Bulls n Bears Daily Market Commentary : 06 October 2020

Tue Oct 6 16:57:02 CAT 2020

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Bulls n Bears Daily Market Commentary : 06 October 2020

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

ZSE commentary

ZSE closes with marginal losses.

The ZSE benchmark indices closed Tuesday's session in marginal losses as the
ZSE All Share Index and the Industrial Index trimmed a similar 0.01% to end
at 1,575.39pts and 5,188.07pts, respectively. The blue chips Index was down
0.68% to 1,039.98pts weighed down by losses in selected heavies. The Mining
Index was stable at 3,785.30pts. Art was the major casualty of the day with
a 6.81% loss to $2.0945, followed by banking group CBZ that shed 3.23% to
$15.0000. Telecoms giant Econet dropped 1.70% to $4.7233 while, crocodile
skin producers Padenga let go 1.33% to close at a vwap of $14.6989. Brick
manufacturers Willdale completed the top five shakers of the day after
retreating 0.96% to $0.2278.

Mash holdings led the loss mitigating pack as it surged 19.76% to $.6000
while, property concern FMP trailed on a 7.64% rise to $2.2000. Hippo added
5.94% to close at $13.9839 while, fast foods group Simbisa improved 3.87% to
$6.7000. Conglomerate Meikles capped the top five risers of the day on 3.83%
gain to $15.0000. Losers of the day outnumbered gainers by a count of four
leaving the market with a negative breadth. Activity aggregates were mixed
in the session as seen in volumes that dropped 19.38% to 2.69m shares while,
value outturn put on 9.84% to $24.59m. Volume drivers of the day were Delta,
Nampak and Econet which claimed a combined 56.13% of the aggregate. Value
outturn was anchored by Delta and Innscor with respective contributions of
44.14% and 15.57% to the total. Foreign outflows stood at $10.44m with no
foreign inflows in the session, leaving the market with a net funds outflow
position. efesecurities 

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

Global Currencies & Equity Markets

South Africa

South Africa's rand firms slightly on upbeat risk sentiment

JOHANNESBURG (Reuters) - South Africa's rand firmed slightly in early trade
on Tuesday as risk appetite improved after U.S. President Donald Trump left
hospital following treatment for COVID-19.

Renewed hopes of U.S. stimulus also supported riskier currencies.

At 0620 GMT, the rand traded at 16.5700 versus the U.S. dollar, a tad firmer
than its previous close of 16.5775.

After steep losses during the onset of the COVID-19 pandemic, the rand has
regained levels last seen in March, mainly thanks to improved appetite for
risk.

In fixed income, the yield on the benchmark government bond due in 2030 rose
a single basis point to 9.505% in early trade.

Zambia

Zambia Leader Tells Central Bank Chief to Stabilize Currency

The kwacha has weakened 30% against the dollar and 34% versus the euro this
year.

Zambian President Edgar Lungu told his new central bank chief to stabilize
Africa's worst-performing currency as the southern African nation tries to
convince private creditors to provide debt relief.

Lungu urged Governor Christopher Mvunga at a swearing-in ceremony on Tuesday
to "redouble efforts" and work with the Finance Ministry to achieve
stability in the kwacha, according to a speech emailed by the presidency.
Lawmakers confirmed Mvunga's appointment on Oct. 1.

The president's request comes as Africa's second-biggest copper producer
starts a debt-restructuring process less than a year before general
elections. Zambian bondholders will vote Oct. 20 on whether to grant the
government's request for a six-month interest-payment suspension, and a
group of creditors has already said it wouldn't support the proposal.

The kwacha has weakened 30% against the dollar and 34% versus the euro this
year.

Lungu's shock firing in August of Denny Kalyalya as governor raised
questions about the independence of the central bank, with economists saying
that Mvunga was too closely aligned with Lungu. Even the International
Monetary Fund issued a statement stressing the importance of the bank's
autonomy.

The government must find more efficient ways to finance agricultural inputs
and manage Zambia's oil procurement, Lungu said in Tuesday's speech. The
central bank on Sept. 15 listed those two factors as among the causes of the
drain on foreign exchange, causing currency depreciation.

 <mailto:info at bulls.co.zw> 

India

Rupee drops by 17 paise to 73.46 on dollar buying by banks

The rupee pared initial gains to settle 17 paise lower at 73.46 against the
US dollar on Tuesday due to dollar buying by banks, possibly on behalf of
the RBI, and oil importers. At the interbank forex market, the domestic unit
opened at 73.17 tracking positive domestic equities and weak greenback, but
soon pared the gains and finally closed at 73.46, down 17 paise over its
previous close of 73.29.

During the session, the local unit witnessed an intra-day high of 73.15 and
a low of 73.51 against the American currency. Meanwhile, the dollar index,
which gauges the greenback's strength against a basket of six currencies,
was trading 0.02 per cent lower at 93.49.

On the domestic equity market front, the BSE benchmark Sensex surged by
600.87 points or 1.54 per cent to close at 39,574.57, and the broader NSE
Nifty climbed 159.05 points or 1.38 per cent to end at 11,662.40. Foreign
institutional investors were net buyers in the capital market as they
purchased shares worth Rs 236.71 crore on Monday, according to exchange
data.

Brent crude futures, the global oil benchmark, rose 0.51 per cent to USD
41.50 per barrel. The domestic unit came under pressure on Tuesday and
fluctuated in the range of 73.15 and 73.51.

The rupee had appreciated to 73.15 earlier this Tuesday morning probably on
the back slightly weak US Dollar, improved global risk appetite and
possibility of a US fiscal stimulus. "We believe that most of the good news
surrounding the fiscal stimulus has been factored in by the markets and
could likely witness no reaction when its officially announced by the US,"
said Sriram Iyer, Senior Research Analyst at Reliance Securities.

According to Iyer, the Indian rupee depreciated this Tuesday for the second
consecutive session against the US Dollar amid intervention by the central
bank in anticipation of further flows into the country. "Indian rupee was
the worst performer among Asian currencies on the back of dollar buying by
nationalised banks and recovery on dollar index. Some profit booking has
been seen during European hours ahead of ECB President Lagarde and US Fed
Chair Powell's speech in global markets," said Devarsh Vakil, Deputy Head
Retail Research, HDFC Securities.

Technically, spot USDINR is having resistance at 74.07, the convergent point
of 50 and 200 DMA, while on downside recent low of 72.75 acts as support,
Vakil noted.-cnbctv18

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold steadies on renewed U.S. stimulus hopes

(Reuters) - Gold inched higher on Tuesday buoyed by growing expectations
that U.S. lawmakers would agree on new stimulus legislation to blunt the
economic impact of the coronavirus, bolstering the metal's appeal as a hedge
against inflation.

Spot gold rose 0.05% to $1,913.76 per ounce by 9:57 a.m. EDT (1357 GMT),
having hit its highest in almost two weeks on Monday at $1,918.36. U.S. gold
futures         fell 0.06% to $1,919.

Gold tends to benefit from widespread stimulus measures from central banks
as it is widely viewed as a hedge against inflation and currency debasement.

However, improved appetite for riskier assets, which, apart from the
stimulus hopes, was also bolstered by U.S. President Donald Trump's return
to the White House from hospital,  stymying bullion's gains. 

Meanwhile, Chicago Federal Reserve Bank President Charles Evans on Monday
said he expects U.S. inflation to reach 2% by 2023 and wants to push it to
2.5% to offset years of below-target price rises.             

The rapid rise in equities may also see increased hedging-related buying in
bullion, Steel added.

Elsewhere, silver shed 1.19% to $24.06 per ounce, platinum fell 2.15%, to
$877.67, while palladium rose 0.1% to $2,364.49. 

Silver Faced Resistance At $24.50 And Failed To Test The Resistance At The
50 EMA

Silver made an attempt to get to the test of the nearest resistance level at
the 50 EMA at $24.65 but was stopped at $24.50. Meanwhile, the U.S. dollar
is mostly flat against a broad basket of currencies after yesterday's
downside move.

The U.S. Dollar Index moved below 93.50 but did not manage to gain more
downside momentum which would have been bullish for precious metals. If the
U.S. Dollar Index manages to settle below the recent low at 93.34, silver
will have a good chance to get to the test of the resistance at the 50 EMA.

Meanwhile, gold managed to get above the 20 EMA at $1910 and tries to
continue its upside move. If gold moves towards the $1950 level, silver will
get additional support.

Gold/silver ratio has once again failed to settle below the major support
level at the 50 EMA at 78.40 and rebounded closer to the 79 level. If
gold/silver ratio declines below the 50 EMA, it will gain additional
downside momentum and head towards the 20 EMA at 77.50. This scenario will
be bullish for silver.

At this point, near-term silver price dynamics will depend on the direction
of the U.S. dollar so silver traders will remain focused on the moves of the
American currency.

Silver continues its attempts to get to the test of the nearest resistance
level at the 50 EMA at $24.65. The 20 EMA is located in the nearby, and this
resistance level is set to be a significant obstacle on the way up for
silver.

If silver manages to get above this resistance level, it will gain upside
momentum and move towards the next resistance level at $25.85. In case
silver gets above the resistance at $25.85, it will continue its upside move
and get to the test of the next resistance level in the $26.20 - $26.30
area.

On the support side, the nearest support level is located at $23.30, and no
material levels were formed between $23.30 and $24.50. A move below the
support at $23.30 will signal that the current upside momentum has come to
an end.-fxempire

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Invest Wisely!

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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