Bulls n Bears Daily Market Commentary : 28 February 2020

Mon Mar 2 02:38:36 CAT 2020

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Bulls n Bears Daily Market Commentary : 28 February 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$31,177,421.52 with foreign buys at ZWL$1,922,302.91 and
foreign sales were ZWL$15,052,030.52 Total trades were 228

The All Share index closed the week on a lower note losing 6.79 points to
close at 473.13 points.DELTA CORPORATION  retreated by $0.4079 to $6.5704,
MEIKLES  eased $0.1000 to $8.3900 and CASSAVA SMARTECH  traded $0.0928
weaker at $2.8015. ZIMRE HOLDINGS also lost $0.0845 to $0.3390 and PADENGA
traded $0.0788 lower at $5.9986.

Gains were recorded in OLD MUTUAL LIMITED  which added another $0.1776 to
$48.1900, INNSCOR AFRICA LIMITED  which rose by $0.0948 to settle at $7.2324
and CBZ 

which gained $0.0625 to end at $1.0625. SEEDCO  also increased by $0.0540 to
$4.2040 and GETBUCKS   traded $0.0240 stronger at $0.1440.
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  Global Currencies & Equity Markets

South Africa

S.African rand closes at 18-month low, stocks slump amid virus fears

(Reuters) - South African rand closed at its weakest level in 18 months on
Friday, extending its slump throughout the day as stocks also crashed amid
deepening worries about coronavirus that sent global financial markets into
a tailspin.

South African markets suffered added pressure from concerns over a sovereign
ratings downgrade by Moody’s, the last agency to rate its debt as
investment-grade, following this week’s budget.

At 1537 GMT, the rand traded at 15.6700 per dollar, 1.18% weaker than its
close on Thursday. The currency was at its weakest level since September
2018.

The stock market meanwhile lost almost 5%, and government bonds weakened
with the yield on the benchmark instrument due in 2026 rising by 26.5 basis
points to 8.127%.

Axel Rudolph, from Commerzbank, said in a note that the rand may pause at
its September 2018 peak, above which lies 15.9854 - a level last seen in
March 2016.

Hopes that the coronavirus outbreak could be contained in China have
vanished this week as infections spread across the globe.

This is also what drove the Johannesburg Stock Exchange’s Top-40 Index down
4.5% to 45,852 points - its lowest level since January last year - and the
broader all-share index down the same amount to 51,038 points.

The rand has also come under pressure as some analysts predicted that
proposed cuts to the public sector wage bill would not be enough to save the
country’s investment-grade credit rating.

Finance Minister Tito Mboweni unveiled the plan to cut the public sector
wage bill by 160 billion rand ($10.50 billion) in his budget speech on
Wednesday.

Moody’s said on Thursday it sees “elevated” risks to the budget forecasts
due to doubts over whether trade unions would agree to cutting the public
sector wage bill and potential liabilities from struggling state companies.

Moody’s is the last of the big three ratings agencies to rate South Africa
in investment grade, and is scheduled to review that rating next month. ($1
= 15.2377 rand)

Nigeria

Nigeria one-year naira slides past 400 on forward market after first
coronavirus case

(Reuters) - Nigeria currency slid past 400 naira on the one-year forward
market after the West African country recorded it first case of coronavirus.

The naira was priced much weaker on Friday at 413.55 to the dollar in a
year’s time, compared with the 399.73 it traded at two weeks ago.

GLOBAL MARKETS

Wall St bounce too little, too late as world stocks post shock weekly
decline

(Reuters) - Coronavirus panic sent world stock markets tumbling again on
Friday, with an index of global stocks setting its largest weekly fall since
the 2008 global financial crisis, and over $5 trillion wiped from global
market value this week.

U.S. stocks shaved most of the day’s losses late in the New York session but
only the Nasdaq eked out a positive close. The Dow lost nearly 3,600 points
this week and the S&P 500 posted a double-digit weekly percentage loss for
only the fifth time since 1940.

Yields on U.S. government bonds, widely seen as the world’s most secure
asset, ended the day near the fresh record lows.

Disruptions to international travel and supply chains, school closures and
cancellations of major events have all blackened the outlook for a world
economy that was already struggling with fallout from the U.S.-China trade
war.

Hopes the epidemic, first detected in China in December, would be over
swiftly and economic activity quickly return to normal have been shattered.
Countries other than China now account for about three-quarters of new
infections.

The Dow Jones Industrial Average fell 357.28 points, or 1.39%, to 25,409.36,
and the S&P 500 lost 24.54 points, or 0.82%, to 2,954.22. The Nasdaq
Composite added 0.89 points, or 0.01%, to 8,567.37.

MSCI’s gauge of stocks across the globe shed 1.76% for a weekly loss over
10%, its second largest on record.

The over $5 trillion lost in market capitalization globally this week is
roughly equivalent to Japan’s yearly GDP, the third-largest in the world.

Japan’s Nikkei futures lost 0.28%.

RATE CUTS PRICED IN

Federal Reserve chairman Jerome Powell said the central bank will act as
appropriate to provide support to the U.S. economy.

Expectations the Fed will cut interest rates to cushion the blow are rising
in money markets and Powell’s remarks reinforced the sentiment. Fed funds
futures are now fully pricing in a rate cut next month, with the question
only being how large it will be.

The European Central Bank historically lags the Fed but it is now seen
cutting by another 10 basis points by June.

The yen’s luster shined, with the Japanese currency rising by the most for
any week since mid-2016.

On Friday the yen strengthened 1.41% versus the greenback at 108.08 per
dollar.

The dollar index fell 0.332%, with the euro up 0.26% to $1.1027. Sterling
was last trading at $1.2818, down 0.51% on the day.

The appeal of guaranteed income sent high-grade bonds rallying. U.S. yields
- which move inversely to the price - plunged, with the benchmark 10-year
note yield hitting a record low of 1.116%.

Benchmark 10-year notes last rose 1-12/32 in price to yield 1.1551%, from
1.299% late on Thursday. The 30-year bond last rose 2-17/32 in price to
yield 1.6784%, from 1.783%.

Oil prices slumped again on fears of drooping demand.

U.S. crude fell 3.8% to $45.30 per barrel and Brent was last at $50.50, down
3.22% on the day.

Palladium led a free fall in precious metals as coronavirus drove
panic-stricken investors to liquidate assets across the board.

Spot gold dropped 3.5% to $1,584.74 an ounce after touching a 7-year high on
Thursday. Palladium dropped 8.9% to $2,593.19 an ounce after hitting a
record high on Thursday.

Among industrial metals, copper rose 0.34% to $5,634.85 a tonne. Three-month
aluminum on the London Metal Exchange rose 0.68% to $1,701.50 a tonne.

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Commodities Markets

Gold retreats from multi-year peak, but virus fears remain

(Reuters) - Gold fell over 1% on Tuesday as the metal’s rally to 7-year
highs in the last session prompted profit-taking even as worries about the
coronavirus kept investors anxious about the fate of global economy.

Spot gold slipped about 1% to $1,644.40 per ounce by 01:56 p.m. EST (1856
GMT). U.S. gold futures settled down 1.6% at $1,650.

On Monday, the metal surged as much as 2.8% to $1,688.66, its highest since
January 2013.

Mainland China had 508 new confirmed cases, up from 409 on Feb. 23, bringing
the total confirmed cases to 77,658.

The rapid spread of the virus beyond China has heightened fears over its
impact on the global economy, driving some bets that the U.S. Federal
Reserve will be pressed to cut interest rates to cushion the hit.

Countries around the world are stepping up efforts to stop a pandemic of the
virus that emerged in China and is spreading in Europe and the Middle East.

Gold in euros and gold priced in sterling slid from all-time peaks hit on
Monday.

Among other precious metals, palladium jumped 3% to $2,707 per ounce.

Silver fell 2.3% to $18.20 an ounce, having touched its highest since early
September on Monday. Platinum slid 3.3% to $931.7.

Shanghai copper, zinc inventories near 3-year high as virus hits demand

(Reuters) - Copper and zinc inventories in warehouses tracked by the
Shanghai Futures Exchange (ShFE) jumped to their highest level in nearly
three years on Friday as the coronavirus outbreak hurt demand.

Copper stockpiles rose 4.1% CU-STX-SGH to 310,760 tonnes this week, while
zinc inventories ZN-STX-SGH were up 11.8% to 160,011 tonnes, each at their
highest level since the week ended April 7, 2017, ShFE weekly data released
on Friday showed.

The most traded ShFE zinc contract dropped as much as 5% on Friday, while
benchmark three-month zinc on the London Metal Exchange (LME) was heading
towards its biggest weekly decline since September 2015, down 6.3% on a
weekly basis as of 0806 GMT.

Aluminium inventories in warehouses tracked by ShFE AL-STX-SGH advanced 7.2%
to 439,087 tonnes, highest since June 14, 2019, the data showed.

Countries on three continents reported their first cases of the coronavirus
on Friday as the world prepared for a pandemic of the disease, pushing
global share markets heading for their worst week since the 2008 financial
crisis.

Chinese authorities should take some non-ferrous metals off producers’ own
stocks to reduce their pressure as demand for copper and aluminium remains
weak, the China Nonferrous Metals Industry Association said on Thursday,
noting major smelters had managed to maintain “normal production”.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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been compiled from sources believed to be reliable, but no representation or
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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
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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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