Bulls n Bears Daily Market Commentary : 07 May 2020

Fri May 8 08:43:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 07 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$14,253,208.09 with foreign buys at ZWL$29,068.00 and
foreign sales were ZWL $2,914,922.50 Total trades were 158.

The All Share index ended the day higher at 497.88 after gaining 3.45 points
. HIPPO gained $0.3975 to $5.8000, LAFARGE rose by $0.2000 to $3.2000 and
DAIRIBOARD ZIMBABWE was $0.1825 firmer at $1.0975. OK ZIMBABWE also
increased by $0.1144 to $2.1569 and RIO ZIM was $0.0933 up at $5.5933.

Gains were offset by losses in OLD MUTUAL LIMITED which lost $0.4267 to
$41.0000, ZB FINANCIAL HOLDINGS eased $0.1000 to $1.4000 and AXIA
CORPORATION dropped by $0.0071 to $2.1404. FIRST CAPITAL BANK also decreased
by $0.0060 to settle at $0.2140 and AFRICAN SUN traded $0.0050 lower at
$0.4950.

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  Global Currencies & Equity Markets

Egypt

Egypt's foreign reserves fall to $37.037 bln end-April - central bank

(Reuters) - Egypt’s foreign reserves dropped by a further $3.07 billion in
April as investors spooked by the coronavirus pulled cash from emerging
markets, the central bank said on Thursday, a drain on funds that has pushed
Egypt to seek help from the International Monetary Fund (IMF).

Reserves fell to $37.037 billion at the end of April from $40.108 billion at
the end of March after having fallen by $5.4 billion in March.

The net foreign assets of the country’s banks plummeted by 162.12 billion
Egyptian pounds ($10.33 billion) in March, according to central bank
figures.

Egypt said on April 26 it was seeking IMF financial support in the form of a
Rapid Financing Instrument (RFI) and its Stand-By Arrangement (SBA), both
designed for countries facing urgent or potential balance of payments
problems.

The IMF’s executive board is scheduled to consider both requests on Monday.
Egypt can borrow as much as $2.78 billion under the RFI and about $4 billion
per year under the SBA, according to analysts and information on the IMF
website.

Egypt drew on its foreign reserves in April to repay a Eurobond worth $1
billion and $600 million in other external obligations, as well as to cover
the imports of strategic goods, the bank said.

Foreign investors in March sold the equivalent of 149.3 billion Egyptian
pounds ($9.5 billion) of Egyptian pound treasury bills, more than half of
their holdings, data published on Thursday on the central bank website
showed.

Foreign currency inflows have been hurt by a virtual halt in tourism from
mid-March, while remittances from workers outside of Egypt have also come
under threat.

Tourism earned Egypt $13 billion and remittances $26.8 billion in 2019,
according to central bank figures. ($1 = 15.7000 Egyptian pounds)

South Africa

S.Africa's rand jumps as Chinese data fuels recovery hopes, Anglo leads

(Reuters) - South Africa’s rand jumped on Thursday as weak business
confidence data was outweighed by big surprise move up in China’s April
exports that also helped its commodity currency peers.

At 1600 GMT the rand was 1.09% stronger against the dollar at 18.5161.

The market mood stabilised globally as Beijing reported a 3.5% rise in April
exports, confounding market expectations of a sharp fall, as factories
restarted output after the coronavirus pandemic, raising hopes of an
economic recovery.

Investec economist Annabel Bishop said in a note that the small bounce back
of commodity currencies like the rand has so far been driven by some
improving market sentiment, with further strengthening likely this year.

Stocks climbed to a one-week high, pulled up by miner Anglo American and the
unexpected rise in Chinese exports.

The Johannesburg-listed diversified miner rose 4.15% alongside its
London-listed parent firm, providing the biggest boost to the Top 40 index,
after Credit Suisse upgraded it to “outperform” from “neutral”, and raised
its price target to 1,800p from 1,650p.

The firm also pleased investors worried about miners’ exposure to fossil
fuel after it said on Thursday it preferred unbundling and listing its
thermal coal operations in South Africa in the next two to three years over
other options for exiting the business.

Its shares helped the mining index rise 0.89%, while peers Exxaro Resources
and BHP Group gained 2.36% and 1.13% respectively.

Other notable gainers were industrial engineering firms , up 1.29%.

South Africa’s stock indexes have rebounded sharply from a
coronavirus-fuelled selloff in March, powered by monetary and fiscal
stimulus and, more recently, the reopening of businesses following a
nationwide five-week lockdown.

The Johannesburg All-Share index rose 0.38%, while the Top-40 index closed
0.31% firmer.

Bonds continued to rally, with the yield on the government issue due in 2030
down 2.5 basis points to 9.420%. 

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Asian shares up as U.S., China trade negotiators talk

(Reuters) - Asian shares rose on Friday as investors focused on talks
between U.S. and Chinese trade officials and solid corporate earnings rather
than the looming release of data expected to show the worst U.S.
unemployment rate in more than 70 years.

Having opened higher following gains on Wall Street overnight, Asian markets
had a further boost late in the morning on Chinese state media reports that
U.S. and Chinese trade representatives had held a phone call and pledged to
cooperate on carrying out the countries’ Phase 1 trade deal.

The news lifted U.S. stock futures, pushing E-minis for the S&P 500 up 1.06%
to 2,910.5.

MSCI’s broadest gauge of Asian share indexes outside Japan was 1.1% higher
and Japan’s Nikkei added 1.78%.

Australian shares were 0.76% higher. China’s blue-chip CSI300 index gained
0.86%.

While rising equity markets on Friday were accompanied by a slight uptick in
U.S. Treasury yields, bond markets remained focused on the shaky global
economic picture as coronavirus-related lockdowns continue to depress
economic activity, despite signs of reopening.

Data from Japan on Friday showed the impact of lockdowns, with household
spending plunging 6% on year in March, and service-sector activity shrinking
at a record pace.

Wall Street indexes climbed on Thursday, with the Nasdaq erasing losses for
2020, following a clutch of upbeat earnings. PayPal Holdings soared 14%.

After hitting a record lows of 0.129% on Thursday, the yield on U.S.
two-year Treasurys ticked up to 0.1368%, while the benchmark 10-year note
edged back up to 0.644% from the previous day’s close of 0.631%.

The yield on the 30-year bond rose to 1.3342% from a close of 1.321%
Thursday.

Bond markets were jolted this week, and the U.S. yield curve steepened after
the U.S. Treasury Department said it would introduce a long-planned 20-year
bond and expected to borrow $2.999 trillion in the second quarter.

But yields fell from three-week highs on Thursday as investors digested the
prospect of a surge in debt supply and as some saw a dim outlook for the
economy as it emerges from virus lockdowns.

Federal funds futures continued to show expectations of negative U.S.
interest rates on Friday, even as Federal Reserve officials have said such a
development would be bad for the economy.

Looming on the market horizon is a report on Friday that is expected to show
that the U.S. April unemployment rate jumped to 16% as people stayed home to
thwart the spread of the novel coronavirus.

Markets had a foretaste with weekly claims for unemployment benefits that
added up to some 33.5 million people over the past few weeks, roughly one of
every five American workers.

In currency trading, the dollar index falling 0.171% to 99.646 after hitting
a two-week high on Thursday as some investors took profits ahead of the jobs
report.

The euro rose 0.17% to buy $1.0850, but the dollar was steady against at
106.33 yen. Oil prices rose on hopes that easing lockdowns would boost
demand. Brent futures were up 29 cents, or 0.98%, at $29.75 a barrel, while
U.S. crude added 28 cents, or 1.19%, to $23.83.

After rising more than 2% on Thursday in anticipation of weak U.S. jobs
data, spot gold edged down 0.1% to $1,715.72 an ounce.

 <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
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
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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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