Bulls n Bears Daily Market Commentary : 04 May 2020

Mon May 4 16:01:57 CAT 2020

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Bulls n Bears Daily Market Commentary : 04 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$9,619,536.30 with foreign buys at ZWL$1,450.80 and
foreign sales were ZWL $850,942.90 Total trades were 147.

The All Share index opened the new trading month on a positive note adding
3.78 points  to close at 492.38 points. OLD MUTUAL LIMITED recovered $0.9917
to $42.9917, OK ZIMBABWE added $0.1725 to $1.9800 and HIPPO  was $0.1700
stronger at $5.2500. TSL  also increased by $0.1000 to $1.6025 and BINDURA
was $0.0876 firmer at $0.5300.

Trading in the negative; ECONET eased $0.0485 to $3.2525, AFRICAN SUN lost
$0.0036 to $0.5164 and SIMBISA  was $0.0022 weaker at $2.7978. The other
counter to decrease was DELTA which traded $0.0017 lower at $5.8483.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Uganda

Ugandan shilling unchanged on slumped demand

(Reuters) - The Ugandan shilling was stable on Monday amid a slump in
appetite for dollars from both merchandise importers and commercial banks,
traders said.

At 0908 GMT commercial banks quoted the shilling at 3,800/3,810, same level
as Thursday's close. Markets were closed on Friday for Labour Day holiday.

South Africa

South Africa's rand on the back foot as recession clouds gather

(Reuters) - South Africa’s rand weakened on Monday, dragged lower by a grim
local economic outlook and outflows from local bonds after the country
officially fell out of the World Government Bond Index (WGBI).

At 0645 GMT the rand was 0.15% weaker at 18.8400 per dollar, adding to the
previous session’s losses to trade at its softest in a week.

Low volumes following Friday’s bank holiday added to the weakness, with a
dearth of offshore demand available to cushion thin liquidity, widening
spreads, and risk-off sentiment sparked by renewed tensions between the
United States and China.

National Treasury is forecasting a deep recession this year, with gross
domestic product set to shrink by close to 6% as the economy remains in a
lockdown aimed at curbing coronavirus infections.

New regulations for a easing of one the world’s strictest lockdowns were
only finalised last Wednesday, leading to some confusion when they came into
effect on Friday. Only some sectors may restart operations, and with limited
staff. Bonds were weaker, with yields on the main government debt jumping
following the country’s official exit from the WGBI as credit downgrades in
late March ended the country’s last investment-grade rating.

The 2030 bond traded at 10.29%, 2 basis points higher.

In stocks, Famous Brands, owner of restaurant chains including Steers and
Wimpy, reported negligible revenue for five weeks as it geared up for the
start of delivery-only services following the easing of the lockdown. 

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GLOBAL MARKETS

Stocks fall as U.S.-China tensions threaten rebound

(Reuters) - European stock markets and oil prices fell on Monday as a spat
between top U.S. officials and China over the origin of the coronavirus
fuelled fears of a new trade war, derailing a rebound in global markets.

European shares were down 2.5% in mid-morning trading, with sectors
sensitive to economic growth including oil and gas, automakers and banks
falling between about 4% and 5.5%.

Volatility gauges for European and American blue-chip stocks shot up to a
two-week high while U.S. stock futures were about 1% in the red.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan fell
2.5%, pulled down by Hong Kong where the Hang Seng returned from a
two-session holiday with its biggest drop in six weeks.

U.S. Secretary of State Mike Pompeo said on Sunday there was “a significant
amount of evidence” that the novel coronavirus emerged from a laboratory in
the central Chinese city of Wuhan.

The U.S. dollar rose against most major currencies amid fears that last
year’s U.S.-China dispute would be reignited, this time over the origins of
the pandemic that has stalled economies around the world.

The euro was down 0.37% at $1.0933 and the pound retreated 0.72% to $1.2407.

Gold prices also rose as investors sought safety. Spot gold was up 0.3% at
$1,704.31 per ounce.

Pompeo did not provide evidence or dispute an earlier U.S. intelligence
conclusion that the virus was not man-made.

An editorial in China’s Global Times said he was “bluffing” and called on
the United States to present its evidence.

Simon Black, head of investment management at wealth management firm Dolfin
said investors were also adjusting their forecasts for the depth of the
economic damage the pandemic will inflict.

Companies listed on the pan-European STOXX 600 are currently expected to
report a 40% decline in earnings in the second quarter.

Manufacturing activity in the euro zone collapsed last month as
government-imposed lockdowns to stop the spread of the new coronavirus
forced factories to close and consumers to stay at home, a survey showed on
Monday.

Recent economic data paints a dire picture of the global economy after weeks
of lockdowns.

In the United States, manufacturing plunged to an 11-year low last month and
consumer spending collapsed. Some 30.3 million Americans have filed
unemployment claims.

Oil prices fell again, paring last week’s gains, on worries a global oil
glut may persist even as lockdowns start to ease.

U.S. West Texas Intermediate (WTI) crude futures fell 5.5% to $18.69 a
barrel while Brent crude futures were down 2.8% at $25.70.

Global coronavirus cases have surpassed 3.5 million and deaths have neared a
quarter of a million, according to a Reuters tally.

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Commodities Markets

London copper hits near 2-week low as some producers resume work

(Reuters) - London copper prices fell to a near two-week low on Monday as
some producers looked set to resume operations, while the coronavirus
outbreak clouded global demand prospects.

Three-month copper on the London Metal Exchange (LME) fell as much as 1% to
$5,060 a tonne, its lowest since April 22. The contract was down 0.7% at
$5,075 a tonne by 0646 GMT.

Global metals demand is expected to dwindle this year due to the economic
pain wrought by the pandemic, but prices have been supported by recent
production cuts in major producing countries.

The global copper market is headed for a surplus of between 200,000-300,000
tonnes in 2020, the head of miner Antofagasta told Chilean media.

Meanwhile, Peru, the world’s second-biggest-producer of copper, said on
Sunday it will gradually ease virus-driven restrictions on key sectors
including mining in May.

Glencore’s Zambian subsidiary Mopani Copper Mines will resume mining for 90
days following a backlash from the government, but the company still expects
to go ahead with its initial plan to place operations on hold.

FUNDAMENTALS

* SHFE: The Shanghai Futures Exchange (ShFE) is closed for a public holiday
in China and will reopen on Wednesday.

* NICKEL: Police in Indonesia’s North Maluku province arrested 8 people
linked to a workers’ demonstration that turned violent at a nickel project
run by France’s Eramet and China’s Tsingshan Holding Group.

* OTHER PRICES: LME aluminium fell 0.7% to $1,476 a tonne, nickel was down
0.7% to $11,870 a tonne, zinc declined 0.9% to $1,895.50 a tonne and lead
decreased 0.6% to $1,619 a tonne.

PRECIOUS-Gold eases on firm dollar; U.S.-China worries limit losses

(Reuters) - Gold inched lower on Monday as the U.S. dollar gained, but
prices were trading above last session's near two-week low as risk sentiment
was weakened by rising U.S.-China tensions over the coronavirus.

    FUNDAMENTALS

* Spot gold        eased 0.1% to $1,697.43 per ounce by 0256 GMT, having
touched its lowest since April 21 at $1,668.53 on Friday. U.S. gold futures
gained 0.3% to $1,705.90 per ounce.

* The dollar rose, oil fell and stock markets were poised to slip as rising
U.S.-China tensions over the coronavirus - and growing unease at the gulf
between asset prices and grim economic reality - turned investors cautious.

* U.S. Secretary of State Mike Pompeo said on Sunday there was "a
significant amount of evidence" that the new coronavirus emerged from a
Chinese laboratory, but did not dispute U.S. intelligence agencies'
conclusion that it was not man-made.

* U.S. President Donald Trump said on Friday raising tariffs on China is
"certainly an option" as he considers ways to retaliate for the spread of
the coronavirus out of Wuhan, China.

* Gilead Science Inc's antiviral drug remdesivir was granted emergency use
authorization by the U.S. Food and Drug Administration for COVID-19 on
Friday.   

* After rolling out trillions of dollars in support for the U.S. economy
during the coronavirus pandemic, Federal Reserve officials have begun
warning of potentially lasting scars to the workforce and productivity if
the recovery is not handled well.

* Gold tends to benefit from widespread stimulus measures as it is often
seen as a hedge against inflation and currency debasement.

* Consumer prices in Japan's capital city fell for the first time in three
years in April and national factory activity slumped, data showed.    

* Australia's Perth Mint said its gold sales shot up in April to their
highest level in at least eight years as concerns of a shortage prompted
investors to stock up to seek cover from the economic blow from the
coronavirus.     

* Hedge funds and money managers increased their bullish positions in COMEX
gold and silver contracts in the week to April 28, the U.S. Commodity
Futures Trading Commission (CFTC) said.        

* Palladium gained 0.7% to $1,912.52 per ounce.

Platinum        slipped 0.4% to $757.27, while silver eased 0.6% to $14.85.

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
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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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