Bulls n Bears Daily Market Commentary : 11 July 2024

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Bulls n Bears Daily Market Commentary : 11 July 2024

 

 	



 

 	


ZSE commentary

 

ZSE surges further ...

The market continued to surge in Thursday's session as the mainstream All
Share Index put on 2.37% to 169.95pts while, the ZSE Top Ten Index rose
2.27% to end at 182 .35pts.The ZSE Agriculture Index went up 4.67% to close
at 133.15pts as the Mid Cap Index grew 1.72% to 138.02pts. Gainers of the
day were led by BAT that soared 15.00% to $34.8215 while, tea company
Tanganda surged 15.00% to $3 .6035. Spirit and wines manufacturer AFDIS
charged a similar 15.00% to settle at $6.9000 while, conglomerate  Meikles
hopped 14.96% to $6.4180. Banking group  CBZ garnered  10.00% to settle  at
$11.0000. On the losing side was FML that dipped 7.32% to $1.9000 while,
Star Africa succumbed 1.63% to $0.0081. Financial services group ZB shed
0.17% to $7.3500 while, Willdale 0.01% to $0.0395.

 

Volumes traded ballooned 220.68% to 4.61m shares while, turnover edged up
333 .57% to close at 8.45m. Volume leaders of the day were Eco.cash, Star
Africa and Delta that accounted for a combined 91.85%. Value leaders of the
day were Delta and Ecocash that claimed 72.79% and 16.42% apiece. The Cass
Saddle ETF improved 15.00% to settle at $0.0115 as the Old Mutual ETF
extended 1.16% to $0.1821. Morgan and Co MCS was stable at $0.4200 on 7,000
units. No trades were registered in the two REITS.

 

 

VFEX retreats further ...

The VFEX market continued to retreat in Thursday's session as trimmed 2 .71%
to $0.3405 while, lnnscor shed 2.46% to end at $0.4511. First Capital lost
1.48% to close at $0.0400 while, African Sun slid to $0.0400. Axia grew
10.05% to $0.0712 while, Edgars ticked up 6.11% to $0.0191. National Foods
gained 0.36% to $1.8000 while, SeedCo International rose 0.07% to $0.2697 .

 

Activity aggregates were depressed as volumes plummeted 76.51% to 207,491
shares while, turnover tumbled 15.90% to $48,249 .65. Volume drivers of the
day were Padenga (44.92%), lnnscor (26.80%) and SeedCo International
(10.83%). Value drivers of the day were lnnscor, Padenga and SeedCo
International which accounted for a combined 95.48% of the
aggregate..-efesecurities

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity 

 

South Africa

 

South African rand extends gains after U.S. inflation data

(Reuters) - The South African rand extended its gains on Thursday after U.S.
inflation unexpectedly fell last month, fuelling bets that the Federal
Reserve may cut interest rates in September.

 

At 1521 GMT, the rand traded at 18.0050 against the dollar , 0.6% stronger
than its previous close.

The dollar index was last down 0.6% against a basket of currencies.

The U.S. consumer price index dipped 0.1% in June after being unchanged in
May, while the annual increase was the smallest in a year, data showed,
reinforcing views that the disinflation trend was back on track.

 

 

U.S. inflation has been improving in recent months and earlier this week Fed
Chair Jerome Powell said that "more good data would strengthen" the case for
central bank interest rate cuts.

Like most emerging market currencies, the rand often takes cues from U.S.
economic data in addition to local factors.

"The domestic currency is mainly influenced by global financial markets,
strengthening as indications of a US rate cut rise," said Investec Chief
Economist Annabel Bishop.

 

 

Locally, Statistics South Africa data showed mining production (ZAMNG=ECI),
opens new tab was unchanged while manufacturing output (ZAMAN=ECI), opens
new tab fell 0.6% year-on-year in May.

On the Johannesburg Stock Exchange, the blue-chip <Top-40 index (.JTOPI),
opens new tab closed 0.9% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 15.5 basis point to 9.570%.

 

 

 

 

Zambian and Kenyan currencies seen under pressure

(Reuters) - Zambia's kwacha and Kenya's shilling could fall against the
dollar in the next week to Thursday, while Uganda's shilling, Nigeria's
naira and Ghana's cedi are seen broadly stable, traders said.

 

KENYA

Kenya's shilling is expected to slip on increased demand for dollars from
oil-retailing companies at a time that some market participants are holding
off from big bets because of uncertainty over the budget and an
International Monetary Fund (IMF) disbursement.

 

Commercial banks quoted the shilling at 128.75/129.75 per dollar, compared
with last Thursday's closing rate of 127.75/128.75.

 

In mid-June Kenya reached a staff-level agreement with IMF, paving the way
for a disbursement of about $976 million once board approval is granted.

 

But since the staff agreement was reached Kenyan President William Ruto
withdrew planned tax hikes in response to nationwide protests, a move
analysts say could result in the country missing key IMF programme targets.

 

"There's an element of, you know, wait and see, we still need to hear from
the IMF okay and even from Treasury in terms of what is the final budget
going to look like," one trader said.

 

NIGERIA

Nigeria's naira is seen little changed on the official market and in street
trading.

 

 

LSEG data showed the naira at 1,534 to the dollar on the official market on
Thursday, compared with around 1,507 a week ago. The unit was quoted at
1,558 on the parallel market on Thursday.

 

Central bank governor Olayemi Cardoso said at a conference on Thursday that
the bank's clearer communication had helped reduce market volatility.

 

"A lot of the wide swings that we saw are gradually beginning to smoothen
out as a result of a better understanding of the market, greater
transparency that is taking place and the comfort that those using the
market see in it," he said.

 

GHANA

Ghana's cedi is expected to hold its ground due to improved liquidity on the
interbank market.

 

LSEG data showed the cedi trading at 15.35 to the dollar on Thursday,
compared with 15.30 at last Thursday's close.

 

"The cedi has seen continued stability this week amid increased volume of
dollar supply even with reduced intervention from the central bank. We
expect the stability to remain in the coming week," said Chris Nettey, head
of trading at Stanbic Bank Ghana.

 

"(The dollar/cedi pair) has been largely directionless in recent sessions,
with very little trading activity between market makers. Improved flows from
corporates have also contributed to tighter bid-offer spreads. Up ahead, we
expect much of the same," said Sedem Dornoo, senior trader at Absa Bank
Ghana.

 

ZAMBIA

Zambia's kwacha is expected to remain under pressure due to strong demand
for hard currency.

 

On Thursday the currency of Africa's second-largest copper producer was
trading at 25.35 per dollar from 24.30 a week ago.

 

"In the foreseeable future, losses are anticipated for the kwacha," Access
Bank said in a note.

 

UGANDA

Uganda's shilling is seen trading around its current levels as hard-currency
demand is curtailed by mid-month tax payments due in the local currency.

 

Commercial banks quoted the shilling at 3,695/3,705 to the dollar, compared
to last Thursday's close of 3,692/3,702.

 

"Demand will be tepid as we have mid-month taxes around the corner," one
trader said, adding the shilling would likely trade in a range of
3,680-3,710 to the U.S. currency in the coming week.

 

 

 <mailto:info at bulls.co.zw> 

Global Markets

 

Dollar drops, yen surges as consumer prices fall in June

Reuters) - The dollar dropped on Thursday after data showed headline
consumer prices unexpectedly fell in June, while a sharp gain in the
Japanese yen sparked speculation of a possible intervention in the currency.

 

The yen rose more than 2% at one point, after falling to a 38-year low
against the greenback last week.

Local Japanese television station Asahi, citing government sources, said
officials intervened.

Domestic news service Jiji cited top currency diplomat Masato Kanda as
saying he could not comment on whether or not there was an intervention, but
that recent moves in the yen were "not in line with fundamentals."

 

It will not be known for certain whether an intervention occurred until
Japan's Ministry of Finance releases its updated figures on intervention at
the end of the month.

 

Analysts noted that the move was likely caused by a large repositioning
after the softer U.S. consumer price index (CPI) earlier on Thursday. A rate
cut in September by the U.S. Federal Reserve is now seen as more certain,
which will reduce the attractiveness of long dollar/yen trades.

 

Positioning in long dollar/yen trades and momentum indicators were also
stretched heading into the data release, with many traders caught on the
wrong side of the move.

 

"I think it was just the reaction to the weak U.S. CPI and the squeeze of
the market long USD positioning. The USD weakened across the board, but more
so against the JPY because of positioning," said Athanasios Vamvakidis,
global head G10 FX strategy at Bank of America Global Research in London.

 

Buying the dollar and selling the yen has been popular because of the wide
interest rate differential between the two countries.

"A lot of this can be chalked up to a bit of unwind as people have been
piling in to this carry trade," said Michael Boutros, senior technical
strategist at FOREX.com in New York.

 

The dollar index was last down 0.49% at 104.45 and earlier reached 104.07,
the lowest since June 7.

Against the yen , the dollar was down 1.81% at 158.75 after hitting 157.4,
the weakest since June 17. It traded as high as 161.76 earlier on Thursday.

 

Boutros noted that the dollar reached a key area of technical support
against the yen, and will need to remain above that to maintain the upward
dollar trend that has been in place since December.

 

Thursday's consumer price data comes after Fed Chair Jerome Powell said this
week he was not ready to conclude that inflation is moving sustainably down
to 2% though he has "some confidence of that."

Unexpectedly elevated inflation in the first quarter raised concerns that it
will take longer for prices to recede than previously thought.

There have also been worries that it would be more difficult for inflation
to continue to recede compared with 2023, following improvement in the
second half of last year.

 

"The question was, could we match or beat it to keep the year-on-year
disinflation path going down," said Steve Englander, head of global G10 FX
research and North American macro strategy at Standard Chartered Bank NY
Branch, but "this was a pretty decisive" improvement.

The euro rose 0.34% to $1.0867 and reached $1.090, the highest since June 7.

 

Sterling hit an almost one-year high as comments from Bank of England
policymakers and better-than-forecast GDP data led traders to reduce bets on
an August rate cut in Britain.

 

BoE chief economist Huw Pill said on Wednesday price pressures remained
persistent and Thursday data showed British economic output increased by
0.4% in May, above expectations.

 

The pound was last up 0.51% at $1.2911 and reached $1.2947, the highest
since July 27, 2023.

In cryptocurrencies, bitcoin gained 0.72% to $57,821.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold Surges Past $2400 as June CPI Reveals Declining Inflation

The Bureau of Labor Statistics' latest Consumer Price Index (CPI) report,
released today, shows a significant decline in inflationary pressures for
June. This marks the first decrease in prices since early 2020.

 

According to the report, "The Consumer Price Index for All Urban Consumers
(CPI-U) declined 0.1 percent on a seasonally adjusted basis, after being
unchanged in May, the U.S. Bureau of Labor Statistics reported today. Over
the last 12 months, the all-items index increased 3.0 percent before
seasonal adjustment."

 

June's CPI dropped by 0.1%, following May's unchanged reading. This decline
brought the annual headline inflation rate to 3%, its lowest in a year and
considerably below May's 3.3% year-over-year figure. The results surpassed
economists' expectations, as FactSet consensus estimates had predicted a
0.1% monthly increase and a 3.1% annual inflation gain.

 

This report provides the Federal Reserve with the additional evidence of
waning inflation that Chairman Powell emphasized as a necessary component
needed to begin cutting interest rates during his recent congressional
testimonies. The data suggests that the Fed is getting closer to reaching
its goal of bringing inflation to its 2% target.

 

Skyler Weinand, chief investment officer at Regan Capital, suggests that
this favorable CPI report could pave the way for the Federal Reserve to
implement interest rate cuts as early as September, with a potential second
cut in December, provided inflation continues to trend downward.

 

Many analysts, including the author, believe that another positive inflation
report in August could prompt the Fed to ease its restrictive monetary
policy with at least two, possibly three, rate cuts this year. This aligns
more closely with the Fed officials' projections from the March FOMC
meeting, which anticipated three rate cuts in 2023. The most recent "dot
plot," however, had scaled back expectations to one or two cuts.

 

The impact of the CPI report on market sentiment regarding rate cuts was
immediate and significant. The CME's FedWatch tool now forecasts a 92.7%
probability of a rate cut at the September FOMC meeting, with an 84.6%
chance of a 0.25% cut and an 8.1% likelihood of a 0.50% reduction. Only a
7.3% probability remains for maintaining the current benchmark rate.

 

The gold market responded positively to this news. Spot gold (Forex) is
currently trading at $2,413.92, representing a substantial daily gain of
$42.79 or 1.8%. Gold futures for August delivery also saw significant
increases, reaching $2,421.90 as of 5:20 PM ET, up $42.20 or 1.77%. The
August contract touched an intraday high of $2,430.40.

 

 

 


 

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 

Email:               bulls at bullszimbabwe.com

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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
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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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suitable for all investors. Securities of emerging and mid-size growth
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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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