Bulls n Bears Daily Market Commentary : 06 June 2023

Wed Jun 7 02:56:21 CAT 2023

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Bulls n Bears Daily Market Commentary : 06 June 2023

ZSE commentary

ZSE in rally as second week of June unfolds.

The market continued to rally in the second week of the month as gains were
recorded across the board. The mainstream All Share Index jumped 8.81% to
122534.30pts while, the ZSE Top Ten Index climbed 9.65% to 74019.74pts on
the back of gains in heavies. The ZSE Agriculture Index soared 8.56% to
476.55pts while, the Mid Cap Index edged up 6.19% to 234085.67pts. A similar
gain of 15.00% was witnessed in NMB, FMP, BAT, FBC and SeedCO Limited as the
quintet closed at respective prices of $115.0000, $50.6000, $6,215.7500,
$247.3000, and $1,474.5888. Other notable risers of the day were CBZ
(+14.95%), Delta (+14.77%) and Hippo (+14.44%). The market saw twenty-five
rising stocks with nil fallers to register a positive breadth.

Activity aggregates were depressed in week-opener as seen in volumes that
plunged 47.77% to 7.69m while, turnover tumbled 20.59% to $5.36bn. OKZIM,
Delta and SeedCo claimed a combined 82.80% of the volume aggregate and
88.62% of the value outturn. Foreign purchases amounted to $418,635.00
while, sales stood at $24,332,620.00 to leave the market with a net funds
outflow position. MIZ charged 14.77% to $3.8098 while, Old Mutual ETF
advanced 6.04% to $26.0102. ThemDatvest MCS and Cass Saddle grew 0.08% and
0.04%. The sole faller of the day was Morgan and Co MCS that shed 3.48% to
$86.0000.. efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand extends gains ahead of GDP data

The South African rand was stronger in early trade on Tuesday ahead of the
country's first quarter gross domestic product (GDP) figures, which could
shed light on the health of Africa's most industrialised economy.

At 0633 GMT, the rand traded at 19.2300 against the dollar , around 0.17%
stronger than its previous close.

The rand had recovered more than 1% against the greenback on Monday after
crashing in May on the back of souring investor sentiment.

The dollar was last trading at 103.830 - around 0.163% weaker - against a
basket of global currencies.

Statistics South Africa will at 0930 GMT release the country's first quarter
GDP figures.

The previous quarter posted a contraction of 1.3% and another negative
figure would classify the economy as facing a technical recession.

Analysts polled by Reuters are hopeful that the first quarter has brought
growth, predicting 0.4% quarter-on-quarter growth.

The South African economy is being crippled by the worst rolling blackouts
on record, leaving businesses and households in the dark for up to 10 hours
daily.

Nigeria

Naira remains stable, exchanges at N464.67 to dollar

Naira remained stable on Tuesday, exchanging at N464.67 to the dollar at the
Investors and Exporters' window.

The local currency did not change from its value on Monday, while the open
indicative rate closed at N464.96 to the dollar on Tuesday.

An exchange rate of N467 to the dollar was the highest rate recorded within
the day's trading before it settled at N464.67.

The naira sold for as low as N460 to the dollar within the day's trading.

A total of 186.02 million dollars was traded at the official Investors and
Exporters' window on Tuesday.

 <mailto:info at bulls.co.zw> 

Global Markets

China's state banks told to lower cap on dollar deposit rates - sources

(Reuters) - A Chinese self-regulatory body overseen by the central bank has
told major state-owned banks to lower dollar deposit interest rates, four
people with direct knowledge of the matter said on Tuesday, in the latest
move to shore up the yuan currency.

Interest rates offered by the banks would be capped at 4.3% for dollar
deposits of $50,000 and above, said the people, who declined to be named as
they were not authorised to speak to the media.

The lowering of interest rates came into effect on Tuesday, they said,
adding the new rates the big banks can offer is set to be lowered by as much
as 100 basis points from the previous ceiling of 5.3%.

The move could encourage Chinese companies, especially exporters, to settle
their foreign exchange receipts in China's yuan CNY=CFXS, which has weakened
to six-month lows against the dollar.

A buoyant dollar and the Federal Reserve's aggressive interest rates hikes
since last year have prompted many Chinese companies to hoard dollar
receipts.

The yuan has lost more than 6% against the dollar since highs hit in
January, when global markets embraced China's border reopening, and is one
of the worst performing Asian currencies this year. It last traded at 7.1199
per dollar. CNY/

The move also came after the central bank said last month it would
resolutely curb large fluctuations in the exchange rate and study the
strengthening of self-regulation of dollar deposits.

The People's Bank of China did not immediately respond to a Reuters request
for comment.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold and silver prices look vulnerable as seasonal summer weakness kicks in
- DeCarley Trading's Carley Garner

(Kitco News) - The gold market has shown resilience with prices holding
critical support around $1,950 an ounce even as the Federal Reserve is
expected to maintain a tight grip on its monetary policy; however, despite
the relative buoyancy in the marketplace, one strategist said that now is
not the time.

In an interview with Kitco News, Carley Garner, co-founder of the brokerage
firm DeCarley Trading, said that while she remains bullish on gold in the
long term, now is not the time to buy.

She explained that gold is entering a traditionally weak seasonal period
that could weigh on prices, and she expects that gold will have one more
correction before it starts its rally to all-time highs.

"If we break below support at $1,950, we could see prices fall significantly
lower," she said. "There is not much holding up the market before $1,880.
It's a big air gap lower. If you are bullish and you want to start building
a position now, you should only nibble at the market, not load up."

She added that gold's 200-day moving average of $1,880 represents a
significant support level.

Garner said that investors looking to play the market might want to buy
weekly options. However, she said that she wouldn't look to buy gold until
at least late July or even early September, depending on where prices are.

Although Garner expects to see gold fall lower in the short term, she added
that she is not actively shorting the market. She said that elevated levels
of market uncertainty continue to provide some support for the precious
metal.

"I would rather be a little bit late to the gold rally than be caught
short," she said.

As to what would shift her near-term sentiment in gold, Garner said that she
would need to see a clear break above $2,000 an ounce.

"Unless we get a break above that resistance level, gravity will take hold
of the price," she said.

Garner is also short-term bearish on silver. She said she expects one more
selloff before a long-term rally.

"I think we need to see some weak longs shaken out of silver before we see a
sustainable move higher. I think prices could fall to $20 an ounce before
they move back to $30," she said.

Along with seasonal factors, Garner said that the Federal Reserve's monetary
policy stance continues to keep investors out of the gold market. Although
markets are priced in for the central bank to hold interest rates unchanged
next week, there are still expectations that rates will go higher before the
summer is done.

Plenty of value in gold as WisdomTree forecasts $2,285 by Q1 2024

However, a growing chorus of analysts and economists have said that further
economic weakness will keep the Federal Reserve on the sidelines in July as
well.

"I hope that the Fed is done raising interest rates," she said. "They have a
habit of becoming fixated on one idea. They want to see inflation down to
2%, but I think that is going to get them in trouble. They should look at a
target of 3% for now and go from there."

Despite her growing concerns, Garner said that if the Federal Reserve can
pull back on the monetary policy reins, it would support sluggish economic
growth through the rest of the year, avoiding a recession. She said that in
this environment, the asset she is watching is copper.

Along with fears of a U.S. recession, copper has also been held back this
year by volatile economic activity in China; however, Garner said that she
expects the base metal to have priced in that weakness.

"I like copper on the upside. The price is holding $3.50, which is a
critical trend line. There is potential for copper prices to push to $4.50,"
she said.

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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