Bulls n Bears Daily Market Commentary : 02 August 2023

Thu Aug 3 03:20:00 CAT 2023

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Bulls n Bears Daily Market Commentary : 02 August 2023

 <https://www.cloverleaf.co.zw/>  ZSE commentary

Zimbabwe Stock Exchange (ZSE)

The overall Market Cap gained 1.00% to close at ZWL9.49 trillion today.
Total turnover declined by 76.12% to close at ZWL 774.49 million. In
addition, total volumes traded disseminated to ZWL1.39 million due to the
52.32% decrease as compared to yesterday. Econet, Masimba and Delta were
today's three most traded counters, with a total contribution of 95.93% to
the total turnover.

The benchmark All-Share Index advanced by 1.23% and closed at 118,994.78
points at the back of 11 risers against 10 decliners. The Top 15 Index
gained 1.62% to close at 75,708.60 points and the Top 10 Index also acquired
2.02% as it closed at 54,351.16 points.

Trading in the positive was OK Zimbabwe, EcoCash Holdings Ltd and Delta
after advancing by 8.15%, 6.77% and 5.54%, respectively. Willdale and FBC
Holdings trailed the list after gaining 2.13% and 1.80% hence closing at
$18,89 and $850.00, respectively.

The shakers list for today was led by Dairibord, CBZ Holdings and Econet
with losses of 4.64%, 3.93% and 3.75%, respectively. Zimre Holdings and Star
Africa Corporation were also among the defeated after deteriorating by 0.52%
and 0.46%, respectively.

Victoria Falls Stock Exchange (VFEX)

The VFEX All Share Index declined by 0.18% as it closed at 66.47 points.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand tumbles as poor PMI data, U.S. downgrade bite

(Reuters) - The South African rand slumped further on Wednesday, after
tumbling as much as 2% on Tuesday, as risk-off sentiment increased on
concerns about global economic growth and a credit rating agency downgraded
the United States.

At 1509 GMT, the rand traded at 18.5000 against the dollar , about 1% weaker
than its previous close.

The dollar last traded at 102.71, around 0.7% stronger against a basket of
global currencies, as it shrugged off losses incurred following rating
agency Fitch's surprise decision to downgrade the U.S. to AA+ from AAA.

Economic data this week showed manufacturing activity contracted in the
U.S., Germany and China and other nations.

"All (emerging market) currencies came under pressure as global growth
concerns resurfaced after a raft of manufacturing PMI numbers around the
globe all printed below the 50.0 mark," said Andre Cilliers, Currency
Strategist at TreasuryONE.

Investec analyst Annabel Bishop said the weakness of the rand was also
influenced by the U.S. credit rating downgrade, sparking risk aversion in
global financial markets as investors scurried towards the safety of dollar.

Shares on the Johannesburg Stock Exchange were dragged down by energy and
technology stocks, with the broader all-share index (.JALSH) ending 2.75%
lower and the blue-chip Top-40 index (.JTOPI) closing down 2.9%.

South Africa's benchmark 2030 government bond was weaker, with the yield up
4 basis points to 10.370%.

Nigeria

Naira slips at official market

Naira fell considerably against the United States dollar on the Investors
and Exporters (I&E) on Tuesday after recording a slight gain in the previous
session on Monday.

The local currency opened trading at N783.56 on Tuesday but closed at
N789.08 to a dollar at the I&E segment, market data posted on the FMDQ
website showed.

Tuesday's rate implies a 32.14 or 4.3 per cent depreciation from N756.94 per
$1 recorded in the previous session on Monday.

Forex turnover rose slightly from $67.21 million posted on Monday to $67.33
million at the close of sales on Tuesday, the data showed.

The local currency recorded an intraday swing of N804.00 (low) and N700.00
(high) per $1 within the business period on Tuesday before halting at
N789.08 per $1.

FIRS

However, black market data posted on Tuesday revealed that the dollar was
exchanged at N865.00 and above on Tuesday, the same range it traded on
Monday.

The local unit has recorded relative volatility in the wake of the removal
of petrol subsidies and the government's efforts to unify multiple exchange
rates.

In less than three months since the move to unify rates took effect, the
naira has depreciated by over 70 per cent at the official market to trade at
N700 and above the mark from N465.13 per dollar it traded in mid-May.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar shrugs off Fitch's U.S. downgrade, advances on strong jobs data

(Reuters) - The dollar rose on Wednesday as investors shrugged off Fitch's
U.S. credit rating downgrade while data showing a larger-than-expected
increase in private payrolls in July bolstered the greenback as it points to
labor market resilience.

Private payrolls rose by 324,000 jobs last month, the ADP National
Employment report showed, more than an increase of 189,000 that economists
polled by Reuters had forecast.

The U.S. labor market is gradually slowing after the Federal Reserve's
hiking of interest rates by 525 basis points since March 2022. But the
economy remains strong, as indicated by the Atlanta Fed's GDPNow running
estimate of real GDP growth for the third quarter at 3.9%.

"The dollar is likely rising more in response to the economic data that
continues to be stronger and therefore the market thinks that the Fed will
continue to raise rates," said Michael Arone, chief investment strategist
for State Street Global Advisors in Boston.

"Those interest rate differentials compared to other countries will continue
to expand or be strong," he said. "The dollar is getting a rally, in
conjunction with a little bit of flight to safety."

The dollar index , a measure of the U.S. currency against six peers, rose
0.57% to a fresh three-week high. The dollar index has gained 3.0% from a
15-month low on July 18.

Fitch on Tuesday downgraded the United States to AA+ from AAA in a move that
drew an angry response from the White House and surprised investors, coming
despite the resolution two months ago of a debt ceiling crisis.

It cited likely fiscal deterioration over the next three years and repeated
down-to-the-wire debt ceiling negotiations that threaten the government's
ability to pay its bills.

Chart shows that the U.S.'s long-term foreign currency rating was downgraded
by Fitch to AA+ in 2023, following a similar move from S&P in 2011.

The downgrade contains no new fiscal information, Goldman Sachs said in a
note, adding that it did not believe there are any meaningful holders of
Treasuries who will be forced to sell because of the downgrade.

There was also little negative reaction in the world's most-traded currency
pair, with the euro down 0.37% to $1.0941 as analysts said the dollar was
likely benefiting from its status as a safe haven.

The downgrade hit risk appetite around the world, with MSCI's gauge of
global equity performance (.MIWD00000PUS) falling 1.55%.

The yen initially clawed back some recent losses as traders assess the Bank
of Japan's tack on monetary policy as traders were still assessing the
implications of the BOJ's move on Friday to loosen its grip on interest
rates.

The yen later traded little changed, edging up 0.07% to 143.24 per dollar.

Deputy governor Shinichi Uchida said on Wednesday the central bank's
decision was aimed at making its massive stimulus more sustainable and was
not a prelude to an exit from ultra-low rates.

Sterling traded down 0.45% on the day at $1.272.

The Bank of England sets interest rates on Thursday and the market is
uncertain whether it will deliver a 25 or 50 basis point increase from the
current 5%.

The Australian dollar fell 1.00% to $0.655, after earlier sliding to its
lowest since June at $0.657.

It was extending a sharp fall from the previous session after the Reserve
Bank of Australia on Tuesday held interest rates and signaled that it might
have finished tightening.

========================================================

Currency bid prices at 2:47 p.m. (1847 GMT)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold retreats as US dollar, bond yields resume climb

Gold prices slipped on Wednesday as the dollar rose and bond yields
strengthened after data showed U.S. private payrolls increased more than
expected in July.

Spot gold

was last down 0.54% at $1,933.5649 per ounce, after rising as much as 0.6%
earlier on some safe-haven bids after ratings agency Fitch downgraded the
U.S. government to AA+ from AAA.

U.S. gold futures slid 0.4% to $1,970.80.

"Higher interest rates would ultimately put pressure on gold. Also, we are
seeing more strength in the dollar. Prices are trapped below $2,000 and
above $1,900 for the time being," said Daniel Pavilonis, senior market
strategist at RJO Futures.

The dollar rose 0.4% to more than a three-week high, making gold more
expensive for holders of other currencies. Benchmark U.S. 10-year Treasury
yields climbed to their highest level since July 10.

U.S. private payrolls rose by 324,000 jobs last month, the ADP National
Employment Report showed, well above the increase of 189,000 that economists
polled by Reuters had forecast.

The Federal Reserve raised interest rates by 25 basis points last week.
According to the CME's FedWatch Tool, the probability that the U.S. central
bank would leave rates unchanged at its Sept. 19-20 meeting was at 83%.

Higher interest rates increase the opportunity cost of holding non-yielding
bullion.

"Traders and investors are not badly shaken over the surprise Fitch news,
but it did somewhat deflate heretofore upbeat marketplace attitudes that had
recently pushed U.S. stock indexes to new highs for the year," Jim Wyckoff,
senior market analyst at Kitco, wrote in a note.

All eyes are on the release on Friday of the U.S. nonfarm payrolls report
for July. Overall payrolls are forecast to rise by 200,000, after increasing
by 209,000 in June.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

zIMBABWE

2023 harmonised elections

August 23

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

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
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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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