Bulls n Bears Daily Market Commentary : 23 June 2021

Wed Jun 23 17:08:59 CAT 2021

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Bulls n Bears Daily Market Commentary : 23 June 2021

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

ZSE commentary

The ZSE was back to positive territory on medium cap stocks gains. The
mid-week session saw a slight decline in activity although the market closed
in the positive reversing the losses seen in yesterday's session. Turnover
improved by 54% to ZW$261.7 million from a trade of over 8.69 million
shares. Activity levels were marginally lower at 579 trades. Delta was the
most active stock at 71 trades followed by GBH and OK Zimbabwe. The market
bias was positive after 24 stocks registered gains against 14 losers while 4
of the active stocks remain unchanged. Bindura was the most liquid counter
as it anchored volume aggregate trading 1 242 400 shares and Delta anchored
the value aggregate with a value of ZW$88.26 million.

The benchmark All Share Index was up 1.58% and the Top 10 Index also up by
1.06%. The Top 15 Index shaded 1.93%. The Medium Cap Index traded higher to
16 024.23 points whilst the Small Cap Index added 1.90% to close at 134
121.09 points. Leading the risers pack of the day was National Foods  and
General Beltings which added 19.99% and 19.97% to close at 39844.81c and
319.5c respectively. The hospitality group RTG was up by 16.20% to 412.72c.
Turnall and Star Africa also added 10.07% and 9.48% respectively. Leading in
the shakers pack was First Mutual Property shading 4.44%. NMB Holdings lost
3.88%. Proplastics and Cassava were down by 3.57% and 2.78% respectively.
ZIMRE Holdings  trimmed yesterday's gains with a 2.68% loss to 291.89c.
Please find a summary of the market activity as shown below; The Old Mutual
Top Ten ETF closed at 179.01c down by 5.29% from a trade of 1 613 760 units
worth ZW$2 888 791.10 in 8 trades.-wealthaccess

Global Currencies & Equity Markets

Malawi

Malawi Kwacha will soon stabilise, says Chilima

The Malawi Kwacha which has for a long time now been erratic and unsteady,
will soon stabilise against devaluation and inflation rates while the cost
of living will will be reduced, the Malawi Citizen Number Two, Saulos
Chilima has said. The country's vibrant Vice President, Chilima, himself an
economist and a marketer, who is popularly known as SKC in the political
echelons, made the remarks Tuesday in his capacity as Minister of Economic
Planning and Public Sector Reforms when he availed himself before Parliament
to update legislators and to answer questions on public reforms
implementation and the Malawi 2063 vision.

This is the second time that Chilima has made himself available to answer
questions from members as he did the same earlier, in March 2021. Responding
to a supplementary question, Chilima assured Malawians that his ministry in
conjunction with the Ministry of Finance and the Reserve Bank of Malawi are
working tirelessly to stabilise the Kwacha devaluation, inflation and rising
cost of living. He said one of the measures undertaken by the central bank
is to reduce the policy rate to make borrowing cheaper.

Chilima alluded to the fact that currently, Malawi is facing exchange rate
challenges because there is a deficit between imports and exports (current
account) around $800- $900 million. The Veep said Malawi is a net importer
of goods and services that requires more forex which is why the government
is working to improve production and productivity for exports to reduce the
current account deficit.

The cost of living in Malawi has skyrocketed to a record high with 90
percent of the population struggling to cope with daily living. 

Before Chilima took the floor, opposition members defeated a motion for
Parliament to start tackling questions pertaining to the Ministry of
Economic Planning and Development and Public Sector Reforms to allow Chilima
to leave but the MPs said they wanted to have more time to interact with the
Veep.

Leader of Opposition and Mulanje Central legislator Kondwani Nankhumwa asked
Chilima to update the August House on the following, how far government has
gone with the Reform Agenda, whether the Public Reforms have already started
bearing fruits, and how interlinked is the Reform Agenda with the Malawi
2063 Agenda.

In his response, Chilima assured the Leader of Opposition, the House and
Malawians that the reforms program, which he is a lead, are on the right
track and that they have already showing the good fruits and that the future
looks promising.

This is the second time that Chilima has availed himself to Parliament. In
March this year, Chilima also appeared before the august House to answer
questions in Parliament. The Government of Malawi has been implementing
Public Service Reforms since the country's independence in 1964; however,
the implementation of reforms was problematic due to several factors.

These included inadequate commitment to reforms by political, administrative
and technical leaders in the public service which led to partial
implementation; lack of ownership of reforms since they were mostly
externally driven; inadequate resources allocated for implementation of
reforms; lack of a shared vision for reforms due inadequate participation of
non-state actors and citizens in reforms; and lack of capacity to implement
reforms. In addition, there had been no overarching policy to guide the
content and implementation of all public service reform programmes.

In 2006 the Public Sector Reforms Management Unit (PSRMU) was established
within the Office of the President and Cabinet (OPC) to coordinate all
Public Sector Reforms for the development of a modern and efficient Public
Service. PSRMU was mandated to provide strategic leadership on Public Sector
Reforms, planning and management, and to develop the strategic linkages
among various reform initiatives in the public sector and institutions that
drive them.

South Africa

South African rand edges higher before inflation data

South Africa's rand was slightly firmer early on Wednesday, before the
release of inflation data which were expected to show growing price
pressures in Africa's most industrialised economy.

At 0605 GMT, the rand ZAR=D3 traded at 14.2550 against the dollar, roughly
0.1% stronger than its previous close.

Statistics South Africa will publish the consumer price index ZACPIY=ECI
around 0800 GMT.

Economists expect it to rise to 5.2% year on year in May from 4.4% in April,
which would mark the first time the indicator has risen above the midpoint
of the central bank's target range since COVID-19 reached South Africa.

The South African Reserve Bank (SARB) tries to keep inflation between 3% and
6%, and it regularly talks about where it is in relation to the midpoint of
that band.

Despite building price pressures, economists are not predicting the SARB
will raise rates when it next meets in July. When Reuters last polled
analysts in May survey medians suggested the bank would keep its repo rate
ZAREPO=ECI at 3.5% throughout 2021, sticking to an accommodative monetary
policy stance.

Government bonds also firmed in early deals on Wednesday, as the yield on
the benchmark 2030 instrument ZAR2030= dropped 4 basis points to 9.025%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar lower as Powell reaffirms pledge to not raise rates too quickly

(Reuters) - The U.S. dollar held at lower levels on Tuesday after Federal
Reserve Chair Jerome Powell reaffirmed the U.S. central bank's intent to
encourage a "broad and inclusive" recovery of the job market, and not to
raise interest rates too quickly based only on the fear of coming inflation.

The dollar had surged after the Fed on Wednesday said that policymakers are
forecasting two rate hikes in 2023. That led investors to re-evaluate bets
that the Fed will let inflation run at higher levels for a longer time
before hiking rates.

The dollar index fell 0.20% to 91.733 . It is holding below a two-month high
of 92.408 reached on Friday.

The euro gained 0.19% to $1.1940 and the dollar gained 0.28% to 110.65
Japanese yen .

Fed officials have expressed differing views on when it may be appropriate
to tighten monetary policy as inflation rises.

The U.S. central bank may be in a position to start reducing its
extraordinary support of the U.S. economy by late this year or early next
year, San Francisco Federal Reserve President Mary Daly said on Tuesday.
read more

Fed officials will keep a close eye on economic data to determine when it
will be appropriate to start adjusting monetary policy and any conversation
about when to adjust interest rates is still far off, said New York Fed Bank
President John Williams.

Producer price inflation data on Friday is the next major economic focus.

Bitcoin recovered from a five-month low on Tuesday in a volatile session in
which it fell below $30,000, extending losses sparked a day earlier when
China's central bank deepened a crackdown on cryptocurrencies. read more

It was last at $32,599 , up 2.95% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices advance as Fed chief calms rate-hike fears

(Reuters) - Copper prices rose on Wednesday as testimony from U.S. Federal
Reserve chair Jerome Powell eased worries of a sooner-than-expected rate
hike that could dampen liquidity into metals.

Three-month copper on the London Metal Exchange was up 0.5% at $9,344.50 a
tonne, as of 0701 GMT, while the most-traded July copper contract on the
Shanghai Futures Exchange closed 2% higher at 68,480 yuan ($10,562.36) a
tonne.

Powell on Tuesday reaffirmed the central bank's intent to encourage a "broad
and inclusive" recovery of the job market, and not to raise interest rates
too quickly based only on the fear of coming inflation.

Last week, investors fretted that the U.S. central bank could tighten its
policy soon, leading to LME copper dropping 8.6%, its biggest weekly fall
since March 2020.

FUNDAMENTALS

* China's state reserves administration said it would publicly auction a
total of 100,000 tonnes of non-ferrous metals early next month in the first
round of a rare and highly anticipated release of its stockpiles.

* China's Zhejiang Huayou Cobalt's first nickel and cobalt project in
Indonesia will have capital expenditure coming in below target, a company
official said.

* Glencore Chief Executive Ivan Glasenberg said copper supplies needed to
increase by one million tonnes a year until 2050 to meet an expected demand
of 60 million tonnes.

* LME nickel rose 0.5% to $17,825 a tonne, while ShFE nickel jumped 2.7% to
133,700 yuan a tonne, and ShFE tin climbed 3.6% to 207,830 yuan a tonne.

* For the top stories in metals and other news, click or

$1 = 6.4834 yuan

Oil jumps to more than 2-year high on U.S. inventories

(Reuters) - Oil rose towards $76 a barrel on Wednesday, reaching its highest
since late 2018, after an industry report on U.S. crude inventories
reinforced views of a tightening market as travel picks up in Europe and
North America.

The American Petroleum Institute reported that crude stocks fell by a bigger
than expected 7.2 million barrels, two market sources said. Official
inventory figures from the Energy Information Administration are due at 1430
GMT.

Brent crude rose $1.08, or 1.4%, to $75.89 by 1340 GMT, having touched its
highest since October 2018 at $75.91. U.S. West Texas Intermediate added
$1.14, or 1.6%, to $73.99 and hit $74.07, also the highest since October
2018.

Brent has gained more than 45% this year, supported by supply cuts led by
the Organization of the Petroleum Exporting Countries (OPEC) and as easing
coronavirus restrictions boost demand. Some oil industry executives are even
talking of crude returning to $100, a level last reached in 2014. read more

OPEC and allies, collectively known as OPEC+, meet on July 1. They have been
discussing a further unwinding of last year's record output cuts from August
but no decision has been made on exact volumes, two OPEC+ sources said on
Tuesday. read more

Global demand is set to rise further in the second half of the year, though
OPEC+ also faces the prospect of rising Iranian supply if talks with world
powers lead to a revival of Tehran's 2015 nuclear deal. read more

A retreat in the U.S. dollar has also helped to prop up oil, making crude
less expensive for buyers holding other currencies.

Our Standards: The Thomson Reuters Trust Principles.

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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opinions expressed and recommendations made are subject to change without
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