Bulls n Bears Daily Market Commentary : 08 May 2020

Mon May 11 07:39:02 CAT 2020

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Bulls n Bears Daily Market Commentary : 08 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$5,527,833.15 with foreign buys at ZWL$38,614.00 and
foreign sales were ZWL $3,431,937.16 Total trades were 87.

The All Share index continues on an upward trend after picking up 2.12
points  to close at 500 points. NATFOODS gained $0.8000 to $27.5000, MEIKLES
rose by $0.3500 t $6.5000 and OLD MUTUAL LIMITED recovered $0.2778 to
$41.2778. PADENGA   also increased by $0.1899 to $5.5900 and TURNALL was
$0.04300 stronger at $0.2580. 

Trading in the negative; HIPPO VALLEY ESTATES lost $0.4000 to $5.4000,
NAMPAK eased $0.0045 to $0.9905 and BINDURA  traded $0.0022 to $0.5278.
FIRST CAPITAL BANK  also decreased by $0.0017 to $0.2123 and STAR AFRICA was
$0.0001 lower at $0.0800.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand gains on improved risk demand, markets end stronger

(Reuters) - South Africa’s rand firmed on Friday, with sentiment toward risk
and emerging market currencies boosted by an easing in tensions between
China and the United States and optimism about the re-opening of some
economies around the world.

The Johannesburg Stock Exchange (JSE) ended the week on a strong note backed
by higher spot gold prices and the general positive sentiment.

At 1520 GMT the rand was 1.32% firmer at 18.3450, extending the gains that
saw it rise more than 2% this week.

Top U.S. and Chinese trade representatives discussed the Phase 1 trade deal
on Friday, with China saying they agreed to improve the atmosphere for its
implementation and the United States saying both sides expected obligations
to be met.

Investors had been fretting over the potential fallout from yet another
escalation in tensions between the world’s two biggest economies at a time
when countries are struggling with the economic havoc wrought by the new
coronavirus pandemic.

The FTSE/JSE all share index closed 1.97% up at 51,004 points and the JSE
Top 40 index rose 2.09% to close at 47,062 points.

The market rally was driven by higher spot gold prices which lifted the JSE
gold index almost 5% when the stock market closed for trading on Friday.

Bonds also gained, with the yield on the benchmark 2030 government issue
down 15.5 basis points to 9.29%.

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) 

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GLOBAL MARKETS

Asian shares inch higher, new wave of infections a worry

(Reuters) - Asian shares followed Wall Street higher on Monday as investors
looked ahead to more countries restarting their economies, even as some
reported an unwelcome pick up in new coronavirus cases.

South Korea warned of a second wave of the new coronavirus as infections
rebounded to a one-month high, while new infections accelerated in Germany.

Still, investors seemed determined to stay optimistic and MSCI’s broadest
index of Asia-Pacific shares outside Japan firmed 0.1%.

Japan’s Nikkei added 0.7% and South Korean stocks 0.3%. E-Mini futures for
the S&P 500 opened soft but bounced as the morning wore on and was last up
0.3%.

Wall Street had rallied on Friday after the April payrolls report proved
dire but not quite as awful as analysts’ worst fears.

The bond market certainly seems to think any recovery will be slow with
two-year yields hitting record lows at 0.105% and Fed fund futures turning
negative for the first time ever.

The rally in prices has come even as the U.S. Treasury plans to borrow
trillions of dollars in the next few months to plug a gaping budget deficit.

Federal Reserve Chair Jerome Powell is due to give a key note speech on
Wednesday and analysts suspect he will rule out taking rates negative, at
least for now.

The decline in U.S. yields might have been a burden for the dollar but with
rates everywhere near or less than zero, major currencies have been stuck in
tight ranges.

The dollar was a shade firmer on the yen at 106.94 on Monday but well within
the 105.97 to 109.37 band that has lasted since late March. The euro was a
fraction softer at $1.0830 but above last week’s low at $1.0765.

Against a basket of currencies, the dollar was idling at 99.837, sandwiched
between support at 98.769 and resistance around 100.40.

In commodity markets, gold edged up 0.3% to $1,706 an ounce .

Oil prices opened about 1% lower as a persistent glut weighed on prices and
the coronavirus pandemic eroded global oil demand, even as some governments
began to ease lockdowns.

Brent crude futures lost 27 cents to $30.70 a barrel, while U.S. crude fell
39 cents to $24.35.

 <mailto:info at bulls.co.zw> 

Commodities Markets

London copper hits 8-week high as more countries restart economies

(Reuters) - London copper climbed to its highest in eight weeks on Monday,
boosted by expectations of better demand for metals as certain countries
started to ease lockdowns put in place to curb the coronavirus pandemic.

Australia, France and Spain are slowly opening their economies, while the
United Kingdom - which has the second-highest virus death toll in the world
- introduced some limited easing of restrictions.

Three-month copper on the London Metal Exchange (LME) rose as much as 1.8%
to $5,370 a tonne, its highest since March 16, while the most-traded copper
contract on the Shanghai Futures Exchange (ShFE) advanced 1.2% to 43,840
yuan ($6,194.10) a tonne by 0303 GMT.

Copper is often used as a gauge of global economic health.

LME aluminium rose 1% to $1,500 a tonne, nickel was up 0.9% to $12,435 a
tonne and zinc climbed 1% to $2,2023 a tonne.

ShFE aluminium rallied 1.1% to 12,535 yuan a tonne, nickel advanced 0.9% to
102,620 yuan a tonne and tin climbed 1.2% to 131,240 yuan a tonne.

FUNDAMENTALS

* CHINA AUTOS: Automakers’ sales in China, the world’s biggest car market,
showed signs of a recovery in April.

* U.S. AIDS: The White House has started informal talks with Congress about
what to include in another round of coronavirus relief legislation.

* NICKEL: ShFE will allow delivery of nickel briquettes against its futures
contracts in response to rising demand for other forms of nickel, notably
for electric vehicles.

* CHINA ZINC: China’s zinc and zinc alloy output rose 3.5% in April from
March to 412,000 tonnes, research house Antaike data showed.

* VALE: Brazil’s Vale SA is seeing a “very vigorous” economic rebound in
China, Chief Financial Officer Luciano Siani said.

* INDONESIA TIN: Indonesia exported 4,220.59 tonnes of refined tin in April,
down 28% year-on-year, official data showed.

Asia Gold-Demand picks up in China, lacklustre in other hubs

(Reuters) - Physical gold demand improved in top hub China this week as
buyers took advantage of hefty discounts, while activity remained muted in
other hubs due to lockdowns and holidays.

Dealers in China were selling gold at an average discount of about $30 an
ounce versus benchmark spot prices, narrowing from last week’s discounts of
$48.

The Labour Day holiday in China runs from May 1-5.

Global spot prices were up more than 1% so far this week, as investors hoped
for more stimulus from the U.S. central bank.

A few jewellery stores opened in India, but demand was negligible because of
higher prices and because there were few people going to the stores.

Indian gold futures were trading around 46,000 rupees per 10 grams on
Friday, near a record high hit last month.

India’s gold imports plunged 99.9% year-on-year in April to their lowest in
nearly three decades as air travel was halted.

Scrap gold supplies in India are likely to hit an all-time high in 2020, the
World Gold Council said.

In Singapore, gold was sold at a premium of $1.25 to $1.65 an ounce. Demand
remained steady even as the coronavirus-led restrictions kept most shops
closed, traders said.

Meanwhile, in Hong Kong, gold was sold at a premium of around $0.53 to $1.25
per ounce over the benchmark.

In Japan, demand was quiet due to a public holiday. Gold bullion was sold at
anywhere between at par with the benchmark to a $0.50 an ounce premium. 

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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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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