Bulls n Bears Daily Market Commentary : 07 August 2023

Mon Aug 7 17:51:02 CAT 2023

 <http://www.bullszimbabwe.com> Bullszimbabwe.com
<mailto:bulls at bulls.co.zw> Views & Comments
<http://www.bullszimbabwe.com> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:%20bulls at bullszimbabwe.com?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 07 August 2023

ZSE commentary

 <https://www.dulys.co.zw/> 

Zimbabwe Stock Exchange (ZSE)

The ZSE All Share Index traded 255.45 points lower to close at 122,242.55
points. Trading in the positive: Losses were recorded in BRITISH AMERICAN
TOBACCO LIMITED which was $990.0500 down at $13,999.9500, TANGANDA LIMITED
shed $100.1562 to $1,118.6979 and FBC LIMITED lost $49.7915 to $850.2085.
SEED CO LIMITED decreased by $48.2528 to $1,343.9526 and DAIRIBORD HOLDINGS
LIMITED was $14.2991 weaker at $385.8871 DELTA CORPORATION LIMITED added
$30.8301 to close at $2,101.4981, ECOCASH

HOLDINGS LIMITED increased by $10.0322 to $135.2236 and RAINBOW TOURISM
GROUP LIMITED was $9.0000 stronger at $135.0000 RIOZIM LIMITED  increased by
$8.0000 to $500.0000 and MEIKLES LIMITED  traded $5.3208 higher at
$706.3208.

EXCHANGE TRADED FUNDS (ETF)

CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND shed $0.1900 to $6.3100, MORGAN
& CO MADE IN ZIMBABWE EXCHANGE TRADED FUND shed $0.0705 to $5.0200 and
DATVEST MODIFIED CONSUMER STAPLES EXCHANGE TRADED FUND (DMCS.zw) lost
$0.0176 to $7.4631. OLD MUTUAL ZSE TOP 10 ETF and MORGAN & CO MULTISECTOR
EXCHANGE TRADED FUND pared at $24.0000 and $167.4500 respectively.

REAL ESTATE INVESTMENT TRUST (REIT)

TIGERE REAL ESTATE INVESTMENT TRUST added $0.1020 to $200.0520.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand on back foot as caution reigns

(Reuters) - The South African rand fell on Monday as global markets were in
a cautious mood after a mixed U.S. jobs report and ahead of U.S. and Chinese
inflation figures later this week.

At 1502 GMT, the rand traded at 18.7150 against the dollar , about 1.41%
weaker than its closing level on Friday.

The dollar was last up 0.05% at 102.13 against a basket of global
currencies.

Casey Delport, an investment analyst at Anchor Capital, said it was
difficult to pinpoint exactly what had caused markets to shift to a risk-off
footing, but while that persisted the rand would be on the defensive.

She said one factor was recent U.S. economic data which had made some
traders speculate that the Federal Reserve will raise interest rates again
in September.

A major focus for markets this week will be inflation data out of China,
Germany and the United States.

"This data can recalibrate the market's outlook on monetary policy once
again, which will feed directly into currency prices, thus a cautious start
to the week is envisaged," Rand Merchant Bank analysts said in a research
note.

Adding to downward pressure on South Africa's economic growth and
contributing to rand volatility is the country's issue of poor power
generation and logistics, among others, said Citibank analysts in a research
note.

Central bank data on Monday showed the country's net foreign reserves rose
in July to $55.626 billion from $54.936 billion in June.

The Johannesburg Stock Exchange's blue-chip Top 40 index (.JTOPI) was little
changed at the end of the day. South Africa's benchmark 2030 government bond
was marginally stronger, with the yield down 1.5 basis points to 10.245%

Reporting by Tannur Anders with additional reporting by Karin Strohecker and
Bhargav Acharya Editing by Alexander Winning, Sharon Singleton and Christina
Fincher

Our Standards: The Thomson Reuters Trust Principles.

Nigeria

Naira Depreciation: Operators Lament As 6 Firms Lose N179.56bn

Six Consumer Goods Companies listed on the Nigerian Exchange (NGX) Limited
have posted a total net loss of N179.561 billion in the first half (H1) of
the year 2023 due to foreign exchange devaluation.

The six companies are; Guinness Nigeria, International Breweries, Nigerian
Breweries, Nestle Nigeria, Cadbury Nigeria and Dangote Sugar Refinery. They
all attributed the loss position to significant increase in unrealised FX
loss and higher net finance cost.

The devaluation of the naira has significant impact on the operations of
multinational companies operating in Nigeria. The naira devaluation led to
increase in operating costs for multinationals whose major costs including
finance costs are denominated in foreign currencies.

On 14 June 2023, the Central Bank of Nigeria announced changes in the
Nigerian forex operations which required the immediate collapse of all
segments of the market into the investor and exporter (I&E) window and
reintroduced the 'willing buyer, willing seller' model. This led to an
approximately 60 per cent movement in the exchange rate, since the
announcement, to N756.24/US$ at the end of June 2023 as the market seeks an
equilibrium level.

In H1, 2023, Guinness Nigeria recorded a loss after tax of N18.168 billion.
International Breweries' loss after tax stood at N21.287 billion, while
Nigerian Breweries posted a net loss of N47.599 billion in H1 2023.

Also, Nestle Nigeria, Cadbury Nigeria and Dangote Sugar Refinery declared
loss of N49.981 billion, N14.539 billion and N27.987 billion in H1, 2023.

Analysts noted that "the negative impacts of a weaker currency and
stubbornly-high inflation worsen in the first half of 2023. The naira
devaluation at the I&E window that trailed the monetary policy reforms drove
the costs of imported raw materials higher and stoke material foreign
exchange losses."

They added that even though most consumers are insulated from the impact of
the depreciation at the I&E (as they mostly access FX at the parallel
market), the combined impact of subsidy removal and the potential increase
in electricity tariffs suggests that discretionary income could become
weaker.

A senior stockbroker, Mr. Tunde Oyediran stated that, "the Nigerian Consumer
Goods Industry experienced growth in topline earnings across companies in
the first half of 2023. However, this growth was eroded by foreign exchange
losses due to the FX reforms. Amidst the macroeconomic headwinds and the
fall in consumers' purchasing power, Fast-Moving Consumer Goods companies
(FMCGs) were strongly affected by the currency depreciation."

The managing director/CEO of Nestle Nigeria, Mr. Wassim Elhusseini explained
that, "in H1, our profit after tax was however, negatively impacted by the
recent devaluation of the naira, which necessitated the revaluation of our
foreign currency obligations.

"Going into the second half of the year, we will continue to focus on
optimising our operations to ensure the availability and accessibility of
the nutritious food and beverages our loyal customers expect from us."

Also, the managing director of Cadbury Nigeria, Oyeyimika Adeboye, noted
that businesses operating in Nigeria continued to face tough challenges,
with rising inflation and devaluation, leading to higher manufacturing and
operational cost.

According to him, despite recording an operating profit of N6.072 billion,
this performance was significantly impacted by the recent devaluation of the
naira. We shall continue to remain resilient and innovative to navigate the
challenging operating environment.

In its report titled 'Consumer Goods: A tale of currency woes and
inflationary fears', Cardinalstone stated that, "FMCG companies transferred
input cost burdens to Nigerian consumers, resulting in strong EBIT margins
for some of our coverage companies despite some volume pullback.

"However, volume contraction was a focal problem in 2023, with negative
reactions to higher prices and, notably, the currency redesign policy,
leading to a material decline in consumer demand for products. As a result
of the latter, the average topline growth of coverage names nosedived to 5.0
per cent YoY between January and March 2023 as against 28.1 per cent YoY in
the corresponding period of 2022."

The research firm noted that "the effect of the cash disruption was more
pronounced on retail customers, who mostly transact with cash compared to
large institutional off-takers of FMCG products. Hence, companies
strategically positioned to serve these huge institutions were mostly
insulated."

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains as Friday's losses seen overdone; Fed comments lend support

(Reuters) - The dollar rose against major currencies on Monday, with
Friday's losses following a mixed U.S. jobs report seen by some investors as
excessive given the economy remains resilient and the labor market is still
tight.

Federal Reserve official comments supporting additional interest rate hikes
also underpinned the dollar.

The euro declined 0.2% against the dollar to $1.0995 . It weakened after
data on Monday showed German industrial production dropped more strongly
than forecast in June, underlining the challenges faced by the manufacturing
sector amid a downturn in Europe's largest economy.

Against the yen, the dollar gained 0.2% to 142.06 yen, while advancing 0.2%
as well versus the Swiss franc to 0.8748 francs .

The dollar index was last little changed at 102.08 . It fell to a one-week
low last Friday in the wake of a U.S. non-farm payrolls report that came out
weaker than expected.

"We're...looking at a correction (in the dollar) from the market's rather
outsized reaction to Friday's non-farm payroll numbers," said Helen Given,
FX trader, at Monex USA in Washington.

"While U.S. employment data did come in below expectation, it wasn't enough
of a downside hit to justify Friday's U.S. dollar losses and the overall
economic picture remains strong."

The broad strength of the U.S. economy was further underscored by Fed
Governor Michele Bowman on Monday who said additional interest rate hikes
will likely be needed in order to lower inflation to the U.S. central bank's
2% target.

Bowman, in remarks prepared for delivery to a "Fed Listens" event in
Atlanta, said she backed the latest rate increase last month because
inflation remains too elevated, and job growth and other indications of
activity show the economy has continued expanding at a "moderate pace."

The Fed late last month raised its benchmark rate by a quarter percentage
point to a range of 5.25% to 5.50%. Investors by and large believe that is
likely the last increase of a campaign the Fed kicked off in March 2022.

Investors are starting to focus on inflation data from the United States and
China due out this week.

U.S. inflation data is due on Thursday, where expectations are for core
inflation of 4.7% on an annual basis in July.

Also expected this week is China's July inflation print on Wednesday, with
traders on the lookout for further signs of deflation in the world's
second-largest economy.

The Chinese yuan hovered near a two-week low, with its offshore counterpart
last 0.1% lower at 7.196 per dollar.

Elsewhere, sterling rose 0.2% against the dollar to $1.277. Last Thursday,
the Bank of England (BoE) raised interest rates by 25 basis points to a
15-year peak of 5.25%. It was the BoE's 14th back-to-back increase, but a
step down in the pace of monetary tightening after rising by 50 bps in its
previous meeting.

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

Currency bid prices at 10:05AM (1405 GMT)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold retreats as dollar, yields firm; US inflation data in focus

Gold prices receded on Monday as the U.S. dollar and Treasury yields gained
after traders digested Friday's jobs report, with attention turning to U.S.
inflation data later this week.

Spot gold was down 0.4% at $1,934.89 per ounce by 1122 GMT, having slid to
its lowest since July 11 on Friday before settling 0.4% higher. U.S. gold
futures eased 0.3% to $1,969.70.

The U.S. economy added fewer jobs than expected in July, data showed on
Friday, but solid wage gains and a decline in the unemployment rate pointed
to continued tightness in labor market conditions.

"Market participants still see the job market in the U.S. being tight...it's
not a considerably strong slowdown in job activity," said UBS analyst
Giovanni Staunovo.

The dollar regained some ground, while benchmark 10-year Treasury yields
also rose after sliding from November highs on Friday.

More persistent wage pressures from labor market tightness suggest that
investors should still keep an eye on inflation risks, said Yeap Jun Rong, a
market strategist at IG.

U.S. consumer price index (CPI) data due on Thursday will be in focus to
assess whether more rate hikes are needed to tame inflation.

"Our expectation is still that the trend points to low inflation and
therefore the Federal Reserve doesn't have to hike rates," Staunovo added.

Non-yielding gold is often sought as a safe investment against inflation,
but tends to lose its sheen when rates rise.

John C. Williams, president of the Federal Reserve Bank of New York, expects
that interest rates could begin to come down next year, the New York Times
reported.

Silver fell 0.9% to $23.38 an ounce, while platinum lost 0.7% to $915.50.
Palladium gained 0.2% to $1,259.57.

"Palladium prices could be near a temporary bottom as supply risks could
resurface driven by geopolitical tensions," Intesa Sanpaolo economist
Daniela Corsini said in a note.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

Padenga

EGM

Royal Harare Golf Club

August 16 - (10am)

Border Timbers

EGM

4 - 12 Paisley Road, Southerton, Harare, or virtually
:https://escrowagm.com/eagmZim/Login.aspx" 

August 18 - (10am)

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 

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com  

Website:         <http://www.bullszimbabwe.com> www.bullszimbabwe.com  

Blog:
<http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1
&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bullszimbabwe.com/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:
<http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimba
bwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA>
www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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.

(c) 2023 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:
<mailto:info at bulls.co.zw> bulls at bullszimbabwe.com Tel: +263 4 2927658 Cell:
+263 77 344 1674

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 34378 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 95020 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0004.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 36956 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 29289 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0006.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image005.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0007.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130917 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230807/58665048/attachment-0001.obj>