Bulls n Bears Daily Market Commentary : 08 September 2021

Wed Sep 8 20:21:19 CAT 2021

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Bulls n Bears Daily Market Commentary : 08 September 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE closed for the second day in the positive headlined by medium cap
stocks. At close, market bias was positive as 18 stocks registered gains
against 11 losers while 4 of the active stocks remained unchanged. Shares of
33 out of 49 companies were traded. Activity levels retreated to 356 trades.
OK Zimbabwe was the most active stock at 36 trades closely followed by
Bindura and Cassava at 34 and 29 trades respectively. Bindura anchored
volume aggregate trading 2 162 900 shares and Delta anchored value aggregate
with a value of ZW$39.7 million contributing 37.8% to total turnover.

The benchmark All Share Index gained 1.02% to 6 712.96 points. The Top 10
Index was up by 0.41%. The Top 15 Index was up 0.24%. The Medium Cap Index
traded lower to 17 582.97 points depreciating by 1.97% whilst the Small Cap
Index shaded a paltry 0.05% to close at 223 897.45 points. Leading the
risers pack of the day was African Sun which was up by 19.37%. Rio Zim added
17.86%. First Mutual Properties added 14.07% and Axia  was up by 12.00%.
Wildale was up by 11.58%. Leading in the shakers' pack were Get Bucks and
Medtech  which shaded 6.54% and 3.92% respectively. Ariston was down by
2.99%. Meikles shaded 2.37%. The Old Mutual Top Ten ETF closed at 244.41c up
3.76% after 10 608 units with a value of ZW$25 927 in 16 trades exchanged
hands. On the VFEX, Padenga traded 500 shares worth US$129.50 adding 19.91%
to close at 25.90c per share.  wealthaccess

Global Currencies & Equity Markets

Nigeria

Naira strengthens at I&E window to 410 naira to the dollar

The naira strengthened at the Investors and Exporters window by 46 kobo to
410-naira 67 kobo to the dollar despite market illiquidity in the forex
market and continued bid by corporates to clear backlog of obligations.

South Africa

South African rand rises, bucking risk-off sentiment

(Reuters) - The South African rand drifted higher on Wednesday, defying a
strong dollar and risk-off sentiment as the country's central bank governor
made the case for a tighter inflation target.

At 1513 GMT, the rand traded at 14.2700 against the dollar, about 0.3%
stronger than its Tuesday close.

The rand often shrugs off local factors, including better-than-expected
second-quarter gross domestic product (GDP) figures on Tuesday, and responds
to global factors instead. read more

Elsewhere, investors were moving away from riskier assets over uncertainty
over the pace of economic recovery, lifting the greenback, which the rand
tends to track.

On Wednesday, South African Reserve Bank (SARB) Governor Lesetja Kganyago
made the case for adopting an inflation target of 3% or 4% with a margin of
error either of 1 percentage point either side, as oppose to the 3% to 6%
target used currently.

With inflation currently at 4.6%, if adopted that would mean South Africa
was already above its target range. Interest rates in South Africa are
currently at a record-low of 3.5% after being slashed following a collapse
in inflation due to COVID-19.

Investors will also be watching domestic data releases on Thursday,
including second-quarter current account (ZACAGP=ECI) and July manufacturing
(ZAMFG=ECI) numbers, following Tuesday's GDP reading of 1.2% growth in
April-June quarter on quarter. read more

Government bonds also edged up, with the yield on the 2030 instrument at
8.825%.

Stocks, however, fell. The Johannesburg Stock Exchange's Top-40 Index
(.JTOPI) was down 1.6% to 59,379 points and the broader All-Share Index
(.JALSH) closed 1.5% lower at 65,525 points.

Miners were the biggest losers on the blue-chip index, hurt as the gold
price slipped to a two-week low. The stronger dollar and higher U.S.
Treasury yields outweighed the boost to the precious metal from deepening
concerns about global economic growth.

Gold Fields (GFIJ.J) fell 4.4%, AngloGold Ashanti (ANGJ.J) dropped 3.4% and
Sibanye Stillwater (SSWJ.J) lost 3.3%.

The Thomson Reuters Trust Principles.

Zambia

Zambia's central bank adjusts government securities auction bidding
thresholds

Zambia's central bank on Tuesday announced an adjustment to bidding
thresholds for government securities auction.

The Bank of Zambia (BoZ) said it has made changes to auction thresholds for
both treasury bills and government bonds in order to align them with
economic changes.

In a statement, the central bank said the maximum bid amount for the
non-competitive window has been adjusted from 29,000 Zambian Kwacha (about
1,800 U.S. dollars) to 499,000 Kwacha per bidder while the minimum bid
amount for competitive bids has been adjusted from 30,000 Kwacha to 500,000
Kwacha per bidder per maturity tenor.

It adds that the revision also aligns the thresholds to the changes in the
auction sizes that have taken place over time and encourages wider
participation of smaller retail investors who may prefer to participate in
the non-competitive window.

The changes will take effect from Sept. 13.

 <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

Copper prices continue to decline

The Copper Monthly Metals Index (MMI) decreased by 3.4% in August, as forms
of the metal included in the index dropped (with the exception of Chinese
copper scrap).

Similarly to the index, LME copper prices dropped by 3.3%. LME trading
volumes spiked as the price declined from Aug. 16-19. This sell-off signaled
a strong negative trend.

Since then, prices recovered. However, trading volumes remained muted,
reinforcing the negative market sentiment.

SHFE prices behaved similarly to LME prices. Meanwhile, the volatility of
the dips did not appear as strong. The SHFE's heaviest trading volumes
occurred toward the end of the month, when prices jumped, thus signaling a
strong positive indicator.

Sentiment change

Several metal prices took a dip mid-August, likely due to concerns over
Federal Reserve tapering, a resurgent delta variant and Chinese measures to
slow economic growth. While other metals managed to recover by or over 100%,
copper did not.

Additionally, as Reuters reported, traders might be concerned over
manufacturing data coming from China. Other Asian countries - such as Japan,
South Korea and Taiwan - expanded at a slower rate due to the aforementioned
concerns, plus supply bottlenecks and chip shortages.

Hurdles in Chile

After BHP and Escondida union workers reached an agreement, other mine
unions rejected new wage offers.

Such was the case at Andina and Salvador, owned by Codelco, Cerro Colorado
of BHP and Caserones of JX Nippon Mining & Metals.

Codelco also started conversations with El Teniente's union.

Additionally, Chile passed a bill that would create the heaviest tax burden
on large copper producers in a new royalty system. The bill currently
includes sales tax brackets that increase as copper prices rise. Industry
insiders believe the move will deter investment and competitiveness.
Proponents say it would replace the current taxes on profit. However, so
far, no bill has been presented to do so.

These potential supply constraints do not seem to concern the market.
Traders are focused on economic cues, particularly from China.

Actual metals prices and trends

The LME three-month copper price decreased by 4.8% month over month to
$9,311 per metric ton as of Sept. 1.

Chinese copper scrap went up by 0.3% to $9,845 per metric ton. Similarly,
Chinese primary cash copper decreased by 3.1% to $10,773 per metric ton.

U.S. copper producer grades 110 and 122 dropped 4.0% to $5.10 per pound.
Producer grade 102 decreased by 4.2% to $5.30 per pound.

Gold dips to 2-week low as dollar extends gains

Gold slipped to a two-week low on Wednesday as strength in the dollar and
higher U.S. Treasury yields outweighed the boost to bullion from deepening
concerns about global economic growth.

Spot gold was down 0.5% at $1,785.24 per ounce by 10:27 am EDT. U.S. gold
futures fell 0.5% to $1,790.30.

Worries about a Delta variant-driven slowdown in economic growth have shaken
equities this week, but flows into gold have been limited by firmer bond
yields and a rise in the dollar that has made bullion costlier for holders
of other currencies.

Non-yielding gold tends to gain in a low interest-rate environment, while
some investors also view the metal as a hedge against higher inflation that
could follow stimulus measures.

Following the disappointing U.S. non-farm payrolls last week, precious metal
traders will focus on NY Fed President John Williams' speech for clues on
whether the Fed could shift the messaging on its tapering countdown away
from this year, TD Securities said in a note.

Investors will also eye a European Central Bank meeting on Thursday for
hints on whether it may roll back economic support.

Elsewhere, silver fell 1.3% to $23.98 per ounce, platinum eased 1.9% to
$979.60 and palladium was down 3.1% at $2,299.68.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

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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