Bulls n Bears Daily Market Commentary : 04 March 2020

Thu Mar 5 03:56:48 CAT 2020

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Bulls n Bears Daily Market Commentary : 04 March 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$27,201,925.07 with foreign buys at ZWL$9,509,812.00 and
foreign sales were ZWL$5,479,453 Total trades were 217

ZSE slips back into the red

The market slipped back into the red in midweek session, reversing
yesterday’s marginal gains. The mainstream All Share Index trimmed 1.42% to
467.77pts while, the Industrials lost 1.45% to 1549.48pts. The ZSE Top Ten
Index shed 1.46% to close at 1.16% to 392.48pts with the resources index
remaining stable at 766.44pts. The top casualty of the day was Mash that
dipped 19.80% to $0.1725, followed by Hippo which dropped 19.18% to $6.6996
reversing previous session’s gains. Property concern Dawn came off 7.86% to
$0.1500 as insurer FML eased 7.37% to settle at $0.8800. Top capitalised
stock Delta  let go 4.75% to end at a vwap of $5.9989, having traded an
intraday low of $5.9900.

Gainers of the day were led by banking group FBC which surged 11.11% to
$1.0000, trailed by apparel retailer Edgars that gained 5% to end at
$0.5040. Construction company Masimba added 1.77% to $0.3562 while,
conglomerate Innscor rose 0.84% to $7.5507. Star Africa completed the top
five winners of the day on a 0.39% lift to $0.0780. The market closed with a
negative breadth of five as nine counters gained against fourteen losers.
Turnover ballooned 128.47% to $27.23m with OKZim, Delta and Econet claiming
53.71% of the outturn. Total volumes traded jumped 64.42% to 3.99m shares as
Old Mutual and Delta anchored the aggregate on respective contributions of
47.51% and 17.43%. -EFE

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

  Global Currencies & Equity Markets

South Africa

South Africa's rand clings on to post-Fed windfall after recession shock

(Reuters) - South Africa’s rand firmed early on Wednesday, finding relief
from a surprise rate cut the U.S. central bank after a sharp selloff
triggered by data showing the economy was in recession.

At 0715 GMT the rand was 0.36% firmer at 15.3600 per dollar, backing down
from a five-session best of 15.2100 on Tuesday touched after U.S. Federal
Reserve delivered an emergency 50 basis point lending rate cut just as local
markets closed.

Before that the stats agency reported Africa’s most advanced economy had
entered its second recession in two years in the final quarter of last year,
shrinking by forecast-smashing 1.4% as a swathe of industries were hit by
months of regular power outages.

The data stoked already bearish sentiment around the currency following last
week’s budget where treasury chopped its 2020 growth forecast to 0.9% and
announced estimates of a higher budget deficit - making a credit downgrade
by Moody’s at month-end a near certainty.

While the Fed move set off some big inflows into emerging markets as the
greenback to a knock to hover near five-month lows, early morning moves in
risk assets were more muted as investors tried to digest the ongoing impact
of the coronavirus.

Bonds, which have also traded in a volatile range, were on the frontfoot,
with the yield on the 10-year 2030 government issue down 9 basis points to
8.875%.

Stocks opened a touch weaker, with the Johannesburg Stock Exchange’s Top-40
index down 0.25% to 47,549 points.

Kenya

Kenyan shilling weakens on central bank plan to buy dollars

(Reuters) - The Kenyan shilling sank to a fresh three months low on
Wednesday, a day after the central bank said it will buy $100 million a
month for four months to boost its reserves.

At 0655 GMT, commercial banks quoted the shilling 102.35/55 per dollar, down
from Tuesday's close of 102.10/30. on Tuesday, the shilling dropped to its
lowest since early December after the central bank's announcement.  

GLOBAL MARKETS

Stocks slide, 10-year Treasury yield hits record low after Fed's emergency
rate cut

(Reuters) - Global equity markets slid on Tuesday and the yield on 10-year
U.S. Treasuries fell below 1% for the first time after the Federal Reserve
cut interest rates in an emergency move to shield the U.S. economy from the
impact of the fast-spreading coronavirus.

Gold prices surged and the dollar sank as markets reacted to the Fed’s
surprise cut of the federal funds rate by a half percentage point, to a
target range of 1.00% to 1.25%.

Yields on U.S. government debt fell across the board as investors grabbed
Treasuries and other safe-have assets, such as gold, amid the uncertainty
sparked by the rate cut.

The slide in stocks and rise in safe-havens suggested markets found the
Fed’s action inadequate to an epidemic that has killed more than 3,000
people worldwide and threatens to significantly slow global growth.

Demand is falling and supply chains have been disrupted, symptoms that lower
interest rates do not cure, Arone said.

The unanimous decision by policymakers to cut rates before their next
scheduled policy meeting on March 17-18 reflects the urgency with which the
Fed felt it needed to act to prevent a potential global recession.

Stocks on Wall Street initially spiked more than 2% on the Fed’s surprise
statement. But the Dow Jones industrial average , Nasdaq composite index and
S&P 500 fell sharply in afternoon trading.

President Donald Trump said his administration was working with Congress to
pass an emergency spending measure to ramp up the U.S. response to the
coronavirus, adding that he expected lawmakers to authorize about $8.5
billion.

The Fed’s announcement largely validated expectations from investors for
aggressive policy action, said Candice Bangsund, a global asset allocation
strategist at Fiera Capital in Montreal.

Shares in Europe rose more than 2%, while MSCI’s all-country world index
rose almost 1%.

The Group of Seven finance officials said in Tokyo they would use all
appropriate policy tools to achieve strong, sustainable global growth and
safeguard against downside risks posed by the coronavirus.

The Fed’s rate cut and the G7 statement came after global stocks last week
suffered their worst rout in a decade on fears that disruptions from the
epidemic to supply chains, factory output and global travel could seriously
slow the world economy.

The pan-European STOXX 600 index rose 1.37%

The Dow Jones Industrial Average fell 745.82 points, or 2.79%, to 25,957.5,
the S&P 500 lost 81.08 points, or 2.62%, to 3,009.15, and the Nasdaq
Composite dropped 260.59 points, or 2.91%, to 8,691.58.

Gold surged. U.S. gold futures settled 3.1% higher at $1,644.40 an ounce.

The dollar fell across the board.

The dollar index fell 0.415%, with the euro up 0.46% to $1.1183. The
Japanese yen strengthened 1.01% versus the greenback at 107.25 per dollar.

Oil prices closed mixed.

Brent crude fell 4 cents a barrel to settle at $51.86, off a session high of
$53.90 hit immediately after the rate cut. U.S. West Texas Intermediate
(WTI) added 43 cents a barrel to settle at $47.18, after trading as high as
$48.66 a barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold jumps, stocks slide after Fed's rate cut

(Reuters) - Global equity markets fell more than 3% while gold prices surged
on Tuesday after the Federal Reserve cut interest rates in an emergency move
to shield the U.S. economy from the impact of the coronavirus.

The 10-year U.S. Treasury note fell below 1% as markets reacted to the Fed’s
surprise cutting of its federal funds rate by a half percentage point to a
target range of 1.00% to 1.25%.

The slide in stocks and rise in safe-haven gold suggested markets found the
Fed’s action an inadequate response to an epidemic that has killed more than
3,000 people worldwide.

Demand is falling, supply chains have been disrupted and lower interest
rates do not cure those two symptoms, Arone said.

The unanimous decision by policymakers to cut rates before their next
scheduled policy meeting on March 17-18 reflects the urgency with which the
Fed felt it needed to act to prevent a potential global recession.

Stocks on Wall Street initially spiked more than 2% on the Fed’s surprise
statement. But the Dow Jones industrial average , Nasdaq composite index and
S&P 500 fell sharply in afternoon trading.

President Donald Trump said his administration was working with Congress to
pass an emergency spending measure to ramp up the U.S. response to the
coronavirus, adding that he expected lawmakers to authorize about $8.5
billion.

The Fed’s rate cut “spooked investors after the strong rebound (on Monday)
because it was made right away and it was 50 basis points,” said Alan Lancz,
president of Alan B. Lancz & Associates Inc in Toledo, Ohio.

The Fed’s announcement largely validated expectations from investors for
aggressive policy action, said Candice Bangsund, a global asset allocation
strategist at Fiera Capital in Montreal.

Shares in Europe rose more than 2% on the day, while MSCI’s all-country
world index rose almost 1%.

The Group of Seven finance officials said in Tokyo they would use all
appropriate policy tools to achieve strong, sustainable global growth and
safeguard against downside risks posed by the coronavirus.

The Fed’s rate cut and G7 statement came after global stocks last week
suffered their worst rout in a decade on fears that disruptions from the
epidemic to supply chains, factory output and global travel could seriously
slow the world economy.

The pan-European STOXX 600 index rose 1.37%

The Dow Jones Industrial Average fell 745.82 points, or 2.79%, to 25,957.5,
the S&P 500 lost 81.08 points, or 2.62%, to 3,009.15 and the Nasdaq
Composite dropped 260.59 points, or 2.91%, to 8,691.58.

Gold surged. Spot gold added 2.7% to $1,633.30 an ounce.

The dollar fell across the board.

The dollar index fell 0.415%, with the euro up 0.46% to $1.1183.

The Japanese yen strengthened 1.01% versus the greenback at 107.25 per
dollar.

Oil prices rose but remained below session highs.

Brent crude rose 19 cents a barrel to $52.09, off a session high of $53.90 a
barrel hit immediately after the rate cut. U.S. West Texas Intermediate
(WTI) added 31 cents a barrel to $47.06 a barrel, after trading as high as
$48.66.

Copper gains as Fed's rate cut gets positive response

(Reuters) - Copper prices climbed on Wednesday as traders interpreted the
U.S. central bank’s rate cut as a positive move that will ease liquidity,
but worries about demand in top consumer China dominated.

Benchmark copper on the London Metal Exchange ended up 0.3% at $5,684 a
tonne. Prices of the metal used by investors as a gauge of economic health
touched $5,780.5 on Tuesday, the highest since Feb. 21.

The U.S. Federal Reserve cut interest rates on Tuesday in a bid to shield
the world’s largest economy from the impact of the coronavirus, in what was
seen as an emergency move.

VIRUS: Worry about the damage to growth and demand from the spread of the
coronavirus from China to other countries have roiled equity and commodity
markets in recent weeks.

CHINA: Metals markets are watching the stock build in China for clues to
manufacturing and construction activity.

INVENTORIES: Copper stocks in warehouses monitored by the Shanghai Futures
Exchange CU-STX-SGH at 310,760 tonnes are more than double the levels seen
in the middle of January.

Aluminium stocks AL-STX-SGH too have more than doubled since the middle of
January to 439,087 tonnes.

Three-month aluminium rose 0.2% to $1,726 a tonne.

OTHER METALS: Zinc gained 0.3% to $1,982, lead slipped 1.3% to $1,818, tin
added 1% to $16,925 and nickel climbed 0.9% to $12,680 a tonne.

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
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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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