Bulls n Bears Daily Market Commentary : 12 May 2020

Wed May 13 07:30:42 CAT 2020

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Bulls n Bears Daily Market Commentary : 12 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$8,034,908.55 with foreign buys at ZWL$1,948,560.00 and
foreign sales were ZWL $2,659,109.15 Total trades were 139.

The All Share index closed the day higher at 550.11 after gaining 37.82
points . BAT LIMITED led the movers after adding $5.0000 to close at
$95.0000, OLD MUTUAL LIMITED gained $3.0226 to $46.0126 and CAFCA LIMITED
rose by $2.0000 to $20.0000 . Two more counters to advance were DELTA
CORPORATION LIMITED which was $1.2355 firmer at $7.5490 and PADENGA HOLDINGS
which traded $0.5577 firmer at $6.1545.

No counter lost ground.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

South Africa

South Africa's rand rises on U.S.-China trade truce hopes

(Reuters) - South Africa’s rand firmed on Tuesday as demand for emerging
markets was boosted by signs of easing tensions between China and the United
States.

The stock market was also buoyed by the easing trade tensions despite fears
of a second wave of coronavirus emerging in certain countries.

At 1530 GMT the rand was 0.88% firmer at 18.2600 per dollar having
kicked-off the session at 18.4520.

The currency had been on the ropes for most of the day over global fears of
a second wave of coronavirus infections as China, Germany and South Korea
reported new infections, driving investors in to safe haven assets.

But optimism later in the session was lifted by a thaw in the trade spat
between Beijing and Washington. “China waived tariffs on certain U.S.
imports today, giving rise to market optimism regarding economic recovery.
This in turn assisted the rand, which has gained just over 1%, “ said Bianca
Botes from Peregrine Treasury Solutions. China announced on Tuesday a new
list of 79 U.S. products eligible for waivers from retaliatory tariffs
imposed at the height of the bilateral trade war, amid continued pressure on
Beijing to boost imports from the United States. The Johannesburg Stock
Exchange (JSE) climbed on Tuesday with the FTSE/JSE all share index inched
up 0.23% to close at 50,319 points, while the JSE top 40 rose 0.34% and
closed at 46,518. Market sentiment was also boosted by a rise in gold prices
which pushed the JSE gold index higher by 2.47%.

Bonds were also firmer, with the yield on the government paper due in 2030
down 12 basis points to 9.32%. 

Uganda

Ugandan shilling holds steady against the dollar

(Reuters) - The Ugandan shilling was stable on Tuesday due to lacklustre
appetite for hard currency from both merchandise importers and commercial
banks. 

At 0909 GMT, commercial banks quoted the shilling at 3,790/3,800, unchanged
from Monday's close.

 <mailto:info at bulls.co.zw> 

GLOBAL MARKETS

Stocks fall on renewed virus fears, Powell speech in focus

(Reuters) - Stocks and oil prices fell on Wednesday as fears about a second
wave of coronavirus infections gripped financial markets.

Investors, many facing steep losses due to the pandemic-driven shakeout in
assets over the past few months, have also had to contend with renewed
U.S.-China trade tensions.

Leading U.S. infectious disease expert Anthony Fauci on Tuesday warned
lawmakers that a premature lifting of lockdowns could lead to additional
outbreaks of the deadly coronavirus, which has killed 80,000 Americans and
brought the economy to its knees.

Fauci’s comments hammered Wall Street stocks overnight, underlining fragile
investor sentiment which has in recent sessions swung between optimism over
some easing in lockdowns globally and anxiety about a fresh spike in virus
cases.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.4%.
Shares in China, where the coronavirus first emerged late last year, fell
0.5%.

The South Korean market was down for a third session. New coronavirus
infections have appeared in Seoul after the country eased restrictions last
week.

Oil markets, which have plummeted this year due to a combination of a
collapse in demand and a supply glut, lost further ground in Asia.

Treasury yields also inched lower amid caution before a speech by U.S.
Federal Reserve Chairman Jerome Powell and rising speculation the United
States could one day adopt negative interest rates.

U.S. stock futures, the S&P 500 e-minis, were down 0.4% in Asian trade.

In overnight trade, Wall Street shares were dragged lower after Fauci’s
remarks, including his statement that a treatment or vaccine is unlikely to
be in place by late August or early September.

The Dow Jones Industrial Average fell 1.89% on Tuesday, the S&P 500 lost
2.05% and the Nasdaq Composite dropped 2.06%.

The mood was further soured by proposed legislation by a leading U.S.
Republican senator that would authorize President Donald Trump to impose
sanctions on China if it fails to give a full account of events leading to
the outbreak of the novel coronavirus.

Stock markets have rebounded sharply in recent weeks as the spread of the
novel coronavirus slowed in some countries in Asia and Europe, while parts
of the U.S. economy began to reopen after weeks of lockdowns.

Equities and some riskier assets are starting to erase some of those gains
due to worries that a rush to re-open factories and shops may be premature.

Australian shares were down 1%, while Japan’s Nikkei stock index slid 0.8%.

The yield on benchmark 10-year Treasury notes eased slightly to 0.6622%. The
two-year yield fell to 0.1589% but remained above a record low of 0.1050%
hit on Friday.

The New Zealand dollar slumped 0.7% to $0.6030 after the country’s central
bank doubled its quantitative easing programme and said it has asked
commercial banks to be ready for negative interest rates by year’s end.

The U.S. dollar nursed losses as traders braced for Powell’s speech, which
will cover economic issues and may offer a hint whether negative rates are a
viable policy option.

Trump on Tuesday again pushed the Fed to adopt negative interest rates, a
hot topic in financial markets since last week when U.S. money market
instruments started to price in a chance of negative rates.

U.S. consumer prices dropped 0.8% in April, the biggest since the Great
Recession, raising the spectre of deflation.

Oil futures fell in Asia as worries about the virus overcame hope that
output cuts will put a floor under prices.

U.S. crude dipped 1.63% to $25.36 a barrel. Brent crude fell 2.03% to $29.37
per barrel.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices hit 8-week high on China demand hopes

(Reuters) - Copper prices hit eight-week highs on Monday as recovering
economic activity in top consumer China after the coronavirus lockdowns
boosted expectations of stronger demand and the country’s central bank
signalled further stimulus.

Benchmark copper on the London Metal Exchange was down 0.3% at $5,258 at
1600 GMT. Prices of the metal used widely in the power and construction
industries earlier touched $5,370 a tonne, the highest since March 16 and a
gain of more than 20% since March 19.

LOANS: New bank lending in China fell less than expected in April from the
previous month while growth of broad money supply quickened, as the central
bank ramped up policy support for the coronavirus-ravaged economy.

AUTOS: China’s monthly auto sales rose for the first time in almost two
years as the country eased virus-related curbs and reopened for business.

DATA: China’s industrial production data for April due on Friday is expected
to show a small rise compared with a contraction in March.

STIMULUS: China’s central bank said on Sunday it will step up
counter-cyclical adjustments to support growth and make policy more flexible
to fend off financial risks.

On Monday, it lowered interest rates on its standing lending facility (SLF)
in April.

SECOND WAVE: Copper prices are likely to be capped by the risks of a second
wave of COVID-19 infections in China and elsewhere limiting manufacturing
activity again this year.

NICKEL: The Shanghai Futures Exchange (ShFE) will allow delivery of nickel
briquettes against its nickel futures contracts later this year in response
to rising demand for other forms of the metal, notably for electric vehicles
(EVs).

STAINLESS: Chinese stainless steel futures surged, hitting their highest
level in more than nine months as domestic demand continued to pick up after
coronavirus-related shutdowns.

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

STOCKS: Traders say declining exports from Indonesia are partly behind the
draws on tin inventories in LME-approved warehouses MSNSTX-TOTAL, which at
4,745 tonnes are down nearly 40% since early April.

SPREADS: The premium for the cash over the three-month tin contract at $97 a
tonne suggests concern about nearby supplies of the soldering metal on the
LME market.

Three-month tin rose 0.2% to $15,255 a tonne.

OTHER METALS: Aluminium was up 0.7% at $1,495, zinc added 1.1% to $2,026,
lead gained 1.8% to $1,673 and nickel rose 0.2% to $12,345 a tonne.

Gold miner SSR to buy Alacer in $1.7 bln deal as bullion prices surge

(Reuters) - Canadian precious metals producer SSR Mining said it would to
buy Alacer Gold in an all-stock deal valued at C$2.41 billion ($1.72
billion), adding heft as gold prices surge due to demand for the yellow
metal in an uncertain economy.

Gold miners have benefited from a 12% jump in prices this year as investors
seek safer assets to shield themselves from the damaging impact of the
coronavirus outbreak on the global economy.

The move also comes on the back of a record year of mergers and acquisitions
in the sector, including some of of the biggest deals in a decade in 2019.

The new company, which will be headquartered in Denver, Colorado, will have
operational mines in four countries and will be led by Alacer Chief
Executive Officer Rodney Antal, the two companies said on Monday.

Alacer has focused over the past several years on free cash flow generation,
and this merger allows the miner to continue this strategy while
diversifying its single operating asset exposure, Antal said.

SSR Mining has operations in Nevada, United States, Saskatchewan, Canada and
Jujuy, Argentina, while Alacer is a low-cost gold producer focused on its
cornerstone Çöpler Gold Mine in Turkey.

The “zero-premium” merger is expected to generate annual free cash flow of
about $450 million and produce about 780,000 gold equivalent ounces over the
next three years based on analysts’ estimates, according to the companies.

As part of the deal, Alacer shareholders will receive 0.3246 SSR Mining
shares for each share held, implying a value of C$8.19 per Alacer share.

Shareholders of SSR Mining and Alacer will own about 57% and 43% of the new
company, respectively, with the new board consisting of five directors from
each of the miners’ existing boards.

The deal includes a $70 million termination fee payable under certain
circumstances, the companies said.

National Bank Financial acted as financial adviser to SSR Mining, while
McCarthy Tétrault LLP and Lawson Lundell LLP acted as legal counsel to the
miner.

Earlier in the day, Gran Colombia said it had proposed to merge with Guyana
Goldfields and Gold X , while Shandong , one of China’s biggest gold
producers, said last week it would buy TMAC Resources.

Shares of SSR Mining were trading down about 8% in morning trade, while
Alacer climbed nearly 2.5%. ($1 = 1.4007 Canadian dollars) 

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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