Bulls n Bears Daily Market Commentary : 07 December 2020

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Bulls n Bears Daily Market Commentary : 07 December 2020

 

 	

 

 

 	

 <http://www.zb.co.zw/> 

 

 	

ZSE commentary

 

The market closed the day with an appreciation of 1.06% to close today at a total market capitalization of ZW$204.6 billion. The All Share Index put on 2.77% to close the day at 1 733.18, the Medium Cap Index was 0.72% higher to 3 533.91 while the Top 10 Index was up 4.09% to 1 104.73. Top gains were recorded in Rio Zim up 20%, Hippo was up 19.85%, ART adding 13.46%, Econet up 11.04% and FCA adding 8.07% to close at 0.85c. Significant losses were noted in Zimplow down 17.97% and Star Africa  down 11.56%. While moderate losses for the day were in Zimre Holdings (7.71%), Turnall (2.93%) and First Mutual Life (2.34%). Elsewhere, the mining stock Bindura was down 11.26% to 303.92c.

 

Total turnover was at ZW$47.3 million in 250 trades. Econet led the turnover contribution at ZW$11.9 million. Among the counters that participated in trading, 13 counters declined against 20 that appreciated. Total trades were 250 with 5 counters remaining unchanged and 17 with zero volume. -wealthaccess.co.zw

 

 

Global Currencies & Equity Markets

 

African currencies week ahead: Kenyan, Ugandan currencies seen stable, Zambian weaker

 

NAIROBI: Kenya's and Uganda's currencies are expected to remain stable in the coming week. Zambia's is expected to be under pressure versus the US dollar.

 

KENYA - The Kenyan shilling is expected to be stable in the week ahead, with the central bank likely to step in and pump in dollars should the currency come under too much pressure from importers.

 

The shilling was trading at 110.70/90 on Thursday, down from 109.95/110.15 at the close of trading last Thursday.

 

It was expected to trade in a range of 109.00-111.00 against the dollar in the week ahead, traders said, with the central bank expected to offer support by pumping in dollars should demand pressure spark extreme volatility.

 

ZAMBIA - The kwacha is likely to continue trading down against the dollar next week due to limited hard-currency inflows.

 

On Thursday, commercial banks quoted the currency of Africa's second-largest copper producer at 21.0100 per dollar from a close of 20.9700 a week ago.

 

Zambia missed payment of a $42.5 million coupon on one of its dollar-denominated sovereign bonds last month, becoming Africa's first pandemic-era sovereign default.

 

UGANDA - The Uganda shilling is seen trading in a stable manner with dollar demand ebbing as most merchandise importers have already met their hard currency needs to pay for shipments of goods for holiday shoppers.

 

At 1121 GMT commercial banks quoted the shilling at 3,680/3,690, compared with last Thursday's close of 3,695/3,705.

 

He said the shilling was likely to swing in the 3,680-3,700 range. TANZANIA - Tanzania's shilling is likely to hold steady in the next week as inflows from tourism are expected to match demand for the US dollar from energy and manufacturing importers.

 

Commercial banks quoted the shilling at 2,314/2,324 on Thursday, unchanged from the levels recorded a week earlier.

 

NIGERIA - Nigerian naira is seen firmer on the black market in the coming week, traders said, supported by a series of central bank actions to try to prop up the currency which eased this week to a 3-1/2 year low of 500 to the dollar on unofficial market.

 

The naira traded at 470 per dollar on Thursday, recovering from the low it touched this week, after the central bank eased rules on diaspora remittances.

 

On Monday, the central bank weakened the naira to 390 per dollar for exchange bureaux mostly patronised by individuals, in an attempt to ease pressure on the currency, which has hit new lows on the black market as dollar scarcity squeezes the economy.

 

South Africa

 

Rand buoyed by improved risk sentiment

JOHANNESBURG - The South African currency rode the tailwinds of external appetite for risk assets during the early European session as dollar weakness lingered, fuelled by vaccine optimism and hopes for US fiscal stimulus according to NKC Research.

 

The favourable external backdrop provided shelter from a brittle domestic environment, as fiscal consolidation uncertainty surrounding the public wage dispute persist and South Africa recorded a worrying increase in infections.

 

 

The solid gains for higher-yielding emerging market (EM) currencies in recent weeks do not deter us from expecting a lot more. We think EM carry trades are just getting warmed up.

 

After a stellar decade during the 2000s and in the initial period after the 2008 global financial crisis, EM carry has been in a decade-long struggle, with 12-month periods of negative returns far outstripping those with positive returns. We are increasingly confident that the next 12-18 months are going to be positive for EM FX carry.

 

And, despite the inherent uncertainties surrounding longer-horizon views, there are tempting arguments to extend this constructive view on EM FX carry to a multi-year horizon similar to that seen during the decade-long period from 2002 till 2012. Expected range today R15.10/$ - R15.40/$.

 

South African bourse

 

The JSE All Share (+1.14 percent) ended in the black on Friday, reaching a 52-week high, lifted by gains large technology (+1.65 percent) and resource (+2.07 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.62 percent) traded on the back foot.

 

Brent crude oil

 

 

On Friday, the Brent oil price traded near its highest level since March fuelled by exceptions of US stimulus and the commitment by Opec+ to manage crude output over the coming months. At the close of local trade, benchmark Brent crude futures quoted at $49.03.pb. Crude prices traded steady during Asian trade this morning.

 

BUSINESS REPORT

 

 <mailto:info at bulls.co.zw> 

 

 

 

Global Markets

 

Dollar near 2018 lows as traders eye more US stimulus; sterling sheds 1%

LONDON (Reuters) - The U.S. dollar index remained near Friday’s two-and-a-half-year low on Monday after weak U.S. jobs data heightened expectations of economic aid, while sterling sank as Britain and the European Union made a last-ditch attempt to strike a trade deal.

 

 

Fears grew rose of a chaotic no-trade deal Brexit on Dec. 31 when the United Kingdom finally leaves the EU.

 

In the United States, Friday’s jobs data showed non-farm payrolls increased by 245,000 last month, the smallest gain since May, a sign the jobs recovery was slowing.

 

Talks aimed at delivering fresh coronavirus relief gathered momentum in the U.S. Congress on Friday, as a bipartisan group of lawmakers worked to put the finishing touches on a $908 billion bill. Members of Congress are expected to offer the legislation as early as Monday.

 

In addition, the Federal Reserve is expected to make more adjustments to its quantitative easing later this month.

 

 

An index that tracks the dollar against a basket of currencies was last trading up 0.2% at 91, close to 90.47, its weakest since April 2018.

 

Over the past week, the U.S. dollar sell-off has extended further, with weakness most evident against the Swiss franc, euro and Canadian dollar.

 

 

The euro fell 0.1% to 1.2110, but remained close to $1.2177, its highest since April 2018. It was unaffected by data showing booming car sales drove a stronger-than-expected jump in German industrial output in October.

 

Leveraged funds continued to add more euro long positions in the week to Dec. 1, taking the total amount of $21 billion, according to data from Commodity Futures Trading Commission (CFTC).

 

The British pound was down 1.2% at $1.3275 and by 1.3% against the euro at 91.35 pence EURGBP=D3, after reaching two-and-a-half week lows against both the dollar and the euro.

 

The biggest move in positioning happened in the Japanese yen, with hedge funds taking the total yen longs to a four-week high of a total $5.71 billion.

 

Elsewhere, the Norwegian crown fell 0.4% to 8.8250 against the dollar and 0.2% versus the euro to 10.5925, having touched earlier a two-week low against the dollar of 8.9170 and a near-three-week low of 10.7775.

 

The Swedish crown was also down, against both the dollar and the euro; the move against the euro was bigger.

 

Sweden’s central bank will keep monetary policy expansionary for as long as necessary to fight the economic effects of the pandemic, the minutes of the November policy meeting, published on Monday, showed.

 

The Australian dollar fell 0.5% at 0.7385 versus the U.S. dollar. The New Zealand dollar shed 0.3%.

 

The Japanese yen was flat versus the dollar at 104.24.

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

 

Gold prices today fall for second day, silver rates slump

Since then prices have recovered from lows as hopes of more US stimulus have brightened

 

Gold and silver prices were lower today in Indian markets as optimism around COVID-19 vaccines roll-outs offset hopes of a US stimulus package being passed this week. On MCX, gold prices edged 0.05% lower to higher to ₹49,149 per 10 gram while silver rates fell 1% to ₹63,070 per kg. In the previous session, gold futures had declined 0.2% to ₹49,209 per 10 gram while silver edged 0.3% higher. However, for the week, gold had logged gains of about ₹1,200 per 10 gram.

 

In international markets, spot gold today remained flat at $1,837 per ounce. Britain is set to become the first country to roll out the Pfizer/BioNTech COVID-19 vaccine this week. Also later this week, the US Food and Drug Administration meets to discuss the vaccine made by Pfizer/BioNTech. A top US official had earlier said that if the vaccine is authorized, distribution could begin within 24 hours.

 

The prospects of more US stimulus brightened after payrolls figures released on Friday showed a less-than-forecast increase. Meanwhile, a bipartisan group of lawmakers worked to put the finishing touches on a new $908 billion bill. Gold tends to benefit from stimulus measures as it raises the prospect of inflation which bullion is used to hedge against. Gold prices in India had hit a high of ₹56,200 in August before losing momentum amid vaccine optimism and consequent rally in risk assets.

 

 

Gold traders will be looking forward to outcome of European Central Bank policy decision later this week. ECB is widely expected to increase and extend its pandemic bond-buying program.

 

ETF outflows which show weaker investor interest. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, fell 0.6% to 1,182.70 tonnes on Friday.

 

Silver however remains supported by general optimism about Chinese economy and recovery in industrial activity across major economies, says Kotak Securities. "Silver may witness choppy trade along with gold amid lack of major triggers however we do not expect a sustained rise unless ETF buying resumes strongly," it added.

 

Analysts say that though gold has recovered from recent lows and remains supported by weaker US dollar, further gains depend on concrete measures on stimulus front.

 

 

 


 

INVESTORS DIARY 2020

 


Company

Event

Venue

Date & Time

 

 	

Zimbabwe

National Unity Day

Zimbabwe

22/12/2020

 

 	

 

Christmas Day

 

25/12/2020

 

 	

 

Boxing Day

 

26/12/2020

 

 	

 

New Year’s Day

 

01/01/2021

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

Counters trading under cautionary

 

 

 

 	

 

 

 

 

 	

ART

Seed co Int.

Dairibord

 

 	

Starafrica

Medtech

Turnall

 

 	

Seed co

 

 

 

 	

 

 

 

 

 	

Invest Wisely!

Bulls n Bears 

 

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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.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77 344 1674

 

 	

 

 

 	
							

 

 

 

 

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