Bulls n Bears Daily Market Commentary : 20 June 2023

Wed Jun 21 06:07:48 CAT 2023

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Bulls n Bears Daily Market Commentary : 20 June 2023

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

ZSE commentary

Heavies drag down the market.

Heavies dragged down the market in Tuesday's session to see their own ZSE
Top Ten Index record the biggest drop of 9.78% to end at 96703.58pts. The
mainstream All-Share Index trimmed 6.64% to close at 168653.34pts while, the
ZSE Agriculture Index weakened 0.53% to 700.94pts. The only gainer amongst
the indices we review was the Mid-Cap Index that rose 2.89% to close at
376615.24pts. Econet headlined the losers' pack on a 14.98% decline to
$861.5783 as beverages giant Delta succumbed 14.84% to $2932.6443. Hotelier
Meikles Limited slid 14.59% to $1785.0000 while, retailer OKZIM gaveup 9.15%
to finish at $267.9735. Sugar refiner Star Africa completed the top five
fallers of the day as it shed 4.20% to $5.1251. Mining house RioZim and
bankers FBC Holdings gained a similar 15.00% end pegged at $423.2000 and
$824.4000. Cable manufacturer Cafca swelled 14.99% to $664.5500 as clothing
retailer Truworths advanced 14.39% to $9.1000. Zimre Holdings was the fifth
gainer as it added 12.72%

to $71.0136. The market enjoyed a positive breadth of two as eleven stocks
gained against nine that lost ground.

Activity aggregates were depressed in the session as volumes dropped 94.13%
to 869,270 shares while, value outturn shrunk 34.98% to $895.91m. Delta and
FBC Holdings were the top value and volume drivers as they contributed
93.44% and 50.64% to the aggregates apiece. Other notable volume drivers
were Star Africa (20.49%), Ecocash Holdings (11.97%) and First Mutual
Holdings (7.76%). On the ETFs section, Cass Saddle was the sole winner as it
gained 0.36% to $4.8500. Datvest, Old Mutual ETF and Morgan & Co MCS fell
10.78%, 9.02% and 3.09% to end at $13.3249, $47.9901 and $140.5224
respectively. The Tigere REIT was unchanged at $330.0000 after trading 236
units.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand, stocks weaken as US dollar firms

(Reuters) - South Africa's rand and stocks lost over 1% on Tuesday as the
dollar firmed on U.S. housing data.

At 1510 GMT, the rand weakened 1.03% to 18.3675 against the dollar .

The dollar index , which measures the U.S. currency against six major
rivals, rose 0.156% to 102.64.

The rand lost over 7% against the greenback in May, but it has managed to
recover those losses in June on the back of less intense power cuts by state
utility Eskom.

The central bank's leading indicator (ZALEAD=ECI) for April dropped 1.0%
month-on-month, falling for the fourth consecutive month this year, data
showed on Tuesday.

The indicator collects data on vehicle sales, business confidence, money
supply and other factors to gauge the outlook for Africa's most
industrialised economy.

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indexes dropped around 1.6%.

South Africa's benchmark 2030 government bond was weaker, the yield up 4.5
basis points to 10.825%.

Nigeria

Naira closes at N756/$ as official, parallel market rates converge week
after FX policy

The Nigerian naira strengthened on Tuesday to close at N756 to the dollar at
the investors and exporters (I&E) window. 

According to FMDQ Securities Exchange Limited, the closing rate represents a
1.8 percent appreciation from the N770 recorded on Monday.

TheCable understands that FX rates converged at the official and parallel
markets on Tuesday, a week after the government unified the exchange rate
windows.

Bureau de Change (BDC) operators told TheCable that local currency traded
between N754 and N757 to greenback in the parallel market.

The naira has consistently experienced fluctuations since the introduction
of new policies by the Central Bank of Nigeria (CBN) which sparked
significant volatility in the market.

The currency had traded at a record high of N791 before recovering to close
at N663 hours after the CBN collapsed all FX windows into the I&E window
last week.

"There is no way you can get a stable rate in the market. If I give you a
rate now, in the next hour, it will change again," a BDC operator said.

"This thing depends on demand and supply."

Speaking on price stability, Kingsley Obiora, the deputy governor CBN, said
the apex bank plans to implement more reforms in the next couple of weeks to
reposition the local currency and relinquish more control.

The deputy governor said the foreign exchange market is already operating on
a willing buyer, willing seller basis; stressing that the central bank "has
not entered the market as a buyer or seller".

"We are allowing the market itself to set a price," he had said in a recent
Bloomberg interview.

"The central bank expects official and parallel-market exchange rates to
converge soon. I don't think it will take a long time for that to happen."

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar finds footing on housing data as yuan falters

(Reuters) - The U.S. dollar was firm in Asia trade on Wednesday following
surprisingly strong U.S. housing data, while the yuan and Aussie dollar
nursed losses and focus turned to Federal Reserve Chair Jerome Powell's
appearance before Congress later in the day.

Single family housing starts surged 21.7% in May against expectations they'd
be more or less flat. Traders discounted it somewhat since the jump wasn't
led by a leap in permits, but it still gave the dollar a boost ahead of
Powell's testimony.

The greenback was marginally stronger at $1.0916 per euro overnight and
steady early in the Asia session. The yen was also firm at 140.50 per dollar
ahead of an appearance by Bank of Japan Governor Kazuo Ueda on Wednesday.

The Aussie and yuan were Tuesday's largest losers and were in no mood for a
bounce early on Wednesday. China had cut rates by less than expected and
while its post-COVID recovery stalls, hoped-for major stimulus is yet to
arrive.

The yuan fell about 0.3% overnight and in offshore trade early on Wednesday
the currency was pinned at 7.1826 per dollar, near a seven-month low.

With China's Premier Li Qiang abroad in Europe, traders see an imminent
announcement of further stimulus as unlikely.

The Aussie had taken a further beating thanks to Tuesday's
less-hawkish-than-expected central bank minutes following this month's rate
hike. It fell 0.9% overnight and last bought $0.6790.

"The path of least resistance is further declines," said Commonwealth Bank
of Australia strategist Joe Capurso.

"The Aussie could dip below 0.6700 this week, particularly if Powell is
hawkish," he said. Powell is due to begin his testimony at 1400 GMT.

The New Zealand dollar was dragged lower in sympathy, breaking below its
50-day moving average before steadying just above its 200-day moving average
at $0.6168.

It is under pressure after the central bank flagged it was finished with
hikes, while data showed the economy in recession.

"From here we see further stagnation in growth," said Mieneke Perniskie, a
currency trader at Kiwibank in Wellington.

"Our pick is that the kiwi will head towards the $0.57 level before the year
is out, but it won't be in a straight line," she said. "First off the bat we
will need to crack the $0.59 level. That may only be a matter of weeks
away."

Elsewhere sterling recovered some of its overnight drop to sit at $1.2760.
British inflation data is due later in the day with economists hoping for
signs its easing.

The data is likely to be decisive for the Bank of England, which meets on
Thursday with markets currently pricing about a 3/4 chance of a 25 bp hike
and a 1/4 chance of a 50 bp hike.

"Sterling may halt the current reversal (if) expectations are reshaped, with
the pair potentially jumping back above 1.28 and re-testing last week's
resistance at 1.2847," said Daniela Hathorn, analyst at Capital.com.

The U.S. dollar index was steady at 102.55. Bitcoin jumped 5% overnight to
break over $28,000 for the first time since late May, helped by the launch
of a new crypto exchange backed by Fidelity, Citadel Securites and Charles
Schwab.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold range-bound as markets position for Powell's testimony

Gold traded in a narrow range on Wednesday as traders refrained from making
big bets ahead of Federal Reserve Chairman Jerome Powell's congressional
testimony, which could offer further insight into the central bank's
interest-rate hike plan.

FUNDAMENTALS

* Spot gold was almost unchanged at $1,936.99 per ounce by 0028 GMT. U.S.
gold futures too were little changed at $1,948.20.

* Powell's congressional testimonies due on Wednesday and Thursday will be
scanned for U.S. interest rate outlook.

* Two Federal Reserve policymakers and an economist nominated to join them
on the Fed's Washington-based board on Tuesday said their focus is on
bringing down too-high inflation so that the U.S. economy can get back to
sustainable growth.

* The Senate Banking committee also released prepared remarks from Fed Board
nominee Adriana Kugler, who said returning inflation to the central bank's
2% target is key to setting a strong foundation for the U.S. economy.

* Gold is considered a hedge against inflation, but interest-rate hikes
raise the opportunity cost of holding non-yielding bullion.

* Traders are now pricing in an about 78% chance of a Fed rate hike in July,
according to the CME Fedwatch tool.

* U.S. Treasury yields fell on Tuesday, in line with declines in Europe and
the UK, as investors priced in market expectations that the Fed is near the
end of its rate-hiking cycle, with some sectors of the economy having shown
signs of moderation.

* Meanwhile, pressure is mounting on China's cash-strapped local governments
as authorities move to shut a private funding route for their financing
arms, according to planned new rules and people familiar with their aims,
raising credit risks and default worries.

* Spot silver ticked down 0.1% to $23.1517 per ounce, platinum fell 0.3% to
$959.76, while palladium rose 0.4% to $1,385.18.

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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