Bulls n Bears Daily Market Commentary : 01 September 2020

Tue Sep 1 15:23:33 CAT 2020

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Bulls n Bears Daily Market Commentary : 01 September 2020

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ZSE commentary

ZSE gains spill into new month

The ZSE opened the month of September on the front footy as it extended its
recently found rising momentum. All four benchmarks in our review went up
with the primary All Share Index putting on 1.76% to 1,413.73pts on the back
of heavy cap gains that saw the Top Ten Index adding 2.48% to settle at
936.40pts. Amongst the segregated indices, the Industrial Index went up
1.79% and closed at 4,614.87pts while, the Mining Index added 1.03% and
closed pegged at 3747.21pts. The bullish sentiment on the market was
underlined by the doubledigit gains posted in all top five gainers led by
the duo of Edgars and Lafarge that were up by an identical 20% as they
closed at $0.6000 and $6.0000 respectively. First Capital bank was back to
winning ways on a 19.95% rebound that took it to $0.8400, as hardware
retailer Powerspeed followed on a 19.91% rise as it ended at $1.8975.
Completing the top risers set was NTS which sustained its ascendency with a
19.75% surge to $0.1910.

Leading the stocks that traded softer for the day was Econet which succumbed
6.21% and closed at $4.5053 while, FBCH followed on a 5.56% slip to $8.5000.
Property group Mashonaland shed 3.33% and ended at $0.5805 with Art and
Cassava capping the top fallers set on declines of 3.26% and 1.66%
respectively. Activity aggregate were overall positive on the day as the
market spend went up 36.79% to ZWL $73.80m spurred by exchanges in Delta,
CBZ and Innscor that claimed a combined 63.91% of the total value. Volumes
of shares traded stood at 6.77m up 11.59% on yesterday driven by trades in
Delta, Econet and Simbisa. Turnover disaggregation however continued to show
a sustained foreign sell off that claimed 48.77% of the disposals while, a
mere 3.89% of portfolio investments were from the foreign component.
efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand falls as local politics weigh

(Reuters) - South Africa’s rand fell on Monday, giving back some of the big
gains it made late last week as the dollar weakened, as sentiment was hit by
speculation that infighting within the ruling African National Congress
would prompt cabinet changes.

At 1517 GMT the rand was 2.26% weaker at 16.9500 per dollar compared to its
close on Friday. It had rallied more than 2% at the end of last week.

The rally was restrained by squabbling between opposing factions of the ANC
over corruption.

On Sunday, the party said President Cyril Ramaphosa will appear before its
integrity commission over campaign donations. Finance Minister Tito Mboweni
later wrote on his Twitter account that he was not quitting the government.

On Friday, Ramaphosa’s predecessor, Jacob Zuma, accused the president of
bringing the party into disrepute over a letter he sent calling for action
against ANC members accused of graft.

Ramaphosa said on Monday the party’s executive had decided at a weekend
meeting that ANC officials formally charged with corruption and other
serious crimes must step aside from their positions.

A rebound in China’s economy in August helped the Johannesburg Stock
Exchange (JSE) open higher but the local political turmoil sent shares
slipping to close in the red.

The FTSE/JSE all share index lost over 1 percent on the day to end at 55,481
points while the top 40 companies index fell 1.01% to close at 55,485
points.

In fixed income, the yield on the benchmark instrument due in 2030 was down
3 basis points to 9.285%. 

 <mailto:info at bulls.co.zw> 

EMERGING MARKETS

Weaker dollar lifts currencies to six-month highs, stocks bounce

(Reuters) - Emerging market currencies scaled six-month highs on Tuesday as
the U.S. Federal Reserve’s accommodative stance on inflation hit the dollar,
while stocks gained after upbeat manufacturing data from China signalled a
strong rebound in global demand.

An index of emerging market currencies rose 0.4% as the dollar slid for a
sixth straight day following Fed Chair Jerome Powell’s statement last week
that the central bank would allow inflation to run higher than 2% “for some
time”.

The index has rebounded since a coronavirus-driven crash earlier this year
and is now about 2.4% below its January highs, as historic global stimulus
drives appetite for risky assets, but analysts cautioned rising COVID-19
cases and geopolitical risks could halt the recent rally.

South Africa’s rand jumped 1.2% after sliding 2% on Monday amid fears of
potential cabinet changes due to infighting within the ruling African
National Congress.

But the Turkish lira slipped another 0.3% as geopolitical tensions ratcheted
up after it said it would carry out seismic surveys in a disputed area of
the eastern Mediterranean until Sept. 12, provoking an angry response from
neighbouring Greece.

The Russian rouble bounced off four-month lows and the stock index gained
0.5% as data showed the country’s manufacturing activity returned to growth
in August after falling for 15 months in a row.

Among stocks, South Africa’s Old Mutual slipped 0.4% after putting its
interim dividend on hold, withdrawing financial targets and warning of a
drop in full-year profit. The wider stock index jumped 1.7%.

A basket of emerging market stocks rose 0.9%, tracking gains in Asia, as
data showed manufacturing activity in China expanded at the fastest clip in
nearly a decade in August, reducing pressure on policymakers to take bolder
steps to avert a deeper global recession.

The Chinese yuan jumped to its strongest level in more than a year.

 <mailto:info at bulls.co.zw> 

Commodities Markets

China data helps propel copper to 2-year highs

(Reuters) - Copper prices scaled two-year highs on Tuesday as robust data on
manufacturing activity in top consumer China, a weaker dollar and falling
inventories boosted sentiment and expectations of strong demand for
industrial metals.

Benchmark copper on the London Metal Exchange was up 1.5% at $6,770 a tonne
at 0937 GMT. Prices of the metal used widely in the power and construction
industries earlier touched $6,830 a tonne, the highest since June 2018 and a
gain of 56% since the middle of March.

MANUFACTURING: The Caixin/Markit Manufacturing Purchasing Managers’
Index(PMI) rose to 53.1 last month from July’s 52.8, marking the sector’s
fourth consecutive month of growth and the biggest rate of expansion since
January 2011.

Expanding activity was bolstered by the first increase in new export orders
this year as manufacturers ramped up production to meet rebounding demand.

DOLLAR: A lower U.S. currency makes dollar-denominated commodities cheaper
for consumers in other currencies. It also increase costs for producers in
other currencies that are appreciating against the dollar.

INVENTORIES: Stocks of copper MCUSTX-TOTAL in LME-registered warehouses at
88,250 tonnes, the lowest since December 2005 have plummeted nearly 70%
since the middle of May.

Cancelled warrants - metal earmarked for delivery and no longer available to
the market - at more than 50% of the total have also fuelled worries about
supply on the LME market.

This can be seen in premium for the cash over the three-month copper
contract closing at $30.50 CMCU0-3 on Friday, the highest since March last
year.

OTHER METALS: Aluminium was up 0.9% at $1,817 a tonne, zinc rose 2.5% to
$2,577, lead added 1.6% to $2,004, tin gained 0.6% to $17,950 and nickel
climbed 2.3% to $15,720.

Bank of England to publish gold holdings data with shorter lag

(Reuters) - The Bank of England said on Tuesday it will publish data on gold
holdings with a one-month lag to improve transparency.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

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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
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for guideline purposes only and sourced from third parties.

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