Bulls n Bears Daily Market Commentary : 28 September 2020

[Bulls n Bears]

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Bulls n Bears Daily Market Commentary : 28 September 2020

 


 

 


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

 


ZSE commentary

 

 

Market rebounds in week opener…

The ZSE broke its nineth losing streak in week opening trades with the mainstream All Share Index recovering 0.47%% to close at 1643.46pts while, the Industrials added 0.49% to see it close at 5422.46pts. The Top Ten Index was 0.67% firmer at 1107.07pts with the Minings shedding 0.22% to 3696.42pts dragged down by a scrappy 200 parcel which traded in Bindura that traded at an intra-day low of $3.0625. ZPI topped the risers set on an 10.67% increase to end at $0.70000 with banking group ZB following ticking up 9.52% to$15.3333. OKZIM was 9.45% firmer to end at $4.5420 while, Innscor added 3.69% to $17.7594. Hippo valley rose 3.45% to $15.0000 on firming demand. Other notable gains were registered in SeedCo, Axia and Meikles. Overall, twenty-seven counters were active in the session as nine rose against twelve losers to register a negative breadth.

 

Banking group First Capital led the laggards of the day on an 9.82% loss that took its price to $0.6526, as demand continued to wane in the counter. Ariston lost 7.14% to $1.3000 albeit closing bid at that level while, NMB was 6.25% down at $3.0000. Turnall eased 6.25% to $0.6000 with Masimba shedding 2.82% to $2.1641 and completed the top five losers set. Activity aggregates slightly improved in the session as volumes exchanged ballooned 154.42% to 2.65m shares yielding a value outturn of $15.75m which was 57.41% up from prior session. Delta and Econet drove the value outturn of the day after claiming 30.96% and 29.09% of the aggregate while, Econet propelled the volumes traded on an 34.71% contribution. Capital flight continued as outflows of $7,494,322 were registered against a mere $17,640 inflows.-efesecurities


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

 

Global Currencies & Equity Markets

 

 

South Africa

 

Rand gives way to rising greenback

JOHANNESBURG - The South African currency slumped during afternoon trade to pare early session gains as a resurgence in Covid-19 infections saw investors shed risk assets according to NKC Research.

 

 

The local unit gave way to the trade weighted US dollar on Friday, which surged close to a two-month high against a basket of currencies, amid economic recovery doubts and political developments in the US.

 

At the close of local trade, the rand quoted 1.38 percent weaker at R17.14/$, after trading in range of R16.81/$ - R17.26/$. The rand inched marginally stronger during premarket trading this morning. Expected range today R16.90/$ - R17.20/$.

 

South African bourse

 

The JSE All Share (-1.22 percent) stumbled at the end of last week as global stock markets suffered a disappointing week of losses. Large telecom (-3.95 percent) and tech (-2.18 percent) stocks were among the day’s biggest laggards as market heavyweight Naspers dropped by 2.16 percent. In the overall emerging market sphere, the MSCI Emerging Market Index (+0.13 percent) traded higher.

 

Brent crude oil

 

Brent oil struggled to gain momentum last week as mounting concerns over weak fuel demand, amid widespread resurgence in Covid-19 infections, weighed down crude prices. At the close of local trade, benchmark Brent crude futures quoted 0.52 percent lower at $41.83pb. Crude prices ticked weaker during Asian trade this morning.-iol

 

 

 

Nigeria

 

Nigeria’s forex reserves drop by $47.3m

Nigeria’s foreign exchange reserves suffered its first decline in recent weeks at the weekend as dreary global crude oil prices, dollar recovery and domestic pressure on the controlled exchange rate heightened fears of further depreciation in naira.

 

Nigeria’s foreign exchange (forex) reserves dropped by $47.33 million to close weekend at $35.77 billion. Crude oil price declined by 4.4 per cent from $43.68bbl to $41.74bbl amid fears upsurge in COVID-19 cases might trigger a new wave of economic lockdowns.

 

Senior Research Analyst, FXTM, Lukman Otunuga, said oil prices would likely remain stuck around the $40 regions in the near term, especially If another round of possible lockdowns hit oil demand.

 

He noted that oil prices have continued to be heavily influenced by demand-side factors and the state of the global economy.

 

He noted that a steady rebound by dollar may put pressure on naira and further exacerbated foreign-currency denominated portion of Nigeria’s public debt stocks.

 

Analysts at Cordros Group said the naira might depreciate further in the medium-to-long term citing widening current account position, currency mispricing, which could induce speculative attacks on the naira, and the resumption of forex sales to the Bureau de Change (BDC) segment, which should place an additional layer of pressure on the reserves.

 

The CBN has offered more than $200 million to the BDC segment since the resumption of forex sales to the segment. The CBN last week sold $100 million through the Secondary Market Intervention Sales (SMIS) Wholesale Window to boost liquidity levels and maintain stability in all segments of the market.

 

The naira closed flat across the official forex windows but suffered a marginal decline at the parallel market. At the Investors and Exporters (I & E) window, naira closed at N386.00 per dollar while CBN’s spot rate also closed at N379.00 per dollar. At the parallel market, naira depreciated to N467.00 per dollar. Meanwhile, turnover at the I & E window dropped by 57.1 per cent to $348.8 million at the weekend, compared with $812.8 million recorded in the previous week.

 

Many analysts expected the naira to depreciate further, especially as dollar rebounded in the global market.

 

Analysts at Financial Derivatives Company (FDC) said the 100 basis points cut in Monetary Policy Rate last week amid rising inflation may worsen Nigeria’s currency management situation.

 

According to analysts, the imbalance could heighten the risk of capital flight, which will further increase the pace of external reserves depletion.

 

They added that Nigeria as an import- dependent economy stands the risk of higher import prices due to a stronger dollar.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

 

 

EMERGING MARKETS

 

Turkish lira slides to record low, EM stocks bounce

(Reuters) - The Turkish lira hit a record low on Monday on growing concerns around clashes between Armenian and Azeri forces, while emerging market stocks tracked gains in Asia as data showed a jump in Chinese industrial profits.

 

The lira tumbled 1.5% to a low of 7.79 against the dollar, while the Russian rouble eased for the fourth straight session. Azerbaijan and Armenia sovereign dollar-denominated bonds fell as much as 3-4 cents.

 

The lira, already among the worst performing European currencies this year, received a brief respite last week following a surprise move by the central bank to raise its key lending rate, but analysts said the average interest rate might not rise by much.

 

An index of emerging market currencies was flat by 0846 GMT, with the South African rand easing slightly against the dollar.

 

The Hungarian forint was nearly unchanged versus the euro. Ratings agency Moody’s on Friday raised Hungary’s sovereign rating outlook to “positive” from “stable”, partly citing improvements in the domestic and external debt position.

 

The Swedish krona was a touch higher as data showed retail sales jumped 3% in August from a year earlier.

 

A basket of developing world stocks was up 0.9% and on track for its best day in two weeks, propped by gains in Russia. Tech-focussed South Korean and Taiwanese stocks also jumped as investors priced in a boost from tighter U.S. curbs on China’s biggest chipmaker.

 

The South African stock index jumped 1.9%, while the Turkish bourse shed 0.5%.

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold prices today fall again, down about ₹7,000 from record highs; silver plun

Gold and silver prices continued to be under pressure in Indian markets today. On MCX, gold futures fell 0.4% to ₹49,460 per 10 gram, extending last week's sharp fall, while silver tumbled 1% to ₹58,473 per kg. Last week, gold prices in India had tumbled ₹2,000 per 10 gram in India while silver plunged ₹9,000 per kg. As compared to is August 7th highs of ₹56,200, gold is down about ₹7,000 per 10 gram.

 

In recent days, gold has been under pressure amid a resurgent US dollar, which is being seen as the preferred safe haven asset amid renewed risk aversion in global financial markets. Global risk sentiment has weakened as rising virus cases especially in Europe have rekindled worries about fresh lockdowns though counties have not yet resorted to large-scale lockdowns.

 

In global markets, gold prices were steady after last week's battering. Spot gold was little changed at $1,860.19 per ounce as the US dollar rally took a pause. The dollar index was down 0.14% against rivals, after hitting a two-month high last week. A softer dollar makes bullion cheaper for holders of other currencies.

 

Among other precious metals, silver rose 0.3% to $22.93 per ounce, platinum gained 0.4% to $850.74 and palladium was up 0.1% to $2,217.87.

 

Gold traders moved to the sidelines ahead of Tuesday's the first US presidential debate between President Donald Trump and Democratic opponent Joe Biden.

 

Asian stock markets were mostly higher today after data over the weekend showed profits at industrial companies in China grew for a fourth consecutive month in August.

 

Gold investors also looked for any signs of breakthrough in talks for further stimulus in the US. Over the weekend, US House Speaker Nancy Pelosi said a deal could be reached with the White House on a coronavirus relief package and that talks were continuing.

 

Despite the recent price drop, ETF investors remained on the sidelines. Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.02% to 1,266.84 tonnes on Friday.

 

 

Speculators reduced their bullish positions in COMEX gold and silver contracts in the week to September 22, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

 

In India, the drop in gold pries triggered some uptick in retail demand last week, dealers said.-livemint

 

 

 

 

Silver Tries To Continue Its Rebound

Silver continues its rebound and is trying to settle above the resistance at $23.30 as the U.S. dollar is losing ground against a broad basket of currencies.

 

The U.S. Dollar Index failed to settle above the resistance at 94.65 and declined closer to the nearest support level at 94.20 as GBP/USD gained ground on hopes for a deal between EU and UK.

 

If the U.S. Dollar Index manages to settle below the support at 94.20, it will gain more downside momentum and provide support to silver.

 

Meanwhile, gold is also trying to rebound. Currently, gold is testing the nearest resistance level at $1875. If gold moves above this resistance level, it will gain upside momentum which will be bullish for silver.

 

Gold/silver ratio is moving towards the 80 level. The nearest significant support for gold/silver ratio is located at the 50 EMA at 78.10. If gold/silver ratio declines closer to this level, silver will have a good chance to gain significant upside momentum.

 

At this point, silver managed to stabilize after the recent sell-off and is trying to gain more momentum for a rebound. The dynamics of the American currency will continue to play a key role for silver in the upcoming trading sessions.

 

Technical Analysis

 

Silver gained upside momentum and is testing the nearest resistance level at $23.30. This level has already been tested several times during the recent trading sessions and proved its strength.

 

If silver manages to settle above $23.30, it will gain additional upside momentum and head towards the next resistance level at the 50 EMA at $24.80. The previous downside move was very fast and no material levels were formed between $23.30 and $24.80, so silver’s rebound may be fast.

 

In case silver gets above the resistance at the 50 EMA, it will head towards the next resistance level at the 20 EMA at $25.30.

 

On the support side, the nearest significant support level is located at $22.30. Silver has mostly ignored the previous resistance level at $22.90  so it won’t serve as a meaningful support level on the way down.

 

In case silver gets below the support at $22.30, it will move towards the next support at the recent lows at $21.65.-fxempire

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

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 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.

 


 

 


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