Bulls n Bears Daily Market Commentary : 08 February 2021

Mon Feb 8 19:54:08 CAT 2021

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Bulls n Bears Daily Market Commentary : 08 February 2021

 <https://www.nedbank.co.zw/> 

ZSE commentary

The All Share Index closed today's session at 4 139.17 points higher. The
Top 10 Index and the Top 15 Index registered 2.34% and 2.37% gains
respectively. The

Medium Cap Index added 4.73% to close at 8 929.38 points. The Small Cap
Index also added 7.87% by close of trading. The ZSE market capitalization
was at ZWL$499.4 billion. Gains for the day were registered in GetBucks
Microfinance bank  which strengthened by 19.88% to close at 31.05c and First
Mutaul Holdings was 19.79% to close at 1619.97c. The clothing retail store
Edgars  added 19.57% to close at 165c, the telecommunication giant Econet
Wireless Zimbabwe  settled at 1975.32c. Zimbabwe's listed brick manufacturer
Wildale  closed at 49.03c after gaining by a margin of 17.49%. Gains were
offset by Medtech  which closed the day at 7c following a decrease of 5.41%,
ZIMRE Holdings edged down by 5.15%, the financial holding company CBZ shaded
2.32% to 9025c and Dawn Properties was 0.84% down to 39.99c. Axia was down
0.45% to close at 1750c.

The Old Mutual Top Ten ETF added 0.27% to 180.48c after 695 237 units with a
value of ZW$1 254 778.18 in 30 trades exchanged hands. Total turnover was at
ZW$123 684 815.12 in 539 trades. The market breath was positive after 34
stocks closed higher and 6 traded in the negative. Total trades were 539
with 5 counters remaining unchanged and 6 with zero volume.-wealthaccess

Global Currencies & Equity Markets

South Africa

Rand strengthens beyond key level

JOHANNESBURG - The rand looked overseas for guidance as the dollar the
dollar dipped following the release of the latest US payrolls data according
to NKC Research.

After taking receipt of the first million doses of the AstraZeneca vaccine
from the SII last week, South Africa expects another 500,000 doses from the
SII in coming weeks as well as 20 million vaccine doses from Pfizer, 12
million doses under the COVAX facility and nine million doses from Johnson &
Johnson.

The government is scrambling to figure out its "next steps" after new
evidence showed that AstraZeneca's vaccine provides minimal protection
against 501Y.V2 variant.

At the close of local trade, the rand quoted 0.62 percent stronger at
R14.90/$, after trading in range of R14.89/$ - R15.05/$. The expected range
of the rand against the dollar today is R14.70/$ - R15.00/$.

South African bourse

The JSE All Share (+1.23 percent) rose heading into the weekend as the
rand's rally lifted financial stocks (2.99 percent). In the overall emerging
market sphere, the MSCI Emerging Market Index (+0.06 percent) inched higher.

Brent crude oil

The Brent oil price reached its highest level in a year on Friday, buoyed by
hopes of an economic recovery and Opec+ supply curbs. At the close of local
trade, benchmark Brent crude futures quoted 1.41 percent higher at $59.86pb.
Crude prices traded stronger during Asian trade this morning.

BUSINESS REPORT ONLINE

Nigeria

Nigeria: Naira Depreciates As External Reserves Decline Persists to
U.S.$36.12 Billion

The naira last week buckled under the weight of increased dollar demand,
depreciatiating in both the parallel market and the Investors and Exporters
(I&E) window, even as the nation's external reserves declined further to
$36.12 billion last week.

Data from the Central Bank of Nigeria (CBN) showed that the external
reserves fell to $36.116 billion Wednesday last week from $36.395 billion
Wednesday the previous week. This translated to a $279 million week-on-week
(w/w) decline and it represents the second weekly decline in the reserves
since December 17th.

The decline according to analysts at Lagos based Afrinvest Securities
Limited might not be unconnected to the recent repayment of a $500 million
Eurobond instrument by the federal government.

Meanwhile the naira depreciated by N2.04 in the I&E window and by 30 kobo in
the parallel market last week.

According to data from FMDQ, the indicative exchange rate of the I&E window
rose to N396.17 per dollar last week from N394.13 per dollar the previous
week, translating to N2.04 depreciation for the naira.

Similarly, the parallel market exchange rate, as provided by the
naijabdcs.com, the live exchange rate platform of the Association of Bureaux
De Change Operators of Nigeria (ABCON), rose to N477 per dollar last week
from N476.7 per dollar the previous week. This translates to 30 kobo
depreciation for the naira.

This trend according to Bismarck Rewane, Chief Executive Officer of
Financial Derivatives Company, will persist till next month due to rising
currency pressure.

Speaking at the monthly Lagos Business School Breakfast series, Rewane who
is also a member of the Presidential Economic Advisory Council, noted that
the combination of declining external reserves and rising dollar demand
could prompt further depreciation of the naira to N410 per dollar in the I&E
window.

He said: "Currency pressures will persist at both parallel market and I & E
window on increased forex demand, increasing the likelihood of another
currency adjustment to keep the I&E window & official exchange rates
closer.-Vanguard.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar steadies after U.S. jobs-related losses

The dollar was flat to slightly lower on Monday in choppy trading, holding
its ground against a basket of major currencies after falling sharply on
worse-than-expected U.S. jobs data last week, as investors continued to
price in faster U.S. recovery than most countries.

The dollar index was at 90.982,, flat on the day. On Friday, it fell as low
as 90.981 after data showed the U.S. economy created fewer jobs than
expected in January and job losses in December were greater than initially
reported.

Speculators have been reducing short positions - bets the dollar will weaken
- on the currency. Some analysts have flagged the likelihood that the same
speculators will be forced out of their short positions by a rise in the
dollar.

Net bearish bets on the dollar by speculators fell to $29.95 billion for the
week ended Feb. 2, compared with a net short position of $33.81 billion for
the previous week, according to calculations by Reuters and U.S. Commodity
Futures Trading Commission data.

The euro was modestly up at $1.2057 against the dollar.

In a note to clients, J.P. Morgan strategists said they "have growing
confidence of underperformance of EUR vs USD".

Investor morale in the euro zone unexpectedly fell in February as lockdowns
to suppress the COVID-19 caseload left their mark on the economy, which lost
touch with other regions in the world as they recovered further, a survey by
Sentix showed.

Sentix's investor sentiment index for the euro zone fell back into negative
territory, dropping to -0.2 from 1.3 in January. A Reuters poll had pointed
to a reading of 1.9.

The British pound bought $1.3686, 0.3% lower to the dollar.

The dollar was quoted at 105.62 yen, having pulled back from a three-month
high reached on Friday.

In the cryptocurrency market, bitcoin hit another record high of $44,899
after Tesla Inc said on Monday it had invested around $1.5 billion in the
virtual currency and expects to begin accepting payment for its cars and
other products with it in the near future.

Bitcoin was last up 12.7% at 43,736.

Ethereum hit a fresh record high of $1,764.55 after the listing of ethereum
futures on the Chicago Mercantile Exchange late Sunday. It was last up 6% at
$1,712.52.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold climbs for a second session, rebounding from a recent 2-month low

Gold futures rose Monday, looking to extend their gains to a second session,
as prices continued to rebound from a recent drop to a two-month low.

The poor U.S. nonfarm payroll numbers "set the scene for gold's recovery
from below $1,800 on Friday, with the tone further boosted by the passing of
the budget reconciliation process in Congress at the end of the week," said
Rhona O'Connell, head of market analysis, EMEA and Asia, at StoneX. 

This means that only a simple majority is needed in the Senate to get the
bill through" and raises the probability of the larger $1.9 trillion package
pushed by President Joe Biden rather than the smaller $600 billion proposal
from the Republicans, she said in a note.

On top of that, Treasury Secretary Janet Yellen over the weekend made
comments "arguing for a robust economic stimulus package in order to
expedite a return to full employment in 2022," said O'Connell.

A second U.S. COVID-19 economic stimulus package would create more debt and
likely weaken the value of the dollar, lifting demand for dollar-denominated
gold prices. In Monday dealings, the ICE U.S. Dollar Index DXY, a measure of
the currency against a basket of six major rivals, was down 0.1%.

Gold for April delivery GCJ21, 1.30% rose $23.90, or 1.3%, to $1,836.90 an
ounce on Comex. Prices climbed on Friday, after dropping more than 2%
Thursday to its lowest finish since late November.

The yellow metal found support Friday, trimming a weekly loss after a
weaker-than-expected jobs report halted a dollar rally. The weak jobs report
was seen adding to momentum for a larger round of aid spending.

The push for additional spending has sparked a debate over the potential for
the measures to overheat the economy and spark inflation.

With investors piling into stocks and other assets traditionally viewed as
risky, a haven asset like gold has limited upside potential, wrote analysts
at Commerzbank, in a Monday note.

Meanwhile, March silver SIH21 was up 61.1 cents, or 2.3%, at $27.63 an ounce
following a volatile trading week that ended with prices up by just about
0.4%.

Among other metals, March copper HGH21, 1.21% tacked on 1.1% to $3.667 a
pound. April platinum PLJ21, 3.93% added 4% to $1,179.20 an ounce and March
palladium PAH21, 0.74% rose 0.7% to $2,342 an ounce.

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
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