Bulls n Bears Daily Market Commentary : 20 August 2021

Fri Aug 20 19:54:55 CAT 2021

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Bulls n Bears Daily Market Commentary : 20 August 2021

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ZSE commentary

The ZSE maintained its sluggishness as it remained in the negative for the 6th consecutive session. Total turnover for the day was valued at ZW$208.9 million. Activity levels were lower than yesterday at 406 trades. Art Corporation was the most active stock at 42 trades closely followed by Star Africa at 41 trades and Medtech at 38. Econet Wireless Zimbabwe anchored both volume and value aggregate trading 1 604 400 shares with a value of ZW$60.48 million contributing 28.96% of total turnover.

The benchmark All Share Index shed 0.41% to 6 820.36 with 9 advancers and 24 losers while 8 counters remained unchanged. Shares of 41 companies were traded. The Top 10 Index was near flat down by 0.05%. The Top 15 Index pared a paltry 0.08%. The Medium Cap Index traded lower to 17 807.22 points depreciating by 0.87% whilst the Small Cap Index lost 1.42% to close at 230 844.49 points. Leading the shakers pack of the day was Fidelity which is struggling for direction down by 13.04%. Dairibord  and the conglomerate Innscor retreating by 9.42% and 4.46% respectively. Zimpapers was down 3.15% to 300c. Leading in the risers’ pack were Econet and FBC Holdings  which added 3.70% and 3.09% respectively. Star Africa Corporation was up 2.46% to 199.52c. Medtech and Get Bucks added 1.66% and 0.23% respectively. The Old Mutual Top Ten ETF closed at 225.06c down by 0.86% after 260 800 units with a value of ZW$586 965 in 18 trades exchanged hands..wealthaccess

Global Currencies & Equity Markets

South Africa

Rand slides on stronger dollar and delta variant worries

The rand reached five-month highs against the dollar on Friday (20 August) amid continued US dollar strength and international concerns around the delta Covid-19 variant.

The rand, along with its emerging-market peers, traded weaker as the Federal Open Market Committee (FOMC) minutes provided the catalyst for a resurgent US dollar, Nedbank said in a research note.

This was echoed by André Cilliers, currency strategist at TreasuryONE, who said that the weak emerging market sentiment has continued following the FOMC minutes of Wednesday and renewed fears that the delta variant can cause lockdowns, slowing global growth.

While markets have largely anticipated that the US Fed would start looking at tapering its asset purchases, there has been little confirmation of when, up until now, said Bianca Botes, director of Citadel Global.

The rand was trading at the following levels against the major currencies at 10h45 on Friday (20 August):

Dollar/Rand: R15.35 (+0.92%)

Pound/Rand: R20.92 (+0.89%)

Euro/Rand: R17.91 (+0.87%)

Zambia

Kwacha cruises to 18th mark

POSITIVE financial market sentiments and less demand for the United State (US) dollar strengthened the Kwacha to a 12 month high gaining 20 ngwee to trade at K18.60. 

In its daily market update released yesterday, Absa Bank Zambia Plc stated that increased inflows of US dollars form both corporate and retail sectors has contributed to the bullish run of the local currency. 

The bulletin noted that the Kwacha opened trading on Wednesday at K19.10 and K19.15 to the dollar but added 20 ngwee to its previous day’s gains by mid-day. 

Bureaus hold on to Kwacha after sharp appreciation

SOME bureau de change in Lusaka are holding on to the Kwacha after the local currency traded below K17.55 to a dollar for the first time since March 2020,

A check around Lusaka found that most bureau de change were holding on to the kwacha, stating that it was in short supply.

C&A Bureau de change, Unimoni Money Transfer and Struts returned clients who tried to sale dollar on the pretext that the local currency had run out.

According to Bloomberg data, the local currency opened the day at K18.875 per dollar and has continued to appreciate in what experts say is a sign of confidence in the country’s President-Elect Hakainde Hichilema.

After outgoing President Edgar Lungu conceded defeat on Sunday, Bloomberg reported that Zambia’s Eurobonds and currency rallied after President-Elect Hichilema scored a shock landslide victory in the presidential election.

Zambia’s $1 billion of Eurobonds due in 2024 jumped 11% to 74.14 cents on the dollar by 2:49 p.m. in London, the biggest gain since March 2020.

President-Elect Hichilema will be sworn in on Tuesday next week.

.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hits new 9-1/2 month high as FX traders seek safety

The U.S. dollar hit a new 9-1/2-month high against major peers on Friday, buoyed by fears that the Delta coronavirus variant could delay the global economic recovery just as central banks begin to reverse pandemic-era stimulus.

While moves in currency markets were much more contained than on Thursday as equity markets stabilised, the risk-sensitive Australian and New Zealand dollars fell sharply again.

The dollar index, which measures the currency against six rivals, rose as high as 93.597 for the first time since early November, before trading little changed at 93.629. For the week it is on track to gain about 1%, the most in two months.

Minutes of the Fed’s July meeting, released on Wednesday, showed officials largely expect to reduce their monthly bond buying later this year.

The Australian dollar sank to a new 9 1/2-month low of $0.7106, down 0.5%, putting it on track for its worst weekly performance since September 2020, as a COVID-19 lockdown on Sydney was extended by a month.

New Zealand’s kiwi dipped to a new nine-month trough of $0.6807. The government on Friday extended a snap COVID-19 lockdown that delayed the central bank raising interest rates this week.

The Canadian dollar dropped to an eight-month low of C$1.2949, down 0.8% vs its U.S. counterpart as oil prices fell further because of worries about the global economy.

Norway’s crown dropped for a second day as weaker oil prices and general nervousness among investors hit the currency despite the Norwegian central bank on Thursday sticking to its plan for a September interest rate hike. The euro was last up 0.7% at 10.625 crowns .

The euro was little changed at $1.1674, but still near the 9-1/2-month low of $1.16655 reached overnight. It is down nearly 1% this week, the most since mid-June.

“Equity market drawdowns and falling commodities mean one thing and one thing only, a stronger USD as investors look for a safe haven,” said Jeremy Thomson-Cook, economist at payments firm Equals Money.

The yen, another safe-haven currency, strengthened. The dollar was down 0.2% at 127.96 yen.

Sterling slipped to one-month lows versus both the dollar and the euro.

Emerging markets have also had a bruising week. A regulatory crackdown in China and the concerns over growth and COVID-19 have sent investors looking for safer assets.

The Chinese yuan sank to a new three-week low of 6.51 per dollar in the offshore market before trading about 0.1% weaker at 6.5052.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Indian spot gold rate and silver price on Friday, Aug 20, 2021

Today Gold Rate ( ₹ 47120) is lower than this week's average of ₹47210.0 by 0.19%. The Gold Price though was lower than yesterday's value of ₹47130.

The Gold Price Today in India ( ₹47120) decreased as compared to yesterday, despite of the fact that the global Gold Price Today increased by 0.18% and reached the value of $1816.7.

Gold and other precious metals on Friday, Aug 20, 2021

The global Gold Price continued to grow as per the current close with a value of $1816.7 per Troy ounce. The total growth being of 0.18%. This price level is 4.24% higher than average Gold Price observed in the past 30 days ($1739.7). Among the other precious metals, Silver Price Today saw a fall. The Silver Price 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 ₹47237 per 10 gram on MCX, with a change of ₹103.9. Also, the price of 24k gold in the Indian spot market was quoted at ₹47120 . 

MCX Gold on Friday, Aug 20, 2021

On MCX, gold futures prices in India jumped 0.22% to ₹47237 per 10 gram. In the previous session, gold was up 0.11% or about ₹103.9 per 10 gram.

On MCX, silver futures grew nearly 0.19% or ₹118.8 per kg to the price level of ₹62550 per kg.

The gold spot price today ( ₹47120) decreased by ₹103.9 from yesterday ( ₹47130), whereas global spot prices saw growth of $3.25 to $1816.7 value today. Following global price trend, MCX future price saw an increase of ₹103.9 and value of ₹47237 as of today.

Currency Exchange Rate on Friday, Aug 20, 2021

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. 

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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