Bulls n Bears Daily Market Commentary : 23 July 2021

Fri Jul 23 14:54:09 CAT 2021

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Bulls n Bears Daily Market Commentary : 23 July 2021

ZSE commentary

The ZSE closed today's session with mixed trading across major indices in
our review. Trading across the board was skewed towards losses after 19
counters closed in the red against 16 that traded in the positive. Total
turnover was lower at ZW$131 million from a trade of over 6.8 million
shares. Activity levels were lower at 493 trades. Star Africa was the most
active stock at 63 trades followed by Medtech and Ariston at 52 and 44
respectively. Econet was the most liquid counter as it anchored both volume
traded and value traded at 1 749 600 shares with a value of ZW$50.04
million. At close, the benchmark All Share Index added 0.21% to 6 618.23
points. The Top 10 Index was up by 0.76%. The Top 15 Index added 0.65%. The
Medium Cap Index traded lower to 17 581.91 points depreciating by 0.45%
whilst the Small Cap Index also pared 1.62% to close at 243 963.15 points.
Leading the risers pack of the day was RTG up by 13.51% followed by Art
Corporation and Innscor which added 6.42% and 4.10% respectively. African
Distillers was up 2.90% to 7100c. Meikles was 1.53% up to 9445.11c. Leading
in the shakers' pack was Get Bucks which shaded 16.86% followed by Zimpapers
shading 6.39%. Medtech  and NMB pared 6.21% and 5.24% respectively. Axia
Corporation closed at 2535.07c down by 4.33%. The Old Mutual Top Ten ETF
closed at 194.93c down by 0.21% after 1 680 182 units with a value of ZW$3
275 149.90 in 19 trades exchanged hands. On the VFEX, Padenga traded 9 600
shares worth US$1 737 in 3 trades to close at 18.10 US cents..- WealthAccess

Global Currencies & Equity Markets

Zambia

Kwacha to gain further

The kwacha has been appreciating for four (4) straight days and now trading
around K22.21 from K22.86 just last week.

On Tuesday, the kwacha made a huge gain to trade at around K22.54 from
K22.86, then K22.49 on Wednesday  and K22.21 on Thursday. 

The $1.4bn forex injection through SDRS will push our reserves to over
$3.1bn by end of August, he said.

Nigeria's naira to weaken, Kenyan shilling also seen shedding value

NAIROBI- Nigeria's naira could weaken amid healthy demand in the coming days
while the Kenyan shilling is also seen shedding value on the back of
importer demand and high liquidity.

NIGERIA

The naira is seen trading within a range on the spot market but the currency
could weaken at retail auction, traders said.

The currency eased to 409.50 naira to the dollar on the spot market on
Thursday to stay within a range of between 407 naira and 412 naira at which
it has traded since last month.

But traders said the currency eased to a low of 440 at a central bank retail
auction on healthy customer demand.

On the black market on Thursday, however, the naira firmed slightly to 503
from a week earlier, but remained at a more than 3-1/2-year low touched last
month.

KENYA

Kenya's shilling KES= is forecast to weaken, undermined by end-of-month
importer dollar demand and excess liquidity in the money markets.

On Thursday commercial banks quoted the shilling at 108.10/30 to the dollar,
the same as last Thursday's close.

UGANDA SHILLING

The Ugandan shilling is seen trading firmer in the coming days helped by
offshore investor flows and typical month-end flows from remittances and
commodity exporters.

At 0939 GMT commercial banks quoted the shilling at 3,550/3,560 to the
dollar, compared to last Thursday's close of 3,545/3,555.

A trader at one of the commercial banks in the capital Kampala said the
shilling will likely benefit from healthy inflows combined with scant
importer demand.

TANZANIA

Tanzania's shilling is expected to hold steady next week as inflows from
investors match hard currency demand from energy and manufacturing
importers.

Commercial banks quoted the shilling at an average of 2,314/2,324 against
the dollar on Thursday, unchanged from last week's close.

ZAMBIA

The kwacha ZMW= is likely to appreciate against the dollar next week,
supported by improved supply of hard currency.

On Thursday, commercial banks quoted the currency of Africa's second largest
copper producer at 22.0750 per dollar from 22.6250 at the close of business
a week ago.

South Africa

Rand should be worth R6/$, according to Big Mac index

The rand is 60% cheaper than it theoretically should be against the dollar,
the newly updated Economist's Big Mac Index shows.

Since the 1980s, the publication has been using McDonald's Big Mac prices to
determine whether currencies are overvalued, or too cheap. It assumes that
an identical product - the Big Mac - should cost the same across different
countries.

It found that the Big Mac costs around R33.50 in South Africa and $5.65 in
the US - which means that the rand should be worth R5.93/$. Instead, it is
currently trading around R14.66/$.

This is 60% weaker than where it supposedly should be, but better than last
year, when the rand was 67% undervalued - the worst performance in the
world. It is now the third-most undervalued currency in the world, according
to the Big Mac index, below Lebanon and Russia.

As recently as a decade ago, the rand was "only" undervalued by 39% against
the dollar.

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

Global Markets

Dollar set for second week of gains as focus turns to Fed

LONDON: The dollar was set to end the week with small gains after a
turbulent few days when currencies were buffeted by shifting risk appetite,
with the market's focus now on next week's U.S. Federal Reserve meeting.

The dollar index was up 0.2per cent for the week, rising slightly on Friday
to stand at 92.891.

But that was off a 3-1/2-month high of 93.194 hit on Wednesday, after strong
Wall Street earnings helped investors regain some of the confidence lost to
earlier worries the Delta variant of the coronavirus could derail the global
economic recovery.

The safe-harbour yen weakened about 0.2per cent for the week and last traded
at 110.36.

Meanwhile, the euro traded flat over the period at US$1.1772, unmoved by
mixed French and German purchasing manager surveys. Surveys for the euro
zone as a whole are due at 0800 GMT.

The European Central Bank on Thursday pledged to keep interest rates at
record lows for even longer, as widely expected.

ECB President Christine Lagarde, in her media briefing, said a fresh wave of
the coronavirus pandemic could pose a risk to the region's recovery,
although she did offer a more balanced economic outlook.

While most analysts see the ECB's dovish pivot as weighing on the single
currency, those at TD Securities say it could push up to US$1.1851 in the
near-term.

The market's next major focus is the Federal Reserve's two-day policy
meeting that wraps up on Thursday. Since the previous meeting on June 16,
when Fed officials dropped a reference to the coronavirus as a weight on the
economy, cases are spiking.

Many economists, however, still expect the meeting to produce some
advancement in the discussions for a tapering of stimulus.

The British pound recovered from losses as steep as 1.3per cent for the week
to trade just about flat at US$1.3741, buoyed by the recovery in risk
sentiment even with COVID-19 cases broadly on the rise.

However, Australia's dollar - often viewed as a proxy for risk appetite -
slid 0.3per cent to US$0.7360 on Friday and was headed for a 0.5per cent
drop on the week, which would be a fourth straight weekly loss.

With half the Australian population languishing under lockdown, economists
speculate the country's central bank could increase stimulus rather than
decreasing it at its next policy meeting.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper gains for fourth session on economic recovery hopes

(Reuters) - Copper prices gained for a fourth straight session on Friday as
investors bet that extended easy monetary policy would help to boost
economic recovery and metals demand.

Three-month copper on the London Metal Exchange (LME) added 0.4% to $9,480 a
tonne by 0945 GMT, on track to finish the week in positive territory.

The European Central Bank pledged on Thursday to keep interest rates at
record lows for even longer to boost sluggish inflation.

Copper, which is used in the power and construction industries among others,
is widely viewed as a gauge of global economic health.

LME copper has eased from a record peak of $10,747.50 in May but is still up
22% so far this year.

The most-traded August copper contract on the Shanghai Futures Exchange rose
1.5% to close at 69,670 yuan a tonne for a third straight weekly gain.

* The premium for LME cash lead over the three-month contract CMPB0-3 hit
$21 a tonne, its highest since June 29, indicating tightening nearby supply
as LME inventories remain at one-year lows MPBSTX-TOTAL and floods in
Germany hit European output.

* LME nickel climbed to its highest in almost five months at $19,305 a tonne
before paring gains to $19,195, a rise of 1.4%, while tin hit a record
$34,700 before pulling back to $34,205, a gain of 0.3%.

LME aluminium added 0.4% to $2,494 a tonne, zinc rose 0.8% to $2,960.50 and
lead fell 0.7% to $2,384.

Gold heads for weekly fall as dollar rises

Gold prices edged lower on Friday, heading for their first weekly decline in
five, as a stronger dollar made bullion more expensive for holder of other
currencies and offset support from lower US bond yields and weak economic
data.

Spot gold was down 0.2% at $1,803.33/oz, at 3.14am GMT. Bullion is down 0.4%
this week. US gold futures fell 0.1% to $1,803.90/oz.

The dollar index held close to a three and a half month peak against its
rival and was heading for its second straight weekly rise.

Risk appetite in wider financial markets for most of this week was fragile
due to worries over the coronavirus Delta variant affecting global economic
recovery, sending investors to take refuge in the dollar.

Focus now shifts to next week's US Federal Reserve meeting for more clues on
monetary policy .

The European Central Bank on Thursday pledged to keep interest rates at
record lows for even longer and warned that the rapidly spreading Delta
variant poses a risk to the eurozone's recovery.

Offering some respite to gold, yields on US Treasuries eased after an
auction of $16bn in 10-year Treasury inflation-protected securities was bid
at a record low.

Data showed the number of Americans filing new claims for unemployment
benefits rose to a two-month high last week.

Silver slipped 0.5% to $25.34/oz and was set for its third weekly fall.
Palladium rose 0.3% to $2,725.19/oz and platinum was flat at $1,092.64/oz.-
Reuters

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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