Bulls n Bears Daily Market Commentary : 08 June 2021

Wed Jun 9 03:30:00 CAT 2021

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Bulls n Bears Daily Market Commentary : 08 June 2021

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ZSE commentary

The ZSE closed today’s session in the positive with gains spurred by small caps and heavy weight stocks. Turnover improved to ZW$77.1 million from a trade of over 3.6 million shares. Activity level was lower at 388 trades. Padenga was the most active stock at 39 trades followed by Delta and Medtech. The market breadth was positive after 18 stocks appreciated against 15 that depreciated in a total of 40 stocks which traded. First Capital Bank was the most liquid counter as it anchored volume aggregate trading 879 600 shares and Delta anchored value aggregate with a value of ZW$45.87 million. The ZSE closed with a market cap of ZW$676.3 billion.

The benchmark All Share Index was up a marginal 0.34% and the Top 10 Index was up by 1.02% spurred by gains in CAFCA and BAT. The Top 15 Index added 0.65%. The Medium Cap Index traded lower to 14 734.89 depreciating by 0.92% whilst the Small Cap Index added 7.23% to close at 84 522.69 points.

Leading the risers pack of the day was Get Bucks which added 17.24% and CAFCA which added 13.64% to 15000c. BAT and African Sun also added 12.50% and 9.17% respectively. Star Africa added 8.07% to 89.6981c. Leading in the shakers pack was the hotelier group RTG and NMB which pared 15.22% and 10.16% respectively. Dairibord  shaded 9.66% and Bindura pared 7.13%. Please find a summary of the market activity as shown below; The Old Mutual Top Ten ETF closed at 180c up 0.02% from a trade of 159 894 units worth ZW$287 809.20 in 15 trades.- wealthaccess

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Global Currencies & Equity Markets

South Africa

South Africa's rand falls ahead of GDP data

(Reuters) - South Africa's rand weakened against the dollar early on Tuesday, ahead of gross domestic product (GDP) figures expected to show that economic growth slowed in the first quarter of this year.

At 0615 GMT, the rand ZAR=D3 traded at 13.5500 against the dollar, 0.11% weaker than its previous close and pulling further away from 28-month high of 13.4150 hit on Monday.

Investors await GDP numbers for the first quarter due to be released at 0930 GMT. Economists polled by Reuters expect annualised growth to have skidded to 2.5% from 6.3% in the previous quarter.

In fixed income, the yield on the benchmark government bond due in 2030 ZAR2030= was up 0.5 basis point to 8.755% in early deals.

Nigeria

Naira slides at official market

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

However, the local unit remained stable at the parallel market.

Data posted at the Nafex window showed that the naira closed at N411.07, this represents a 0.08 per cent decrease from N410.75 the rate it traded in the previous session on Friday last week.

This happened as foreign exchange supply dipped by 34.45 per cent, with $151.37 million posted as against $230.93 million recorded in the previous session on Friday last week.

Naira hit an intraday low of N420.73 and oscillated to a high of N400.00 at the Nafex window, before closing at N411.07 on Monday.

The last time the currency hovered around the rate of N411.00 and above was on June 2 when it closed at N411.06.

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

According to the data posted, the domestic currency exchanged hands with the greenback currency at N502.00, the same rate it traded in the previous session on Friday last week.

This leaves the disparity between the black market and official market rates at N90.93.This translates to a margin of 18.11 per cent as of the close of business on Monday.

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Global Markets

Dollar doldrums are back as inflation worries heat up

Though bitcoin and other cryptocurrencies are the talk of the moment, the good old US dollar still reigns as the world's reserve currency. But it hasn't been too mighty as of late.

The US Dollar Index, which measures the greenback versus the euro, yen and several other major global currencies, has fallen about 2.5% in the past three months -— and it's now down more than 7% in 2021.

Fears of rising inflation are taking a bite out of the dollar, as are expectations that the Federal Reserve will keep interest rates near zero for the foreseeable future despite inflation concerns. Both inflation and historically low interest rates lower the value of a currency over time.

A weaker dollar could be bad news for any American looking to travel abroad anytime soon as well as US consumers looking to buy exported goods, which become more expensive as the dollar falls.

The greenback's slump is also one of the reasons that prices for oil, food and other commodities and consumer goods have surged lately.

But investors in major blue-chip multinationals are licking their chops: Companies such as Apple, Microsoft, Coca-Cola, Caterpillar and others that generate a big chunk of revenue overseas should get a boost.

That's because their products are more affordable to foreign buyers, and the value of sales from international transactions goes up when they are translated back into US dollars.

So it's no wonder that many investors have been globetrotting and scooping up shares of big US firms that have a significant presence in Europe and Asia.

The S&P 500 is up about 10% in the past three months compared to just a 4% gain for the Russell 2000, an index of smaller companies that tend to do more business in the US.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today drop, down ₹7,000 from record highs, silver rates fall

Gold and silver prices in India inched lower today amid flat global rates. On MCX, gold futures were marginally lower at ₹49,131 per 10 gram while silver rates fell 0.3% to ₹71,619 per kg. In the previous session, both gold and silver had inched up by 0.35% each. On the domestic front, MCX gold faces resistance at ₹49550-49750 levels while has support at ₹48,210, say analysts.

Last week, gold had hit almost five-month high of ₹49,700 in Indian markets amid a global rally on lingering worries over inflation. A relatively softer dollar also improved appetite for gold. A mildly disappointing US job data that weakened US dollar, offered some support for gold. Still, gold is down about ₹7,000 from last year's record high of ₹56,200.

Technically, international gold is trading with marginal sideways and negative bias below $1900 levels and may continue to decline and test the support of $1875-$1865 levels, say analysts at CapitalVia Investment Advisor.

The dollar index, which measures the greenback against a basket of major currencies, was flat at 90.003, well below a three-week high of 90.627 hit last week. The benchmark 10-year yield was pinned near more than one-week low, reducing the opportunity cost of holding non-interest bearing gold.

On gold traders' radar will be US consumer price data to be released later this week. Gold is often viewed as a hedge against inflation.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.6% to 1,037.33 tonnes on Monday from 1,043.16 tonnes on Friday.

The SPDR gold backed ETFs physical holdings increased by 2.57% in May after a seventh monthly outflow till April. The physical holdings of gold backed ETFs with SPDR gold trust declined 0.14% in the first week of June.

Among other precious metals, silver rose 0.1% to $27.89 per ounce while platinum edged 0.1% higher to $1,174.02.

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 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 other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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