Bulls n Bears Daily Market Commentary : 01 October 2021

Fri Oct 1 18:03:45 CAT 2021

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Bulls n Bears Daily Market Commentary : 01 October 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE closed the week in the positive with significant gains from blue chip counters which headlined the market rally. Activity levels were lower at 446 trades with market bias positive as 19 stocks rose against 15 decliners and 4 of the active stocks remained unchanged. Star Africa was the most active stock at 41 trades followed by Econet and OK Zimbabwe at 34 and 30 trades respectively. Bindura anchored volume aggregate trading 1 607 800 shares and Delta anchored value aggregate with a value of ZW$33.8 million contributing 26.5% to total turnover.

The benchmark All Share Index closed at 8 719.53 points, up by 1.62%. The Top 10 Index added 2.90%. The Top 15 Index gained 1.97%. The Medium Cap Index traded lower to 20 464.29 points depreciating by 0.66% whilst the Small Cap Index added 0.46% to close at 255 411.79 points. Leading the risers pack of the day was Hippo  which added 18.96%. National Foods added 17.42% to 79 922.03c. African Sun added 11.39% and Bindura was up by 10.19%. NMB Holdings added 6.67%. Mitigating the gains were losses in OK Zimbabwe and Axia Corporation which shaded 10.84% and 5.69%. First Mutual Holdings and Star Africa lost 3.50% and 3.37% respectively. Medtech Holdings shaded 2.98% to 27.67c. The Old Mutual Top Ten ETF closed at 313.44c up by 0.46% after trading 15 750 units with a value of ZW$49 366.76 in 16 trades.. 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.

Nigeria

Naira gains at official market

Naira gained significantly against the U.S dollar at the official market on Thursday, after the local currency experienced a profound fall against the hard currency in the previous session Wednesday.

Data from FMDQ securities exchange window, also known as the Investor and Exporters (I&E) window where forex is officially traded showed naira which opened at N413.71 closed at N413. 38 per $1.

The currency’s performance on Thursday implies N1.35 or 0.33 per cent appreciation from N414.73 it exchanged hands with the greenback currency on Wednesday.

This became significant as foreign exchange supply remained unchanged at $467.56 million, the same rate recorded at the close of business on Wednesday.

Naira touched an intraday high of N404.00 and a low of N415.20 before closing at N413.38 per $1 on Thursday.

At the black market in Abuja and Lagos, dealers exchanged the naira at N570.00 per $1 on Thursday.

In Uyo, dealers said it traded at N575.00 a dollar in the morning but rose to N573.00 at the close of business on Thursday.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar falls for 2nd day, but outlook remains positive

The dollar fell for a second straight session on Friday, tracking declines in U.S. Treasury yields, as investors pared back their positions after recent sharp gains, though the decline was viewed as temporary.

U.S. 10-year Treasury yields were last at 1.484%, down four basis points.

For the week, the dollar index was on track for its largest percentage gain since late August, as investors looked to the Federal Reserve’s reduction of asset purchases in November and a possible rate hike late next year.

Cautious market sentiment due to COVID-19 concerns, wobbles in China’s growth and a Washington gridlock ahead of a looming deadline to lift the U.S. government’s borrowing limit has lent support to the dollar, seen as a safe-haven asset.

In mid-morning trading, the dollar index slipped 0.3% to 94.047, having gained 0.8% this week, the largest weekly rise since late August. Friday’s batch of U.S. data was mixed, adding to weakness in the dollar ahead of the weekend.

U.S. consumer spending increased more than expected in August, posting a 0.8% rise, but consumption was weaker than initially thought in July, dipping 0.1% instead of gaining 0.3%.

Inflation remained elevated, but not by much. Core inflation as measured by the personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, was up 0.3% in August, unchanged from previous month.

In manufacturing, data was more upbeat. The Institute for Supply Management (ISM) said its index of national factory activity increased to a reading of 61.1 last month from 59.9 in August.

In other currencies, the euro was flat at $1.1587, falling about 1.1% for the week, on pace for its biggest percentage fall since June.

The yen bounced back against the dollar from a 19-month low overnight, with the greenback last down 0.3% at 110.98 yen. Commodity currencies rallied against the dollar on Friday.

The Australian dollar gained 0.5% to US$0.7266 and slumped 3.6% in the third quarter - the worst performance of any G10 currency against the dollar - as prices for Australia’s top export, iron ore, fell sharply. Sterling was also an underperformer last quarter, dropping 2.5%, and looks set to log its worst week in more than a month, amid growing supply chain problems.

Sterling was last up 0.6% at $1.3560, just above a 9-month low at $1.3516.

 <mailto:info at bulls.co.zw> 

Commodities Markets

London copper set for weekly loss on China, Evergrande worries

(Reuters) - London copper prices rose on Friday but headed for a weekly decline as investors reduced risk exposure amid widespread power restrictions in China and a looming debt crisis at property giant China Evergrande Group.

Three-month copper on the London Metal Exchange rose 0.5% to $8,982.50 a tonne by 0735 GMT, but was set to post a weekly decline of 3.7%.

China’s power shortage has prompted analysts to cut growth outlook in the world’s biggest metals consumer, and its factory activity unexpectedly shrank in September, partially due to the curbs.

Risk sentiment remained tepid as cash-strapped Evergrande missing some offshore debt obligations sparked concerns its woes could spread through the financial system and reverberate around the world.

LME aluminium rose 0.4% to $2,870.50 a tonne, nickel declined 0.5% to $17,840 a tonne, zinc rose 0.3% to $2,997 a tonne, and tin dropped 1.2% to $33,505 a tonne.

LME lead was almost unchanged at $2,092 a tonne, hovering near its lowest since April 26 hit in the previous session of $2,060 a tonne.

Chinese markets were closed on Friday for a week-long public holiday.

FUNDAMENTALS

* Copper production in Chile, the world’s top producer of the metal, dropped 4.6% year-on-year in August amid falling ore grades and labour strikes at key deposits, government statistics agency INE said on Thursday.

* ShFE copper inventories CU-STX-SGH on Thursday fell to 43,525 tonnes, the lowest since June 2009, cushioning losses in copper prices.

Gold price today falls after a big jump, silver rates dip

Gold and silver were subdued in Indian markets after a big jump in the previous session. MCX gold futures were down 0.03% to ₹46,505 per 10 gram while silver futures dipped 0.05% to ₹59,588 per kg. In the previous session, gold had jumped 1.7% or ₹800 per 10 gram while surged 2% or ₹1,200 per kg. 

In global markets, gold prices softened after a surge in the previous session. Spot gold fell 0.1% to $1,754.64 per ounce as the dollar rebounded and made the metal expensive for holders of other currencies. In the previous session, gold had surged to one-week high as the dollar index slipped.

For gold, trend remains choppy with negative bias as long as it stays below $1760, says domestic brokerage Geojit. 

Among other precious metals, silver fell 0.6% to $22.06 per ounce while platinum was down 0.9% to $954.51.

The US dollar today was close to its highest level of the year, recouping most of Thursday's losses. 

Gold and silver are being pressurized by by firmness in US dollar amid increased expectations of Fed’s monetary tightening, say analysts. Also weighing on silver are demand concerns amid slowdown in manufacturing activity and concerns about health of Chinese economy, they added. 

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 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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