Unum Market Commentary: What Tariffs? + JSE Top 40, USDZAR, Gold, US Dollar Index

Unum Market Commentary: What Tariffs? +
JSE Top 40, USDZAR, Gold, US Dollar Index
              and Mondi Ltd
On Friday, the price action in global equities may have surprised many (including
me) considering that the US had officially started it's trade war with China by
imposing $34bn worth of tariffs on the world's second largest economy. While the
major indices in the US were mostly higher, even more surprising was that Asian
equities did not reflect the potential impact of a trade war. China's main index, the
Shanghai Composite was higher by 0.49% however it had been sold off significantly
over the last number of weeks. The local market however, failed to follow global
equities higher as it ended the daily mostly lower, with financials such as Standard
Bank and Firstrand leading the way down. This morning, the strong move higher in
global equities continue.

JSE

All Shares Index -0.17%
Top 40 Index -0.14%
Resources 10 -0.16%
Financial 15 -1.03%
Industrial 25 +0.09%

For the week, some of the major movers on the JSE were as follows:

JSE Top 40 - Technical Analysis
Last Close: 51446

After a strong 3-day rebound off the lows at 48370, the five-day consolidation phase
is starting to show signs of fatigue as it consolidates just below the downward trend
line and 200-day moving average (level: 51903). On Thursday we saw a rejection
candle at the 200-day while Friday saw a hanging man being printed. In the short
term, resistance is at 51684 while support is at 51222. In early Monday trade, a
strong bounce in Tencent and BHP Billiton may support the index however a
stronger rand could cap gains to a certain extent.

USDZAR - Technical Analysis

Following a period of consolidation at the downward trend line resistance, the price has
started to make a bearish reversal, with the RSI confirming this move lower, breaking the
upward trend that has been in place since 25 January (lower panel). A break below 13.38 sets
us up to test 13.22 which is the lower boundary of the upward channel, while a break of this
level could see the 200dma at 12.76 being tested. On the upside, resistance comes in at 13.68
and 13.85.

Please keep an eye on the following international high impact economic data for the
day ahead. You may also find the Unum Economic Calendar here:
http://www.unum.co.za/economic-calendar/

In currencies, the South African Rand trades as follows:

USDZAR -0.12% to 13.45
GBPZAR -0.06% to 17.88
EURZAR -0.02% to 15.82

Gold trades at $1259
Platinum at $858
Brent Crude Oil at $77.48

International Markets

This morning, Asian equities are as follows:

Nikkei 225 (+3.05%)
Hang Seng (+1.47%)
Shanghai Composite (+1.65%)

Latam Markets closed as follows:

Merval 25 (-0.73%)
Bovespa (+0.61%)
INMEX (+0.86%)

Company News

Pallinghurst Resources Limited - Monthly Operational Market Update 31
March 2018

Gemfields shareholders are advised that the Company has released information
about its business related and operational results and financial position up to and
including March 2018. The figures have been produced on a monthly-basis for both
Gemfields’ 75% owned Kagem emerald mine and Fabergé – the iconic luxury brand.
Gemfields will follow up with its Montepuez ruby mine figures in due course. The
operational results can be found on the Company’s website at
www.gemfieldsgroup.com. Shareholders are advised that all figures are
approximated and are unaudited.

Shareholders are informed that the full competent person’s report (CPR) for Kagem
Mining Limited can also be found on the Company’s website at
https://www.gemfieldsgroup.com/assets/mineral- resources-and-mineral-reserves/.
The CPR for Montepuez Ruby Mining Limitada is currently under review by the JSE
and will be released on the Company’s website once approved.

Murray & Roberts - ATON GmbH acquisition of an interest in Aveng Limited
amounting to 25.42% of its total issued ordinary shares

Shareholders are referred to the announcement released on SENS today by Aveng
regarding a notification received from ATON on Thursday, 5 July 2018, indicating
that ATON and its wholly owned subsidiary ATON Austria Holdings GmbH, have in
aggregate, acquired an interest in the ordinary shares of Aveng, such that the total
interest in the ordinary shares of Aveng now amounts to 25.42% of the total issued
ordinary shares of Aveng.

The board of directors of Murray & Roberts (“Board”) will assess this development
and provide further guidance to Murray & Roberts’ shareholders in relation to a
potential combination of Murray & Roberts and Aveng in due course.
Shareholders are referred to the announcement released on SENS on 18 June 2018
and the guidance provided by the independent board of Murray & Roberts that
Murray & Roberts’ shareholders have time to evaluate the mandatory offer from
ATON (”ATON Mandatory Offer”) and therefore are not required to take any action at
this stage. In the event that the ATON Mandatory Offer is declared unconditional in
all respects, ATON is required to release an announcement on SENS. Murray &
Roberts’ shareholders will still have 10 business days from the date of such
announcement to accept the ATON Mandatory Offer, if they choose to do so, on the
terms offered by ATON at that time.

Responsibility statement

The Board accepts responsibility for the information contained in this announcement
and certifies that, to the best of its knowledge and belief, the information contained
in this announcement is true and nothing has been omitted which is likely to affect
the importance of the information.

Aus miners:
BHP Billiton (+2.02%)
Rio Tinto (+1.35%)
S32 (+0.28%)

FANGs:
Facebook (+2.41%)
Amazon (+0.64%)
Netflix (+2.48%)
Google (+1.21%)

FTSE Miners:
Anglo American plc (-1.19%)
BHP Billiton plc (+0.31%)
Glencore plc (+0.87%)

Alibaba Holdings (+2.88%)
Tencent Holdings (+2.38%)

Gold - Technical Analysis

A persistently stronger US Dollar has seen Gold come under pressure since late-
March of this year, declining from $1350 to last week's year-to-date low of $1238
which is in line with the incline support in place since November 2015 as well as the
swing low seen December 2017. As per the weekly chart below, the price trading
just above the 200-week moving average has attracted interested parties. While the
price is managing to hold onto the incline support, the RSI has broken this level and
is now in bearish territory, trading at the lowest level since January 2017. Although
the RSI is trending lower, traders should bear in mind the US Dollar Index breaking
down which may help gold. Weekly Chart Below:

US Dollar Futures (Daily Chart) - As highlighted previously, there are a number of
way to participate in US Dollar weakness. What comes to mind (and to name a few)
is Emerging Markets e.g. SA inc shares, commodities, commodity currencies (AUD,

CAD), US Multinationals (e.g. Coca Cola). To get more insight, please contact
the trading desk or open a trading account.

Mondi Ltd

After closing it's gap at R373, Mondi's share price tested the lower boundary of the
upward channel that has been in place since February. This rebound off the upward
trend line saw the share make an unsuccessful attempt to break above the previous
high of R373. We now see the price at the lower boundary of the channel with the
RSI testing support, which, if breached, could see a change in medium term trend
and an opportunity to for traders to take a short/sell position, with a potential test of
the 200-day simple moving average at R333.

All the best,

Lester Davids
Unum Trading Desk Analyst
e-mail: clientservices@unum.co.za
Tel: 011 384 2923