Bulls n Bears Daily Market Commentary : 15 May 2020

Mon May 18 07:06:34 CAT 2020

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Bulls n Bears Daily Market Commentary : 15 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$45,050,321.90 with foreign buys at ZWL$2,664,453.00 and
foreign sales were ZWL $21,942,371.00 Total trades were 285.

The All Share index jumped up by a huge 50.39 points to close at 693.69
points. OLD MUTUAL LIMITED added $2.8497 to $56.0575, RIOZIM LIMITED rose by
$1.5000 to $9.0000 and PADENGA traded $1.2255 firmer at $7.3800. HIPPO
VALLEY ESTATES also increased by $1.1350 to $6.8400 and DELTA CORPORATION
LIMITED was $0.7610 stronger at $9.0105.

No counter traded in the negative as ZB FINANCIAL HOLDINGS  traded unchanged
at $1.6800.

 <mailto:info at bulls.co.zw> 

  Global Currencies & Equity Markets

Kenya

Kenyan shilling weakens as demand surges amid easing coronavirus lockdown

(Reuters) - The Kenyan shilling was under slight pressure on Friday due to
an uptick in demand from businesses buying hard currency to meet their
obligations as economic activity slowly resumes amid the novel coronavirus
pandemic, traders said.

At 0857 GMT, commercial banks quoted the shilling at 106.70/90 per dollar,
compared with 106.60/80 at Thursday's close.

South Africa

South Africa's rand weakens on coronavirus rebound fears

(Reuters) - South Africa’s rand fell on Friday and ended lower on the week
as fears about a resurgence of coronavirus infections hurt sentiment toward
the emerging markets.

The stock market, however, was upbeat, bucking a largely declining trend on
positive factory output data from China.

At 1515 GMT the rand was 0.64% weaker at 18.5750 per dollar in a low-volume
trading session dominated by offshore events as investors weighed the
likelihood of a global economic rebound.

New infections in Germany and other countries that have eased their lockdown
restrictions dented earlier investor optimism that economies could get back
to close to normal soon.

Risk sentiment was further dampened by a flare-up of trade tensions between
China and the United States, with U.S. President Donald Trump saying on
Thursday he was disappointed with China’s failure to contain the
coronavirus, suggesting he could cut ties Beijing.

Bonds at long end of the curve saw their yields rise, while short-end yields
fell, continuing a recent divergence fuelled by bets of a sharp drop in
lending rates and higher issuance in coming months before a reversion as
conditions normalise.

The Johannesburg Stock Exchange (JSE) benchmark FTSE/JSE all share index
rose 1.05% to end the week at 49,629. The FTSE/JSE top 40 companies’ index
rose 1.11% to 45,948.

Sentiment rose after the first rise in China’s factory output number after
it eased the lockdown in the country. However, much of the optimism was
offset by fear of a flare up in Sino-U.S. trade relations.

China is South Africa’s biggest trade partner.

The yield on the government issue due in 2026 fell 9 basis points to 7.80%,
while the 2037, 2044 and 2048 bonds all saw yields climb between 15 and 20
basis points. 

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GLOBAL MARKETS

Asia shares follow S&P 500 higher, oil and gold jump

(Reuters) - Asian shares were led higher by S&P 500 futures on Monday and
oil prices hit a five-week peak as countries’ efforts to re-open their
economies stirred hopes the world was nearer to emerging from recession.

Summer weather is enticing much of the world to emerge from coronavirus
lockdowns as centres of the outbreak from New York to Italy and Spain
gradually lift restrictions that have kept millions cooped up for months.

Federal Reserve Chairman Jerome Powell took a cautious line in an interview
over the weekend, saying a U.S. economic recovery may stretch deep into next
year and a full comeback might depend on a coronavirus vaccine.

Late Sunday, Powell outlined the likely need for three to six more months of
government financial help for firms and families.

Data out on Friday showed retail sales and industrial production both
plunged in April, putting the U.S. economy on track for its deepest
contraction since the Great Depression.

Closer to home, data in Japan confirmed the world’s third largest economy
slipped into recession in the first quarter, putting it on course for its
worst postwar slump as the coronavirus takes a heavy toll.

Adding to the uncertainty were the trade tensions between the United States
and China, with Beijing warning it was opposed to the latest rules against
telecoms equipment company Huawei .

MSCI’s broadest index of Asia-Pacific shares outside Japan still edged up
0.4%. Japan’s Nikkei rose 0.6% and Chinese blue chips 0.3%.

More carefree were E-Mini futures for the S&P 500 which added 1.1%, even
though results from a raft of U.S. retailers this week are likely to make
grim reading.

EUROSTOXX 50 futures also gained 1.5% and FTSE futures 1.4%.

Dealers reported much chatter about a possible treatment for COVID-19 from
drug maker Sorrento Therapeutics which saw its shares soar on Friday.

Another focus will be the U.S. Treasury Department’s first auction for its
20-year bond on Wednesday. Treasury plans to borrow a record amount of
nearly $3 trillion this quarter.

So far, the market has easily absorbed the flood of new debt with 10-year
yields holding to a tight range around 0.64%.

The dollar has also been largely range-bound, with its safe-haven appeal
keeping it well supported overall. Against a basket of currencies, it was
last at 100.380 having drifted 0.7% higher last week.

The euro was steady at $1.0826, while the dollar was a fraction firmer on
the Japanese yen at 107.10.

The pound touched a seven-week low at $1.2073 after the chief economist of
the Bank of England said it was looking more urgently at options such as
negative interest rates and buying riskier assets to prop up the economy.

In commodity markets, the flood of liquidity from central banks combined
with record-low interest rates to help lift gold to a seven-year peak. The
metal was last up 1.2% to $1,762 an ounce, with silver and palladium also on
a roll.

Oil prices rose as demand picked up as countries around the world eased
travel restrictions.

Brent crude futures firmed 96 cents to $33.46 a barrel, while U.S. crude
rose 98 cents to $30.41.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper rises on demand hopes as economies reopen

(Reuters) - Copper prices climbed on Monday as the reopening of economies
paralyzed by the coronavirus crisis boosted hopes of a revival in demand for
metals.

Three-month copper on the London Metal Exchange (LME) rose 1% to $5,234.50 a
tonne by 0137 GMT, while the most-traded July copper contract on the
Shanghai Futures Exchange (ShFE) advanced 0.3% to 42,940 yuan ($6,045.08) a
tonne.

Summer weather is enticing much of the world to emerge from coronavirus
lockdowns as centres of the outbreak from New York to Italy and Spain
gradually lift restrictions that have kept millions cooped up for months.

FUNDAMENTALS

* OTHER PRICES: LME aluminium rose 0.7% to $1,472 a tonne and nickel
advanced 0.8% to $11,955 a tonne, while zinc was up 0.7% to $1,975 a tonne
and lead increased 0.7% to $1,611 a tonne.

* SHANGHAI PRICES: ShFE aluminium climbed 1.4% to 12,730 yuan a tonne and
zinc advanced 1% to 16,580 yuan a tonne, while nickel fell 0.6% to 99,150
yuan a tonne.

* DAYE: China Daye Non-Ferrous Metal Mining Ltd, one of the country’s top
copper producers, said its refined copper output came in more than 10% below
target in the first quarter as the coronavirus outbreak hit operations.

* ZAMBIA COPPER: Zambia reopened its Nakonde border with Tanzania on Friday
for cargo after a five-day closure of the transit point for copper and
cobalt exports and fuel imports, but people were not allowed to cross.

* CHINA: The danger of a second wave of infections is looming large in
China, Chinese government’s senior medical adviser Zhong Nanshan told CNN.

* BUSINESS: China and South Korea have consulted Japan about easing border
controls on business travellers to help revive business activities, the
Yomiuri newspaper reported.

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
report shall be solely responsible for making their own independent
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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