Bulls n Bears Daily Market Commentary : 03 August 2020

Mon Aug 3 16:17:38 CAT 2020

 <http://www.bulls.co.zw/> Bulls.co.zw        <mailto:bulls at bulls.co.zw>
Views & Comments        <http://www.bulls.co.zw/blog> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 03 August 2020

 <http://www.zb,co.zw/> ZSE commentary

Slow start trading as market opens net sellers

The market resumed trading on a slow note after a month of suspension. The
session was characterised by low activity aggregates with all benchmarks
Indices closing in the red. The mainstream All Share Index lost 4.495% to
end lower at 1708.50pts with the Industrials reversing gains on a 4.54%
slump to see it closing at 5603.61pts. The Top Ten Index was the main
casualty amongst the indices after succumbing 5.60% settle to 1163.79pts as
most heavies opened net sellers. The less active Mining Index was 2.43% down
at 3898.45pts on the back of losses sustained in RioZim. Volumes exchanged
dipped 95.97% to 1.84m shares, yielding a value outturn of $10.25m, which
was a 96.59% dip from the last trading session. Medtech anchored the volumes
traded claiming 27.14% of the total while, Delta anchored 37.47% of the
turnover.-EFE Securities 

Global Currencies & Equity Markets

South Africa

South Africa's rand leads EMEA FX losses ahead of data-heavy week

(Reuters) - Emerging market currencies retreated on Monday as rising
coronavirus cases and concerns over the U.S. economy weighed on investor
sentiment, while most stocks inched higher.

South Africa’s rand was among the worst performing currencies in Europe,
Africa and the Middle East, hurt by increased safe-haven demand as concerns
arose over a slowing U.S. economic recovery from the pandemic.

Currencies in Hungary and the Czech Republic also fell to the euro, while
gold benefited from the risk-off sentiment.

The dollar, which marked its worst month in a decade in July, rose amid some
squeezing out of crowded short positions and safe-haven demand.

Markets are now looking to a data-heavy week of inflation and business
activity readings, as well as employment figures from the United States on
Friday.

While recent data has indicated some economic recovery from lows hit during
the height of the pandemic, the possibility of new lockdown measures seems
likely to upset the fledgling uptrend.

Polish stocks were a touch higher, while the zloty fell to the euro after
factory activity in the country expanded for the first time since late-2018
in July.

Most EMEA stocks and currencies had marked strong gains in July, as they
continued to recover from pandemic-led losses. Optimism over a possible
vaccine, along with some improving economic indicators, had also helped.

Russia’s rouble shrugged off weak oil prices and strengthened slightly, as
the end neared of a dividend payout period that tends to pressure the
currency.

Chinese stocks closed higher after data showed improving factory activity,
spurring some gains across broader emerging markets.

Turkish markets were closed for a holiday.

Kenya

Kenya central bank has 'plenty of firepower', governor says

(Reuters) - Kenya’s central bank governor said on Thursday that policymakers
still had plenty of firepower left to limit the damage to the country’s
economy from the coronavirus crisis.

Policymakers cut the benchmark lending rate by a total of 125 basis points
at the onset of the crisis, lowered cash reserves for commercial banks and
allowed them to restructure distressed loans.

Njoroge said good weather had boosted production volumes and exports of key
crops like tea.

A rebound in exports of flowers, as well as projected higher production of
other crops like maize and higher production of cement, promised a quicker
economic recovery than earlier anticipated, he said.

“All these point to strong growth in 2020 despite COVID,” he said, adding
that the bank’s economic growth forecast would be released soon.

He lowered the current account deficit forecast for this year to 5.1% of GDP
from the previous forecast of 5.8%.

He cited a better-than-expected performance in hard cash sent by Kenyans
living abroad, known as remittances, and the rebound in farm exports.

The central bank now expects remittances to grow by 1% this year, an
improvement of its initial forecast of a drop of 12.3% due to COVID-19.

The central bank was not concerned by the recent depreciation of the
shilling, which is down 6.3% against the dollar this year to date.

The bank’s Monetary Policy Committee has gone back to meeting to review
rates every two months, it said, after it started meeting every month in
March because of the coronavirus crisis.

 <mailto:info at bulls.co.zw> 

EMERGING MARKETS

Currencies set for best month in 2020 as dollar languishes

(Reuters) - Emerging market currencies were set for their best month this
year on Friday, as the dollar was on track to record its worst month in a
decade on doubts about a U.S. economic recovery, while a pick-up in Chinese
factory activity aided riskier bets.

The MSCI’s index for emerging market currencies gained 0.3% on Friday and
was up 1.5% in July, as confidence eroded in the world’s reserve currency.

The dollar fell to a two-year low a day after U.S. President Donald Trump
raised the possibility of delaying the November presidential election,
moments after data showed U.S. GDP contracted at the sharpest pace since the
Great Depression in the second quarter.

A weaker U.S. currency and excess liquidity stemming from stimulus packages
in developed markets have boosted buying interest in emerging market
currencies.

South Africa’s rand edged higher, outperforming its peers in July, as
investors valued the rand’s yield differential, or carry, keeping focus off
the country’s mounting fiscal fragility.

The Turkish lira edged up as a four-day holiday kicked off and thinned
market liquidity. It was recently plagued with concerns of depleted FX
reserves and costly state interventions to steady the currency.

Russia’s rouble largely underperformed its peers for the week and the month,
but analysts say a worse oil price outlook, prospect of further rate cuts
and speculation of more U.S. sanctions are not the only causes for its
weakness.

Further supporting the risk-on mood was data which showed China’s factories
stepped up activity in July for a fifth straight month on improving
prospects for electrical and pharmaceutical goods.

Stocks in the developing world were set to clock their biggest gains since
April on improving economic indicators and global stimulus steps, but
caution prevailed due to surge in COVID-19 cases in hotspots including
Brazil, India and Russia.

Hungary’s forint was set to outperform central and eastern European units in
July, with most currencies in the region firming broadly after European
Union leaders struck a deal on the 750-billion euro ($889.50 billion)
coronavirus recovery fund early last week.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold retreats from record peak as dollar firms

(Reuters) - Gold hit a record high on Monday as fears over the economic
fallout from rising coronavirus cases bolstered its safe-haven appeal,
before inching lower as a bounce in the dollar fuelled some profit-taking.

Spot gold eased 0.2 % to $1,970.69 per ounce at 1211 GMT, having hit a
record high of $1,984.66 in early Asian trade. U.S. gold futures were 0.1%
higher at $1,986.90.

However a move to $2,000 is on the cards in the near-term, Norman added,
with a host of factors including weaker economic data and a resurgence in
the geopolitical spat between the United States and China contriving to take
gold higher.

Gold prices have surged about 30% so far this year, supported mainly by
lower interest rates and widespread stimulus measures by global central
banks to ease the economic blow from the pandemic.

Weighing on bullion, the dollar index was up 0.5% against its rivals, making
assets priced in the U.S. unit more expensive for holders of others
currencies.

Also on investors’ radars was the new U.S. stimulus plan that lawmakers are
struggling to hammer out. White House Chief of Staff Mark Meadows said on
Sunday he was not optimistic on a near-term deal for coronavirus relief
bill.

Spot gold may retreat into a range between $1,943 and $1,954 per ounce as it
failed again to break resistance at $1,982, said Reuters technical analyst
Wang Tao.

Elsewhere, silver dipped 0.6% to $24.22 per ounce, platinum rose 0.5% to
$911.17, while palladium climbed 1.2% to $2,116.20.

Oil falls as OPEC+ set to boost output

(Reuters) - Oil prices fell on Monday on fears about the economic fallout
from rising COVID-19 cases around the globe and on oversupply worries as
OPEC and its allies are set to wind back output cuts in August.

Brent crude slid 36 cents, or 0.8%, to $43.16 a barrel by 0942 GMT, and U.S.
West Texas Intermediate (WTI) crude was down 46 cents, or 1.1%, at $39.81.

In the last month, Brent has been trading in a range between $41 and almost
$45.

Coronavirus cases continued to surge in the United States and stood at
almost 18 million globally. More countries imposed new restrictions or
extended the current ones to control the pandemic.

Amid slow recovery of fuel demand due to the resurgence of the virus,
investors are also worried about oversupply, as the Organization of the
Petroleum Exporting Countries and its allies, known as OPEC+, will ease oil
supply curbs from August.

OPEC+ members have been cutting output since May by 9.7 million barrels per
day (bpd). From August, cuts will officially taper to 7.7 million bpd until
December.

Russian oil and gas condensate output increased to 9.8 million bpd on Aug.
1-2 from 9.37 million bpd in July, a source familiar with data said on
Monday.

However, oil prices found some support after a survey showed that
manufacturing activity across the euro zone expanded for the first time
since early 2019 last month. Positive manufacturing data in Asia also capped
the losses.

A Reuters poll on Friday indicated that oil is set for a slow crawl upwards
this year as the gradual easing of coronavirus-led restrictions buoys
demand, although a second COVID-19 wave could slow the pace of a recovery.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Zimbabwe

National Heroes Day

Zimbabwe

10  August 2020

Zimbabwe

Defence Forces’ Day

Zimbabwe

11  August 2020

CBZ

AGM

Virtual

14  August 2020 | 6pm

 <mailto:info at bulls.co.zw> 

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
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls ‘n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

(c) 2020 Web: <http:// www.bulls.co.zw >  www.bulls.co.zw Email:
<mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77
344 1674

Invest Wisely!

Bulls n Bears 

Telephone:      <tel:%2B263%204%202927658> +263 4 2927658

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw&sa=D&sntz=1&usg=AF
QjCNH8LYgdY55h-XKseuM8Kpr-JKdfhQ> www.bulls.co.zw 

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bulls.co.zw/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.jpg
Type: image/jpeg
Size: 3653 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 545114 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 50590 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0009.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 30149 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0010.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0011.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 30150 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0012.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image007.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20200803/af85d24e/attachment-0013.jpg>