Bulls n Bears Daily Market Commentary : 02 October 2020

Fri Oct 2 19:13:26 CAT 2020

 <http://www.bullszimbabwe.com> Bullszimbabwe.com
<mailto:bulls at bulls.co.zw> Views & Comments
<http://www.bullszimbabwe.com> 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 : 02 October 2020

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

ZSE commentary

Market rebounds in week-ending session.

The market seesawed in the week-ending session, reversing losses incurred on
Thursday with the mainstream All Share Index adding 0.83% to $1104.45pts.
The Industrials put on 0.45% to 5407.17pts while, the Top Ten was 0.83%
higher at 1104.45pts. The Mining Index was the only index to close in the
red as it went down 4.18% to 3880.20pts on losses in RioZim. An aggregate of
thirty counters exchanged hands, of which thirteen fell while, eleven
registered gains, leaving the market with a negative breadth. Leading the
set of risers was Zimplow which went up 19.05%, albeit on scrappy shares.
Nampak followed on an 15.57% surge to $1.1563 while, Padenga was 6.74%
firmer at $14.9474. Conglomerates Innscor and Meikles ticked up 4.45% and
3.19% to end the session at $19.9973 and $14.4467 respectively.

Truworths was the session's worst performer slumping 19.93% to $0.1310
while, RioZim followed shedding 19.23% to settle at $9.2000. Hotelier
African Sun eased 13.17% to 1.6436 with property concern FMP dropping 4.35%
to $2.2000. Simbisa Brands capped the top five fallers set with a 3.51% loss
to $6.5032. Other losses in heavies were registered in SeedCo (-1.06),
Econet (-0.89%), Hippo (-0.41%) and Delta (-0.03%). Activity aggregates
slightly improved with volumes exchanged enhancing 98.14% to 3.04m shares,
yielding a value outturn of $23.76m which was 90.87% up from prior session.
Innscor and Delta anchored the day's turnover after claiming 27.07% and
18.51% in that order. Foreign inflows accounted for 0.29% of the day's
turnover while, outflows claimed 40.28% of the same. efesecurities 

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

Global Currencies & Equity Markets

Nigeria

Nigerian stocks recover COVID-19 losses

Nigerian stocks are profiting from a low interest rate environment.

Published 9 hours ago on October 2, 2020By Nairametrics Nigerian stocks
recover COVID-19 losses

The Nigerian stock market has clawed back COVID-19 losses, making back all
the money lost during the pandemic.

The Nigerian All Share Index, which measures performance of the stock market
in general terms, fell to as low as 21,300 points in March, the lowest since
June 2012. It was 28,843 and 26,216 in January and February 2020
respectively. The drop was due to the COVID-19 pandemic, which triggered a
significant outflow of capital from Nigeria.

Investors dumped the stock market during March and April as uncertainty and
fear of the pandemic triggered a lock down of the global economy. Market
turmoil was also compounded by the crash in oil prices, triggering a
significant outflow of capital in equities.

Data from the Bureau of Statistics, reveals only $52.3 million on capital
flowed into equities in the second quarter of the year, compared to $639.7
million in the first quarter and $496.8 million in the corresponding quarter
in the prior year.

The ensuing devaluation at the end of March 2020 spooked foreign investors;
who also feared more devaluation was on its way, thus sealing any immediate
hope of a return to the stock market in the second quarter of 2020.

However, since July, the stock market has inched higher in positive
territory, ending the third quarter with consecutive gains in July, August,
and September respectively. This was the first time since 2017 (second
quarter) that Nigerian stocks will post gains in three consecutive months.

What are the drivers: Nigerian Stock Market has often been the bellwether
for the economy, reacting way earlier than other markets, in gauging the
direction of the economy.

One of the major drivers for the stock market recovery, is the lack of
investable assets available for most fund managers.

Information from fund managers suggests most of the demand in stocks have
been from local portfolio investors.

Some fund managers who spoke to Nairametrics, revealed the low-interest rate
environment means there is limited options where they can throw money into
creating an opening for stocks.

The Stock Exchange's foreign portfolio investment report, also confirms this
viewpoint. Out of the N1.2 trillion transactions in stocks this year, N731
billion was from domestic investors, the highest percentage contribution
since 2010.

Other factors

Stocks have also been considered undervalued following the March sell-offs,
as indicative in the high dividend yield. Dividend yield is the percentage
return derived from dividend paid by companies, divided by the share price
of the company.

This year, we have seen dividend yield higher than risk-free investments
like treasury bills.

Another plausible reason for the positive stock performance is the better
than expected performances of Banks, FCMGs, Telecommunications sector, and
the Agriculture sector of the economy.

Headwinds: Despite the positive performance of stocks, trouble still lies
ahead for most investors.

The Nigerian economy is still in the doldrums with most companies counting
losses.

Banks have performed better than expected, but some naysayers expect
year-end profits to be dampened by rising non-performing loans.

Nigeria's exchange rate crisis remains a major challenge for investors and
the economy at larger, especially as it affects supply chains.

Rising inflation triggered by devaluation, increased fuel, and electricity
prices could lead to higher operating expenses and significantly higher
input cost.

Finally, despite these headwinds, stocks remain one of the cheapest and most
reliable forms of investing available in a low-interest rate environment.
Those who choose the right stocks at the right time, stand to gain the most.

South Africa

South African Rand Rally Pauses on Risk Aversion

The USDZAR pair rose by more than 0.25% today as traders digested news that
Donald Trump had contracted coronavirus. The pair is trading at 16.6430,
which is higher than yesterday's low of 16.54.

In a statement earlier today, Donald Trump revealed that he had infected the
Covid-19. Melania Trump, his wife, and Hope Hicks, a senior aide, have also
tested positive. As a result, experts believe that other senior
administration officials have also contracted the illness. This announcement
has sent shivers around the world, with most people worried about what will
happen next.

As a result, the US dollar, Japanese yen, Swiss franc, and gold have all
risen while US and European equities have declined. That is because analysts
consider the former assets to be safe havens.

Indeed, the dollar has risen across other developed world and emerging
market currencies, including the South African rand.

Meanwhile, the USDZAR pair is also waiting for the nonfarm payrolls numbers
that will come out later today. Analysts believe that the data will show
that the US added close to a million jobs in September while the
unemployment rate fell for the sixth consecutive month.

USDZAR technical outlook

The USDZAR is trading at 16.6667, which is a few pips above today's low. On
the daily chart, the price is along the 50% Fibonacci retracement level. It
has also dropped for the past three consecutive days. Also, it is below the
25-day and 15-day exponential moving averages.

Therefore, I suspect that the pair will resume the downward trend and
possibly test the support at 16.00. On the flip side, a move above the
resistance at 17.00 will invalidate this trend.-investingcube

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar, yen rise after Trump's positive COVID test

The safe-haven yen and dollar rose on Friday after President Donald Trump
tested positive for COVID-19, rattling investors just a month before
November's U.S. presidential election.

Data showing U.S. nonfarm payrolls rising less than expected in September,
but with a drop in the unemployment rate, had little impact on currencies as
markets were more focused on Trump's health.

Trump, who had played down the threat of the coronavirus pandemic for
months, said on Friday he and his wife Melania had tested positive for
COVID-19 and were going into quarantine, upending the race for the White
House.

The news sparked a sell-off in European stocks, before they pared some of
their losses, and on Wall Street.

The yen made its sharpest gain in more than a month to reach a one-week high
of 104.95 and was last up 0.3% on the day at 105.27 yen to the dollar.

Implied volatility gauges for the yen rose to a four-week high of 7.6 vols
over the next month, signaling more choppy trading ahead.

Currencies seen as riskier bets fell across the board, with a fall in oil
prices also pressuring the commodities-exposed Russian rouble, South African
rand and Australian dollar.

Data showing slowing U.S. employment had marginal FX impact, but it
underscored the challenges the economy faced as it tries to emerge out of
the recession.

In the last monthly employment report before the Nov. 3 presidential
election, the Labor Department on Friday said nonfarm payrolls increased by
661,000 jobs last month after advancing 1.489 million in August.

Economists polled by Reuters had forecast 850,000 jobs were created in
September.

In midmorning trading, the dollar rose 0.1% against a basket of six major
currencies to 93.815, but remains down 0.8% for the week - its biggest
weekly drop since late August. The euro fell 0.3% to $1.1716.-cnbc

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price holds fast above $1,900 following employment U.S. nonfarm
payrolls

(Kitco News) - The gold market is holding firmly above the $1,900 level as
the U.S. labor market continued to showed mixed improvement in September.

Friday, The Bureau of Labor Statistics said 661,000 jobs were created last
month. The data significantly missed expectations as economists were
expecting to see job gains of around 900,000.

Meanwhile, the unemployment rate came in at 7.9%, compared to August's level
at 8.4%; consensus forecasts were calling for a reading at 8.2%.

The gold market was seeing some selling pressure ahead of the report and
have remained relatively unchanged in initial reaction to the data. December
gold futures last traded at 1,916.60 an ounce.

According to some economists, the component in the latest jobs report that
could tip the scales in gold's favor is the disappointing earnings numbers.
The report said that average hourly earnings increased by only 0.1% last
month, down from August's 0.4% rise. According to consensus forecasts,
economists were expecting to see a 0.5% increase.

Economists note that U.S. consumers, making less money will be hesitant to
make big purchases and without robust consumption the U.S. economy will
remain weak.

While the sharp drop in the unemployment rate is definitely an
attention-grabber, some economists say that it comes as the participation
rate dropped. The report said that the participation rate in the U.S. labor
market -- the number of people actively working or looking for work -
dropped to 61.4%, down from August's level of 61.7%.

Although the U.S. economy continues to add jobs, Katherine Judge, senior
economist at CIBC said that it appears the recovery is losing some momentum
and could continue to struggle.

Copper price in biggest drop since height of pandemic

The copper price rally came to an abrupt halt on Thursday with the
bellwether metal experiencing one of the worst one-day price drops on
record. 

On the Comex market, copper for delivery in December fell 5.9% to a low of
$2.8540 a pound ($6,292 a tonne) amid heavy selling, with more than 2.6
billion pounds traded by 1pm in New York. 

It was the biggest decline since mid-March at the height of the covid-19
induced sell-off, which sent the copper price crashing to below $2.00 a
pound - levels last seen during the global financial crisis.  

S&P Global reports a rapid buildup of inventories in warehouses managed by
the London Metal Exchange could be behind Thursday's decline after inflows
of almost 92,000 tonnes over just three days.

Wild swings

Thursday's decline comes just a day after copper leapfrogged the pivotal $3
a pound level and looked ready to retake levels last seen in 2018, after a
key gauge of the Chinese manufacturing sector, the world's top consumer of
the metal, showed new orders jumping to a nine-year high.

Capital Economics said China's September PMI reading suggests that "the
economy is now entering a period of above-trend growth, which is
indisputably good news for the prices of commodities, particularly
industrial metals."

The Wall Street Journal reported Wednesday a measure from Citigroup that
tracks end uses of copper in the country in various sectors, including auto
and appliance makers, shows the three-month average reaching its highest
level since early in 2017.-mining

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Invest Wisely!

Bulls n Bears 

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.bullszimbabwe.com> www.bullszimbabwe.com  

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

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

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201002/f30d1cd6/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/20201002/f30d1cd6/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 26695 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201002/f30d1cd6/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 26603 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201002/f30d1cd6/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 21688 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201002/f30d1cd6/attachment-0009.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/20201002/f30d1cd6/attachment-0010.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image006.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201002/f30d1cd6/attachment-0011.jpg>