Bulls n Bears Daily Market Commentary : 25 September 2020

Fri Sep 25 17:04:57 CAT 2020

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Bulls n Bears Daily Market Commentary : 25 September 2020

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

ZSE commentary

Market Turnover ZWL$9,985,789.00 with foreign buys at NIL and   foreign
sales were ZWL $1,776,800.00 Total trades were 133

The ZSE All Share Index ended the week on a negative note after losing 8.57
points at 1,635.79 points. ZB FINANCIAL HOLDINGS and RIOZIM  both dropped by
$2.0000 to close at $14.0000 and $10.0000 respectively. MEIKLES LIMITED lost
$1.5000 to end at $14.5000. LARFAGE CEMENT traded weaker at $6.2429 after
losing $0.1071 and CASSAVA SMARTECH fell by $0.0782 to close at $4.4000.

Losses were offset by MASIMBA HOLDINGS LIMITED which advanced by $0.1867 to
settle at 2.2269, INNSCOR AFRICA  traded $0.1035 firmer at $17.0135 and
EDGARS  gained $0.0833 to close at $0.9833. PADENGA HOLDINGS LIMITED
increased by $0.0418 to end at $14.1503 while OK ZIMBABWE traded higher at
$4.1500 after adding $0.0328.

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

Global Currencies & Equity Markets

Malawi

Malawi kwacha threats loom after tobacco revenue slump: Forex shortage hits

Threats to the Malawi Kwacha loom due to seasonal surge in demand for
imports. A financial analyst says the growing demand is a normal seasonal
occurrence. 

This week the local unit showed it was slowly but surely losing its two-year
long grip, losing ground against major trading currencies. The gradual fall
in the currency, while seen as seasonal contrasts sharply with the last two
years of the former Democratic Progressivr Party (DPP) administration when
it remained stable while imports grew.

While authorized dealer banks quoted the MWK as trading at K739.527 to the
US dollar and K44 against the South African rand, the reality is that they
will soon

start to ration.

The move is in preparation for the lean forex season. On the black market,
traders quoted the Malawi Kwacha at 800 against the US dollar and 50 against
the Rand. The local currency has also marginally lost its grip against the
British pound, trading at 944.793 from around 937 last month.

Production of tobacco, Malawi's major foreign currency earner fell by 31.3%
this year on account of too much rain, the Tobacco Commission said earlier
this month.

The slump in production triggered a 26.4% decrease in the tobacco seller's
revenues. That led to revenue from tobacco sales falling to US$174.5M
compared to US$237M in 2019, said the auctioneer AHL.

Tobacco accounts for about 50 to 60% of Malawi's total foreign currency
earnings and roughly 15% of GDP.

Malawi's forex spring occurs during the tobacco selling season when inflows
of US dollars is high and demand for imports traditionally low.

The forex spring tends to dry in the summer as the imports curve rises.

President Lazarus Chakwera, in his first State of Nation Address in
Parliament called for concerted efforts to diversify Malawi's reliance from
tobacco to ensure

economic sustainability. Meanwhile, according to press reports, some
manufacturing companies have scaled down their production as they cannot
import raw materials due to the shortage of foreign exchange in the
country's commercial banks.

On Wednesday, Malawi Confederation of Chambers of Commerce and Industry head
of membership development and communication Tione Kafumbu called for urgent
action to address the forex situation. In the second quarter ending June
2020, Reserve Bank of Malawi indicated that official foreign exchange
reserves dropped to $646.4 million from $699.9 million recorded in the
previous quarter.

South Africa

S.Africa's stock market falls 2%, rand weakens in afternoon trade

(Reuters) - The Johannesburg Stock Exchange (JSE) index gave up the gains
made earlier in the week as the stock market plunged on Friday amid concerns
that rising coronavirus cases could delay economic recovery.

By 1250 GMT, the benchmark FTSE/JSE all share index had fallen 2% to 53,068
points, losing ground regained on Wednesday and sending it back to levels
seen a day earlier, when the stock markets topped off a six-day losing
streak.

The bluechip FTSE/JSE top 40 companies index was trading down 2.21% at
49,017 points.

The broad-based rout, which saw shares from real estate to technology tank,
was led by index heavyweight Naspers Ltd , down about 4% in afternoon trade.

Naspers, along with subsidiary Prosus, hold a weight of almost a quarter in
major South African indices.

South Africa's rand also slipped way past the sentimental 17 rand per dollar
mark on Friday, paring gains seen in early trade as the second wave of
coronavirus in Europe dampened hopes of faster economic recovery and moved
investors away from riskier currencies.

At 1250 GMT the rand was 1.12% down at 17.1450 per dollar, following a close
of 16.9400 overnight in New York in low volume trade with local markets
closed for a national holiday.

After rallying to a six-month high of 16.0950 last Friday, the rand and
other risk assets have reversed course. It has weakened more than 6% as
fears of a second wave of COVID-19 infections in Europe rattled investor
sentiment.

Bonds inched lower, with the yield on the benchmark 2030 government issue up
1 basis point to 9.50%. 

 <mailto:info at bulls.co.zw> 

Global Markets

Risk currencies recover some losses; dollar stabilises below two-month highs

LONDON (Reuters) - The dollar stabilised below its recent two-month highs on
Friday and riskier currencies erased some of their weekly losses, while
equity markets got a lift from hopes that U.S. fiscal stimulus talks would
resume.

The dollar is on track for it best week since early April, driven by risk
aversion that made traders quit their dollar shorts as the outlook for the
global economic recovery darkened with a second wave of COVID-19 cases in
Europe.

It pulled back slightly on Friday, with riskier currencies, which have
fallen sharply this week, gaining in early London trading.

Stocks rose after a late tech-driven rally on Wall Street, with sentiment
boosted by a key lawmaker saying Democrats in the U.S. House of
Representatives are working on a $2.2 trillion coronavirus stimulus package
that could be voted on next week.

The New Zealand dollar rose to 0.6584, up 0.6% since New York's close but
still down 2.6% on the week NZD=D3.

The Australian dollar rose 0.5% to as much as $0.7086 at 0724 GMT, but was
still having its worst week against the dollar since March AUD=D3.

At 0738 GMT, the dollar index against a basket of currencies was down less
than 0.1% on the day at 94.246 =USD but up 1.3% on the week - its biggest
weekly jump in nearly six months.

Britain announced new lockdown measures on Tuesday, while France reported
that the number of people in intensive care due to the coronavirus jumped
over 1,000 for the first time since early June.

The euro rose 0.1% on Friday to $1.1676 EUR=EBS, but is down 1.4% on the
week.

Although investors remain cautious over the upcoming U.S. elections, a
return to the dollar surge of March is not expected.

The yen rose slightly against the dollar to 105.385 JPY=EBS, while the Swiss
franc gained around 0.1% against the euro EURCHF=EBS.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slides to two-month low while silver takes a bullet

Gold fell to a two-month low as the dollar extended gains and hopes for
further U.S. fiscal stimulus faded. Silver plunged after entering a bear
market.

Bullion has retreated this week as the Bloomberg Dollar Spot Index climbed
2%. Congressional stimulus talks have stalled since early August with both
political parties about $1 trillion apart in their offers. Virus cases
continued to pick up in several nations, with France and Israel joining
Britain in tightening lockdowns that could crimp the nascent economic
recovery.

Gold has fallen back after hitting a record in August on massive stimulus
programs, negative real rates and a weakening dollar. Morgan Stanley expects
the market to remain subdued until 2021, when rising inflation and a weaker
U.S. currency could see the precious metal re-test $2,000 an ounce.

Spot gold declined as much as 0.8% to $1,848.88 an ounce, the lowest since
July 22, before trading at $1,856.44 as of 10:38 a.m. in New York. Comex
futures for December delivery fell 0.5% to $1,859.60. Spot silver slipped as
much as 4.8%.

Gold's investment appeal over the summer was burnished as real treasury
rates slid deeper into negative territory. Since early August, those rates
have been almost flat, and it will take a significant boost to inflation
expectations to drive them lower.

Fed officials are sounding the alarm about the U.S. economic recovery.
Chairman Jerome Powell told a congressional hearing that more support was
likely to be necessary, while others were more full-throated, with Cleveland
Fed President Loretta Mester saying it was very much needed given the "deep
hole" the economy is climbing out of. Applications for U.S. unemployment
benefits were little changed last week, contrasting with estimates for a
decline and highlighting an economic recovery that's coming in fits and
starts.

Support looks unlikely to come soon as stimulus talks are pushed to one side
by the battle to appoint a new Supreme Court justice, following the death of
Ruth Bader Ginsburg.

That's a prelude to the upcoming presidential election, the biggest event on
the precious-metals horizon. Tensions continue to rise after President
Donald Trump on Wednesday wouldn't commit to a peaceful transfer of power if
a tally of ballots shows victory for Democrat Joe Biden. Increasing
political uncertainty could boost gold in the short term, according to
analysts including those at Citigroup Inc.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Invest Wisely!

Bulls n Bears 

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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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