Bulls n Bears Daily Market Commentary : 17 July 2023

Tue Jul 18 09:25:23 CAT 2023

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Bulls n Bears Daily Market Commentary : 17 July 2023

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

ZSE commentary

HARARE - Zimbabwe Stock Exchange shares remained stuck in mediocrity at the
start of the week as bearish sentiment continues to prevail.  

Activity was lacklustre with fractional movements among the stocks except
for a select few, which traded lower. Market bias was negative with 14
fallers against four risers. As a result, the All Share Index lost 2.12% to
129 028.70.

Total turnover amounted to $2.38 billion after 2.8 million shares traded.
Econet contributed the most to volume at 1.12 million shares while Delta led
in value at $1.56 billion and was the most active of the 194 trades at 42.
Foreigners sold $972.1 million worth of Delta shares. There were no
purchases.

The Top Ten was the worst index performer, losing 2.36% to 61 667.97. Econet
lost 12.715 to 51 082.35c and EcoCash was 1.83% lower to 15 500c.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa 

South African rand rises in early trade on weak dollar

(Reuters) - The South African rand firmed in early trade on Tuesday, helped
by the U.S. dollar languishing near its lowest level since April 2022.

At 0550 GMT, the rand traded at 17.9800 against the dollar, about 0.3%
stronger than its previous close. The dollar index , meanwhile, was down
about 0.2%.

Local markets mostly shrugged off a decision by Fitch to affirm South
Africa's sovereign credit rating on Monday, and this week's major focus is
local inflation data out on Wednesday and an interest rate announcement on
Thursday.

"The impact of the Fitch news on the rand is likely to be limited at best as
much of what Fitch highlighted is well-known. The currency, for now, is
tracking movements in the U.S. dollar," Rand Merchant Bank analysts said in
a research note.

Analysts polled by Reuters are predicting inflation (ZACPIY=ECI) to further
decline to 5.6% in June from 6.3% in May, putting it back within the central
bank's 3% to 6% target range for the first time since April 2022.

The majority of economists expect no change in the South African Reserve
Bank's repo rate (ZAREPO=ECI) on Thursday, but a significant minority are
predicting a further 25 basis points increase to 8.50%.

The bank has raised rates at its last 10 monetary policy meetings to try to
bring inflation back to target, in a hiking cycle that started in November
2021.

Nigeria

Naira hits N820 per dollar as demand rises further

Naira on Monday further weakened by 1.09 percent following increased demand
for dollars in the parallel market, also known as black market.

During the morning trading on Monday, dollars were quoted at the rate of
N820 as against the average rate of N811 on Friday.

"Individuals, especially those who want to travel for business or holiday
are the ones buying dollars. We have dollars in the market, " a trader told
BusinessDay.

Read also: Nigeria's June inflation surges marginally despite hike in petrol
prices

At Investors and Exporters ( I&E), Naira depreciated as the dollar was
quoted at N803.90 on Friday as against the previous close of N746.28 on
Thursday, data from the FMDQ indicated.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar teeters near one-year low; euro climbs to 17-month peak

(Reuters) - The dollar wobbled near an over one-year low against its major
peers on Tuesday, as investors awaited fresh catalysts to gauge if the
greenback has further downside in the wake of last week's
cooler-than-expected U.S. inflation report.

The U.S. dollar index , which measures the greenback against a basket of six
currencies, fell 0.15% to 99.753 in Asia trade, languishing near Friday's
trough of 99.574, its lowest since April 2022.

The index had clocked its worst week of 2023 last week, after data showed
U.S. inflation subsided further with consumer prices registering their
smallest annual increase in more than two years, taking pressure off the
Federal Reserve to continue raising interest rates.

"I think the dollar can stay under selling pressure," said Carol Kong, a
currency strategist at Commonwealth Bank of Australia. "Markets are focused
on the end of the FOMC tightening cycle."

Against the greenback, the euro hit a fresh 17-month high of $1.1256, while
sterling gained 0.16% to $1.30945, not far from last week's top of $1.3144,
also its highest since April 2022.

Money markets have largely priced in a 25-basis-point (bps) rate hike from
the Fed at its policy meeting later this month, though see rates coming down
as early as December.

Conversely, investors expect the European Central Bank and the Bank of
England to have further to go in their rate-hike cycle. ,

Elsewhere, the Japanese yen rose about 0.2% to 138.46 per dollar, as
investors look to the Bank of Japan's (BOJ) monetary policy meeting next
week for clues on whether the central bank will begin phasing out its
ultra-dovish policy stance.

"More market participants have priced in chances of BOJ widening its yield
curve control policy's trading band by 25 bps in the next meeting," said
Ryota Abe, an economist at SMBC.

In other currencies, the Australian dollar was last 0.21% higher at $0.6831
after minutes of the Reserve Bank of Australia's (RBA) July policy meeting
released on Tuesday provided no major surprises on the rate outlook.

"The RBA minutes... did not contain much new information from Governor
Lowe's recent speech, where he seemed less definitive on the need for
further rises and more attuned to potential growth risks," said Tapas
Strickland, head of market economics at National Australia Bank.

"This tone was arguably reflected in the minutes, though there was a strong
case presented for further tightening."

The New Zealand dollar rose 0.27% to $0.63425, with both Antipodean
currencies nursing losses from the previous session after China's
second-quarter gross domestic product data on Monday showed the economy
growing at a frail pace as demand weakened at home and abroad.

"Everyone is just waiting for the (Chinese) authorities to come out with
concrete measures," said Khoon Goh, head of Asia research at ANZ.

"The rhetoric coming out from the government has been, in a sense, saying
they want to support growth, but I think for the markets, they actually want
to see the follow up, concrete action, to back up those words."

China's top economic planner pledged on Tuesday that it would roll out
policies to "restore and expand" consumption without delay as consumers'
purchasing power remained weak.

The onshore yuan eked out a small gain and last bought 7.1696 per dollar,
after the People's Bank of China set a firmer-than-expected daily mid-point.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold struggles for traction as traders await Fed cues

Spot gold was little changed at $1,955.24 per ounce

COMMODITIESPRECIOUS METALS

Gold prices struggled for momentum in early Asian trading on Tuesday, as
traders awaited a U.S. Federal Reserve meeting due next week for clues about
its monetary tightening path.

* Spot gold was little changed at $1,955.24 per ounce by 0110 GMT. U.S. gold
futures gained 0.1% to $1,958.80.

* The dollar was steady at 99.88, hovering close to its April 2022 lows of
99.58.

* Interest rate futures showed markets were pricing in another rate hike at
the Fed's July 25-26 meeting, with rate cuts seen well into 2024. * Fed
Chair Jerome Powell had earlier highlighted the majority view that two
additional rate increases would be needed.

* Fed Governor Christopher Waller made the case for tighter policy in the
central bank leadership's final remarks before the blackout on public
comments ahead of the July meeting.

* Lower interest rates decrease the opportunity cost of holding non-yielding
bullion.

* Speaking to Bloomberg TV on Monday, Treasury Secretary Janet Yellen said
she did not expect the U.S. economy to enter into a recession.

* Goldman Sachs' chief economist, Jan Hatzius, said the bank was cutting its
probability that a U.S. recession will start in the next 12 months to 20%
from an earlier 25% forecast.

* China's economy grew at a frail pace in the second quarter, raising
pressure on policymakers to deliver more stimulus to shore up activity.

* Spot silver fell 0.1% to $24.83 per ounce, platinum was little changed at
$976.07 while palladium rose 0.1% to $1,284.91. DATA/EVENTS (GMT) 1230 US
Retails Sales MM June 1315 US Industrial Production MM June (Reporting by
Seher Dareen in Bengaluru; Editing by Subhranshu Sahu)

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

CBZ

AGM

Virtual

July 21 2023 | 4pm

POSB

AGM

Chapman Golf Club

July 25 2023 |10am

Afdis

AGM

Virtual | St Marnocks, Lomagundi Road, Stapleford

July 26 2023 | 12pm

RTG

AGM

Rainbow Towers Hotel

July 27 2023 |12pm

ZHL

AGM

206 Samora Machel Avenue

July 28 2023 | 10am

Delta

AGM

Virtual | Head Office, Northridge Close, Borrowdale

July 28 2023 | 12:30pm

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

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 

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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
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opinions expressed and recommendations made are subject to change without
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