Bulls n Bears Daily Market Commentary : 01 June 2021

Wed Jun 2 08:01:32 CAT 2021

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Bulls n Bears Daily Market Commentary : 01 June 2021

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

ZSE commentary

The ZSE maintained its upward trend as it sustained marginal gains in
today's session with improved liquidity. Heavyweight counters continue to
dominate turnover closing in today's session at ZW$205.7 million (73.56%
higher) from a trade of over 16.26 million shares. Medtech and Padenga were
the most active stocks at 27 trades followed by Star Africa and OK Zimbabwe
at 26 trades each. The market breadth was positive after 22 stocks
appreciated against 20 that depreciated in a total of 44 stocks which
traded. Medtech was the most liquid counter as it anchored volume traded at
5 168 800 shares and Delta anchored value aggregate a value of ZW$48.59
million.

At close, the benchmark All Share Index gained 0.17% and the Top 10 Index
was up by 0.39%. The Top 15 Index added 0.54%. The Medium Cap Index traded
lower to 13 840.80 points depreciating by 0.20% whilst the Small Cap Index
also added 1.82% to close at 69 892.21 points. Leading the risers pack of
the day was NMB up by 8.33% followed by Simbisa Brands which added 7.71%.
get Bucks Microfinance Bank added 6.72% to 316c. The cables manufacturer
CAFCA was 4.76% up to 13200c. First Mutual Holdings added 3.98% to 2611.29c
after releasing its 2020 financial results this week. Leading in the shakers
pack was African Distillers which pared 12.50% followed by Meikles shading
6.27%. Medtech Holdings and Proplastics pared 5.86% and 5.80% respectively.
Please find a summary of the market activity as shown below; The Old Mutual
Top Ten ETF closed at 197.69c down 2.38% after 488 455 units with a value of
ZW$942 638.15 in 7 trades exchanged hands..-wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand firmer in early trade

The rand firmed in early trade on Tuesday ahead of unemployment data, still
buoyed by bets that interest rates in the United States will remain low for
an extended period.

At 0645 GMT, the rand was 0.25% firmer at 13.7100 per dollar, just shy of
the 27-month best it touched last week.

While U.S. inflation data released on Friday briefly drove the greenback
higher against other currencies, traders said it was unlikely to shift the
Federal Reserve from its loose policy.

SA's statistics offices publishes first quarter unemployment data at 0930
GMT. The rate of joblessness jumped to a record high of 32.5% in the fourth
quarter, and despite a recovery in economic activity since, it is not seen
improving much.

Bonds were a touch firmer, with the yield on the benchmark 2030 paper down
1.5 basis points to 8.895%.

Nigeria

Naira slides towards 500 a dollar at parallel market

The naira fell 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.

According to the data posted, the naira closed at N498.00, this represents a
0.61 per cent depreciation from N495.00, the rate it exchanged hands with
the hard currency in the last three consecutive sessions.

However, the currency remained stable against the U.S dollar at the
Investors and Exporters (I&E) window on Tuesday.

Data posted on the FMDQ Security Exchange where forex is officially traded
showed that the naira closed at N412.00, the same rate it traded in the
previous session on Monday.

The currency's performance on Tuesday became effective as foreign exchange
supply plummeted further by 22.74 per cent, with $96.91 million posted as
against $125.44 million posted in the previous session on Monday.

Like in the previous session on Monday, the Naira experienced an intraday
low of N420.33 and a high of N400.00 at the Nafex window.

With this, the spread between the black market and official market rates
currently is pegged at N86.00, translating to a margin of 17.27 per cent as
of the close of business on Tuesday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar edges up on manufacturing data after initial softness

The dollar edged higher on Tuesday against a basket of peer currencies after
U.S. manufacturing data showed a stronger-than-expected pickup in activity,
even as labor shortages and a lack of raw materials weighed on production.

The Institute for Supply Management (ISM) said its index of U.S.
manufacturing activity rose in May as pent-up demand amid a reopening
economy boosted orders. read more

The dollar initially traded lower on the report, in which ISM said
manufacturing's growth potential continued to be hampered by worker
absenteeism and temporary shutdowns because of shortages of parts and labor.

The report suggests that supply issues in the manufacturing sector are
having an impact on the economy as a whole, said Kathy Lien, managing
director at BK Asset Management.

The dollar index crept up 0.35% to 89.822, but was well off Friday's high of
90.447, when a measure of U.S. inflation closely watched by the Federal
Reserve posted its biggest annual rise since 1992.

The market bias is generally toward a softer dollar, said Vassili
Serebriakov, FX and macro strategist at UBS.

Hawkish signals from the central banks of some G10 countries, including
Canada, Norway and New Zealand, have also added pressure to the greenback,
he said.

Britain's pound touched a three-year high of $1.425 during the Asian
session, helped by remarks from a Bank of England policymaker last week
pointing to a rate hike next year or sooner.

The euro ticked up 0.05% to $1.2305, following data that showed euro zone
inflation surged past the European Central Bank's target in May. read more

Commodity-linked currencies were generally stronger versus the dollar as oil
prices rose on expectations for growing fuel demand. read more

The Organization of the Petroleum Exporting Countries and allies - known
collectively as OPEC+ - agreed on Tuesday to stick to the existing pace of
gradually easing oil supply curbs, as producers balanced anticipation of a
recovery in demand against a possible increase in Iranian supply. read more

The Canadian dollar reached a six-year high of 1.2010 per greenback, helped
by the strength in oil, and data that showed Canada's economic growth in the
first quarter remained robust.

The Australian dollar was up 0.45% at 0.77625.

Australia's central bank left its cash rate at record lows and reiterated
its lower-for-longer policy stance, even as data showed the country's output
was above its pre-pandemic level. read more

China's yuan was steady after authorities ordered banks to increase their
foreign exchange reserve ratio, a move seen as an attempt to limit the fast
appreciation of the yuan.

The offshore yuan was at 6.3817, up 0.11% on the day.

In cryptocurrencies, bitcoin was down 2.66% at $36,348.78, while ether fell
1.21% to $2,566.90.

Our Standards: The Thomson Reuters Trust Principles..

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices subdued after touching resistance zone; lower inventory and
weaker dollar lend support

Copper prices pared earlier gains and turn flat in the evening session
tracking subdued global cues despite upbeat industrial data from Euro and a
softer US dollar. The base metal retreated after testing the resistance of
Rs 773-777 during the morning session and traded below them.

Copper delivery for June slightly dipped Rs 0.20, or 0.03 percent, to Rs
768.65 per kg at 19:02 hours with a business turnover of 4,412 lots. The
same for the July contract eased Rs 0.10, or 0.01 percent to Rs 772.50 per
kg with a turnover of 2,339 lots.

The value of June and July's contracts traded so far is Rs 1,860.32 crore
and Rs 30.77 crore, respectively.

MCX METLDEX marginally rose 35 points, or 0.23 percent, at 15,335 at 19:04.
The index tracks the real-time performance of key base metals.

Kshitij Purohit, Product Manager, Currency & Commodities, CapitalVia Global
Research Limited said, "We may expect a dip in prices where Rs 767-765
levels may be tested on the downside in the evening session."

Market players expect supply threat in Chile and massive US spending plans
on infrastructure ignited worries of a possible shortage of metal in the
global markets.

LME supplies for copper are in marginal deficit for the day which may
strengthen the uptrend.

A strike by a union of remote operations workers at BHP's Escondida and
Spence copper mines in Chile continued over the weekend, with the company
using replacement workers to ensure continued production.

The US dollar fell to 89.77, down 0.24 percent in the evening session
against the rival currencies. The decline in the greenback makes
Dollar-denominated industrial metals cheaper for other currency holders.

Technicals

The non-ferrous metal has been trading higher than 5, 20, 50, 100 and 200
days' simple moving averages and exponential moving average on the daily
chart. The momentum indicator Relative Strength Index (RSI) is at 57.18,
which indicates a mildly bullish movement in prices.

At 1346 (GMT), the reddish-brown metal price rose 0.46 percent to quote at
$10,322.25 per tonne in London.

MCX Copper has intraday support at Rs 762.50-758 whereas resistance is at Rs
773-776.50, said Motilal Oswal. The brokerage advised its clients to buy on
dips near support is advised for the day.

Gold prices end with a modest loss, hold above the $1,900 mark

Gold futures ended lower on Tuesday, but held ground above the key $1,900
mark, as U.S. Treasury yields edged up following upbeat U.S. manufacturing
data.

Prices for the metal pared early gains after data showed that the IHS Markit
U.S. manufacturing index in May was at 62.1, versus an initial 61.5. Prices
then moved lower after separate data on the U.S. ISM manufacturing survey
revealed a rise to 61.2% in May from 60.7%.

Against that backdrop, the Treasury yields rose, with the 10-year Treasury
note yield TMUBMUSD10Y, 1.607% above 1.61%. Rising bond yields can dull the
luster of gold, which offers no yield.

Gold prices on Friday, the last trading day before Monday's U.S. holiday,
had settled at their highest in about five months.

Gold for August delivery GC00, -0.36% GCQ21, -0.36% inched down by 30 cents,
or 0.02%, to settle at $1,905 an ounce on Comex. Prices for the yellow metal
scored a gain of nearly 8% in May.

July silver SI00, -0.86% SIN21, -0.86%, meanwhile, gained 9 cents, or 0.3%,
to finish at $28.10 an ounce on Tuesday.

The May rally for gold, which saw it finish above the psychologically
important $1,900-an-ounce level on Friday, was accompanied by robust
purchases by exchange-traded funds, which totaled 49 tons, said Carsten
Fritsch, analyst at Commerzbank, citing Bloomberg data.

The Federal Reserve remains in focus as policy makers weigh when to begin
considering a reduction in its monthly pace of bond purchases in the wake of
rising inflation. The U.S. personal consumption expenditure inflation index
climbed to 3.6% in April from a year earlier, marking the strongest reading
since 2008 and putting inflation well above the Fed's 2% goal.

Among other metals, July copper HGN21, -0.30% fell 0.5% to $4.65 a pound.
July platinum PLN21, -0.93% settled at $1,199.70 an ounce, up 1.5% and
September palladium PAU21, -0.46% climbed by 1.2% to $2,863.20 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
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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