Bulls n Bears Daily Market Commentary : 07 October 2020

Wed Oct 7 17:01:04 CAT 2020

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Bulls n Bears Daily Market Commentary : 07 October 2020

 <http://www.zb.co.zw/> 

ZSE commentary

Market Turnover ZWL$31,671,147.00 with foreign buys at NIL and foreign sales
were ZWL$4,278,444.00Total trades were 200

The All Share index lost further by 27.40 points to close at 1,547.99
points. Trading in the negative were CBZ HOLDINGS which lost $2.3500 to
settle at $40.0000, INNSCOR AFRICA eased $1.4916 to $18.4086 while ZB
FINANCIAL HOLDINGS traded lower at $14.1772 after dropping $0.8228.
DAIRIBORD ZIMBABWE went down by $0.5562 to $8.4338 and HIPPO VALLEY
decreased by $0.4839 to close the day at $13.5000. Trading in the positive
were; BINDURA   which advanced by $0.2105 to settle at $4.0905, MASHONALAND
HOLDINGS rose to $2.2000 after adding $0.2000 and ART CORPORATION traded
higher at $2.2475 after gaining $0.1530. AFRICAN SUN  added $0.0515 to
settle at $1.7265 while MEIKLES was stronger at $15.0500 after increasing by
$0.0500.

Global Currencies & Equity Markets

Nigeria

Naira gains, exchanges for N457/$

The naira gained slightly, as it exchanged to the dollar at N457/$ at the
parallel market on Tuesday.

It had earlier exchanged at N465/$ a week earlier.

The President, Association of Bureaux De Change Operators, Alhaji Aminu
Gwadabe, said, "The intervention sales of proceeds of international money
transfer operators to BDCs have always been positively impactful in the
market over the years.

The CBN had retained the official exchange rate on its website at N379/$, as
it continued moves to ensure the unification of the exchange rates in the
country.

South Africa

South African Stocks Edge Higher With Banks Helped by Rand Gains

South Africa's main stock index advance 0.2% by 9:45 a.m. in Johannesburg as
a stronger rand boosts shares in banks and gains for diversified miners
counter weakness in gold and platinum producers.

Investors will be keeping an eye on developments around a national strike
called Wednesday by unions representing workers across a range of
industries, to highlight a litany of grievances, including job losses, an
inadequate public transport system, corruption and state spending curbs.

.         Rising iron ore prices lift diversified miners, countering
weakness from precious metals producers, lifting the gauge for mining stocks
by 0.2%

.         BHP Group Plc +0.7%, Anglo American Plc +0.7%, Glencore Plc +1.5

.         Sub-index of gold stocks retreats for a second day, down 0.4% as
bullion prices dropped following President Donald Trump announcement that he
had ended talks with Democrats on a new fiscal stimulus package until after
the November presidential election, a move that roiled financial markets and
boosted the dollar.

.         Harmony Gold Mining Co. -2.1%, Gold Fields Ltd. -1.1%, Pan African
Resources Plc -1.1%, DRDGold Ltd. -0.1%

.         Sub index for platinum firms -0.1%

.         Northam Platinum Ltd. -1.8%, Sibanye Stillwater Ltd. -1.5%

.         Index heavyweight Richemont rises 0.9%. British American Tobacco
Plc +0.1%, Naspers Ltd. +0.2%, Anheuser-Busch Inbev SA +2.8%

.         Index of bank stocks advances 0.8% as the rand strengthens

.         FirstRand Ltd. +0.9%, Standard Bank Group Ltd. +1.1%, Nedbank
Group Ltd. +1.2%, Absa Group Ltd. +0.6%, Capitec Bank Holdings Ltd. +0.2%,
Investec Plc +0.4%

.         NOTE:Rand Gains as Central Bank Flags Stable Rates: Inside S.
Africa

.         Foreigners remained net sellers of South African stocks for a
third day Tuesday, disposing of 1.06 billion rand worth of shares, according
to index operator, JSE Ltd.

 <mailto:info at bulls.co.zw> 

Global Markets

Pound-Dollar Drops 0.80% after Trump Pulls Plug on Stimulus Talks, but
Further Losses not Guaranteed

Stock markets and commodities fell while the safe-haven Dollar, Yen and
Franc were bid higher after President Donald Trump unexpectedly ended
negotiations with Democrats over a large coronavirus relief and stimulus
package.

The question of whether the Democrats and Republicans would agree on a new
multi-billion dollar aid package for the covid-hit economy had become a key
concern for markets of late, with Trump earlier in the week urging fast
action on a fifth major coronavirus aid bill to augment the more than $3
trillion approved earlier this year.

But with both sides looking unable to reach a compromise Trump ultimately
pulled the plug. "I have instructed my representatives to stop negotiating
until after the election when, immediately after I win, we will pass a major
Stimulus Bill that focuses on hardworking Americans and Small Business,"
said Trump.

Senate Majority Leader Mitch McConnell, who had reportedly been cool to a
large new aid package, told reporters he supported Trump's move. He said he
thought the Republican president believed that a deal with Democrats was not
in the offing and that "we need to concentrate on the achievable."

Pound Dollar volatility

Above: Price action in GBP/USD showing the falls endured on Oct. 06, but the
market is not following through with Dollar buying on Oct. 07. If you have a
GBP/USD payment requirement and would like to lock in current levels for use
at a future point in order to protect your budget, please learn more here.

The Pound-to-Dollar exchange rate fell 0.78% on Tuesday to close the day at
1.2875 courtesy of the Dollar's surge in the wake of the news. The
Euro-to-Dollar exchange rate meanwhile fell 0.40% to close the day at
1.1733.

But the GBP/USD and EUR/USD pairs are at 1.2918 and 1.1760 respectively on
Wednesday, suggesting there has been no significant follow through overnight
as Trump made clear in subsequent tweets that he was still open to some
element of stimulus support.

This appears to have pared some of the sharp market moves that followed the
announcement that talks were off.

Jamaleh says the impact of the cessation of negotiations could work against
the Dollar because the recovery of the US economy - as also explained by
Powell a few hours before Trump's announcement - cannot yet be considered as
sure-footed, and further fiscal stimulus is essential.

One reason for U.S. Dollar strength over recent months, and even years, has
been the U.S. economic outperformance against its rivals.

Global investors have been keen to invest in this economic outperformance,
sending investment into the U.S. and thereby bidding up the value of the
currency.

Remove this exceptionalism and the Dollar understandably comes under
pressure.

However, on this particular matter, expectations for significant stimulus on
a Democrat sweep of Congress and the Presidency should limit the extent of
concerns.

Of late polls have reflected an increasing lead for Biden and the Democrats
which is cementing a view that a Biden administration will be able to offer
significant support early on in the administration, thereby taking pressure
off the Fed to potentially boost quantitative easing further or cut interest
rates.

This could be positive for the Dollar. Yet it must be noted that there are
numerous drivers of the Dollar at present, while it ultimately still remains
difficult to gauge what a Biden win would mean for the currency over the
longer term.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold, silver bulls work on price-stabilization at mid-week

(Kitco News) - Gold futures prices are lower in early U.S. trading
Wednesday, but the cash market shows firmer prices. The reason is that the
Comex gold futures market officially closed in early afternoon
Tuesday-before the late-afternoon sell off that was reflected in cash market
prices. So futures prices today have to reflect the Tuesday afternoon price
pressure. The gold market sold off sharply Tuesday afternoon following
President Trump's tweet calling for an end to U.S. stimulus package
discussions in Congress. Lately, the gold market has been acting more like a
raw commodity than a safe-haven asset. The yellow metal on many days moves
in tandem with the U.S. stock indexes-like Tuesday. December gold futures
were last down $19.30 at $1,889.50 and December Comex silver was last down
$0.296 at $23.625 an ounce.

Global stock markets were mixed overnight. U.S. stock indexes are set to
open the New York day session higher. After selling off Tuesday afternoon
following a tweet from President Trump that called for an end to additional
Covid stimulus package negotiations with the Democrats, U.S. stock indexes
rebounded overnight when Trump in another, later series of tweets walked
back his initial tweet by saying he does want certain stimulus measures
passed by Congress, including stimulus checks for Americans. The matter
remains up in the air, with there still being doubts Congress can soon agree
on a stimulus plan for Americans and U.S. businesses.

The U.S. data point at mid-week is the FOMC minutes from the last meeting,
to be released Wednesday afternoon. Fed Chairman Jerome Powell in a speech
on Tuesday said the U.S. economy is recovering from the Covid-19 lockdowns
faster than expected, but added that the pace of the recovery has slowed
recently and that it could be a long "slog" before the U.S. economy fully
recovers.

The important outside markets early today see the U.S. dollar index slightly
higher. Nymex crude oil prices are lower and trading around $39.75 a barrel.
The 10-year U.S. Treasury note yield is presently trading around 0.76%.

U.S. economic data due for release Wednesday includes the weekly MBA
mortgage applications survey, the FOMC minutes, consumer credit, and the
weekly DOE liquid energy stocks report.

Technically, the December gold futures bulls have the overall near-term
technical advantage but prices are still trending down on the daily bar
chart. Trend-line resistance that I have shown you on the daily chart
recently held fast on Tuesday. Bulls' next upside price objective is to
produce a close in December futures above solid resistance at this week's
high of $1,927.00. Bears' next near-term downside price objective is pushing
futures prices below solid technical support at the September low of
$1,851.00. First resistance is seen at the overnight high of $1,902.40 and
then at $1,927.00. First support is seen at the overnight low of $1,877.10
and then at $1,851.00. Wyckoff's Market Rating: 6.0

December silver futures bulls have the overall near-term technical
advantage. However, prices are still trending lower on the daily chart.
Silver bulls' next upside price objective is closing prices above solid
technical resistance at $25.00 an ounce. The next downside price objective
for the bears is closing prices below solid support at the September low of
$21.81. First resistance is seen at this week's high of $24.675 and then at
$25.00. Next support is seen at this week's low of $22.965 and then at
$22.50. Wyckoff's Market Rating: 6.0.

Copper up on U.S. airlines, payroll aid hopes after stimulus deal stalls

(Reuters) - Copper prices edged up on Wednesday as U.S. airlines and payroll
aid hopes helped the metal recover from earlier losses following an end to
talks on a large U.S. coronavirus stimulus bill.

Trump said Congress should quickly extend $25 billion in new payroll
assistance to U.S. passenger airlines furloughing thousands of workers as
air travel remains down sharply.

The demand came hours after Trump announced his administration would abandon
talks with congressional Democrats over proposals to spend at least $1.6
trillion in additional coronavirus relief funds.

Copper is often used as a gauge of global economic health and a U.S.
stimulus bill would have supported a recovery in the world's biggest
economy.

Three-month copper on the London Metal Exchange rose 0.2% to $6,541 a tonne
by 0731 GMT, having declined as much as 1.2% earlier in the session.

Nickel advanced 1% to $14,665 a tonne, aluminium rose 0.5% to $1,774 a tonne
and lead was up 0.7% at $1,793 a tonne.

FUNDAMENTALS

* Tesla Inc is in talks with BHP Group about a nickel supply deal, Bloomberg
News reported.

* LME cash aluminium last traded at a discount of $25.50 a tonne over the
three-month contract CMAL0-3, its smallest since July 2 as LME inventories
MALSTX-TOTAL fell to their lowest since May 18 at 1.43 million tonnes.

* BHP Group Ltd, has suspended its membership of an Australian state mining
lobby group that has campaigned against the Greens political party ahead of
an election this month in coal-rich Queensland state.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Invest Wisely!

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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
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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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