Bulls n Bears Daily Market Commentary : 22 May 2020

Tue May 26 04:28:50 CAT 2020

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Bulls n Bears Daily Market Commentary : 22 May 2020

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Zimbabwe Stock Exchange Update

Market Turnover ZWL$50,134,337.80 with foreign buys at NIL and foreign sales
were ZWL $11,186,397.40 Total trades were 288.

The All Share index gained another 46.36 points to close at 913.24 points.
Insurance giant OLD MUTUAL LIMITED led the movers with a $6.6165 gain to
close at $74.6665, CAFCA  rose by $4.7500 to close at $28.7500 and NATFOODS
gained $2.5000 to $36.1000. INNSCOR also increased by $2.2395 to $13.8461
and DELTA   traded $1.4358 stronger at $12.0108.

Gains were offset by losses in RIOZIM which dropped by $7.8000 to $7.800,
HIPPO VALLEY ESTATES which eased $1.0358 to $8.8042 and FIRST MUTUAL LIMITED
which traded $0.2796 lower at $2.5004. FIRST MUTUAL PROPERTIES  also
decreased by $0.1500 to $2.0000 and AMALGAMATED REGIONAL TRADING   was
$0.1154 weaker at $1.5238.

 Global Currencies & Equity Markets

South Africa

South African rand slips on U.S.-China tensions

(Reuters) - South Africa’s rand slipped against the dollar on Monday as
tension between the United States and China over civil liberties in Hong
Kong dented appetite for riskier assets.

At 1525 GMT, the rand traded at 17.6750 per dollar, 0.4% weaker on the day,
alongside falls in other emerging market currencies like the Russian rouble.

Over the weekend, the White House said China could face U.S. sanctions as
Beijing pressed ahead with a national security law in Hong Kong that
threatens the city’s status as a financial hub.

But some economists predicted the rand would resume an upward trajectory
before long, after gains of more than 4% against the U.S. currency so far in
May.

Investec analysts predicted the rand would strengthen towards 16 per dollar
by year-end, supported by accommodative monetary policy by major central
banks and hopes for a global economic recovery from the coronavirus crisis.

President Cyril Ramaphosa on Sunday announced a further easing in South
Africa’s lockdown restrictions from June 1, but the market reaction was
muted.

South Africa’s economy was in bad shape before the COVID-19 pandemic struck,
with repeated bailouts for ailing state firms like power utility Eskom and
South African Airways a drain on public finances.

On the Johannesburg Stock Exchange (JSE), the Top-40 Index closed down 0.17%
at 46,351 points and the broader All-Share Index slipped 0.15% to 50,074
points.

Miner AngloGold Ashanti was one of the biggest losers on the blue-chip
index, falling 4.3% after it said on Sunday that its Mponeng mine would be
closed after 164 workers tested positive for the novel coronavirus.

It said shortly after market close on Monday that the number of employees
that had tested positive for the virus had risen to 196.

Government bonds were slightly firmer on Monday, with the yield on the 2030
bond down 6.5 basis points to 9.05%. JSE data showed offshore investors
bought 2.17 billion rand of bonds last week. 

Uganda

Ugandan shilling unchanged as banks' appetite flat

(Reuters) - The Ugandan shilling traded unchanged on Friday amid flat demand
for hard currency from commercial banks and merchandise importers.

At 0923 GMT commercial banks quoted the shilling at 3,785/3,795, same level
as Thursday’s close.

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India

Weak rupee leads Indian trade body to lift cotton export estimate

(Reuters) - India’s cotton exports could rise to 4.7 million bales in
2019/20, up 12% from the previous estimate, as a fall in the value of the
rupee to a record low made shipments competitive, a trade body forecast.

Higher exports by the world’s biggest cotton producer could put pressure on
global prices, which are trading near their highest level in more than two
months.

Indian exports could also limit shipments from rivals such as the United
States, Brazil and Australia to key Asian buyers such as China, Bangladesh
and Vietnam.

The rupee’s fall has made Indian cotton the cheapest in the world and
attractive for Asian buyers, Atul Ganatra, president of the Cotton
Association of India (CAI) said.

Indian cotton was sold at around 62 cents per pound on a cost and freight
basis (C&F) to Asian buyers such as Bangladesh, while the supplies from the
United States were available at around 70 cents, Ganatra said on Monday.

The South Asian country exported 4.2 million bales in 2018/19, the lowest in
a decade.

India is expected to produce 33 million bales in the marketing year ending
Sept. 30, down 7% from the previous estimate, the CAI said.

“Sowing of winter crop was possible this year due to availability of water.
Many farmers did not wait for the last picking of cotton. They uprooted
cotton plants to make space for winter crops,” Ganatra said.

Despite lower production and higher exports, India will have ample surplus
due to a steep fall in the consumption, which the CAI said could drop to 28
million bales in the current year, down 15% from the previous estimate. (1
Indian bale = 170 kg) 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Barrick pays Tanzania initial $100 mln after gold shipments resume

(Reuters) - Barrick’s Tanzania subsidiary Twiga Minerals has resumed exports
of gold concentrate after receiving clearance for its first shipments since
the lifting of a government ban imposed during a tax dispute with the mining
company.

The dispute originally involved Acacia Mining, which was taken over by
Barrick last year. The Tanzanian government imposed a ban on exporting
mineral concentrates in 2017 after accusing Acacia of tax evasion.

Tanzania said it would lift the ban on Jan. 24 when the two parties signed a
deal in which the government took a 16% stake in Twiga Minerals - a new
joint venture managing Barrick’s three gold mines.

The deal to end the dispute included a settlement of $300 million to be paid
by Barrick to the government.

Earlier on Monday Simon Msanjila, permanent secretary at Tanzania’s ministry
of minerals, told Reuters that Twiga has been allowed to export the gold.

Barrick CEO Mark Bristow told Reuters on Jan. 27 that the gold to be
exported was worth between $260 million and $280 million.

The more than three-month wait to export the containers has played in
Barrick’s favour, given that the price of gold has climbed by about 9% since
the end of January, with investors buying the precious metal as a safe-haven
asset as the coronavirus pandemic spread.

Barrick also said that 90% of outstanding land claims at its North Mara mine
have been settled, with payment scheduled to start on Monday. The North Mara
mine has been hit by disputes pitting the community against the mining
company.

Shanghai copper slips for second day as U.S.-China tensions simmer

(Reuters) - Shanghai copper prices fell for a second day on Monday, as
investors focused on tensions between the United States and top metals
consumer China, whose annual parliament meeting continues this week, and as
supply constraints eased.

While copper stocks in Shanghai Futures Exchange warehouses dropped at the
fastest rate in nearly eight months last week, China's copper consumption is
weakening as a backlog of factory orders clears and the call on refined
metal to replace limited scrap supply fades, Jinrui Futures said.

Supply-side support for copper prices is also weakening with the resumption
of some mining in South American countries after coronavirus-related
closures, Jinrui Futures added.

The London Metal Exchange is closed on Monday for the Spring Bank Holiday
and reopens on May 26. 

    FUNDAMENTALS

* COPPER: The most-traded July copper contract on the ShFE  fell as much as
1.2% to a one-week low of 43,210 yuan ($6,054.36) a tonne, before closing
0.2% lower at 43,650 yuan.

* COPPER: China's Tongling Nonferrous will in July start up a new 400,000
tonnes per year copper smelting project in Inner Mongolia after shutting
down an older plant, a government statement said.

* STRIKE: Workers at China Molybdenum's Tenke Fungurume copper-cobalt mine
in Democratic Republic of Congo ended a one-day strike on Sunday after
agreeing a compromise with management over compensation for working in
isolation.

* OTHER METALS: The ShFE complex ended mixed, with nickel  closing down 2%
and zinc ending 0.2% lower, while lead closed up 1.7%, aluminium gained 0.3%
and tin finished flat.

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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