Bulls n Bears Daily Market Commentary : 30 June 2021

Wed Jun 30 14:51:32 CAT 2021

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Bulls n Bears Daily Market Commentary : 30 June 2021

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

ZSE commentary

The ZSE closed today's mid-week session with mixed trading as small cap
stocks continued outperforming the market. Activity levels were higher at
781 trades. Medtech was the most active stock at 168 trades followed by OK
Zimbabwe and Star Africa at 59 and 106 trades each. The market bias was
positive after 25 stocks registered gains against 14 losers while 2 of the
active stocks remain unchanged. Medtech was the most liquid counter as it
anchored volume aggregate trading over 4.78 million shares while OK Zimbabwe
anchored value traded with a value of ZW$66.4 million contributing 32% to
total turnover. The benchmark All Share Index was up 0.42% and the Top 10
Index also down by a paltry 0.58%. The Top 15 Index shaded 0.57%. The Medium
Cap Index traded higher to 17 272.09 points whilst the Small Cap Index added
6.08% to close at 190 131.50 points.

Leading the risers pack of the day was Fidelity and Zimpapers which added
20.00% each. The clothing retailer Truworths hit its new high at 175c up by
18.78%. Medtech was up by 13.56% to 23.53c. First Mutual Properties also
added 10.39%. Leading in the shakers pack was Simbisa shading 9.61%. NMB and
Axia Corporation shares retreated 7.69% and 5.08% to 1200c and 2088.20c
respectively. Ariston Holdings and African Sun were down by 2.74% and 2.51%
respectively. The Old Mutual Top Ten ETF closed at 178.99c down by 0.0032%
from a trade of 505 700 units worth ZW$905 174 in 11 trades. Elsewhere on
the VFEX, Seed Co International traded 100 000 shares worth US$25 200 to
close at US$0.252.-wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand weakens as virus fears lift dollar

(Reuters) - South Africa's rand weakened on Tuesday as the safe-haven U.S.
dollar climbed to a one-week high over fearsthat new coronavirus outbreaks
could undermine a global economic recovery.

At 1625 GMT, the rand ZAR=D3traded at 14.3200 against the dollar, roughly
0.5% lower than its previous close.

Fears over the spread of the highly infectious Delta coronavirus variant
have dented global sentiment at a time that markets are on edge because of a
hawkish tilt from the U.S. Federal Reserve.FRX/

South African scientists said at the weekend that the Delta variant seemed
to be starting to dominate new infections, after which President Cyril
Ramaphosa tightened restrictions for 14 days.

The country, the worst-hit on the African continent in terms of recorded
cases and deaths, is in the grip of a third COVID19 wave that is expected to
surpass a severe second wave that peaked in January.

Johannesburg-listed stocks rose after economic data showed disposable income
rose 2.3% year on year in the first quarter, which, together with low
interest rates and subdued inflation, pushed household consumption spending
higher.

That had a positive impact on retailers, with Walmart WMT.N majority-owned
Massmart MSMJ.J, Famous Brands FBRJ.J, Truworths TRUJ.J, Mr Price MRPJ.J,
TFG TFGJ.J, Pick n Pay PIKJ.J, Woolworths WHLJ.J and pharmacy group Clicks
CLSJ.J up between 6.53% and 3.39%.

They cautioned, however, that "the pace of increase will partly be contained
by subdued investment activity and rising COVID-19 infections".

Overall, the Johannesburg All-Share index .JALSH rose 1.12% to 66,548
points, while the Top-40 index .JTOPI gained 1.13% to 60,495 points.

In fixed income, the yield on the benchmark 2030 government bond ZAR2030=
dipped 1 basis point to 8.95%, reflecting a slightly firmer price.

Nigeria

Naira gains further at official market, stable at black market

Naira gained further at the official market on Tuesday as forex supply
increased, but maintained stability at the parallel market segment after
recording a sharp fall in the previous session on Monday.

Data posted on the FMDQ Security Exchange where forex is officially traded
showed that the naira closed at N410.83 at the Nafex window.

Tuesday's performance represents a N0.45 or 0.11 per cent appreciation from
the N411.28 rate it traded in the previous session on Monday.

The currency staged an intraday low of N420.90 and a high of N387.67 before
closing at N410.83 on Tuesday.

The local unit status became evident as forex turnover skyrocketed by 114.50
per cent, with $215.53 million recorded at the end of the market session as
against the $100. 48 million posted in the previous session on Monday.

The last time the currency hovered around N410.00 benchmark and above was on
June 23.

However, data posted on abokiFX.com, a website that collates parallel market
rates in Lagos showed that the naira closed at N502.00 per $1 at the black
market window on Tuesday again, the same rate it exchanged hands with the
hard currency in the previous session on Monday.

The spread between the parallel market and the official rates stood at
N91.17. This translated to a margin of 18.20 per cent as of the close of
business on Tuesday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar set for best month in 4-1/2 years, payrolls test looms

The dollar was heading for its biggest monthly rise since November 2016 on
Wednesday, supported by traders' trepidation ahead of unpredictable U.S.
labor data and concern over the spread of the Delta coronavirus variant.

The dollar has gained about 2.5% against a basket of currencies this month,
mostly in the wake of a surprisingly hawkish shift in the Federal Reserve's
rates outlook. Traders think it could move sharply in either direction if
labor data this week provides clues as to the pressure on policymakers.

On Wednesday, risk-sensitive and commodity-exposed currencies nursed the
largest losses, after the Australian and New Zealand dollars had fallen
about 0.7% against the dollar on Tuesday and the Canadian dollar had lost
about 0.5%.

They were steady in the European session, as were the safe-havens of the
Japanese yen and the Swiss franc which held their own through Tuesday. That
left the euro at $1.1900, the yen at 110.49 per dollar and the Aussie at
$0.7518 - all within sight of recent milestone lows against the dollar.

The U.S. dollar index, which measures the greenback against a basket of six
major currencies, was steady at 92.041 after touching a one-week high of
92.194 on Tuesday.

A test of the near-term dollar outlook arrives this week with U.S. labor
data. Signs of strength could add to inflationary pressure on policymakers
to move sooner on rate hikes, while a miss might put some padding into the
timeline.

Private payrolls are due later on Wednesday, but the main focus is on more
comprehensive labor figures due on Friday.

Economists polled by Reuters forecast private payrolls showing a gain of
600,000 in June, a slowdown from a month ago when 987,000 jobs were created.

The average forecast for Friday's non-farm payrolls is for a rise of 700,000
jobs, but the variation among the 83 estimates is large, ranging from
376,000 to more than a million.

Besides the looming data, a fresh spike in global coronavirus infections and
in restrictive measures to contain them kept a lid on currency movements.

Case counts are hitting daily records in Indonesia, lockdowns are being
extended in Malaysia and expanded in Australia, while travelers from Britain
are facing new restrictions as the contagious Delta variant spreads.

Paul Mackel, global head of FX research at HSBC, said currency markets
seemed to be in transition from closely tracking the ebb and flow of risk
sentiment towards a greater sensitivity to interest rates, driving a
shakeout that has lifted the dollar.

Indeed, data showed the sharpest fall in the value of bets against the
dollar in three months occurred last week, a boost for the greenback as the
shorts buy dollars to close positions.

Sterling traded flat at $1.3832.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold en route to biggest monthly drop since 2016

Gold prices edged down on Wednesday, on track for their biggest monthly
decline since November 2016, as upcoming U.S. jobs data and taper talks from
the U.S. Federal Reserve kept investors on the sidelines.

Spot gold eased 0.3% to $1,755.70 per ounce by 0846 GMT, having touched its
lowest since April 15 at $1,749.20 on Tuesday. U.S. gold futures fell 0.4%
to $1,756.70.

Bullion prices are down about 8% for the month, weighed down by the Fed's
sudden hawkish shift. But they are up nearly 3% for the quarter.

Equity markets remains strong as the economy recovers, and "that's something
which potentially will be a drag on gold," as it is considered as safe haven
assets, UBS analyst Giovanni Staunovo said, adding, bullion could drop
towards $1,600 by the end of the year.

Investors are also eyeing the non-farm payrolls on Friday, which if comes
out strong, could further pressurize gold, Staunovo added.

The U.S. Labor Department expected to report a gain of 690,000 jobs in June,
compared with 559,000 in May, according to a Reuters poll of economists.

Elsewhere, silver traded at $25.74 per ounce.

Palladium lost 0.2% to $2,673.18 per ounce, and was set for a second
straight month of decline. Platinum fell 1.4% to $1,052.05 and was set for
its biggest monthly and quarterly drop since March 2020.

Oil steady as U.S. stockpiles fall, OPEC warns of possible 2022 glut

Oil prices were broadly steady on Wednesday, heading for monthly and
quarterly gains, after some data suggested U.S. crude stockpiles were
shrinking while an OPEC report warned of a possibly significant glut
building by the end of next year.

Brent crude was up 6 cents, or 0.08% at $74.82 a barrel by 0902 GMT. U.S.
crude was up 30 cents, or 0.4% at $73.28 a barrel.

Both contracts are just below highs last reached in 2018, and are set to
record their seventh monthly gain in the past eight months.

While the highly contagious Delta coronavirus variant is taking hold in many
countries, prompting new lockdowns or restrictions on movement from
Australia to Portugal, hopes of a broader recovery in demand for fuel remain
intact.

Crude stocks in the United States were down by 8.2 million barrels, American
Petroleum Institute data showed, according to two sources who spoke on
condition of anonymity. Government data is due later on Wednesday.

Hopes for a broad recovery received a boost from Mohammad Barkindo,
Secretary General of the Organization of the Petroleum Exporting Countries
(OPEC), who said on Tuesday that demand is expected to rise by 6 million
barrels per day (bpd) in 2021, with 5 million bpd of that coming in the
second half of the year.

Goldman Sachs forecasts that demand will rise by a further 2.2 million bpd
by the end of 2021, leaving a 5 million bpd supply shortfall.

However, an internal OPEC report seen by Reuters highlights that the oil
market could return to a glut after the group is expected to unravel oil
production cuts of under 6 million barrels per day by April 2022.

OPEC ministers and their allies are meeting to decide future policy on
Thursday.

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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