Bulls n Bears Daily Market Commentary : 03 July 2024

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Bulls n Bears Daily Market Commentary : 03 July 2024

 

 	

 

 

 	


ZSE commentary

 

ZSE maintains the positive momentum...

The ZSE market maintained a positive momentum as the primary All Share Index
added 3.94% to 143.32pts while, the Blue-Chip Index rose 3.96% to 152.88pts
. The Agriculture Index went up 3.64% to 118.14pts as the Mid Cap Index grew
4.53% to 124.77pts. Banking group FBC and cigarette manufacturer BAT led the
top performers of the day on a similar 15% jump to close at $2.5300 and
$30.2880 respectively. Spirit and wines distillers AFDIS soared 14.99% to
$5.2815 while, ART added an identical 14.99% to settle at $0.0899. Banking
group ZB Financial Holdings completed the winners of the day on a 14.99%
upsurge to end the day pegged at $4.2580. In contrast, Proplastics led the
laggards of the day on a 13.23% drop to $0.6248, followed by Star Africa
that slipped 0.87% to $0.0078. Brick manufacturer Willdale eased 0.66% to
$0.0394 while, Zimpapers capped the worst performers of the day on a 0.0001%
retreat to end the day pegged at $0.0460. The market closed on a positive
breadth of twenty- one after twenty-five counters recorded gains against
four that faltered.

 

Activity aggregates were mixed in the session as volume traded dropped
79.22% to 4.52m shares while, turnover grew 11.03% to $13 .48m. The top
volume drivers of the day were Econet (32.76%), Star Africa (27.84%), Delta
(15.58%) and Ecocash (9.61%). The trio of Delta, Econet and Meikles
contributed a combined 95.91% to the total value traded. A total of 31,450
units worth $3,338 .00 exchanged hands in the ETF section. Morgan and Co
Multi Sector ETF climbed 1.75% to close at $0.4192 while, OMIT ETF charged
9.36% to $0.1488. The Tigere REIT stepped up 15.00% to end the day pegged at
$0.8120 after 24,997 units exchanged hands in the midweek
session..-efesecurities

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity

 

South Africa

 

Rand trades weaker on signs of discord between ANC and DA

The South African rand traded weaker against the US dollar as the African
National Congress (ANC) and the Democratic Alliance (DA) failed to reach an
agreement on the Gauteng Government of Provincial Unity. 

 

The DA wants a power sharing provincial Cabinet, which the ANC is unwilling
to give. Talks were deadlocked on Tuesday evening.

 

The rand ended nearly 1.6% weaker yesterday as there are already signs that
the Government of National Unity (GNU) may face significant obstacles, as
the two main parties, the African National Congress and the Democratic
Alliance, struggle to find common ground.

 

This is according to Andre Cilliers, Currency Strategist at TreasuryONE.

 

Cilliers said that the rand is trading unchanged at R18.60 this morning
despite a softer dollar.

 

Data from Anchor Capital showed that 5.30am the US dollar is trading
marginally lower against the rand at R18.60.

 

The local currency was trading marginally higher at R19.98 against the euro,
while the British pound has marginally gained against the rand to trade at
R23.59.

 

At 10.45am, the rand was trading at R18.49 against the dollar. The SA
currency was trading at 19.89 against the euro, while the rand was at R23.47
against the pound.

 

Problems with unity talks

On Tuesday, the DA and the ANC struggled to reach agreement on the
allocation of positions in the Gauteng Legislature as provincial government
of unity talks between the two political parties reached a breaking point.

 

Following the deadlock in talks between the two parties, the DA said that
they were still open to negotiations as long as the ANC treats and
approaches them with respect.

 

According to DA Federal Chairperson, Helen Zille, they want the ANC to
accept the compromise that composition of the Gauteng Legislature will have
five MEC positions for the ANC, four for the DA and one position for the
IFP.

 

IOL Business

 

 

 

Uganda

 

Ugandan shilling firms on slump in importer, banks' FX appetite

(Reuters) -The Ugandan shilling UGX= traded firmer on Wednesday, helped by a
slump in demand for hard currency from both commercial banks and merchandise
importers, traders said.

 

At 0903 GMT commercial banks quoted the shilling at 3,685/3,695, compared to
Tuesday's close of 3,697/3,707.

MA

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Yen drops to 38-year low, US dollar slumps after weak data

(Reuters) - The yen sank to a 38-year low against the U.S. dollar and a
record trough versus the euro on Wednesday, as the Japanese unit continued
its downward spiral, with market participants on high alert for Japanese
intervention to boost the currency.

The dollar, on the other hand, fell after a slew of softer-than-expected
U.S. economic data that bolstered expectations that the Federal Reserve will
likely start cutting interest rates later this year.

It declined after data showed that U.S. private payrolls rose slightly less
than expected in June and initial jobless claims increased, both consistent
with a slowing labor market.

A report indicating that the U.S. services sector contracted last month and
factory orders fell also weighed on the dollar.

With the greenback on the defensive, the euro remained resilient, helped by
a stubbornly high inflation reading on Tuesday that suggested the European
Central Bank would take its time before cutting interest rates again.
Sterling, meanwhile, gained before Thursday's UK election.

Ahead of the July 4th holiday in the United States, the yen remained the
main focus as it fell to 161.96 per dollar for the first time since December
1986. The dollar was last up 0.1% at 161.64, after earlier falling to a
session low below 161 following weak U.S. data.

The yen also hit an all-time low of 174.48 against the euro . The euro was
last up 0.4% at 174.22 yen.

"The BOJ (Bank of Japan) might actually have to wait until the Fed cuts
interest rates and adopt a sort of 'benign neglect' policy," said Helen
Given, FX trader, at Monex USA in Washington.

"U.S. yields are simply still too high for an intervention to take hold -
it's going to take a catalyst on the U.S. dollar side to bring them lower
and that could come from the Fed."

Japanese authorities have been largely quiet on the yen this week, with
Finance Minister Shunichi Suzuki only commenting on Tuesday that moves were
being watched vigilantly. He refrained from repeating the often used warning
that the ministry stood ready to act.

 

 

Wednesday's data overall depicted a U.S. economy that is slowing down,
undermining the dollar.

Initial applications for U.S. unemployment benefits increased last week,
while the number of people still on jobless rolls rose further to a 2-1/2
year high toward the end of June. First-time jobless claims rose to a
seasonally adjusted 238,000 for the week ended June 29.

The number of people receiving benefits after an initial week of aid
increased to a seasonally adjusted 1.858 million in the week of June 22, the
highest since late November 2021.

 

Separately on Wednesday, the ADP Employment report showed private payrolls
grew by 150,000 jobs in June after rising 157,000 May. Economists polled by
Reuters had forecast private employment increasing by 160,000.

"The economic data surprises in the U.S. are now undershooting expectations
relative to other major economies, which has generally coincided with
periods of dollar weakness," wrote Jonas Goltermann, deputy chief markets
economist, at Capital Economics in a note after Wednesday's data.

 

"Taken together, we think the next major move in the greenback will be
lower. We forecast the (dollar index) to end this year around 106, near its
current level, before falling to 98 by the end of 2025."

The dollar index , which measures the currency against six major
counterparts, slid 0.2% to 105.41. It dropped to a three-week low earlier in
the session.

 

The euro rose to a three-week high against the dollar, and was last up 0.3%
at $1.0781.

Further pressuring the dollar was a weak U.S. services report from the
Institute for Supply Management. The data showed a reading of 48.8, a
four-year low, from 53.8 in May. It was the second time this year that the
PMI had dropped below 50, which indicates contraction in the services
sector.

 

U.S. factory orders also eased 0.5% in May, below expectations for an
increase.

Factory orders and ISM PMI

Following the barrage of U.S. data, U.S. rate futures have priced in a 74%
chance of a rate cut in September, up from 69% late on Tuesday, according to
LSEG calculations. The market has also priced two rate cuts in 2024.

 

Fed officials at their last meeting acknowledged the U.S. economy appeared
to be slowing and that "price pressures were diminishing." They still
advocated for a wait-and-see approach before committing to interest rate
cuts, according to minutes of the two-day gathering held on June 11-12.

 

The focus now shifts to Friday's nonfarm payrolls report, which is expected
to show an increase of 190,000 jobs in June after rising 272,000 in May,
according to a Reuters poll of economists. The unemployment rate is forecast
to be unchanged at 4.0%.

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold hits near 2-week high as soft US data lifts Fed rate-cut bets

(Reuters) - Gold prices rose more than 1% to a near two-week high on
Wednesday, driven by increased bets for a September interest rate cut by the
Federal Reserve after recent U.S. data suggested that the labor market was
softening.

Spot gold was up 1.2% at $2,357.06 per ounce by 02:08 a.m. ET (1808 GMT).
U.S. gold futures settled 1.5% higher to $2369.40.

 

 

"The precious metals complex, as well as base metals, are rallying across
the board on ADP and jobless claims data that reinforces the 'softening
economy' narrative which will likely lead to the first rate cut in
September," said Tai Wong, a New York-based independent metals trader.

"Bulls are trying to get ahead of what many believe will finally be a weak
payrolls report on Friday," he added.

First-time applications for U.S. unemployment benefits increased last week,
while the number of people on jobless rolls rose further to a 2-1/2 year
high towards the end of June, consistent with a gradual cooling in the labor
market.

A measure of U.S. services sector activity slumped to a four-year low in
June amid a sharp drop in orders, potentially hinting at a loss of momentum
in the economy at the end of the second quarter.

Following the U.S. data, the dollar slipped to a two-week low, making gold
more attractive for other currency holders, while the yield on the benchmark
U.S. 10-year Treasury note slid. [USD/

The market now sees a 68% chance of the Fed cutting interest rates in
September. Lower rates reduce the opportunity cost of holding non-yielding
bullion.

Fed officials at their last meeting acknowledged the U.S. economy appeared
to be slowing and that "price pressures were diminishing," according to
minutes of the two-day session held on June 11-12.

Investors now look forward to the nonfarm payrolls report due on Friday for
more clarity on U.S. rate cuts.

Spot silver rose 3.4% to $30.51, platinum gained 0.8% to $999.12 and
palladium eased 0.1% to $1,020.98.

 


 

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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for guideline purposes only and sourced from third parties.

 

 	

 

 

 	


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