Bulls n Bears Daily Market Commentary : 22 July 2024

Tue Jul 23 08:40:57 CAT 2024

 <http://www.bullszimbabwe.com> Bullszimbabwe.com
<mailto:bulls at bulls.co.zw> Views & Comments
<http://www.bullszimbabwe.com> Bullish Thoughts
<http://www.twitter.com/BullsBears2010> Twitter
<https://www.facebook.com/BullsBearsZimbabwe> Facebook
<http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn
<mailto:%20bulls at bullszimbabwe.com?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 22 July 2024

ZSE commentary

Focus turns to Treasury's mid-term as ZSE maintains rally

HARARE - Finance Minister Mthuli Ncube will present the mid-term budget
review on Thursday which is expected to show strong focus on two key areas;
boosting local currency use and measures to boost agricultural output as the
country gears up for recovery following the 2023-24 drought.

The mid-term budget review is an instrument to track how well the national
budget, as tabled at the beginning last year, has been executed, and to
allow for priority reshuffling if there is any need. The budget will be
recalibrated to ZWG from ZWL it was presented in last year while Ncube said
there would be no supplementary budget. The budget balance for the first
quarter of 2024 was a deficit of ZWL18.9 billion, which was mainly financed
through exchange rate gains (changes in Government current deposits).

The economic growth forecast will be revised to 2% from the previous 3.5%
and next year's growth is targeted at 5%. In order to set the economy on a
path of recovery following the impact of last season's drought, much focus
will be on measures to boost agricultural output to ensure food
self-sufficiency at both household level and country level. Industry is
targeting to get incentives and better taxation regimes to enable recovery
but it's unlikely that the Minister will avail any in light of the
well-known public sector pressures.

Ncube said Treasury and the Reserve Bank of Zimbabwe continue to be aligned
and are working "well together" through the Liquidity Management Committee.
In order to support this, the Minister is expected to announce measures to
increase the demand for ZWG and its subsequent use as they seek to lower the
usage ratio which is now at 90% USD is several sectors against 10% local
currency.

Inflation risk is now low and the pressure on the exchange rate is not
expected to be high for the remainder of the year. What continues to be a
drag is the lack of a tangible arrears and clearance plan and hopes are that
the Minister will dedicate more space to this. Total Public and Publicly
Guaranteed debt stock, as at end March 2024 stood at US$21 billion,
comprising of external debt stock amounting to US$13 billion (61.9%) and
domestic debt stock of US$8 billion (38.1%). To service its debt, Government
paid ZWL174.4 billion and US$102.7 million on maturing TBs during the first
quarter of 2024.

Meanwhile, Finance permanent secretary George Guvamatanga told journalists
after a routine engagement with the Budget and Finance Parly Committee, that
there was need to align the Auditor-General's department to the other
pillars of auditing within government so that their reports can be released
on time and properly reconciled to government operations. This comes amid
concerns about revelations in the recently released 2023 reports. The major
noise was around non-delivery of vehicles across all ministries, which
Guvamatanga said was not accurately audited.

He said that government had a centralised internal audit department where
procurement processes and reconciliations are made. However, the AG's
department does not make use of this department and continues to operate
independently. "We need to align the department with other auditing units.
For instance, the report highlighted non-delivery of cars at 197. As of June
2024, only about 20 had not been delivered. There is an information gap
between the departments."

Elsewhere, Zimbabwe Stock Exchange shares remained in positive territory
with the All Share Index gaining 1.75% to close past a key level after a
stellar performance from mid-tier stocks.  The All Share closed at 203.32 in
a session which yielded 20 risers against three fallers. The Medium Cap
Index rose 4.05% to 168.89 and the Top Ten was 0.75% higher 212.94.-finx

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

Nigeria

Dollar to Naira exchange rate appreciates massively

The Naira appreciated massively against the dollar upon resumption of
trading at the official market on Monday.

FMDQ data showed that the Naira appreciated to N1500.32 to the dollar on
Monday from N1596.92 recorded last week Friday.

This represents a whooping N96.6 gain against the dollar compared to the
N1596.92 per dollar exchanged on Friday.

Meanwhile, at the black market, the exchange rate dropped to N1570 per
dollar on Monday from N1550 last Friday.

This showed that the Nigerian Naira shredded N20 against the dollar compared
to the N1550 it exchanged on Friday.

Recall that last week, the Central Bank Of Nigeria sold $20,000 each to
legible Bureau De Change operators at an N1450 per dollar rate.

This comes as the apex bank revealed that it sold a total of $106.5 million
in Foreign currency in 48 hours to authorized dealers.

South Africa

South African rand stable, inflation data in focus

(Reuters) - The South African rand was stable in early trade on Monday as
investors await inflation data later this week for hints on the country's
future interest rate path.

At 0745 GMT, the rand traded at its Friday close of 18.2925 against the
dollar.

"With no data out today look for consolidation and ranges to persist," said
Rand Merchant Bank analysts in a research note.

At home, investors will focus on June inflation figures expected on
Wednesday, which may give clues on the future interest rate path of Africa's
most industrialised economy.

On Sunday, U.S. President Joe Biden ended his reelection bid and endorsed
Vice President Kamala Harris to replace him as the Democratic candidate in
the November election against Republican Donald Trump.

"Harris's emergence as the likely Democratic candidate could introduce
uncertainty, affecting market sentiment," said Andre Cilliers, currency
strategist at TreasuryONE.

The risk-sensitive rand often takes its cues from global drivers such as
U.S. political developments in addition to domestic factors.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index traded around
0.2% stronger in early trade.

South Africa's benchmark 2030 government bond was slightly weaker in early
deals, with the yield gaining 1 basis point to 9.66%.

 <mailto:info at bulls.co.zw> 

Global Markets

Indian Rupee Sees Small Rise Against US Dollar

The Indian rupee edged up to 83.6250 against the US dollar at 09:30 a.m. IST
from the previous session's close of 83.6575.

What does this mean?

This modest rise in the rupee aligns with a broader trend among Asian
currencies, led by the Korean won's 0.3% increase. Despite the dollar index
holding steady at 104.2, the rupee has recently struggled due to persistent
dollar demand from local importers and the Reserve Bank of India's
intervention to absorb dollar inflows. Investors are now eagerly awaiting
Prime Minister Narendra Modi's first post-election budget presentation at
11:00 a.m. IST. The budget is expected to outline an economic strategy that
balances fiscal responsibility with electoral promises and coalition partner
demands. Key points of interest include the fiscal deficit target,
forecasted at 5.1% according to a Reuters poll, and gross market borrowing
estimates. CR Forex's managing director, Amit Pabari, predicts the rupee
will stabilize between 83.40 and 83.70.

Why should I care?

For markets: Watching the ripple effects.

The rupee's movements are intertwined with trends in other Asian currencies.
Investors will be particularly attentive to Modi's budget details,
especially the fiscal deficit target and gross borrowing estimates. A
conservative fiscal approach could further strengthen the rupee, while a
higher borrowing target might apply downward pressure.

The bigger picture: A delicate balance.

Modi's budget is expected to chart the course for India's economic
trajectory. Balancing fiscal prudence with coalition partner needs and voter
expectations is a tricky task. How well this balance is achieved could
influence both domestic market sentiment and foreign investor confidence,
impacting the broader economic landscape.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold 

Gold price Gold slips to over 1-week low as dollar firms, investors await
more Fed cues

(Reuters) - Gold prices fell to a more than one-week low on Monday as the
dollar firmed, while traders awaited more U.S. economic data and comments
from Federal Reserve officials this week for clarity on the timeline for
interest rate cuts.

Spot gold fell 0.2% to $2,394.18 per ounce, as of 1837 GMT. U.S. gold
futures settled 0.1% lower at $2,394.70.

The dollar rose, making gold more expensive for other currency holders.

"We're seeing a quiet market today for gold" as "they're waiting to see what
exactly the change in the democratic party's candidacy means for the
election and for the country and the world overall," said Jeffrey Christian,
managing partner of CPM Group.

Joe Biden on Sunday announced he was exiting the U.S. presidential race, and
endorsed Vice President Kamala Harris as the Democratic candidate in the
November election.

"It's far too early for any strategic positions ... longer-term is probably
more favourable for gold if Trump is in the White House," said StoneX
analyst Rhona O'Connell in a note.

"Trump would be inflationary and potentially incendiary in geopolitical
terms, while Harris' foreign affairs policy is as yet undefined so that
favours gold for now, but not possibly in the longer term."

The market is now looking out for U.S. gross domestic product data for the
second quarter on Thursday, as well as the personal consumption expenditure
(PCE) data on Friday.

Money markets are fully pricing in a 25-basis-point Fed rate cut by
September, according to CME's FedWatch data. Lower interest rates reduce the
opportunity cost of holding non-yielding bullion.

Gold prices scaled an all-time high of $2,483.60 per ounce last week on
increased chances of U.S. interest rate cuts this year.

Spot silver fell about 0.6% to $29.09 after falling nearly 5% last week.
Platinum slipped 1.5% to $947.88, while palladium rose 0.1% to $909.50.

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

Website:            www.bullszimbabwe.com 

Blog:                 www.bullszimbabwe.com/blog

Twitter (X):        @bullsbears2010

LinkedIn:           Bulls n Bears Zimbabwe

Facebook:          www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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
constitute an offer to sell or the solicitation of an offer to buy or
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
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls 'n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
report shall be solely responsible for making their own independent
investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
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

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20240723/ee9ac48c/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 34378 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20240723/ee9ac48c/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 29359 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20240723/ee9ac48c/attachment-0002.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20240723/ee9ac48c/attachment-0003.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130906 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20240723/ee9ac48c/attachment-0001.obj>