Bulls n Bears Daily Market Commentary : 30 March 2020

Tue Mar 31 02:09:37 CAT 2020

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Bulls n Bears Daily Market Commentary : 30 March 2020

 <mailto:info at bulls.co.zw> 

Zimbabwe Stock Exchange Update

Market Turnover ZWL$5,797,171.20 with foreign buys at ZWL$4,698.00and
foreign sales were ZWL$22,920.00 Total trades were 70

The All Share index opened the week in red losing 5.19 points to close at
452.69 points. MEIKLES  eased $0.6667 to $6.8333, HIPPO dropped $0.5000 to
$6.0000 and SEEDCO   was $0.4981 lower at $3.5000. TSL  also decreased by
$0.2045 to $1.600 and FBC HOLDINGS  traded $0.0914 weaker at $1.1311.

Trading in the positive; OLD MUTUAL LIMITED  recovered $1.4803 to $37.9916,
ART CORPORATION added $0.0762 to $0.4900 and FIDELITY  was $0.0225 stronger
at $0.1370. CASSAVA SMARTECH  also increased by $0.0098 to settle at $2.5097
and BINDURA  was $0.0041 firmer at $0.2500.

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

  Global Currencies & Equity Markets

South Africa

South Africa's rand crashes to all-time low after Moody's pulls the plug

(Reuters) - South Africa’s rand plunged to an all-time low on Monday,
falling below 18.00 to a dollar after ratings firm Moody’s cut the country’s
last investment grade credit rating to “junk”, adding to mounting panic
about the coronavirus outbreak.

At 0913 GMT the rand was 0.97% weaker at 17.8300 per dollar, pulling back
from the all-time low of 18.0800 it crashed to in Asian trading.

Late on Friday Moody’s downgraded the rating one notch to Ba1 from Baa3 and
maintained a negative outlook. S&P Global and Fitch downgraded Africa’s most
industrialised economy to sub-investment grade in 2017.

Moody’s downgrade will see South Africa kicked out of the benchmark World
Government Bond Index (WGBI) of local-currency debt at the end of April,
triggering up to $12 billion of forced selling, treasury and analysts
estimate.

One factor likely to shield bonds and the rand from a deep and prolonged
selloff is the relatively high rate of return, or yield, which is 4% to 5%
higher than return offered by similarly rated peers and significantly above
the near zero rates offered by developed market bonds.

The central bank’s decision to a launch a “quantitative easing” style
bond-buying programme, alongside easier repo terms for commercial banks, was
also set to support demand for government bonds and limit a sharp spike in
the curve.

Bonds opened weaker, albeit in a more muted fashion than moves seen last
week as country entered lockdown. The yield on the benchmark government
bonds due in 2026 was up 12.5 basis points to 10.615%.

Central bank governor Lesetja Kganyago said in a teleconference late on
Sunday the aim of the bond-buying exercise was to normalise conditions in
the bond market, and not to press down borrowing costs or directly plug
government’s cash shortfall.

On the same call, Finance Minister Tito Mboweni said the government was
ready to approach the International Monetary Fund for emergency cash, but
only to fund health interventions rather than stem widening fiscal deficits.

South Africa’s confirmed coronavirus cases increased by 93 to 1,280 on
Sunday and the death toll doubled to two. The country is in its fourth day
of a national lockdown.

Kenya

Kenyan shilling holds steady against the dollar

(Reuters) - The Kenyan shilling was stable on Monday due to commercial banks
and some multinational companies offloading dollars to fund their
activities, traders

said.

At 0950 GMT, commercial banks quoted the shilling at 104.55/75 per dollar,
compared with 104.50/70 at Friday's close.

Market participants had built up their dollar holdings in the past two weeks
after the shilling weakened significantly due to concerns about the impact
of the coronavirus, traders said. 

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

World equity markets edge higher; oil plunges to 2002 lows

(Reuters) - Global equity benchmarks rose on Monday despite a drop in oil
prices to their lowest levels since 2002, as central banks and the United
States tried to contain damage from the rapidly spreading coronavirus that
has upended the global economy.

U.S. President Donald Trump on Sunday extended the government’s stay-at-home
guidelines until the end of April, dropping a sharply criticized plan to get
the economy up and running by mid-April after a top medical adviser said
more than 100,000 Americans could die from the outbreak.

JPMorgan now predicts that global gross domestic product (GDP) - the total
monetary value of all goods and services produced - could contract at a
10.5% annualized rate in the first half of the year. As a result, central
banks have mounted an all-out effort to bolster activity with interest rate
cuts and massive asset-buying campaigns, which have at least eased liquidity
strains in markets.

China on Monday became the latest to add stimulus, with a cut of 20 basis
points to a key reverse repo rate, the largest in nearly five years.

MSCI’s gauge of stocks across the globe gained 1.99% following broad gains
in Europe and declines in Asia.

On Wall Street, the Dow Jones Industrial Average rose 690.7 points, or
3.19%, to 22,327.48, the S&P 500 gained 85.18 points, or 3.35%, to 2,626.65
and the Nasdaq Composite added 271.77 points, or 3.62%, to 7,774.15.

In oil markets, Brent futures were down 8%, or $2, at $22.50 a barrel -
their lowest in 18 years. U.S. West Texas Intermediate (WTI) crude futures
fell as far as $19.92, near a 2002 low hit this month. Oil futures have
fallen by more than 68% from their early January highs.

Investors continued to seek the perceived safety of bonds, with bond yields
falling in Europe and in the United States. Benchmark 10-year notes last
rose 9/32 in price to yield 0.7154%, from 0.744% late on Friday.

The drop in yields has combined with efforts by the Federal Reserve to pump
more U.S. dollars into markets, dragging the dollar off recent highs.

Rodrigo Catril, a senior FX strategist at National Australia Bank (NAB),
said the main question for markets was whether all the stimulus would be
enough to help the global economy withstand the shock from the coronavirus
pandemic.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Aluminium hits four-year lows, fears of deep recession reinforced

(Reuters) - Aluminium prices hit four-year lows on Monday as worries about
prolonged shutdowns around the world due to the coronavirus reinforced fears
of a deep recession and tumbling demand for industrial metals.

Benchmark aluminium on the London Metal Exchange was down 1.1% at $1,529 a
tonne at 1706 GMT. Prices of the metal used widely in transport and
packaging earlier touched $1,526.50, the lowest since April 2016.

PROLONGED: Metals came under further pressure after U.S. President Donald
Trump extended his stay-at-home guidelines until the end of April, dropping
a plan to get the economy up and running by mid-April.

AUTOS: Vehicle sales in China, the world’s biggest car market, tumbled in
February as customers stayed at home. Automakers are halting production at
plants across Europe and the United States.

CUTBACKS: Plummeting aluminium prices due to the impact of the pandemic on
demand are unlikely to persuade producers to immediately cut output as input
costs have also fallen, leaving the market with massive surpluses.

STOCKS: Market surpluses are expected to make their way to exchange
warehouses, which have already seen more deliveries of aluminium.

Aluminium stocks MALSTX-TOTAL in LME-approved warehouses, at 1.15 million
tonnes, have climbed nearly 20% since March 17.

Stocks of the metal in warehouses monitored by the Shanghai Futures Exchange
AL-STX-SGH fell 5,922 tonnes last week to 528,072 tonnes, but that is still
up from below 190,000 tonnes at the start of the year.

However, analysts expect deliveries to ShFE warehouses to rise further over
coming weeks.

SHORTS: Data from Marex Spectron shows the net speculative short position
rose to 47% of open interest or 260,000 tonnes as of last Thursday.

DOLLAR: Industrial metals also came under pressure from a stronger U.S.
currency, which when it rises makes dollar-denominated commodities more
expensive for holders of other currencies.

OTHER METALS: Copper was down 0.4% at $4,773, zinc fell 0.3% to $1,873, lead
gained 0.2% to $1,707, tin added 0.5% to $14,335 and nickel ceded 0.3% to
$11,315 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
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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