Bulls n Bears Daily Market Commentary : 24 June 2021

Thu Jun 24 13:35:59 CAT 2021

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Bulls n Bears Daily Market Commentary : 24 June 2021

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

ZSE commentary

The ZSE firmed in the positive territory in today's session. There was a
decline in activity which saw the small cap stocks marking their 31st day of
consecutive gains. Turnover declined by 74% to ZW$67.3 million from a trade
of over 10.2 million shares. Activity levels were lower to 487 trades. GBH
was the most active stock at 70 trades followed by Medtech and OK Zimbabwe.
The market bias was positive after 23 stocks registered gains against 13
losers while 3 of the active stocks remain unchanged. Medtech was the most
liquid counter as it anchored volume aggregate trading over 4.7 million
shares and Innscor anchored the value aggregate with a value of ZW$19
million.

The benchmark All Share Index was up 1.75% and the Top 10 Index also up by
1.20%. The Top 15 Index shaded 1.76%. The Medium Cap Index traded higher to
16 333.05 points whilst the Small Cap Index added 11.33% to close at 149
316.26 points. Leading the risers pack of the day was Star Africa and Get
Bucks which added 19.91% and 19.51% to close at 168.25c and 1142.50c
respectively. Unifreight was up by 16.99% to 1800c. National Foods and
Ariston also added 12.94% and 11.92% respectively. Leading in the shakers
pack was RTG shading 16.16%. Edgars lost 11.37%. General Beltings and
Mashonaland Holdings were down by 5.22% and 4.23% respectively. Truworths
pared 2.62% to 131.05c. Please find a summary of the market activity as
shown below; The Old Mutual Top Ten ETF closed at 186.13c up by 3.98% from a
trade of 15 500 units worth ZW$28 850 in 8 trades. Elsewhere on the VFEX,
Seed Co International traded 25 000 shares worth US$5 250 in one trade to
close at 21c.-wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand little changed at open, tracking dollar

(Reuters) - South Africa's rand was little changed early on Thursday,
tracking the dollar which lolled below an 11-week high amid conflicting
signals from the U.S. Federal Reserve.

At 0718 GMT, the rand ZAR= traded at 14.2250 against the dollar, less than
0.1% stronger than its previous close.

The U.S. currency got some support overnight as two Fed officials said a
period of high inflation in the United States could last longer than
anticipated, a day after Fed Chair Jerome Powell had played down rising
price pressures. But it was a touch weaker on Thursday against a basket of
major currencies .DXY.

Statistics South Africa will release producer price index ZAPPIY=ECI figures
around 0930 GMT, giving further clues about inflationary pressures in
Africa's most industrialised economy.

Data on Wednesday showed consumer inflation hit a 30-month high in May, but
economists are not predicting the South African Reserve Bank will raise
interest rates any time soon.

South African government bonds were also barely changed early on Thursday,
as the yield on the benchmark 2030 instrument ZAR2030= rose 0.5 basis points
to 8.955%.

Nigeria

Naira falls at official window as external reserve declines to 4-year low

The exchange rate between the naira and the US dollar closed at N411.50/$1
at the official Investors and Exporters window.

Naira depreciated on Wednesday against the US dollar to close at N411.50 to
a dollar compared to N410/$1 recorded on Tuesday, 22nd June 2021.

The exchange rate remained stable for a second consecutive day at the
parallel market to close at N500/$1 on Wednesday, June 23, 2021. This was
the same rate that was recorded on Tuesday, June 22, 2021.

Trustfund Pensions Limited

The fall of the local currency at the official window is further compounded
by the persistent decline in Nigeria's external reserves which is at a
4-year low at just over $33 billion despite rising oil prices.

The CBN Governor, Godwin Emefiele, at an event organized by Standard Bank of
Africa, told investors in the UK, that he expects the true value of the
naira to be between N430-440/$1 and not the black market rate of about
N500/$1.

Naira depreciated against the U.S dollar at the Investors and Exporters
window on Wednesday to close at N411.50/$1, representing a N1.50 drop when
compared to the N410/$1 that was recorded the previous day.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar rally sputters as Fed sends mixed signals on inflation

(Reuters) - The U.S. dollar vacillated below an 11-week high versus major
peers on Thursday as traders attempted to navigate conflicting signals from
Federal Reserve officials on the timing of a withdrawal of monetary
stimulus.

The dollar index , which measures the greenback against six rivals, stood at
91.806 early in the Asian session after dipping to 91.509 on Wednesday. It
was at 92.408 at the end of last week, the highest since April 9.

The U.S. currency got some support overnight as two Fed officials said that
a period of high inflation in the United States could last longer than
anticipated, a day after Fed Chair Jerome Powell played down rising price
pressures.

Atlanta Fed President Raphael Bostic said with growth surging to an
estimated 7% this year and inflation well above the Fed's 2% target, he now
expects interest rates will need to rise in late 2022.

Both Bostic and Fed Governor Michelle Bowman said that while they largely
agree recent price increases will prove temporary, they also feel it may
take longer than anticipated for them to fade. read more

The dollar index jumped as much as 2.1% last week after the Fed surprised
markets on June 16 by saying that policymakers are forecasting two interest
rate hikes in 2023.

But the index gave up about a third of those gains after Powell on Tuesday
said that inflation is climbing due to a "perfect storm" as the economy
reopens from the COVID-19 pandemic, and that those price pressures should
ease on their own. read more

Six Fed officials are due to speak on Thursday, including New York Fed
President John Williams, who on Tuesday said any conversation about when to
adjust interest rates is still far off.

Producer price inflation data on Friday is this week's U.S. economic focus,
with consumer spending numbers also due that day, and the latest reading on
jobless claims released later on Thursday.

The euro was little changed at $1.19295 on Thursday compared to the previous
session, when it rose as high as $1.19700 for the first time in a week. It
had dipped to the lowest since April 6 on Friday, at $1.18470.

The yen weakened as far as 111.11 per dollar for the first time in 15
months, and was last 0.1% weaker at 111.03.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper prices fall on firm dollar, supply pressure

(Reuters) - Copper prices fell on Thursday, pressured by a strong dollar,
fears of a sooner-than-expected interest rate hike in the U.S. and a
forecast for rising supply in the coming months.

A firm dollar, which has been hovering around an 11-week high, makes
greenback-priced metals more expensive to holders of other currencies, while
a rate hike could dampen liquidity into metals and slow a global economic
recovery.

Three-month copper on the London Metal Exchange fell 1.1% to $9,379.50 a
tonne by 0712 GMT, while the most-traded July copper contract on the
Shanghai Futures Exchange closed up 0.3% to 68,350 yuan ($10,560.88) a
tonne, tracking overnight gains in London.

A period of high inflation in the United States may last longer than
anticipated, two U.S. Federal Reserve officials said on Wednesday, prompting
one to pull forward his views on when the central bank should start raising
interest rates.

Copper prices on the London Metal Exchange fell on the morning of Thursday
June 24, with concerns of earlier-than-expected interest rate increases
returning to the market.

The three-month copper contract on the LME was down 1.3% at 9am on Thursday,
at $9,357.50 per tonne, following a 2% rise at the close of trading on
Wednesday, at $9,482.50 per tonne. Wednesday's closing price was the metal's
highest one in a week.

Crude oil

Crude oil continued its positive performance as it rose on Wednesday with
the Brent Crude closing at $75.23 per barrel after dropping earlier in the
day as shrinking inventories in the US and China added to bullish sentiment
around the global demand recovery.

Gold prices climb to highest finish in a week

Gold futures climbed on Wednesday, with prices posting their highest
settlement in a week, supported by a U.S. dollar that is receding from
roughly two-month highs.

The outlook for gold remains uncertain after a sharp selloff last week and
as investors wrestled with the Federal Reserve's view on inflation and the
projections for the labor-market rebound from the COVID pandemic.

Further clarity on the Fed's "plans to taper asset purchases and ultimately
raise benchmark interest rates" will be the main factor that determines if
gold moves going forward, said Tyler Richey, co-editor of Sevens Report
Research.

On Wednesday, August gold GCQ21, -0.02% GC00, -0.02% rose $6, or 0.3%, to
settle at $1,783.40 an ounce, after touching an high of $1,795.60. The
settlement was the highest for a most-active contract since June 16, FactSet
data show.

Gold prices may reclaim $1,800 in the short term, but the "upside could be
capped by the PCE inflation data on Friday," Lukman Otunuga, senior research
analyst at FXTM, told MarketWatch.

July silver SIN21, -0.00% SI00, -0.00% also rose 25 cents, or 1% to $26.11
an ounce, following a nearly 0.7% fall Tuesday.

Yields for the 2-year Treasury yield TMUBMUSD02Y, 0.272% fell on Tuesday to
mark the largest one-day drop since March 17, while a gauge of the U.S.
dollar, the ICE U.S. Dollar Index DXY, -0.06%, was little changed, but
trading lower for the week - offering support for dollar-denominated gold
prices.

Gold bulls were "thrown a lifeline" Fed Chairman Jerome Powell "struck a
decidedly more cautious tone during his congressional testimony" on Tuesday,
said Otunuga.

Powell on Tuesday testified before a House committee, repeating that the
central bank expects rising inflationary pressures to prove transitory. The
central bank chief also reiterated that policy makers would be patient in
raising benchmark interest rates higher from their current range between 0%
and 0.25%.

Gold prices extended their gains Wednesday, immediately following data that
showed IHS Markit U.S. flash manufacturing PMI rose to 62.6 in June from
62.1. IHS Markit U.S. flash services PMI, meanwhile, fell to 64.8 in June
from 70.4.

Data from the government Wednesday also showed the U.S. current-account
deficit rose by $20.7 billion to $195.7 billion in the first three months of
this year.

Meanwhile, July copper HGN21, -0.58% climbed by 2.4% to $4.33 a pound.

July platinum PLN21, -0.58% climbed by 1.5% to $1,086.50 an ounce and
September palladium PAU21, -0.40% added 2.8% to $2,630.50 an ounce.

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
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