Bulls n Bears Daily Market Commentary : 02 June 2021

Thu Jun 3 03:51:05 CAT 2021

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Bulls n Bears Daily Market Commentary : 02 June 2021

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

ZSE commentary

The stock market realized a small gain on the second day of the month with
overall activity picking up from yesterday. Heavyweight counters continue to
dominate turnover closing in today's session with total turnover of ZW$56.8
million (72.37% lower) from a trade of over 3.85 million shares. Padenga was
the most active stocks at 43 trades followed by GBH and OK Zimbabwe at 32
trades each. The market breadth was flat after 18 stocks appreciated against
18 that depreciated in a total of 40 stocks which traded.

Star Africa was the most liquid counter as it anchored volume traded at 1
464 100 shares and Padenga anchored value aggregate a value of ZW$14.08
million. At close, the benchmark All Share Index added a paltry 0.57% and
the Top 10 Index was down by 0.04%. The Top 15 Index added 0.51%. The Medium
Cap Index traded higher to 14 039.50 points appreciating by 1.44% whilst the
Small Cap Index also added 1.51% to close at 70 949.97 points passing yet
another psychological level to a YTD of 495.51%. Leading the risers pack of
the day was FML and FMP up by 16.17% and 12.28% respectively after releasing
impressive set of FY2020 results. Dairibord added 5.67%. the hotelier
African Sun added 5.17% to 299.56c. Delta was 4.39% up to 6380.29c. Leading
in the shakers pack was Art Corporation which pared 10.65% followed by
Edgars shading 6.67%. NMB and Hippo pared 6.54% and 6.20% respectively.
Please find a summary of the market activity as shown below; The Old Mutual
Top Ten ETF closed at 190.07c down 1.51% after 36 692 units with a value of
ZW$69 739.80 in 13 trades exchanged hands.-wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand rallies to highest in more than 2 years, stocks hit new
high

(Reuters) - The South African rand rallied to its highest in more than two
years against the dollar on Wednesday, as investors cheered the latest
evidence of a sustained rebound in global economies and as U.S. Treasury
yields pulled back.

At 1525 GMT, the rand was 1.27% firmer at 13.5900 against the dollar,
trading at its firmest since early February 2019.

With the local economy remaining weak and facing power cuts, the rand's
recent rally has been mainly on the back of global factors, including higher
commodity prices which benefit resource-rich South Africa and expectations
U.S. lending rates will stay lower for longer.

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.

Investors waited for crucial U.S. jobs data on Friday to assess what the
increasing evidence of a faster-than-expected economic recovery would mean
for central bank policy in the United States.

Stocks continued their upward movement with the main index racing past its
all-time peak seen in early May to hit a record on Wednesday, as raging
growth prospects in the U.S. boosted industrials and financial stocks.

The FTSE/JSE all-share index ended up 0.18% at 69,049 points. The blue-chip
index of top 40 companies, often a gauge of the performance of the best of
the listed companies, was up 0.14% at 62,787 points.

He said favourable U.S. non-farm payroll data on Friday could be critical
for a continued bull.

Bonds were a touch firmer, with the yield on the 2030 government issue down
1.5 basis points at 8.89%.

Nigeria

Naira gains at official market

Naira strengthened against the U.S. dollar at the Investors and Exporters
(I&E) window on Wednesday, data posted on the FMDQ Security Exchange where
forex is officially traded showed.

However, it remained stable against the hard currency at the parallel
market.

According to the data posted at the Nafex window, the local unit closed at
N411.06, this represents a 0.23 per cent appreciation from N412.00, the rate
it traded in the previous session on Tuesday.

Wednesday's performance became effective as foreign exchange supply dipped
by 69.20 per cent, with $164.00 million posted as against $96.91 million
posted in the previous session on Tuesday.

The Naira hit an intraday low of N420.47 and a high of N381.50 at the Nafex
window.

The last time the currency hovered around the rate of N411.00 and above was
on May 24 last month.

Meanwhile, the domestic currency remained unchanged at parallel market on
Wednesday, data posted on abokiFX.com, a website that collates parallel
market rates in Lagos showed.

The data posted showed that the naira closed at N498.00 at the black market,
the same rate it exchanged hands with the greenback currency in the previous
session on Tuesday.

As a result, the spread between the black market and official market rates
currently is pegged at N86.94, translating to a margin of 17.46 per cent as
of the close of business on Wednesday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar edges higher as jobs data awaited

The dollar was nearly flat on Wednesday in choppy trading, after backing off
of an almost five-month trough versus major peers, as traders waited for
employment data later in the week to paint a clearer picture of the state of
the U.S. economic recovery.

The dollar index, which measures the greenback against six rival currencies,
was up 0.001% at 89.907 at 2:34 p.m. ET, after trading in a range of 89.856
and 90.247.

The previous jobs report, for April, came in much weaker than expected,
sending the dollar sharply lower. Then earlier this week, manufacturing data
showed that while activity spiked due to pent-up demand amid the reopening
from COVID-19 shutdowns, labor shortages actually hampered the sector's
growth potential.

Another weak nonfarm payroll report would put pressure on Treasury yields,
which in turn would weigh on the greenback, he said.

The euro edged 0.01% lower against the dollar to $1.2215 after pulling back
from near a multimonth top overnight, when it touched $1.22545.

Producer prices in the euro zone rose more than expected in April, boosted
by a surge in energy costs, data showed. But the European Central Bank,
which wants to keep consumer price growth close to 2% over the medium term,
said that while inflation may temporarily rise above its target this year,
anemic wage growth will likely keep it in check for years to come.

Sterling rose 0.15% to $1.4167, after easing off a three-year high of
$1.4250 reached on Tuesday.

Elsewhere, the Canadian dollar fell 0.22% to C$1.2065 per greenback after
rallying to a fresh six-year peak of C$1.2077 overnight as oil prices rose.

The Australian and New Zealand dollars dipped 0.01% and 0.24% respectively
against the greenback. The Aussie was last at $0.77525, while the Kiwi was
at $0.7234 against the U.S. dollar.

Investors were also eyeing the trajectory of China's recently bullish yuan.
It eased 0.07% to 6.38 per dollar in offshore trading, after retreating from
a three-year high of 6.3526 on Monday as policymakers took steps to cool its
advance, including raising banks' FX reserve requirements.

In cryptocurrencies, bitcoin was up 3.52%, at $37,983.25, while ether was up
7.37% at $2767.65

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices reclaim highest settlement since January

Gold futures edged higher Wednesday to reclaim their highest settlement
since early January, on the back of a slide in yields for U.S. government
debt, as investors awaited a monthly report on U.S. nonfarm payrolls due at
the end of the week.

Randal Quarles, the Fed's vice chair for supervision, told Politico in an
interview Tuesday that a recent jump in inflation would prove transitory,
according to a Reuters report.

On Wednesday, gold for August delivery  GC00, -0.04% GCQ21, -0.04%  edged up
by $4.90, or 0.3%, to settle at $1,909.90 an ounce, following a 0.02% slip
on Tuesday on Comex. Prices for the most-active contract, which scored a
gain of nearly 8% in May, settled at their highest since early January,
FactSet data show.

In electronic trading Wednesday afternoon shortly after the release of the
Fed Beige Book's report on current economic conditions, August gold moved up
a bit further to $1,910.30.

The moves for bullion in Wednesday trading session came as the benchmark
10-year U.S. Treasury yield TMUBMUSD10Y, 1.593% was at 1.60%, off 2 basis
points. Lower bond yields can reduce the opportunity costs of owning
precious metals which don't offer a coupon.

However, moves in gold were checked by a rise in the dollar, as gauged by
the ICE U.S. Dollar Index DXY, 0.02%, which was up 0.1%. A stronger dollar
can make assets priced in the monetary unit more expensive to overseas
buyers.

July silver SIN21, 0.25% SI00, 0.25% , meanwhile, rose 10 cents, or 0.4%, at
$28.20 an ounce, after rising 0.3% on Tuesday.

Precious metals have trended higher against the backdrop of rising inflation
fears, with bullion seen traditionally as an inflation hedge.

Market participants have vacillated between greater confidence that the
economy will show a healthy recovery from the COVID pandemic and fears that
the economy may run too hot for the Fed to manage.

Against that backdrop, some strategists predict that gold may remain
rangebound until Friday's report on the U.S. employment situation in May,
which could serve as a cross-asset catalyst, especially after April's report
showed that the U.S. added 266,000 jobs on the month, far fewer than the
roughly 1 million that had been forecast by most economists.

Among other metals traded on Comex Wednesday, July copper HGN21, 0.12% shed
1.3% to $4.59 a pound. July platinum PLN21, 0.07% lost 0.6% to $1,192.70 an
ounce, but September palladium PAU21, -0.13% settled at $2,868.60 an ounce,
up 0.2%. 

Silver Price Forecast - Silver Markets Continue Same Dance

Silver markets have initially pulled back a bit during the trading session
on Wednesday but have also turned around to show signs of strength again.
Ultimately, the $28 level is a bit of a major anchor for price, as people
continue to see this as a market that we should be buying dips and longer
term. This does not necessarily mean that we are going to break out
imminently, but it does look like we are going to try to get to the $30
level above.

The 50 day EMA continues to grind higher, as it is sitting just below the
$27 level. All things been equal, this is a market that I think continues to
be very choppy but favors the upside with the 50 day EMA offering a
significant amount of "dynamic support." The silver markets are also going
to continue to move based upon a shrinking US dollar, so pay close attention
to the US Dollar Index as it could give you an inverse correlated type of
signal. Beyond that, we also have to think about the potential of industrial
use case scenario for silver, as the reopening trade should bring in quite a
bit more in the way of demand for the metal.

At this point, it is worth noting that the market has broken above $30
before, and as a result it is worth paying attention to because we have seen
silver take off towards the $50 level a couple of times in the past.
Obviously, this is a longer-term call, but it certainly looks as if we are
trying to break through that barrier. Once we do, this is a market that will
accelerate quite rapidly.

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
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been compiled from sources believed to be reliable, but no representation or
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