Bulls n Bears Daily Market Commentary : 01 July 2021

Thu Jul 1 15:13:11 CAT 2021

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Bulls n Bears Daily Market Commentary : 01 July 2021

ZSE commentary

The ZSE opened the second half of the year near flat with a slight decline
in both volume and value traded. Turnover was spurred by heavyweight
counters which contributed over 88% of total turnover of ZW$121.87 million.
Activity levels were lower at 664 trades. Medtech was the most active stock
at 128 trades followed by OK Zimbabwe and Star Africa at 38 and 78 trades
each. The market bias was positive after 26 stocks registered gains against
14 losers while 1 of the active stocks remain unchanged. Medtech was the
most liquid counter as it anchored volume aggregate trading over 5.72
million shares while Seed Co Zimbabwe anchored value traded with a value of
ZW$26.07 million. The benchmark All Share Index was up 0.70% and the Top 10
Index also up by 0.98%. The Top 15 Index added 0.85%. The Medium Cap Index
traded higher to 17 293.13 points whilst the Small Cap Index added 5.95% to
close at 201 439.50 points.

Leading the risers pack of the day was Unifreight and Hippo which added
17.29% and 15.79% respectively. Zimpapers hit its new high at 309.70c up by
14.70%. The clothing retail giant Edgars was up by 11.35% to 398.18c.
Wildale also added 9.80% as it continued on its upward trend. Leading in the
shakers pack was Get Bucks  shading 11.58%. Star Africa and Padenga shares
retreated 8.38% and 2.61% to 281.43c and 2917.13c respectively. Delta and
Turnall were down by 2.36% and 1.91% respectively. The Old Mutual Top Ten
ETF closed at 178.01c down by 0.55% from a trade of 585 238 units worth ZW$1
041 769.44 in 8 trades..-wealthaccess

Global Currencies & Equity Markets

Nigeria

Naira loses at official, black markets

Naira fell marginally against the U.S. dollar at the parallel market on
Wednesday after it remained unchanged for the past two days.

The currency also fell at the official market after maintaining steady gains
in the last two sessions.

Data posted on abokiFX.com, a website that collates parallel market rates in
Lagos showed that the naira closed at N503.00 per $1 at the black market
window on Wednesday.

This represents a N1.00 or 0.20 per cent devaluation from N502.00 it traded
in the last two previous sessions.

Also, data posted on the FMDQ Security Exchange where forex is officially
traded showed that the naira closed at N411.50 at the Nafex window.

This represents a N0.67 or 0.16 per cent depreciation from the N410.83 rate
it traded in the previous session on Tuesday.

The local unit clinched an intraday low of N420.95 and a high of N3400.00
before closing at N411.50 on Wednesday.

This happened as forex turnover dipped by 25.71 per cent, with $160.12
million recorded at the end of the market session as against the $215.53
million posted in the previous session on Tuesday.

The spread between the parallel market and the Over-the- Counter rates stood
at N91.50, translating to a margin of 18.20 per cent as of the close of
business on Wednesday.

South Africa

Rand falls on subdued risk appetite

THE rand fell in early trade on Thursday as concerns about new coronavirus
infections and fresh lockdowns subdued investors' appetite for risk. Markets
were also on edge ahead of the release of US jobs data seen as crucial to
the Federal Reserve's policy outlook.

At 0630 GMT, the rand traded at 14.3000 against the dollar, 0.22 percent
weaker than at its previous close.

Investors were concerned about the spread of the Delta variant of Covid-19
globally, which has led some countries to impose tighter curbs while others
have extended restrictions.

South Africa, the worst-hit country on the African continent in terms of
recorded cases and deaths, tightened its restrictions on Sunday.

Investors are awaiting the US non-farm payrolls report due on Friday for
clues on the Fed's next step.

Riskier currencies, such as the rand, thrive on US interest rates remaining
low, because they benefit from the interest rate differential that increases
their appeal for carry trade.

REUTERS

 <mailto:info at bulls.co.zw> 

Global Markets

China advances in challenge to dollar hegemony

China has already made one attempt to turn the renminbi into an
international currency and reduce its dependence on the dollar. It is now
trying again, and this time things really could be different.

The renewed effort to dethrone the dollar is based in large part on China's
technological prowess. It is banking that the development of the necessary
financial infrastructure, the country's world-beating mobile payments
systems and a successful launch of the digital version of the renminbi will
make it easier to use and promote the currency beyond China's borders.

The approach is unorthodox. But if Beijing succeeds in its quest it will
undermine the dollar-led global order, at least in China's sphere of
geopolitical influence, and challenge the way America wields power.

Given that China is the second-largest economy and the world's biggest
trading nation, the renminbi should be used far more extensively than it is.
However, Beijing's determination to retain capital controls has prevented it
from following a conventional path to reserve currency status.

China is still operating restrictions on money flows, so why has the outlook
for the renminbi brightened?

A reserve currency has to serve as a medium of exchange, a store of value
and a unit of account. According to Mark Carney, the former governor of the
Bank of England, history has showed that the most important of these
attributes is the first one.

Since its first abortive bid to challenge the dollar between 2009 and 2015,
China has made progress in setting up a digital renminbi payments system
that, by being cost-effective and easy to use, satisfies Carney's criterion
for usefulness.

The People's Bank of China is well advanced in preparations for the digital
renminbi, which will initially serve the domestic economy. But the central
bank is also working with its counterparts in Hong Kong, Thailand and the
United Arab Emirates, alongside the Bank for International Settlements, on
using a digital ledger of transactions that is distributed among
counterparties. The aim is to harness central banks' digital currencies to
make multicurrency cross-border payments simpler and cheaper.

Success will depend partly on other countries' willingness to embrace
China's financial innovations and western nations could well resist. But the
project offers benefits that should appeal in particular to emerging markets
poorly served by current arrangements in which a "correspondent" bank often
acts as intermediary for another to facilitate transfers.

China has also made progress on boosting the renminbi's attractiveness as a
store of value, establishing its credentials as a stable, low-inflation
economy even as financial markets worry that unprecedented fiscal and
monetary stimulus will unleash inflation in the US, tarnishing the dollar.

Importantly, central banks and financial institutions that regard the
renminbi as a credible store of value now have more rein to express their
view. China has opened its capital markets more to foreign investors,
triggering hefty inflows into stocks and bonds over the last couple of
years.

True, China retains capital controls. But a successful rollout of the
digital renminbi, which will be firmly under the control of the PBoC, is
likely to make the Communist party more comfortable with relaxing controls
because the authorities will have full visibility over two-way flows.

Finally, the renminbi's functions as a unit of account have also increased
since the initial bid to internationalise the renminbi. Trade invoicing in
renminbi still has to regain its peak 2015 levels, but in the meantime China
has launched renminbi-denominated futures contracts in a number of
commodities, including oil and gold.

Those who doubt the renminbi will become a reserve currency will point to
the absence of the rule of law in China, the lack of independent
institutions, and the opaque and unpredictable policymaking of an
authoritarian regime. But those who doubt the dollar can remain the
undisputed apex currency only have to point to the recent attacks in the US
on the democratic institutions that are also meant to be an indispensable
underpinning of reserve currency status.

China is now striving to capitalise on a reputation for innovation in
payments to carve out a sphere of currency influence, defined not by common
interests or political culture but by shared infrastructure and technical
standards. While interests can change, the hard wiring of digital and
economic connectivity is far harder to break once established. And it is
China that enjoys first-mover advantage.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips on firmer dollar as market eye U.S. jobs data

(Reuters) - Gold prices edged lower on Thursday, as the dollar hovered near
a three-month peak, with investors looking ahead to a key U.S. jobs report
due later this week for clues on what it might mean for monetary policy.

FUNDAMENTALS

* Spot gold eased 0.1% to $1,769.11 per ounce, as of 0117 GMT. U.S. gold
futures fell 0.2% to $1,768.10.

* The dollar held firm near a three-month high scaled in the previous
session. A stronger dollar makes greenback-priced metals more expensive for
holders of other currencies.

* U.S. private payrolls increased more than expected in June as companies
rushed to boost production and services amid a rapidly reopening economy.

* Federal Reserve Bank of Dallas President Robert Kaplan said Wednesday he
would like the Fed to start reducing its support for the economy before the
end of the year, in part to make an abrupt policy tightening less likely
later on.

* A Fed rate hike will increase the opportunity cost of holding bullion and
dull its appeal.

* Investors are now awaiting the U.S. non-farm payrolls report on Friday.

* India has slashed the base import price of palm oil, soyoil, gold and
silver, the government said in a statement late on Wednesday, as prices fell
in the overseas market.

* Silver rose 0.1% to $26.14 per ounce, palladium fell 0.5% at $2,764.68 and
platinum shed 0.6% at $1,065.74. DATA/EVENTS (GMT) 0750 France Markit Mfg
PMI June 0755 Germany Markit/BME Mfg PMI June 0800 EU Markit Mfg Final PMI
June 0830 UK Markit/CIPS Mfg PMI Final June 0900 EU Unemployment Rate May
1230 US Initial Jobless Clm Weekly 1345 US Markit Mfg PMI Final June 1400 US
ISM Manufacturing PMI June

Copper tumbles 8.5%, aluminium up during June

Copper's three-month price has shown the biggest fall during June among base
metals on the London Metal Exchange, rocked by Chinese announcements and
rising inventories, while the prices of other base metals such as aluminium
and tin were higher than on June 1.

Copper's price was $9,374.50 per tonne on Wednesday June 30 at the close of
trading, falling from $10,245 per tonne on June 1.

Among the factors behind this were numerous announcements from Chinese
officials, starting in late May, in regards to the high levels that copper's
price has achieved since the start of the year.

This statement was followed by action, when the East Asian country's
National Food & Strategic Reserves Administration said that it intended to
sell copper, aluminium and zinc from the country's reserves into the market
in an attempt to quell prices.

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
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for guideline purposes only and sourced from third parties.

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