Wednesday, May 25, 2016

#Uganda shilling and global market report, May 25, 2016

The Uganda shilling closed at 3385 on the US dollar, 4976 on the British pound, 3776 on the Euro, 50.32 on the Rupee, 33.55 on the Kenyan shilling, 2598 on the Canadian dollar, 2455 on the Australian dollar and 1.55 on the Tanzanian shilling. 
In less than 2 weeks, the Ugandan shilling has weakened a lot.  Where we thought (I thought) it would crash through its resistance at 3300 and fly higher, it has not done so.  
We still have to give credit to Dr. Mutebile (BOU - Bank of Uganda)  for having managed to reign it in and not seen it crash hard during the election and post election turmoil. 
Elections are now over and what we are facing is the reaction from all the importers (importers are key since exporters are minute) and the next few weeks will tell us where the shilling is going.  
It does not help much that Uganda's "biggest trading partner" is China.  You shall remember that China devalued their currency multiple times this year and we are not even half way yet.  Those who ignore the China effect also forget that Uganda's other big trading partner is India which happens to trade a lot with China.
On the bright side, Uganda now wants to concentrate on exports within the EAC (East African Community) instead of relying on exports to Europe, North America, etc.. Too bad the countries they (EAC) prefer are also hurting economically.
Coffee Arabica closed at $3.11 a kilo.
Coffee Robusta closed at $1.86 a kilo.
The coffee odds are favouring Robusta these days.  Do not lose heart because Arabica moves really well and all coffee traders need to take the advice seriously.  Mix your shipments.  Most of you ship out 5 containers a month (25,000 kgs) so why not do 3 of Arabica and 2 of Robusta?  Robusta can cushion you on days like these.  Any movement of even $0.05 per kg affects the bottom line and Arabica is playing with these numbers a lot lately.  But then again, commodities are hurting.
Gold is trading at $1224 per ounce and lost $1.45 per ounce so far.  Nothing to write home about.
Oil (Brent Crude) closed at $49.89 per barrel after gaining $0.79 per barrel.  Oil keeps pulling back and then recovering.  A professional trader once told me that when you make profit, book 50% of it and then watch the other 50% ride the wave.  
We will see pull backs when people book half of the profits and let the rest ride.  The fact is when Iran got the sanctions lifted, we all expected Iran to flood the markets with extra oil to the tune of 1 million barrel a day.  They probably did it but remember that OPEC was strategizing to cut back supply to stabilize prices.  
Meanwhile US was like "heck, we have so much crude and can produce it cheaply and beat remain competitive". Canada is in the same boat since most of the explorers of crude and natural gas here are American companies.  What was even more shocking was while the biggest producers need $60 per barrel to break even (meet costs), Saudi Arabia can pump out crude at $9 for break even.  Good luck Africa!
Shanghai lost 7 points but is forming a base to soon go higher.
Hong Kong gained 7 points and put in a nice play indicating that it will go up.  The falling is over with.
Tokyo jumped up by 259 points which is normally nothing big but it jumped up and closed above its 50 day Moving Average (MA).  The movement was tiny given that  the $NIKK (Nikei) can move some 1000 points in one day but this little move and jumping above a key resistance point means that good things are coming to Japan, God willing.
Frankfurt jumped up and shot through its 200 day MA gaining 148 points above yesterday.  The chart is awesome.  The $DAX closed above its 200 day MA.  Beautiful play.
Paris gained 50 points and formed a bullish pattern too (more buyers than sellers).  The chart is beautiful although not as cute as Germany.
London gained 44 points.  This is a good one.  London bridge is not going down.  This Index fell through support and then just shot up above the resistance.  BREXIT maybe?  Chart of the day.  It crashed under its 50 day and 200 day MA then just shot up above both resistance lines.
North America:
Toronto gained 101 points.  Which should not be a surprise since the $TSX is oil heavy.  It has been on a tear.  Toronto is not one place you want to end up being short.
Dow Jones Industrial Average gained 145 points and also rocked up above its 200 day MA.
Standard and Poor formed a similar pattern to its cousins.  It gained 14 points and formed a chart even better than the Dow.
NASDAQ did the same as the other North American indices.  This is a bull market people.  Things are going up and gravity is being ignored.
Check the World News on The Insider.
Martha Leah Nangalama
The writer has an IT and business background.  All opinions do not reflect any organisation or company I am affiliated with.

No comments:

Post a Comment