Bulls n Bears Daily Market Commentary : 21 June 2021

Tue Jun 22 07:02:44 CAT 2021

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Bulls n Bears Daily Market Commentary : 21 June 2021

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

ZSE commentary

The ZSE opened the week with positive gains across the board scrapping
marginal gains as it slid back into black after closing in the red last
week. Turnover declined to ZW$71 million from a trade of over 7.8 million
shares. Activity levels were lower at 493 trades. OK Zimbabwe was the most
active stock at 89 trades followed by GBH and Star Africa. The market
breadth was positive after 21 stocks appreciated against 16 that depreciated
in a total of 42 stocks which traded. Medtech was the most liquid counter as
it anchored volume aggregate trading 3 629 200 shares and OK Zimbabwe
anchored value aggregate trading over 2 million shares with a value of
ZW$30.4 million. The return of Seed Co raises ZSE market share to ZW$729.2
billion.

The benchmark All Share Index was up 2.60% and the Top 10 Index also up by a
marginal 0.40%. The Top 15 Index added 0.47%. The Medium Cap Index traded
higher to 15 897.18 points whilst the Small Cap Index added 1.59% to close
at 118 744.65 points. Leading the risers pack of the day was Seed Co which
added 204.51% to close at 6580.06c from 2160.89c in 9 trades. General
Beltings was up by 19.89% to 223c. First Mutual Properties and the brick
maker Wildale also added 18.75% and 13.62% respectively. Fidelity added
5.81% to 700c. Leading in the shakers pack was the clothing retailer
Truworths shading 8.86%. ZIMRE Holdings lost 6.78%. Mashonaland Holdings and
Star Africa were down 3.92% and 2.38% respectively. Bindura pared 2.03% to
499.71c. Please find a summary of the market activity as shown below; The
Old Mutual Top Ten ETF closed at 189.87c up 0.39% from a trade of 3 185
units worth ZW$6 047.50 in 4 trades.-wealthaccess

Global Currencies & Equity Markets

South Africa

Rand stronger as dollar rally stalls

THE rand opened slightly stronger on Monday as a rally in the dollar stalled
following a surprise hawkish shift from the US Federal Reserve last week.

The rand lost more than 4 percent against the dollar last week as the Fed
brought forward its projections for interest rate increases, prompting a
sell-off in emerging-market currencies.

At 0647 GMT, the local currency traded at 14.3500 against the dollar,
roughly 0.1 percent firmer than its previous close, as the dollar dipped
against a basket of major currencies.

This week, South Africa-focused investors will look to the consumer and
producer price indices for clues about inflationary pressures in Africa's
most industrialised economy.

The Consumer Price Index data will be released on Wednesday and the Producer
Price Index figures on Thursday.

Economists polled by Reuters expect consumer inflation to rise to 5.2
percent year on year in May from 4.4 percent the previous month, which would
be the first time the indicator has risen above the midpoint of the South
African Reserve Bank's target range since the Covid-19 pandemic reached
South Africa.

Annual producer inflation is seen rising to 7.3 percent in May from 6.7
percent in April.

Government bonds were little changed early on Monday, with the yield on the
2030 bond up 1 basis point to 8.97 percent.-REUTERS

Nigeria

Naira losing strength as ex-CBN director faults new FX measures

The naira is losing its resistance against the dollar a few days after it
gained some margin at the parallel market.

At the weekend, the naira retreated to about N498/$ at the black market from
490/$ it sold on Thursday.

The momentary gain for the local currency came after the Central Bank of
Nigeria (CBN) mandated the money deposit banks (MDBs) to sell to end-users
for personal travel allowance (PTA).

Following the directive, banks have intensified campaigns on forex
businesses while resurging dollar retreated momentarily. Dollar had exceeded
N500/$ as speculators took over the market before the CBN's intervention.

A former deputy director of the apex bank, Stan Ukeje, warned that the
racketeers might have hijacked the CBN's gesture and that it was not
sustainable. He observed that those applying for FX for PTA might be doing
so for the arbitrage.

Ukeje noted: "With little regard to the precarious inflow of foreign
exchange, money deposit bank (MDBs) advertise availability of foreign
currency for would-be travellers and bureau de change (BDCs) get enhanced
supply of foreign currency at below Nigerian Autonomous Foreign Exchange
(NAFEX) rate. The hope is to lower the expectation of naira depreciation but
it does not work out that way."

He noted that the (CBN) would run out of firepower, after which the slide of
the local currency would continue.

Ukeje had earlier noted that the current NAFEX was "incomplete" as major FX
earners, including the Nigerian National Petroleum Corporation (NNPC), do
not play in the market.

Experts had advised that the best option for stabilising the currency crisis
was setting market-clearing exchange rate as NAFEX does not establish the
market equilibrium required to achieve stability.

Last week, both the World Bank and the International Monetary Fund (IMF)
sought full harmonisation of the different exchange, saying it was a
necessary action point to achieve stability. Though they commended the
adoption of NAFEX for official transactions, they noted that a broader
reform would be required to a market that supports growth.

The Central Bank had, last month, discarded the previous official rate for
NAFEX, otherwise known as investors' and exporters' (I&E) window, on which
the monetary authority had promised to pursue rate harmonisation.

With NAFEX currently trading at N411/$ last week, the differential between
the two markets stands at about N85/$. Financial experts are concerned that
the wide differential would continue to incentivise round tripping and other
historic market manipulations.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar loses some steam after Fed boost; bitcoin tumbles

(Reuters) - The dollar dipped on Monday against major currencies, but
broadly held most of the previous week's gains after the Fed's surprise
hawkish tilt.

The dollar index lost momentum after a leap of 1.9% last week - the most
since March 2020 - as the U.S. Federal Reserve signalled a
sooner-than-expected end to its ultra-easy monetary policy.

The index, which tracks the greenback against six major currencies, fell
0.2% to 92.074 from a high of 92.405 reached on Friday, a level not seen
since April 13.

The Fed's hawkish shift has weighed on markets since, although risk
sentiment improved somewhat on Monday, reflected in European stock markets
turning positive. read more

Among currencies gaining ground was sterling, up 0.6% at $1.3877, after
shedding more than 2% versus the dollar the previous week.

The euro also gained around a quarter of a percent, at $1.18960. The yen was
last up 0.2%, shedding some earlier gains. ,

The Fed's policy stance has become a tailwind for the dollar and will be a
challenging backdrop for risk assets, Westpac analysts said.

While the dollar index has the scope to test highs reached in March after
its recent gains, "there's not enough juice for a sustained medium-term
breakout beyond that", they added.

Analysts at Goldman Sachs agreed the dollar's gains may not be sustained,
noting other central banks will need to consider policy normalisation too as
their economies recover from the blow of the pandemic.

In cryptocurrencies, bitcoin's poor recent run continued with an 8% drop
below $33,000, as China expanded restrictions on mining to the province of
Sichuan. read more

Cryptomining is big business in China, accounting for more than half of
global bitcoin production.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper hits near 10-week low as dollar firms after Fed rate view

(Reuters) - Copper prices fell to their lowest in nearly 10 weeks on Monday,
as fears of sooner-than-expected policy tightening by the U.S. Federal
Reserve strengthened the dollar.

Three-month copper on the London Metal Exchange fell as much as 0.4% to
$9,105 a tonne, its lowest since April 15. Last week, the contract dropped
8.6%, its biggest weekly fall since March 2020.

The most-traded July copper contract on the Shanghai Futures Exchange shed
as much as 2% to 66,480 yuan ($10,302.34) a tonne, its lowest since April
14.

The dollar held near multi-month peaks against other major currencies after
the U.S. Federal Reserve surprised markets last week by signalling it would
raise interest rates and end emergency bond-buying sooner than expected.

A stronger dollar made greenback-priced metals more expensive and less
appealing to holders of other currencies.

FUNDAMENTALS

* China's copper exports edged up for a third straight month in May to their
highest level since March last year, customs data showed, as higher
international prices encouraged traders to ship more metal overseas.

* LME nickel rose 1.4% to $17,385 a tonne at 0229 GMT and ShFE nickel
advanced 0.9% to 129,100 yuan a tonne amid strong Chinese demand and near
record-low inventories in warehouses tracked by ShFE NI-STX-SGH.

* ShFE zinc dropped as much as 3.2% to 21,390 yuan a tonne, its lowest since
April 23, while ShFE lead rose 1.6% to 15,375 a tonne.

* Chinese refined lead imports dropped 98.7% year-on-year to 21 tonnes in
May. ShFE lead inventories PB-STX-SGH eased slightly last week but were
still hovering near their highest since 2013.

Gold price today: Yellow metal nears Rs 47,000, silver trades flat

NEW DELHI: Gold prices firmed on Monday, after posting a 6 per cent drop
last week, as a retreat in US Treasury yields boosted the allure of the
non-yielding metal. However, a stronger dollar may reduce safe heaven's
appeal and make the yellow metal a lot more volatile.

The benchmark US Treasury yields fell to their lowest since March 3,
reducing the opportunity cost of holding bullion, which pays no return. Gold
prices traded under pressure on US Fed comments to hike interest rates by
2023.

The US dollar held near multi-month peaks against other major currencies on
Monday, after the Fed surprised markets last week by signalling it would
raise interest rates and end emergency bond-buying sooner than expected. The
dollar index rallied sharply triggering sell off in gold prices.

Gold purchases in India ticked up last week after a decline in local rates,
although dealers cautioned that demand is unlikely to return to normal
levels soon.

Gold futures on MCX were down 0.38 per cent or Rs 179 at Rs 46,907 per 10
grams. Silver futures shed 0.03 per cent or Rs 19 to Rs 67,579 per kg.

In the spot market, highest purity gold was sold at Rs 47,266 while silver
was priced at Rs 68,687 on Friday, according to the Indian Bullion and
Jewellers Association.

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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