Bulls n Bears Daily Market Commentary : 13 May 2021

Thu May 13 14:06:33 CAT 2021

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Bulls n Bears Daily Market Commentary : 13 May 2021

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

ZSE commentary

The ZSE maintained its upward trend as it rose to past a key milestone of a
ZW$600 billion market in today's session which saw improved liquidity.
Heavyweight counters continue to dominate turnover closing in today's
session at ZW$235.9 million (153.95% higher) from a trade of over 8.99
million shares. Delta was the most active stock at 59 trades followed by
Simbisa Brands and Innscor. The market breadth was positive after 31 stocks
appreciated against 5 that depreciated in a total of 41 stocks which traded.

Bindura was the most liquid counter as it anchored volume traded at 1 932
200 shares and Delta anchored value aggregate a value of ZW$47.5 million. At
close, the benchmark All Share Index gained 3.09% and the Top 10 Index was
up by 3.62%. The Top 15 Index added 3.03%. The Medium Cap Index traded
higher to 12 687.78 points appreciating by 2.35% whilst the Small Cap Index
also added 2.97% to close at 48 402.18 points with a month to date gain of
12.42%. Leading the risers pack of the day was Zimre Holdings up by 19.90%
followed by Proplastics which added 19.87%. Hippo added 15.40% to 14
424.52c. Star Africa was 10.56% up to 76.73c.

Delta added 8.37% to 6030.98c. Leading in the shakers pack was CBZ which
pared 5.88% followed by Art Corporation shading 2.63%. Simbisa Brands and
Cassava  pared 0.39% and 0.08% respectively. Please find a summary of the
market activity as shown below; The Old Mutual Top Ten ETF closed at 174.48c
up 0.30% after 38 869 units with a value of ZW$67 819.89 in 11 trades
exchanged hands.wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand recovers after slide post U.S. inflation data

South Africa's rand recovered early on Thursday, after sliding the previous
day as a surprisingly strong rise in U.S. consumer prices raised fears that
the Federal Reserve would raise interest rates, weighing on risk appetite.

The rand traded at 14.0875 against the dollar as of 0624 GMT, 0.37% firmer
than its previous close.

The rand, which hit a 16-month high on Tuesday, has had a strong run since
March, prompted by lower rates in the developed world, a surge in global
commodity prices and signs the local economy is on track for a
better-than-expected recovery.

Data on Wednesday showed U.S. consumer prices increased the most in nearly
12 years in April, intensifying concerns over rising inflation and raising
expectations that the central bank would tighten its monetary policy.

Higher U.S. interest rates dent the appeal for riskier but high-yielding
currencies such as the rand.

Traders will now turn attention to U.S. weekly jobless claims due later on
Thursday and retail sales numbers on Friday for guidance on whether upward
pressure on prices will persist. read more

Locally, focus is on March mining production data due at 0930 GMT.

In fixed income, the yield on the government bond due in 2030 was flat at
9.075%.

Our Standards: The Thomson Reuters Trust Principles.

Nigeria

Naira depreciates at NAFEX window, diaspora remittances to hit $22 billion

Tuesday, 11th May 2021: The exchange rate between the naira and the US
dollar closed at N411.25/$1 at the Importers and Exporters window, where
forex is traded officially.

Naira depreciated against the US dollar to close at N411.25 to a dollar on
Tuesday, 11th May 2021, representing a 58 kobo drop when compared to
N410.67/$1 that was recorded on Monday, 10th May 2021.

Meanwhile, the naira remained stable at the parallel market as it closed at
N483/$1. This was the same rate that was recorded on Monday, May 10, 2021,
as a report from Augusto Consulting Limited expects diaspora remittances to
hit $22 billion by the end of 2021.

Trading at the official NAFEX window

The naira depreciated against the US dollar at the Investors and Exporters
window on Tuesday to close at N411.25/$1, representing a 58 kobo drop when
compared to the N410.67/$1 that was recorded on Monday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar holds gains as inflation fears boost yields

The dollar held gains on Thursday, supported by higher Treasury yields after
a bigger-than-expected rise in U.S. consumer prices fanned fears about an
increase in inflationary pressure.

Traders will now turn their attention to U.S. weekly jobless claims due
later on Thursday and retail sales numbers on Friday to determine whether
consumer prices will continue to rise.

The greenback is likely to continue to rise as some investors unwind bearish
bets on the currency and reposition for more sustained inflation as more
countries leave behind the coronavirus pandemic, analysts said.

The dollar bought 109.55 yen , close to its strongest level in five weeks.

Against the euro , the dollar stood at $1.2083, holding onto a 0.6% gain
from the previous session.

The British pound bought $1.4068.

The dollar also rose to 0.9083 Swiss franc , close to a one-week high.

U.S. consumer prices increased by the most in nearly 12 years in April as
booming demand amid a reopening economy pushed against supply constraints,
data on Wednesday showed. read more

Benchmark 10-year U.S. Treasury yields rose to a five-week high of 1.7040%,
which increases the appeal of holding dollar-denominated assets.

Signs of stronger labour market and increased consumer spending would offer
more evidence that inflationary pressure will pick up, which could push
yields and the dollar even higher, traders said.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold Markets Pullback From Trendline Again

Gold markets fell during the trading session on Wednesday as the downtrend
line continues to hold very resiliently. The $1850 level above there is also
an area of interest.

Gold markets have pulled back during the trading session on Wednesday as the
downtrend line continues to show negativity. The $1850 level above is a
large, round, psychologically significant figure that has attracted
attention more than once. Because of this, the market is very likely to
continue struggling in the short term and could pull back towards the 200
day EMA underneath at the $1793 level. If we were to break down below the
200 day EMA it could open up a bigger move to the downside but right now it
does not look likely to happen quite yet.

If we can break above the $1850 level, then it is likely that we could go
looking towards the $1950 level. That would be a major trendline break out
and we should continue to go higher. The hammer from the previous session is
still holding as support so far, so it does look like we could probably
continue to go back and forth in a tight range before we can make a bigger
move. -fxempire.com

Copper prices at all-time high, will other base metals follow suit?

There are growing signs that aluminium would follow the momentum of copper.
A firm China trade data and a rebound in industrial activities buoyed the
demand outlook of the commodity.

Copper prices doubled in the last year boosted by rapidly tightening in
physical markets amid hopes that it will have a vital role in the world's
shift to green energy. Signs of the global economy recovering from the
negative impact of COVID-19 also raised investor confidence in the metal.

Prices plunged to a four-year low in the initial phase of the COVID-19
breakout in Wuhan last year, but measures to boost the economy by various
central banks propped up prices to record highs recently. In LME, prices
jumped to a high of $10,600 a tonne last week by gaining more than 120
percent from its previous year low. A similar trend was witnessed in the
Shanghai, COMEX and MCX futures as well.

Many investors are betting on the future demand for copper as the world is
largely focusing on reducing carbon emissions. This reddish industrial metal
is largely used in electric vehicles and its demand is estimated to be four
times higher than conventional vehicles. A vast amount of copper is also
required to set up charging stations to keep them running as well.

The large surge in prices was not just a China-initiated drive. Recoveries
in other major industrial economies like the US, Germany and Japan also
assisted the trend. At the same time, supplies remain on the tighter side as
new mines are hard to find and it is expensive to develop and start
production from new mines.

Since the metal also has a vast array of uses in heavy industry, electrical
and manufacturing, it is considered a reliable indicator of the trends in
the global economy.

There are growing signs that aluminium would follow the momentum of copper.
A firm China trade data and a rebound in industrial activities buoyed the
demand outlook of the commodity.

Tight supply is the other reason supporting the metal. China's push to cut
carbon emission spurs hope that aluminium supply expansions will be curbed
in the near future. A spike in transportation and logistics costs too lifted
the price of the metal.

The dispute between China and Australia also convulsed the global aluminium
market. China is the world's leading buyer of aluminium while Australia is a
major producer of raw materials for the production of aluminium.

In the meantime, lead and zinc are unlikely to participate in the present
commodity supercycle. Surplus stocks of both metals are weighing the
sentiment. As per the Lead and Zinc Study Group, the global supply of
refined zinc is expected to exceed demand by 3,53,000 tonnes in 2021 while,
the supply of lead will exceed demand by 96,000 tonnes. Also, both these
metals do not have an obvious tie-in to the electrification and
decarbonisation drivers that have set other metals abuzz.

Lower demand from China is raising concerns over zinc and lead prices.
China's net import of refined zinc fell by 6 percent last year, the second
consecutive year of decline. Net imports of refined lead have also collapsed
in the past two years. Demand of lead is under pressure due to the green
energy movement in several countries. Lead is also the obvious loser in the
transition from conventional engines to electric vehicles.

Looking ahead, base metals perhaps benefited from the global manufacturing
recovery, but lead and zinc are unlikely to generate the same investment
excitement seen in copper and aluminium. China's considerable appetite for
commodities and global economic optimism continues to support the base metal
complex in near future.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

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
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been compiled from sources believed to be reliable, but no representation or
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