Bulls n Bears Daily Market Commentary : 26 October 2020

[Bulls n Bears]

 <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 : 26 October 2020

 


 

 


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

 


ZSE commentary

 

ZSE retreats as VFEX debut…

The market reversed prior session’s gains to commence the last trading week of the month in the red, as the VFEX debuted with no trades recorded in the dual listed Seedco International. The mainstream All Share Index and the Industrials slipped an identical 0.41% to close at 1,514.93pts and 5,017.98pts apiece. The ZSE Top Ten Index shed 1% to close at 984.72pts while, the Mining Index went down 0.47% to end pegged at 3,019.90pts. The top casualty of the day was SeedCo Limited which succumbed 11.95% to $15.1000, trailed by apparel retailer Truworths that let go 9.93% to $0.1315. Telecoms giant Econet dropped 5.53% to $4.0082, having reached an intra-day low of $3.9900 while, retailers OKZIM lost 3.97% to $4.6095, where demand could be established. Banking group First Capital capped the top five fallers’ pack on a 2.59% slide to $0.5009 on waning demand.

 

Headlining the winners of the day was Proplastics that surged 15.92% to $5.7099 while, Dairibord followed on a 5.75% increase to $9.0000, albeit closing well offered at that level. Star Africa added 5.56% to $0.1900 on scrappy shares while, brick manufacturers Willdale gained 4.17% to $0.2500. Completing the top five risers of the day was hotelier Meikles that improved 0.33% to $15.1500. Twenty-seven counters were active in Monday’s sessions as ten gained against twelve fallers while, five remained unchanged to leave the market with a negative breadth of two. Volumes traded jumped 46.24% to 6.42m shares, yielding a turnover of $58.35m which was a 98.70% rise from prior session. Top volume drivers were Econet (33.54%), Delta (23.28%), Innscor (16.47%) and Axia (12.93%). Anchoring the value outturn were Delta, Innscor and Econet that claimed a combined 88.02% of the aggregate. -efesecurities

 

 

Global Currencies & Equity Markets

 

Nigeria

 

Naira maintains stability in forex markets, dollar supply improves despite curfew

At the black market where forex is traded unofficially, the Naira remained stable against the dollar to close at N463/$1 on Friday.

 

Forex turnover improved significantly by 154% as Nigeria’s exchange rate at the NAFEX window remained stable against the dollar to close at N386/$1 during intraday trading on Friday, October 23.

 

Also, the naira remained stable against the dollar, closing at N463/$1 at the parallel market on Friday, October 23, 2020, as more states across the country impose curfew due to outbreak of violence.

 

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 Friday. This was the same rate that it exchanged for on Thursday, October 22.

 

·         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.

 

NAFEX: The Naira remained stable against the dollar at the Investors and Exporters (I&E) window on Friday, closing at N386/$1.

 

This was the same rate that it exchanged for on Thursday, October 22.

·         The opening indicative rate was N386 to a dollar on Friday. This represents a 13 kobo gain when compared to the N386.13 that was recorded on Thursday.

·         The N393.13 to a dollar is the highest rate during intraday trading before it closed at N386 to a dollar. It also sold for as low as N380/$1 during intraday trading.

 

Forex turnover: Forex turnover at the Investor and Exporters (I&E) window increased significantly by 154.3% on Friday, October 23, 2020.

 

According to the data tracked by Nairametrics from FMDQ, forex turnover rose from $77.62 million on Thursday, October 22, 2020, to $197.42 million on Friday, October 23, 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 increase in dollar supply after a record drop 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.

 

 

 

South Africa

 

South African Stocks Fall As Virus Cases Surge and U.S. Stimulus Deal Elusive

(Bloomberg) -- South Africa’s main stock index retreated 0.5% by 9:53 a.m. in Johannesburg as a U.S. stimulus deal remained elusive, damping risk sentiment, and as concerns mounted over surging virus cases in America and Europe.

 

Locally, investor focus turns to South Africa’s mid-term budget on Wednesday, with economists saying Finance Minister Tito Mboweni may be forced to lay the groundwork for tax increases next year, as the country seeks funds to help it recover from its longest recession in three decades.

 

 

 

Index giant Naspers Ltd. declined for the fourth day, the longest losing streak in more than a month, providing the biggest drag on the market.

·         Naspers subsidiary Prosus NV, which holds the South African tech investor’s stake in Tencent Holdings Ltd., dropped 0.8% as the Chinese internet behemoth fell for a second day in Hong Kong.

·         Index of bank stocks halts a three-day rally, falls 1.7% as the rand weakens.

·         FirstRand Ltd. -2.1%, Standard Bank Group Ltd. -1.2%, Absa Group Ltd. -2.1%, Nedbank Group Ltd. -2.3%, Capitec Bank Holdings Ltd. -0.8%, Investec Plc -0.4%

·         Six-Day Rand Gain Ends as Budget Approaches

·         Diversified miners outweigh gains in gold and platinum companies to lead mining sector index lower, as gauge falls 0.5%.

·         BHP Group Plc -1.3%, Anglo American Plc -0.8%, Glencore Plc -1.2%, Pan African Resources Plc -2.5%

·         Index of gold stocks gains for the first day in three as rising virus cases boost demand for haven assets, and as a weaker local currency increases the rand price of the metal.

·         Gold Fields Ltd. +1.6%, AngloGold Ashanti Ltd. +0.7%, DRDGold Ltd. +1.5%

·         Index of platinum companies +0.6%

·         Impala Platinum Holdings Ltd. +1%, Anglo American Platinum Ltd. +1.1%, Northam Platinum Ltd. +0.6%, Royal Bafokeng platinum Ltd. +0.3%

·         Foreigners were net sellers of South African stocks for an eighth consecutive session Friday, disposing of 1.25 billion rand worth of shares, according to exchange operator JSE Ltd.-

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

 

 

Global Market

 

U.S. dollar rises on coronavirus surge, U.S. stimulus worries

NEW YORK (Reuters) - The U.S. dollar gained on Monday, rising for a second straight session, bolstered by safe haven bids amid surging coronavirus cases in Europe and the United States as well as a lack of progress on a U.S. stimulus package.

 

The United States has recorded its highest number of new COVID-19 cases for two consecutive days and so has France. Spain announced a new state of emergency and Italy has ordered restaurants and bars to shut by 6 p.m.

 

On the stimulus front, U.S. House Speaker Nancy Pelosi said on Sunday she expected a White House response on Monday to the latest relief plan, but there is little evidence a deal is close.

 

Media reports that the Oxford/AstraZeneca vaccine has proved successful in elderly people and that staff at a major British hospital were told to prepare for it as early as next month were not enough to bolster sentiment.

 

An index tracking the U.S. dollar against a basket of six major currencies =USD was last up 0.2% at 93.024.

 

The euro EUR=EBS, which has the largest percentage share of the dollar index, fell 0.3% to $1.1820. It has slipped earlier by half a percent after the German Ifo business climate index fell for the first time in six months in October.

 

The dollar also rose 0.2% against the Japanese yen to 104.95 JPY=EBS.

 

Speculators remain short the U.S. dollar, the latest data from the Commodity Futures Trading Commission showed, though the number of shorting contracts declined in the last couple of weeks.

 

On Monday, however, the spread between the U.S. two-year and U.S. 10-year notes narrowed to 65 basis points US2US10=TWEB, after hitting its widest gap since early June.

 

The U.S. dollar rose 0.5% against the Chinese yuan in the offshore market to 6.703 CNH=EBS, in a sign of caution as the Chinese government began discussions on its next five-year plan.

 

Some other losers included the Norwegian crown and the Australian dollar, as they retreated from last week’s gains driven by traders taking on more risk. Both fell in early European trading, but rebounded slightly afterwards.

 

The Aussie dollar was last flat at 0.7138 AUD=D3. The crown was down 0.2% at 9.2520 against the dollar NOK=D3, having seen nearly 1% drop earlier and stabilised against the euro EURNOK=D3 at 10.9410.

 

The British pound also fell 0.2% against the dollar to $1.3016 GBP=D3.

  

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

 

Copper price soars on China's recovery and go-green efforts

The copper price reached $7,000 per tonne on Wednesday, its highest price since June 2018, on China's burgeoning demand for the industrial metal as the country's economy recovers from a pandemic-induced slowdown.

 

Thanks to resurgent sales in China, the value of copper has risen by 12 percent this year, The Times reported Monday. 

 

China is the world's largest consumer of raw materials. Analysts believe China's copper demand will continue to grow in the coming years as the country invests vast amounts of money in new infrastructure projects, including green energy projects and electrical grids. The country is also pushing electric cars in an effort to reduce carbon emission. All the above require large amounts of copper products. 

 

China previously set targets to be carbon-neutral by 2060, which analysts expect to lead to even more renewable energy projects, and thus more copper.

 

The stronger yuan is further fueling demand in China. This month, the currency has been at its highest against the dollar since April 2019, making copper more affordable for Chinese buyers.

 

 

 

Gold prices today fall, down over ₹5000 from record highs, silver rates plunge

Gold and silver prices in India edged lower today, as elusive US stimulus package and a stronger US dollar put pressure on the yellow metal. On MCX, December gold futures fell 0.3% to ₹50679 per 10 gram while silver futures plunged 1.12% to ₹61,749 per kg. In recent weeks, gold has remained in a narrow range, after losing momentum since hitting record high of ₹56,200 per 10 gram in August. In the previous session, gold had inched up 0.2% while silver had declined 0.3%.

 

In global markets, gold rates fell today to an one-week low as the US stimulus package remained elusive and the dollar strengthened. But the losses were limited as US reported record coronavirus infections. Spot gold fell 0.1% to $1,899.41 per ounce, after hitting $1,890 earlier in the session. Among other precious metals, silver fell 0.5% to $24.45 per ounce, while platinum dipped 0.7% to $895.

 

Gold traders remained focused on the chances of an agreement on a stimulus package as November’s election fast approaches. US House Speaker Nancy Pelosi said she is not giving up on passing another coronavirus relief economic package before the November 3 election. Pelosi says she sent the administration a list of concerns on Friday and she is told that she’ll have answers on Monday.

 

The dollar index was up 0.16% against a basket of currencies, putting pressure on gold. The dollar was stronger as rising virus cases and lack of progress towards a U.S. stimulus package put traders in a cautious mood.

 

Gold ETF investors continued to remain on the sidelines. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or gold ETF, fell 0.14% to 1,263.80 tonnes on Friday.

 

In India, however, gold premiums in India last week jumped to their highest in nearly three months last week, as jewellers continued to stock up as the festive season gathers pace.

 

Kotak Securities maintains a buy-on-dips view on gold. "We may see choppy trade in gold along with other asset classes as market players react to development relating to US stimulus. However, we maintain buy on dips view as concerns about US economy and US election uncertainty may keep pressure on US dollar." (With Agency Inputs)

 

 

 

 

 

 


 

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/20201026/c3f29dde/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/20201026/c3f29dde/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/20201026/c3f29dde/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/20201026/c3f29dde/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/20201026/c3f29dde/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/20201026/c3f29dde/attachment-0009.jpg>