Bulls n Bears Daily Market Commentary : 02 July 2021

Fri Jul 2 14:40:49 CAT 2021

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Bulls n Bears Daily Market Commentary : 02 July 2021

ZSE commentary

The ZSE closed the week in the red with losses across the board mainly from
heavyweight counters (Delta, Econet. OK, Masimba). Activity levels were
lower at 683 trades. Medtech was the most active stock at 117 trades
followed by OK Zimbabwe and Star Africa at 48 and 51 trades each. The market
bias was negative after 21 stocks registered losses against 18 gainers while
3 of the active stocks remain unchanged. Medtech was the most liquid counter
as it anchored volume aggregate trading over 2 million shares while Delta
anchored value traded with a value of ZW$56.66 million.

The benchmark All Share Index was down 1.11% and the Top 10 Index also down
by 1.19%. The Top 15 Index pared 1.05%. The Medium Cap Index traded lower to
17 070.05 points whilst the Small Cap Index added 5.14% to close at 211
801.65 points. Leading the shakers pack of the day were Star Africa and
Getbucks which shaded 19.06% and 11.51% respectively. Masimba closed at
3893.14c down by 8.55%. The telecoms giant Econet lost 5.04% to 2610.17c.
General Beltings also shaded 3.30%. Leading in the riser's pack was
Truworths adding 19.35%. Fidelity and RTG shares were up by 18.89% and
15.07% to 1070c and 524.40c respectively. Unifreight and Medtech Holdings
were up by 12.21% and 7.21% respectively. The Old Mutual Top Ten ETF closed
at 178.82c up by 0.46% from a trade of 1 586 064 units worth ZW$2 836 246.06
in 17 trades.wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand falls on virus worries, focus on U.S. jobs data

(Reuters) - South Africa's rand weakened early on Friday, hit by concerns
over the spread of the coronavirus's Delta variant, while investors awaited
U.S. jobs data that could influence the timeline of the Federal Reserve's
monetary policy shift.

At 0617 GMT, the rand ZAR= traded at 14.4745 against the dollar, 0.4% weaker
than its previous close.

The jobs report is due at 1230 GMT. Investors will be looking for clues
about the Fed's next move.

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

Markets are also on the edge due to concerns about the spread of the Delta
variant of COVID-19 around the world, leading some countries to impose
tighter curbs while others have extended restrictions.

Naira

Nigeria's GDP to rise 4.2% in 2022 - Official

The exchange rate of the Naira to the dollar, which was N379 in the 2021
budget, has been adjusted to the NAFEX rate of N410.15 to one US dollar. The
federal government has projected Nigeria's Gross Domestic Product (GDP) to
grow by 4.2 per cent in 2022.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, said
this at the Public Consultation on the Draft 2022 to 2024 Medium Term Fiscal
Framework and Fiscal Strategy Paper (MTFF/FSP) on Thursday.

Mrs Ahmed said the GDP, projected in 2021 to rise three per cent, had been
adjusted downwards to close at 2.5 per cent.

The minister further said the Nominal GDP projected for 2022 was N184.38
trillion up from N168.6 trillion in 2021, and then to N201 trillion in 2023
and N222 trillion in 2024.

She also said the inflation rate was expected to drop slightly to 13 per
cent in 2022 from 15 per cent in 2021.

She noted that the increase in inflation was due to the exchange rate.

She, however, said the federal government had put the Nigerian Autonomous
Foreign Exchange Rate Fixing (NAFEX) rate of N410.15 to one US dollar for
2022 to 2024.

TEXEM

Federal Allocation

Furthermore, Mrs Ahmed took an overview of the federation and fiscal
outcomes for the Federation and Value Added Tax (VAT) Pool Accounts
Distributable for January to May.

She said the amount available for distribution from the Federation Account
was N2.78 trillion.

Also, the minister said the gross oil and gas revenue was projected at N5.19
trillion for January to May.

She noted that the inflow was N864.20 billion or 49.8 per cent less than the
projection as of May.

Giving an update on the revenue performance of 2021 budget implementation
for January to May, Mrs Ahmed said the federal government's retained revenue
was N1.84 trillion, 67 per cent of pro-rata target.

She said the share of oil revenues was N289.61 billion, which represented 50
per cent performance.

She also added that non-oil tax revenues totalled N618.76 trillion, 99.7 per
cent of pro-rata.

She said other revenues amounted to N762.70 billion, of which Independent
revenues were N487.01 billion.

On the expenditure side, the minister said N4.86 trillion, representing 92.7
per cent of the prorated budget had been spent.

She noted that of the expenditure, N1.80 trillion was for debt service
representing 37 per cent of federal government's expenditure and N1.50
trillion for personnel costs, including pensions, representing 31 per cent
of the federal government's revenues.

The minister further said that as of May, N973.13 billion had been released
for capital expenditure.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar at 3-month high ahead of U.S. jobs test

(Reuters) - The U.S. dollar hit a fresh three-month high versus other major
currencies on Friday, as traders wagered strong U.S. labour data could lift
it even further.

The dollar index is on track for a further weekly gain - its fourth in five
weeks - of nearly 1%. It gained 0.1% on the day, hitting 92.699.

The greenback has strengthened broadly since the U.S. Federal Reserve
surprised markets last month by signalling it could tighten policy earlier
than expected to curb inflation.

The U.S. jobs report is due at 1230 GMT and is forecast to show a solid rise
of 700,000, with traders braced for any surprises.

A higher number in the employment report could fuel concerns of tighter Fed
policy, analysts said.

The dollar hit a fresh three-month high versus the euro ahead of the report,
edging up 0.2% on the day to $1.18235. It was broadly flat versus the yen
and British pound. ,

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil prices up about 2% on OPEC+ output, demand prospects

(Reuters) - Oil prices rose roughly 2% on Thursday on indications that OPEC+
producers could increase output more slowly than expected in coming months,
while rising global fuel demand causes supply to tighten.

Brent crude settled at $75.84 a barrel, up $1.22, or 1.6%. U.S. West Texas
Intermediate crude settled at $75.23 a barrel, gaining $1.76, or 2.4%.

During the session, both benchmarks climbed by more than $2 a barrel,
reaching their highest since October 2018.

Futures pared gains after the Organization of the Petroleum Exporting
Countries and allies, known as OPEC+, delayed its ministerial meeting until
Friday to hold more talks on oil output policy, sources said, after the
United Arab Emirates blocked a plan for an immediate reduction in supply
cuts. read more

OPEC+ sources said earlier that the group was expected to increase output by
0.4 million barrels per day a month from August to December 2021. read more

Some market participants remained skeptical of the demand projection.

Yawger said OPEC's demand forecast does not account for the possibility of
increased supply from Iran, spread of the COVID-19 Delta variant and
lackluster seasonal U.S. gasoline use.

There have been several outbreaks of the Delta variant of the coronavirus,
raising concerns that the recovery will falter. 

Our Standards: The Thomson Reuters Trust Principles.

Copper prices in marginal rise

COPPER prices have marginally rebounded, boosted by solid United States (US)
data as optimism builds up in the world's biggest economy. Three-month
copper on the London Metal Exchange was up 0.4 percentage point at US$9,410
a tonne, while the most-traded August copper contract on the Shanghai
Futures Exchange advanced 0.7 percentage point to 68,710 yuan (US$10,641) a
tonne. 

Reuters reports that prices of copper, often used as a gauge of global
economic health, climbed yesterday as solid US data boosted optimism over a
strong recovery in the world's biggest economy.  

In the foreign exchange market, the Kwacha continued to add on to its losses
on a close-to-close basis against the dollar on Wednesday as witnessed from
its previous sessions but traded firm on the day as demand and supply from
corporates was almost evenly matched. Absa Bank Zambia Plc said the local
unit opened and closed at K22.61 and K22.66 per dollar, compared to
Tuesday's close of K22.60 and K22.65 on the bid and offer respectively.

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
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opinions expressed and recommendations made are subject to change without
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