Bulls n Bears Daily Market Commentary : 07 August 2024

Thu Aug 8 08:59:32 CAT 2024

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Bulls n Bears Daily Market Commentary : 07 August 2024

ZSE commentary

ZSE The ZSE slips back into losses in mid-week session...

The ZSE slipped back in losses in the midweek session to see the primary All
Share Index retreating 0.18% to 200.77pts while, the Agriculture Index fell
0.54% to 207.62pts. The Agriculture Index gained 0.96% to 185.65pts while,
the Mid Cap Index firmed up 0.31% to 175.67pts . Fintech group Ecocash
Holdings led the laggards of the day on a 14.74% drop to $0.4419, followed
by Zimre Holdings Limited that trimmed 6.25% to $0.3000. Star Africa tumbled
4.22% to $0.0096 while, construction  company  Masimba  shed  1.70%  to
close  at $2.6000. Life assurer Fidelity capped the fallers of the day on a
0.41% retreat to end the day pegged at $1.2025. Partially mitigating today's
losses was logistics company Unifreight that surged 14.93% to $1.4050m,
followed by FMP that went up 14.11% to settle at $0.3806. ART Corporation
advanced 12.96% to $0.1700 while, seed producer SeedCo recovered 10.20% to
$3.1127. The market closed with a positive breadth of four as thirteen
counters recorded gains against nine that faltered .

VFEX tumbles further ... 

The VFEX market tumbled further as the All-Share Index fell 0.89% to
103.36pts. Fast foods group Simbisa lost 5.51% to $0.3309 while, Padenga
retreated 2.85% to end the day pegged at $0.1601. In contrast, hotelier,
African Suh charged 4.40% to $0.0380 while, banking group First Capital
stepped up 2.31% to $0.0399. lnnscor completed the winners pack on 261.05
Activity aggregates were mixed in the session as volume of 222 .81
shares traded jumped 222.81% to 313,414 shares while, value outturn   rose
261.05%  to  $120,172.61.  lnnscor  anchored today's volume and value traded
after contributing 77.27% to the former and 93.75% to the latter.

efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand firms on improved sentiment, focus on US data

(Reuters) - The South African rand firmed in early trade on Wednesday, as
risk sentiment improved and markets awaited jobless claims data out of the
United States on Thursday for hints on the future interest rate path of the
world's biggest economy.

At 0626 GMT, the rand traded at 18.41 against the dollar, about 0.45%
stronger than its previous close.

The rand is trading firmer "as risk sentiment improves and EM (emerging
market) currencies all show some gains," Andre Cilliers, currency strategist
at TreasuryONE, said.

"Tomorrow's U.S. jobless claims number will now be sharply in focus for
confirmation of the weakening U.S. labour market," Cilliers added.

Friday's weak U.S. July payrolls report stoked recession worries earlier
this week and led to a plunge in global equities on Monday, with traders
fleeing to safe havens.

But U.S. central bank policymakers pushed back on Monday against the notion
that the economy is close to recession and indicated the Federal Reserve
would need to cut rates to avoid such an outcome.

Like other risk-sensitive currencies, the rand often takes its cue from
global drivers such as U.S. economic data and monetary policy in addition to
local factors.

On the domestic front, South Africa's net foreign reserves rose to $59.165
billion at the end of July from $58.437 billion in June, central bank data
showed on Wednesday.

South Africa's benchmark 2030 government bond was also firmer in early
deals, with the yield down 2.5 basis points to 9.35%.

Nigeria

Nigeria central bank sells $876 million to reduce pressure on naira

(Reuters) -Nigeria's central bank said on Wednesday it has sold $876.26
million at 1,495 naira to the dollar at its first retail auction for end
users, firmer than where the currency is trading at on the official market.

The auction drew bids of $1.18 billion, received from 32 authorised dealers,
the central bank said, adding that only 26 banks with bids valued at $876.26
million qualified.

The naira has weakened to a low of 1,628 to dollar on Wednesday before the
auction result was announced.

 <mailto:info at bulls.co.zw> 

Global Markets

US Dollar Index falls to near 103.00 due to dovish mood surrounding the Fed

The US Dollar depreciates due to heightened expectations of the US Fed
reducing rates in September.

CME FedWatch tool suggests 72.0% odds of a 50-basis point Fed rate cut in
September, up from 11.8% last week.

The rising geopolitical tensions in the Middle East could drive increased
safe-haven demand for the Greenback.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD)
against six other major currencies, retraces its recent gains from the
previous two sessions, trading around 103.00 during the Asian session on
Thursday.

This downside of the DXY could be attributed to the rising expectations of
the US Federal Reserve (Fed) implementing a more aggressive rate cut
beginning in September. According to the CME FedWatch tool, there is now a
72.0% probability of a 50-basis point (bps) interest rate cut by the US
Federal Reserve (Fed) in September, up from 11.8% a week earlier. The
expectation of deeper rate cuts may put pressure on the US Dollar in the
near term.

Weaker employment data from July have heightened concerns about a potential
US recession. US Nonfarm Payrolls (NFP) came in weaker than the expectation,
data showed on Friday. Meanwhile, the US Unemployment Rate rose to the
highest level since November 2021 in July.

Earlier this week, Chicago Fed President Austan Goolsbee stated that the US
central bank is prepared to act if economic or financial conditions worsen.
Goolsbee emphasized, "We're forward-looking about it, and so if the
conditions collectively start coming in like that on the through line,
there's deterioration on any of those parts, we're going to fix it."
according to Reuters.

Additionally, the decline in US Treasury yields contributes to downward
pressure for the US Dollar (USD), with 2-year and 10-year yields on US
Treasury yields trading around 3.94% and 3.90%, respectively, at the time of
writing.

The increased risk aversion related to escalating Middle East tensions could
drive greater demand for the US Dollar as a safe haven. CNN reported two US
intelligence officials, saying that Iran and its allies are preparing for
potential retaliation against Israel in response to the recent killings of a
top military commander of Iran's Hezbollah in Lebanon and a senior Hamas
leader in Tehran.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold pares gains as higher US dollar, bond yields weigh

(Reuters) - Gold prices pared gains on Wednesday as the U.S. dollar and
Treasury yields edged higher, although mounting bets of U.S. interest rate
cuts in September and rising geopolitical tensions in the Middle East
underpinned bullion.

Spot gold was flat at $2,388.16 per ounce, as of 2:12 p.m. ET (1812 GMT),
after rising as much as 0.7% earlier in the session.

U.S. gold futures settled mostly unchanged at $2,432.40.

The U.S. dollar (.DXY), opens new tab rose 0.2% against its rivals, while
benchmark 10-year Treasury yields also rose, putting pressure on bullion.

"I do think a correction is most likely if economic data shows that the
recession fears are justified... gold will probably hit a new all time high
in the coming months," said Everett Millman, chief market analyst with
Gainesville Coins.

Last week's soft jobs report has led traders to expect nearly 105 basis
points of rate cuts by year-end, with a 100% chance of a September rate cut,
according to the CME FedWatch Tool, opens new tab.

On Tuesday, the leader of Hezbollah pledged a "strong and effective"
response to the killing of its military commander by Israel last week, no
matter the consequences.

Bullion is considered a hedge against geopolitical and economic
uncertainties and tends to thrive in a low interest rate environment.

"Jobless claims on Thursday is something markets will be looking for
confirmation of slowing economic numbers, particularly employment," said
Bart Melek, head of commodity strategies at TD Securities.

Meanwhile, China's central bank held back on buying gold for its reserves
for a third straight month in July, official data showed on Wednesday.

"There has been some improvement in the appetite for gold in the West, but
really China does lead the way in this regard and if they're not buying as
much, then that's going to have a bigger impact on the aggregate global gold
demand," Millman added.

Spot silver fell 1.5% to $26.64 per ounce.

Platinum rose 0.6% to $917.38 and palladium was up 1.1% to $884.00.

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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