Bulls n Bears Daily Market Commentary : 01 August 2024

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Bulls n Bears Daily Market Commentary : 01 August 2024

 

 	



 

 	


ZSE commentary

 

NMB dominates activity aggregates in the session...

NMB drove the activity aggregates of the session as 4.84m shares worth circa
$14.03m. The banking group contr ibuted 67.90% of the volume traded and in
the same vein claimed 69.83% of the turnover. The other notable value driver
was Delta that claimed 10.85% of the aggregate . The Datvest MCS was 10.13%
weaker at $0.0310 while, the Old Mutual Top 10 ETF was 0.18% lower at
$0.1810. In the REIT category, the Revitus REIT garnered 10.50% to $0.5525
while, Tigere REIT ticked up 11.11% to $1.0000. A total of scrappy 57 units
worth $46.26 exchanged hands in the REIT category.

 

 

Sugar processor Hippo Valley led the gainers of the day as it edged up
14.88% to $8.0500 while, packaging company Proplastics was 12.77% higher at
$2.0917. Banking group NMB inched up 3.59% to end at $2.9005 while, property
concern Mashonaland  Holdings  gained   1.45%  to  end  pegged  at $0.3844 .
Ecocash Holdings rose 0.74% to $0.4699 as it fastened the gainers list of
the day . Weighing down the market was cable producer Cafca that lost 12.79%
to $15.0000 while, brick manufacturer Willdale parred off 9.29% to end at
$0.0363. Nampak was 7.27% lower at $1.0200 while, Ariston lost 5.49% to
$0.0403 . Sugar processor Star Africa capped the top five worst performers
list of the day on a 4.94% retreat to $0.0092. The ZSE market recovered in
the  month opening session as the All-Share Index added 0.41% to 198 .95pts
while, the  ZSE  top  10 Index advanced  0.44% to  206.99pts. The
Agriculture Index charged 2.72% to settle at 186.94pts while, the Mid Cap
Index was 0.46% up at 173.68pts.

 

 

VFEX retreats in the penultimate session of the week

The VFEX market retreated in the penultimate session of the week as the
All-Share Index fell 0.08%  to 104.9lpts. Agriculture  concern  Zimplow
tumbled  6.03%  to  close  at $0.0187 while, hotelier African Sun dropped
5.53% to $.0359. Retail and distribution group Axia trimmed 4.56% to $0.0859
while,    Padenga    slipped    3.46%   to   $0.1591.   SeedCo 694,800.00
0.09   International  lost  a  negligible  0.31%  to  $0.2920.  Partially
offsetting today's losses was Edgars that soared up 5.82% to $0.0200 while,
fast foods producer Simbisa put on 2.06% to $0.3616. Conglomerate lnnscor
surged 1.23% to $0.4606.

 

Activity aggregates declined in the session as volumes traded fell by 73.72%
to 62,625 shares while, turnover retreated by 99.75% to $11,652.36 . The duo
of lnnscor and Zimplow drove the  activity  aggregates  of  the  day  as
they  contributed  a combined 83.7% of the volumes traded and 92.86% of the
turnover traded.-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 gains on geopolitical tensions, pound slips after rate cut

(Reuters) - The dollar gained on Thursday as rising geopolitical tensions
drove a safe-haven boost, while the British pound fell after the Bank of
England cut interest rates from a 16-year high.

 

Concerns about a widening conflict in the Middle East intensified after
Hamas leader Ismail Haniyeh was assassinated in the Iranian capital, Tehran,
on Wednesday morning, drawing threats of revenge on Israel.

 

"We are looking at the threat of outright conflict breaking out in the
Middle East," said Karl Schamotta, chief market strategist at Corpay in
Toronto. "That is supporting the dollar's safe-haven appeal."

 

 

The dollar also bounced as a selloff on Wednesday following dovish comments
by Federal Reserve Chair Jerome Powell at the conclusion of the U.S. central
bank's two-day meeting was seen as possibly overdone.

"Although Jerome Powell was extremely dovish in the press conference, the
statement released by the Federal Open Market Committee really sounded more
balanced," said Schamotta.

 

Powell said that interest rates could be cut as soon as September if the
U.S. economy follows its expected path. The Fed's policy statement on
Wednesday cited "some further progress toward the (Federal Open Market)
Committee's 2% objective," while noting that the unemployment rate, at 4.1%,
"remains low."

 

 

Traders are now fully pricing in three 25-basis-point rate cuts by year-end,
indicating one cut at each of the Fed's September, November and December
meetings.

The next major U.S. economic release that is likely to drive Fed policy will
be Friday's jobs report for July. It is expected to show that employers
added 175,000 jobs during the month, while the unemployment rate is expected
to stay steady at 4.1%. (USNFAR=ECI), opens new tab, (USUNR=ECI), opens new
tab

Data on Thursday showed that the number of Americans filing new applications
for unemployment benefits increased to an 11-month high last week.

The dollar index was last up 0.35% at 104.41.

Tumbling stocks also likely boosted the safe-haven appeal of the U.S.
currency.

 

 

Sterling slipped 0.96% to $1.2733, the lowest level since July 3, after the
Bank of England cut interest rates following a tight vote by policymakers,
who were split over whether inflation pressures had eased sufficiently.

Governor Andrew Bailey led the 5-4 decision to reduce rates by a
quarter-point to 5%, and he said the BoE would move cautiously going
forward.

"If you look at the headlines that Bailey produced: caution on cutting too
quickly or by too much, it implies to me that they're looking at sort of a
steady quarterly pace of reductions," said Colin Asher, economist at Mizuho.

 

 

The euro touched a three-week low of $1.07775 and was last down 0.36% at
$1.07865.

The Japanese yen edged higher, a day after a dramatic rally following the
Bank of Japan's decision to hike rates to 0.25%, the highest since 2008.

The yen has gained since hitting a 38-year low of 161.96 against the dollar
on July 3, boosted by interventions by Japanese authorities and by traders
unwinding carry trades in which they were short the yen and long U.S. dollar
assets.

The dollar was last down 0.21% at 149.65 yen . It earlier reached 148.51,
the lowest since March 15.

In cryptocurrencies, bitcoin fell 2.68% to $62,848.

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold 

 

Global gold demand reaches Q2 record - report

The latest publication by the World Gold Council showed global demand for
the precious metal increased 4% year-on-year to 1,258 tonnes in the second
quarter, the highest ever of any Q2 on record.

 

 

Total increased demand, says the Council, was supported by healthy
over-the-counter (OTC) transactions, which were up a notable 53%
year-on-year at 329 tonnes.

 

Sign Up for the Precious Metals Digest

 

Central banks and official institutions also increased global gold holdings
by 183 tonnes, a slower rate than the previous quarter but still reflecting
a 6% increase year-on-year.

 

The surge in OTC demand and continued buying from central banks, plus a
slowdown in ETF outflows, helped drive gold prices to a record $2,427/oz.
during the quarter. Gold averaged $2,338/oz. for the three-month period, 18%
higher year-on-year.

 

The WGC central bank survey confirmed that reserve managers believe gold
allocations will continue to rise over the next 12 months, driven by the
need for portfolio protection and diversification in a complex economic and
geopolitical environment.

 

"The rising and record-breaking gold price has made headlines as strong
demand from central banks and the OTC market supported prices, which has
been a consistent trend throughout the year," Louise Street, senior markets
analyst at the WGC said in the report.

 

Demand breakdown

Global gold investment remained resilient during Q2, marginally higher
year-on-year at 254 tonnes, concealing divergent demand trends. Bar and coin
investment decreased 5% to 261 tonnes, due to a sharp decline in demand for
gold coins.

 

 

Strong retail investment in Asia was counterbalanced by lower levels of net
demand in Europe and North America, where profit-taking surged in some
markets, WGC said.

 

Global gold ETFs saw minor outflows of 7 tonnes during the quarter. Asian
growth continued, sizable European outflows in April turned into nascent
inflows in May and June, and North American outflows slowed significantly
compared to the previous quarter.

 

Record high prices drove down jewellery demand by 19% year-on-year in Q2,
but H1 demand remains resilient compared to the same period last year,
thanks to a stronger-than-expected first quarter.

 

In addition, demand for gold in technology continued to increase, jumping
11% year-on-year driven primarily by the AI boom in the electronics sector
which saw an increase of 14% year-on-year.

 

Meanwhile, gold supply rose 4% year-on-year, with mine production increasing
to 929 tonnes. Recycled gold volumes increased 4% compared to the same
quarter in 2023, marking the highest second quarter since 2012.

 

Outlook

Looking ahead, the question is: "What will be the catalyst to keep gold
front and centre in investment strategies?" Street said.

 

"With a long-awaited rate cut from the US Fed on the horizon, inflows into
gold ETFs have increased thanks to renewed interest from Western investors.
A sustained revival of investment from this group could change demand
dynamics in the second half of 2024.

 

"In India, the recently announced import duty cut should create positive
conditions for gold demand, where high prices have hampered consumer
buying," she noted.

 

"While there are potential headwinds for gold ahead, there are also changes
taking place in the global market that should support and elevate gold
demand."

 

 

 

 


 

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 

 

 

 Invest Cellphone:            +263 71 944 1674 | +27 79 993 5557 

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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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investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 

 	

 

 

 	


 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

 

 	

 

 

 	
							

 

 

 

 

 

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