Business

Uganda shilling and global market report – October 24, 2016

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The Uganda shilling closed at 3451 on the US dollar. It is steady depreciation. It has firm resistance at 3400 (3425 is minor). It has support at 3500 (3475 is minor). This shilling is dropping no matter how much BoU tries to prop it up.

Poor Fiscal Policy leads to things like this. As an importer from Uganda, I like its weakness. The fact is the country imports more than it exports hence things for the shilling will not be easy. On top of that, most all exports are in natural state and not processed so the BoP depends on global commodity prices which are not very hot right now.

If Uganda had accepted Heritage Oil and Tullow to build them the 20,000 barrels per day oil refinery many years ago, they were set to put oil on the market when oil was flying. Something like $168 per barrel at that time. Now we are waiting for the 60,000 barrels per day of a refinery which no one is building and oil is hovering around $50 per barrel and sinking. Beggars can never be choosers. Basically, the shilling is now dependent on the commodities exported, people in diaspora remitting money, exporting graduates to the Middle East and donations or grants.

Gold is $1266 per ounce and basically uncanged. No flight of money into safety. No wonder the markets did well.

Brent Crude Oil closed at $51.44 after losing $0.48 per barrel. It has actually fallen more but reversed when North America joined the action and ended up recovering. It formed a hammer on this most recent drop with last week’s many white candles. From this point it could actually resume the climb but its MACD looks bearish.

I personally would not add to any positions now or download but I have a better record shorting so I would sell some puts at this level. Think about this. The proposed OPEC / Russia cut is only to reduce 200,000 barrels per day which one rig in US or Canada can pump out. Remember we are not in OPEC and we have rigs waiting to be opened up. Then you have those OPEC already bickering about their oligarchy. And all this over a meagre 200,000 barrels a day cut back spread among all of them. Kindergarten Maths. The announcement was not worth airtime.

GLOBAL MARKETS

Shanghai caught fire. The SSEC has been graceful and simply fantastic for selling calls and going long. It gained 37 points and on a nice ride to the north.

Australia lost 25 points. It opened strong but the damn Cannucks and Gringos woke up. It is bearish.

Tokyo is the best spot for sushi. If you did not know that then think how the Nikkei has not shed over 1000 points in a while now. I call the NIKK the widow maker. It has been moving very gently and bullish like you have any idea. It gained 50 points today and I would not short it.

Frankfurt gained points and closed at resistance but I swear all the DAX has to do is pull a good short squeeze and we go to the moon. ¬†There is no way I would sell puts or short it because it is just a hair below blasting through the current level. I hear Deustche Bank has problems, reporting and might need a bail out. Who even cares? The market is not worried. We all run deficits and low profits but we still be Don’t Worry, Be Happy. Jokes aside, Germans have been very resilient. Congratulations.

Paris gained 16.50 points. Looking at the CAC chart, one would think they are cousins with Germans. Another resilient tribe.

London lost 34 points. The FTSE is looking tired. It is ready for a tone down and get some rest. It has a fantabulous run but the steam has dissipated.

Toronto – everything Canada touches tuns into Gold. The TSX lost 16 points with no resistance in sight on the daily chart. What a beautiful chart.

Dow Jones Industrial Average gained 77 points but sheesh, the INDU is still iffy. Real risk takers are gonna make a killing the day after the elections. In fact, looking at the puts and calls, looks like people are leveraging by going long and shorting. If you cannot afford to lose the money, then stay on the side. I personally have not liquidated anything.

Standard and Poor gapped up and gained 10 points. Mmmh. Is the SPX betting on Clinton? It is still bearish though.

Nasdaq gapped up big time and gained 52 points. I would go long on the COMPQ. Remember Xmas gadgets and the NAS is tech heavy. Definite a good one to buy now.

GLOBAL NEWS

Some people are still dead set on killing others. The world news today was morbid.

Check out our world news at. http://www.theinsider.ug/category/world-news/#.WA6Tk8rMbqA

If you do not follow me on Social Media, you lose a lot as I share news constantly and write this business report only after the North America markets (GMT – 6).

Martha Leah Nangalama

Moncton, Canada

Twitter: @mlnangalama

WhatsApp: +15068716371 for explanation of terminology or other questions.

All opinions are mine. I have an IT and business background.

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