Bulls n Bears Daily Market Commentary : 26 March 2020

Fri Mar 27 02:45:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 26 March 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$28,978,882.29 with foreign buys at ZWL$105,928.00 and
foreign sales were ZWL$5,253,490.20 Total trades were 172

The All Share index continues to decline after losing another 13.47 points
to close at 466.94 points. BAT eased $2.6033 to $87.3967, OLD MUTUAL LIMITED
dropped $1.1262 to $37.7353 and SEEDCO LIMITED  was $0.3916 weaker at
$4.1084. MEIKLES  also decreased by $0.3879 to $7.4364 and DELTA shed
$0.3253 to close at $6.4435.

Losses were countered by gains in TSL which added $0.3000 to $1.8050,
NATFOODS rose by $0.2322 to $22.2000 and DAIRIBORD was $0.0100 firmer at
$0.6300. INNSCOR   also increased by $0.0041 to $7.7596. 

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

  Global Currencies & Equity Markets

Nigeria

Nigeria suspends foreign exchange sales to retail currency traders

(Reuters) - Nigeria’s central bank has suspended foreign exchange sales to
retail currency traders, a senior bureau de change (BDC) official said, to
help protect the naira after a devaluation following the coronavirus
outbreak and a fall in oil prices.

The central bank last week moved the currency rate for BDC to 380 to the
U.S. dollar from the previous 360. It subsequently adjusted the naira’s
official rate to 360, weaker than its previous peg of 306, implying a 15%
devaluation.

Since the currency adjustment, the naira has weakened further. It fell to a
new low of 361 to the dollar on the official market and hit 383.25 on the
over-the-counter spot market on Thursday.

Nigeria, which is Africa’s biggest economy and its largest oil exporter, has
confirmed 46 coronavirus cases, with one death. It has banned entry to
arrivals from countries that have reported more than 1,000 coronavirus
cases.

The naira came under pressure after oil prices fell following a disagreement
between Russia and Saudi Arabia over a deeper production cut. The
coronavirus outbreak has also hit global demand for oil.

Quotes on the black market on Thursday were thin, with some dealers pricing
the naira much weaker, above 400 to the dollar, closer to where the currency
traded on the one-month forward market.

BDCs resell hard currency to individual users with dollar expenses such as
medical bills and school fees abroad. However, with the lockdown the central
bank assumes that currency demand for these expenditures should not exist,
the official said.

The central bank did not respond to a request for comment.

Prior to the latest move, the central bank had stepped up forex sales to the
country’s 5,000 retail currency operators, selling around $20,000 almost
daily to shore up the naira. ($1 = 360.00 naira) 

Nigeria

Nigeria naira fell to new lows on official and spot markets

(Reuters) - The Nigerian naira eased to a new low on both the official and
over-the-counter spot markets on Thursday after the country’s central bank
last week depreciated its currency rate.

The naira weakened to 361 on the official market, supported by the central
bank, while the currency hit 383.25 naira on the spot market.

Traders on Thursday said most of them were switching to remote dealing due
to a spread of the coronavirus outbreak in the West African country.

South Africa

South African stocks lifted by global markets, gold gains

(Reuters) - South African stocks gained with global markets on Thursday,
lifted by a $2 trillion U.S. coronavirus relief package and a higher gold
price, while the rand fell ahead of a lockdown.

The Johannesburg Stock Exchange’s Top-40 index as well as the broader
All-Share index gained 4.09%, led higher for a third straight day, with gold
miners up 7.12% and financials 7.18% higher.

A Wall Street rally powered global gains in stocks as traders focused on the
unanimous passage of the coronavirus relief bill in the U.S. Senate and the
possibility of more stimulus to come.

Spot gold gained after data showed U.S. jobless claims surged to a record
high due to the coronavirus pandemic, with Gold Fields shares up 7% to
113.96 rand and AngloGold Ashanti 7.59% higher at 389.59 rand.

President Cyril Ramaphosa said on Monday that South Africa, which has
confirmed more than 900 cases of coronavirus, would be in lockdown from
midnight on Thursday to try to curb its spread.

Analysts expect the lockdown to support to Platinum Group Metals (PGMs)
because of possible supply concerns.

South Africa is the world’s largest platinum producer with the mining sector
accounting for around 13% of GDP and among Thursday’s biggest gainers were
platinum groups Impala, up 2.93%, and Northam which rose by 1.49%.

The South African rand was 0.14% weaker at 17.3540 per dollar at 1622 GMT,
snapping a two-session rally that had driven the currency to 17.1900, its
highest level since Friday.

Bonds firmed, with the yield on the benchmark paper due in 2026 down 28
basis points to 10.335%. 

 <mailto:info at bulls.co.zw> 

Global Market 

Stocks up on $2 trillion stimulus Wall St rally; dollar takes a hit

(Reuters) - A Wall Street rally powered global gains in stocks on Thursday
despite a record number of new unemployment filings in the United States, as
traders focused on the unanimous passage of a $2 trillion coronavirus relief
bill in the U.S. Senate and the possibility that there is more stimulus to
come.

The legislation is intended to flood the country with cash in a bid to stem
the crushing impact the epidemic has already had on the world’s largest
economy. Nearly 3.3 million Americans filed for unemployment benefits over
the past week, eclipsing the previous record of 695,000 set in 1982. The
bill is heading for the House of Representatives for a vote on Friday.

Earlier on Thursday, Federal Reserve Chair Jerome Powell said the U.S.
economy is likely in recession already but that reopening businesses should
be dictated by the control of the virus’ spread, in contrast to the urging
by some of President Donald Trump’s advisers for a faster reopening. The
president himself has said he wants the economy to be “roaring” by Easter,
in a little over two weeks.

Mnuchin said the central bank would lend “aggressively” to ensure the
economy can withstand the sudden sharp drop in activity, with an expected
$424 billion commitment from the U.S. Treasury to cover any losses, allowing
the Fed to unleash perhaps $4 trillion for credit to “Main Street.”

The astronomical number of jobless filings left some wondering if the
stimulus package, despite its size, would be enough.

She said the stock market reaction would suggest “that market participants
expect a larger stimulus package or fiscal package from the government than
the $2 trillion that has been agreed upon.”

The Dow Jones Industrial Average rose 1,115.19 points, or 5.26%, to
22,315.74, the S&P 500 gained 118.5 points, or 4.79%, to 2,594.06 and the
Nasdaq Composite added 303.84 points, or 4.11%, to 7,688.13.

The pan-European STOXX 600 index rose 0.66% and MSCI’s gauge of stocks
across the globe gained 3.56%.

Global markets have lost about a quarter of their value in the last six
weeks of virus-driven selling.

While markets have found a measure of sustenance as governments and central
banks launch unprecedented support measures, investors have struggled to
work out how bad the coronavirus impact would be.

The combination of the massive jobless claims and stimulus dragged the
dollar lower.

The dollar index fell 1.222%, with the euro up 1.19% to $1.101.

The Japanese yen strengthened 1.52% versus the greenback at 109.57 per
dollar, while Sterling was last trading at $1.2075, up 1.60% on the day.

The softer greenback buoyed emerging market currencies, with MSCI’s index
touching a one-week high.

Oil fell as fears of plunging demand outweighed expectations of support from
the U.S. stimulus.

U.S. crude recently fell 4.08% to $23.49 per barrel and Brent was recently
at $27.16, down 0.84% on the day.

Prices on U.S. Treasury bonds rose but yields traded relatively tightly and
within the week’s range, suggesting the market had already priced in
expectations for abysmal data.

Benchmark 10-year notes last rose 14/32 in price to yield 0.8128%, from
0.856% late on Wednesday. The 30-year bond last rose 43/32 in price to yield
1.37%, from 1.421% late on Wednesday.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold jumps as record high U.S. jobless claims fuel stimulus hopes

(Reuters) - Gold prices jumped to a two-week high on Thursday, after a
record surge in U.S. jobless claims dented the dollar and boosted
expectations of further stimulus to cushion the global economic toll from
the coronavirus pandemic.

Spot gold        rose 0.7% to $1,624.46 per ounce as of 11:52 p.m. EDT (1552
GMT).

Central banks have been turning to quantitative easing (QE), or large-scale
purchases of government bonds and other financial assets to pump money into
the economy.

Gold climbed more than 1% earlier in the session after data showed a record
high of more than 3 million Americans filed claims for unemployment benefits
last week as strict measures to contain the pandemic hit economic activity.

The dollar dropped to a near one-week low against rivals, making gold
cheaper for holders of other currencies.       

Wall Street stocks jumped as investors bet on more stimulus measures.     

The U.S. Senate on Wednesday overwhelmingly backed a $2 trillion bill aimed
at helping unemployed workers and industries hurt by the outbreak.

This came after the U.S. Federal Reserve said on Monday it would buy as many
bonds as needed to stabilize financial markets and backstop direct loans to
companies.             

Gold market participants remained concerned about a supply squeeze following
a sharp divergence in London and New York prices as the coronavirus closed
precious metals refineries.

U.S. exchange operator CME Group         on Tuesday announced a new gold
futures contract to combat price volatility caused by the shutdown of gold
supply routes, but traders and bankers said it would not immediately calm
markets.             

U.S. gold futures rose 0.8% to $1,646.80 per ounce, and held above the
London spot contract.

Palladium dropped 2% to $2,270.06 per ounce, a day after posting its largest
daily gain since 1997 as a lockdown in major producer South Africa
exacerbated supply woes.

Platinum slipped 0.3% to $735.95, while silver was flat at $14.43.

Copper slips as coronavirus hit to metals outweighs U.S. stimulus

(Reuters) - Copper prices fell on Thursday as volatile markets and a hit to
metals demand from the coronavirus pandemic eclipsed the boost from a
massive U.S. stimulus package.

Benchmark copper on the London Metal Exchange (LME) was down 1% to $4,805
tonne at 1727 GMT. The metal, used as a gauge of economic health, rose by 5%
over the last two sessions.

A $2 trillion U.S. bill aimed at helping unemployed workers and industries
hurt by the coronavirus epidemic failed to rouse copper prices for long.

U.S ECONOMY: The number of Americans filing claims for unemployment benefits
surged to a record of more than 3 million last week as strict measures to
contain the coronavirus pandemic brought the country to a sudden halt.

CHINA CORONAVIRUS: Mainland China reported no new locally transmitted cases
of coronavirus for the sixth time in eight days but imported cases rose as
Beijing ramped up controls to prevent a resurgence of infections.

CODELCO: Top copper miner Codelco said it would suspend construction of some
projects including the Chuquicamata mine in a bid to halt the spread of the
coronavirus.

ZINC-LEAD SUPPLY: Sumitomo Corp will suspend operation at its San Cristobal
silver-zinc-lead mine in Bolivia and its Ambatovy nickel mine in Madagascar
to prevent the spread of the coronavirus.

GLENCORE: South Africa’s export terminals will close to mineral exports from
midnight, when a nationwide 21-day lockdown begins, disrupting copper and
cobalt supplies from the Democratic Republic of Congo and Zambia.

INVENTORIES: On-warrant aluminium stocks in LME-approved warehouses rose by
17,625 tonnes to 947,300 tonnes, the highest since Dec. 20.

LME aluminium prices gained 0.5% to $1,545 tonne, after touching their
lowest since 2016 at $1,528.

ZINC & LEAD: The global zinc market flipped to a surplus of 35,600 tonnes in
January, while the lead market deficit shrank to 3,100 tonnes in the same
month, industry data showed.

CHINA: Shops and local authorities in China are slashing prices and handing
out millions of dollars worth of discount coupons to kick start the economy.

PRICES: LME zinc gained 1.2% to $1,858 a tonne, lead rose 2.7% to $1,689,
tin fell 0.8% to $14,180 while nickel dipped 1% to $11,175. 

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
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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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