Bulls n Bears Daily Market Commentary : 10 July 2023

Tue Jul 11 06:38:09 CAT 2023

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Bulls n Bears Daily Market Commentary : 10 July 2023

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

ZSE commentary

Zimbabwe Stock Exchange (ZSE) 

The overall Market Cap for today closed at ZWL12.36 trillion with a
percentage decreased of 2.13%. Total turnover decreased by 23.75% to close
at ZWL2.53 billion, regardless of the 102.42% increase in the total volumes
traded which later closed at ZWL8.52 million. Delta, Zimplow and Truworths
were today's three most traded counters, with a contribution of 95% to the
total turnover. 

The benchmark All-Share Index dropped by 2.10% to close with 152,053.02
points at the back of 15 raisers and 11 decliners. The Top 15 Index lost
2.50% to 101,463.46 points with the Top 10 Index also decreasing by 3.02% to
close with 76,405.70 points. 

Fidelity Life Assurance and Cafca topped the movers list for the day after
adding 15.00% and 14.99% each to close at $92.00, and $3,320.07,
respectively.  Nampak Zimbabwe, Meikles Limited and Nmbz Holdings capped the
risers' list after advancing by 14.98%, 14,94% and 12.99% to close at
$119.00, $1,000.00 and $255.01,respectively.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand flat; manufacturing and mining data due this week

(Reuters) - The South African rand was flat on Monday, at the start of a
week in which local manufacturing and mining data will be released.

At 1513 GMT, the rand traded at 18.8675 against the dollar , 0.04% weaker
than its previous close.

Statistics South Africa will release May manufacturing output (ZAMAN=ECI) on
Tuesday and mining figures (ZAMNG=ECI) on Thursday.

Like other emerging market currencies, the risk-sensitive rand also takes
cues from big global drivers such as U.S. monetary policy and the dollar.

"The rand will remain beholden to U.S. data releases, exhibiting high
sensitivity," Investec analyst Annabel Bishop said in a research note.

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indices were down more than 0.5%.

South Africa's benchmark 2030 government bond was weaker, the yield up 3.5
basis points to 10.805%.

Nigeria

Naira trades at N795 per dollar in black market

Naira on Monday exchanged with the dollar at N795, which was lower by N1/$1
than N794 exchanged on Friday at the parallel market, also known as black
market.

One trader at CMS said the naira depreciation was due to a slight rise in
dollar demand by end users, saying there might be further weakening of the
naira as demand continues to increase.

The first foreign exchange market (FX) trading week in July began bearish
for the naira as it depreciated by N19.20 or 2.48 percent week-on-week (w/w)
to N792.20/$1 from N773/$1 at the parallel market as FX market and traders
continue reacting to the forces of demand and supply, analysts at Cowry
Asset Management Limited said.

At the Investor and Exporters (I&E) foreign exchange (FX) market, naira
depreciated by14.27 percent as the dollar was quoted at N776.90 on Friday as
against the previous close of N762.63, data from the FMDQ indicated.

The naira depreciation followed a 25.53 decline in the daily FX market
turnover, which dropped to $73.42 million on Friday from $98.60 million
recorded on Thursday.

Week-on-week, at the investors and exporters FX window, the naira lost N7.65
or 0.99 percent w/w against the United States dollar to close at N792.20/$1
from N773/$1 last week, despite funds inflow. This comes as traders continue
to position themselves in a bid to ascertain the fair value of the naira,
the analysts said.

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar drops to three-week low as Fed rate hikes nearly done

(Reuters) - The dollar sank to a three-week low on Monday after comments by
Federal Reserve officials reinforced market expectations that the U.S.
central bank is near the end of its tightening cycle.

The Fed, however, is widely expected to raise interest rates by another 25
basis points this month despite Friday's data showing U.S. job gains were
the smallest in 2-1/2 years. The expected rate hike in July would follow a
Fed pause in June.

Several Fed officials led by San Francisco Fed President Mary Daly on Monday
said the central bank likely will need to raise interest rates further to
bring down inflation that remains persistently high, but the end to its
current monetary policy tightening cycle is getting close.

In afternoon trading, the dollar index , which tracks the U.S. currency
against a basket of major peers, slid 0.3% to 101.98, a three-week low.

The euro rose to three-month peaks of $1.0997 versus the dollar and last
changed hands at $1.0995 , up 0.2%.

Against the yen, the greenback fell as low as 141.32 yen , the lowest since
June 21. It was last down 0.6% at 141.335. It slid nearly 1.3% last Friday
after U.S. nonfarm payrolls increased 209,000 in June, missing market
expectations for the first time in 15 months.

"The weaker pressure on the dollar has ... been hard to square from a
relative rates and growth standpoint," said Erik Nelson, macro strategist at
Wells Fargo in London.

"U.S. growth has outperformed expectations, while Europe and China have
underperformed. I think the U.S. economy is stronger than we give it credit
for," Nelson added.

Details in Friday's employment report reflecting persistently strong wage
growth underscored market pricing of a further rate hike later this month,
even if once-expected cuts later in 2023 now seem unlikely.

With U.S. nonfarm payrolls out of the way, attention turns to U.S. inflation
data due on Wednesday. Expectations are for core CPI to have risen 5% on an
annual basis in June.

Meanwhile, Norway's crown, the second-weakest performing currency in the G10
this year, strengthened after data showed core inflation continued to rise
in June and hit a fresh record.

The Norwegian crown firmed against the dollar and euro following Norway's
inflation data. The dollar was last down 1% at 10.493 , while the euro
dropped nearly 1% to 11.5363 .

The Chinese yuan slumped against the dollar after weak inflation numbers in
the world's second-largest economy.

Data on Monday showed factory-gate prices fell at the fastest pace in 7-1/2
years in June and consumer inflation was at its slowest since 2021, fueling
hopes for further support measures from Chinese authorities.

The U.S. dollar was last little changed versus the offshore yuan at 7.230.

The weak Chinese data dragged down the Australian and New Zealand dollars,
which are often used as liquid proxies for the Chinese yuan.

The Aussie fell 0.2% to US$0.6677, while the New Zealand dollar reversed
losses to trade 0.1% higher to US$0.6215.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold struggles for momentum as traders await US inflation data

Gold prices were steady on a weaker dollar on Tuesday, although bullion
struggled for momentum as investors were wary of placing big bets ahead of
U.S. inflation data that could influence the Federal Reserve's policy
trajectory.

Spot gold held its ground at $1,926.19 per ounce by 0231 GMT. U.S. gold
futures were flat at $1,930.20.

Bullion is being supported by a weaker dollar and yields as the Fed seems to
imply that they're at the end of the tightening cycle, "but gold bugs appear
hesitant to overcommit ahead of Wednesday's U.S. inflation report," said
Matt Simpson, senior market analyst at City Index.

The dollar was near a two-month low on prospects of lower rates, while
benchmark U.S. yields hovered near Monday's lows at 4.0018%.

A weaker dollar makes gold cheaper for holders of foreign currencies.

Several U.S. central bank officials on Monday said the Fed will likely need
to raise interest rates further to bring down inflation that is still too
high, but the end to its current monetary policy tightening cycle is getting
close.

Investors see a 95% chance that the central bank would raise rates in its
July meeting into the 5.25-5.5% range, keeping them there until rate cuts
could be seen in 2024, as per CME's Fedwatch tool.

Higher rates dampen the appeal of bullion, which pays no interest.

The focus this week will be on the U.S. CPI (Consumer Price Index) data due
on Wednesday, with core CPI in June expected to have risen 0.3%
month-on-month, as per a Reuters poll.

"As we've become accustomed to inflation decelerating, an upside surprise
would spark the most volatile reaction and weigh on gold. Gold bulls need
inflation to behave to justify a bullish breakout," Simpson added.

Asian shares bounced as investors hoped for an end to rate hikes and cheered
the prospect China will deliver economic stimulus to prop up stalling
growth.

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
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
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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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