Bulls n Bears Daily Market Commentary : 28 June 2023

Wed Jun 28 21:31:52 CAT 2023

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Bulls n Bears Daily Market Commentary : 28 June 2023

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

ZSE commentary

Zimbabwe Stock Exchange (ZSE) 

The overall Market Cap for today increased by 0.62% to close at ZWL 14.13
billion. Total turnover increased by 109.60% to close at ZWL2.79 billion,
with an increase of 228.41% in the total volumes traded which later closed
at a value of ZWL2.81 million.  Delta, Econet and Fbc Holdings, were today's
three most traded counters contributing 66% of the total turnover.

The benchmark All-Share Index increased by 0.67% to close at 173,040,84
points at the back of 18 risers and 7 decliners. The Top 15 Index improved
by 0.60% to 121,262.41 points with the Top 10 Index also increasing by 0.69%
to close at 95,210.79 points. 

Cafca, First M. Limited and General Belting Holdings topped the risers' list
for the day after gaining 15.00% each to close at $1,535.40, $106.95 and
$8.05, respectively. Nmbz Holdings and Nampak Zimbabwe capped the list after
advancing by 14.71% and 14.55% to close at $188.00 and $63.00, respectively.

Meikles Limited and First M. Properties lost 14.53% and 8.33% to close at
$1,098.23 and $110.00, respectively. Dairibord, CBZ Holdings and Econet also
traded in the negative in today session after each lost 0.09%, 0.09% and
0.02% to later close at $467.56, 2,925.70 and $899.51, respectively. 

Victoria Falls Stock Exchange (VFEX) 

The VFEX All Share Index improved by 0.07% to close at 76.94 points.-Akribos
Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Nigeria

Naira gains, trades at N763/$ at I&E window amid sallah celebration

The naira, on Tuesday, appreciated by 0.67 percent to N763 to a dollar at
the investors and exporters (I&E) window.

Figures from the FMDQ Securities Exchange, a platform that oversees foreign
exchange trading in Nigeria, show that the greenback was quoted at the rate
of N763 as against N768.17 quoted on Monday. 

The local currency, which opened on Tuesday at N760.50, recorded a high of
N841 and a low of N467. 

The daily foreign exchange market turnover rose by 23.98 percent to $245.65
million from $198.13 million published in the previous market session on
Monday.

Meanwhile, the greenback was sold at N760 at the parallel section of the
market, Bureaux De Change operators (BDCs) in the Ikeja area of Lagos,  told
TheCable.

Since President Bola Tinubu made a case for the revamping of monetary policy
in his inaugural speech on May 29, Nigeria has shown seriousness in
critically reforming the financial sector.

The Central Bank of Nigeria, on June 14, announced the unification of all
segments of the forex exchange (FX) market, signalling the floating of the
naira.

This was quickly accompanied by the removal of restrictions on inflows into
domiciliary accounts. On Tuesday, the apex bank pegged daily transaction
limits to N50,000 for contactless payment.

The moves seemed to be yielding gains with Nigeria's stocks rising to a
two-month high in May. Later on June 13, the country's bonds raced to a
five-month high after the president suspended Godwin Emefiele as the central
bank governor.

Investors considered Emefiele's exit to be an end to a raft of policies that
have kept foreign investments away from Africa's largest economy.

"Glad to see President Bola Tinubu taking concrete steps to scrap Nigeria's
harmful government subsidies and multiple exchange rates," David Malpass,
former president of the World Bank, had said.

"These are important steps toward currency stability, lower inflation, and
reduced corruption in Africa's most populous country."

South Africa

South African rand falls against stronger dollar

(Reuters) - The South African rand weakened on Wednesday as the U.S. dollar
edged higher after Federal Reserve Chair Jerome Powell did not rule out the
possibility of another interest rate hike next month.

At 1537 GMT, the rand traded at 18.6850 against the U.S. dollar , around
0.88% weaker than its previous close.

The dollar last traded at 102.97 against a basket of global currencies, up
0.45%, fuelled by hawkish comments by Powell.

He was speaking at a European Central Bank conference in Portugal along with
Bank of England Governor Andrew Bailey, ECB President Christine Lagarde and
Bank of Japan Governor Kazuo Ueda.

Like other emerging market currencies, the risk-sensitive rand is
susceptible to moves in global drivers such as the dollar, in the absence of
local catalysts.

The rand strengthened at the start of the week as analysts speculated that
the weekend's aborted mutiny in Russia may mean President Vladimir Putin
could skip a BRICS summit, where South Africa would in theory be obliged to
arrest him on a war crime charge.

The BRICS group of emerging economies -- Brazil, Russia, India, China and
South Africa -- is due to hold the summit in Johannesburg in August.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI)
closed about 0.35% stronger.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 4 basis points to 10.480%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar strengthens as Fed's Powell speaks, yen pressured

The dollar index rose on Wednesday as Federal Reserve Chair Jerome Powell
did not rule out the possibility of another rate hike by the central bank at
its next meeting in July.

Powell, speaking at a European Central Bank (ECB) conference along with Bank
of England Governor Andrew Bailey, ECB President Christine Lagarde and BOJ
Governor Kazuo Ueda, noted that most central bankers still see two rate
rises this year, and did not rule out the possibility of more rate hikes at
its next policy meeting set for July 25-26.

Expectations for a 25 basis point hike at the July meeting moved up to 84.3%
from 76.9% a day earlier, according to CME's FedWatch Tool.

"It's not a big change. To me they are all reading from the same scripts
from their recent central bank meetings," said Erik Bregar, director, FX &
precious metals risk management, at Silver Gold Bull in Toronto.

The dollar index

rose 0.44% at 102.94

The yen, which has been under pressure as the Bank of Japan (BOJ) has been
an outlier among global central banks in keeping a loose monetary policy,
weakened to a fresh 7-month low of 144.57 per dollar. BOJ Governor Kazuo
Ueda said the central bank would see a good reason to alter its monetary
policy if it became "reasonably sure" inflation would start to re-accelerate
into next year after a period of moderating.

Softness in the yen has prompted warnings from Japanese currency officials
this week that the central bank could intervene to prop up the yen,
something that last took place when it traded around 145 per dollar.

"The only thing kind of notable to me is Ueda's lack of pushback on yen
weakness, so if his position is that other G7 policies are the more dominant
factor for yen weakness, he is really opening the door here to further
weakness," said Bregar.

The dollar was up 0.06% against the Japanese yen

at 144.16, while the euro fell 0.22% against the yen at 157.560 after
earlier hitting a new 15-year high of 158.00.

Lagarde said the ECB is still not seeing enough evidence that underlying
inflation has embarked on a downward path, while Bank of England Governor
Andrew Bailey said it remained to be seen if financial markets are right
about the interest rate increases they are expecting from the British
central bank.

The euro

was down 0.44% to $1.0911 while sterling

was last trading at $1.2647, down 0.78% on the day.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold hits near 4-month low on bets for hawkish Fed strategy

Gold prices on Wednesday fell to their lowest in nearly 4 months on bets for
interest rates remaining higher for longer, while U.S. Federal Reserve Chair
Jerome Powell reiterated a hawkish stance.

Spot gold

last fell 0.08% to $1,911.8666 per ounce, after hitting its lowest since
mid-March. U.S. gold futures

settled 0.1% lower at $1,922.20.

Powell reiterated that more rate rises likely lie ahead for the central
bank, and did not rule out a boost in the cost of borrowing at a policy
meeting scheduled for the end of July.

"Although the market is pricing in a decent chance the Fed is going to hike
in July, the more relevant factor for gold is that the market has been
simultaneously pricing out the number of cuts we could expect over the next
year," said Daniel Ghali, commodity strategist at TD Securities.

Markets were pricing in a 82% chance of a rate hike at the Fed's next
meeting in July, seeing little odds of any easing in monetary policy by the
end of this year, according to the CME FedWatch tool.

The dollar index firmed 0.4%, making gold less attractive for overseas
buyers. A drop in benchmark 10-year Treasury yields limited further
downside.

"Good U.S. economic data remains a headwind for the yellow metal, as it
likely keeps Fed officials reiterating a hawkish tone," UBS analyst Giovanni
Staunovo said.

Sales of new U.S. single-family homes surged to the highest in nearly 1-1/2
years in May, while U.S. consumer confidence also jumped in June.

"We still expect at some point the aggressive monetary policy tightening to
weaken U.S. economic data and result in a change of tone by the Fed,"
Staunovo added.

High interest rates discourage traders from investing in non-yielding gold.

Gold prices extended their slide on Wednesday to hit their lowest in 3-1/2
months on bets for interest rates remaining higher for longer, while traders
positioned for a speech by Federal Reserve Chair Jerome Powell.

fell 0.06% to $1,912.19 per ounce, after earlier hitting its lowest since
mid-March. shed 0.14% to $1,921.20.

"Although the market is pricing in a decent chance that the Fed is going to
hike in July, the more relevant factor for gold is that the market has been
simultaneously pricing out the number of cuts that we could expect over the
next year," said Daniel Ghali, commodity strategist at TD Securities.

Markets were pricing in a 74% chance of a rate hike at the Fed's next
meeting in July, seeing little odds of any easing in monetary policy by the
end of this year, according to the CME FedWatch tool.

The dollar index firmed 0.47%, making gold less attractive for overseas
buyers.

"Good U.S. economic data remains a headwind for the yellow metal, as it
likely keeps Fed officials reiterating a hawkish tone," UBS analyst Giovanni
Staunovo said.

Sales of new U.S. single-family homes surged to the highest in nearly 1-1/2
years in May, while U.S. consumer confidence also jumped in June.

Investors' focus has shifted to Powell's speech at a policy panel at the
European Central Bank Forum in Portugal.

"We still expect at some point the aggressive monetary policy tightening to
weaken U.S. economic data and result in a change of tone by the Fed,"
Staunovo added.

High interest rates discourage traders from investing in non-yielding gold.

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
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
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for guideline purposes only and sourced from third parties.

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