Bulls n Bears Daily Market Commentary : 18 July 2023

Wed Jul 19 09:03:57 CAT 2023

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Bulls n Bears Daily Market Commentary : 18 July 2023

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

ZSE commentary

The ZSE All Share Index eased 84.30 points to close at 128,944.39 points.
Trading in the negative: HIPPO VALLEY ESTATES LIMITED lost $38.3333 to close
at $2,261.6667, ECOCASH HOLDINGS LIMITED shed $15.3785 to $139.6215 and
ZIMRE HOLDINGS LIMITED was $10.0000 weaker at $75.0000. DELTA CORPORATION
LIMITED also decreased by $6.3196 to end at $2,024.8155 and MASIMBA HOLDINGS
LIMITED lost $5.9798 to close at $904.4254.

TSL LIMITED added $70.0000 to close at $610.0000, FIRST MUTUAL PROPERTIES
LIMITED was $13.9987 up at $107.7487 and MASHONALAND HOLDINGS LIMITED was
$9.5209 stronger at $111.7900. ECONET WIRELESS LIMITED also increased by
$4.2097 to end at $515.0332. MEIKLES LIMITED was $3.0912 up at $753.0769

On the US$ denominated bourse, VFEX, the All Share Index succumbed to
sell-offs, extending losses to 5 consecutive sessions by a further -0.48% to
close at 71.95 points. Losses were driven by 3 counters against 3 risers. An
aggregate of US$10,902 exchanged hands in today's session, down from
US$203,084 traded in the prior session. Meanwhile, Zimplow Holdings Ltd
listed on VFEX on Friday of last week and recorded its debut trade today,
rising by 7.8%.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand gains; analyst says it had looked undervalued

(Reuters) - The rand gained strongly on Tuesday, with one analyst saying it
had looked undervalued after year-to-date losses and citing support from
rising prices for precious metals, a key South African export.

At 1550 GMT, the rand traded at 17.8550 against the dollar, about 1%
stronger than its previous close.

Danny Greeff, a financial market analyst at ETM Analytics, said sentiment
towards emerging markets had been lifted by softer-than-expected U.S. retail
sales.

"The rand is outperforming, however, owing to its stretched undervaluation
after a dismal year-to-date performance. All the while, gold, platinum, and
palladium markets have also seen healthy gains today, providing further
support," Greeff said.

Major local economic data points this week that could influence rand trading
are local inflation data out on Wednesday and an interest rate announcement
on Thursday.

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 (SARB) repo rate (ZAREPO=ECI) on Thursday, but a significant minority
are predicting a further 25 basis points (bps) increase to 8.50%.

The SARB 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.

"Although the market has been paring bets on an extended rate-hike cycle in
SA, there is still a strong chance that the SARB hikes by 25 bps to keep the
rand on the front foot," Greeff said.

The Johannesburg Stock Exchange's All-share index (.JALSH) closed down 0.2%
on Tuesday. South Africa's benchmark 2030 government bond was firmer, as the
yield fell 12 basis points to 10.325%.

Nigeria

Naira recovers to N742/$

The naira rebounded yesterday to N742/$ in the Investors and Exporters (I&E)
Window- official market.

The rate represents N53/$ gain from at N795.2/$ it closed on Monday.  The
rate at the parallel market was N812/$, which was stronger than N820  it
closed on Monday.

Data from FMDQ Exchange indicated a turnover of  $156 million.

The Central Bank of Nigeria (CBN) unified exchange rates into the I&E Window
and allowed market forces to determine exchange rate for the naira.

The floating of the naira, which ended decades of multiple exchange rate
regime was one of the first policy pronouncements by  President, Bola
Tinubu.

On the inauguration day, he announced series of reforms many considered long
overdue, including a directive to the Central Bank of Nigeria (CBN) to unify
exchange rates.

Read Also: Naira closes at N795/$ in official market

The multiple exchange rates -  the International Air Transport Association
(IATA) rate, parallel market rate, Interbank Exchange Rate and Bureaux De
Change (BDC) rate were collapsed into the Investors & Exporters (I&E)
Window.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar bounces from 15-month low on strong core U.S. retail sales

(Reuters) - The U.S. dollar rose from a 15-month low against a basket of
currencies on Tuesday after core retail sales saw strong gains in June, as
investors wait on the Federal Reserve's interest rate decision next week.

Headline U.S. retail sales rose less than expected in June, with a 0.2%
increase during the month. Data for May was also revised higher to show
sales gaining 0.5% instead of 0.3% as previously reported.

Core sales showed more resilience, however. Excluding automobiles, gasoline,
building materials and food services, retail sales increased 0.6% in June.
Data for May was revised slightly up to show core retail sales increasing
0.3% instead of the previously reported 0.2%.

The softer-than-expected headline number suggests that "the Fed is making
some progress," said Bipan Rai, North American head of FX strategy at CIBC
Capital Markets in Toronto.

However, "you still did get a fairly strong control group number - that's
going to feed through to GDP and domestic demand. That's still very much
supportive of the fact that the Fed does need to hike rates again later this
month," Rai said.

The dollar tumbled after consumer and producer price gains slowed in June,
boosting expectations that the U.S. central bank will stop hiking rates
after a widely expected 25 basis-point increase at its July 25-26 meeting.

Fed funds futures traders are pricing in an additional 33 basis points of
tightening this year, with the benchmark rate expected to peak at 5.40% in
November.

Other data on Tuesday showed production at U.S. factories unexpectedly fell
in June, but rebounded in the second quarter as motor vehicle output
accelerated after two straight quarterly declines.

Traders will also be watching inflation releases from regions including the
eurozone, Britain and Japan this week for further clues about whether
inflation is cooling globally.

The dollar index was last up 0.04% on the day at 99.924, after earlier
falling to 99.549, the lowest since April 2022.

Bank of America analysts noted in a report on Tuesday that recent weakness
in the greenback has exceeded the drivers of the move, which "can typically
be attributed to stretched positioning and sentiment, as well as technical
breaks."

In particular the analysts note that gains in the Norwegian krone and
Japanese yen have exceeded their expected moves, and that they expect yen
underperformance to resume "once the dust settles."

The dollar rose 0.10% against the Japanese yen to 138.83, after dropping to
137.245 on Friday, the lowest since May 17.

The euro was little changed on the day at $1.1229 after earlier hitting
$1.12760, the highest since Feb. 2022.

European Central Bank (ECB) governing council member Klaas Knot said on
Tuesday that the bank will look closely for signs of inflation cooling down
in the coming months to avoid taking rate hikes too far.

The European Central Bank is expected to raise interest rates by 25 basis
points next week.

The British pound fell 0.22% to $1.3046, after hitting $1.31440 on Thursday,
the highest since April 2022.

The Australian dollar fell 0.07% to $0.6813 after minutes of the Reserve
Bank of Australia's (RBA) July policy meeting released on Tuesday provided
no major surprises on the rate outlook.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold retreats from 1-1/2-month high even as traders bet on Fed rate pause

Gold prices pulled back on Wednesday from a 1-1/2-month high scaled in the
previous session even as investors bet that recent U.S. economic readings
make the case for a pause in the Federal Reserve's interest rate-hike
stance.

* Spot gold was down 0.1% at $1,978.09 per ounce by 0043 GMT, after hitting
its highest since May 24 at $1,984.19 on Tuesday.

* U.S. gold futures were flat at $1,981.60.

* The dollar index wobbled near more than a one-year low.

* U.S. retail sales rose less than expected in June, increasing 0.2% last
month, against the 0.5% forecasted by economists polled by Reuters. Consumer
spending, however, appeared to be solid.

* Economists polled by Reuters see the Fed raising its interest rate by 25
basis points to the 5.25%-5.50% range on July 26, with a majority saying it
would be the last increase of the current tightening cycle.

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

* Big U.S. banks said on Tuesday higher interest rates helped boost profit
in the second quarter, causing shares to spike, but a pullback in consumer
spending, slower loan growth and increased deposit costs may cloud the
outlook for the sector.

* Meanwhile, confidence at big Japanese manufacturers fell in July for the
first time in six months, the Reuters Tankan survey showed on Wednesday, in
a sign of growing exporter concern about weakening overseas demand.

* Spot silver fell 0.1% to $25.06 per ounce, platinum was up 0.2% at
$984.42, while palladium fell 0.2% to $1,317.16. DATA/EVENTS (GMT, June)
0600 UK Core CPI YY 0600 UK CPI YY 0900 EU HICP Final MM, YY 1230 US Housing
Starts Number 

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
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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