Bulls n Bears Daily Market Commentary : 16 November 2020

Tue Nov 17 05:21:36 CAT 2020

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Bulls n Bears Daily Market Commentary : 16 November 2020

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ZSE commentary

ZSE rebounds in week-opener…

The market rebounded in the new week as three of the benchmark indices in our review closed in the black. The primary All Share Index gained 1.20% to 1,578.34pts while, the Industrial Index put on 1.27% to 5,216.45pts. The blue chips index rose 1.53% to close at 1,028.20pts, buoyed by selected heavies. Star Africa led the risers’ pack on a 19.86% surge to $0.3000 on scrappy shares while, apparel retailer Truworths followed on a 19.83% jump to $0.2085. Retailer OKZIM firmed 13.82% to $5.5000 on firming demand while, Axia improved 8.35% to $4.9000. Crocodile skin producers Padenga advanced 7.13% to $14.7200 reversing previous session’s losses. Shakers of the day were headlined by banking group NMB which trimmed 10.34% to $2.6000, trailed by ZHL which let go 3.45% to settle at $2.8000. Nickel miner Bindura shed 1.43% to $3.4500 dragging the Mining Index down to 3,391.21pts. Conglomerate Innscor capped the top five fallers’ list on a 0.68% slide to $25.0231.

A positive market breadth of sixteen was recorded as twenty counters gained against four losers while, nine traded at previous prices. Activity aggregates faltered in Monday’s session as volumes traded plunged 67.69% to 7.12m shares while, turnover retreated 38.82% to end at $30.97m. Top volume drivers of the day were Econet (33.35%), First Capital (17.88%), Masimba (16.56%) and Cassava (11.22%). Econet and Delta were the top value drivers with respective contributions of 30.29% and 22.77%. Elsewhere, CAFCA reported a PAT of $466.69m for its FY20 results with no dividend declared for the period. Foreign inflows amounted to $2.10m while, outflows stood at $17.06m to register a net funds outflow of $14.95m. -efesecurities

Global Currencies & Equity Markets

South Africa

Rand continues to strengthen against the greenback

JOHANNESBURG - The South African rand ended the week on a strong footing, briefly teetering on the R15.5/$ threshold before giving up some gains towards the end of the European session according to NKC Research.

While gaining some ground towards the end of the week, Friday’s trading level was still far from the R15.2/$ rates seen on Monday. The day saw no significant domestic data releases but news that African National Congress (ANC) Secretary General Ace Magashule was granted bail of R200,000 and is set to appear before the court on February portends a very tense political environment in coming months. Mr Magashule, one of the top six most powerful officials in the country, is facing 21 charges of corruption and fraud.

At the close of local trade, the rand quoted 0.55 percent stronger at R15.57/$, after trading in range of R15.54/$ - R15.69/$. The rand inched stronger during Asian trading this morning. Expected range today R14.20/$ - R14.50/$.

South African bourse

The JSE All Share (+0.88 percent) ended higher on Friday, led by gains in large technology and industrial stocks. On the news front, shares of Botswana’s budget supermarket chain Choppies Enterprises (-20.0 percent) resumed trading on the JSE on Friday after failing to publish financial results before, which led to a two-year suspension. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.60 percent) traded higher.

Brent crude oil

The Brent oil price plunged during Friday’s European trading session due to fears of a slower global economic recovery as coronavirus cases surged across the globe. At the close of local trade, benchmark Brent crude futures quoted 2.98 percent lower at $42.98pb. Crude prices recovered during Asian trade this morning after 15 Asia-Pacific nations signed a major trade deal on Sunday. The Regional Comprehensive Economic Partnership is now the world’s largest trade alliance.

BUSINESS REPORT ONLINE

Nigeria

Nigeria naira hits 12-week low on black market

ABUJA  - Nigerian naira eased to its lowest in 12 weeks on the black market on Monday after the currency fell 1.05% against the U.S. dollar as dealers funnelled unmet demand from official sources to the parallel market, traders said.

The currency eased to 475 naira per dollar on Monday, a level last seen in August. It traded at 465 naira a week earlier as demand pressure resurfaced in the wake of dollar shortages in the economy.

Traders had expected the currency to trade flat on the black market on the hopes that higher oil prices will boost Nigeria's foreign exchange supplies. Global oil prices climbed on Monday on latest COVID-19 vaccine progress.

The naira has been stuck at 381 per dollar on the official market supported by the central bank since July, a discount of nearly 20% to the black market rate.

The central bank has been selling dollars to foreign investors seeking to repatriate funds and to clear a backlog. But demand is swelling especially with importers seeking dollars to buy goods ahead of Christmas sales, traders say.

The bank sold around $150 million on the spot market last week at 385.67 naira and on the forward market at 392.43 naira.

 <mailto:info at bulls.co.zw> 

Global Markets

Global Market

Vaccine rollout could cause U.S. dollar to fall 20% in 2021: Citi

LONDON (Reuters) - The widespread distribution of vaccines to combat the coronavirus pandemic and ongoing monetary easing could cause the U.S. dollar =USD to weaken as much as 20% next year, Citibank said on Monday.

Moderna Inc said on Monday its experimental vaccine was 94.5% effective in preventing COVID-19 based on interim data from a late-stage clinical trial, becoming the second U.S. company in a week to report results that far exceed expectations.

Citi’s bearish dollar view is also premised on bets that the U.S. central bank will continue to keep policy settings easy even if inflation expectations rise with an economy recovery, thus allowing the U.S. yield curve to steepen.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today fall, silver rates jump

Gold prices today struggled in Indian markets while silver rates edged higher. On MCX, gold futures fell 0.12% to ₹50,925 per 10 gram while silver futures rose 0.22% to ₹63,941 per kg. In India, trading on commodity exchange MCX started from 5 pm today. MCX remained closed for the morning session today on the occasion of Diwali Balipratipada.

On Saturday, in the special one-hour Muhurat trading session, gold futures on MCX had ended flat while silver rates edged lower. Overall for the week as a whole, gold prices on MCX fell ₹1,200 per kg, tracking a similar trend in overseas markets as optimism over covid vaccine put pressure on gold prices.

In global markets, gold prices today inched higher in global markets, supported by a weaker dollar. The yellow metal also benefitted from hopes of more stimulus as coronavirus cases continued to rise in many parts of the world. Spot gold rose 0.3% to $1,893.30 per ounce, after hitting its $1,898.81 earlier in the session. The dollar index today hit a one-week low, making gold cheaper for holders of other currencies. Silver rose 1.1% to $24.91 per ounce. Platinum rose 1% to $897.52, while palladium was 1.1% higher at $2,350.20.

In global markets, gold prices fell 3.3% last week after Pfizer said its experimental COVID-19 vaccine was over 90% effective based on initial trial results.

Meanwhile, last week, US Federal Reserve Chairman Jerome Powell repeated week his view that more action from the central bank and Congress, in the form of further fiscal stimulus, would likely be needed.

Gold tends to benefit from stimulus measures from central banks as it is considered a hedge against inflation and currency debasement and the yellow metal has soared 29% this year so far in Indian markets.

ETF investors continued to remain on the sidelines. Holdings in SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, fell 0.42% to 1,234.32 tonnes on Friday.

Asian equities hit a record high on Monday as investors set aside fears about rising coronavirus cases and bought stocks, cheered by data showing a robust recovery in China and Japan. Optimism over covid vaccine also supported the sentiment.

The announcement, a week ago, that Pfizer had developed a very effective vaccine has investors hoping for similar good news soon from rival Moderna and and AstraZeneca.

More data from vaccine creator Moderna Inc. is expected in the coming days, while AstraZeneca and its partner, the University of Oxford, may also have preliminary results in the next few weeks. (With Agency Inputs)

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Simbisa Brands

AGM

SAZ, Northend Close, Borrowdale, Harare as well as virtually on: https:/escrowagm.com/eagmZim/Login.aspx

20/11/2020 | 8:15am

Axia Corporation

AGM

virtual https://escrowagm.com/eagmZim/login.aspx

24/11/2020 | 8:14am

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

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.

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