Bulls n Bears Daily Market Commentary : 26 May 2021

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Bulls n Bears Daily Market Commentary : 26 May 2021

 

 	

 

 

 	

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

 

 	


ZSE commentary

 

The ZSE closed the mid-week session with marginal gains across the board. Turnover for the day surged to ZW$135.98 million (218% higher) from a trade of over 12.6 million shares. Meikles contributed the most at 32.12% of the total turnover. Meikles was the most active stock at 63 trades followed by Star Africa and Medtech in a total of 559 trades. The market breadth was positive after 23 stocks depreciated against 16 that depreciated in a total of 44 stocks which traded. Medtech Holdings was the most liquid counter as it anchored volume traded at 8 487 100 shares and Meikles anchored value traded at ZW$43.7 million respectively.

 

At close, the benchmark All Share Index was up by 1.07% and the Top 10 Index was up by a marginal 0.34%. The Top 15 Index added a paltry 0.33%. The Medium Cap Index traded higher to 14 181.37 points appreciating by 2.19%. The Small Cap Index added 0.45% to 62 217.81 points. Leading the risers pack of the day was CAFCA up 20.00% to 12600c followed by First Mutual Properties adding 19.74%. Masimba Holdings was up by 14.35%. ZB Holdings and TSL added 10.05% and 10.02% respectively. Leading in the shakers pack was Lafarge Cement Zimbabwe which pared 18.15% amid delay in publishing its FY2020 financial results followed by Zimplow shading 11.43% to 602.26c. Meikles and Medtech pared 8.90% and 4.14% respectively. Please find a summary of the market activity as shown below; The Old Mutual Top Ten ETF closed at 199.01c down 0.51% after 252 600 units with a value of ZW$502 695 in 11 trades exchanged hands closing with a yield to date of 99%.wealthaccess



 

 <mailto:info at bulls.co.zw> 

 

 


Global Currencies & Equity Markets

 

 

 

Nigeria

 

Nigeria devalues naira as part of path to single exchange rate

Nigeria adopted the multiple exchange-rate regime to avoid an outright devaluation of the naira but that system sparked criticism from the International Monetary Fund.

 

Nigeria’s central bank devalued the naira by 7.6% against the dollar as authorities in Africa’s biggest oil producer migrate toward a single exchange-rate system for the local currency.

 

The Abuja-based Central Bank of Nigeria replaced the fixed rate of 379 naira to a dollar used for official transactions with the more flexible nafex, also known as the investors and exporters exchange rate, that has averaged 410.25 naira per dollar this year, according to data on its website on Tuesday.

 

The bank held interest rate at 11.5% in line with the median estimate in a Bloomberg survey.

 

Nigeria adopted the multiple exchange-rate regime to avoid an outright devaluation of the naira by keeping a stronger pegged rate for official transactions and weaker exchange for non-government related transactions. This currency management system was criticized by the International Monetary Fund, and the World Bank held back a $1.5 billion loan in a bid to push for more foreign-exchange reforms.

 

The nafex, which acts as a spot rate, was introduced in 2017 to improve dollar liquidity and encourage inflows from foreign investors that were exiting the country following the 2016 economic crisis. The West African nation suffered even more acute hard-currency scarcity last year after the Covid-19 pandemic led to a plunge in oil prices, forcing it to devalue the local unit twice.

 

While crude contributes less than 10% to the country’s gross domestic product, it accounts for nearly all foreign-exchange earnings and half of government revenue.

 

The latest central bank move is expected to improve confidence in policy making, but recovery in portfolio inflows will not be immediate as investors wait for more dollar liquidity, analysts including Simon Kitchen and Mohamed Abu Basha at Cairo-based EFG Hermes said.

 

 

 

South Africa

 

Rand remains on the front foot against the dollar

JOHANNESBURG - The rand hovered near a 22-month high as dovish rhetoric by the US Federal Reserve fed into a softening dollar, according to NKC Research.

 

The external environment continued to provide a soft landing for the rand, cushioning the local currency from a still-weak fiscal position, despite a brightening outlook for merchandise trade.

 

In the US, bipartisan talks on an infrastructure package took a step back last week.

 

US President Joe Biden’s $1.7 trillion (about R23.5 trillion) counteroffer, down from $2.3 trillion in the American Jobs Plan (AJP), did little to bridge the gap with the Republicans, whose latest public offer totalled $568 billion. Even if the two parties could agree on a top-line spending number, they remain far apart on offsets to pay for a package.

 

If an agreement is not reached this week, the Democrats will shift to moving the AJP, perhaps with the American Families Plan, through the budget reconciliation process. Passage could occur before the August summer recess, but that’s not assured.

 

At the close of local trade, the rand was 0.36 percent stronger at R13.85 to the dollar, after trading in range of R13.82 to R13.93. The rand remained on the front foot overnight. The expected range of the rand against the dollar today is R13.75 to R13.95.

 

Brent crude oil

 

The price of Brent oil increased yesterday after rallying strongly in the previous session, as traders tempered expectations that Iran would soon recommence supplying oil to global markets. At the close of local trade, benchmark Brent crude futures were 0.28 percent higher at $68.68 per barrel.

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Pound trades sideways vs. dollar and euro amid thin data calendar

(Reuters) - Britain’s pound traded within recent ranges against the dollar and the euro on Wednesday, as a lack of fresh economic catalysts in a sparse data calendar kept the currency in consolidation mode.

 

Sterling is the second best-performing G10 currency versus the dollar this year, up 3.4% year-to-date and trailing only the commodity-linked Canadian dollar. That performance is a result of investors betting on a quicker reopening for Britain’s economy on the back of its rapid COVID-19 vaccination pace.

 

Britain commenced a third part of a phased reopening last week, allowing indoor dining in pubs and restaurants. Economic indicators such as retail sales are looking up, as are surveys of purchasing managers across industries.

 

By 0809 GMT, sterling was 0.05% lower against the dollar at $1.4138, some way off a three-month high of $1.4233 hit last week.

 

The pound was flat versus the euro at 86.57 pence, and off a two-week low of 86.20 hit against the common currency on Tuesday.

 

The only event with potential to move the currency in an otherwise thin data calendar on Wednesday was a testimony by British Prime Minister Boris Johnson’s former chief adviser, Dominic Cummings.

 

Cummings, the strategist behind the 2016 Brexit campaign and Johnson’s landslide election win in 2019, will be quizzed by British lawmakers from 0830 GMT on the lessons that can be learned from the pandemic.

 

Cummings, who left the government late last year, has said the British health ministry was a “smoking ruin”, that Western governments failed during the crisis, and that the secretive British state was woefully unprepared for the pandemic.

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold prices today rise again, jumping ₹5,000 in less than 2 months

Gold and silver prices today edged higher in Indian markets, following the uptick in global rates. On MCX, gold futures were up 0.4% to ₹49,049 per 10 gram while silver rose 0.7% to ₹72622 per kg. In the previous session, gold had risen 0.62% while silver had gained 0.51%. Concerns about inflation, subdued US bond yields and US dollar and renewed coronavirus surge in many parts of the world has helped gold rebound in international markets.

 

On the other hand, weighing on price are concerns about India’s consumer demand as virus related restrictions impacts domestic activity, says Kotak Securities.

 

In March, gold prices in India had hit a near year low of about ₹44,000 per 10 gram. Despite the recent recovery in prices, gold rates are still down significantly from last year's high of ₹56,200.

 

In international markets, gold edged past key $1900 levels, supported by a weak dollar, making gold cheaper for other currency holders. Also supporting the precious metal was subdued US bond yields, reducing the opportunity cost of holding non-interest bearing gold. The dollar index was near 4-month low of 89.605 while benchmark US Treasury yields were near two-week low of 1.57%.

 

Gold added 0.4% to $1,906.16 an ounce while silver was steady at $27.99 and platinum gained 0.8% to $1,200.69.

 

MCX Gold has resistance at ₹49,400 and support at ₹47,900, the brokerage added.

 

Gold traders will be watching US initial jobless claims, GDP, durable goods, pending home sales data to be released later this week. Asian equity markets were mostly higher today while Bitcoin climbed toward $40,000 in a partial recovery from last week’s crypto rout.

 

 


 

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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