Bulls n Bears Daily Market Commentary : 07 September 2021

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Bulls n Bears Daily Market Commentary : 07 September 2021

 

 	

 <mailto:info at bulls.co.zw> 

 

 	


ZSE commentary

 

The ZSE closed today in a rebound after a dull start for September with
improved liquidity and activity levels. The market was pulled to the
positive by heavyweight counters. At close, market bias was negative as 17
stocks registered losses against 16 gainers while 5 of the active stocks
remained unchanged. Shares of 38 out of 49 companies were traded. Activity
levels improved to 465 trades. Art was the most active stock at 41 trades
closely followed by Innscor and Delta at 29 trades each. First Capital Bank
anchored volume aggregate trading 1 969 600 shares and Delta anchored value
aggregate with a value of ZW$37.2 million contributing 33.6% to total
turnover.

 

The benchmark All Share Index gained 0.67% to 6 645.03 points. The Top 10
Index was up by 1.40%. The Top 15 Index was up 1.22% to 4 084.15 points. The
Medium Cap Index traded lower to 17 243.46 points depreciating by 0.27%
whilst the Small Cap Index also shaded 0.87% to close at 224 016.77 points.
Leading the risers pack of the day was Cassava which was up by 13.60%.
Bindura added 5.73% amid strong performance from the increase in nickel
prices. Medtech added 5.54% and Dairibord  was up by 5.50%. Zimplow Holdings
was up by 5.46%. Leading in the shakers' pack were Fidelity and First
Capital which shaded 20.00% and 12.57% respectively. Turnall  was down by
11.18%. Zimre Holdings shaded 8.83%. The Old Mutual Top Ten ETF closed at
2535.55c down 13.09% after 34 600 units with a value of ZW$81 500 in 20
trades exchanged hands. On the VFEX, Padenga traded 500 shares worth US$108
adding 20.00% to close at 21.60c per share.-wealthaccess

 



 

Global Currencies & Equity Markets

 

 

South Africa

 

South African rand dips before second-quarter GDP data

(Reuters) - The rand slipped early on Tuesday before the release of
second-quarter gross domestic product (GDP) data that will show the pace of
South Africa's economic recovery from the COVID-19 pandemic.

 

At 0636 GMT, the rand traded at 14.2700 against the dollar, 0.3% softer than
its previous close.

 

On global markets, the dollar (.DXY) was 0.2% stronger against a basket of
peers as investors awaited a European Central Bank meeting and more U.S.
data to gauge the policy outlook. read more

 

Statistics South Africa will publish the latest GDP numbers (ZAGDPN=ECI) at
0930 GMT.

 

Economists polled by Reuters have predicted quarter-on-quarter growth of
0.7% in seasonally adjusted and non-annualised terms, down from 1.1% in the
previous three months.

 

Earlier on Tuesday, central bank data showed net reserves rose to $55.67
billion in August, boosted by an increase in holdings of special drawing
rights. But that did little to affect rand trading. read more

 

Government bonds were also weaker in early deals, with the yield on the
benchmark 2030 bond rising 3 basis points to 8.84%.

 

The Thomson Reuters Trust Principles.

 

 

Currencies like the rand are in 'sweet spot', yields may be too good to
resist

Central banks in developing nations will take centre stage this week as
assurances that the Federal Reserve is in no hurry to raise interest rates
lay the groundwork for an extended rally in emerging-market currencies. 

 

Policymakers in Poland, Russia, Peru and Malaysia are all due to set
borrowing costs, safe in the view that US rates will remain low for longer,
a message that Fed Chair Jerome Powell hammered home at Jackson Hole. And it
means that any hawkish turn in emerging markets could bring the carry trade
back into play, supercharging gains, as was the case for the Chilean peso
last week.

 

 

While the emerging-market carry trade returned just 0.5% in the first half,
Bloomberg's EM Carry Index is already up almost 2% since the end of July,
with high-yielding but volatile currencies such as Turkey's lira and South
Africa's rand leading the charge. 

 

Friday's weak employment data underscored belief that the Fed will hold
rates even as it begins to scale back emergency stimulus. That would keep
the cost of borrowing dollars to park in higher-returning securities low, a
strategy that could serve investors particularly well given that the Fed's
focus on nurturing the economic recovery will also keep a lid on the
greenback.

 

The decoupling of tapering from rates has also given a new lease of life to
the currencies of early hikers like Brazil and Russia, whose outperformance
had been starting to wane following aggressive gains this year. The ruble
and real have been among the top performers in emerging markets since
Powell's Jackson Hole speech on 27 August, which gave policymakers room to
react to economic fundamentals rather than second-guessing the Fed.

 

That may be just the start. The ruble's volatility-adjusted implied yield,
for example, has climbed more than 200 basis points to a 20-month high
following a rate increase in July, with another expected this week. And
while implied yields fell across emerging-market regions in the past month,
they're already showing some recovery in Asia and Latin America.

 

As the carry trade roars back, investors may find yields in countries such
as South Africa, Brazil and Turkey too juicy to resist, bolstering their
currencies, said Michel Vernier, head of fixed income strategy at Barclays
Private Bank. Export- and commodities-linked currencies are also expected to
get a boost.

 

 

Uganda

 

Africa's Third-Best Performing Currency May Have More to Run

Uganda's shilling, Africa's third-best performing currency this year, gained
for a fourth straight day on Tuesday, buoyed by dollar inflows from coffee
exporters and foreign investors chasing yield.

 

 

Nigeria

 

Exchange rate crisis: Nigerians appetite for foreign goods killing Naira
-CBN

The Central Bank of Nigeria (CBN) has said that cutting down on foreign
goods, aggressive investment in agriculture and complete diversification
would revamp the nation's economy.

 

Director, Corporate Communications Department, CBN, Osita Nwanisobi, stated
this, weekend, at one-day interactive session with the organised labour and
civil society on the five-year policy thrust of CBN in Enugu.

 

Nwanisobi said that it was for that reason that the apex bank introduced
about 37 intervention programmes, especially for agriculture, to boost the
economy, reduce inflation and create more jobs for the youth.

 

Director General of Michael Imodu National Institute of Labour Studies,
Issah Aremu, praised the CBN for bringing in a national planning policy.

 

He also commended the CBN for promoting financial literacy of workers, which
according to him, would help them know what is happening in the economy,
inflation rate and to know the difference between policies, their jobs and
productivity.

 

Chairman of Nigeria Labour Congress (NLC) Enugu Chapter, Virginus Nwobodo,
said the sensitisation session has enlightened them on the effect of
consuming locally made goods.

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Markets

 

Sterling sinks for second day on dollar strength

LONDON (Reuters) - Sterling dipped for a second consecutive day against a
broadly stronger dollar on Tuesday, adding to losses sustained at the start
of the week on stuttering economic momentum in Britain.

 

With currencies largely range-bound on Tuesday owing to a U.S. holiday,
traders largely kept the dollar bid in morning deals in London. [FRX/]

 

Hawkish comments from BoE policymaker Michael Saunders did not have a
sizeable impact on the pound. Saunders said the central bank may need to
raise interest rates next year if growth continues and inflation becomes
stickier.

 

Sterling, earlier trading flat on the dollar, eased 0.2% to $1.381 by 0820
GMT, trading some ways off a 4-week high of $1.3890.

 

Against the euro, the pound traded flat at 85.90 pence.

 

Brown added that on the whole, the market remains fairly subdued, and tight
ranges continue to prevail.

 

Bets that Britain's rapid pace of COVID-19 vaccinations would lead to a
faster economic reopening and rebound had earlier propelled sterling to one
of the best performing G10 currencies this year.

 

But recent surveys have hardened indications of slowing economic growth,
after a strong rebound triggered by the country's rapid vaccine rollout
earlier in the year. They also reveal that economic momentum is stuttering
under the impact of Brexit, global supply chain issues and COVID isolation
rules.

 

On Monday, sterling dipped on the back of a survey of purchasing managers
that showed the UK construction industry grew last month at its weakest pace
since the lockdown of early 2021, hit by a severe shortage of building
supplies.

 

Friday PMI data had showed growth in the services sector slowed down in
August compared with July.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Yellow metal flat; silver edges lower

NEW DELHI: Bucking global trends, gold was little changed on Tuesday in the
domestic market. The yellow metal lacked directional cues as the US market
was closed on Monday on account of a public holiday.

 

However, a softer dollar and prospects of the US Federal Reserve delaying a
tapering in its pandemic-era bond purchases made gold an attractive asset.

 

Gold futures on MCX were marginally down 0.02 per cent, or Rs 8, at Rs
47,417 per 10 gram. Silver futures declined 0.13 per cent, or Rs 88, at Rs
65,204 per kg.

 

Gold prices had hit a multi-week high last week following a disappointing US
non-farm payrolls data. A strong jobs recovery is crucial for the central
bank to start withdrawing its stimulus measures.

 

The yellow metal kept rangebound trading on Monday. Mixed global cues post
US non-farm payroll data has also kept gold prices in range. Gold prices may
trade sideways for the day.

 

Ravindra Rao, CMT, EPAT, VP - Head Commodity Research at Kotak Securities,
said gold eased a bit amid a pause in the US dollar's slide and as market
players moved to sidelines ahead of central bank meetings this week.
Investor interest also remains weak in gold as is evident from ETF outflows.

 

Physical gold demand across top Asian hubs was largely muted last week,
while dealers in India pinned hopes on the upcoming festival season.

 

However, India's gold imports in August nearly doubled from a year earlier
on strong demand and as weaker prices prompted jewellers to ramp up
purchases for the coming season.

 

In the spot market, highest purity gold was sold at Rs 47,534 per 10 gram
while silver was priced at Rs 64,957 per kg on Monday, according to the
Indian Bullion and Jewellers Association.

 

The spot price of the yellow metal has gained about Rs 300 per 10 gram in
the last one week, whereas silver has gained more than Rs 1,550 during the
period under review.

 

Gold has been a frustrating trade as the precious metal struggles to find
bullish momentum despite currency weakening and real interest rates in
negative territory, said Sandeep Matta, Founder, TRADEIT Investment Advisor.

 

Global markets

Spot gold rose 0.2% to $1,826.75 per ounce by 0108 GMT. US gold futures
eased 0.3% to $1,828.00.

 

Silver firmed 0.4% to $24.76 per ounce, platinum rose 0.1% to $1,020.26 and
palladium was flat at $2,410.52.

 

 

 


 

INVESTORS DIARY 2021

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

BAT

Analyst Briefing

H1 Virtual

September 7 -1230pm

 

 	

Hippo

AGM

virtual

September 17 -  (9am)

 

 	

Star Africa

AGM

virtual

September 23 -11am

 

 	

 

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

 

 

 

 	

 

 

 

 

 	

 

 

 

 	

 

 

 	

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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344 1674

 

 	

 

 

 	
							

 

 

 

 

 

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