Bulls n Bears Daily Market Commentary : 28 August 2023

Mon Aug 28 23:29:12 CAT 2023

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Bulls n Bears Daily Market Commentary : 28 August 2023

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

Zimbabwe Stock Exchange (ZSE)

The overall Market Cap gained 1.30% to close at ZWL9.74 trillion today.
Total turnover excessively increased by 138.74% to close at ZWL 6.48
billion. In addition, total volumes traded accumulated to ZWL 5.52 million
due to the 158.33% increase as compared to yesterday. Delta, Meikles and
Econet were today's three most traded counters, with a total contribution of
99% to the total turnover.

The benchmark All-Share Index advanced by 0.91% and closed at 122,229.25
points at the back of 13 risers against 9 decliners. The Top 15 Index gained
0.78% to close at 79,071.03 points and the Top 10 Index also acquired 1.13%
as it closed at 57,975.93 points.

Trading in the positive was Masimba Holdings, Zimre Holdings and Econet
after advancing by 14.99%, 11.17% and 8.46%, respectively. Unifreight Africa
and Ariston Holdings trailed the list after gaining 7.50% and 5.56% hence
closing at $220.00 and $24.93, respectively.

The shakers list for today was led by Getbucks Microfinance, Willdale and
TSL Limited with losses of 11.63%, 9.17% and 4.40%, respectively. EcoCash
Holdings Ltd and Rainbow Tourism Group were also among the defeated after
deteriorating by 3.47% and 0.59%, respectively.

Victoria Falls Stock Exchange (VFEX)

The VFEX All Share Index declined by 0.84% as it closed at 70.21 points.

Global Currencies & Equity Markets

South Africa

South African rand recovers to edge higher against dollar

(Reuters) - The South African rand was up slightly against a weakening
dollar on Monday after slipping earlier in the day amid uncertainty about
the outlook for U.S. Treasury yields and interest rates.

The rand was over 0.2% stronger than its last close at 1558 GMT, at 18.5600
against the dollar , after slipping as much as 0.7% earlier in the day.

The dollar last traded around 0.08% weaker against a basket of global
currencies as investors await a slew of U.S. economic data scheduled for
later this week for more clues on interest rate outlook.

The risk-sensitive rand often takes cues from global factors, such as U.S.
monetary policy, in the absence of local economic drivers.

Local data releases this week include July money supply (ZAM3=ECI), private
sector credit (ZACRED=ECI) and budget (ZABUDM=ECI) numbers on Wednesday, and
July producer inflation (ZAPPIY=ECI) and trade (ZATBAL=ECI) figures on
Thursday.

On the Johannesburg Stock Exchange, the blue-chip Top-40 (.JTOPI) closed
1.77% higher while the broader all-share (.JALSH) index closed nearly up
1.7%.

South Africa's benchmark 2030 government bond was stronger, with the yield
up 5 basis points at 10.160%.

Nigeria

Naira loses 2.23% of value in August as external reserves decline

Nigeria's currency has lost about 2.23 per cent of its value against the
dollar in almost one month due to a persistent rise in demand for the
greenback at the parallel foreign exchange (FX) market segment.

According to analysts, the continued loss in the value of the Naira followed
the scarcity of dollars occasioned by low inflows from oil receipts, foreign
capital and Diaspora remittances, among others.

Consequently, the external reserves, which give the Central Bank of Nigeria
(CBN) the firepower to defend the Naira, have steadily declined.

In the last month, Nigeria's foreign exchange reserves have declined by 0.53
per cent to $33.74 billion as of August 24, 2023, from $33.92 billion
recorded on August 3, 2023, data from the CBN showed.

The CBN's data showed that the reserves declined by 8.47 per cent
year-to-date to $33.92 billion as of August 4, 2023, from $37.06 billion as
of January 3, 2023.

Data gathered from Abokifx and street traders show that one dollar traded at
N915/$1 during the intraday trading on Monday, compared to N895/$1 sold
early week of the month (on August 5 2023).

Read also Naira hits new low of 915/$

The demand for dollars mainly was from importers who could not access
foreign exchange from the official segment and individuals who wanted to
travel for business, tourism, medical or school.

"There are enough dollars in the market, but demand is high", said Abubakar,
one of the street traders in Lagos.

Last week, the value of the Naira to the dollar weakened by 526 bps to close
at N778.42/$ at the Investors and Exporters FX Window, Nigeria's official FX
market.

Read alsoUnder pressure Central Bank going the way of the old by rash of new
policies as Naira wobbles

On August 18, 2023, the CBN released a new operational guideline for the
sale of forex by Bureau De Change (BDC) operators.

According to the new guideline, the spread on buying and selling by BDC
operators shall be within an allowable limit of -2.5 per cent to +2.5 per
cent of the Nigerian foreign exchange market window weighted average rate of
the previous day.

"The -2.5 to +2.5 per cent is the spread the BDCs are allowed to make in
buying and selling on their rates. The anchor rate to calculate the distance
is the closing average weighted rates in the I&E window of the previous day
on the following day, said Aminu Gwadabe, national president of the
Association of Bureau De Change Operators of Nigeria (ABCON).

Read also How Nigerians can help 'weeping' Naira smile again

Festus Adenikinju, member of the Monetary Policy Committee (MPC), said in
his March 2023 personal statement that the decline in gross external
reserves was driven by the rise in debt service payments and foreign
exchange (FX) swap transactions.

He said the FGN's net fiscal operations resulted in an expansionary
budgetary deficit in February 2023 (m-o-m). The overall deficit rose by
-N539.01 billion in February 2023 compared to - N417.75 in January 2023.
Both government expenditure and revenue declined. FGN Debt increased owing
to new borrowings to finance the deficit in the 2022 budget and new loans by
subnational governments.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hits nine-month high against yen

(Reuters) - The dollar edged up to a nine-month high against the Japanese
yen on Monday but dipped against a basket of currencies after Federal
Reserve Chair Jerome Powell on Friday left open the possibility of further
rate hikes.

The greenback hit 146.685 Japanese yen, the highest since Nov. 9.

Traders are watching out for any signs of intervention in the currency
market from Japanese authorities as the yen weakens.

Bank of Japan Governor Kazuo Ueda said on Saturday that the bank will
maintain the current approach to monetary policy, as underlying inflation in
Japan remains "a bit below" its 2% target.

The dollar index , which measures the U.S. currency against six others, was
down 0.08% at 104.07, after hitting its highest since early June on Friday
at 104.44.

Investors raised bets that the U.S. central bank could hike rates again this
year after Powell said that further rate increases may be needed to cool
still-too-high inflation, while also promising to move with care at upcoming
meetings.

Markets see an 81% chance of the Fed standing pat next month, according to
the CME Group's FedWatch tool, but the probability of a 25 or 50 basis point
hike in November is now at 57%, versus 43% a week earlier.

The market is largely consolidating before European inflation and U.S.
personal consumption expenditures data due on Thursday, and ahead of
Friday's highly anticipated U.S. jobs report for August.

The euro has weakened against the greenback for the past month as the United
States economy remains solid, while European growth slows.

"Europe is stagnating," said Marc Chandler, chief market strategist at
Bannockburn Global Forex in New York, adding that not only is the European
Central Bank talking about tightening monetary policy further, government
budgets for the next year also look like they are going to be cut.

The single currency was last at $1.0806, up 0.11% on the day, after falling
to $1.07655 on Friday, the lowest since June 13.

China's yuan steadied against the dollar, buoyed by the Chinese central bank
persistently setting stronger-than-expected daily-mid-points. The spot yuan
was roughly flat at 7.2928 per dollar.

The China-sensitive Australian dollar rose 0.31% to $0.6423, having taken a
beating this month as worries over China's sputtering post-pandemic recovery
weighed on sentiment.

"Market confidence will unlikely improve much until there are signs of
China's weakening economic momentum turning around," said Tommy Wu, senior
economist at Commerzbank.

China halved the stamp duty on stock trading effective Monday in the latest
attempt to boost the struggling market as a recovery sputters in the world's
second-biggest economy.

However, Chandler noted "how quickly the market rebuffed the Chinese efforts
to pump up their stock market."

China's blue-chip CSI 300 Index (.CSI300) was up 1.2% at the close, some
distance from the 5.5% jump at the market open.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rallies on short covering, perceived value buying

(Kitco News) - Gold prices are posting decent gains and silver prices are
slightly up in midday U.S. trading Monday. Short covering by the futures
traders is featured in gold, along with some perceived bargain hunting. The
silver market is seeing some technical buying amid friendly near-term
charts. December gold was last down up $13.30 at $1,953.30 and December
silver was up $0.137 at $24.72.

This is the unofficial last week of summer for the U.S. Look for the
marketplace to become more active next Tuesday, following the three-day U.S.
Labor Day weekend holiday. This is a big week for U.S. economic reports, so
traders and investors are likely to become at least a bit more tuned in as
the week progresses.

(Note: For exclusive market forecasts and intermarket insights, sign up to
my new weekly Markets Front Burner newsletter )

Asian and European stock markets were mostly higher in overnight trading.
U.S. stock indexes are modestly higher at midday. News that China cut a key
tax rate and pledged to shore up its capital markets boosted trader and
investor attitudes in Asia.

The key outside markets today see the U.S. dollar index near steady. Nymex
crude oil futures prices are slightly higher and trading around $80.00 a
barrel. The benchmark U.S. Treasury 10-year note is presently fetching
4.214%.

The U.S. economic data pace picks up rapidly on Tuesday and it's a big data
week, including the employment situation report on Friday.

Technically, December gold futures bears still have the overall near-term
technical advantage. However, a four-week-old downtrend on the daily bar
chart has been negated. Bulls' next upside price objective is to produce a
close above solid resistance at $2,000.00. Bears' next near-term downside
price objective is pushing futures prices below solid technical support at
$1,900.00. First resistance is seen at $1,963.50 and then at $1,975.00.
First support is seen at today's low of $1,940.10 and then at Friday's low
of $1,931.00. Wyckoff's Market Rating: 3.5

December silver futures bulls have the overall near-term technical
advantage. Prices are trending higher on the daily bar chart. Silver bulls'
next upside price objective is closing prices above solid technical
resistance at the July high of $25.82. The next downside price objective for
the bears is closing prices below solid support at the August low of
$22.585. First resistance is seen at $25.00 and then at $25.345. Next
support is seen at Friday's low of $24.31 and then at $24.00. Wyckoff's
Market Rating: 6.0.

December N.Y. copper closed up 95 points at 379.35 cents today. Prices
closed nearer the session low. The copper bears have the overall near-term
technical advantage. Copper bulls' next upside price objective is pushing
and closing prices above solid technical resistance at the August high of
403.75 cents. The next downside price objective for the bears is closing
prices below solid technical support at the August low of 367.00 cents.
First resistance is seen at today's high of 382.90 cents and then at last
week's high of 384.25 cents. First support is seen at Friday's low of 376.55
cents and then at last week's low of 372.15 cents. Wyckoff's Market Rating:
3.5.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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
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for guideline purposes only and sourced from third parties.

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