Bulls n Bears Daily Market Commentary : 11 September 2020

Fri Sep 11 16:31:16 CAT 2020

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Bulls n Bears Daily Market Commentary : 11 September 2020

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ZSE commentary

ZSE northward trend continues

ZSE remained afloat in week-ending session as three of the benchmarks closed
pointing northwards. The All Share Index gained 5.38% to 1,764.66pts while,
the Industrial Index added 2.47% to 5,656.15pts. The blue chips index put on
1.97% to 1,199.28pts while, the resources index shed 0.52% to 3,162.30pts.
Financial services group ZBFH headlined the risers’ pack on 19.99% surge to
$13.2000, trailed by construction group Masimba which garnered 19.86% to
close at $1.6600. Dairibord extended 18.56% to settle at $10.4073 while,
banking groups CBZ and FBC rose 13.85% and 10.83% to see the former close at
$53.7904 while, the latter ended at $11.0019. Other notable gainers were BAT
(+7.30%), Padenga (+2.75%), Hippo (+1.68%) and SeedCo Limited (+0.71%).

Leading the shakers of the day was property concern ZPI which trimmed 16.61%
to $0.5775, followed by hotelier African Sun which let go 8.87% to settle at
$1.5036. Beverages group Delta succumbed 6.46% to end at $22.3767 while, ART
slipped 3.73% to $2.2143. Brick manufacturer Willdale completed the top five
fallers of the day after retreating 2.83% to $0.2608. Gainers outweighed
fallers by a count of two leaving the market with a positive breadth.
Volumes dipped 47.74% to 4.95m shares while, turnover dropped 33.21% to
$38.93m. Volume drivers of the day were OKZIM (39.56%), Econet (17.52%) and
MedTech (17.08%). Top value leaders were CBZ, OKZIM and Econet which claimed
a combined 65.93% of the outturn. Foreign purchases ballooned 141.42% to
$3.35m which represents 8.61% of the day’s turnover while, sales tumbled
91.84% to $1.63m claiming 4.18% of value. –efesecurities
<mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Sudan

Sudan declares state of economic emergency due to fall of currency

KHARTOUM (Reuters) - Sudan declared an economic state of emergency on
Thursday after its currency fell sharply in recent weeks due to “systematic
vandalism,” officials said.

The transitional government, in charge of the country since the ouster of
Omar al-Bashir last year, will set up special courts in the next days to
fight smuggling and other illicit activities undermining the economy,
officials told a televised news conference.

The pound had fluctuated drastically in recent days, prompting major food
suppliers to halt distribution of their products and pushing prices of food
up between 50% and 100% at supermarkets and retailers, a Reuters witness
said.

It comes at a time of record Nile River flooding that has left tens of
thousands of people homeless. The government said it had allocated more than
150 million Sudanese pounds ($2.73 million) to help flood victims, the state
news agency reported.

The government under Bashir had previously tried to crack down on the
black-market traders by arresting some of them, but others remained
persistent. The currency has been devalued four times since 2018.

Inflation in Sudan is second only to that of Venezuela, with the headline
rate climbing to 143.78% in July from 136.36% in June.

Security forces would also step up controls at borders and airports to stop
a smuggling of commodities such as gold, officials said.

Nigeria

Nigeria's central bank told to stop giving forex for food imports

ABUJA,  (Reuters) - Nigerian President Muhammadu Buhari on Thursday directed
the central bank to stop issuing foreign exchange for food and fertiliser
imports, according to a statement by his spokesman.

It follows a similar order the president issued last year that the
nominally-independent bank only partly followed, with some food importers
still receiving foreign exchange.

Since his election in 2015, Buhari has sought to cut foreign imports,
particularly agricultural products. Expanding Nigeria’s farm sector is a key
pillar of his economic policy.

But the bans on imports like rice have seen prices surge, sparking
widespread frustration.

Nigeria’s foreign reserves have been battered as the central bank spends
billions of dollars on costly programmes such as propping up the local naira
currency despite double-digit inflation.

There was no immediate, public reaction from the central bank to Buhari’s
comments, though its governor was present at the meeting where the order was
given.

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GLOBAL MARKETS

Equities edge higher but political concerns weigh on sentiment

NEW YORK, (Reuters) - Global equities and U.S. government bonds edged higher
Friday as investors weighed better-than-expected corporate earnings and
increased M&A activity in Europe against political concerns ranging from
November’s U.S. elections to Brexit.

Growing fears over a messy no-deal Brexit dragged sterling to new
5-1/2-month lows after the European Union told Britain it should urgently
scrap a plan to break their divorce treaty.

MSCI’s gauge of stocks across the globe gained 0.45% following modest gains
in Europe and Asia. Japan’s Nikkei rose after Tokyo dropped its coronavirus
alert by one notch from the highest level as COVID-19 cases trend down.

European indexes were bolstered after telecoms and cable group Altice Europe
said its founder had offered to take the company private, sending its shares
up more than 24% .

In morning trading on Wall Street, the Dow Jones Industrial Average rose
153.71 points, or 0.56%, to 27,688.29, the S&P 500 gained 23.02 points, or
0.69%, to 3,362.21 and the Nasdaq Composite added 103.22 points, or 0.95%,
to 11,022.82

Shares of cloud services company Oracle Corp and exercise bike maker Peloton
Interactive Co both jumped after better-than-expected earnings.

The NYSE Fang+ index of big 10 tech companies has lost 5.4% so far this week
- its biggest weekly loss since the market turmoil in March if sustained by
the end of Friday.

Still, the index has more than doubled from its March trough, and investors
have gathered that high valuations are justifiable in light of near-zero
interest rates in much of the developed world and massive liquidity the
world’s central banks have created.

Many investors have said the sell-off was a healthy correction.

Yet, with the world’s stocks still trading near the most expensive levels
relative to the profit outlook since the 2000 tech bubble, some analysts
called for caution.

In currency markets, the British pound was set for its worst week against
the euro and the dollar since mid-March. On Friday it was down 0.1% against
the euro at 0.9285 pence and 0.2% to the dollar to $1.2825.

The European Union is ramping up preparations for a tumultuous end to the
four-year Brexit saga after Britain explicitly said this week it plans to
break international law by breaching parts of the Withdrawal Agreement
treaty signed in January.

The dollar index fell 0.106%, with the euro up 0.3% to $1.1848.

Benchmark 10-year notes last rose 2/32 in price to yield 0.6772%, from
0.684% late on Thursday

Oil prices were under pressure from a surprise rise in U.S. stockpiles and
weak demand due to the coronavirus pandemic.

U.S. crude recently fell 0.4% to $37.15 per barrel and Brent was at $39.64,
down 1.05% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Asia Gold-Still no takers as Indian dealers offer discounts for fourth week

(Reuters) - Physical gold dealers in India were forced to offer discounts
for a fourth straight week as bullion remained unattractive for most retail
consumers.

In India, the second-biggest buyer after China, demand took a further hit
due to the start of ‘Shradh’, a two-week period considered inauspicious to
buy gold and other assets.

Local gold futures traded around 51,445 rupees per 10 grams on Friday,
having hit an all-time high of 56,191 rupees last month.

Discounts eased to $30 an ounce over official domestic prices, inclusive of
12.5% import and 3% sales levies, from last week’s $40.

While demand usually picks in the run up to the October- November festival
season, a worsening COVID-19 outbreak has hammered sentiment, with India’s
economy shrinking by nearly a quarter in April-June.

Premiums were unchanged at $0.80-$1.50 an ounce versus the benchmark.

In China, demand remained weak with gold sold at $45-$50 discounts, versus
last week’s $56 level.

Discount may narrow, especially going into the fourth quarter wedding
season, said Samson Li, a Hong Kong-based precious metals analyst at
Refinitiv GFMS,

Japanese premiums were unchanged at $0.50.

In Bangladesh, domestic prices were hiked with the best quality gold priced
at 74,008 taka ($874.49) per Bhori, or 11.664 grams, with a higher dollar
driving up import costs.

Meanwhile, Thailand’s central bank on Thursday said it would soon allow gold
trading in U.S. dollars, as the baht remained strong.

Copper slips on strong dollar, China demand hopes limit losses

(Reuters) - Copper prices dropped to a one-week low on Friday as the U.S.
dollar rebounded, setting the LME benchmark on track for its first weekly
loss in five, but hopes of increased demand in top metals consumer China
lent some support.

Three-month copper on the London Metal Exchange fell as much as 1.2% to
$6,589 a tonne, before turning 0.2% higher by 0717 GMT. The contract was on
track for a 0.5% loss this week.

Copper on the Shanghai Futures Exchange closed down 0.7% at 51,680 yuan
($7,559.53) a tonne, paring losses after also hitting its lowest since Sept.
4.

The dollar index rebounded after a steep drop against the euro in the
previous session, making metals more expensive for buyers holding other
currencies.

Given fluctuations in the dollar index, copper prices have been “in a
tangled and turbulent pattern”, said analysts at Huatai Futures in a note.

Copper's pullback also tracked data that showed LME inventories of the metal
MCUSTX-TOTAL ticking higher on Thursday.

Research group Antaike raised its 2020 forecast for China’s refined copper
imports for the second time this year, while the country’s copper scrap
imports are expected to fall about 50% this year, according to an industry
official.

Other base metals also fell on Friday dragged down by concerns over Brexit,
fading hopes of a further U.S. fiscal stimulus, and data suggesting the U.S.
labour market’s recovery from the coronavirus crisis has stalled.

* In Shanghai, aluminium slipped 0.9%, nickel lost 0.3%, lead slumped 1%,
and tin dropped 1.5%, but zinc climbed 0.7%.

* On the LME, aluminium dipped 0.4% to $1,783 a tonne and tin slumped 0.5%
to $17,910, but zinc rose 1.1% to $2,443.50, nickel gained 0.2% to $14,860,
while lead added 0.6% to $1,893.50.

* The Shanghai exchange expects to roll out its alumina futures contract in
2021.

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
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