Bulls n Bears Daily Market Commentary : 24 July 2023

Tue Jul 25 06:27:28 CAT 2023

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Bulls n Bears Daily Market Commentary : 24 July 2023

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

The overall Market Cap for today closed at ZWL9.54 trillion, 0.59% decrease
compared to last week's ZWL 9.58 trillion. Total turnover decreased by
76.11% to close at ZWL 1.20 billion. This was at the back of a 86.81%
decrease  in total volumes traded which accumulated to ZWL8.52 million.
Delta, Seed Co and Masimba Holdings were today's three most traded counters,
with a total contribution of 93% to the total turnover.

The benchmark All-Share Index dropped 0.68% to close at 119,632.83 points at
the back of 95 raisers against 16 decliners. The Top 15 Index lost 1.11% to
close at 76,807.13 points and the Top 10 Index sheds 1.16% as it closes at
55,047.10 points.

The mover's list for today was led by the circuit breakers, Fidelity Life
Assurance and Masimba Holdings which increased by 15.00% each to close at
close at $105.05, and $884.10, respectively.  NMBZ Holdings and Mashonaland
Holdings trailed the list after advancing by 14.99% and 7.14% to close at
$171.55 and $120.00, respectively.

Trading in on top of the negatives was Cafca which lost 15.00% at it closes
at $2,398.83. EcoCash Holdings and ART were also amongst the fallers after
losing 12.94% and 11.76% to close at $114.78 and $45.00, respectively.

Victoria Falls Stock Exchange (VFEX) 

The VFEX All Share Index added 0.08% to close with 71.11 points

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand jumps; focus on major central bank decisions

(Reuters) - The South African rand strengthened more than 1% against the
dollar on Monday, after weaker business activity in the UK, euro zone and
United States suggested fewer global rate hikes might be needed.

At 1512 GMT, the rand traded at 17.7575 against the dollar , about 1.2%
stronger than its previous close.

The dollar was firm, trading around 0.2% stronger against a basket of global
currencies .

Central bank interest rate decisions in major economies are the focus with
week, with investors expecting rate hikes from the U.S. Federal Reserve on
Wednesday and the European Central Bank on Thursday.

South Africa's central bank kept rates unchanged last week after 10
consecutive hikes.

"The ZAR enjoyed some tailwinds this afternoon as the market pared bets on
an extended global rate-hike cycle after some weak Eurozone and UK PMI
data," said Danny Greeff, co-head of Africa at ETM Analytics.

Rising gold and coal prices provided additional support, he added.

The rand has gained more than 5% since the start of July.

On the Johannesburg Stock Exchange, both the blue-chip Top-40 index (.JTOPI)
and the broader all-share index (.JALSH) closed 0.08% lower.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 7.5 basis points to 10.260%.

Nigeria

Nigeria's naira hits record low on black market ahead of central bank
meeting

Nigeria's naira traded at a record low of 860 per dollar on the black market
on Thursday, 20 July, according to traders, weakening below its official
rate a month after the country devalued the currency ahead of a central bank
policy meeting next week.

The bank last month allowed the naira to weaken by more than a third in a
bid to unify Nigeria's multiple exchange rates and to lure foreign
investment to shore up liquidity in an economy struggling with dollar
shortages.

Last month's devaluation helped narrow the gap between the naira's exchange
rates on the official window and the black market but pressure is gradually
building up especially from individuals paying for expenses abroad.

The naira has been swinging widely on the official market since the
devaluation. It touched a new low of 853 naira per dollar on Wednesday, 18
July according to OTC market regulator, FMDQ Exchange.

The currency closed at 742 naira against the dollar on the official market
on Thursday, Refinitiv data showed.

Dollar shortages on the official market have seen customers turning to the
black market, helping to widen the gap between the spot rate and the black
market, one trader said.

Nigeria has embarked on its boldest reform agenda in decades, including the
removal of a popular but costly petrol subsidy and the loosening of
restrictions on foreign-exchange trading, a gamble President Bola Tinubu
hopes will boost sluggish economic growth.

Analysts have warned that a weaker currency and the fuel subsidy removal
would likely push inflation higher in the short term.

The central bank will meet on Monday and Tuesday to set interest rates with
investors looking for measures to support the currency.

 <mailto:info at bulls.co.zw> 

Global Markets

‘Blue dollar’ hits AR$552, another record high

Argentina’s informal dollar exchange rate, popularly known as the “blue
dollar,” rose by over AR$24 on Monday and reached AR$552 for the first time
in history. The record-high nominal value means that the blue dollar is
almost double the official rate, which closed at AR$284.

“Today’s increase mostly reflects the lack of certainty around the agreement
with the IMF, the fact that the government is driving many companies towards
alternative dollar exchange rates, and political uncertainty less than a
month from the primaries,” said Juan Ignacio Paolicchi, chief economist of
the consulting firm Empiria. 

“The rise of the blue dollar is due to Argentina’s own inflationary dynamic.
It should be noted that we had two months with curiously calm informal
exchange rates, which were fluctuating between AR$490 and AR$500,” Paolicchi
said. “Until last week, the dynamic of the fluctuating exchange rates seemed
to be more a consequence of inflation and a logical adjustment in a context
where prices course-correct .”

Monday’s marked increase comes as Argentina continues tough negotiations
with the International Monetary Fund (IMF) — official sources told the
Herald expects to sign a Staff-Level Agreement with the lender by the middle
of this week following months of talks. Earlier on Monday the government
implemented new taxes for imports of goods and services, also granting a
higher exchange rate for some agricultural exports (although soybeans are
excluded).

Federico Furiase, director of Anker Latinomérica, described the new measures
as a reflection of the government’s political restrictions that preclude it
from devaluing and pressures from both the IMF and the Argentine financial
market.

“What the IMF and the market are asking for is to solve macroeconomic
problems in order to accumulate more reserves,” said Furiase. “We are in a
situation where there are no benign options due to macroeconomic
vulnerability.” 

“The key is whether the IMF disbursement is enough to show the market that
there is enough ammunition to calm the financial dollar market.”

Economy Minister Sergio Massa — who is also the presidential candidate for
the ruling coalition Unión por la Patria — announced on Sunday night that
Argentina will receive a “big disbursement package” from the IMF in August
that will “largely cover” this year’s debt payments with the credit
organization. 

“The increase is in part due to negative expectations regarding the
measures. The increase of alternative exchange rates pushes the ‘blue
dollar’ rate at the same time,” said Gustavo Quintana, an analyst and broker
for PR Corredores de Cambio. “It’s operating with a low supply of foreign
currency and that translated as a price increase.” 

Argentina is going through a major international reserve scarcity crisis,
which deepened due to this year’s historic drought.

“Apparently, the market is interpreting that the new measures don’t
contribute towards solving the structural problems the economy faces,”
Quintana said. “We shouldn’t forget that the blue dollar is a smaller
market, where any sudden change alters prices. I don’t think it was anything
in particular, but a combination of factors.”

Quintana echoed Paolicchi’s electoral considerations, saying that they tend
to “push investment portfolios towards dollarization.” Argentina’s primary
elections (PASO, for their Spanish acronym) will be held on August 13, the
run-up for which has showcased fractures in the country’s main electoral
coalitions, particularly in the presidential race. 

“I think more forceful action was expected from the government, which didn’t
come in the end,” Paolicchi said.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold trades narrow range as Fed verdict draws near

Gold prices traded in a tight range on Monday as traders braced for a widely
anticipated interest rate hike along with clues on future monetary policy
from the Federal Reserve this week.

Spot gold was mostly unchanged at $1,959.00 per ounce. U.S. gold futures
settled 0.2% lower at $1,962.20.

“Gold is slow and steady, with traders betting that the Fed is getting close
to their point where they stop hikes,” said Bob Haberkorn, senior market
strategist at RJO Futures.

Bullion may have found some safe-haven demand after Russia destroyed
Ukrainian grain warehouses on an export route for Kyiv after pulling out of
the Black Sea grain deal last week, Haberkorn added.

But the focus was still on the Fed’s decision on interest rates on
Wednesday, followed by the European Central Bank on Thursday, with both seen
hiking rates.

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

“Any dovish surprise, particularly from the Fed, could be positive for gold,
with good chances of seeing a new attack to the $2,000 mark,” said Carlo
Alberto De Casa, market analyst at Kinesis Money, in a note.

The dollar index inched 0.2% higher, limiting gold’s upside by making it
more expensive for holders of other currencies.

Gold priced in euros hit its highest since July 5 earlier in the day after
data showed euro zone business activity shrank much more than expected in
July.

Silver fell 0.7% to $24.39 per ounce, platinum slipped 0.1% to $961.01 and
palladium dropped 1% to $1,277.84.

UBS analysts in a note predicted platinum would be under-supplied for the
rest of 2023 due to substitution in autocatalysts and lower South African
production.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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
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