Bulls n Bears Daily Market Commentary : 03 June 2021

Thu Jun 3 16:24:31 CAT 2021

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Bulls n Bears Daily Market Commentary : 03 June 2021

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

ZSE commentary

The ZSE closed today's session in the positive buoyed by gains across the
board in a session marked by improved liquidity. Turnover improved by 217.6%
to ZW$180.5 million from a trade of over 20.7 million shares which exchanged
hands in 529 trades. Delta and Medtech were the most active stocks at 34
trades each followed by Bindura and OK. The market breadth was negative
after 19 stocks depreciated against 16 that appreciated in a total of 41
stocks which traded. GBH was the most liquid counter as it anchored volume
aggregates trading over 6.17 million shares and FMP anchored the value
aggregate with a value of ZW$50.7 million.

The benchmark All Share Index was up 1.32% and the Top 10 Index was up by a
1.02%. The Top 15 Index added 1.12%. The Medium Cap Index traded higher to
14 281.84 appreciating by 1.73% whilst the Small Cap Index added 2.80% to
close at 72 936.08. Leading the risers pack of the day was Dairibord  which
added 15.37% pending the finalization of a merger acquisition deal with
Dendairy. Masimba Holdings and Get Bucks Microfinance also added 11.44% and
9.24% respectively. 

African Distillers added 9.09% to 6000c. Meikles appreciated by 7.56%.
Leading in the shakers pack was Medtech Holdings which pared 8.23% followed
Ariston Holdings  shading 3.74%. Fidelity and First Capital Bank pared 3.13%
and 2.50% respectively. Please find a summary of the market activity as
shown below; The Old Mutual Top Ten ETF closed at 193.99c up 2.06% after 20
391 units with a value of ZW$39 557.45 in 7 trades exchanged
hands.-wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand hits two-year high against the dollar as it continues strong run

The South African rand rallied to its highest level in more than two years
against the dollar on Wednesday, as the local currency continued its strong
run on the back of a sustained rebound in global economies and positive US
Treasury data.

The local currency was trading at R13,54 at 09h00 on Thursday (3 June), its
highest position against the greenback since early February 2019.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar climbs ahead of U.S. jobs data

LONDON (Reuters) - The U.S. dollar rose on Thursday as traders waited for a
batch of U.S. economic data that could set the tone at central bank meetings
later this month.

Investors have bet on the dollar falling as the world recovers from the
COVID-19 pandemic, but they have lately grown nervous over whether a
surprisingly strong U.S. economic rebound poses a threat to the assumption
that interest rates will stay low for a long time.

The mood has kept speculators from adding much to short positions in recent
weeks and has put the brakes on what a month ago seemed like a relentless
downtrend.

Against the euro the dollar traded 0.2% higher at $1.2187 and it crept
higher versus Antipodean currencies. [AUD/] It rose 0.2% to buy 109.78 yen.

The dollar index, which measures the greenback against a basket of six
currencies, rose to 90.112. It has found strong support around the 89.946
mark in recent sessions after falling 2% in April and a further 1.6% in May.

Fed officials have begun to hint at tapering discussions and on Wednesday
the Fed announced it will unwind corporate bond holdings it amassed through
an emergency facility last year - another sign of pandemic measures coming
to an end.

U.S. ADP payrolls - sometimes a litmus test for the broader non-farm figures
- are expected to show a gain of 650,000 jobs when the data is released at
1215 GMT, a slowdown from a rise of 742,000 in the previous month.

April's big miss on payrolls, when monthly hiring of 266,000 confounded
expectations for 1 million, has added to the nervousness, with a miss likely
to weigh on the dollar while a beat could support it. The consensus estimate
is for 664,000.

PECKING ORDER

Globally, the Fed is becoming a laggard as other central banks start to
discuss and even lay out timetables for hikes, as has happened in New
Zealand, Canada, Norway and been hinted at by Bank of England policymakers -
helping their currencies.

The next Fed meeting is in June, while the European Central Bank meets next
week with investors focused on whether it will persist with its current pace
of bond buying.

Sterling was the best-performing G10 currency against the dollar in May,
with a 2.9% gain, but moves have been even more dramatic against the
Japanese yen, since there are no expectations of Japan's gigantic monetary
support backing off.

Indeed speculators in March flipped rapidly into short yen positions and
Japanese currency has been the biggest major loser against the dollar during
2021, dropping almost 6%.

Sterling is up 10% on the yen this year and the Canadian dollar, which has
been further bolstered by rising oil prices, has gained more than 12%
against the yen.

Sterling was 0.1% higher to the dollar at $1.4180 on Thursday as investors
fret a little about whether a new virus variant spreading in Britain can
delay plans for reopening the economy. [GBP/]

Cryptocurrencies rose, with bitcoin last at $39,324 and Ether up 6% on the
day at $2,879.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil price nears $72 per barrel over larger than expected crude draw

Crude oil price closed in on the $72 mark as Brent crude hit $71.85 per
barrel on demand optimism and an American Petroleum Institute (API) report
of larger than expected draw in crude oil inventories of 5.36 million
barrels for the week ending May 28.

Analysts had predicted a draw of 2.114 million barrels for the week.

According to a report from oilprice.com, the API, in the previous week
reported a draw in oil inventories of 439,000 barrels after analysts had
predicted a draw of 1.050 million barrels, adding that crude oil inventories
have grown by more than 46 million barrels since the start of 2020,
according to API data.

The American Western Texas Intermediate (WTI) rose by 0.55% to close at
$69.21 per barrel on Thursday morning, the Bonny light crude rose by 1.12%
to close at $70.15 per barrel while the OPEC basket rose by 0.70% to close
at $69.01 per barrel.

Oil prices were trading up on Wednesday afternoon, on bullish signals from
OPEC that saw the cartel stick to its output plans for the coming month. The
bullish OPEC news, combined with a lack of new developments regarding the
Iran/U.S. nuclear deal, has seen oil prices maintain a steady rise.

The latest data from the Energy Information Administration (EIA) says that
US oil production continued at an average of 11 million BPD for the week
ending May 21, while crude oil inventories fell again this week.

The API reported a build in gasoline inventories of 2.51 million barrels for
the week ending May 28-compared to the previous week's 1.986-million-barrel
draw. Analysts had expected a 1.385-million-barrel draw for the week.

What you should know

Oil prices rose on Wednesday as a rebound in oil demand in China, the United
States and Europe threatened to outpace planned increases in supply in
addition to the uncertainty surrounding the negotiations over the Joint
Comprehensive Plan of Action which has recorded little progress.

S&P Global Platts reported that any resolution on the JCPOA remained far
from certain as the fifth and final round of negotiations proceeded in
Vienna, putting into question the prospect of increased Iranian oil hitting
the market.

Also, crude oil prices strengthened further during the week after OPEC+
signalled its growing optimism about the balance between demand and supply,
and confirmed that it planned to continue increasing production.

Investors fleeing to gold as volatility rise in crypto market

With a drop of 36%, bitcoin posted its worst monthly fall since November
2018 in May as lofty valuations, concerns over its environmental impact and
a regulatory crackdown on cryptocurrencies in China took a toll

After chasing higher returns and enduring big swings over the last few
months, funds are now reversing from cryptocurrencies such as bitcoin to
gold as investors appreciate the reliability and stability of the precious
metal, according to a note by Quantum Mutual Fund.

With a drop of 36%, bitcoin posted its worst monthly fall since November
2018 in May as lofty valuations, concerns over its environmental impact and
a regulatory crackdown on cryptocurrencies in China took a toll. Moreover,
bitcoin's fall in May is the second biggest since May 2013, as per data
available with cryptocurrency tracker CoinGecko.

In May, gold prices rose above the key psychological level of $1,900 per
ounce, ending the month roughly 8% higher and turning positive for the year
to date.

According to the fund house, much of May's action in gold was a result of
evidence showing a rise in prices in the US and the weakening of its key
rivals, the 10-year Treasury yield, the dollar index and bitcoin.

With trillions of dollars of stimulus trickling down to the real economy in
the US, accelerating vaccination rollouts and unfixed supply chains, higher
inflation has become the central market-moving theme so far in 2021.

Global equities markets have been supported by a coordinated effort from
major central banks, which have pumped trillions of dollars into financial
markets since last year while committing to lower-for-longer interest rates.
But higher inflation could mean a scaling back of central banks' easy money
policy.

According to the fund house, the precious metal is expected to reflect
investor concerns over record debt and deficit levels, frothy financial
markets and the emergence of inflation, thus strengthening going forward.

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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