Bulls n Bears Daily Market Commentary : 07 June 2023

Thu Jun 8 00:48:07 CAT 2023

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Bulls n Bears Daily Market Commentary : 07 June 2023

ZSE commentary

ZSE extends positive stride.

Gains on ZSE stretched into the midweek session to see the primary All Share
Index growing 7.39% to 146,132.91pts while, the Blue-Chip Index rose 7.85%
to 89,508.46pts. The Agriculture Index ticked up 1.77% to 553.15pts while,
the Mid Cap Index added 5.87% to 266,733.58pts. NMB, ZB Financial Holdings
and BAT surged a similar 15.00% to settle at $132.2500, $555.4500 and
$8,220.3000. Beverage giant Delta also jumped 15.00% to close at $3,620.1000
while, CBZk Holdings capped the top five gainers' pack on a 15.00% uplift to
end the day pegged at $1,617.3968. There were no laggards in the midweek
session as all counters registered gains. Activity aggregates were depressed
in the session as volumes traded declined 87.22% to 764,370 shares while,
value outturn plummeted 74.73% to $1.15m.

The volume leaders of the day were Mashonaland Holdings (57.71%) and Ecocash
Holdings (12.86%). Delta, SeedCo Limited, Mashonaland Holdings and Econet
were the top value drivers after the quartet contributed a combined 79.85%
of the total. In the ETF section, Cass Saddle climbed 14.05% to $3.9600
while, the Datvest MCS advanced 10.18% to close at $7.4960. MIZ ETF and
Morgan and Co MCS soared 14.80% andk 10.61% to $4.4100 and $105.0953
respectively. The Old Mutual ETF gained 5.51% to end the day pegged at
$27.5679. The Tigere REIT firmed 7.12% to settle at $160.1186 on 25,300k
units.

efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand firms to below R19 per US dollarIn early trade the local currency was
at R19.28 against the dollar.

The South African rand strengthened below R19 to the US dollar for the first
time in three weeks on Wednesday, as a weakening greenback and an easing of
rolling power cuts, known as load shedding, boosted the currency.

The rand firmed more than 1% at R18.97 to $1, its strongest level since May
16, before retreating to R19.04 at 1233 GMT.

The dollar was last trading at 103.940, around 0.14% weaker, against a
basket of global currencies.

"Externally, the USD is weaker today. which will be providing a tailwind for
the rand," Kieran Siney of research firm ETM Analytics, said.

"News that the nation's power utility Eskom is suspending daytime load
shedding for the time being has provided a boost to investor sentiment."

He added that news reports that South Africa is looking to host the Brics
summit online or in China, to avoid implementing an International Criminal
Court arrest warrant for Russian President Vladimir Putin, had boosted
sentiment.

The rand lost 7% in May amid record deep power cuts and US allegations that
South Africa had supplied arms to Russia last year, pushing it as low as
R19.90 against the greenback last week and leading to fears it would breach
R20.

"The fact that the rand has pulled back more against the US dollar than
other EM's could be down to the fact that the rand was disproportionally
undervalued against its (emerging market) peers and a bit of rebalancing was
warranted," said Andre Botha, senior dealer at TreasuryONE.

The country managed 0.4% growth in gross domestic product for the first
quarter and dodged a recession, data showed on Tuesday.

Investor outlook mostly remains bleak as the country's rolling blackouts
show no signs of fully abating. A business confidence survey published on
Wednesday dropped to its lowest level in three years.

Nonetheless, South Africa's international dollar bonds rallied, with some
longer dated maturities up more than 0.7 cents in the dollar.

"(It) suggests that there could be some significant portfolio inflows as
investors take advantage of the deep discounts and the attractive yields on
offer," Siney said.

South Africa's local benchmark 2030 government bond also strengthened, with
the yield down 9 basis points at 10.875%.

Nigeria

Nigeria central bank allows naira to weaken 2% to record low

(Reuters) - Nigeria's central bank allowed the naira to drop about 2% on the
official market to a record low on Wednesday, but the currency's rate
remained above where it trades at central bank auctions and on the black
market.

Nigeria is trying to find a way to unify its multiple exchange rate system,
used to keep the naira artificially strong.

New President Bola Tinubu told members of his governing party last week that
the country would not have multiple exchange rates anymore.

The naira fell as low as 475 naira to the U.S. dollar from Tuesday's trades
of around 465 naira, before recovering to 466 naira.

Traders said the central bank had allowed them to trade the currency as weak
as 475 naira to the dollar on the official market, outside a previous band
of 460 to 467 naira to the dollar.

In the past, the bank has allowed the naira to weaken in 5 naira increments.

The central bank has been adjusting the naira gradually on the official
market to avoid a large-scale devaluation.

The bank sold the dollar at 645 naira at its Friday auction, fuelling
speculation that a devaluation which could weaken the official exchange rate
closer to the auction level was imminent.

Last Thursday, the central bank denied devaluing the naira, following media
reports of a big fall in the currency after Tinubu met the central bank
governor.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar edges up against yen as investors wait on inflation data, Fed

The dollar edged higher against the yen on Wednesday as investors awaited
U.S. inflation data for May and the Fed's interest rate decision next week,
while the Canadian dollar jumped after the Bank of Canada hiked rates.

The U.S. central bank is expected to hold rates steady next Wednesday as it
evaluates the impact of recent rate increases, though Fed fund futures
traders are pricing for an additional rate hike in July.

Consumer inflation data on Tuesday is expected to show that prices rose by
0.30% in May.

"We expect a fair degree of consolidation ahead of the Fed decision next
week," said Bipan Rai, North American head of FX strategy at CIBC Capital
Markets in Toronto. "That CPI number's going to be critical for the Fed
decision as well. To me it makes sense that we don't see large bets placed
either way at this point."

The dollar gained 0.37% to 140.14 yen

, while the euro

rose 0.05% against the U.S. currency to $1.0696. The dollar index

was little changed on the day at 104.12.

Data on Wednesday showed that the U.S. trade deficit widened by the most in
eight years in April as imports of goods rebounded while exports of energy
products declined.

Traders have also priced out most expectations that the Fed will cut rates
this year as inflation remains above target.

"There is persistence and resilience in inflation in the U.S., but also in
much of the G10, as well, meaning that central banks are likely to be
cautious," said Rabobank chief strategist Jane Foley.

The Canadian dollar strengthened after the Bank of Canada hiked its
overnight benchmark rate to 4.75%, the highest level in 22 years.

The U.S. dollar was last down 0.23% against the loonie at C$1.3372.

Although the rate hikes by foreign central banks could put pressure on the
greenback, the prospect of an additional Fed rate increase in July is likely
to limit losses.

The Fed next week may indicate that it is not done raising rates, and "that
might short circuit the idea of the dollar getting hit because the Fed is
going to be out of step with Canada, Australia and probably the ECB during
this month's meeting, because they'll still have the idea that there's more
to come," said Lou Brien, market strategist at DRW Trading in Chicago.

The Australian dollar turned negative a day after the Reserve Bank of
Australia raised rates by a quarter-point to an 11-year high of 4.1%.

Australia's central bank chief on Wednesday stepped up a warning of more
rate hikes ahead to temper rising price pressures.

The Australian currency was last down 0.25% at $0.6652, after earlier
reaching $0.6718, the highest since May 11.

The offshore Chinese yuan reached its weakest level against the U.S. dollar
since Nov. 30 after data earlier on Wednesday showed that China's exports
shrank much faster than expected in May and imports fell as manufacturers
struggled to find demand abroad and domestic consumption remained sluggish.

The yuan was last at 7.1477 against the greenback.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips 1% as US yields tick higher, focus still on Fed

Gold prices fell on Wednesday, weighed by an uptick in U.S. bond yields,
while investors looked forward to inflation data and Federal Reserve policy
meeting next week for more clarity on interest rate path.

Spot gold was last down 1.15% to $1,940.2676 per ounce. U.S. gold futures

settled down 1.2% to $1,958.40.

Benchmark U.S. 10-year Treasury yields rose to a more than one-week high.
The dollar index steadied against its rivals.

"Yields have remained relatively elevated keeping some light pressure on the
gold market," said David Meger, director of metals trading, High Ridge
Futures.

"Clearly inflation is still the main focal point of this market. At this
point the expectation is that the Fed is going to pause. However, if those
inflationary numbers remain extremely elevated, you could see a shift in
outlook."

The U.S. inflation report for May, due on June 13, ahead of the Fed meeting,
will provide investors with more clarity about the health of the world's
largest economy.

The U.S. economy is strong amid robust consumer spending but some areas are
slowing down, U.S. Treasury Secretary Janet Yellen said, adding that she
expects continued progress in bringing inflation down over the next two
years.

The Fed will not raise interest rates for the first time in well over a year
at its June 13-14 meeting, according to economists polled by Reuters.

Gold prices are highly sensitive to rising U.S. interest rates, as these
increase the opportunity cost of holding non-yielding bullion.

Data from China showed exports shrank much faster than expected in May,
hinting of a slowing global economy that could crimp demand for the precious
metal, Jim Wyckoff, senior analyst at Kitco, wrote in a note.

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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