Bulls n Bears Daily Market Commentary : 10 September 2020

Thu Sep 10 16:59:09 CAT 2020

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Bulls n Bears Daily Market Commentary : 10 September 2020

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

ZSE commentary

Market stretches gains to twelve straight sessions

The ZSE extended gains for the twelfth consecutive session with only the
Mining Index closing in the red. The mainstream All Share Index rose 2.95%
to 1674.57pts with the Industrials ticking up 3.36% to 5520.07pts. Not to be
outdone, the Top Ten Index put on 4.46% to end at 1176.10pts on firming
demand in selected heavies. The less active Mining Index succumbed 11.39% to
3178.68pts, dragged down by Bindura which led the losers of the day on an
18.51% plunge to $3.0150 on scrappy shares. Mash followed, easing 10.01% to
settle at $0.6299 with banking group First Capital shedding a further 6.85%
to $0.9364 on waning demand. Delta lost a further 1.58% to end at $23.9228
as demand continued to weaken in the counter with Medtech completing the top
five fallers set on a 0.13% loss to end at $0.0799.

Mining house RioZim was the session’s best performer as it topped with a 20%
surge to close at $10.2000 on firming demand. Masimba was 19.91% firmer as
it edged higher to $$1.3800 with apparel retailers Edgars adding 19.75% to
close at $1.0200. Banking group CBZ put on 17.55% to $47.2488, having traded
at a high of $48.0000. Dairibord surged 15.41% to $8.7709 to complete the
top five risers list. Other gains in heavies were registered in Cassava,
Econet, Innscor, Padenga and SeedCo. Activity aggregates remained depressed
with volumes exchanged dropping 25.54%, yielding a value outturn of $58.28m
which was a 28.75% drop from previous session. Econet was the most
sought-after stock of the day, driving both the values and volumes after
claiming 23.39% and $28.76% respectively. Other notable trades were seen in
Proplastics and Meikles which contributed 11.49% and 10.50% in that order.
Capital flight continued as a mere $1.38m worth of foreign purchases were
registered against sales of $19.96m.-efesecuries <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Zambian Kwacha, black market Naira seen bearish

(Reuters) - Zambia and Nigeria’s currencies are expected to come under
pressure against the greenback in the coming week as Uganda and Tanzania’s
hold steady.

ZAMBIA

The kwacha is likely to remain under pressure against the U.S. dollar next
week as a shortage of hard currency driven by agricultural and energy sector
imports persists.

On Thursday, commercial banks quoted the currency of Africa’s second largest
copper producer at 19.7500 per dollar from a close of 19.5610 a week ago.

NIGERIA

Nigeria’s naira is seen easing on the black market in the week ahead as
pressure builds on the currency, despite the central bank’s efforts to clear
backlog demand, traders said.

The naira was quoted at 445 per dollar on the unofficial market on Thursday,
weakening from 435 it reached last week after the central bank resumed forex
sales to investors stuck in the country following a coronavirus-induced oil
price collapse.

The currency traded at 386.57 on the over-the-counter spot market on volumes
in excess of $40 million.

Volumes on the spot market, widely quoted by investors and importers, had
been declining daily, following the absence of foreign inflows and
inadequate central bank interventions.

Oil prices dipped on Thursday although the Brent benchmark stayed above $40
a barrel.

Dollar shortages have plagued the country for months after sharp falls in
the price of oil, Nigeria’s main export.

UGANDA

The Ugandan shilling is seen holding in a stable range in the coming days as
preparations by firms to pay mid-month taxes curb demand for dollars.

Commercial banks quoted the shilling at 3,700/3,710, compared with last
Thursday’s close of 3,680/3,690. The shilling is expected to trade in the
3,685-3,710 range in coming days.

TANZANIA

Tanzania’s shilling is expected to hold steady as dollar demand from
manufacturers and oil importers matches inflows from agricultural exports.

Commercial banks quoted the shilling at 2,315/2,325, the same level as last
Thursday’s close.

KENYA

The Kenyan shilling, which was trading at 108.35/55 on Thursday, is expected
to take its cue from the central bank in the week ahead.

The shilling closed last Thursday’s trade at 108.25/45 per dollar.

Traders said next week’s auction of 50 billion shillings worth of government
bonds was unlikely to move the market, since offshore investors usually
prefer to participate in the auctions of infrastructure bonds, rather than
ordinary ones.

 <mailto:info at bulls.co.zw> 

EMERGING MARKETS

Russia's rouble falls on threat of sanctions; EM shares rise

(Reuters) - Emerging market stocks were set to snap a six-day losing run on
Thursday tracking gains on Wall Street, while Russia’s rouble fell on a
threat of sanctions and rising pressure to investigate the suspected
poisoning of Kremlin critic Alexei Navalny. As the European Union seeks to
impose sanctions on Russia, Italy said Russian President Vladimir Putin has
agreed to set up a committee to probe Navalny’s illness. A report said
Navalny has made further progress in his recovery and is now able to speak
again. Foreign investors have recently cut investments in Russian markets, a
central bank deputy governor said, but strong demand for government bonds
has helped the rouble recover from recent lows.

The currency fell slightly against the dollar on Thursday, last trading at
75.59. Data on Wednesday showed Russia’s economy shrank 8% annually in the
second quarter, although the central bank said the active stage of economic
recovery is over, expecting it to slow down.

ING pointed to the lack of material improvement in the private capital flows
as a lack of support to the rouble from local players.

As the euro climbed with eyes on a European Central Bank policy meeting due
later in the day, the dollar fell. But emerging market currencies were
hesitant to capitalize on the greenback’s weakness.

South Africa’s rand slipped 0.5% after sharp gains on Wednesday. Markets
will now watch for current account as well as mining and manufacturing data
later in the day for more clues on the standing of the recession-hit
economy.

The Turkish lira gained marginally, attempting to post gains for the first
time since Aug. 28, while currencies of emerging markets in central and
eastern Europe slipped against a stronger euro.

Emerging market stocks, meanwhile, rose as much as 0.7%, but cut some gains
as optimism from a Wall Street rally petered out.

Rising corona cases in some countries and a stall in the development of a
potential vaccine have weighed on investor minds as they prepare for a
longer period of economic duress.

Hungary’s main equities index fell 0.7% after the central bank said its sees
a slower economic recovery from a pandemic induced slump.

 <mailto:info at bulls.co.zw> 

Commodities Markets

S. Africa's Harmony Gold Mining forecasts loss for full year

(Reuters) - Harmony Gold Mining said on Thursday it expects to report a loss
for the full year, largely driven by the weakening of the South African rand
against the U.S. dollar.

The gold miner expects headline loss for the year ended June 30, to be
between 139 and 169 South African cents per share, compared to earnings of
204 cents per share reported in the year-ago period. 

Copper withers on doubts about further gains, ECB stimulus

(Reuters) - Copper prices slipped on Thursday as investors questioned
whether its recent rally was exaggerated and were cautious ahead of a news
conference by the European Central Bank (ECB).

Copper, which has rebounded about 50% from 45-month lows in March, is the
bestperforming industrial metal this year, helped by a recovery in top
metals consumer China

and tumbling inventories.

Three-month copper on the London Metal Exchange fell 0.7% to $6,684.50 a
tonne in official trading, after rising on Wednesday.

LME copper inventories MCUSTX-TOTAL ticked higher on Thursday after
repeatedly touching the lowest levels since 2005 in recent weeks.

* The ECB left policy unchanged, but investors will scrutinise a news
conference, which could set the stage for further stimulus.

* Benchmark treatment charges for copper concentrate next year are likely to
fall for a sixth straight year to their lowest since 2011 at about $60 a
tonne.

* LME lead inventories MPBSTX-TOTAL rose to 131,750 tonnes, the highest
since June 2018, having more than doubled over the past two months.

The discount of LME lead cash to the three-month contract CMPB0-3 rose to
$28.75 a tonne, the highest since November 2018, indicating healthy
supplies.

* LME aluminium edged down 0.2% to $1,781 a tonne in official activity,
nickel fell 0.8% to $14,796 and tin added 0.1% to $18,025.

Lead dropped 0.6% to a one-month low of $1,882.50 while zinc lost 0.6% to
$2,409.50 after touching $2,385, the weakest in over three weeks. 

INVESTORS DIARY 2020

Company

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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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