Bulls n Bears Daily Market Commentary : 25 June 2021

Sat Jun 26 06:16:56 CAT 2021

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Bulls n Bears Daily Market Commentary : 25 June 2021

 <http://www.firstmutual.co.zw/> 

ZSE commentary

The ZSE maintained gains for the third consecutive session this week with turnover improving significantly by 160% to ZW$175.45 million from a trade of over 10.4 million shares. Activity levels were higher to 609 trades. Star Africa was the most active stock at 63 trades followed by Medtech and OK Zimbabwe. The market bias was positive after 25 stocks registered gains against 11 losers while 4 of the active stocks remain unchanged. Econet was the most liquid counter as it anchored both volume and value aggregate trading over 1.98 million shares with a value of ZW$54.39 million. The benchmark All Share Index was up 1.04% and the Top 10 Index also up by 1.40%. The Top 15 Index shaded 0.84%. The Medium Cap Index traded higher to 16 505.89 points whilst the Small Cap Index added 6.56% to close at 159 118.65 points.

Leading the risers pack of the day was Star Africa and Unifreight which added 19.73% each to close at 201.45c and 2155.09c respectively. Unifreight hit its new 52-week high clinging on its title as the best performer on a year to date basis across the market. Hippo was up by 18.05% to 16696.09c. Edgars and Wildale also added 12.76% and 10.65% respectively. Leading in the shakers pack was Seed Co shading 15.46%. GBH shares retreated 13.56% to 261.75c for the second day after a 10-day winning streak was halted yesterday. Simbisa and First Mutual Holdings were down by 4.50% and 2.94% respectively. OK Zimbabwe pared 1.93% to 1599.08c.  The Old Mutual Top Ten ETF closed at 186.78c up by 0.35% from a trade of 5 800 units worth ZW$10 833 in 4 trades.- wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand trades marginally stronger in early trade

(Reuters) - The South African rand traded stronger on Monday as the dollar weakened on the back of uncertainty as to what direction the U.S. Federal Reserve would take on rate hikes.

A raft of mixed signals from the Fed in the last couple of weeks has made the rand jittery as investors fear rising inflation numbers in the U.S. could force the Fed to clamp down on a loose monetary policy in 2022 instead of 2023 as earlier expected.

At 0735 GMT, the local currency was trading 14.17 rand against a dollar, down 0.18%.

In early June, the rand had reached a 28-month high, making it the best performing emerging market currencies on hopes that a dovish Fed would keep the flow of dollars into riskier markets.

Since then it has lost over 5% as investors continue to brace uncertainty. But they are hoping it is a transitory period.

Nigeria

Naira depreciates at official window as dollar supply drops significantly by 43%

The exchange rate between the naira and the US dollar closed at N411.67/$1 at the official Investors and Exporters window.

Naira depreciated marginally on Thursday against the US dollar to close at N411.67 to a dollar compared to N411.50/$1 recorded on Wednesday, 23rd June 2021.

The exchange rate remained stable for the third consecutive day at the parallel market to close at N500/$1 on Thursday, June 24, 2021. This was the same rate that was recorded on Wednesday, June 23, 2021.

The local currency was down at the official window as forex liquidity dropped by 43.2%.

Trustfund Pensions Limited

Meanwhile, the Governor of the Central Bank of Nigeria, Godwin Emefiele advised investors in the U.K that he expects the true value of the naira to be between N430-440 to the dollar and not the black-market rate which closed at about N500/$1.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar firm as traders brace for U.S. inflation data

(Reuters) - The U.S. dollar held near multi-month highs on Friday as investors warily awaited U.S. inflation data, while the pound nursed modest losses after Bank of England (BoE) policymakers leaned away from flagging rate rises.

Early Asia trade was steady, with the euro pinned below its 200-day moving average at $1.1930 and the yen just short of a 15-month low at 110.955 per dollar.

The dollar vaulted to its highest levels since March against the euro last week - and to its highest since March 2020 on the yen - after the U.S. Federal Reserve surprised markets by projecting interest rate rises sooner than expected in 2023.

Subsequent rhetoric from Fed chair Jerome Powell seems to have calmed nerves in bond and stock markets about hikes any time soon, but the dollar has held its gains and traders are wary of further rises if inflation is hotter than forecast.

Economists polled by Reuters expect core personal consumption expenditures index to post year-on-year gains of 3.4%, a rise even faster than the nearly three-decade high pace of 3.1% recorded last month. The data is due at 1230 GMT.

The stronger dollar has kept other majors in check through the week, even against currencies where rate rises are likely to land sooner than in the United States.

The New Zealand dollar has crept back above its 200-day moving average to $0.7063, but it remains well shy of February highs above 74 cents. In Australia, despite booming terms of trade, the Aussie held at $0.7584.

The U.S. dollar index was steady at 91.833, off a week-ago high of 92.408 but clear of troughs below 90 that it had plumbed in May.

Sterling had started to move away from its post-Fed lows, but was the weakest G10 currency overnight and fell 0.3% after the BoE failed to provide any hint it was in a hurry to hike rates and warned against "premature tightening".  

In emerging markets, the Mexican peso surged to a two-week high following a surprise benchmark interest rate hike.  

Bitcoin was steady at $34,380 and headed for a small weekly loss, as it has recovered most of a plunge below $30,000.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today fall for second day, down about ₹10,000 from record highs

Gold rates continued to struggle in Indian markets, with futures on MCX edging lower for second day to ₹46,865 per 10 gram. Silver edged 0.17% higher to ₹67845 per kg. MCX gold faces resistance at ₹47,200 while has support at ₹46,360, say analysts. Gold may continue to trade in a range amid choppiness in equity market and US dollar as market players try to assess Fed’s stance, says Kotak Securities. However, the general bias is still weak as diverging monetary policy outlook may keep US dollar supported, it added.

In global markets, gold was steady at $1,778.48 per ounce and is on track for about 0.8% gain. The yellow metal had plunged 6% last week after Fed's hawkish turn. The retreat in US dollar has supported gold. The US index edged lower to 91.787, making the precious metal cheaper for holders of other currencies.

In India, gold rates had edged closer to ₹50,000 level earlier this month before correcting, in tandem with global rates. In August last year, gold had hit a record high of ₹56,200.

Gold traders remained cautious ahead of US producer price data due later in the day that would offer further clues on rising inflation.

The US Fed has given mixed signals about its stance. Two Fed officials warned on Thursday that inflation could rise more than policymakers' expectation in the near term. However, earlier this week, Fed chief Jerome Powell in a congressional testimony said that inflation would not be the only determinant of interest rate decisions, calming investors worried about policy tightening after the Fed's hawkish turn.

Among other precious metals, silver was up 0.5% at $26.06 per 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 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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