Bulls n Bears Daily Market Commentary : 08 June 2023

Fri Jun 9 05:06:54 CAT 2023

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Bulls n Bears Daily Market Commentary : 08 June 2023

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

ZSE commentary

ZSE soars higher as exchange rate depreciation continues.

The ZSE continued to soar higher in the session under review as exchange
rate depreciation continued both on the formal and parallel markets. The
All-Share Index surged 14.77% to close at 167,721.84pts anchored by heavies.
The Blue-chip Index garnered 16.94% to close at 104,672.14pts while, the
Agriculture Index jumped 13.62% to 628.49pts. The Mid-Cap Index was up 7.30%
to end pegged at 286,200.52pts. The top five counters of the day all rose by
15% only to be restricted by circuit breakers, highlighting that demand
continues to outstrip supply in market. The demand is being driven by excess
supply of the ZWL currency in the market. Dairibord led the group as it
closed at $552.0000 followed by mining concern RioZim that ended trading at
$368.0000. Banking Group CBZ, Hippo Valley and Meikles closed trading at
$1,860.0000, $2,434.1500, and $2,033.15000 respectively. Partially
offsetting today's gains were losses in Zimpapers that shed 14.95% to end at
a VWAP of $7.3200 followed by agriculture concern Ariston that retreated
13.72% to settle at $15.0214. Spirit and wines manufacturer AFDIS was down
3.50% at $1,238.4493 while,

apparel retailer Edgars fell 0.46% to close at $75.0000.

Activity aggregates enhanced today as volume of shares traded ballooned by
5,022.52% to see 39.16m shares worth $19.90bn exchanged hands. This
represented 1,629.66% increase in turnover. Headlining today's volume
aggregate was Ariston that claimed 83.21% of the total while, Delta was the
other notable volume contributor with 11.26%. Heavy cap counter Delta
highlighted today's value aggregate as it claimed 88.29% of the value
traded. In the ETF category four of the five funds registered positive
movement with the major gainers being Morgan & co Made in Zimbabwe and
Morgan & C0 Multi Sector ETF. The Morgan & Co duo advanced 14.87% and 14.18%
respectively. Cass Saddle ETF was stable at $3.9600 as 162,837 units
exchanged hands. The Tigere REIT closed 13.73% higher at $182.1073 after
1.36m units traded in today's session. efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand flat before current account, manufacturing data

The South African rand was little changed in early trade on Thursday,
holding onto gains made since the start of the week.

At 06:11 GMT, the rand traded at 19.0975 against the dollar, the same as its
previous close. 

The dollar was also broadly unchanged against a basket of global currencies.

On Wednesday, the rand briefly strengthened below 19 to the dollar for the
first time in three weeks, boosted by a weakening greenback and an easing of
rolling power cuts. 

Investors will look to South Africa's first-quarter current account balance
at 09:00 GMT and April manufacturing data at 11:00 GMT for clues about the
health of Africa's most industrialised economy.

"Strong rand gains continue, yet USD/ZAR now faces the tough test of
breaking through the psychologically important 19.00 level," said Rand
Merchant Bank analysts in a research note.

The rand has been recovering after a tumultuous May where it lost over 7%
against the dollar on record power cuts and U.S. allegations that South
Africa had supplied arms to Russia.

Nonetheless, investor sentiment remains sour with survey data on Wednesday
showing business confidence at a three-year low. 

Kenyan shilling and Zambian kwacha seen falling further

(Reuters) - The Kenyan shilling and Zambia's kwacha are seen extending
losses in the next week to Thursday, while the Ugandan shilling, Nigerian
naira and Ghana's cedi are expected to be broadly stable, traders said.

KENYA

Kenya's shilling KES= is expected to fall further, as a long-running bearish
trend remains deeply entrenched.

On Thursday commercial banks quoted the shilling at 139.15/139.35 to the
U.S. dollar, compared with 138.50/70 a week earlier.

One trader said foreign-currency demand remained strong and meagre dollar
inflows were being picked up at much higher prices than 139.10 to the
dollar.

"We are adjusting to higher levels," the trader said.

UGANDA

Uganda's shilling UGX= is forecast to stay mostly unchanged as jitters over
possible aid cuts by Western donors because of the enactment of a harsh
anti-LGBTQ law start to fade.

Commercial banks quoted the shilling at 3,720/3,730 to the U.S. dollar,
compared to last Thursday's close of 3,740/3,750.

A trader at one commercial bank said fears that donors would move quickly to
cut aid over the law backed by President Yoweri Museveni were easing.

"I anticipate as those worries sort of peter out, that should help the local
unit to keep its balance," the trader said.

ZAMBIA

Zambia's kwacha ZMW= is likely to continue trading weaker as demand for
hard-currency continues to outweigh supply.

On Thursday commercial banks quoted the currency of Africa's second-largest
copper producer at 20.2700 per dollar from 19.7400 at the close of business
a week ago.

"The local unit is anticipated to depreciate further in the near term given
that current market trends persist," Access Bank said in a note.

NIGERIA

Nigeria's naira is seen unchanged on the official market after the central
bank allowed the currency to drop 2% to a record low on Wednesday as it
tries to find a way to unify multiple exchange rates.

The naira NGN=D1 traded at 465 naira on the official market on Thursday
after dropping to a low of 475 naira on Wednesday, outside a previous band
of 460 to 467 naira to the dollar.

The naira was at 765 NGNP= to the dollar on the parallel market.

"We expect the naira to be stable at the current level next week," one
trader said.

At a central bank currency auction on Friday the new spot rate of 475 naira
to the dollar is expected to be the minimum bid, the trader added.

GHANA

Ghana's cedi GHS= is expected to remain stable due to higher remittance
inflows that have helped meet corporate foreign-currency demand, traders
said.

Refinitiv Eikon data showed the cedi trading at 10.7000 to the dollar on
Thursday, compared to 10.8000 at last Thursday's close.

"We expect the currency to hold fairly steady against the dollar in the
coming week as corporate FX demand is largely matched off by remittance
inflows," said Andrews Akoto, head of trading at Absa Bank Ghana.

Stanbic trader Selasi Kabo also predicted the cedi would be broadly
unchanged.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slips from near three-month highs as traders gauge rate outlook

(Reuters) - The dollar fell slightly on Thursday from near three-month
highs, a day after a surprise rate hike from the Bank of Canada suggested
the Federal Reserve may also have more work to do to combat inflation.

The euro was last up 0.3% at $1.073 against the dollar - the most traded
currency pair in global markets.

That was despite data showing that the euro zone economy slipped into a mild
recession in the first quarter, after gross domestic product statistics were
revised.

The dollar index, which measures the currency against six major peers, was
down 0.19% to 103.84. Last week the index hit 104.7, the highest since March
15.

A view among investors that the U.S. 2-year bond yield had potentially
peaked was weighing on the dollar, said Simon Harvey, head of FX analysis at
Monex Europe.

But, he added: "We must highlight that the moves we're seeing today are
marginal."

Yields on the U.S. 2-year Treasury rose after the Bank of Canada decision
and hit 4.592% on Thursday before slipping back to 4.565%. Bond yields are
key drivers of currencies, with higher rates typically attracting
investment.

The Bank of Canada surprised traders by raising interest rates to 4.75%, a
22-year high. It followed a rate hike by the Reserve Bank of Australia on
Tuesday.

"The view here was that if both Australia and Canada felt the need for
further hikes, in all probability the Fed would too," Chris Turner, head of
markets at ING, said in a note to clients.

Against Canada's dollar, the U.S. dollar was down 0.19% at C$1.335, after
falling 0.24% on Wednesday.

The Australian dollar was up 0.43% at $0.668, taking its monthly gains to
roughly 2.7%. Sterling was 0.21% higher at $1.247.

The Canadian decision put the spotlight back on the Federal Reserve, which
sets interest rates on Wednesday next week.

According to derivative market pricing, traders currently think there's a
70% chance the Fed will hold rates steady next week, and a 30% chance of a
25 basis point (bp) increase.

They think the Fed could then raise rates by 25 bps in July, after
policymakers hinted at a so-called skip. That would boost the Fed funds rate
to a range of 5.25% to 5%.

The European Central Bank sets rates on Thursday and traders broadly expect
a 25 bp hike, to be followed by another 25 bp increase in July, taking rates
to 3.75%.

In Asia, the dollar was down 0.29% against Japan's yen at 139.71 yen per
dollar, after rising 0.37% the previous day.

The onshore and offshore yuan eased to their weakest in six months against
the dollar, further pressured by economic worries.

Data released on Wednesday showed China's exports shrank much faster than
expected in May while imports extended declines, raising doubts about the
country's fragile economic recovery.

Meanwhile, the Turkish lira slipped to a record low of 23.39 per dollar in
early Asia trading. It remained under pressure, last at 23.36.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil prices fall on demand fears, headed for second weekly loss

(Reuters) - Oil prices fell in early Asia trade on Friday as demand concerns
outweighed the prospect of tighter supply from global producers while
investors remained sceptical that the United States and Iran could strike a
nuclear deal.

Brent crude futures dropped 36 cents, or 0.5%, to $75.60 a barrel by 0058
GMT, while the U.S. West Texas Intermediate crude futures eased 33 cents, or
0.5%, to $70.96 a barrel.

Both benchmarks slid by around $1 on Thursday, rebounding from their earlier
losses of more than $3, after the U.S. and Iran both denied a report by the
Middle East Eye that they were close to a nuclear deal.

For the week, they were on track for about 1% losses and for a second week
of losses. Oil prices rose early this week following Saudi Arabia's pledge
over the weekend for deep output cuts, but they pared gains after rising
U.S. fuel stocks and weak Chinese export data.

"Apparently, market is still sceptical about the U.S.-Iran nuclear deal,"
said Satoru Yoshida, a commodity analyst with Rakuten Securities.

There is both upside and downside pressure on prices, he said, with fears
over tighter supply and expectations of higher demand as the United States
enters driving season being offset by worries over further U.S. interest
rate hikes and slow pickup in China's fuel demand.

"Oil prices are expected to stay in a range of about 3 dollars above and
below $70 for WTI in the near term," Yoshida said.

The United States and Iran on Thursday both denied a report that they were
nearing an interim deal under which Tehran would curb its nuclear program in
return for sanctions relief that would include exporting up to 1 million
barrels of oil per day.

Some analysts say, however, oil prices could get a lift if the U.S. Federal
Reserve skips a rate hike at its next meeting on June 13-14. Economists
polled by Reuters expect no hike at the meeting.

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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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
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opinions expressed and recommendations made are subject to change without
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