Bulls n Bears Daily Market Commentary : 23 October 2020

Fri Oct 23 17:40:33 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 : 23 October 2020

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

ZSE commentary

ZSE rebounds in week ending session…

The ZSE rebounded in the week ending session spurred by gains in CBZ that rallied 14.60% to close at vwap of $44.6998 having traded an intraday high of $45.0000. The mainstream All Share Index put on 2.61% to close at 1,521.22pts while, the Industrial Index gained 2.84% to 5,038.71pts breaching the 5,000pts mark. The ZSE Top Ten Index rose 3.81% to close higher at 994.65pts. Other gains were seen in Zimre that surged 17.45% to $2.9000 post the release of its HY20 results while, Ariston improved 8% to $1.3500. Retailers OKZIM extended 6.67% to close at $4.8000 while, Axia added 6.08% to end pegged at $3.7500. Banking group First Capital topped the fallers’ pack after letting go 6.61% to $0.5142, trailed by nickel miner Bindura that shed 6.31% to $3.0182 weighing down the resources index that closed at 3,034.28pts. Dairibord trimmed 5.44% to $8.5103 while, hotelier RTG slipped 5% to $1.9000. Turnall capped the top five shakers of the day on a 2.41% slide to $0.5700.

Twenty-seven counters registered price movements distributed as fourteen gainers and thirteen losers to establish a positive market breadth of one. Activity aggregates faltered in Friday’s session as volumes dropped 67.85% to 4.39m shares while, turnover plunged 62.25% to $29.37m. Top volume drivers of the day were Medtech and Innscor which contributed 48.49% and 16.87% apiece. Top value drivers of the day were Innscor, SeedCo Limited and Delta that claimed a combined 79.14% of the aggregate. Foreign purchases dipped 75.74% to $6.84m while, sales succumbed 24.51% to $6.80m, leaving the market with a net funds inflow position. –efesecurities

Global Currencies & Equity Markets

South Africa

Rand trades steady overnight

JOHANNESBURG - The South African currency started yesterday on a weaker footing, but cautious optimism continued to provide support later in the session ahead of next week’s pivotal medium-term budget policy statement (MTBPS) according to NKC Research.

Parastatals, including national carrier SAA and energy producer Eskom, will be among the key points that the finance minister will need to address at the MTBPS on October 28 in a hostile environment of political resistance against crucial labour & wage reform and privatisation. On US soil, the latest week’s jobless claims figures were a mix of hopeful and worrisome signs, as the US dollar index rose gradually yesterday.

At the close of local trade, the rand quoted 0.91 percent stronger at R16.20/$, after trading in range of R16.20/$ - R16.40/$. The rand was steady overnight as Asian stock markets traded mixed this morning. Expected range today R16.00/$ - R16.40/$.

South African bourse

The JSE All Share (-0.99 percent) ended lower yesterday, dragged mostly by losses in large gold mining (-7.19 percent) stocks. In the overall emerging market sphere, the MSCI Emerging Market Index (-0.12 percent) traded lower.

Nigeria

Naira stabilizes in forex markets as dollar supply hits record low during curfew

Naira maintains stability at forex markets as dollar supply rise by 57%, Exchange rate, dollar, Foreign Direct Investment, Global Investment, Naira appreciates at I & E window, hits N384 to $1

Forex turnover hit record low dropping by 81.5% as Nigeria’s exchange rate at the NAFEX window remained stable against the dollar to close at N385.75/$1 during intraday trading on Wednesday, October 21.

Also, the naira remained stable against the dollar, closing at N463/$1 at the parallel market on Wednesday, October 21, 2020, as the imposition of the curfew bits hard on businesses.

This is also as businesses shut down due to the outbreak of violence in some parts of the country including Lagos during the protest against the special anti-robbery unit (SARS) and police brutality by the Nigerian youth.

Parallel market: According to information from Abokifx, a prominent FX tracking website, at the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N463/$1 on Wednesday. 

·         This was the same rate that it exchanged for on Tuesday, October 20.

·         The local currency had strengthened by about 7.8% within the one week in September at the black market, as the CBN introduced some measures targeted at exporters and importers, in order to try to boost the supply of dollars in the foreign exchange market, and reduce the high demand for forex by traders. The measure

·         The CBN has sold over $500 million to BDCs since they resumed forex sales on Monday, September 7, 2020. This was expected to inject more liquidity to the retail end of the foreign exchange market and discourage hoarding and speculation.

·         However, the exchange rate against the dollar has remained volatile after the initial gains made, following the CBN’s resumption of sales of dollars to the BDCs.

·         The President of the Association of Bureau De Change Operators, Aminu Gwadebe, said he expects the impact of the extra liquidity in the market to be gradual.

·         Despite the drop in speculative buying of foreign exchange, the huge demand backlog by manufacturers and foreign investors still puts pressure and creates a volatile situation in the foreign exchange market.

·         This was the same rate that it exchanged for on Tuesday, October 20.

·         The opening indicative rate was N386.24 to a dollar on Wednesday. This represents a 14 kobo gain when compared to the N386.38 that was recorded on Tuesday.

·         The N386 to a dollar is the highest rate during intraday trading. It also sold for as low as N384/$1 during intraday trading.

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window hit record low as it declined by 81.5% on Wednesday, October 21, 2020.

·         According to the data tracked by Nairametrics from FMDQ, forex turnover dropped from $32.67 million on Tuesday, October 20, 2020, to $6.05 million on Wednesday, October 21, 2020.

·         The CBN is still struggling to clear the backlog of foreign exchange demand, especially by foreign investors wishing to repatriate back their funds.

·         The continuous drop in forex supply reinforces the volatility of the foreign exchange market. The supply of dollars has been on a decline for months due to low oil prices and the absence of foreign capital inflow into the country.

·         As part of the measure to check forex abuse and check illegal transactions, the CBN last month directed the freezing of accounts of about 38 companies.

·         The average daily forex sale for last week was about $169.93 million, which represents a huge increase from the $34.5 million that was recorded the previous week.

·         Total forex trading at the NAFEX window in the month of August was about $857 million, compared to $937 million in July.

·         The exchange rate is still being affected by low oil prices, dollar scarcity, a backlog of forex demand and a shaky economy that has been hit by the coronavirus pandemic.

·         According to Reuters, currency traders said that the naira is expected to be stable this week as banks limit foreign exchange transactions by both firms and individual buyers on the unofficial black market to curb speculation

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar headed for weekly loss amid election, stimulus uncertainty

(Reuters) - The dollar eased against a basket of major currencies on Friday following the final U.S. presidential debate, with fading prospects for a coronavirus relief package before the Nov. 3 elections pulling the greenback toward a weekly decline.

Republican President Donald Trump and Democratic challenger Joe Biden squared off on Friday in a less raucous debate than their previous meeting, but tensions were still high, with a focus on the handling of the COVID-19 pandemic and plenty of personal attacks thrown into the mix.

The market is looking at a potential Biden victory as setting the stage for a more robust post-election rescue package, which is reducing the demand for the safe-haven greenback, he added.

The dollar index =USD was last down 0.13%, bringing it nearly 1% lower for the week.

Given the potential risk of a contested election result, the dollar is likely to be confined to the range it has been in for the last several weeks, Manimbo said.

In Europe, business surveys in France and Germany showed the impact of the second wave of COVID-19 infections in the euro zone's two biggest economies, threatening to derail the bloc's nascent recovery.

Despite the data, the euro EUR= edged higher 0.2% against the greenback to $1.1844.

The euro also firmed after Reuters reported that France was laying the groundwork for a fisheries compromise to help the European Union strike a Brexit deal with Britain.

Sterling also gained on the report, before easing back to 1.3065, down 0.12% against the dollar.

The safe-haven yen JPY=D3 dipped 0.15% to 104.76 per dollar following comments on Thursday by U.S. House of Representatives Speaker Nancy Pelosi that stimulus talks had made progress.

The Chinese yuan CNY= ticked down 0.11% against the dollar after an official at China's foreign exchange regulator said it has been more stable than expected, suggesting authorities are not too worried about its recent rise.

The yuan has gained about 7.5% since the end of May as China led the global coronavirus recovery.  

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today struggle after sharp fall, silver rates drop

Gold and silver prices in India today remained muted after a sharp fall in the previous session. On MCX, gold futures were up 0.16% to ₹50,845 per 10 gram while silver futures edged 0.1% lower to ₹62,551 per kg. In the previous session, gold had fallen 1.11% while silver had tumbled 1.5%. In global markets, gold prices were steady today as investors watched developments in Washington, where US lawmakers continue to work toward a stimulus package to bolster the economy.

Spot gold was up 0.1% to $1,905.65 an ounce after slipping more than 1% in the previous session. US House Speaker Nancy Pelosi on Thursday said negotiators were making progress in talks with the White House over a new coronavirus fiscal aid package and a deal could be reached "pretty soon".

But White House economic adviser Larry Kudlow cautioned that there were still "significant policy differences" unlikely to be resolved before the election.

Among other precious metals, silver fell 0.8% to $24.56 per ounce, while platinum dropped 0.4% to $880.94.

A higher US dollar however capped the rise in gold. The dollar index was up 0.08% at 93.037, making gold costlier for holders of other currencies.

US President Donald Trump and former Vice President Joe Biden today debated topics including the response to Covid-19, immigration policy and health-care reform in their final US presidential debate.

ETF data shows muted investor interest. Holdings of the largest gold-backed exchange-traded-fund (ETF), the SPDR Gold Trust, fell 0.1% on Wednesday to 40.8 million ounces from Tuesday.

Brent crude oil

The Brent oil price bounced back yesterday following Wednesdays’ sharp sell off. At the close of local trade, benchmark Brent crude futures quoted 2.50 percent higher at $42.58pb. Crude prices traded steady during Asian trade this morning.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Falgold

EGM

1st Floor, KPMG Building, 133 Josiah Tongogara Avenue, Bulawayo

29/10/2020 | 10:00 am

Bindura

AGM

Virtual

05/11/2020 | 14:00

Natfoods

AGM

Royal Harare Golf Club

09/11/2020 | 8:45am

Afdis

AGM

virtual

13/11/2020 | 12:20pm

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 

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%2FBullsBearsZimbabwe&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/20201023/33b16c2d/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/20201023/33b16c2d/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 28731 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201023/33b16c2d/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 21694 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201023/33b16c2d/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201023/33b16c2d/attachment-0008.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 4846 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20201023/33b16c2d/attachment-0009.jpg>