Bulls n Bears Daily Market Commentary : 20 May 2020

Thu May 21 07:13:44 CAT 2020

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Bulls n Bears Daily Market Commentary : 20 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$41,416,209.93 with foreign buys at ZWL$779,942.00 and
foreign sales were ZWL $3,390,060.00 Total trades were 267.

The All Share index added another 46.80 points  to close at 835.05 points.
BAT led the movers with a significant $23.6667 gain to close at $142.0000,
RIOZIM rose by $1.5000 to $12.0000 and INNSCOR was $1.4673 firmer at
$11.5972. SEEDCO INTERNATIONAL LIMITED also increased by $1.0614 to end at
$6.3900 and SEEDCO traded $0.8873stronger at $5.3250.

Trading in the negative; TURNALL eased $0.0454 to $0.5746, OK ZIMBABWE
dropped $0.0177 to $3.9993 and STAR AFRICA CORPORATION was $0.0111 lower at
$0.1703. AFRICAN SUN  also decreased by $0.0008 to $0.7192 and BINDURA was
$0.0001 weaker at $0.9975.

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  Global Currencies & Equity Markets

South Africa

South Africa's rand firms to 5-week highs, stocks continue to move up

(Reuters) - South Africa’s rand edged up on Wednesday as global risk
appetite improved on hopes of an economic recovery, though investors
remained cautious a day ahead of a central bank rate decision.

Stocks continued their upward trajectory, following other global markets on
renewed optimism of economies opening up and increasing demand.

At 1500 GMT the rand was 2.15% firmer at 17.9510 per dollar, trading at its
strongest levels since April 10.

The rand’s strength mirrored gains in the euro, which climbed towards a
two-week high as a Franco-German proposal for a common fund that could move
Europe closer to a fiscal union boosted demand for the currency.

Back at home, investors were waiting for the South African Reserve Bank
(SARB) interest rates decision on Thursday.

A Reuters poll of analysts forecast the SARB to cut rates by 50 basis points
(bps) to 3.75%, but some see the possibility of a deeper, 100 bps cut.
That’s on top of 225 bps-worth of rate reductions since March.

On the stock market, the benchmark FTSE/JSE all-share index was up 0.37% to
end at 52,143 points, a 10-week high, while the top 40 companies index
closed up 0.46% to 48,380.

Government bonds firmed, with the yield on the 10-year instrument due in
2030 falling 23 basis points to 8.98%. ($1 = 0.9098 euros) 

Kenya

Kenyan shilling steady, tight liquidity helps

(Reuters) - The Kenyan shilling held steady on Wednesday supported by tight
liquidity in the local money market that countered importer dollar demand,
traders

said.

At 0748 GMT, commercial banks quoted the shilling at 106.70/90 per dollar,
the same as Tuesday's close.

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GLOBAL MARKETS

Asia shares temper rally, await China policy meeting

(Reuters) - Asian shares stepped back slightly and U.S. stock futures fell
on Thursday as lingering caution about the long-term impact of the
coronavirus outbreak offset some of this week’s enthusiasm over re-opening
of economies.

Investors were also looking ahead to a key policy gathering in China that
may yield more economic stimulus, while recent data around the world
underscored that a sustainable recovery is several months away.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up just
0.04%, having rallied around 3% so far this week. S&P 500 e-mini stock
futures fell 0.66%. Broad risk appetite has been checked somewhat by
escalating tensions between the United States and China due to President
Donald Trump’s criticism of Beijing’s handling of the coronavirus outbreak.

Australian shares, which have been hampered by concerns about a trade row
with China, pulled back slightly from a two-month high.

Japan’s Nikkei stock index slid 0.05% after data showed the country’s
exports collapsed in April.

Shares in China fluctuated between gains and losses before the start of the
annual parliament meeting on Friday.

The focus will be on Premier Li Keqiang’s 2020 work report on the opening
day of the National People’s Congress (NPC), where he is expected to
announce key economic targets and details on fiscal stimulus plans.

Global equities were buoyed this week as governments around the world
gradually loosened their coronavirus lockdown restrictions, but many
investors remain wary of the outlook as a raft of recent data suggested a
full-blown recovery is likely some way off.

On Wall Street, the S&P 500 gained 1.67% on Wednesday, but the positive mood
did not last long in Asia.

U.S. crude ticked up 0.45% to $33.64 a barrel, while Brent crude rose 0.64%
to $35.98 per barrel in a sign of easing concerns about a supply glut.

The dollar edged higher to $1.0964 per euro and rose to $1.2202 against the
British pound.

The greenback also gained against the Australian and New Zealand dollars in
a sign that some investors remain averse to risk.

Minutes from the U.S. Federal Reserve’s April meeting released on Wednesday
showed policymakers reaffirmed a pledge to keep interest rates near zero
until they are confident the economy is on track to recovery.

The U.S. government auctioned $20 billion of 20-year debt on Wednesday for
the first time since 1986. The 20-year yield eased slightly to 1.1602% in
Asia, while the yield on benchmark 10-year Treasury notes fell to 0.6639% as
traders sought the safety of government debt.

Another $54 billion of 20-year bonds are expected over the next three months
as the U.S. government ramps up spending to fund the economic recovery from
the coronavirus pandemic.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil gains, stocks rally on renewed recovery hopes

(Reuters) - Crude prices rose and a gauge of global equities broke out of a
three-week trading range on Wednesday as investors bet on a rapid recovery
from the coronavirus-induced recession.

Oil prices climbed 3%-4% on signs of improving demand and a drawdown in U.S.
crude inventories, while a surge in Facebook Inc and Amazon.com Inc to
record highs lifted the Nasdaq to within 5% of its all-time peak.

U.S. Treasury yields were little changed and gold edged higher, but gains
were limited as risk appetite improved.

The markets are expecting economic recovery sooner rather than later, though
there is a risk the slowdown isn’t as temporary as some think, said Michael
Arone, chief investment strategist at State Street Global Advisors in
Boston.

MSCI’s gauge of stocks across the globe gained 1.36% to within 1 point of
500, after the benchmark was unable to climb past 495 the past three weeks.

The pan-European STOXX 600 index rose 0.98% to close just shy of a
three-week high, led by the tech, chemicals and energy sectors.

On Wall Street, the Dow Jones Industrial Average rose 369.04 points, or
1.52%, to 24,575.9. The S&P 500 gained 48.67 points, or 1.67%, to 2,971.61
and the Nasdaq Composite added 190.67 points, or 2.08%, to 9,375.78.

Two-thirds of 223 fund managers surveyed by Bank of America reckon recent
equity gains indicate a bear-market rally.

Federal Reserve policymakers re-upped a pledge to keep interest rates near
zero until they are confident the U.S. economy is on track to recovery, a
detailed summary of their most recent policy-setting meeting showed.

The 10-year Treasury notes fell 2.1 basis points to yield 0.6899%.

U.S. crude inventories fell by 5 million barrels last week, Energy
Information Administration data showed, while Cushing, Oklahoma, stocks
dropped by 5.6 million barrels.

U.S. crude futures rose $1.53 to settle at $33.49 a barrel, while Brent
gained $1.10 to settle at $35.75 a barrel.

The euro extended gains on Monday’s French-German proposal for a 500 billion
euro common fund that could move Europe closer to a fiscal union.

The euro rose 0.51% to $1.0977 and the dollar index fell 0.382%. The
Japanese yen strengthened 0.15% versus the greenback at 107.57 per dollar.

U.S. gold futures settled up 0.4% to $1,752.10 an ounce.

Gold firms on stimulus wave, doubts about possible vaccine

(Reuters) - Gold rose on Wednesday amid extensive stimulus measures and
uncertainty over a possible coronavirus vaccine, but bullion's gains were
limited as risk appetite improved on hopes of an economic recovery.

Spot gold was up 0.3% at $1,749.29 per ounce by 2:05 p.m. EDT (1805 GMT).
U.S. gold futures settled up 0.4% at $1,752.10.

Stock markets climbed on hopes of an economic recovery and further stimulus.

Massive global stimulus to limit the economic damage from the coronavirus
pandemic has supported gold, considered a hedge against inflation and
currency debasement.

Gold also found support from minutes of the latest Federal Reserve meeting,
with members acknowledging the possibility of further support measures if
the economic downturn persists.

Fed Chair Jerome Powell told lawmakers on Tuesday the U.S. central bank was
looking at extending access to credit facilities to additional borrowers,
including states with smaller populations.   

Recent dismal U.S. data, including massive jobless claims, have underscored
the economic blow from the pandemic, which has infected almost 4.91 million
people globally.  

Among other precious metals, palladium gained 1.4% at $2,087.16 per ounce
after touching a one-month peak. Silver rose 0.8% to $17.53 and platinum
climbed 1.7% to

$846.39, holding above a two-month high.

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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