Bulls n Bears Daily Market Commentary : 15 August 2024

Fri Aug 16 10:28:17 CAT 2024

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Bulls n Bears Daily Market Commentary : 15 August 2024

ZSE commentary

FBC, select mid-tier stocks support ZSE gains

HARARE - Zimbabwe Stock Exchange shares were higher on Thursday supported by
gains in FBC Holdings and select mid-tier stocks.

In a market, which is seeing a dearth of strong corporate news to stir up
momentum, investors continue to await the release of the monetary policy
statement, which is expected to provide guidance on the de-dollarisation
roadmap and how to anchor ZiG stability in a tight liquidity environment.
Treasury is also expected to release a supporting statement on government's
role in increasing demand for the local currency.    

The All Share Index put on 1.48% to 204.95.  Market bias was positive after
13 stocks recorded gains against nine fallers. Turnover was at ZWG5.96
million, 92% of which came from just five counters. Delta contributed the
most to value at ZWG2.13 million and was the most active at 24 trades.
Dairibord saw the most volume at 421 500 shares. Total trades amounted to
204, all local with no foreign participation.

The Top Ten Index rose 1.06% to 210.34. FBC was the standout performer among
the blue chips after putting on 14.86% to 402c in a low volume trade of 200
shares. It now sits on market cap of US$195.94 million. Econet added a
marginal 0.06%.

There were losses however in Meikles, which dropped 0.67% to 591c and other
fractional losses in Delta and EcoCash.

The Medium Cap Index was 2.30% higher at 181.34.  Unifreight was the day's
top performer with a 14.99% gain to 213.60c.  Mash Holdings advanced 14.40%
to 50.51c taking its market capitalisation to US$61.83 million. Seed Co was
13.65% higher to 450c and Ariston added 12.47% to 4.5c.

There were losses in Zimre Holdings, down 5.46% to 28.32c and Dairibord
which pared 2.86% to 292.27c. Other fractional losses were seen in Masimba
and Star Africa.

On the REITs, Revitus was 14.5% higher at 5.59c in a low value trade worth
ZWG69.30.  The Tigere REIT, which has seen decent activity over the past two
weeks was 13.41% ahead to 8.72c. The REIT now sits as the 14th most
capitalised counter on the ZSE.

Turnover on the VFEX was fair at US$218 275 after 631 528 shares traded. The
All Share fell 1.38% to 102.44.

Seed Co International was the worst performer losing 19.59% to 21.71 US
cents. The company issued 177 548 new ordinary shares on the BSE following
the exercise on 5 August 2024 of vested rights from the 2018 Seed Co
International Limited Share Appreciation Rights.

First Capital was 2.5% lower to 3.90 US cents and marginal losses were
recorded in the majority of the stocks.

Only Axia traded in the green, gaining 3.76% to 8.82 US cents.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand heads for 2% weekly gain on improved risk appetite

(Reuters) - South Africa's rand was slightly stronger in early trade on
Friday and was on course for gains of about 2% this week as upbeat U.S.
economic data allayed fears of an imminent recession in the world's top
economy.

At 0705 GMT, the rand traded at 17.97 against the U.S. dollar , up about
0.2% on Thursday's closing level.

The dollar was down 0.1% against a basket of global currencies .

Data on Thursday showed the number of Americans filing new applications for
unemployment benefits dropped to a one month-low last week, while retail
sales increased by the most in 1-1/2 years in July.

"U.S. data remains the compass for currency markets worldwide," ETM
Analytics said in a note.

The research firm said the rand had also been helped by improved terms of
trade, as prices for gold and platinum that South Africa exports had risen.

The Johannesburg Stock Exchange's Top-40 index (.JTOPI), opens new tab was
up 0.9% in early deals, and the benchmark 2030 government bond was
marginally stronger as the yield fell 1.5 basis points to 9.215%.

Nigeria

Naira rises to 1,564.48/$ in official market on increased dollar supply

The naira on Thursday recorded a gain of 1.38 percent on the official
foreign exchange (FX) market following increased dollar supply by market
players.

After trading on Thursday, the dollar was quoted at N1,564.48 compared to
N1,586.04 quoted on Wednesday at Nigerian Autonomous Foreign Exchange Market
(NAFEM), according to data from the FMDQ Securities Exchange Limited showed.

Read also: Naira records first loss as external reserves decline by 0.68%

The dollar supplied by willing buyers and willing sellers increased by 61.54
percent to $149.25 million on Thursday from $92.39 million recorded on
Wednesday at NAFEM.

The intraday trading show market players quoting dollar as high as N1,600 on
Monday as against N1,595, while the intraday low closed at N1,515 on
Thursday from N1,495.

At the parallel market, also known as the black market, the naira gained N5
as the dollar closed at N1,595 compared to N1,600 closed on Wednesday.

The Central Bank of Nigeria (CBN) could not hold the retail Dutch auction
system on Wednesday as there was no auction statement released. In line with
its pledge to provide transparent access to foreign exchange for all
legitimate customers, the CBN's leadership has introduced an additional
mechanism through the Retail Dutch Auction System (RDAS) to directly
facilitate FX sales to end users.

This approach aims to foster a more transparent market, reducing information
asymmetry and supporting price discovery. It complements the two-way quote
system deployed over the past few months to enhance liquidity in the
interbank market, through which over $305 million of foreign exchange has
been sold to authorised dealers in the last three weeks.

Read also: MTN, Airtel chart naira profit path after $1.56bn losses

"The central bank has made substantial efforts to stabilise the foreign
exchange market, which has led to increased foreign portfolio investment
inflow and a reduction in exchange rate volatility. In addition to current
measures being taken by the Bank, medium and long-term strategies are being
explored to ensure that the exchange rate settles at a market determined
equilibrium level," Bala Moh'd Bello, member of the Monetary Policy
Committee (MPC), in his personal statement at the last meeting in July 2024.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar firm after US data quells recession fears

TOKYO: The dollar hovered near a two-week high to the yen after its biggest
one-day gain against major peers in four weeks as firm U.S. economic data
all but eliminated fears about a recession.

The greenback was especially strong against the Japanese currency thanks to
a surge in Treasury yields as traders pared back bets the Federal Reserve
would be forced into aggressive easing next month.

Risk-sensitive currencies like sterling were firm as the improved economic
outlook spurred a rally in equities.

The dollar index, which measures the greenback against six major peers
including the yen, sterling and euro, was little changed at 103.20 after
rallying 0.41% overnight, the most since July 18.

The dollar eased slightly to 149.11 yen, but remained close to Thursday's
high of 149.40, a level last seen on Aug. 2.

The Commerce Department said retail sales rose 1.0% last month, topping
forecasts for a 0.3% gain. Separate figures showed 227,000 Americans filed
for unemployment benefits last week, fewer than the 235,000 expected.

Traders are convinced the Fed will slash rates on Sept. 18, but had debated
the size of the reduction. Odds currently stand at 25% for a super-sized 50
basis-point cut, down from 36% a day earlier, according to the CME Group's
FedWatch Tool.

Surprisingly soft monthly payrolls data at the start of the month had pushed
the odds of the larger cut to 71%.

"Growth is in a better spot and the consensus is again subscribing to the
'soft landing' thesis," said Chris Weston, head of research at Pepperstone,
pointing to 150 yen per dollar as the next level to watch for the currency
pair.

"While there are always risks that could impact, there is little in the data
flow now to really derail sentiment in the immediate near-term."

Sterling edged up slightly to $1.2859, building on its overnight 0.21%
advance. The British currency got an additional boost from solid GDP figures
on Thursday.

The euro was flat at $1.0973, following a 0.36% slide in the previous
session.

The risk-sensitive Australian dollar held steady at $0.66105 having advanced
0.2% the previous day after data showed a much-bigger-than-expected surge in
jobs.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold poised for weekly gain on US interest rate-cut bets

(Reuters) - Gold prices steadied on Friday and were headed for a weekly gain
on optimism about a U.S. interest rate cut, while traders awaited Federal
Reserve Chairman Jerome Powell's speech due next week for cues on the size
of the cut.

Spot gold was nearly unchanged at 2,457.14 per ounce, as of 0747 GMT, but
has gained more than 1% so far this week. U.S. gold futures rose 0.1% to
$2,494.4.

"The bullish outlook for gold remains intact given the lower trajectory
expected for global interest rates. The precious metal is still poised to
make a possible run at $2,500," said Tim Waterer, chief market analyst, KCM
Trade.

"But in the absence of a pick-up in safe-haven demand, it may require the
dollar and bond yields to take a step lower for gold to reach the $2,500
level."

U.S. economic data this week eased fears about a recession but traders are
convinced the Fed will slash rates in September.

Markets see a 75% chance of a 25-basis-point cut next month and a 25% chance
of a 50 bps reduction, the CME FedWatch tool, opens new tab showed. Traders
were evenly split at the start of the week between the two cut options.

A low interest rate environment tends to boost non-yielding bullion's
appeal.

Minutes of the Fed's July policy meeting are due on Wednesday and Powell
will speak on the U.S. economic outlook next Friday at the Jackson Hole
symposium.

Gold is expected to find support at $2,440 and face resistance at $2,485,
with potential to rise toward $2,585-$2,590, said Ajay Kedia, director at
Kedia Commodities, Mumbai.

Elsewhere, spot silver fell 0.8% to $28.17 per ounce, and platinum rose 0.1%
to $953.85 after hitting a two-week high on Thursday. Palladium shed 0.1% to
$943.01.

All metals were poised for weekly gains.

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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