Bulls n Bears Daily Market Commentary : 16 July 2024

Wed Jul 17 09:24:39 CAT 2024

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Bulls n Bears Daily Market Commentary : 16 July 2024

ZSE commentary

ZSE rising streak continues in Tuesday's trades...

The ZSE rising streak continued in Tuesday's trades as all the four indices
we review closed pointing northwards. The All- Share Index was 4.99% higher
at 189.22pts while, the Blue- Chip Index charged 5.22% to breach  the 200pts
mark as it ended pegged at 202.25pts. The Agriculture Index jumped 7.06% to
163.77pts mainly buoyed by BAT, TSL and Dairibord. The Mid Cap Index added
3.45% to close at 151.63pts. Cigarette producer BAT led the gainers of the
day as it inched up 15.00% to close at circuit breaker limit of $51.7495 as
1,000 shares exchanged hands in the name. TSL edged up 14.99% to $2.6230
while, Dairibord trailed behind with a near similar gain of 14.98% to settle
at $1.7500. Cable manufacturer Cafca advanced 14.62% to end at $14.9000
while, banking group ZB Financial Holdings fastened the top five gainers'
list of the day on a 13.03% upsurge to $9.2909. Retailer Ok Zimbabwe led the
laggards of the day as it dropped 8.16% to $0.5050 while, Star Africa shed
7.07% to close at $0.0075. Property concern Mashonaland Holdings trimmed
3.70% to $0.2600 as scrappy 2,800 shares traded in the session while,
Ecocash was 1.39% lower at $0.4350. General Beltings fell 0.40% to $0.0500
as it capped the top five losers' list of the day.

Activity aggregates improved in the session on the back of book overs mainly
done by institutional players. Volumes traded rose 5.03% to 6.94m shares
while, turnover jumped 95.52% to $27.58m. OK Zimbabwe, Delta, Econet and
Star Africa led the volume drivers of the day as they claimed a combined
84.66% of the aggregate. In the turnover category, activity was mainly
confined in Delta that claimed 75.04% of the total value traded. lh the ETF
category, the Datvest MCS ETF garnered 14.86% to $0.0270 as 6.79m units
traded in the fund. The Tigere REIT was 3.96% up at $0.7404 while, the
Revitus recorded no trades in the session.

VFEX losses continue into the second session of the week...

Losses continued into the second trading session of the week as the
All-Share Index slipped 1.42% to 102.16pts . Banking group First Capital
retreated 15.29% to $0.0338 while, Axia dropped 12.06% to $0.0751.
Agriculture concern Zimplow shed 3.00% to $0.0194, where demand could be
found while, lnnscor parred off 2.13% to $0.4374. Partially offsetting
today's gains were Edgars and Padenga that advanced 11.11% and 6.98% to
settle at $0.0200 and $0.1410. Seed technology group Seed Co International
rose 0.18% to $0.2710 while, Simbisa added 0.17% to $0.3508.

Activity aggregates enhanced in the session as volumes traded ballooned
3,930.S5% to 745,023 shares while, value outturn increased by 92 .24% to
$249,551.95. Activity was mainly confined in lnnscor that contributed 62
.56% of the volume traded and 81.69% of the turnover.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand slips before retail sales data

(Reuters) - The South African rand slipped against the dollar in early trade
on Wednesday before the release of retail sales figures.

At 0625 GMT, the rand traded at 18.0725 against the dollar , about 0.2%
weaker than its previous close.

Statistics South Africa will publish May retail sales data (ZARET=ECI),
opens new tab at 1100 GMT, shedding light on consumer spending patterns in
one of Africa's biggest economies.

Economists polled by Reuters predict retail sales will rise 0.7% year on
year in May, after a 0.6% increase in April.

-

>From 1200 GMT, mining and petroleum minister Gwede Mantashe will brief
reporters on his plans for those sectors.

On Thursday investor attention will shift to an interest rate announcement
by South Africa's central bank (ZAREPO=ECI), opens new tab and a speech in
parliament by President Cyril Ramaphosa laying out priorities for the new
coalition government.

Nigeria

Naira depreciates against dollar despite CBN's $122.67m intervention

THE naira depreciated against the dollar in the just concluded week despite
the Central Bank of Nigeria's (CBN) $122.67 million foreign exchange (FX)
sales to authorised dealers.

At the official Nigerian Autonomous Foreign Exchange Market (NAFEM) on
Friday, July 12, the naira fell to N1,563.80 to the dollar, compared to
N1,509.67 per dollar on Monday, July 8.

In the parallel market, the naira also fell to N1,540 on Friday from N1,523
to the dollar on Monday.

Last week's performance of the Nigerian currency against the dollar reflects
the weakness in the value of the naira in recent times, traceable to FX
volatility in the Nigerian currency market.

Although the sale of the $122.67 million to authorised dealers led to a
surge in FX turnover in the week, it could not relieve the naira
depreciation against the dollar.

In a statement on Friday, July 12 by its Director of Financial Markets,
Omolara Duke, the apex bank disclosed that it sold $122.67 million FX to
authorised dealers.

According to the CBN, it sold $67.5 million to 27 authorised dealers while
purchasing $2.5 million from one authorised dealer on Wednesday, July 10.v

He realed that the bid range for the transactions was between N1,480/$1 and
N1,500/$1.

He said on Thursday, July 11, it sold $55.17 million to 19 authorised
dealers at a rate of N1,540.0/$1, stating that the payments for these spot
sales are due on July 15, 2024.

"All authorised dealers are to ensure that foreign exchange purchases from
the Bank are used exclusively for trade-backed transactions, which should be
reported within 72 hours," the apex bank added.

According to the Chief Economist at Vetiva Capital Management Limited,
Ibukun Omoyeni, the naira will begin to shed some gains with the coming up
of the CBN by-monthly Monetary Policy Committee (MPC) this month.

While on Channels TV on Saturday, July 13, he noted this to be the practice,
given the fact that the MPC has its stands against FX pressure.

"The exchange rate factor is that we don't look at weekly or monthly
forecast, we look at quarterly or yearly forecast because a lot of factors
can cause the naira to depreciate today in the short term and appreciate
today in the medium term," he said.

Between January and February this year, the naira traded around N1,800 to
the dollar.

Omoyeni added, "The fact that we are at N1,500 shows that there are some
improvements."

The ICIR reports that Naira depreciation remains one of the economic
headwinds causing food inflation and soaring commodities prices in the
country.

In the last year, basic staples like rice, beans, and vegetables have become
increasingly unaffordable for the average Nigerian, stretching household
budgets to their limits.

The monthly inflation data of the National Bureau of Statistics (NBS) show
food index constitutes over 51 per cent of the inflation basket which could
be attributed to rising prices in fundamental food commodities, including
bread, cereals, oil, and fat.

According to analysts at Cowry Asset Management, 43 food items surveyed
reported price increases on a year-on-year and month-on-month basis between
April and May 2024.

"An unweighted simple average, which does not account for consumption
trends, shows that the average price of food items in the Bureau's
designated basket increased by 137.3% year-on-year and 13.4%
month-on-month," the analysts stated in weekly financial markets review.

 <mailto:info at bulls.co.zw> 

Global markets

Stocks rise, dollar flat on solid data and rate cut prospects

(Reuters) - World stock indexes mostly rose and the U.S. dollar gained
against the yen on Tuesday after solid U.S. retail sales data was taken as
supporting prospects the Federal Reserve will ease rates to rein in
inflation while aiming to avoid a recession.

Data showed retail sales unchanged in June from a May reading that was
higher than initially estimated.

Echoing comments from Fed Chair Jerome Powell on Monday, Fed Governor
Adriana Kugler said recent data suggests inflation is returning to the
central bank's 2% target. Investors are pricing in a cut of at least 25
basis points (bps) at the U.S. central bank's September meeting, according
to CME's FedWatch Tool.

-

The retail sales data suggest consumers are still spending, "so the market
definitely saw that as a favorable data point," said Dustin Thackeray, chief
investment officer at Crewe Advisors in Salt Lake City.

MSCI's gauge of stocks across the globe (.MIWD00000PUS), opens new tab rose
3.00 points, or 0.36%, to 831.73. The Dow Jones Industrial Average reached
an all-time closing high of 40,954.48.

Investors kept pondering the implications of a possible Donald Trump victory
in the upcoming U.S. presidential election following the attempted
assassination on Trump on Saturday.

-

The Republican former president has indicated support for policies
traditionally seen as friendly to domestic businesses, such as loosening
regulation, increasing tariffs on some foreign imports and cutting taxes.

The S&P 500 (.SPX), opens new tab gained 35.98 points, or 0.64%, to 5,667.20
and the Nasdaq Composite (.IXIC), opens new tab gained 36.77 points, or
0.20%, to 18,509.34.

"Obviously the market liked the boost in his ratings and the potential for a
Trump presidency... we know what we're getting with Trump," Thackeray said.

Boosting the Dow and S&P 500 was UnitedHealth Group (UNH.N), opens new tab,
which gained more than 6% after strong results.

In Europe, the STOXX 600 (.STOXX), opens new tab fell 0.28%.

A CLOSE RACE

Opinion polls show a close race between Trump and President Joe Biden,
though Trump leads in several states that are likely to decide the November
election.

Trump's nomination on Monday of his onetime critic, Ohio Sen. J.D. Vance, as
his vice presidential running mate, also reverberated in financial markets.

"Vance is particularly tough on China, so that's one of the reasons for the
weakness in Chinese assets today," said Colin Asher, economist at Mizuho.

Shares of Trump Media & Technology Group (DJT.O), opens new tab gave back
some of the large gains racked up on Monday, falling 9.1% on the day.

The dollar index , which measures the greenback against a basket of
currencies, was near flat at 104.22 after giving up earlier gains, with the
euro up 0.05% at $1.0899.

Against the Japanese yen , the dollar strengthened 0.22% to 158.37.

Investors are still closely watching the yen after Tokyo's suspected
intervention last week disrupted the popular carry trade.

Japanese officials also issued fresh warnings of possible measures.

Data on Tuesday showed the Bank of Japan likely intervened a second time on
July 12 to the tune of 2.14 trillion yen ($13.50 billion) to support the
currency, following some $22.43 billion apparently spent on intervention the
previous day.

The yield on benchmark U.S. 10-year notes hit a four-month low on rate cut
expectations, falling 6.6 basis points to 4.163%, from 4.229% late on
Monday.

Oil prices racked up their third straight day of losses. Brent futures
closed down 1.3%, to $83.73 a barrel, while U.S. West Texas Intermediate
(WTI) crude fell 1.4%, to $80.76.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold 

Gold price Gold hits new all-time high as US yields tumble, buyers eye
$2,500

Gold price skyrockets to a new all-time high of $2,469 on Tuesday amid
growing bets that the US Federal Reserve (Fed) will begin its easing cycle
in September. This, along with increasing chances that former President
Donald Trump would win November's election, underpinned the yellow metal.
The XAU/USD trades at $2,467, gains more than 1.70%.

Last week's lower-than-expected consumer inflation figures pushed
non-yielding metal prices higher amid the Fed's dovish pivot. The CME
FedWatch Tool shows that the odds for a 25-basis point rate cut in September
are 100%, with a minuscule part of economists foreseeing a 50 bps of easing.

Besides this, over-the-weekend political developments involving former
President Trump sponsored a leg-up on the Golden metal. Trump's Presidency
will aim to increase tariffs and cut taxes, which will most likely increase
the US budget deficit and generate inflationary pressures.

Meanwhile, Fed Chair Jerome Powell appeared at the Economic Club of
Washington, where he commented that the economy performed well and added
that the Fed will lower borrowing costs once it is confident that inflation
is moving toward the 2% goal.

Data-wise, the US Census Bureau reported that Retail Sales in June were
unchanged, as expected. However, excluding autos, sales rose sharply,
exceeding forecasts.

Daily digest market movers: Gold climbs as traders ignore mixed US data

Weaker-than-expected US Consumer Price Index (CPI) data sponsored Gold's
leg-up above $2,400, as the odds for Fed rate cuts increased, as reflected
by falling US Treasury bond yields.

US Retail Sales in June were flat at 0% MoM, as expected. Core sales
expanded by 0.4% MoM, above the projected 0.1%.

June Export and Import Prices both decreased, with Export prices dropping
-0.5% MoM, below the forecast of -0.1%. Import prices rose compared to May's
-0.2% decline, coming in at 0%, beneath the estimated 0.2% increase.

Meanwhile, the US Dollar Index (DXY), which tracks the Greenback against a
basket of six currencies, is up by a minimal 0.02% at 104.27.

December 2024 fed funds rate futures contract implies that the Fed will ease
policy by 53 basis points (bps) toward the end of the year, up from 50 last
Friday.

Bullion prices retreated slightly due to the People's Bank of China (PBoC)
decision to halt gold purchases in June, as it did in May. By the end of
June, China held 72.80 million troy ounces of the precious metal.

Gold technical analysis: XAU/USD surged and extended rally as traders eye
$2,500

Gold prices remain bullish and trading at all-time highs, clearing the May
20 high of $2450, which opened the door for further gains. Momentum is still
in the bulls' favor, as depicted by the Relative Strength Index (RSI), which
aims higher and is shy of reaching "regular" overbought conditions.

XAU/USD's next resistance would be $2,475, followed by the $2,500 figure.
Conversely, if gold prices slide below $2,450, the first resistance would be
the $2,400 figure, followed by the July 5 high at $2,392. If cleared,
XAU/USD would continue to $2,350.

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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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
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for guideline purposes only and sourced from third parties.

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