Bulls n Bears Daily Market Commentary : 25 August 2021

Wed Aug 25 15:35:14 CAT 2021

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Bulls n Bears Daily Market Commentary : 25 August 2021

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ZSE commentary

The ZSE slid back to negative territory in today’s mid-week session despite positive SDR ques on across-the-board weaknesses headlined by heavyweight counters. Activity levels were higher at 432 trades. Econet was the most active stock at 52 trades closely followed by Star Africa at 39 trades and OK Zimbabwe at 33 trades. Star Africa anchored volume aggregate trading 1 108 100 shares and Econet anchored value aggregate with a value of ZW$39 million. Market Cap closed at ZW$797 billion shading 1.89%.

The benchmark All Share Index pared 1.94% to 6 690.89 with 12 advancers and 23 losers while 4 counters remained unchanged. Shares of 39 out of 49 companies were traded. The Top 10 Index was down 0.88%. The Top 15 Index also shaded 1.74%. The Medium Cap Index traded lower to 17 074.83 points depreciating by 3.55% whilst the Small Cap Index also lost 0.45% to close at 229 340.31 points. Leading the risers pack of the day was Cassava which was up by 18.06%. African Sun and Star Africa  added 11.43% and 4.34% respectively. Edgars was up by 3.85% to 390c. Leading in the shakers’ pack were BAT and First Mutual Properties  which lost 20.00% and 19.99% respectively. Hippo Valley Estates was down 19.46% to 15300c and Masimba Holdings and Axia Corporation shaded 15.45% and 8.40% respectively. The Old Mutual Top Ten ETF closed at 225.21c down by 5.96% after 1 142 008 units with a value of ZW$2 571 879 in 20 trades exchanged hands.-wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand dips before release of rebased GDP figures

(Reuters) - South Africa's rand dipped early on Wednesday, before the release of rebased gross domestic product (GDP) estimates that will address changes in the structure of Africa's most industrialised economy.

At 0645 GMT, the rand ZAR=D3 traded at 15.0175 against the dollar, roughly 0.2% weaker than its previous close.

Government bonds were also softer, with the yield on the 2030 instrument ZAR2030= rising 1.5 basis points to 8.875%.

Statistics South Africa will release the rebased and benchmarked GDP figures around 0930 GMT, changing the reference year for real estimates of national accounts to 2015 from 2010 and incorporating new data sources.

Those adjustments could result in a new estimate of the size of the country's economy, currently the second-largest on the African continent behind Nigeria.

On global markets, investors were looking to the Federal Reserve's Jackson Hole symposium later in the week for clues about the trajectory of U.S. monetary policy and the timing of an expected tapering of its pandemic-era stimulus.

The safe-haven dollar .DXY traded close to a one-week low versus major peers on Wednesday.

Nigeria

Naira Loses 0.2% at Parallel Market, Gains 0.2% at I&E 

The Naira depreciated by N1 or 0.2 per cent against the US Dollar at the parallel market on Tuesday, August 24, Business Post reports.

During the session, the value of the local currency closed at N521/$1 at the unregulated segment of the foreign exchange (FX) market compared with N520/$1 it was sold at the previous session.

Also, the domestic currency depreciated against the Pound Sterling yesterday by N2 to sell for N710/£1 versus the preceding day’s rate of N708/£1, while against the Euro, the Naira depreciated by N1 to settle at N605/€1 in contrast to Monday’s N604/€.

However, at the Investors and Exporters (I&E) window, the exchange rate of the Nigerian currency to its American counterpart favoured the former.

This was because the local currency closed stronger by 83 kobo or 0.2 per cent, quoting at N411/$1 as against N411.83/$1 it traded a day earlier.

Data showed that the strengthening of the indigenous currency was helped by a decline in FX transactions at the market window.

The value of trades recorded yesterday went down by 55.4 per cent or $96.18 million to $77.46 million from $173.64 million achieved at the preceding session.

A look at the interbank segment indicated that the value of Naira against the US Dollar slightly declined by 3 kobo or 0.01 per cent to N410.19 /$1 from N410.16/$1.

Cryptocurrencies Fall as Investors Take Profit

At the cryptocurrency market, profit-taking was the order of the day following the previous days’ gains as some more established financial services companies offer their customers access to virtual coins.

During the session, Litecoin (LTC) dropped 7.1 per cent to sell at N89,999.00, Ripple (XRP) fell by 6.4 per cent to trade at N602.13, while Tron (TRX) depreciated by 4.7 per cent to sell at N44.09.

In addition, Dash (DASH) lost 3.5 per cent to trade at N130,600, Bitcoin (BTC) went down by 2.9 per cent to close at N24,895,852.06, while Ethereum (ETH) declined by 1.9 per cent to close at N1,668,279.99.

But the US Dollar Tether (USDT) went in a different route on Tuesday as it moved northwards by 0.9 per cent to quote at N515.01.

.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar perks up to trade above one-week low on delta variant fears

The dollar index, which tracks the currency against six rivals, edged up 0.2% to 93.03 by 7:13 a.m. ET, after dipping to 92.804 the previous day for the first time since Aug. 17.

The safe-haven dollar gained on Wednesday to trade above a one-week low versus major peers amid concerns that the highly contagious delta coronavirus variant could derail a global economic recovery.

Risk appetite in global markets has improved since the U.S. Food and Drug Administration granted full approval to the Covid-19 vaccine developed by Pfizer and BioNTech in a move that could accelerate U.S. inoculations.

Dr. Anthony Fauci, the country’s top infectious disease expert, said on Tuesday that the United States could get Covid-19 under control by early next year.

The dollar index, which tracks the currency against six rivals, edged up 0.2% to 93.03 by 7:13 a.m. ET, after dipping to 92.804 the previous day for the first time since Aug. 17.

The greenback had rallied until the start of this week, with the dollar index hitting a 9 1/2-month high of 93.734 on Friday, on fears over delta’s economic impact and as the Federal Reserve signaled a tapering of stimulus was likely this year.

However, with delta clouding the outlook, expectations have diminished that Fed Chair Jerome Powell will indicate a timeline for tapering when he speaks at the Fed’s annual economic symposium at Jackson Hole, Wyoming, on Friday.

Gkionakis added that he thinks Jackson Hole won’t be a big event for the dollar.

The dollar gained 0.2% to 109.89 yen, another safe-haven currency, near the middle of the trading range since early July.

Against the euro, the dollar fell about 0.1% to $1.1738, remaining close to the one-week low of $1.17655 touched overnight.

Sterling traded 0.09% lower at $1.3716 after rising to as high as $1.37475 on Tuesday, its strongest since Nov. 19.

Australia’s dollar dropped 0.07% to $0.725 after touching a one-week high of $0.7271 in the previous session.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold eases on steady dollar, focus on Jackson Hole

(Reuters) - Gold retreated below $1,800 on Wednesday as the dollar halted its slide while investors sought cues on the timeline of monetary tapering from the U.S. Federal Reserve’s symposium this week.

Spot gold fell 0.5% to $1,793.80 per ounce by 1150 GMT, while U.S. gold futures were down 0.7% at $1,795.60.

Gold jumped 1.4% on Monday to the highest in nearly three weeks, driven by a broad retreat in the dollar this week.

The dollar steadied off a one-week low, limiting appetite for bullion from those holding other currencies.

Powell’s speech at the Fed’s symposium in Wyoming on Aug. 27, which had to be moved online because of virus-related concerns, could shed more light on the timeline for withdrawing stimulus, with some still betting on a less dovish stance.

Some investors view gold as a hedge against higher inflation that could follow stimulus measures.

Silver eased 0.5% to $23.71 per ounce, while palladium shed nearly 1% to $2,450.14

Platinum fell 1.6% to $994.96. It has fallen more than 6% this year.

Oil steadies near $71 after two-day rally

(Reuters - Oil prices steadied near $71 a barrel, taking a breather after a strong rally in recent days as Mexico was set to resume crude production following a major outage.

Brent crude was up 14 cents, or 0.2%, to $71.19 a barrel by 1028 GMT, reversing earlier losses. U.S. West Texas Intermediate (WTI) crude was up8 cents, or 0.12%, to $67.62.

Both benchmark contracts over the previous two days rose by about 8%. That rally erased most of the slump from a seven-day losing streak on the back of a resurgence in COVID-19 cases.

The rally came after Mexican supply fell by more than 400,000 barrels per day following a fire on an oil platform. Mexico's state oil firm said it expected to resume production by Aug. 30.

The bank expects Brent crude prices to rise to $75 a barrel by December.

American Petroleum Institute data showed crude inventories fell 1.6 million barrels for the week ended Aug. 20, while gasoline stockpiles fell 1 million barrels, according to sources, who spoke on condition of anonymity.

Analysts were expecting crude stockpiles to fall by 2.7 million barrels and gasoline stocks to drop by 1.6 million barrels, a Reuters poll showed.

U.S. Energy Information Administration official data is due to be released on Wednesday at 1430 GMT.

Last week's losses were driven by fears that the spread of the highly contagious Delta variant of the coronavirus in Asia would slow the region's economic recovery.

In a promising sign that the spread of Delta infections was easing in China, the country on Wednesday reported just 20 new confirmed coronavirus cases for Aug. 24, down from 35 a day earlier.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Dairibord

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

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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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