Bulls n Bears Daily Market Commentary : 05 July 2023

Thu Jul 6 06:43:10 CAT 2023

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Bulls n Bears Daily Market Commentary : 05 July 2023

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

ZSE commentary

Zimbabwe Stock Exchange (ZSE) 

The overall Market Cap for today dropped by 2.47% to close at ZWL 13.28
billion. Total turnover decreased by 52.07% to close at ZWL0.93 billion,
with loss of 98.28% in the total volumes traded which closed at ZWL1.42
million.  Meikles Limited, Delta and Econet, were today's three most traded
counters with a total contribution of 81% to the total turnover.

The benchmark All-Share Index retreated by 2.38% to close at 162,840.11
points with 15 risers and 17 decliners. The Top 15 Index lost 3.13% to
110,707.75 points with the Top 10 Index also decreasing by 4.35% to close
with 84,766.93 points.

Fidelity Life Assurance, ART and Masimba Holdings came out as the top
performers after gaining 15.00% each to close at $92.00, $69.00 and $641.05,
respectively. Rainbow Tourism Group and Nampak Zimbabwe followed after each
rose by 14.98% to close at $115.00 and $78.30 respectively, capping off the
Top 5 risers list for the day.

CBZ Holdings and Meikles Limited topped the decliners list for the day after
shedding of 15.00% to close at a price of $1,298.25 and $1,005.65.
Mashonaland Holdings, Fbc Holdings and Ok Zimbabwe also traded negative
today. Each of these counters lost 8.96%, 7.68% and 5.11% to close at
$100.07, $1,199.95 and $238.98, respectively. 

Victoria Falls Stock Exchange (VFEX) 

The VFEX All Share Index gained 0.47% to close at 75.37 points.-Akribos
Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand weaker ahead of US Fed's June meeting minutes

(Reuters) - South Africa's rand weakened against a stronger dollar on
Wednesday as traders awaited minutes from the U.S. Federal Reserve's June
policy meeting for clues on the interest rates outlook.

At 1624 GMT, the rand traded at 18.7650 against the dollar , 0.4% weaker
than its previous close.

The dollar index , which measures the greenback against a basket of six
other currencies, was up around 0.2% at 103.26.

"Today's FOMC minutes will be more about how hawkish the statement is
relative to what is priced in rather than just a reaction on whether the
central bank is hawkish," ETM Analytics said in a research note.

Federal Reserve policymakers opted to leave the policy rate unchanged last
month, but signaled they may raise interest rates at least twice more by the
year's end.

Locally, S&P Global survey showed South Africa's private sector activity
contracted again in June as higher prices continued to weigh on business
demand.

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indices closed around 0.4% lower.

South Africa's benchmark 2030 government bond was slightly stronger in
afternoon deals, with the yield down 2.5 basis points to 10.515%.

Nigeria

Nigeria's naira hits new low against the dollar on forwards market -
Refinitiv Data

Nigerian non-deliverable currency forwards fell to a new record low of 775
on Wednesday, down from previous low of 770, Refinitiv data showed.

Non-deliverable currency forwards, a derivative product used to hedge
against future exchange rate moves, indicated markets expected the naira's
exchange rate at 775 to the dollar in one months' time.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains after Fed minutes reinforce rate hike expectations

(Reuters) - The U.S. dollar edged higher against other major currencies on
Wednesday after minutes from the Federal Reserve's June policy meeting
reinforced market expectations of another interest rate hike at the end of
July.

Almost all Fed officials agreed to hold interest rates steady last month and
most expected policymakers would eventually need to tighten policy further,
a view that pushed Treasury yields higher and added to earlier dollar gains.

Fed funds futures showed expectations of a 25 basis point hike at the end of
a two-day policy meeting on July 26 rose to 88.7%, according to CME Group's
FedWatch Tool.

The dollar index , which measures the U.S. currency against a basket of six
others, including the euro and Japan's yen, rose 0.262% .

The Fed will likely increase rates in July after the hawkish pause last
month baring any surprises, said Jeffrey Roach, chief economist for LPL
Financial. The jobs report on Friday will be parsed for any signs the labor
market is weakening, he said.

"A very interested statement within these minutes reveal that job growth may
actually be weaker than indicated by payroll employment," Roach said in a
note.

The Labor Department report is expected to show the U.S. economy will have
added 225,000 jobs in June, and that the unemployment rate edged down to
3.6% last month, according to a Reuters poll.

"The economy looks resilient overall, but manufacturing has been in this
funk for eight months and counting and we'll have to see if that leads the
Fed to signal that it's not far from the end of its tightening cycle," said
Joe Manimbo, senior market analyst at Convera in Washington.

The euro fell 0.21% to $ 1.0854 .

The dollar rose to around 144.48 yen, but was still below the 145 threshold
that prompted intervention by Japanese authorities last autumn. The
greenback had last week briefly popped as high as 145.07 for the first time
since November.

INTERVENTION RISK?

The dollar-yen rate has broadly moved in sync with the U.S. 10-year Treasury
yield , which rose to 3.9375% after the Fed minutes were released.

Shusuke Yamada, chief forex and rates strategist at Bank of America in
Tokyo, said the market is paying attention to the potential risk of
intervention but over the medium term is looking for further downside for
the yen.

"We don't see a very high probability that the Ministry of Finance will
intervene at the same level as last year - and if the move is not rapid,
below 150 we might not see intervention at all," he said.

Australia's dollar fell in line with the Chinese yuan after data showed
China's services activity expanded at the slowest pace for five months in
June, the latest sign of a sputtering post-pandemic recovery in the world's
second-largest economy.

The Australian dollar fell 0.5% to $0.6658 for a fifth day of losses.

Prior to the Chinese services data, the Aussie had been slightly firmer
following another stronger yuan fixing from the People's Bank of China,
fueling bets for imminent policy support from Beijing.

The yuan rebounded a touch, up 0.37% at 7.2611 . 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips as US dollar, yields rise after Fed minutes

Gold prices fell on Wednesday, weighed down by an uptick in the dollar and
U.S. Treasury yields after minutes from the Federal Reserve's June policy
meeting cemented expectations that rates will stay higher for longer.

Spot gold was down 0.5% at $1,916.49 per ounce by 02:32 p.m. EDT (1832 GMT).
U.S. gold futures settled 0.1% lower at $1,927.10.

"Gold slumps to day's lows after Fed minutes showed that the 'pause' in June
was simply the path of least dissent and almost the entire committee
expected ultimately higher rates," said Tai Wong, a New York-based
independent metals trader.

"The upcoming JOLTS report and payrolls data will have much greater impact,
especially if they are weaker than expected."

A united Fed agreed to hold interest rates steady at the June meeting,
according to meeting minutes released on Wednesday, even as the vast bulk
expected they would eventually need to tighten policy further.

Benchmark U.S. 10-year Treasury yields jumped to a near four-month peak
after the release, while the dollar rose 0.3% against its rivals.

Traders are pricing in an 89% chance of a 25-basis-point hike from the Fed
in the July meeting after last month's pause, per CME's Fedwatch tool.

Gold is highly sensitive to rising U.S. interest rates, as they increase the
opportunity cost of holding non-yielding bullion.

Investors focus now shifts to the U.S. Labor Department's Job Openings and
Labor Turnover Survey, or JOLTS, and ADP, jobless claims on Thursday before
Friday's non-farm payrolls report.

Traders also kept a close watch on updates about China's export controls on
semiconductor metals as it ramps up a tech fight with the United States
ahead of U.S. Treasury Secretary Janet Yellen Beijing visit.

Spot silver rose 0.8% to $23.12 per ounce, platinum eased 0.1% to $914.11
while palladium climbed 1% to $1,255.78. 

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
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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