDP)
and be used to buy medicine and equipment to combat the COVID-19 crisis.

The opposition alleges Maduro wants to use the gold to pay off his foreign
allies, which his lawyers deny. Over the past two years, Maduro’s government
has removed some 30 tonnes from its reserves in Venezuela to sell abroad for
much-needed hard currency, according to people familiar with the operations
and the bank’s own data. ($1 = 0.8035 pounds)

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
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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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