Bulls n Bears Daily Market Commentary : 02 March 2020

Tue Mar 3 02:31:53 CAT 2020

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Bulls n Bears Daily Market Commentary : 02 March 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$4,154,470.77 with foreign buys at ZWL$1,180,015.32 and
foreign sales were ZWL$381,706.80 Total trades were 129

The All Share index started the month on a lower note after dropping 2.13
points to close at 471.00 points. OK ZIMBABWE LIMITED  retreated by $0.0991
to $1.8000, DELTA CORPORATION  eased $0.0704 to $6.5000 and AFRICAN SUN
traded $0.0685 weaker at $0.7040. BINDURA   also lost $0.0364 to $0.5400 and
ARISTON  traded $0.0228 lower at $0.5710.

Gains were recorded in CAFCA LIMITED   which added $1.9800 to $11.9100,
NATIONAL FOODS LIMITED   which rose by $0.8556 to settle at $20.1000 and
MEIKLES LIMITED   which gained $0.1080 to end at $8.4980. ART CORPORATION
also increased by $0.0835 to $0.5015 and OLD MUTUAL LIMITED  traded $0.0590
stronger at $48.2490.

. <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand strengthens as Fed cut bets slow virus-linked selloff

(Reuters) - South Africa’s rand strengthened on Monday as central banks
abroad signalled a willingness to shield their economies against the
coronavirus, though the currency was restrained by anticipation of another
batch of grim local data.

Stocks recovered, breaking a two-day losing streak that saw them shed over
7%, as local equities tracked overseas shares higher, with retailers
Shoprite, Miner AngloGold and tech giant Naspers leading the upward trend.

At 1641 GMT the rand was 0.35% stronger at 15.5770 per dollar, stepping back
from a session-best 15.4670 as the reaction to higher bets of the U.S.
Federal Reserve cutting rates this month ebbed.

The rand has tanked 13% since the beginning of 2020 and 4% since Wednesday’s
budget speech where the treasury announced higher budget deficits and debt,
as well as plans to slash public sector wages, raising the likelihood of a
credit downgrade by Moody’s.

Traders trimmed big bets ahead of Tuesday’s release of 2019 Q4 data expected
to show the economy went into a technical recession, raising further the
likelihood of the country losing its final investment grade credit rating
from Moody’s.

Stocks also benefited from the central bank’s willingness to pump liquidity
into markets, with Naspers up nearly 3% on the day, while AngloGold climbed
2% to the rand, and Shoprite’s price increased 5.5% to the rand.

Overall, the Johannesburg Stock Exchange’s Top-40 index rose 1.74% to 46,648
points and the broader all-share index closed 1.57% higher at 51,840 points.
Bonds rallied, with the yield on the government issue due in 2030 down 9.5
basis points to 9.01%.

Uganda

Uganda shilling holds steady as importer demand recedes

(Reuters) - The Ugandan shilling traded unchanged on Monday as a recent
spike in importer appetite for hard currency weakened.

At 0917 GMT, commercial banks quoted the shilling at 3,705/3,715, the same
level as Friday's close.

GLOBAL MARKETS

Hopes of global monetary support lift EM stocks, FX

(Reuters) - Emerging market stocks rose on Monday after their worst week in
8-1/2 years, and an index of developing world currencies rebounded from near
five-month lows on hopes of a global monetary response to offset the impact
of the coronavirus.

Markets worldwide were hammered last week, wiping more than $5 trillion from
world stocks, as the fast-spreading outbreak sounded alarm bells for a
likely global recession.

That increased bets that central banks would step in to help economies
weather damage from the outbreak, as evidenced by dismal Chinese factory
activity. The U.S. Federal Reserve and Bank of Japan both said action would
be taken to stabilise markets and support their economies.

MSCI’s index of emerging market shares rose 1.3%, after losing 7.3% last
week, while the currencies counterpart firmed 0.7%, reversing Friday’s
losses.

Heavily weighted mainland China shares jumped more than 3% each after
Beijing reported a sharp fall in new confirmed cases of the virus on Sunday,
and on hopes that the People’s Bank of China will be among central banks
joining the coordinated effort.

Main stock indexes in Turkey, Russia, South Africa and Poland all made
handsome gains, rising between 2.5% and 3.2%.

The yuan firmed to over two-week highs against a dollar weakened by Fed rate
cut expectations. A cut in U.S. rates increases appeal for higher yielding
emerging market currencies, while more broadly, a robust U.S. economy
translates to steady imports from export-reliant emerging markets.

South Africa’s rand rallied up to 1.4% after hitting their lowest since
2016. With a possible downgrade from Moody’s looming, investors will watch
gross domestic growth numbers due on Tuesday. Analysts expect a contraction
but say the rand may be more influenced by global factors.

The Turkish lira rebounded from 17-month lows, with data showing
manufacturing activity expanding for the second month in February. This
comes after Friday’s numbers showed the Turkish economy rebounded strongly
in the fourth quarter.

But Syria tensions still persisted where Russia is backing government forces
against Turkey. Turkey shot down two Syrian warplanes over Idlib on Sunday
and struck a military airport well beyond its front lines following the
death of dozens of Turkish soldiers last week.

The Kremlin struck a more conciliatory tone on Monday saying Russia did not
want war.

 <mailto:info at bulls.co.zw> 

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.

Copper rebounds on stimulus hopes after dire Chinese data

(Reuters) - Copper and other industrial metals prices bounced back on Monday
on hopes that global central banks will inject stimulus into sagging
economies shaken by the coronavirus outbreak.

The extent of the impact on top metals consumer China emerged when data
showed factory activity suffered the sharpest contraction on record in
February while other Asian manufacturing sectors also took a beating.

The Organisation for Economic Cooperation and Development warned that the
virus is plunging the world economy into its worst downturn since the global
financial crisis.

Three-month copper on the London Metal Exchange (LME) rose 1.2% to $5,700 a
tonne in final open-outcry trading after sliding to a low of $5,533 on
Friday.

Copper has shed about 10% since touching an eight-month peak of $6,343 in
mid-January.

* NICKEL: LME nickel jumped 3.7% in closing rings to reach $12,700 a tonne,
the biggest one-day gain since last August, and rebounding from an
eight-month low hit on Friday.

Prices gained support after top nickel producer Indonesia reported its first
coronavirus cases, creating uncertainty over ore supply.

“If the situation gets out of control (in Indonesia) then production of
nickel ore and nickel pig iron will decrease,” said one nickel analyst.

* CHINA: Nearly 300 million people have gone back to work in China since the
Lunar New Year break as more companies restart business and coronavirus
travel restrictions ease, though many smaller businesses are still
struggling to find enough workers to run plants.

* AUTOMOBILES: Two more Chinese cities heavily reliant on car manufacturing
plan to offer incentives to bolster auto sales hit by the outbreak.

* ALUMINIUM OPTIONS: There is heavy open interest in LME aluminium option
strikes ahead of the expiry on Wednesday, Alastair Munro at broker Marex
Spectron said in a note.

There are 5,400 lots at $1,700 and 5,900 lots at $1,750, he said.

* PRICES: LME aluminium advanced 1.4% to close at$1,718 a tonne, zinc added
0.1% to reach $2,022.50, lead slipped 0.1% to $1,847 and tin climbed 2.1% to
$16,625.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

 <mailto:info at bulls.co.zw> 

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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