Bulls n Bears Daily Market Commentary : 30 July 2024

Wed Jul 31 06:06:07 CAT 2024

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Bulls n Bears Daily Market Commentary : 30 July 2024

ZSE commentary

ZSE Econet's 10% loss weighs down ZSE; Simbisa to list US$28m property fund

HARARE - Zimbabwe Stock Exchange slipped into negative territory on Tuesday
ahead of the July month-end weighed down by losses in Econet.

The All Share Index was down 1.07% to 201.58 as investors focus turns to the
upcoming monetary policy statement, which is expected to contain measures on
how to refine the current willing buyer/willing seller forex market and
further measures to boost ZWG stability.

Market bias was positive after narrowly positive after 10 stocks recorded
gains against seven losers in relatively light trading sustained largely by
activity in Delta. Turnover was at ZWG6.95 million from 182 trades. Total
volume was at 1.6 million with Star Africa contributing the most at 782 400.
Delta brought in the most value at ZWG6.28 million.  

The Top Ten Index fell 1.95% to 209.62. Econet was the worst performer,
losing 10.69% to 325.50c, EcoCash dropped 0.96% to 49.43c while Delta pared
0.13% to 1 398.16c.

The Medium Cap Index rose 1.12% to 176.44. Proplastics, which is expecting
significant changes at shareholder level, was the top performer, gaining
14.86% to 170c.

Mining company RioZim put on 14.68% to 125c and retailer OK Zimbabwe added
11.85% to 80c. Zimpapers rose 6.97% to 5c on volume of 46 500 shares and
Turnall added 5.58% to 5.3c.

Ariston shed 4.47% to 4.39c in the wake of its trading update for the third
quarter to June, where it reported muted revenue performance of 0.5%, which
was weighed on by lower tea sales volume.  Star Africa was down a marginal
0.94% to 0.96c.

On the VFEX, the All Share put on a marginal 0.07% to 103.77. First Capital
led the risers, gaining 18.62% to 3.44 US cents and Zimplow was 8.74% ahead
to 1.99 US cents. Innscor put on 1% to 45.45 US cents while other fractional
gains were seen in African Sun and Seed Co International.

National Foods was the worst performer with a 10.26% loss to 175 US cents
and Edgars fell 5.5% to 1.89 US cents.

Simbisa saw a marginal loss of 0.08% to 35.47 US cents. The group is set to
list a US$28.5 million property fund as a REIT on the VFEX. The Pfuma Fund
seeks to raise US$15 million by selling 150 million units at 10 US cents.
The funds will be used to build new complexes in Ruwa and Eastlea.

The Fund will seek to grow its portfolio to US$50 million in five years with
more sites planned in Kuwadzana, Marondera and the Mbudzi area. The
portfolio currently includes the new Hogerty Hill Centre, Cork Corner and a
Chegutu development.

Total turnover was subdued at US$46 774 after the trade of 167 983 shares.
Simbisa brought in the most value at US$42 917. -finx

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand pares losses, focus on Fed

(Reuters) - The South African rand pared the previous session's losses in
early trade on Tuesday, as markets waited on the outcome of a U.S. Federal
Reserve meeting on Wednesday which could give hints on its rate-cut
timeline.

At 0729 GMT, the rand traded at 18.38 against the dollar, about 0.3%
stronger than its previous close, after tumbling against a stronger
greenback on Monday.

Investors will focus on the Fed on Wednesday for insights into the future
interest rate path in the world's biggest economy. The Fed is expected to
leave interest rates unchanged, but markets are betting on a cut at its
September meeting.

Like other risk-sensitive currencies, the rand often takes cues from global
drivers such as U.S. monetary policy in addition to domestic factors.

South Africa's National Treasury will publish the country's budget balance
figures for June later on Tuesday.

On the Johannesburg Stock Exchange, the Top-40 index eased about 0.1% in
early trade. South Africa's benchmark 2030 government bond was slightly
stronger, with the yield down 1.5 basis points at 9.49%.

Nigeria

Naira falls to 1,621/$ at official market

The naira fell to a four-month low on Tuesday at the official window as it
traded at 1621. 12/dollar compared to N1611. 40/dollar on Monday.

This marked a 0.60 per cent depreciation from the previous day's close.

This is despite recent interventions of the Central Bank of Nigeria during
which it sold dollars to authorised dealers and eligible Bureau De Change
operators, suggesting that foreign exchange demand continues to outweigh
supply.

"In the interim, we expect the naira to remain weak, driven by tight market
liquidity due to the CBN's limited capacity to significantly intervene in
the FX market," Cordros Capital Limited recently said in an update.

The CBN Governor, Olayemi Cardoso, said that the central bank was not
interested in defending the naira but allowing the market forces to
determine the price and that it would merely step in to provide liquidity in
specified segments of the market.

At the close of Monday's trading, the naira fell to 1,611.40/$ on the
Nigerian Autonomous Foreign Exchange Market domiciled on the FMDQ Securities
Exchange.

The naira closed at 1,611.40/$ on Monday, about 0. 13 per cent weaker
compared to the close of 1,609/$ on Friday.

The daily turnover stood at $179.34m compared to $168.3m on Friday with an
intra-day high of 1,622/$ and an intra-day low of 1,500/$.

At the black market on Tuesday, the naira traded as high as 1,630/$.

A ship equipment merchant in the Apapa area of Lagos, who spoke with The
PUNCH off the record, disclosed how he had agreed to sell a piece of
equipment at the rate of 1,550/$ on Monday evening only to wake up to higher
rates on Tuesday.

 <mailto:info at bulls.co.zw> 

Global Markets

Yen gains on reports of possible BOJ hike to 0.25%

(Reuters) - The Japanese yen gained on Tuesday on news reports that the Bank
of Japan is considering raising rates to 0.25% when it concludes its two-day
meeting on Wednesday.

That would be an increase from the current 0-0.1% and more than the market
is currently pricing in, with a 10 basis-point increase still seen as only a
55% probability.

The Japanese central bank will also detail plans to taper its huge bond
buying as it steadily unwinds a decade of massive monetary stimulus.

"We've seen quite a move in the yen on the day," said Shaun Osborne, chief
foreign exchange strategist at Scotiabank in Toronto. "Some people were
thinking that this move had probably already played out, but I think there's
still the potential for some of these carry trades and some of the
positioning to unwind a little bit further."

The dollar was last down 0.47% at 153.29 yen . The dollar has fallen against
the Japanese currency since hitting a 38-year high of 161.96 on July 3.

Osborne sees the yen having a fair value of around 145 against the dollar,
saying that "there's a way to go before the short yen trade is fully cleaned
out and maybe even reversed."

The greenback has lost around 4.7% against the Japanese currency this month.

The yen had weakened earlier on Tuesday as investors closed positions before
Wednesday's interest rate decision.

"We've obviously had a very big move in the month of July," said Brad
Bechtel, global head of FX at Jefferies in New York.

Bechtel sees further yen gains as likely temporary, with the currency
expected to continue to suffer from the wide differential between U.S. and
Japanese interest rates.

"The yen is going to ultimately resolve weaker over time. It's just a
question of how long that time period is," Bechtel said. "There's no point
in being long the yen because nobody wants to pay carry when they can earn
carry in a myriad of other ways in the FX market."

The dollar fell 0.03% to 104.55 against a basket of currencies , after
earlier hitting 104.79, the highest level since July 11.

The Federal Reserve on Wednesday is expected to hold rates steady, but
possibly give stronger clues that it is closer to rate reductions.

Traders see a rate cut in September as certain and are also pricing in a
second and possibly third cut by year-end.

The U.S. central bank is wary of hinting at cuts too soon in case inflation
rebounds, however, which may make a signal more likely at the U.S. central
bank's economic symposium in Jackson Hole, Wyoming, next month.

U.S. data on Tuesday showed that U.S. job openings fell modestly in June and
data for the prior month was revised higher. Consumers' perceptions of the
labor market, meanwhile, are deteriorating.

The euro fell 0.06% to $1.0812 and earlier reached $1.0798, the lowest level
since July 8.

The euro zone's economy grew slightly more than expected in the three months
to June, though a mixed underlying picture and a string of pessimistic
surveys cloud the outlook for the rest of the year.

The German economy unexpectedly contracted in the second quarter after
skirting a recession at the beginning of the year and July's inflation rose.

Sterling weakened 0.2% to $1.2833 before the Bank of England's Thursday
meeting. Market pricing sees it as roughly a coin toss whether the BoE cuts
rates.

In cryptocurrencies, bitcoin fell 2.64% to $65,586..

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price gains 1% following rise in Middle East tensions

Gold prices gained the most in two weeks on Tuesday as traders sought safety
in the precious metal after Israel struck Beirut's suburbs in response to a
weekend attack.

Spot gold was 0.9% higher at $2,405.00 per ounce by 2:30 p.m. ET, its
biggest intraday gain since July 16. US gold futures crossed the $2,450 mark
in New York, up 1.0% at $2,451.10 per ounce.

Sign Up for the Precious Metals Digest

Gold's rise follows an Israeli attack on the Lebanon capital as retaliation
for a rocket strike in the Golan Heights on Saturday that killed 12 people.
The metal, which has gone up by over 15% this year, traditionally gains
value during times of geopolitical uncertainty.

Fed expectations

The precious metal wavered earlier in the day as traders parsed through
fresh US data while awaiting a flurry of central-bank events in coming days,
including a Federal Reserve policy meeting Wednesday.

Data on Tuesday showed US consumer confidence rose in July on an improved
outlook for the economy, while job openings in June came in above forecast.

The Fed is expected to hold benchmark rates at the highest level in more
than two decades this week, and traders will be closely watching for any
hints that the start of policy easing is near. Policymakers in Japan and the
UK will also meet, as traders look for signs of rate cuts in both economies.

Gold hit a record earlier this month as Asian investors ramped up demand for
physical bars in the over-the-counter market. It was the precious metal's
best second quarter in data going back at least 25 years, according to the
World Gold Council.

This year's US presidential election has also started to spur interest in
bullion. Gold-backed exchange-traded funds have expanded by about 44 tons in
July, putting them on track for the biggest increase in more than two years,
the WGC said.

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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opinions expressed and recommendations made are subject to change without
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