Bulls n Bears Daily Market Commentary : 03 August 2021

Tue Aug 3 17:08:30 CAT 2021

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Bulls n Bears Daily Market Commentary : 03 August 2021

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ZSE commentary

The ZSE sustained gains in today’s session although marginal albeit improved liquidity and activity levels. Total turnover improved significantly to ZW$172.9 million from a trade of over 10.5 million shares spurred by trades in NMB which traded 1.47% of its issued shares. Activity levels were higher at 545 trades. Medtech was the most active stock at 55 trades followed by Star Africa and OK Zimbabwe at 38 each. NMB was the most liquid counter as it anchored both volume and value traded trading 5 998 200 shares with a value of ZW$79.18 million contributing 45.8% to total turnover. At close, the benchmark All Share Index added a marginal 0.37% with 13 advancers and 23 losers while 4 counters remained unchanged. The Top 10 Index was up by 0.89%. The Top 15 Index added 1.04%. The Medium Cap Index traded lower to 17 744.10 points depreciating by 0.28% whilst the Small Cap Index also shaded 1.42% to close at 233 609.14 points.

Leading the risers pack of the day was First Mutual Holdings up by 10.59% followed by Seed Co and Get Bucks which added 6.77% and 6.41% respectively. Delta was up 5.12%. Leading in the shakers’ pack were NMB and National Tyre Services which shaded 20.00% and 19.07% respectively. Mashonaland Holdings shaded 13.97%. The nickel giant Bindura  and General Beltings pared 10.30% and 10.18% respectively. The Old Mutual Top Ten ETF closed at 200c up by 4.71% after 13 900 units with a value of ZW$27 800 in 7 trades exchanged hands.-WealthAccess

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Global Currencies & Equity Markets

Nigeria

Naira gains at black market

Naira gained against the U.S. dollar at the parallel market window on Monday, according to AbokiFX.com, which collates black market rates.

According to data published at the black market window (abokiFX.com), the local unit closed at N512.00 per $1 at the market segment on Monday.

This implies a N3.00 or 0.60 per cent appreciation from the N515.00 rate it traded in the previous session on Friday last week.

By implication, the currency has gained approximately 3.00 per cent at the unofficial market segment after witnessing an all-time devaluation record last Wednesday when it closed at N525 after the Central Bank of Nigeria (CBN) banned forex sales to Bureau De Change operators.

The local currency fell against the greenback currency at the official market segment on Monday.

FMDQ data showed that the naira closed at N411.50 per $1. This implies a N0.23 or 0.02 per cent devaluation from the N411.44 rate it traded in the previous session on Friday last week.

It touched an intraday high of N405.00 and a low of N412.15 before closing at N411.50 on Monday.

The market forex supply plummeted by 18.30 per cent, with $143.20 million posted at the end of the market session as against the $121.08 million recorded in the previous session on Friday last week.

The spread between the official market and the unofficial market rates stood at N100.50, leaving a disparity of 19.63 per cent as of the close of business Monday.

South Africa

South African rand firms on weaker dollar, commodities boost

(Reuters) - South Africa's rand firmed early on Tuesday, hovering near two-week highs hit in the previous session, boosted by commodity prices and weakening of the dollar.

The rand ZAR= traded at 14.4100 against the dollar at 0612 GMT, 0.3% firmer than its previous close.

The currency rose to 14.3675 on Monday, its strongest since July 19, as rand-linked commodities such as iron ore, platinum and gold advanced. It extended gains made last week after a dovish tone from the U.S. Federal Reserve meeting.

The dollar was on the back foot against the safe-haven yen and Swiss franc on Tuesday, dragged by soft U.S. manufacturing data and rising concerns about the coronavirus Delta variant. USD/

Market focus is also on U.S. non-farm payroll data due on Friday, an important parameter to determine the Fed's future policy stance.

Riskier currencies such as the rand thrive on U.S. rates staying low because they benefit from the interest rate differential that increases their appeal for carry trade, in which investors borrow in a low-yielding currency to invest in higher-yielding assets.

In fixed income, the yield on the benchmark 2030 government bond ZAR2030= was down a single basis point to 8.76% in early deals.

 <mailto:info at bulls.co.zw> 

Global Markets

Kiwi dollar, Aussie jump on central bank talk

LONDON (Reuters) - The New Zealand and Australian dollar were the biggest gainers among major currencies on Tuesday, helped by talk from their central banks, while the U.S. dollar took a backseat to the Japanese yen and Swiss franc amid some risk aversion in markets.

The Australian dollar spiked higher after the Reserve Bank of Australia stuck with its plan to taper its bond-buying programme, shrugging off concerns about the economic impact from rising coronavirus cases. It gained half a percent to $0.7393 against its U.S. counterpart.

The Kiwi dollar rose 0.6% to $0.7007 after New Zealand’s central bank said on Tuesday it would soon begin consulting on ways to tighten mortgage lending standards, as it tries to control an inflated housing market and protect home buyers.

The U.S. dollar slipped 0.1% to 109.21 yen, near its July 19 low of 109.07, which was its lowest level since late May. Against the Swiss franc, the dollar traded at 0.9046 franc, having hit a 1-1/2-month low of 0.9038 in the previous session.

Market watchers have of late pointed to the decline in U.S. Treasury yields as being indicative of fears of a coming disappointment in economic growth.

The U.S. 10-year Treasury yield dropped on Monday shortly after an Institute for Supply Management (ISM) report showed July U.S. manufacturing growth slowed for the second successive month.

Clouding the outlook further is the spread of the COVID-19 Delta variant. In the United States, COVID-19 hospital admissions in Louisiana and Florida have hit a new peak though top U.S. health expert Anthony Fauci has ruled out another lockdown in the country.

That outweighed any excitement over a $1-trillion infrastructure investment bill that could be ready for a final vote as early as this week.

The euro was a touch higher at $1.1880, having lost some momentum after hitting a one-month high of $1.1909 on Friday. Sterling gained 0.2% to $1.3914, just off Friday’s one-month high of $1.39835.

Japan expanded state of emergency curbs to more regions on Monday as cases hit a record in Tokyo. In China, the spreading Delta variant poses new risks for the world’s second-biggest economy.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil falls in volatile session on concerns over COVID spread

(Reuters) - Oil fell on Tuesday in volatile trade as concern over rising cases of the Delta coronavirus variant weighed on prices while expectations of a lower U.S. inventories lent some support.

Benchmark Brent crude oil futures fell $1.22, or 1.7%, to $71.67 a barrel by 1236 GMT.

U.S. West Texas Intermediate (WTI) crude was down $1.42, or 2%, at $69.84 a barrel.

Both had risen more than 60 cents earlier in the session.

Despite recent fluctuations, Brent has risen more than 40% this year, helping earnings of oil firms.

BP (BP.L), ConocoPhillips (COP.N), Diamondback Energy Inc (FANG.O) and Continental Resources Inc (CLR.N) all reported strong second-quarter earnings this week. read more

Concerns over the spread of Delta variant in the United States and China, the top oil consumers, weighed on prices.

In China, the spread of the variant from the coast to inland cities has prompted authorities to impose strict measures to bring the outbreak under control. read more

Expectations of a return of Iranian crude to the markets also had a negative impact.

Iran's new president, Ebrahim Raisi, said on Tuesday his government would take steps to lift "tyrannical" sanctions imposed by the United States on its energy and banking sectors. read more

Iran and six powers have been in talks since April to revive a nuclear pact. But Iranian and Western officials have said significant gaps remain.

The sixth round of indirect talks between Tehran and Washington adjourned on June 20, two days after Raisi was elected president. Parties involved in the negotiations have yet to announce when the talks will resume.

Meanwhile, a preliminary Reuters poll showed U.S. crude and product inventories likely declined last week, with both distillates and gasoline stockpiles predicted to have fallen for a third straight week.

The Thomson Reuters Trust Principles.

Gold price today at Rs 47,380 per 10 gm, silver trending at Rs 67,850 a kg

The price of 10 gm of 22-carat gold remain unchanged on Tuesday to trade at Rs 47,380. Silver was selling at Rs 67,850 per kg, down Rs 50 compared to yesterday, according to the website Good Returns.

Gold jewellery price varies across India, the second-largest consumer of the metal, due to excise duty, state taxes, and making charges.

In New Delhi, the price stands at Rs 47,150 per 10 gm. For Mumbai, the yellow metal is selling at Rs 47,380, while, in Chennai, it is at Rs 45,360, according to the website.

The rate of 24-carat gold stood at Rs 48,380 per 10 gm.

On Monday, in the global market, gold prices ticked higher, propped up by a weaker dollar and US bond yields, though an uptick in risk appetite took some shine off the safe-haven metal, Reuters reported.

Spot gold rose 0.1% to $1,816.01 per ounce by 1:44 pm EDT (1744 GMT), having hit a session low of $1,804.49, while US gold futures settled up 0.3% at $1,822.20.

Meanwhile, a fund manager has predicted that the gold prices could double in the next 3-5 years. Gold is primed to surge to fresh highs as the risks around central banks unwinding massive stimulus are under-appreciated by investors, said Diego Parrilla, who manages the $250 million Quadriga Igneo fund, Bloomberg reported.

Gold and other precious metals 

Following yesterday's trend, global spot prices continued its growth today as well. It was clocked at $1816.7 per Troy ounce in the latest close which noted an increase of 0.18% over yesterday. This price level is 4.24% higher than average gold price observed in the past 30 days ($1739.7). Among other precious metals, silver prices saw a fall today. Silver plunged 0.06% to $25.2 per Troy ounce.

Further, platinum price has shown an uptick. The precious metal platinum rose 0.05% to $1078.0 per Troy ounce. Meanwhile in India, gold was priced at ₹47919 per 10 gram on MCX, with a change of ₹100.6. Also, the price of 24k gold in the Indian spot market was quoted at ₹48380 .

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Dairibord

Starafrica

Medtech

Turnall

Seed co

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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