Bulls n Bears Daily Market Commentary : 06 May 2020

Thu May 7 06:53:33 CAT 2020

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Bulls n Bears Daily Market Commentary : 06 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$13,214,360.85 with foreign buys at ZWL$1,027,213.00 and
foreign sales were ZWL $5,878,846.00 Total trades were 103.

The All Share index retreated by 3.85 points to close at 494.43 points.
CAFCA lost $1.0000 to $18.0000, RIOZIM eased $0.5600 to $5.5000 and OLD
MUTUAL LIMITED  dropped by $0.4153 to $41.4267. CASSAVA SMARTECH  also
decreased by $0.2264 to settle at $3.2499 and EDGARS  traded $0.0799 lower
at $0.3201.

Trading in the positive; TSL  gained $0.3175 to $1.9200, HIPPO VALLEY
ESTATES  rose by $0.1048 to $5.4025 and OK ZIMBABWE  was $0.0742 firmer at
$2.0425. PROPLASTICS  also increased by $0.0400 to $1.6500 and TURNALL was
$0.0350 up at $0.2150

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  Global Currencies & Equity Markets

South Africa

South Africa's rand falls amid weak economic data

(Reuters) - South Africa’s rand weakened against the dollar in afternoon
trade on Wednesday, with market sentiment bruised by indicators painting a
bleak outlook for the economy both at home and globally amid the coronavirus
crisis.

At 1530 GMT the rand was 1.21% weaker at 18.7520 per dollar, giving up gains
from earlier in the session. Investors globally dumped riskier assets in the
wake of dire economic numbers after shutdowns to stem the spread of the
virus.

In South Africa, private sector activity fell to a record low in April, a
business survey showed on Wednesday, as temporary company closures led to a
collapse in demand.

Africa’s most developed economy is now in its sixth week of a strict
lockdown aimed at curbing the spread of the new coronavirus, which has
infected more than 7,000 and killed 148.

Manufacturing data in the euro zone and the UK also painted a bleak picture
and sent investors piling into safe-haven currencies such as yen and dollar.

Greg Davies, trader at Cratos Capital, said the all share index was pulled
upwards by stocks that tend to benefit from a weaker rand, like miners that
export their product, or firms with an overseas presence and therefore a
rand hedge in place.

British American Tobacco rose 1.90% to 695.73 rand, BHP Group climbed 4% to
311.77 rand, paper and packaging firm Mondi was up 2.50% to 313.44 rand,
while mining firms climbed 2.84%.

But miner Harmony Gold closed 9.03% lower after it said it planned to raise
up to $200 million via a share issue to fund part of its purchase of
AngloGold Ashanti’s last remaining assets in South Africa.

Harmony also said it had withdrawn its annual production guidance for the
financial year as it does not have clarity on the ramp-up of production from
its mines after the lockdown.

The Top-40 index rose 1.64% while the broader all-share closed 1.32% firmer.

In fixed income, the yield on government paper due in 2030 rose 2.5 basis
points to 9.78%. 

Uganda

Ugandan shilling unchanged amid low importer dollar demand

(Reuters) - The Ugandan shilling was unchanged on Wednesday on the back of
low dollar demand from importers in sectors like energy and manufacturing,
traders

said. 

At 0921 GMT, commercial banks quoted the shilling at 3,790/3,800 per dollar,
the same level as Tuesday's close.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asia stocks relieved by China export surprise, US bonds face debt flood

(Reuters) - Asian shares pared early losses on Thursday after Chinese
exports proved far stronger than even bulls had imagined, while U.S. bond
investors were still daunted by the staggering amount of new debt set to be
sold in coming weeks.

Beijing reported exports rose 3.5% in April on a year earlier, completely
confounding expectations of a 15.1% fall and outweighing a 14.2% drop in
imports.

The surprise stoked speculation the Asian giant could recover from its
coronavirus lockdown quicker than first thought and support global growth in
the process.

The news helped regional market steady after a shaky start and MSCI’s
broadest index of Asia-Pacific shares outside Japan was back to near flat.

Japan’s Nikkei was off a slim 0.2% while South Korea added 0.2%. Chinese
blue chips were just a fraction lower, while E-Mini futures for the S&P 500
bounced 0.5%.

Markets had started cautiously with renewed Sino-U.S. tensions lurking in
the background.

U.S. President Donald Trump said he would be able to report in about a week
or two whether China is meeting its obligations under a trade deal, as
Washington weighed punitive action against Beijing over its handling of the
coronavirus outbreak.

The flow of economic data also remained grim, with U.S. private employers
laying off 20 million workers in April.

Figures due later on Thursday are forecast to show initial jobless claims
rose a further 3 million last week, while Friday’s payrolls report is
expected to see 22 million jobs lost and unemployment hit 16% or higher.

On Wall Street, energy and utility sectors were the main losers while demand
for techs kept the Nasdaq in the black. The Dow had ended down 0.91% and the
S&P 500 0.70%, while the Nasdaq added 0.51%.

WORLD’S BIGGEST BORROWER

Bond markets saw one of the largest shifts in a while after the U.S.
Treasury said it would borrow a truly astonishing $2.999 trillion during the
June quarter, five times larger than the previous single-quarter record.

It will sell $96 billion next week alone and a surprising amount of that
will be at longer tenors, which in turn pushed up long-term yields and
steepened the curve.

Yields on 30-year bonds jumped 7 basis points to 1.40%, the largest daily
increase since mid-March.

That rise gave a lift to the U.S. dollar on most currencies and its index
firmed to 100.140. The euro eased to $1.0800, hurt in part by a gloomy
economic outlook from the European Commission.

Indeed, the single currency sank to its lowest against the Japanese yen
since late 2016 at 114.40, and even the dollar touched a seven-week trough
at 105.98 yen.

He noted that with rates across the globe falling to all time lows, the yen
no longer had a large yield disadvantage.

The yen was also cheap by many measures, he argued, with fair value put at
around 85 per dollar.

In commodity markets, gold eased on expectations that supplies will grow as
bullion refineries resume operations. The metal was last at $1,689.68 an
ounce.

Oil prices turned flat after a six-session streak of gains which saw Brent
almost double since hitting a 21-year low in April.

Brent crude futures were last up 3 cents at $29.70 a barrel, while U.S.
crude rose 6 cents to $24.05.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold falls more than 1% as dollar strengthens, lockdowns ease

(Reuters) - Gold fell more than 1% on Wednesday, pressured by a stronger
dollar and expectations that gold supplies will grow as bullion refineries
resume operations, and on gradual improvement in investor risk appetite as
countries have begun to ease coronavirus restrictions.

Spot gold dipped 1.1% to $1,686.50 per ounce by 1:44 p.m. EDT (1744 GMT).

U.S. gold futures settled 1.3% lower at $1,688.50, narrowing their lead over
the London spot prices to just around $2 after two of the world’s biggest
gold refiners said they are restoring almost all operations.

This ended six weeks of closures that disrupted global gold supply and
helped drive prices in New York and London further apart than they have been
in decades. Gold has risen about 11% so far this year as the global economy
has slumped during the pandemic.

The S&P 500 and Nasdaq rose on hopes of a pickup in business activity as
states eased coronavirus-induced curbs, with investors also looking past a
stunning 20 million-worker plunge in U.S. private payrolls last month.

Further denting gold’s appeal, the dollar index rose 0.3% to a more than
one-week high.

The outbreak, which has infected more than 3.68 million people globally, has
battered global growth and prompted nations to unleash massive fiscal and
monetary measures to limit economic damage.

Gold tends to benefit from widespread stimulus from central banks because it
is considered a hedge against inflation and currency debasement.

Investors also kept a close eye on brewing U.S.-China tensions over the
origin of the coronavirus.

Reflecting investor interest, holdings in the world’s largest gold-backed
exchange-traded fund, SPDR Gold Trust, rose to their highest level since
April 2013.

Elsewhere, silver fell 0.7% to $14.91 per ounce and platinum dropped 1.8% to
$751.05.

Palladium eased 0.3% to $1,795.00 per ounce after hitting its lowest level
in over a month on Tuesday.

Prices of platinum group metals could fall 15-20% in the near term on a
rising surplus, Citigroup said in a note.

Copper prices edge up ahead of China trade data

(Reuters) - Copper futures edged higher on Thursday ahead of the release of
China’s trade data for April, although simmering trade tensions between
Washington and Beijing pressured prices.

Three-month copper on the London Metal Exchange ticked up 0.1% at $5,205 a
tonne by 0153 GMT, extending gains into a fourth session.

The most-traded June copper contract on the Shanghai Futures Exchange rose
0.3% to 42,690 yuan ($6,006.84) a tonne.

China’s exports and imports are expected to record double-digit declines in
April after a tentative recovery in March as the coronavirus pandemic
batters global demand and disrupts manufacturing supply chains, a Reuters
poll showed.

China’s services firms wallowed in contraction in April as layoffs hit a
record and export orders plunged after signs of improvement in March, a
private survey showed.

Analysts have warned it could take months before the Chinese economy returns
to normal and widely expect Beijing to roll out further stimulus, including
a more proactive fiscal policy.

FUNDAMENTALS

* TRADE WAR: U.S. President Donald Trump said on Wednesday he would be able
to report in about a week or two whether China is fulfilling its obligations
under a Phase 1 trade deal the two countries signed in January before the
coronavirus spread globally.

* ALUMINIUM: A robust recovery in aluminium demand in China has boosted
prices in the world’s top consumer and producer of the metal by more than
10% in a month, but traders say weak demand for Chinese exports could soon
take the shine off the market.

* BARRICK: Barrick Gold Corp reported a nearly 55% rise in quarterly profit
on Wednesday as gold prices surged, bolstering its ability to snap up mines
including in copper, its chief executive said.

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
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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
contents or otherwise arising in connection therewith. Recipients of this
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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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