Bulls n Bears Daily Market Commentary : 31 May 2021

Mon May 31 18:32:28 CAT 2021

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Bulls n Bears Daily Market Commentary : 31 May 2021

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

ZSE commentary

The ZSE closed the last day of the month with trading mixed although it
managed to close with gains boosted by heavyweight stocks. Total traded
value for the session was ZW$118.5 million with Innscor contributing the
most at ZW$37.08 million after a trade of 452 000 shares. Delta led activity
at 21 trades with a total share volume of 291 200. Econet and OK Zimbabwe
followed at 16 and 15 trades respectively. Overall activity levels were
lower at 239 trades with a total volume of 5 320 000 shares. The Top 10
Index was up 1.36% to 3 005.08. This was after Delta gained 3.92% to
5862.74c, BAT added 9.65% to 87 714.29c and FBC was down 3.44% to 2999.89c.
OK Zimbabwe also added 1.98% to close at 1 799.72c. The Top 15 Index shaded
a paltry 0.04% while the Medium Cap Index also traded lower to 13 868.88
points depreciating by 1.35%.

At close, the Small Cap Index was up by 0.53% to 68 639.91. This was spurred
by gains in NTS with a 1.79% gain at 1040c, Star Africa adding 1.93% and
General Beltings adding 2.14% to 75c. Other gains were registered in Zimplow
which was up 10.64% to 679.90c and First mutual Properties gaining 17.59% to
1340c after releasing its FY2020 financial results. Bears for the day
included First Mutual Holdings  which pared 12.80% and Simbisa Brands
shading 11.21% to 3536.99c. Please find a summary of the market activity as
shown below; The Old Mutual Top Ten ETF closed at 197.69c down 0.89% after
10 200 units with a value of ZW$20 164 in 11 trades exchanged
hands.-wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand trades flat overnight

The South African rand shuffled sideways with a bullish bias as traders were
fixated on data from the US, with the CPI release expected to shape guidance
on policy expectations according to NKC Research.

PCE inflation rose 0.6 percent m-o-m, in line with market expectations.
Meanwhile, US consumer spirits deflated in May as inflation expectations hit
a decade high amid the resurgent economy and encouraging vaccine campaign.

After improving 11.5ppts between February and April, the University of
Michigan's consumer sentiment index fell to 82.9 in May. While long run US
inflation forecasts over the next five to 10 years ticked up from 2.7
percent in April to 3.0 percent in May, expectations remain well-anchored
and historically tame compared to previous inflationary episodes.

At the close of local trade, the rand quoted 0.08 percent stronger, at
R13.77/$, after trading in range of R13.73/$ to R13.88/$. The rand traded
flat overnight. The expected range of the rand against the dollar today is
R13.70/$ to R13.90/$.

South African bourse

The JSE All Share (+0.92 percent) ended in positive territory on Friday,
thanks to gains in large industrial (+1.95 percent) and technology (+1.89
percent) stocks. In the overall emerging market sphere, the MSCI Emerging
Market Index (+0.48 percent) climbed higher.

Brent crude oil

The Brent oil price inched firmer at the end of last week - but failed to
breach the psychological $70-level - as investors remained upbeat about the
prospects of higher global demand. At the close of local trade, benchmark
Brent crude futures quoted 0.29 percent stronger, at $69.68pb. Crude prices
traded firmer during Asian trade this morning.

BUSINESS REPORT ONLINE

Nigeria

Nigeria: Naira Weakens Further As Reserves Dip

The value of the naira continued on its downward spiral at all ends of the
market as it closed last week losing N10 to sell at N495 to the dollar in
the parallel market, a situation analysts said would continue this week.

It had begun depreciating on Tuesday last week following the acceptance of
the Nigeria Autonomous Foreign Exchange (NAFEX) rate by the Central Bank of
Nigeria (CBN). At the NAFEX window, the value of the naira depreciated
slightly to N412 to the dollar compared to N410 when it opened the week's
trading activities.

The CBN governor, Godwin Emefiele had, at the end of the monetary policy
committee (MPC) meeting in Abuja on Tuesday, confirmed that the change in
the official exchange rate to NAFEX rate was necessitated by the fact that
government transactions were no longer consummated using the official
exchange rate.

Emefiele noted that transactions are rather benchmarked against the NAFEX
rate, reiterating that Nigeria still operates a managed-float exchange rate
regime.

Consequently, the value of the naira which had depreciated slightly on
Tuesday to N486 to the dollar was down to N493 as at Wednesday and further
slid to N495 on speculation of a further devaluation of the naira.

The CBN had earlier this month removed the N380 per dollar exchange rate
from its website spurring rumour of a pending devaluation.

At the end of the week, total turnover increased by more than 125 per cent
to $1.26 billion, with trades consummated within the N400 and 430 to the
dollar band.

In the Forwards market, the rate weakened across the 1-month (-0.1% to
N413.71/$), 3-month (-0.3% to N420.39/$), 6-month (-0.3% to N429.40/$) and
1-year (-0.5% N447.56/$) contracts.

Meanwhile the 30-days moving average of foreign reserves dipped slightly by
0.3 per cent to $34.24 billion as at May 27, 2021 despite a 5.1 per cent
increase in the price of Brent crude, a position analysts hope to turn
around.

The expected turnaround was hinged on expectations that reopening economies
and higher travel numbers in the US and Europe would boost fuel demand
outweighed concerns about the coronavirus spread in parts of Asia.

At the money market end, rates fell as system liquidity closed at N486.5
billion.-Leadership.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar set for second consecutive monthly loss vs euro and pound

The dollar came under pressure on Monday and was heading for its second
consecutive monthly loss against the euro and the pound, as traders assessed
the impact of a surge in U.S. inflation before monthly jobs data later this
week.

With London and New York markets closed for a holiday, the dollar index of
major currencies fell 0.1% to 90.044 at 1350 GMT

On Friday, data showing a key measure of U.S. inflation at a 29-year high
briefly boosted the dollar to a two-week high.

The euro was flat at $1.2195, off Friday's low of $1.2133. The British pound
edged 0.1% lower at $1.4173 .

In holiday-thinned trade, investors weighed the impact on U.S. assets of
rising price pressures and a dovish Fed. Despite rising inflation, markets
don't expect a rate hike well into the back end of 2022.

The core PCE price index vaulted 3.1% on Friday, the largest annual gain
since July 1992, due to a recovery from the pandemic and various supply
disruptions. read more

The market considers current inflation levels in the U.S. to be
transitional. Next year's U.S. inflation will remain at 2.5%, Ulrich
Leuchtmann, Commerzbank's head of FX and commodity research wrote in a note.

Speculators increased their bets against the dollar last week with U.S.
dollar short positions hitting a 2-1/2 month high.

The Chinese yuan hit a three-year high against the dollar before falling
back following a chorus of warnings from Chinese officials against
speculative bets on the currency.

The offshore yuan changed hands at 6.3698 per dollar after touching
overnight its highest since May 2018 of 6.3553 per dollar .

In volatile cryptocurrencies, bitcoin was 2.6% higher at $36,604 . Ether
rose 5.8% to $2,528.

The main event of the week will be U.S. payrolls on Friday with median
forecasts at 650,000 but the outcome is uncertain following April's
shockingly weak 266,000 gain.

Our Standards: The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold Heads for Biggest Monthly Gain Since July on Inflation Bets

Gold headed for the biggest monthly advance since July, with inflation risks
in focus ahead of key U.S. jobs data due later this week that will offer
clues on the economic recovery.

Some Federal Reserve officials have said that recent price pressures are to
be expected as the economy reopens amid pent-up demand, and should prove
temporary as supply glitches abate. The PCE price index -- which the Fed
uses for its inflation target -- rose 3.6% from a year earlier, the biggest
jump since 2008.

Gold heads for biggest monthly gain since July

Bullion erased its 2021 losses this month amid signs of accelerating
inflation and a potentially uneven economic recovery due to the resurgence
of Covid-19 in some countries. Investor interest has also returned, with
hedge funds and other large speculators boosting their net-long position in
gold to the highest since early January. Holdings in bullion-backed
exchange-traded funds climbed for the first time in four months in May but
the gains remained far short of those seen during last year's record rally.

Spot gold rose 0.2% $1,906.78 an ounce by 3:05 p.m. in London, bringing this
month's gain to 7.8%. Prices climbed to $1,912.76 last week, the highest
since Jan. 8. Silver, palladium and platinum also advanced. The Bloomberg
Dollar Spot Index headed for a second straight monthly drop.

The U.S. nonfarm payrolls report scheduled for release on Friday augurs a
pivotal moment for investors to assess whether surprisingly tepid job gains
seen last month were a momentary blip or the start of something more
persistent.

Copper futures in New York declined 0.2%, while the London Metal Exchange
was closed for a public holiday.

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
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opinions expressed and recommendations made are subject to change without
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