Bulls n Bears Daily Market Commentary : 16 March 2020

Tue Mar 17 03:05:29 CAT 2020

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Bulls n Bears Daily Market Commentary : 16 March 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$22,835,670.60 with foreign buys at ZWL$1,500 and foreign
sales were ZWL$2,622.75 Total trades were 129

The All Share index opened the week in red losing 17.30 points to close at
504.90 points. OLD MUTUAL LIMITED eased $10.5981 to $42.6213, RIO ZIM  lost
$1.2200 to end at $6.1200 and MEIKLES LIMITED was $1.1440 lower at $8.5833.
DELTA CORPORATION  also decreased by $0.5832 to $6.8827 and PADENGA HOLDINGS
traded $0.2745 weaker at $5.8655.

Losses were offset by gains in BAT LIMITED  which gained $2.7500 to
$99.0000, HIPPO rose by $0.1676 to $7.7378 and FIRST MUTUAL PROPERTIES  was
$0.1400 firmer at $0.8400.Two more counters to advance were SEEDCO
INTERNATIONAL LIMITED   which added $0.0419 to close at $5.0060 and FIRST
MUTUAL LIMITED  which traded $0.0132 firmer at $0.9150.

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

  Global Currencies & Equity Markets

Uganda

Ugandan shilling weakens due to commercial bank dollar demand

(Reuters) - Ugandan shilling weakened on Monday as commercial banks bough
dollars amid a squeeze in supplies due to export disruption caused by the
coronavirus.

At 0940 GMT, commercial banks quoted the shilling at 3,735/3,745, weaker
than Friday’s close of 3,710/3,720.

South Africa

South African assets plunge as coronavirus panic worsens

(Reuters) - South Africa’s rand, stocks and government bonds plunged on
Monday, as fears surrounding the coronavirus outbreak roiled financial
markets worldwide and cemented local economists’ expectations for an
interest rate cut this week.

At 1600 GMT, the rand traded at 16.5630 per dollar, around 2.5% weaker than
its previous close.

The Johannesburg Stock Exchange (JSE) suffered one of its steepest daily
drop on record, its All-Share Index falling more than 8%, while the yield on
the 2030 rand-denominated government bond rose 77 basis points.

South Africa has recorded 62 confirmed cases of the coronavirus, far fewer
than in many countries in Europe and Asia. Public health experts, however,
are concerned that the number of cases could quickly get out of control if
local transmission takes hold in poor and overcrowded informal settlements.

President Cyril Ramaphosa declared a national state of disaster on Sunday,
imposing travel bans on foreign nationals from “high-risk” countries such as
Italy, Germany, China, Britain and the United States and prohibiting public
gatherings of more than 100 people.

Africa’s most industrialised economy is already in recession, and the
pandemic is expected to make matters worse by hurting tourist arrivals and
commodity exports to major trading partner China.

Citi said on Monday that it expected the South African Reserve Bank to cut
its main lending rate by 50 basis points this week because of the economic
shock from the coronavirus.

The drop in the JSE’s All-Share Index to 40,500 points was its worst daily
decline since October 1997.

Retailers, miners and telecom companies were deep in the red, with Investec
and Old Mutual among the top decliners on a bruising day for the financial
services sector.

GLOBAL MARKETS

Markets crater as coronavirus fears overwhelm central bank emergency
measures

(Reuters) - Markets reeled on Monday, with stocks on Wall Street and the
price of Brent crude tumbling more than 10%, as the Federal Reserve’s second
emergency rate cut in as many weeks failed to calm fears of a
coronavirus-induced recession.

Volatility gauges known as fear indexes spiked, with the Euro STOXX 50 in
Europe surging almost 28% to an all-time high while the CBOE Market
Volatility index soared 44% to a record close as stocks plunged further into
bear territory.

The sell-off gathered speed at the close on Wall Street, with S&P 500
falling 12%, the Nasdaq a bit more and the Dow industrials down almost 13%
on the day.

Some $2.69 trillion in market value was wiped from the S&P 500 as it
suffered its third-largest percentage decline. Over the past 18 days the
benchmark index has lost $8.28 trillion.

Even traditional safe havens cratered as fearful investors decided cash is
king.

Platinum dived nearly 27% to its weakest level since 2002, while gold fell
more than 5% as investors unloaded precious metals in exchange for cash as
not enough buyers sparked illiquidity, especially in the U.S. Treasury
market.

The S&P 500 plunged 8% at the open to trigger an automatic 15-minute trading
halt on the three main U.S. stock indexes, marking the third emergency pause
on Wall Street in six days. U.S. stocks furthered their decline after
trading resumed.

Investors worried that the Fed action, joined by central banks in Japan,
Australia, New Zealand and elsewhere, may be insufficient for companies
facing a sharp slide in demand. The moves were reminiscent of the sweeping
steps taken more than a decade ago to staunch a meltdown of the global
financial system.

Lower rates and increased asset purchases by the Fed will help ease tight
credit markets, but the U.S. government needs to do more to address the
impact of the coronavirus, said David Joy, chief market strategist at
Ameriprise Financial in Boston.

The New York Fed said it would offer an additional $500 billion in support
to overnight lending markets, introducing the latest round of essentially
unlimited loans meant to keep cash flowing through increasingly tight credit
markets.

The U.S. Senate is under pressure to pass stimulus spending after the House
of Representatives last week approved a multibillion-dollar bill.

U.S. President Donald Trump issued new guidelines to help fight the
coronavirus, including a recommendation that people avoid social gatherings
of more than 10 people, discretionary travel, and going to bars, restaurants
and food courts.

Trump, in remarks just before markets closed, said the new guidelines from
his coronavirus task force applied for 15 days and were meant to slow the
spread of the virus.

Finance ministers in the euro zone said the bloc so far has deployed a
fiscal boost worth 1% of its gross domestic product to help the economy
withstand the pandemic and pledged to do more if needed.

Rate-sensitive U.S. financial stocks plunged 14.0%, leading declines among
the major S&P sectors. Energy stocks tracked a 10% slump in oil prices,
while technology stocks also slid 13.9%. Apple Inc, Amazon.com Inc and
Microsoft Corp together lost nearly $300 billion in market value.

MSCI’s gauge of stocks across the globe shed 9.14% and the pan-European
STOXX 600 index lost 4.86% as stock markets pared initial deeper losses in
Europe. Markets in France and Spain led the decline as the two countries
joined Italy in enforcing a national lockdown.

The benchmark European index has now lost more than a third of its value
since hitting a record high in mid-February, while the benchmark S&P 500 and
Nasdaq composite are down about 27%.

On Wall Street, the Dow Jones Industrial Average fell 2,997.1 points, or
12.93%, to 20,188.52. The S&P 500 lost 324.89 points, or 11.98%, to 2,386.13
and the Nasdaq Composite dropped 970.28 points, or 12.32%, to 6,904.59.

Almost nothing was left unscathed. Oil, already slammed by a
Saudi-instigated price war, slid to less than $30 a barrel to lows last seen
in early 2016.

Oil futures for West Texas Intermediate, the U.S. benchmark, fell $3.03 to
settle at $28.70 a barrel, while Brent crude futures fell $3.80 to settle at
$30.05 a barrel.

There were moves in Europe to curb short-selling of stocks as bond markets
weighed the risk to vulnerable countries, as well as the impact of a fiscal
spending splurge on safe-haven debt.

Benchmark 10-year Treasury notes last rose 66/32 in price to yield 0.745%.

The Fed’s emergency 100-basis-point rate cut on Sunday was matched by the
renewal of its quantitative easing program to increase cash in markets and
more cheap U.S. dollar funding to ease a ruinous logjam in global lending
markets.

There was further policy easing on Monday from the Bank of Japan in the form
of a pledge to ramp up purchases of exchange-traded funds and other risky
assets.

New Zealand’s central bank cut rates 75 basis points to 0.25%, while the
Reserve Bank of Australia pumped more money into its financial system. South
Korea and Kuwait both lowered rates, while Russia and Germany were throwing
together multi-billion dollar anti-crisis funds.

MSCI’s index of Asia-Pacific shares outside Japan tumbled 5.2% to lows not
seen since early 2017, while the Nikkei fell 2.5% as the BoJ’s easing steps
failed to reassure markets.

U.S. and Chinese data underscored just how much economic damage the disease
can cause, with official numbers in China showing the worst drops in
activity on record. Industrial output plunged 13.5% and retail sales 20.5%.

Manufacturing activity in New York state also plunged in March by the most
on record to its lowest level since 2009, offering an early glimpse of the
coronavirus’ damaging impact on the U.S. economy.

In Asia, Shanghai blue chips fell 4.3% overnight even as China’s central
bank surprised with a fresh round of liquidity injections to the financial
system. Hong Kong’s Hang Seng index tumbled 4%.

The safe-haven Japanese yen jumped as concerns about the outbreak sent
investors fleeing higher-risk assets.

The dollar index rose 0.176%, with the euro up 0.63% to $1.1175.

The Japanese yen strengthened 1.91% versus the greenback at 105.92 per
dollar.

U.S. gold futures settled 2% lower at $1,486.5 an ounce.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper falls to 40-month low on fears for economy, demand

(Reuters) - Copper prices slid on Monday to the lowest since November 2016
on worries that lockdowns in Europe and the United States to tackle the
coronavirus would further erode metals demand.

But the falls in industrial metals of around 1-4% were more measured than in
equities and oil markets, which saw plunges of 10% or more.

Around half of metals demand comes from China, where new virus cases have
fallen sharply and the government is expected to roll out major stimulus
spending.

Industrial output in China, the world’s biggest copper user, contracted at
the sharpest pace in 30 years in the first two months of the year, data
showed on Monday.

A China-based metals analyst said: “Diving data in February is what
everybody has anticipated, but my worry is March. People think things are
going back to normal after utilisation rates recover, but they ignore the
permanent loss of the supply chain.”

Three-month copper on the London Metal Exchange (LME) fell 3.1% to $5,290.50
a tonne in final open-outcry trading, the weakest since November 2016.

Copper, often used as a gauge of global economic health, has shed 17% since
touching an eight-month high of $6,343 in mid-January.

The Federal Reserve cut U.S. interest rates to near zero on Sunday and
pledged to expand its balance sheet by at least $700 billion in the coming
weeks, but this did little to calm investor panic over the deepening
economic hit from the virus.

The biggest risk was that China would suffer a second wave of infection
after restrictions were lifted, he added.

Worries of an aluminium surplus were fuelled by data showing China’s
production of the metal rose by 2.4% to 5.85 million tonnes in
January-February from a year earlier.

The net speculative short position of aluminium on the LME has grown to a
year-to-date high of 30% of open interest, close to last year’s peak of 32%,
broker Marex Spectron said in a note.

LME aluminium dipped 0.3% to close at $1,675 a tonne.

Among other prices, LME zinc dropped 2.2% to end at$1,942 a tonne, while
nickel lost 3.1% to $11,935 after touching $11,670, the lowest since June
last year.

Lead shed 1% to $1,725 after hitting $1,682.50, the lowest since June 2016,
and tin eased 4.1% to $15,300, the weakest since February 2016.

* For the top stories in metals and other news, click or

($1 = 7.0034 Chinese yuan renminbi)

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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