Bulls n Bears Daily Market Commentary : 01 June 2022

Thu Jun 2 07:38:30 CAT 2022

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Bulls n Bears Daily Market Commentary : 01 June 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

Market rally continues into the new month..

The market commenced the new month in marginal gains as the All-share Index
increased 1.54% to close pegged at 23390.66pts. The Blue-Chip Index advanced
1.54% to 15573.82pts while, the Mid-Cap Index added 0.90% to 37973.59pts.
ZSE-Agriculture was the only loser amongst the indices as it lost 0.34% to
close at 120.30pts. Ecocash Holdings headlined the winners' list as it
surged 7.33% to trade at $120.0414 while, Masimba Holdings jumped 3.48% to
settle at $52.0000. Axia put on 3.21% to $125.1750 as hotelier African sun
ticked up 3.11% to $16.4373. OK Zimbabwe rounded up the top five winners of
the day as it went up 3.00% to close at $42.3943.

Unifreight was the biggest loser of the day after dropping 10.20% to
$30.0824, followed by bankers NMB that declined 9.22% to $27.2344. Seed-Co
trimmed 2.98% to $230.0000 as Hippo valley let go 0.06% to $325.0024. Fast
foods Simbisa was  the fifth faller on a 0.04% slump to $222.0049. Turnover
retreated 29.29% to $739.49m during the mid-week session while, volumes fell
by 35.21% to close at 3,374,862. OKZIM, Simbisa, Econet, Innscor and Delta
were the day's top volume drivers claiming a combined contribution of 91.15%
of the aggregate. Heavies Innscor, Simbisa, Econet, Delta and National Foods
accounted for a shared 89.37% of the outturn. A total of 150,686 units worth
$1.20m exchanged hands in the three ETFs. The Datvest ETF added 1.51% to
$1.9936, Morgan and Co went up 0.19 % to $23.9535 while, the Old Mutual ETF
ticked up 5.83% to $10.6678. Padenga was the only counter to trade on the
VFEX market as it gained 0.80% to $0.2273 on 39,100 shares. Local purchases
accounted for 99.99% of the days' turnover while, sales represented 96.96%
of the same. EFE Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand steadies against firmer dollar

JOHANNESBURG: The South African rand steadied in early trade on Wednesday,
struggling for momentum as investors sought safety in the US dollar amid
worries over global inflation.

At 0620 GMT the rand traded at 15.6500 against the dollar, largely unchanged
from its previous close.

The currency was set to take cues from global markets in the absence of
domestic catalysts.

South Africa's rand steady ahead of unemployment, trade data

The dollar strengthened on Wednesday, buoyed by investor concern over the
potential effects on global economic growth from interest rate increases
likely to be needed to contain surging inflation.

The South African Reserve Bank last month unveiled its biggest rate increase
in more than six years, citing fuel prices among risks to the inflation
outlook.

The government on Tuesday outlined new measures to curb steeply rising
domestic fuel prices and ease pressure on consumers.

The government's benchmark 2030 bond was weaker in early deals, with the
yield up 1.5 basis points at 9.85%.

Nigeria

Naira gains marginally against dollar, exchanges at 419

The Naira on Wednesday exchanged at 419 to the dollar at the Investors and
Exporters window, compared to 419. 50 on Tuesday, representing 0.12 per cent
appreciation.

The open indicative rate closed at N418.21 to the dollar on Wednesday.

An exchange rate of N444.00 to the dollar was the highest rate recorded
within the day's trading before it settled at N419.

The Naira sold for as low as 410 to the dollar within the day's trading.

A total of 171.98 million dollars was traded in foreign exchange at the
official Investors and Exporters window on Wednesday

 <mailto:info at bulls.co.zw> 

Global Markets

Rising U.S. yields help dollar higher

The dollar rose as far as 130.23 yen, its highest since May 11, extending
Wednesday's 1.1% gain and heading back towards its 20-year peak of 131.34
hit in May.

The euro was at $1.0654, having fallen 0.81% to a 10-day low overnight, and
sterling was at $1.2485 after losing 0.96% on Wednesday.

The dollar hit a three-week high against the yen in early trade on Thursday
and was holding firm against other majors, supported by rising U.S. Treasury
yields, which hit two-week peaks overnight.

The dollar rose as far as 130.23 yen, its highest since May 11, extending
Wednesday's 1.1% gain and heading back towards its 20-year peak of 131.34
hit in May.

The euro was at $1.0654, having fallen 0.81% to a 10-day low overnight, and
sterling was at $1.2485 after losing 0.96% on Wednesday.

This left the dollar index on the front foot at 102.53.

"If you look at the equity market, at bonds, at dollars, it all sort of
joins up," said Ray Attrill, head of foreign exchange strategy at National
Australia Bank.

"In the last 48 hours or so we've seen a reversal in declines in U.S.
Treasury yields - the 10 year is now back near 3% - equity markets have been
struggling and the U.S. dollar strengthening. It's almost a mirror image of
what we saw last week, when there was talk of a possible pause in the
tightening cycle."

"Also I think the euro has pretty much done what it can do on the upside
ahead of the ECB meeting next week, because a lot is priced in now," he
added.

The U.S. benchmark 10-year yield hit a two-week high of 2.951% on Wednesday
after data showed U.S. manufacturing activity had picked up in May as demand
for goods remained strong, which could allay fears of an imminent recession.

U.S. job openings also remained at high levels.

Yields have been rising as the U.S. Federal Reserve has raised interest
rates quickly in an attempt to bring red hot inflation under control while
hoping to avoid pushing the economy into recession.

The 10-year yield was a touch softer in early Asia at 2.9145%.

Traders are looking to more U.S. employment data due later Thursday and to
Friday's U.S. payroll data.

They are also starting to turn their minds towards next week's European
Central Bank (ECB) policy meeting, at which the central bank is expected to
give more details about its plans for rate increases.

Elsewhere, the Australian dollar was little changed at $0.717, and bitcoin
was trading around $29,800, having fallen overnight, unable to sustain its
push above $30,000 earlier in the week.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold steady as lower bond yields offset dollar strength

Gold held its ground on Thursday, with greenback-priced bullion caught
between support from slightly lower U.S. Treasury yields and pressure from a
firm dollar.

Spot gold was steady at $1,844.57 per ounce, as of 0305 GMT. U.S. gold
futures were down 0.1% to $1,846.80.

Gold has been in a narrow range between $1,828 and $1,864, for about a week,
hovering around $1,850 overall, and prices are consolidating now, GoldSilver
Central MD Brian Lan said, adding that (trading in) this range could
continue with some investors sitting on the sidelines due to an absence of
major news.

Investors are yet to see how gold reacts to lifting of lockdowns in
Shanghai; while there could be pent-up demand on the physical side,
institutions holding large amounts of gold may liquidate to raise funds, Lan
said.

Benchmark U.S. 10-year Treasury yields dipped, buoying the appeal of
zero-yield gold.

However, the dollar steadied after hitting a more than one-week peak on
Wednesday, making bullion less attractive for overseas buyers.

"A hawkish Fed (U.S. Federal Reserve), higher real rates, and what still
remain anchored medium-term inflation expectations have weighed on gold
price momentum amid a relatively robust dollar backdrop," Citi Research said
in a note.

Bullion is considered a safe haven during times of political and economic
uncertainty. However, higher short-term U.S. interest rates increase the
opportunity cost of holding gold.

"It also seems likely some geopolitical risk premium has eroded as the
market absorbed the Russia/Ukraine conflict. On the other hand, elevated
asset market volatility, a potential return of the central bank gold bid,
and 'stagflation' tail hedges have likely buttressed $1,800 support," the
note said.

Spot silver dipped 0.1% to $21.77 per ounce, and platinum fell 0.7% to
$989.50, while palladium rose 0.2% to $2,001.15.

.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

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