Bulls n Bears Daily Market Commentary : 30 September 2021

Fri Oct 1 06:38:24 CAT 2021

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Bulls n Bears Daily Market Commentary : 30 September 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE closed today with mixed trading as profit taking started to creep in
on heavyweight counters. Activity levels were up to 549 trades with market
bias near flat with 17 stocks rising and 16 declining and 9 of the active
stocks remained unchanged. Star Africa was the most active stock at 56
trades followed by Bindura and Delta at 41 and 37 trades respectively.
Masimba anchored both volume and value aggregate trading 4 368 915 shares
with a value of ZW$188.7 million. The benchmark All Share Index closed at 8
580.16 points, down marginally by a paltry 0.08%. The Top 10 Index shaded
0.51%. The Top 15 Index gained 0.52%. The Medium Cap Index traded higher to
20 599.24 points appreciating by 0.54% whilst the Small Cap Index added
1.88% to close at 254 232.90 points.

Leading the risers pack of the day was General Beltings after releasing its
HY2021 results today adding 14.33%. TSL added 12.15% to 6168.18c. BAT
continued its upward trend adding 11.00% and Cassava was up by 4.30%.
Zimplow added 3.85%. Leading the bears for the day were Axia Corporation and
First Mutual Properties which shaded 13.94% and 10.68%. Bindura and National
Foods lost 9.61% each. OK Zimbabwe which shaded 6.49% to 2042.55c. The Old
Mutual Top Ten ETF closed at 312.02c up by 2.06% after trading 13 660 units
with a value of ZW$420622 in 15 trades. Elsewhere on the VFEX, Seed Co
International added 0.31% to close at US 28.09 cents. wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand gains as trade surplus widens; stocks fall

(Reuters) - The South African rand gained strongly on Thursday as the
country's trade surplus widened more than expected last month, credit
extension picked up and the dollar fell on global markets.

At 1545 GMT, the rand traded at 15.0425 against the dollar, around 1% firmer
than its previous close.

Data from the revenue service showed the trade surplus widened to 42.4
billion rand ($2.8 billion) in August, versus economists' predictions for a
39.0 billion rand surplus.

Bumper commodities prices especially for precious metals, a key South
African export, have bolstered the country's terms of trade this year and
supported the rand.

August private sector credit rose 1.1% year on year in August, central bank
data showed, also more than expected and suggesting loan demand is
recovering.

The dollar (.DXY) was more than 0.1% weaker against a basket of currencies,
pressured by a rise in U.S. weekly jobless claims and as investors
consolidated gains after a steep rise the last few sessions. read more

Johannesburg-listed stocks dipped, closing the day with the biggest monthly
decline since the March 2020 crash as worries around China's growth and
crackdown on technology firms, coupled with stimulus withdrawal signals from
the U.S. dented sentiment.

The benchmark all-share index (.JALSH) dropped 0.13% to 64,282 points,
closing the third quarter of the year with a monthly decline of 4.96%.

The blue-chip index of top 40 companies (.JTOPI) was down 0.27% to 57,863
points.

South African mining firms and technology investor Naspers Ltd (NPNJn.J),
which indirectly holds around 30% stake in Chinese company Tencent
(0700.HK), are among the major companies that pulled the indexes down this
month.

Investors have said that a bull run in the local market is over as commodity
prices have started to decline, but with companies having repaired their
balance sheets, a major crash is also unlikely.

In fixed income, the yield on the benchmark 2030 government bond dropped 4.5
basis points to 9.225%, reflecting a stronger price.

The Thomson Reuters Trust Principles.

Zambia

Zambian Kwacha seen weaker, other African currencies stable

LUSAKA: Zambia's currency may remain under pressure against the US dollar
next week as those of Kenya, Uganda and Tanzania's hold steady.

The kwacha will likely trade on the back foot against the dollar next week
as demand for hard currency remains higher than supply.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 16.7147 per dollar from a close of 16.5500 a week ago.

Kenya

Kenya's shilling is expected to hold steady but with a bias to weaken due to
increased importer dollar demand.

Commercial banks quoted the shilling at 110.40/60 to the dollar, compared
with last Thursday's close of 110.30/50.

Uganda

The Ugandan shilling is seen trading on a stable footing, supported by hard
currency inflows from exporters of commodities like coffee, tea and cocoa.

Commercial banks quoted the shilling at 3,535/3,545, compared with last
Thursday's close of 3,525/3,535.

Tanzania

Tanzania's shilling is expected to hold steady with inflows from investments
and exports matching demand from the energy and manufacturing sectors.

Commercial banks quoted the local currency at 2,305/2,315, stronger than
2,314/2,324 levels at last Thursday's close.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar heads for best week in months as Fed tightening looms

The dollar began the last quarter of 2021 near its highest levels of the
year and headed for its best week since June, as currency markets braced for
U.S. interest rates to rise before those of major peers.

The euro slipped 0.1% early on Friday to $1.1572 and has fallen 1.3% this
week, tumbling through major support around $1.16 to touch its lowest levels
since July 2020.

The yen is down 0.6% for the week and twice as much in a fortnight as higher
U.S. Treasury yields have drawn flows out of the Japanese yen into dollars.
U.S. Treasury yields have surged on growing market expectations of U.S.
tapering by year-end and rate hikes in 2022.

The yen bounced from a 19-month low of 112.08 per dollar on Thursday as
yields settled, last trading at 111.41 per dollar. The dollar index stood at
94.327, having gained 1.1% so far this week, the largest weekly rise since
late June.

A Federal Reserve meeting last week reinforced expectations for asset
purchase tapering beginning this year and rate hikes starting in 2022 or
early in 2023.

Commodity currencies made a bounce on the dollar on Thursday following a
Bloomberg report which said China had ordered energy companies to secure
supplies for the winter at all costs, citing unnamed people familiar with
the matter.

Beijing is scrambling to deliver more coal to utilities to restore supply
amid a power crunch that has unsettled markets due to the likely hit to
economic growth.

The Australian dollar rose 0.7% overnight but that was hardly enough to
offset a slide in the quarter as prices for Australia's major export, iron
ore, fell. The Aussie slumped 3.6% in the third quarter - the worst
performance of any G10 currency against the dollar.

The Aussie hit one-month lows earlier this week and was last just above
those levels at $0.7222. The New Zealand dollar also lifted from a month-low
on Thursday and last sat at $0.6892.

Central banks in both countries meet next week, with the Reserve Bank of New
Zealand expected to hike rates.

Sterling was also an underperformer last quarter, dropping 2.5%, and looks
set to log its worst week in more than a month weighed by worries about a
hawkish sounding central bank in spite of growing supply chain problems.

Sterling traded just above a 9-month low at $1.3445.

Markets in Hong Kong and China are closed on Friday. Later in the day,
traders are awaiting U.S. personal spending and core consumption deflator
data and nervously watching for any progress on the debate over raising the
U.S. debt ceiling.

A deadline for authorizing extra Treasury borrowing looms in mid-October.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil steadies after report China ready to buy more

(Reuters) - Oil futures were little changed on Thursday as reports China was
prepared to buy more oil and other energy supplies to meet growing demand
offset price pressure from an unexpected rise in U.S. crude inventories and
a strong dollar.

Brent futures for November delivery fell 12 cents, or 0.2%, to settle at
$78.52 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 20
cents, or 0.3%, to settle at $75.03.

Earlier in the day prices at both benchmarks dropped over $1 a barrel.

Brent futures for December, which will soon be the front-month, were up 0.3%
to $78.31 a barrel. New York Harbor Ultra Low Sulfur Diesel (ULSD) futures ,
meanwhile, closed at their highest since October 2018 for a second day in a
row.

China Premier Li Keqiang said the world's biggest crude importer and No.2
consumer will ensure its energy, power supply and will keep economic
operations within a reasonable range.

British petrol stations are still seeing unprecedented demand with more than
a quarter of pumps still dry as the fuel crisis cut road traffic volumes to
the lowest level since the COVID-19 lockdowns ended two months ago. read
more

A possible dampener on oil prices has been the power crisis and housing
market concerns in China, which have hit sentiment because any fallout for
the world's second-biggest economy is likely to affect oil demand, analysts
have said.

China's factory activity unexpectedly shrank in September due to wider curbs
on electricity use and elevated input prices. read more

Meanwhile, inventories have risen in the top oil consumer, the United
States. Government data on Wednesday showed U.S. oil and fuel stockpiles
increased by 4.6 million barrels to 418.5 million barrels last week.

Last week's rise in U.S. inventories came as production in the Gulf Coast
returned close to levels reached before Hurricane Ida struck about a month
ago.

In another bearish development, the U.S. dollar (.DXY) hit a new one-year
earlier in the day, making oil more expensive for holders of other
currencies.

But expectations of a continued crude supply deficit helped support prices.

The Organization of the Petroleum Exporting Countries (OPEC) and allies
including Russia, a group known as OPEC+, are next week expected to hold to
a pact to add 400,000 barrels per day to their output for November. read
more

Stalled talks between Iran and world powers to reinstate a 2015 nuclear deal
will resume "soon", the European Union's foreign policy chief Josep Borrell
said on Thursday. A nuclear deal should allow Iran to export more crude.
read more

The Thomson Reuters Trust Principles.

Gold Advances Amid Weaker Dollar, Disappointing U.S. Labor Data

Gold rose to the highest in a week as investors sought haven after a labor
report pointed to an uneven recovery in the U.S. jobs market.  

Applications for U.S. state unemployment benefits unexpectedly rose for a
third straight week, led by another surge in California. The dollar fell
after the report, boosting bullion's appeal for investors holding foreign
currencies.

A worsening labor market could push the Federal Reserve to delay reducing
stimulus, which cushioned the economy from the worst effects of the pandemic
and sent bullion prices to a record last year. 

Still, gold is on course for its biggest monthly loss since June with
precious metals pressured by the prospect of a pullback in stimulus
measures. 

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Public Holiday in lieu of Boxing Day falling on a Sunday

December 27

Counters trading under cautionary

ART

Seed co Int.

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
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for guideline purposes only and sourced from third parties.

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