Bulls n Bears Daily Market Commentary : 04 September 2020

Fri Sep 4 17:11:35 CAT 2020

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Bulls n Bears Daily Market Commentary : 04 September 2020

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ZSE commentary

ZSE rally continues

The ZSE capped the first week of the month in the black buoyed by a rise in
selected heavies. The mainstream All Share Index jumped 3.63% to close at
1,499.67pts while, the ZSE Top Ten Index breezed past the 1000pts mark to
settle at 1,019.49pts. The Industrials put on 3.32% to 4,902.39pts. The
Mining Index surged 13.50% to 3,808.67pts after a boost from Bindura and
Riozim which rose 13.61% and 13.16% apiece. Life assurer Fidelity added 20%
to $0.8100 while, beverages group Delta improved 13.02% to end at a vwap of
$21.7346, having traded an intraday high of $22.8500. Hippo reached $13.1000
after a 10.76% rise. The shakers of the day were led by MedTech that
succumbed 11% to $0.0712 while, brick manufacturer Willdale trailed on a
3.58% loss to $0.2314. Art let go 2.94% to $2.0964 while, Ariston shed 2.65%
to $1.3801. Retailer OKZIM completed the top five losers of the day

after retreating 1.62% to $4.7720.

Gainers outnumbered fallers by a count of nine leaving the market with a
positive breadth. Volumes traded jumped 88.64% to see 17.70m shares exchange
hands on the bourse while, turnover grew 29.75% to $101.68m. Volume drivers
of the day were Cassava, Econet and MedTech with respective contributions of
31.86%, 31.27% and 14.69%. Value drivers of the day were Delta, Econet,
Cassava and Innscor which claimed a combined contribution of 87.48%. Foreign
inflows stood at $3.83m while, outflows amounted to $48.78m, leaving the
market with a net funds outflow position.

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Global Currencies & Equity Markets

South Africa

South Africa's rand inches weaker in tentative trade

South Africa's rand inched weaker early on Friday as investors opted for
caution ahead of key jobs data from the United States.

JOHANNESBURG, Sept 4 (Reuters) - South Africa's rand inched weaker early on
Friday as investors opted for caution ahead of key jobs data from the United
States.

At 0720 the rand ZAR=D3 was 0.09% weaker at 16.7450 per dollar, from a close
of 16.7300 overnight in New York.

The greenback has regained some ground in the last two sessions after a dip
to a 28-month low earlier this week.

The dollar is poised for further gains if non-farms payroll figures due
later in the session shows a sustained recovery, something analysts said was
doubtful.

Locally, a light data release calendar has seen the rand driven mainly by
offshore issues. The return of nationwide electricity blackouts this week
has kept the unit from making major headway.

Bonds inched weaker ahead of auctions of short-dated and inflation-linked
bonds. The yield on the benchmark 2030 government bond ZAR2030= was down 2.5
basis point to 9.085%.

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Global Markets

Nasdaq falls 3% as tech selloff resumes

(Reuters) - The Nasdaq fell another 3% on Friday after plunging in the
previous session as technology stocks sold off again, overshadowing data
showing a steeper-than-expected drop in the unemployment rate in August.

At 10:23 a.m. ET, the tech-heavy Nasdaq Composite was down 293.00 points, or
2.56%, at 11,165.11. The Dow Jones Industrial Average was down 129.15
points, or 0.46%, at 28,163.58, while the S&P 500 was down 41.27 points, or
1.19%, at 3,413.79.

Dollar set to extend decline as policy outlook favours euro: PIMCO

LONDON (Reuters) - The U.S. dollar “is set to decline further” as the
Federal Reserve keeps interest rates very low for years, with policy
responses now favouring the euro, money managers at PIMCO said on Tuesday.

PIMCO’s Gene Frieda, Global Strategist, and Sachin Gupta, Head of Global
Portfolio Management Desk, noted that in previous depreciation cycles the
real trade-weighted dollar had fallen some 15% to 20% relative to current
levels, but that even then “the dollar would still only be marginally
undervalued based on our estimates.”

The dollar on Tuesday hit a new 28-month low =USD and the euro approached
$1.20 for the first time since 2018.

The U.S. currency’s previous interest rate advantage over rivals has
disappeared as the Fed embarked on aggressive policy stimulus, and the PIMCO
managers said a huge new recovery fund in the European Union had increased
the euro’s attractiveness as an alternative to the greenback.

The Newport Beach, California-based Pacific Investment Management Co (PIMCO)
had $1.92 trillion in assets under management at end-June.

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Commodities Markets

Gold spot price at Rs 50,350, lower than week’s average by 1.38%

(Reuters) The spot gold price on Friday (Rs 50,350) is lower than this
week's average of Rs 51,055.71 by 1.38%. The price was also higher than
yesterday's value of Rs 50,340.

The Indian spot gold price as of today is Rs 50,350 which grew by 0.02%; the
rate was lower than the global gold spot growth rate of 0.33%. The global
spot price is $1936.6.

Gold and other precious metals on September 04, 2020.

In global markets, gold prices moved higher today after a fall in the
previous session. Spot gold rose by 0.33% to $1936.6 Gold per Troy ounce.
This price level is 1.75% lower than average gold price observed in the past
30 days ($1970.5). Among other precious metals, silver prices edged higher
today. Silver gained 0.36% to $26.7 per Troy ounce.

Further, platinum price has shown an uptick. The precious metal platinum
rose 0.73% to $899.5 per Troy ounce. Meanwhile in India, gold was priced at
Rs 50952 per 10 gram on MCX, with a change of Rs 0.0. Also, the price of 24k
gold in the Indian spot market was quoted at Rs 50350. 

MCX Gold on September 04, 2020

On MCX, silver futures remained stable at Rs 66,800 per kg. The gold spot
price today (Rs 50,350) increased by Rs 0.0 from yesterday (Rs 50,340),
along with global spot prices growth of $6.0 to $1936.6 value today. No
change was seen in MCX future price as of today, and had a value of Rs
50952.

Currency Exchange Rate on September 04, 2020

The dollar to rupee conversion has been constant since yesterday and any
fluctuation today in the gold price would suggest no relation with the
dollar value.

Oil still under pressure

Stay up to date with all of ING’s latest economic and financial analysis.

Energy

Crude oil continued to trade soft this week on improving supplies in the
immediate term while demand uncertainty continues.

Both the ICE-Brent and NYMEX-WTI forward curve widened over the week with
prompt month trading at a deeper discount to the December contract
reflecting the higher supplies in the spot market. On refined products, data
from Insight Global shows that the gasoil inventory in the ARA region
dropped by 152kt last week on lack of cargo arrivals at the ports.

The hurricane activity in the US over the past few weeks has reduced diesel
shipments in the short term and created some supply tightness. However, the
inventory withdrawal wasn’t much of a support to the gasoil cracks in Europe
which dropped to a fresh ten-year low of below US$3/bbl due to subdued
demand and a large stockpile in the US and Asia. Meanwhile, International
Enterprise reported that Singapore middle distillate inventory increased by
a huge 1.7MMbbls last week, pushing up the distillate inventory to a
nine-year high of 16MMbbls and only marginally down from the record peak of
16.7MMbbls made in August 2010.

Next week, China will be releasing its monthly oil import numbers on Monday
and will be watched closely to gauge the strength of oil demand in the
country. Then we have EIA’s Short-Term Energy Outlook on Wednesday which
will have its updated US oil production forecasts for this year and next.
And there will be usual API and EIA weekly reports which will reflect the
post-hurricane restarts activity.

Metals

Metals continued to be traded under pressure amid a strengthing dollar
index.

Nickel’s bull run hit the brakes with the London three-month prices dropping
by over 3% DoD yesterday. The recent strong performance has made nickel the
second-best performer in LME base metals complex on a year-to-date basis.
According to SHMET, Chinese NPI (nickel pig iron) productions continued to
fall in August (-9% MoM) as a result of cutbacks amid ore supply tightness.
Tight ore supply has been one of the bull drivers behind the recent rally,
and low inventory at Chinese ports may remain a case throughout the year.

Turning to copper, data release from South America suggested that Chilean
copper productions have grown by 1.4% YoY to 3.25 mln tonnes during the
first seven months despite Covid-19 threats. July productions saw a decline
of 5% YoY due to disruptions at several operations.

According to SMM, Chinese bonded warehouses stocks have risen to 249.5kt at
import arrivals, but they are getting slower to be cleared into the local
market as demand hasn’t come out of a seasonal lull. 

INVESTORS DIARY 2020

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