Bulls n Bears Daily Market Commentary : 23 July 2024

Wed Jul 24 09:18:53 CAT 2024

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Bulls n Bears Daily Market Commentary : 23 July 2024

ZSE commentary

ZSE posts a 0.29% gain as activity wa nes...

The ZSE market recorded a 0.29% gain in the session as three of the four
indices we review closed pointing northwards, despite reduced activity
across the board. The All-Share Index was 0.29% firmer at 203.91pts while,
the Blue-Chip Index inched up 0.45% to 213.90pts. The Mid Cap Index added
1.27% to 170.83pts while, on the contrary the Agriculture Index was 1.15%
weaker at 190.66pts. Leading the gainers of the day was property company
Mashonaland Holdings that edged up 14.49% to $0.2885, trailed by agriculture
concern Ariston that went up 12.86% to $0.0451. Roofing materials producer
Turnall rose 10.00% to $0.0550 while, Zimre Holdings Limited advanced 6.74%
to $0.3100. General Beltings fastened the top five gainers' list of the day
as it charged 5.71% to $0.0476 . Trading in the negative territory were BAT
that dropped 15.00% to close at lower circuit breaker limit of $50.9830
while, cable manufacturer Cafca parred off 13.04% to end trading at $16.0000
as scrappy 300 shares exchanged hands in the counter . Seed technology group
SeedCo Limited shed 3.85% to settle $3.2099, where demand could be found.
Packaging company Nampak was 3.77% lower at $1.1500 as it capped the losers
of the day.

Activity aggregates faltered in the session as volumes traded declined 8.87%
to see 5.39m shares exchanged hands while, turnover was 40.30% lower at
$10.98m .The duo of Star Africa and Econet drove the volume aggregate as
they contributed a combined 88.23% of the total. In the turnover category,
activity was mainly skewed toward Econet that claimed 84.41% of the total
value traded. In the ETF category, the funds traded mixed as the Old Mutual
Top 10 ETF trimmed 2.53% to

$0.1755 while, the Datvest MCS improved 1.99% to $0.0345. The Tigere REIT
inched up 0.33% to close at $1.0000 as circa 2.35m shares exchanged hands in
the aforementioned fund. Elsewhere, CBZ Holdings, through its subsidiary,
Datvest, has embarked on a US$150 million housing project, Northgate, a
mixed-use residential park w ith 8,000 housing units.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand weakens, eyes on inflation data

(Reuters) - The South African rand weakened in early trading on Tuesday, as
investors looked towards June inflation data due out on Wednesday and
markets watched for developments in the U.S. presidential race.

At 0725 GMT, the rand traded at 18.38 against the dollar, about 0.75% weaker
than its previous close.

"Market participants (are) sitting on the sidelines watching the U.S.
presidential race unfold and also local inflation data out tomorrow," said
Rand Merchant Bank analysts in a research note.

On Sunday, U.S. President Joe Biden withdrew his bid for reelection in the
November vote and endorsed Vice President Kamala Harris to face Republican
Donald Trump.

Investors will turn to June inflation data due on Wednesday for hints on the
future interest rate path of Africa's most industrialised economy.

Monetary policy has remained tight as the central bank tries to steer
inflation back towards the midpoint of its 3%-6% target range.

"Inflation is being forecast to print marginally softer at 5.1% for the
month compared to May's 5.2%," Rand Merchant Bank analysts added.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index traded around
0.4% weaker in early trade.

South Africa's benchmark 2030 government bond was weaker in early deals, as
the yield gained 3.5 basis point to 9.6%.

Nigeria

Naira slumps against dollar amid CBN interest rate hike 

The naira nosedived against the dollar at foreign exchange markets in the
wake of the Central Bank of Nigeria's latest interest rate hike.

Dayyabu Ashiru, a Bureau De Change operator in Wuse Zone 4, Abuja, told
DAILY POST that the naira exchanged for N1,590 per dollar on Tuesday from
N1,570 the previous day.

"We buy at N1,580 per dollar and sell at N1,590," he said.

This represents a N20 loss.

The naira similarly depreciated at the official foreign exchange market.

FMDQ data showed that the currency depreciated to N 1,548.76 per dollar on
Tuesday from N1,500.32 exchanged on Monday.

This showed that the naira shed N48.44 against the dollar on Tuesday
compared to the previous day.

The depreciation comes despite CBN selling $106.5 million in foreign
currency last Wednesday and Thursday to authorised dealers.

This comes on the heels of CBN's interest rate hike to 26.75 per cent on
Tuesday from 26.25 per cent in May.

 <mailto:info at bulls.co.zw> 

Global Markets

Chinese Yuan Hits Eight-Month Low Against The US Dollar

What's going on here?

The Chinese yuan hit its lowest level in over eight months, dropping to
7.2756 to the dollar this week.

What does this mean?

The yuan's decline stems from falling commodity prices and subdued demand in
China, impacting currencies tied to commodities. The US dollar stayed strong
as traders focused on upcoming US economic data. HSBC's Joey Chew
anticipates the dollar will continue to outperform the yuan, even if the
Federal Reserve starts cutting rates. Meanwhile, China's central bank set
the yuan's midpoint at its weakest since last November, but it was still
1,437 pips above Reuters' forecast. Despite the PBOC's careful management,
the yuan fell 1.96% below its midpoint, underlining China's ongoing economic
struggles.

Why should I care?

For markets: Riding the currency waves.

The strength of the US dollar versus the yuan highlights broader trends for
investors. China's fiscal challenges, such as property sector woes and weak
consumer spending, contribute to the yuan's pressure. Combined with lower
yields and stalled market sentiment despite policy updates, it suggests that
the US dollar might continue to gain. Analysts at Bank of America believe
that the yuan might not appreciate until 2025, reflecting a long-term
bearish outlook.

The bigger picture: Navigating global economic shifts.

China's recent rate cuts show its need for monetary support to bolster
growth. However, this move hasn't significantly improved market confidence,
hinting at deeper systemic issues. Globally, the strength of the US dollar
against other currencies could influence international trade dynamics and
investment flows. As the world's second-largest economy struggles, investors
and policymakers should stay alert to the broader ramifications, including
potential effects on global supply chains and market stability.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices climb as investors focus on US economic data

(Reuters) - Gold prices inched higher on Wednesday, with investors awaiting
U.S. economic data that could influence the Federal Reserve's rate-cut
timeline.

Spot gold was up 0.3% at $2,416.62 per ounce, as of 0402 GMT. U.S. gold
futures gained 0.4% to $2,417.10.

Investors expect key U.S. data releases this week, including the
second-quarter gross domestic product (GDP) reading on Thursday and the June
personal consumption expenditures (PCE) price index number on Friday, to
offer more cues about the rate-cut timeline.

"If either the GDP or core PCE figures produce an upside beat, this could
provide a stumbling block for gold in the short term on dollar strength,"
said Tim Waterer, KCM Trade's chief market analyst.

But "the near-term outlook for gold remains constructive from a fundamental
point of view, given that the Fed appears to be on the doorstep of a rate
cut."

The Fed will cut interest rates just twice this year, in September and
December, as resilient U.S. consumer demand warrants a cautious approach
despite easing inflation, according to a growing majority of economists in a
Reuters poll.

Bullion prices scaled an all-time high of $2,483.60 last week amid rising
bets of rate cuts. Lower interest rates reduce the opportunity cost of
holding non-yielding gold.

Spot gold may break resistance at $2,417 and bounce further to $2,432,
according to Reuters technical analyst Wang Tao.

Meanwhile, India slashed import duties on gold and silver to 6% from 15%,
which ANZ said should support jewellery manufacturing in the world's
second-biggest consumer of bullion and add to an already favourable backdrop
for demand.

Spot silver rose 0.2% to $29.28 per ounce.

"Growth estimates in photovoltaic panel usage have been markedly revised
higher, resulting in silver demand draws far exceeding supply. A price
squeeze within a few years is becoming more likely," Sprott Asset Management
said in a report.

Platinum firmed 0.3% to $945.73 and palladium steadied at $925.64.

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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