Bulls n Bears Daily Market Commentary : 14 July 2021

Wed Jul 14 15:47:53 CAT 2021

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Bulls n Bears Daily Market Commentary : 14 July 2021

ZSE commentary

Market Turnover ZWL$168,954,519.00 with foreign buys at ZWL$4,648,980.00and
foreign sales were ZWL$18,716,560.00 Total trades were 318

The All Share Index closed at 6,488.60 points following a 0.86% (55.62
points) gain from the previous session. Major gains were spurred by SEEDCO
LIMITED which advanced by a further $10.4821 to $66.5283, LAFARGE CEMENT
ZIMBABWE jumped $5.0000 to $65.0000 while INNSCOR AFRICA moved $2.3870 up to
$88.1986. DAIRIBORD ZIMBABWE  added $2.0436 to $33.1628 and CBZ HOLDINGS
rose by $1.9554 to $94.7846. Trading in the negative; AXIA LIMITED shed
$1.7916 to $20.0751, ECONET WIRELESS lost $0.5527 to $29.4477 while FIRST
MUTUAL HOLDINGS dropped by $0.5000 to $24.5000. FIRST CAPITAL BANK was
$0.3565 down at $3.1796 together with MASIMBA HOLDINGS LIMITED  which traded
at $43.6667 following a $0.2641 decline.zse

Global Currencies & Equity Markets

South Africa

South African Rand Becomes Currency to Short Amid Turmoil

Deadly riots. Sky-high unemployment. A surge in virus infections. Add to
that rising U.S. inflation and prospects of Federal Reserve tapering, and
South Africa's rand is in a tight place.

The currency plunged this week, ceding its position as the year's top
emerging-market performer. Deadly protests that erupted following former
President Jacob Zuma's jailing showed no signs of letting up, disrupting
South Africa's Covid-19 vaccination program and threatening food shortages
as supply chains buckled. The nation's dollar debt headed for the biggest
three-day drop since May.

Investors are concerned that the unrest -- the sternest test yet to
President Cyril Ramaphosa's authority -- will derail South Africa's efforts
to rebuild the economy in the wake of the pandemic. Citigroup Inc. reduced
its overweight South African government bond position in its model portfolio
and recommended selling the rand.

Spread on South Africa's dollar debt widens after narrowing to a record

Why Ex-Leader's Arrest Cast South Africa Into Turmoil: QuickTake

The South African currency caught a breather on Wednesday after plunging to
14.7898, the weakest since April 1, wiping out all its gains for the year.
But options traders still see an 81% probability that the rand will slide to
15 per dollar this quarter, up from about 34% in early June. The Taiwanese
dollar and Chinese yuan eclipsed the rand on Tuesday as this year's top
emerging-market performers.

Selling the rand is becoming one of the favored strategies for investors
seeking to profit from relative-value trades as a spike in Covid-19 cases
keeps expectations for tighter monetary policy at bay. Pimco is going long
in the currencies of Russia and Brazil -- which have raised interest rates
this year -- against those that aren't getting a lift from policy tightening
such as the rand. Deutsche Bank AG is advising investors to short the South
African currency against the Russian ruble.

Traders brace for more rand volatility amid turmoil in South Africa

Meanwhile, the cost of hedging against rand declines is rising. Three month
risk reversals -- the premium of options to sell the currency over those to
buy it -- have jumped 20 basis points this week. Overnight implied
volatility climbed to the highest since March.

Outflows from South Africa's stock and bond markets have accelerated since
June. Foreign investors have dumped the equivalent of a net $7 billion of
securities this year through Monday, according to JSE Ltd. data compiled by
Bloomberg. That's putting pressure on the current account, negating some of
the benefit of a ballooning trade surplus. It's also keeping the
government's borrowing costs high at a time when it's struggling to reduce a
budget deficit of more than 11% of gross domestic product.

Outflows from South Africa's bond and stocks markets have accelerated since
June

While the benchmark FTSE/JSE Africa All Share Index has been buoyed by
strength in "rand-hedge" companies that have income from abroad and benefit
from weakness in the local currency, the stock market hasn't escaped
unscathed. Bank shares have been hard-hit by the fallout from the violence
and the currency's battering, with an index for the sector plunging 4.5% on
Tuesday, the steepest drop this year.

The selloff may be a temporary blip, said Gustavo Medeiros, deputy head of
research at Ashmore Group in London. While the unrest can lead to more
economic problems, it may not last, he said.

Rand's correlation to industrial metal prices rises to the highest since
2017

But with the "buy-everything rally" over, it would take a strong turnaround
in South Africa's fortunes to entice investors back, according to Ian
Beattie, co-chief investment officer and head of emerging markets at NS
Partners in London. Investors are looking for "quality and growth," he said,
and South Africa has neither.

South Africa is "among our largest underweights," Beattie said. "It will be
impacted by a weakening growth environment globally, the U.S. dollar rally
and negative sentiment for positioning toward emerging markets. It continues
to suffer terribly from Covid-19 and has low vaccination deployment, and the
political unrest and riots are unsettling."

Nigeria

Naira loses at official market

The currency stayed unchanged at the black market.

The naira fell against the U.S. dollar at the official market on Tuesday,
after it gained slightly in the previous session of the market segment on
Monday.

The currency remained unchanged at the black market window for two
consecutive sessions on a stretch.

Data posted on the FMDQ Security Exchange where forex is officially traded
showed that the local unit closed at N411.75 per $1 at the official window
on Tuesday.

This represents a N0.25 or 0.10 per cent from N411.50 rate it exchanged
hands with the greenback currency in the previous session on Monday.

The last time the currency closed at N411.75 on the dot was on Friday last
week.

The touched an intraday low of N412.50 and oscillated to a high of N400.00
before closing at N411.75 as of the close of business on Tuesday.

The market session forex turnover dipped by 34.05 per cent, with $116.15
million recorded at the end of the market session as against the $176.13
million posted in the previous session on Monday.

However, the currency again maintained stability against the U.S dollar at
the parallel market on Tuesday.

Data posted on abokiFX.com, a website that collates parallel market rates in
Lagos showed that the naira closed at N505.00 per $1 at the black market
window.

 <https://www.facebook.com/Hyundaizimbabwe/> 

Global Markets

Rupee depreciates 12 paise to 74.61 against US dollar in early trade

The Indian rupee depreciated 12 paise to 74.61 against the US dollar in
opening trade on Wednesday as firm American currency and weak domestic
equities weighed on investor sentiment.

At the interbank foreign exchange, the rupee opened at 74.57 against the
dollar, then fell further to 74.61, registering a fall of 12 paise over its
previous close.

On Tuesday, the rupee had settled at 74.49 against the US dollar.

Meanwhile, oil prices continued its upward trajectory, while coronavirus
infections are surging in some parts of the world, which could also weigh on
sentiments if outbreaks become more pronounced, the note added.

The dollar index, which gauges the greenback's strength against a basket of
six currencies, was trading down 0.02 per cent at 92.72.

Global oil benchmark Brent crude futures fell 0.31 per cent to USD 76.25 per
barrel.

On the domestic equity market front, BSE Sensex was trading 85.36 points or
0.16 per cent lower at 52,684.37, while the broader NSE Nifty declined 25.55
points or 0.16 per cent to 15,786.80.

Foreign institutional investors were net buyers in the capital market on
Tuesday as they purchased shares worth Rs 113.83 crore, as per exchange
data.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper eases as dollar firms on U.S. inflation jitters

(Reuters) - Copper prices were subdued on Wednesday, as a firmer dollar made
greenback-priced metals less appealing to holders of other currencies, while
inflationary pressures in the United States sparked worries of a
sooner-than-expected monetary policy.

Three-month copper on the London Metal Exchange eased 0.1% to $9,408 a tonne
by 0740 GMT, while the most-traded August copper contract on the Shanghai
Futures Exchange closed down 0.4% to 68,870 yuan ($10,637.28) a tonne.

The U.S. dollar touched a three-month high versus the euro and a one-week
high versus the yen, after U.S. consumer prices last month increased by the
most in 13 years, spurring bets of faster monetary policy tightening than
the Federal Reserve officials have so far signalled.

Markets will pay attention to any information indicating the Fed's liquidity
tapering, said Huatai Futures in a report.

FUNDAMENTALS

* China, the world's biggest metals consumer, will take "comprehensive
measures" to ease rising commodity prices, Premier Li Keqiang said.

* LME tin decreased 0.1% to $32,360 a tonne, nickel dropped 0.4% to $18,705
a tonne, and zinc was up 0.3% at $2,943 a tonne.

* ShFE aluminium 1.7% to 19,510 yuan a tonne on fears of output cut amid
energy curb, traders said, zinc shed 0.5% to 21,980 yuan a tonne, and lead
was down 0.5% to 15,650 yuan a tonne.

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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