Bulls n Bears Daily Market Commentary : 31 July 2024

Thu Aug 1 07:11:01 CAT 2024

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Bulls n Bears Daily Market Commentary : 31 July 2024

ZSE commentary

ZSE register losses in month end session...

The ZSE recorded losses in the month end session to see the primary All
Share Index sliding 1.71% to 198.14pts while, the Blue-Chip Index dropped
1.69% to 206.08pts. The Agriculture Index fell 2.48% to 182.00pts as the Mid
Cap Index declined 2.02% to 172.89pts. Banking group ZBFH led the laggards
of the day on a 15.00% plunge that took it to $10.2000, followed by TSL that
dropped 14.99% to $3.0009. Telecoms giant Econet eased 6.27% to $3.3040
while, retailer OkZim tumbled 6.16% to close at $0.7507. Fintech group
Ecocash Holding capped the fallers of the day on a 5.64% retreat to end the
day pegged at $0.4665. In the contrary, ART and Masimba headlined the top
performers of the day on a 15.00% jump to settle at $0.1265 and $2.6450
respectively. Logistics group Unifreight charged 14.95% to $0.9225 while,
Riozim advanced 12.00% to settle at $1.4000. Proplastics completed the top
performers of the day on a 9.10% uplift to end the day pegged at $1.8548.
Thirteen counters recorded gains against eleven that faltered to leave the
market w ith a positive breadth of two.

Activity aggregates enhanced in the session as volumes traded ballooned
27.94% to 2.05m shares while, turnover traded grew 24.20% to $8.64m. Top
volume drivers of the day were Ok Zim (24.92%), Willdale (21.52%), Delta
(17.87%) and Econet (10.77%) . The trio of Delta, Hippo and Econet
contributed a combined 78.19% of  the  total  value  traded.  A  total  of
2, 199,613 units exchanged hands in the ETF section. Datvest ETF inched up
0.58% to close at $0.0345 as 2.18m units exchanged hands in the name. OMTI
ETF added 0.83% to $0.1815 while, Morgan and Co Made In Zimbabwe declined
0.29% to settle at $0.0100. Tigere REIT firmed up 10.16% to end the day
pegged at $0.9000 as 29,501 units exchanged hands.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

Nigeria

Dollar drops to N1,555/$1 at parallel market

The dollar eased slightly against a basket of currencies on Monday while
dropping from N1,598.06/$1 at the weekend to N1,555/$1 yesterday across
parallel markets in the country.

This came after President Joe Biden announced on Sunday that he will not be
seeking re-election and endorsed Vice President Kamala Harris as the
Democratic candidate for the U.S elections which would be holding in
November.

Harris quickly received the backing of many within the party, but several
high profile names stayed quiet, including former House of Representatives
Speaker Nancy Pelosi.

Former President, Donald Trump, the Republican nominee, sits well ahead in
betting markets, to win the election. After the announcement was made, the
demand for FX eased slightly with parallel markets in Lagos, Kano and Port
Harcourt where the dollar was sold between N1,555/$1 - N1,560/$1.

On the other hand, the naira appreciated by 6.4% to N1,500.32/$1 at the
Nigerian Autonomous Foreign Exchange Market (NAFEM).

The dollar index - a measure of its value relative to a basket of foreign
currencies - fell 0.1% at 104.30.

Reacting to the development, a financial analyst who spoke based on
anonymity, noted that the specific impact on Nigeria's parallel FX markets
would depend on the broader market's perception of the US political
situation and its ripple effects on global financial stability.

He stated that with this development, investors might flock to safe-haven
assets such as gold or stable currencies like the Swiss Franc or Japanese
Yen, impacting the demand and supply dynamics for the Naira.

"There is no doubt that Biden's resignation introduced uncertainty in global
markets, including the FX markets. Investors might react with caution,
leading to increased volatility in currency values.

What happened in the last few weeks taught us we should not expect the
dollar to react to election developments unless the candidates make specific
reference to the U.S. currency. However, we expect the market to continue
trading on the back of the data and central banks because we posit that it
is way too early to assess the impact of Biden's move", he said.

South Africa

South African rand gains ahead of Fed policy decision

(Reuters) - South Africa's rand strengthened on Wednesday, ahead of a
much-anticipated policy decision by the U.S. Federal Reserve.

At 1535 GMT, the rand traded at 18.19 against the dollar , more than 0.7%
stronger than its previous close.

Investors' focus will be on the Fed later on Wednesday for clues to the
future interest rate trajectory of the world's biggest economy.

The central bank is expected to leave rates unchanged, but markets are
betting on a cut at its September meeting.

Like other risk-sensitive currencies, the rand often takes cues from global
drivers like U.S. monetary policy in addition to local factors.

On the domestic front, South Africa recorded a trade surplus of 24.23
billion rand in June, revenue service figures showed on Wednesday.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed over 2%
up.

South Africa's benchmark 2030 government bond firmed, with the yield down 10
basis points to 9.405%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar falls as Fed signals likely September rate cut

(Reuters) - The dollar added to losses on Wednesday after the Federal
Reserve held interest rates steady but opened the door to reducing borrowing
costs as soon as its next meeting in September.

Fed Chair Jerome Powell said in comments after the statement from its
two-day meeting that an interest rate cut could be on the table as early as
September if inflation moves down in line with expectations, growth remains
reasonably strong and the labor market remains as it is.

But he also said that the U.S. central bank remains data dependent and has
not made any decisions about future meetings.

"The Fed wants to let the data play out a little bit longer, even at the
risk of falling behind the curve," said Adam Button, chief currency analyst
at ForexLive in Toronto.

Traders have fully priced in a September rate cut, which may take pressure
of the Fed to signal a certain move then.

"Everyone in the market knows it's priced in, the Fed knows it's priced in,
so really not pushing back against that is a kind of implicit endorsement of
market pricing," said Button.

Traders are also expecting a second and possible third cut by year-end.

The dollar index fell as low as 103.92 and was last down 0.34% at 104.09. It
is on track for a monthly loss of 1.7%.

The next major U.S. economic release that is likely to drive Fed policy will
be Friday's government jobs report for July. It is expected to show that
employers added 175,000 jobs during the month, according to the median
estimate of economists polled by Reuters. (USNFAR=ECI), 

The ADP National Employment Report on Wednesday showed that private payrolls
rose by 122,000 jobs this month, below economists' expectations for 150,000
in jobs gains.

The Japanese yen hit a four-month high against the dollar on Wednesday after
the Bank of Japan raised rates to the highest since 2008 and indicated that
more hikes may follow.

The BOJ raised the overnight call rate target to 0.25% from 0-0.1%, the
largest increase since 2007.

"A lot of market participants were preparing for this as if it was a
possibility, but very few actually expected the BOJ to raise more than 10
basis points," said Helen Given, FX trader at Monex USA in Washington. "This
upside surprise is giving yen a huge boost."

Japan's rate increase came just months after the BOJ ended eight years of
negative interest rates as the bank's chief seeks to dismantle his
predecessor's unorthodox policies.

The Japanese central bank also announced plans to halve its monthly Japanese
government bond (JGB) purchases to 3 trillion yen as of January-March 2026.

The yen has rallied since hitting a 38-year low of 161.96 against the
greenback on July 3, in large part boosted by interventions by Japanese
authorities. Traders unwinding bets that were short the yen and long the
dollar has added to the move.

Japanese authorities spent 5.53 trillion yen ($36.8 billion) intervening in
the foreign exchange market this month to boost the currency, official data
showed on Wednesday.

The dollar was last down 1.87% at 149.91 yen and got as low as 149.63, the
lowest since March 19. It is on track to post a monthly loss of 6.9% against
the Japanese currency, the largest since November 2022.

The Australian dollar fell to a three-month low of $0.6480 and was last down
0.08% at $0.6532, following a softer reading on core inflation.

Markets abandoned bets of a further rate hike from the Reserve Bank of
Australia after the data.

The euro gained 0.05% to $1.082 and is set for a roughly 1% gain in July.

Euro zone inflation unexpectedly edged up in July, data showed on Wednesday,
although a widely watched gauge of price growth in the services sector
eased.

The pound was up 0.11% at $1.2848 and is heading for a monthly gain of 1.5%.

Sterling options volatility rose to its highest in almost a year, reflecting
the degree of nervousness ahead of Thursday's Bank of England rate decision
where markets are pricing in 66% odds of a rate cut.

In cryptocurrencies, bitcoin fell 0.77% to $65,668.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold climbs over 1% after Fed's Powell hints at early rate cut

(Reuters) - Gold prices extended gains on Wednesday after Federal Reserve
Chair Jerome Powell hinted that an interest rate cut could be on the table
as early as September if inflation stays in line with expectations.

Spot gold was up 1.2% at $2,437.39 per ounce as of 3:21 p.m. ET (1921 GMT)
and logged its biggest monthly rise since March, gaining over 4%. U.S. gold
futures settled 0.9% higher at $2,473.

Powell, speaking at a press conference following the Fed's decision to leave
its benchmark interest rate unchanged, kindled investors' hopes for a
September rate cut by stating that policymakers are gaining more confidence
that inflation is steadily approaching the 2% target.

"Gold and silver are rallying as Chair Powell's comments indicate a
September rate cut is likely," said Tai Wong, a New York-based independent
metals trader.

"However, he did effectively close the door on a 50bps move. It remains to
be seen if gold can make new all-time highs given the Fed has just met
recently expanded expectations."

Support for the safe-haven asset strengthened amid the threat of conflict
escalation in the Middle East after Hamas leader Ismail Haniyeh was
assassinated early on Wednesday in Iran spurring a region already shaken by
the war in Gaza and a deepening conflict in Lebanon.

Fed cuts rates coupled with geopolitical risk in the Middle East could
potentially push gold to up to $2700 an ounce, said Bob Haberkorn, senior
market strategist at RJO Futures.

The U.S. dollar slightly pared losses after the Federal Reserve rate
decision, while the benchmark U.S. 10-year Treasury yields moved lower.

Spot silver was up 1.6% at $28.85 per ounce. Platinum gained 2.1% to $979.05
and palladium climbed 4.6% to $928.50. All three metals were headed for
monthly declines.

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INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

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