Bulls n Bears Daily Market Commentary : 11 June 2021

Fri Jun 11 15:57:42 CAT 2021

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Bulls n Bears Daily Market Commentary : 11 June 2021

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

ZSE commentary

Market Turnover ZWL$118,688,274.90 with foreign buys at ZWL$45,119,905.00
and foreign sales were ZWL$86,335,645.00 Total trades were 434.

The All Share Index ended the week at 5,891.40 points after posting gains of
0.91% (53.37 points) in today's session. Gains were spurred by HIPPO VALLEY
ESTATES which closed $11.4658 higher at $161.1448, ZB FINANCIAL HOLDINGS
rose by a further $7.1500 to $86.0000 while NATIONAL FOODS LIMITED  ticked
$5.0000 up to $330.0000. INNSCOR AFRICA edged $2.9887 higher to finish the
week at $87.2242 along with SIMBISA BRANDS which increased by $1.4396 to
$42.7827. Trading in the negative; CAFCA LIMITED  slipped $25.0000 to
$125.0000, MASIMBA HOLDINGS LIMITED tumbled $3.8020 at $34.9640 while
PADENGA HOLDINGS shed $2.8802 to $31.4377. FIRST MUTUAL PROPERTIES  and
FIRST MUTUAL HOLDINGS dropped by $1.4982 and $0.4032 each to finish the week
at $16.0026 and $28.0513 respectively.-zse

Global Currencies & Equity Markets

South Africa

Rand continues to gain, riding on US inflation data

THE RAND rallied yesterday after a rise in US inflation was seen by
investors as soft enough to keep monetary policy loose there, boosting
demand for risk assets.

At 5pm, the rand was 0.75 percent firmer at R13.63 to the dollar, having
earlier reached a session-best R13.58, to snap a three-day losing streak
prompted by concerns that faster rising consumer prices in the US would lead
to higher lending rates.

The high-yielding rand, which hit its strongest level in 28 months last
Friday, is the top performing major emerging market currency this year,
spurred by a boom in global commodity prices and the low-rate environment in
developed markets.

On the day, a widening of the current surplus to 5 percent of gross domestic
product in the first quarter supported demand. But the rand's rally was
dented by signs of a slower economic recovery as manufacturing and mining
output hit a speed bump.

Bonds continued to rally, with the yield on the benchmark 2030 government
issue down 6.5 basis points to 8.65 percent.

Shares on the JSE slipped a tad from the previous day's closing but largely
brushed off concerns of higher inflation in the US. The all share index lost
0.2 percent at 67542.84 points and the Top40 index fell 0.23 percent at
61291.03 points.- REUTERS

Nigeria

Trade Deficit Widens to $9.61bn in Q1 2021; Naira Falls

Nigeria has traditionally exported more than it imports i.e. it usually
enjoys a balance of trade surplus. This was principally because of high oil
prices and revenue. In recent times with oil price crashing, Nigeria had
started running a balance of trade deficit (imports greater than exports).
Trade deficit increased by 1,094.2% to $9.61bn in Q1'21 from $804.71mn in
Q1'20. 

The recent spike in oil prices has raised hopes for a return to the trade
surplus era. This is why the surprise swing of Q1 merchandize trade to a
deficit of $9.61bn caught the market napping. Analysts are still optimistic
and project that the balance of trade will swing into surplus of $3.6bn in
2022. The Q1 deficit of $9.61bn will be more than compensated by the higher
oil price currently at $72pb. 

Not surprisingly, the Naira has weakened in the forex markets to N502/$
(parallel) but is expected to recover in Q3 towards its fair value of
N470-480/$. This is because of currency adjustment and an expected decline
in demand for imported goods. Nigeria's import bill is currently $63.8bn. 

Trade deficits are usually funded by a combination of export earnings,
external reserves and foreign loans. This could further increase the
country's external debt stock to $45bn.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar steadies, currency investors seek hawkish central banks

The dollar stabilised on Friday and major currency pairs were stuck within
recent ranges as markets shrugged off Thursday's high U.S. inflation number,
believing the Federal Reserve's stance that it is likely to be a temporary
blip.

U.S. consumer prices rose 5% year-on-year in May, the biggest jump in nearly
13 years. read more

Currency markets had been sluggish all week in anticipation of the data, but
when it came in above expectations, there was little market reaction. The
Federal Reserve has repeatedly said that it expects any rise in inflation to
be temporary and that it is too soon to be discussing reducing its monetary
stimulus.

The dollar index edged lower in the Asian session but picked up later in the
day. At 1056 GMT it was up 0.1% on the day at 89.995 . It was on track for a
small weekly gain of 0.1%.

There were signs of slightly increased risk appetite in currency markets,
with the Australian dollar up against the U.S. dollar . But the British
pound slipped to $1.4159 .

LONGER-TERM FLOWS

A dovish stance from the ECB at its meeting on Thursday had little effect on
the euro, which slipped on Friday to $1.2152 and was set for a small weekly
loss of around 0.1% . read more

A gauge of euro-dollar implied volatility over a six-month horizon was at
its lowest since early March 2020, almost back to the levels it was at
before the COVID-19 pandemic caused volatility to spike .

Neil Jones, head of FX sales at Mizuho, said he was getting a lot of
questions from clients about central banks that are likely to raise rates
before the Fed and the ECB.

The British pound, Canadian dollar, Australian dollar and New Zealand dollar
are currencies that may gain against a weaker U.S. dollar, Jones said.

ING strategists wrote in a note to clients that the "glut of liquidity" from
central banks was driving a search for "carry". In currency trading, "carry"
refers to gains from holding higher-yielding currencies.

Russia's central bank increased its key interest rate to 5.5% on Friday,
increasing the cost of lending for the third time this year due to rising
inflation, and said more hikes would be needed. read more

BITCOIN, ETHER

Elsewhere, in cryptocurrencies, bitcoin recovered slightly this week while
ether was set for a 9% weekly drop , . Both have stabilised so far this
month but are still trading significantly below their mid-May peaks.

Attention now turns to the Fed meeting next week. The central bank is likely
to announce in August or September a strategy for reducing its massive
bond-buying program, but won't start cutting monthly purchases until early
next year, a Reuters poll of economists found. read more

Meanwhile, leaders of the Group of Seven wealthiest economies are meeting in
the English seaside resort of Carbis Bay. Although the meeting is not
expecting to contain market-moving events, if the leaders agree to provide
more vaccines to countries where there is a shortage, then those countries'
currencies could benefit, Mizuho's Jones said. read more

Our Standards: The Thomson Reuters Trust Principles..

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges lower as dollar bounces

Gold futures edged lower Friday, losing ground as the U.S. dollar edged
higher, though market bulls said the slide in Treasury yields should
underpin the yellow metal.

Gold for August delivery GC00, -0.49% GCQ21, -0.49% fell $4.80, or 0.3%, to
$1891.60 an ounce on Comex. July silver SIN21, +0.96% rose 14.4 cents, or
0.5%, to $28.175 an ounce.

Gold rose modestly on Thursday after data showed U.S. inflation continued to
run hot in May, though the yellow metal, traditionally seen as an inflation
hedge, didn't initially find support on the news.

Gold "fell initially on surging U.S. inflation, but found support from
falling U.S. Treasury yields," said Sophie Griffiths, analyst at OANDA, in a
note. Yields falling on rising inflation appears counterintuitive, she said,
"but as inflation is surging interest rate expectations are not, which is a
sweet spot for gold."

Read: U.S. Treasury yields fall despite higher inflation: Here are some
reasons why

The ICE U.S. Dollar Index DXY, +0.31%, a measure of the currency against a
basket of six major rivals, rose 0.2%. A stronger dollar can weigh on
commodities priced in the currency, making them more expensive to users of
other currencie

Meanwhile, the popular SPDR Gold Shares ETF GLD, +0.43% was trading just
above a "tactical decision point at $174.66 to $172.91," wrote John Kosar,
chief market strategist at Asbury Research, in a Thursday note. GLD closed
Thursday at $177.74.

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
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