Bulls n Bears Daily Market Commentary : 04 July 2023

Wed Jul 5 00:17:51 CAT 2023

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Bulls n Bears Daily Market Commentary : 04 July 2023

ZSE commentary

Zimbabwe Stock Exchange (ZSE)

The overall Market Cap for today dropped by 1.02% to close at ZWL 13.62
billion. Total turnover increased by 229.45% to close at ZWL1.94 billion,
with an increase of 1,372.37% in the total volumes traded which closed at
ZWL82.80 million.  Turnall, Delta and Tanganda Tea Co. Ltd, were today's
three most traded counters with a total contribution of 87% to the total
turnover.

The benchmark All-Share Index retreated by 1.00% to close at 166,809.69
points with 20 risers and only 9 decliners. The Top 15 Index lost 1.66% to
114,288.13 points with the Top 10 Index also decreasing by 2.02% to close
with 88,617.51 points.

Zimbabwe newspapers and Nmbz Holdings came out as the top performers in the
session on gaining 15.00% each to close at $11.50 and $287.50, respectively.
First M. Limited and General Beltings Holdings followed after each rose by
14.98% and 14.59% to close at $186.90 and $10.60, respectively. Nampak
Zimbabwe strengthened by gaining 13.40% to settle at $68.10, capping off the
Top 5 risers pack for the day.

CBZ Holdings again topped the laggards list after shedding of 15.00% to
close at a price of $1,527.30. Fbc Holdings, Ok Zimbabwe and Edgars Stores
also traded negative today. Each of these counters lost 7.16%, 3.13% and
2.24% to close at $1,299.70, $251.86 and $105.00, respectively. Econet
dropped by 0.93% to settle at $870.53, capping off the Top 5 losers list for
the day.

Victoria Falls Stock Exchange (VFEX) 

The VFEX All Share Index lost 1.74% to close at 75.02 points.-Akribos
Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand Rallies on Chinese Export Restriction

The South African rand looks for its third straight day of gains against the
U.S. dollar after Friday's US Core PCE Deflator release missed estimates. In
what would have been a relatively muted trading day today as the US
celebrates Independence Day, China's Foreign Ministry stated they would look
to restrict certain chip making materials including gallium and germanium.
These two little known substances could have major upside for the local
currency as South Africa is one of the biggest germanium producers globally
and gallium is produced in aluminum production (a capability South Africa
holds). The demand for these materials would in theory rise in accordance
with the Chinese decision to limit exports and should increase the demand
for the rand.

Other major South African commodity prices are trading higher today
including gold and iron ore on the back of a weaker USD and with no
significant economic data scheduled for today, I do not expect much in the
way of price volatility before tomorrow. Tomorrow's calendar (see below)
begins with South African S&P PMI data which could track lower following the
ABSA release yesterday. The primary focus will be the FOMC minutes and the
thought process behind its members to keep rates on hold.

Nigeria

Naira appreciates by 3.61 per cent, exchanges at N741.50 against US  

The Naira appreciated against the US dollar, exchanging at N741.50 at the
investors' and exporters' window.

According to NAN, the Naira gained by 3.61 per cent on Monday compared with
N769.25, which it exchanged for the dollar at the close of business on June
30.

The open indicative rate closed at N760.39 to one dollar on Monday.

The official forex window stood at N792 to the dollar within the day's
trading before it settled at N741.50.

The Naira sold for as low as N696.37 to the dollar within the day's trading.

On Monday, $88.68 million was traded at the investors' and exporters'
window.

On June 14, the Central Bank of Nigeria introduced operational changes to
the forex exchange market leading to the unification forex window.

 <mailto:info at bulls.co.zw> 

China state lenders lower dollar deposit rates for second time in a month -
sources

(Reuters) - China's major state banks have lowered their dollar deposit
rates for the second time in a month, seven banking sources with direct
knowledge of the matter said, as authorities have stepped up efforts to
arrest a slide in the yuan.

Interest rates offered by the "Big Five" state-owned lenders on most dollar
deposits are now capped at 2.8%, down from 4.3% previously, said the people,
who declined to be named as they were not authorised to speak to the media.

The People's Bank of China, which typically issues guidance on dollar
deposit rates to state banks, did not immediately comment on the matter.

The lenders - Industrial and Commercial Bank of China (601398.SS), , Bank of
China (601988.SS), , Agricultural Bank of China (601288.SS), , China
Construction Bank (601939.SS), and Bank of Communications (601328.SS), - did
not immediately respond to requests for comment.

Traders and analysts said policymakers, worried that a prolonged yuan slide
could both discourage foreign investment and spur an outflow of funds
abroad, want to bring down dollar deposit rates - which typically track
offshore rates - towards domestic rates, which have been cut to aid the
flagging economy.

The yuan is one of the worst-performing Asian currencies this year, knocked
nearly 5% lower against the dollar by a slowdown in China's economy and
widening yield differentials with the United States.

"It shows that the move is to narrow the interest rate advantage of the U.S.
dollar in onshore markets," said Ken Cheung, chief Asian FX strategist at
Mizuho Bank.

"It is likely aiming to prevent stockpiling dollars and encouraging (foreign
exchange) settlements."

The lower rates could both discourage households from putting savings into
higher-yielding dollar deposits and nudge Chinese firms, especially
exporters, to settle foreign exchange receipts in yuan.

The new rates came into effect on July 1, said two of the sources, adding
that some of the banks were not offering rates above the 2.8% cap for large
deposits. Banks typically offer higher rates to deposits exceeding $1
million.

The PBOC, China's central bank, has recently moved to brake the yuan's slide
against the dollar, setting stronger-than-expected daily fixings for the
currency, while state banks have also been spotted selling dollars on
occasion in both the onshore and offshore markets, trading sources said.

The latest cut in dollar deposit rates was the second in barely a month. In
early June, sources told Reuters the big state banks had lowered such rates
as much as 100 basis points from the previous ceiling of 5.3%.

Sources also told Reuters last week that the central bank has surveyed some
foreign banks about the interest rates they offer to their clients for
dollar deposits.

The PBOC said last Friday it would continue to keep the yuan basically
stable and guard against the risk of large exchange rate fluctuations.

Some currency traders also said the cuts in dollar deposit rates would ease
pressure on commercial lenders' net interest margin, as banks' dollar
deposit rates had risen above lending rates before the recent adjustments.

The latest PBOC data showed that the weighted-average interest rate on large
dollar deposits stood at 5.67% in March, up 4.15 percentage points from a
year earlier, while the weighted-average dollar lending rate was up only
3.74 percentage points at 5.34%.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold listless as investors wait for Fed's June meeting minutes

Bars of gold are seen at the Krastsvetmet company, one of the world's
largest producers of precious metals in Moscow, Russia on January 31, 2023.
The company produces precious metals in ingots, granules, powders in the
form of chemical compounds. Precious metal bars of Krastsvetmet are included
in the lists of Good Delivery (high quality of delivery) on international
platforms. In 2021, the company produced 203 tons of gold, 484 tons of
silver and 102 tons of platinum group meta

Bars of gold are seen at Krastsvetmet, one of the world's largest producers
of precious metals, in Moscow, January 31, 2023.

Gold prices were flat on Tuesday in thin trading due to a U.S. holiday,
while traders awaited the U.S. Federal Reserve's minutes of the June meeting
on Wednesday for more clues on its interest rate hike path ahead.

Spot gold

was little changed at $1,921.39 per ounce by 0241 GMT, while U.S. gold
futures

were flat at $1,929.10.

Trading volume could be light due to a U.S. holiday.

"Right now the headwinds for gold are the expectations of a further 50 bps
tightening, more liquidity withdrawal and rates remaining relatively
elevated for some time after the Terminal value has been reached," said
Nicholas Frappell, global head of institutional markets, ABC Refinery.

Investors see a nearly 90% chance of a 25-basis-point hike in July,
according to CME's Fedwatch tool, bringing rates into the 5.25% to 5.50%
range before cuts are seen after March in 2024. High interest rates
discourage investment in non-yielding gold.

The dollar index

held steady.

U.S. manufacturing slumped further in June to the lowest reading since May
2020 per data on Monday, yet price pressures continued to deflate since
bottlenecks in the supply chain have eased considerably and higher borrowing
costs dampen demand.

Markets will also watch for minutes of the June 13 to14 FOMC meeting being
released on Wednesday.

While gold prices could recover to $1,940 before a potential drop lower,
"the rates background remains a significant drag," Frappell added.

Japan's top financial diplomat Masato Kanda said authorities were in close
contact with U.S. and other overseas authorities in lieu of the yen falling
to a near eight-month low against the dollar last week.

The Reserve Bank of Australia's policy decision would also be watched during
the Asian market hours.

Spot silver

rose 0.1% to $22.91 per ounce, platinum

was up 0.6% to $912.15 while palladium

jumped 2% to $1,253.95.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

Counters trading under cautionary

CBZH

GetBucks

EcoCash

TSL

Econet

Turnall

First Capital Bank

ZBFH

Fidelity

Zimplow

FMHL

Invest Wisely!

Bulls n Bears 

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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