Bulls n Bears Daily Market Commentary : 06 May 2021

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Bulls n Bears Daily Market Commentary : 06 May 2021

 

 	

 

 

 	

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

 

 	


ZSE commentary

 

The ZSE registered across the board gains in today’s session as the list of
companies delaying the publication of their audited results continue to pile
up. Turnover jumped 105.55% to ZW$104.26 million from a trade of over 5.56
million shares which exchanged hands in 430 trades. OK Zimbabwe was the most
active stock at 36 trades followed by Star Africa and Econet. The market
breadth was positive after 24 stocks appreciated against 11 that depreciated
in a total of 41 stocks which traded. Econet was the most liquid counter as
it anchored both volume and value aggregates trading 1 947 700 million
shares with a value of ZW$40.89 million which is 39.22% of total turnover
for the day. At close, the benchmark All Share Index gained 1.07% and the
Top 10 Index was up by 0.79%. The Top 15 Index added 0.67%. The Medium Cap
Index traded higher to 11 482.28 appreciating by 1.32%, whilst the Small Cap
Index was the best performer for the day gaining 7.77% to close at45 785.58
points to a month to date gain of 6.34%.

 

Leading the risers pack of the day was First Mutual Properties and National
Tyre Services  which both added 20.00%. First Capital Bank added 12.71% to
282.76c. General Beltings was 10.04% up to 79.23c. Zimpapers added 6.25% to
170c. Leading in the shakers pack was the hospitality group African Sun
which pared 5.29% followed by Turnall Holdings shading 2.74%. The banking
group NMB pared 2.36% and Art Corporation went down by 0.76% to 625.24c.
Please find a summary of the market activity as shown below; The Old Mutual
Top Ten ETF closed at 174.96c down 1.08% after 212 700 units with a value of
ZW$372 146 in 14 trades exchanged hands.-wealthaccess



 

 <mailto:info at bulls.co.zw> 

 

 


Global Currencies & Equity Markets

 

 

 

South Africa

 

Rand steadies ahead of U.S. jobs report

JOHANNESBURG - The South African rand steadied in early trade on Thursday,
with investors' focus on a key U.S. jobs report which may provide clues on
when the Federal Reserve will dial back monetary stimulus.

 

At 0625 GMT, the rand traded flat at 14.3600 against the dollar, holding to
gains made in late afternoon trade on Wednesday.

 

The potential for higher U.S. interest rates has weighed on riskier but
high-yielding assets like the rand this week.

 

Investor attention is also on a scheduled review of South Africa's sovereign
credit by Moody's on Friday. The rating agency already assigns a "junk"
status to the country, but with a negative outlook there is the potential
for a further downgrade.

 

Government bonds firmed in early deals, and the yield on the instrument due
in 2030 slipped 3 basis points to 9.090%

 

 

 

Nigeria

 

Naira gains at NAFEX window as dollar supply improves by 305%

The exchange rate between the naira and the US dollar closed at N410.5/$1 on
Wednesday, as dollar supply spiked by 305%.

 

The exchange rate between the naira and the US dollar closed at N410.5/$1 at
the Importers and Exporters window, where forex is traded officially.

 

Naira appreciated marginally against the US dollar on Wednesday, 5th May
2021 to close at N410.5 to a dollar. This represents a 50 kobo gain when
compared to N411/$1 recorded on Tuesday 4th May 2021.

Meanwhile, the naira maintained stability at the parallel market as it
closed at N485/$1, while Nigeria’s external reserve plunged $94.84 million
to close at $34.79 billion on Tuesday, 4th May 2021.

 

Trading at the official NAFEX window

The naira appreciated against the US dollar at the Investors and Exporters
window on Wednesday to close at N410.5/$1, representing a 50 kobo gain when
compared to the N411/$1 that was recorded at Tuesday’s session.

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

 

Global Markets

 

Dollar on back foot ahead of US jobs data

As the dollar is softer against most currencies, the euro outshone many
others, having gained 0.5% on Thursday to trade at $1.2063.



The dollar stayed under modest pressure on Friday ahead of a key US jobs
report that could cement expectations of a strong economic recovery and fan
investor appetite for stocks, higher-yielding currencies and commodities.

 

The dollar’s index against six other major currencies stood near its lowest
level so far this week, at 90 868, having lost about 0.4% overnight.

 

As the dollar is softer against most currencies, the euro outshone many
others, having gained 0.5% on Thursday to trade at $1.2063.

 

Against the yen, the dollar dipped to 109.05 yen, almost flat so far on the
week as its rebound since late April has lost steam.

 

US payrolls data due at 1230 GMT will likely confirm the economy’s solid
path to recovery from the pandemic, analysts said.

 

Economists expect 978 000 new US jobs for April, according to a Reuters
poll.

 

Ahead of the closely-watched report, data showed on Thursday the number of
Americans filing new claims for unemployment benefits fell below 500 000
last week for the first since the COVID-19 pandemic started more than a year
ago.

 

Although signs of a strong job recovery could stoke inflation worries, so
far most Federal Reserve policymakers have downplayed the risks of higher
prices, a sign stimulus tapering will not be on agenda any time soon.

 

The Canadian dollar rose almost 1% overnight to a 3-1/2-year high of
C$1.21455 and last stood at C$1.2157.

 

The currency has been bolstered by oil price gains and the Bank of Canada’s
recent shift to more hawkish guidance.

 

The Chinese yuan also held firm near a two-month high, standing at 6.4655
per dollar in offshore trade, just short of its April 30 peak of 6.4613.

 

The British pound traded at $1.3896, unable to hold on to gains made on
Thursday after the Bank of England slowed the pace of its trillion dollar
bond-purchasing programme.

 

The decision was largely expected and the BoE stressed it was not reversing
its stimulus.

 

The British currency could be capped for now by uncertainties over Scottish
election that could trigger a showdown with British Prime Minister Boris
Johnson over its independence movement.

 

Although the polls already closed at 2100 GMT, votes will not be counted
until Friday morning due to the coronavirus pandemic.

 

Just over a third of the results will be announced on Friday and the
remainder will be announced on Saturday.

 

Elsewhere, ether hit a fresh record high of $3,610.04 and last traded at
$3,473.51.

 

Bitcoin fetched $56,541, trapped in a range between $53,000 and $59,000 over
the past week.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

 

Gold prices top $1,800, settle at highest since February

Gold prices rallied on Thursday, prompting the commodity to settle above the
psychologically significant value of $1,800 an ounce for the first time
since February, as slipping bond yields and a slightly weaker U.S. dollar
offered some support.

 

The precious metal’s rise above the key price mark is “quite something for
gold,” Ross Norman, chief executive officer at Metals Daily, told
MarketWatch.

 

June gold GC00, +0.21% GCM21, +0.21%  rose $31.40, or 1.8%, to settle at
$1,815.70 an ounce after trading as high as $1,818.60. Prices for the
most-active contract marked the highest finish since Feb. 12, FactSet data
show.

 

Gold has been under pressure since August of last year, but it has “begun to
improve in the near-term after finding support at an important technical
level,” with gold stopping its decline in the $1,670 to $1,690 zone, he said
in emailed commentary.

 

July silver SIN21, +0.27% SI00, +0.27% also added 96 cents, or 3.6%, to
$27.48 an ounce, with prices posting their highest finish since late
February.

 

Also see: Iron-ore prices hit record high with appetite for steel ‘far
beyond expectations’

 

Gold and silver bulls garnered support from Federal Reserve “assurances of
ongoing low rates overnight and the dollar showing a definitive reversal
down, wrote analysts at Zaner, in a daily note.

 

On Wednesday, the precious metal bounced back from a Tuesday decline after
Yellen, formerly head of the Federal Reserve, clarified remarks that had
been interpreted as advocating for raising interest rates to keep the
economy from overheating.

 

The 10-year Treasury note yield TMUBMUSD10Y, 1.569% was lower at around
1.57%, while the U.S. dollar was off 0.4% at 90.977, as measured by the ICE
U.S. Dollar Index DXY, -0.09%.

 

Commodity traders also parsed the Bank of England’s vote that advocated for
slowing the pace of continuing government bond purchases “somewhat.”

 

By an 8-to-1 vote, the Bank of England said it would maintain its target for
U.K. government bond purchases at £875 billion, with only chief economist
Andy Haldane, who is going to be leaving the central bank, voting to reduce
the size by £50 billion.

 

In other metals news, separate data released Thursday showed outflows for
global gold-backed exchange-traded funds first quarter, and in April.

 

Global gold ETFs lost 18.3 metric tons in April, marking outflows for five
of the past six months, according to the World Gold Council.

 

Separately, Refinitiv Metals Research said gold ETF investors liquidated 175
metric tons in the first quarter, representing the largest level of net
quarterly outflows since the first quarter of 2013.

 

The outflows were “largely a reflection of a shift in investor sentiment
towards gold since the beginning of the year, with gold being pressured by
firm U.S. dollar, rising U.S. Treasury yields and growing enthusiasm around
economic recovery amidst the ongoing rollout of vaccination [programs],”
according to Refinitiv Metals Research.

 

Rounding out action on Comex, prices for July copper HGN21, +0.95% added
1.7% to $4.60 a pound, with most-active contract prices settling at their
highest since February 2011.

 

Prices continued to benefit from an overall, ongoing global economic
recovery. “The uptrend remains well intact for the industrial metal,”
analysts at Sevens Report Research said in Thursday’s newsletter.

 

 

 

Copper and Iron Ore Surge as Chinese Investors Unleash Demand

Spot iron ore broke $200 a ton for the first time, while copper approached a
record high as Chinese investors unleashed fresh demand following a
three-day holiday.

 

The reopening of major industrial economies is sparking a surge across
commodities markets from corn to lumber, with tin climbing above $30,000 a
ton for the first time since 2011 on Thursday. In the wake of mounting
evidence of inflation -- fueled by higher raw materials prices -- investors
are also increasingly focused on when the U.S. Federal Reserve might start
throttling back its emergency support.

 

Many banks say the rally has further to run, particularly for copper, which
will benefit from rising investment in new energy sectors. Copper is at the
highest in a decade, fueling bets it will rally further to take out the
record set in February 2011. Steel demand is surging as economies chart a
path back to growth just as the world’s biggest miners have been hampered by
operational issues, tightening ore supply.

 

Trading house Trafigura Group and several major Wall Street banks including
Goldman Sachs Group Inc. and Bank of America Corp. expect copper to extend
gains.

 

Copper for three-month delivery rose 1.4% to settle at $10,092 a ton on the
London Metal Exchange.

 

Profits are surging at China's steel mills amid pollution crackdown

Benchmark spot iron ore prices rose to a record, while futures in Singapore
and China climbed.

 

The boom comes as China’s steelmakers keep output rates above 1 billion tons
a year, despite a swath of production curbs aimed at reducing carbon
emissions and reining in supply. Instead, those measures have boosted steel
prices and profitability at mills, allowing them to better accommodate
higher iron ore costs.

 

Spot iron ore with 62% content hit $201.15 a ton on Thursday, according to
Mysteel. Futures in Singapore jumped as much as 5.1% to $196.40 a ton, the
highest since contracts were launched in 2013. In Dalian, prices closed 8.8%
higher.

 

Still, some analysts including Commerzbank’s Briesemann expect a short-term
correction as metals become detached from fundamentals. There’s also a risk
that China could engage in policies that may cool demand for iron ore and
copper.

 

The metals rally has boosted concerns about short-term Chinese demand. Some
manufacturers and end-users have been slowing production or pushing back
delivery times after costs surged, while weaker-than-expected domestic
consumption has opened the arbitrage window for exports.

 

Tin climbed as much as 2% to $30,280 a ton on the LME, boosted by rising
orders for the soldering metal. Tin is at the highest since May 2011, with a
48% gain this year making it the best-performing metal on the LME.

 

 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

FCB

AGM 

virtual

06/05/21 : 3pm

 

 	

NMB

AGM

virtual

1205/21 :  3:30pm

 

 	

 

Africa Day

 

25/05/21

 

 	

 

 

 

 

 

 	

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
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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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