Bulls n Bears Daily Market Commentary : 17 March 2020

Wed Mar 18 00:43:47 CAT 2020

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Bulls n Bears Daily Market Commentary : 17 March 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$17,865,701.81 with foreign buys at ZWL$87,043.00 and
foreign sales were NIL Total trades were 226

The All Share index retreated further by 24.09 points to close at 480.81
points. OLD MUTUAL LIMITED  dropped by $4.6208 to $38.0005, HIPPO  eased
$1.2365 to $6.5013 and MEIKLES  was $0.5833 to $8.0000. PPC  also decreased
by $0.5580 to $5.0000 and DELTA  was $0.4029 lower at $6.4798.

Trading in the positive; FIRST MUTUAL LIMITED added $0.1575 to $1.0725,
BINDURA  gained $0.0500 to settle at $0.5000 and SEEDCO INTERNATIONAL
LIMITED   traded $0.0130 firmer at $5.0190. MASH HOLDINGS  also increased by
$0.0125 to $0.2075 and CBZ   rose by $0.0094 to $1.5094.

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

  Global Currencies & Equity Markets

Uganda

Uganda central bank sells dollars after shilling weakens

(Reuters) - Uganda’s central bank said on Tuesday it had sold dollars after
a sharp depreciation of the shilling amid ongoing fears about the potential
economic damage from the outbreak of the coronavirus pandemic in the East
African nation.

At 0857 GMT, commercial banks quoted the shilling at 3,745/3,755 after
weakening to as low as 3,760/3,670 in early morning trading. It closed
Monday at 3,735/3,745.

Uganda has no confirmed coronavirus cases, which have been reported in its
neighbours Kenya, Rwanda, Tanzania and Democratic Republic of Congo.

Faisal Bukenya, managing director at Pay Uganda, a forex dealer said an
upsurge in offshore investor demand and slowing remittances were weakening
the shilling.

The coronavirus outbreak and its global economic impact have pushed offshore
investors to move funds from riskier emerging economies like Uganda.

Kenya

Kenyan shilling edges down against the dollar

(Reuters) - The Kenyan shilling inched down on Tuesday against the dollar as
worries about the potential impact of the COVID-19 pandemic continued to
weigh on

the market, traders said. 

At 0725 GMT, commercial banks quoted the shilling at 103.45/65 per dollar,
compared with 103.20/40 at Monday's close.

The shilling started weakening on Friday after Kenya reported its first case
of the new coronavirus. Two more cases have since been confirmed.
Policymakers are scheduled to meet on Monday to set rates. 

EMERGING MARKETS

Stocks fall after Wall St tumble as pandemic fears weigh

(Reuters) - Emerging market fell on Tuesday after Wall Street futures
sharply reversed gains, as heightened fears over the economic damage of the
coronavirus pandemic weighed on sentiment.

With countries increasingly resorting partial or complete shutdowns,
investors are worried about the hit to economic activity.

Wall Street suffered its biggest drop since the crash of 1987 on Monday as
co-ordinated efforts by central banks around the globe have done little to
calm markets as the number of infections and deaths outside China continued
to rise.

On Tuesday, S&P futures jumped as much as 3.8% to hit their upper limit,
before erasing gains to trade about 1% lower. World stocks also gave up
gains during Asian hours.

In the near-term, “we’re going to see U.S. equities setting the benchmark
for risk appetite,” said Simon Harvey, FX market analyst at Monex Europe.

Philippines indefinitely closed trading in its stock market on Tuesday
citing risks to traders, becoming the first country to do so. Bonds and
currency trading have also been suspended with the peso set to resume trade
on March 18, the country’s exchange said.

Equity indexes in Hong Kong, Poland and Johannesburg rose, but airlines
pushed Turkey’s main index in to the red.

MSCI’s index of developing world stocks was at near four-year lows, down
1.1%, after sliding 6.5% on Monday.

Indonesia’s benchmark index lost 5% to lead losses in Asia. Mainland China
stocks lost around 0.5% and Indian shares gave up gains of up to 2% to trade
flat.

Goldman Sachs said on Tuesday that China’s economy will likely shrink 9% in
the first quarter.

Against a stronger dollar, India’s rupee traded flat after the central bank
held off from cutting rates. South Korea’s won lost 0.6% a day after the
Bank of Korea slashed interest rates by 50 basis points.

Turkey’s lira dipped 0.3% touching its lowest level in 1-1/2 years.

South Africa’s rand rallied at least 1%. The central bank is expected to cut
rates on Thursday, but less aggressively than its counterparts around the
world.

Russia’s rouble which had risen about 1% earlier in the session, edged 0.4%
lower against the dollar. A poll showed the bank is seen leaving its
benchmark rate at 6% on Friday. Focus will be on the press conference after
the meeting.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rebounds as recent plunge opens door for bargain hunters

(Reuters) - Gold jumped on Tuesday as a five-session decline in the bullion
market led bargain hunters out in force, with the Federal Reserve’s
announcement to relaunch financial crisis-era purchases of short-term
corporate debt offering further support.

Platinum and palladium also bounced back, recovering from Monday’s meltdown
on concerns of a global recession.

Spot gold jumped 1.5% to $1,536.62 per ounce at 11:32 a.m. EDT (1532 GMT).
U.S. gold futures soared 3.3% to $1,535.60.

Gold has shed nearly 10% from over seven-year highs hit last week. Bullion
slumped as much as 5.1% to its lowest since November 2019 and broke below
its 200-day moving average on Monday.

Precious metals were caught up in a broader market sell-off as coronavirus
continued to spread rapidly, with some investors obliged to sell assets to
cover margin calls.

U.S. stocks reversed early losses to trade higher after the Fed said it
would buy short-term corporate debt to thaw credit markets strained by the
coronavirus pandemic.

Palladium, meanwhile, jumped 6.4% to $1,721.48, having plummeted as much as
18% in the previous session. Platinum rose 2.8% to $681.55 per ounce, having
posted its biggest one-day percentage decline ever on Monday.

Silver fell 0.7% to $12.82, after touching its lowest since 2009 in the last
session.

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.

“That’s something we don’t know and that’s the big, big wild card.”

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.

($1 = 7.0034 Chinese yuan renminbi)

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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