Bulls n Bears Daily Market Commentary : 25 July 2023

Wed Jul 26 05:45:34 CAT 2023

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Bulls n Bears Daily Market Commentary : 25 July 2023

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

ZSE commentary

The overall Market Cap for today closed at $9.44 trillion, 0.99% decrease
compared to yesterday's $9.54 trillion. Total turnover increased by 119.61%
to close at $2.65 billion. This was supported at the back of a 116.39%
increase in total volumes traded which accumulated to $3.95 million. Delta,
NMBZ Holdings and FBC Holdings were today's three most traded counters,
contributing 85% to the total turnover.

The benchmark All-Share Index dropped by 1.14% to close at 118,263.57 points
at the back of 11 risers against 8 decliners. The Top 15 Index lost 1.89% to
close at 75,420.56 points and the Top 10 Index shaded 1.81% as it closed at
54,008.87 points.

The risers list for today was led by Willdale with an increase of 10.93%
hence closing at $18.95, followed by General Beltings Holdings with a 10.00%
advancement closing at $11.00, and Masimba Holdings which gained 6.90% to
close at $945.10, Nampak Zimbabwe acquired 6.52% to close at $122.50, and
Zimre Holdings slightly advanced by 4.87% to settle at $10.00.

The top shakers for the day included FBC Holdings, NMBZ Holdings, and Seed
Co which lost 14.65%, 7.27% and 5.76%, closing at $890.99, $160.00, and
$1,546.29, respectively. BAT Zimbabwe and EcoCash Holdings Ltd were also
amongst the defeated for the day after losing 5.53% and 1.55% to close at
$16,499.00 and $113.00, respectively.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand gains on China policy pledges

(Reuters) - The South African rand extended gains from the previous session
on Tuesday as China's pledges to increase support for its sputtering economy
boosted risk appetite globally.

At 1534 GMT, the rand traded at 17.6150 against the dollar , about 0.7%
stronger than its closing level on Monday.

The rand is up more than 6% this month against the U.S. currency, recovering
further from a record low struck in early June.

"Buoyed by Chinese optimism after the global superpower pledged to provide
stimulus for the flailing economy, bolstering the traditional positive
relationship it maintains with the rand," DailyFX analyst, Warren Venketas,
said in research note.

China's top leaders pledged on Monday to step up help for the economy amid a
tortuous post-COVID recovery and signalled that there would be more to come
for the property industry.

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indices both rose almost 1%.

South Africa's benchmark 2030 government bond was weaker, with the yield up
2.5 basis points to 10.285%.

-The Thomson Reuters Trust Principles.

Nigeria

Nigeria opts for small rate hike at first meeting after Emefiele's
suspension

(Reuters) - Nigeria's central bank raised its main lending rate by a
smaller-than-expected 25 basis points (NGCBIR=ECI) on Tuesday, saying it
preferred a moderate increase to anchor inflation expectations while
continuing to support investment.

In the boldest reforms seen in years, new President Bola Tinubu has ended a
decades-old petrol subsidy that has seen prices triple and ended
restrictions on foreign exchange, which has weakened the naira more than
40%, feeding into inflation.

The reforms have been mostly welcomed by investors, but analysts would have
preferred more aggressive central bank action to counter price increases.

Tuesday's decision to raise the bank's Monetary Policy Rate to 18.75% is the
first since Tinubu suspended central bank governor Godwin Emefiele in June.

Emefiele, who earlier appeared in court on fire arms charges, had used a
much-criticised system of multiple exchange rates to keep the country's
naira currency artificially strong and lent directly to businesses to try to
boost growth.

Analysts polled by Reuters had predicted a 100 basis point hike, as
inflation rose for the sixth month in a row in June to 22.79% in annual
terms.

Acting central bank governor Folashodun Shonubi told a news conference that
the balance of arguments among monetary policy committee members "leaned in
favor of a moderate rate hike to sustain efforts at anchoring inflation
expectations, narrow the negative real interest rate gap and improve
investor confidence".

At the last monetary policy meeting under Emefiele in May, the central bank
raised its policy rate by 50 basis points.

Research firm Capital Economics said investors wanted to see whether the
central bank would continue to take the inflation fight more seriously, or
follow the lead of Tinubu, who has said he prefers lower interest rates.

"There is clearly not the appetite for the major, and prolonged, monetary
policy tightening that is needed to address high inflation," the firm said a
note to investors.

Tinubu criticised the central bank's policies under Emefiele at his
inauguration, saying they needed "thorough house-cleaning".

-The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Global Markets

Global Markets

Dollar near two-week high as Fed decision looms; Aussie falls

(Reuters) - The dollar hovered close to a two-week high versus the euro on
Wednesday, while the yen consolidated near the middle of its range this
month as traders awaited crucial policy decisions from the nations' central
banks this week. The Australian dollar slid after benign inflation data
suggested the Reserve Bank of Australia would forgo a rate hike next week.

The U.S. dollar index - which measures the currency against six major peers,
but is heavily weighted toward the euro - edged 0.06% higher to 101.37 in
the Asian morning, after pushing as high as 101.65 overnight for the first
time since July 11.

The euro slipped 0.16% to $1.1042, bringing it close to the previous
session's low of $1.1036, a level last seen on July 12.

Continued signs of a resilient U.S. economy in the face of the Federal Open
Market Committee's (FOMC) steep series of interest rate increases has helped
buoy the dollar index from a 15-month trough of 99.549 reached a week ago.

In the latest data, U.S. consumer confidence increased to a two-year high in
July amid a persistently tight labor market and receding inflation.

Money market traders see a quarter point hike from the U.S. Federal Reserve
on Wednesday as a near certainty, but are split on the odds of another later
in the year, putting it at more or less a coin toss.

Meanwhile, the European Central Bank sets policy on Thursday. Again, a
quarter point hike is widely expected, but building evidence of an economic
slowdown has called into question the chances of another by year end.

"Given the deceleration in underlying inflation, we think the risk is (Fed
Chair Jerome) Powell cools on another hike by describing the FOMC as 'data
dependent,'" which would pressure the dollar, said Joseph Capurso, a
strategist at Commonwealth Bank of Australia.

"If the ECB retain their hawkish bias, by no means guaranteed but more
likely than the FOMC, EUR is likely to track higher this week."

The Bank of Japan sets policy on Friday, and speculation for a hawkish tweak
to the yield curve control (YCC), which had soared earlier in the month, has
steadily receded over recent days.

The dollar added 0.12% to 141.15 yen on Wednesday, following a rebound from
a multi-week low of 137.245 mid-month.

The Australian dollar slid 0.63% to $0.67505 after inflation slowed more
than expected in the June, suggesting less pressure for another hike in
interest rates for the central bank on Aug. 1.

That unwound most of the Aussie's 0.79% gain of the previous day, after
Beijing announced stimulus, lifting the economic outlook for Australia's key
trading partner.

"Just when it looked safe to get back in the water with Aussie longs on the
China sentiment rebound, the downside surprise on inflation casts fresh
doubt on the extent of further RBA tightening needed," said Sean Callow, a
strategist at Westpac, predicting the currency would drop below $0.67 near
term.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold trades narrow range as traders await Fed decision

Gold is highly sensitive to rising interest rates as they increase the
opportunity cost of holding non-yielding bullion. The dollar and U.S.
Treasury yields held near their two-week highs from Tuesday, making
zero-interest-bearing bullion more expensive for buyers holding other
currencies and limiting gains.

Gold prices struggled for direction in early Asian trading on Wednesday as
traders awaited the U.S. Federal Reserve's widely expected rate hike and a
potential end to its monetary tightening cycle.

FUNDAMENTALS

* Spot gold held its ground at $1,964.14 per ounce by 0110 GMT, while U.S.
gold futures edged 0.1% higher to $1,965.90.

* Market focus is on a series of central bank meetings this week, starting
from the Fed policy decision on Wednesday, followed by the European Central
Bank on Thursday and the Bank of Japan a day later.

* Traders expect the U.S. Fed to keep rates in the 5.25%-5.5% range until
March 2024, according to the CME FedWatch tool.

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

* The dollar and U.S. Treasury yields held near their two-week highs from
Tuesday, making zero-interest-bearing bullion more expensive for buyers
holding other currencies and limiting gains.

* While U.S. consumer confidence increased to a two-year high in July, they
remained fearful of a recession over the next year following high interest
rates.

* The U.S. Commerce Department is also expected to report new home sales
likely fell to a seasonally adjusted annual rate of 725,000 units in June,
from 763,000 units in the month before.

* Meanwhile in China, net gold imports via Hong Kong fell by about 29% to
their lowest in five months in June, reflecting a sluggish economic recovery
in the world's top consumer of the metal.

* Spot silver fell 0.3% to $24.61 per ounce, platinum rose 0.1% to $966.18
and palladium was up 0.3% to $1,287.86.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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
the securities of more established companies. Neither Faith Capital nor any
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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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