Bulls n Bears Daily Market Commentary : 04 June 2024

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Bulls n Bears Daily Market Commentary : 04 June 2024

 

 	

 

 

 	


 <mailto:sales at dulys.co.zw?subject=Request%20Quote> ZSE commentary

 

 

Econet highlights trading activity ...

 

Telecoms giant Econet highlighted today's activity aggregates after
contributing 70.00% to the total volume traded and 81.69% to turnover. Star
Africa was the other notable volume driver with a 19.46% contribution while,
Delta claimed 15 .44% of the total value traded . Activity aggregates
enhanced in the session as volume of shares traded ballooned  175.86% to
2.68m while, turnover grew 695.55% to $4.67m. A total of 119,163 units worth
$4,313.15 exchanged hands in the ETF section. Datvest ETF trimmed 0.27% to
$0.0199 while, OMTI ETF stepped up 0.20% to close at $0.1099. The Revitus
REIT was 15 .00% firmer at $0.3335 while, the Tigere REIT traded 109,603
units at a stable price of $0.6600.

 

The primary All Share Index rose 1.95% to close at 105.llpts while, the
Blue-Chip Index went up 2.36% to 107.89pts. The Agriculture Index added
3.85% to 91.37pts while, the Mid Cap Index gained 1.19% to 101.6Spts. Sugar
processor Hippo Valley led the  top  performers  of  the  day  on  a  14.76%
jump  to

$3.8100, followed by Nampak that surged 14.29% to close at

$0.4000 on scrappy shares. Milk processor Dairibord climbed 11.54% to
$0.7250 while, Econet inched up 7.25% t.o $2.0366. Meikles Limited capped
the top five winners of the day on a 4.62% uplift to end the day pegged at
$2.8856. On the contrary, Star Africa was the worst performer of the day on
a 8.10% slide to $0.0065 while, General Beltings fell 1.69% to settle at
$0.0492. TSL slipped 0.94'% to $1.0500 as FBC Holdings dropped 0.18% to
settle at $1.8400. Banking group CBZ Holdings completed the fallers of the
day on a negligible 0.0001% retreat to end the day pegged at $3.6000. The
market closed with a positive breadth of nine as fourteen counters recorded
gains against five that faltered.efesecurities

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity Markets 

 

Nigeria

 

Naira remains calm across FX markets dollar sales rise by 94.46%

The naira on Tuesday remained calm across the foreign exchange (FX) markets
as the dollar sales surge by 94.46 percent at the official market.

 

 

The naira closed flat, losing 0.06 percent as the dollar was quoted at
N1,476.95 on Tuesday, compared to N1,476.12 quoted on Monday at the Nigerian
Autonomous Foreign Exchange Market (NAFEM), according to the market summary
released by the FMDQ Securities Exchange Limited.

 

The dollar sales by willing buyers and willing sellers increased
significantly by 94.46 percent to $236.99 million on Tuesday from $121.87
million recorded on Monday.

 

According to the market summary, the intraday high closed steady at N1,500
per dollar, while the intraday low depreciated to N1,362.15 on Tuesday as
against N1,250/$1 closed on Monday.

 

The local currency steadied at the rate of between N1,480 and N1,500 on the
parallel market also known as black market.

 

 

 

South Africa

 

Rand gains as investors bet Zuma is out, DA in for coalition government

 

Investors are hoping that the country will emerge from the next 13 days of
coalition talks with a market-friendly government.

Assets are rebounding and the rand has improved. 

 

Finance Minister Enoch Godongwana on Monday said the ANC will not make
reckless decisions in selecting a coalition partner.

South African assets are rebounding, fuelled by investor hopes that the
country will emerge from the next 13 days of coalition talks with a
market-friendly government.The rand surged as much as 1.6% on Monday, its
biggest one-day gain since December 14 after the ruling ANC failed to secure
a majority for the first time in 30 years. The rand was at R18.55 to the
dollar before 08:00 on Tuesday.

 

South Africa's dollar bonds were among the top performers in a Bloomberg
index of emerging and frontier sovereign Eurobonds, while the FTSE/JSE All
Share index ended the day as the second-best performing equity gauge in
dollar terms among the 92 indexes monitored by Bloomberg.

 

A new government must be sworn in by June 17, and the anticipated coalition
might look quite different to what was previously forecast.

 

Before the election, many on Wall Street had priced in the ANC securing
about 45% of the vote, allowing the party to form a coalition with a smaller
party. However, the ANC secured 40.2% of the vote only, opening up several
scenarios that investors had previously considered unlikely, including a
potential alliance with the left-leaning Economic Freedom Fighters or the
newly formed uMkhonto weSizwe party, which includes former president Jacob
Zuma.

 

 

"Our perception is that the market views a potential coalition with the
largest opposition party, the Democratic Alliance, as overall benign albeit
fragile," said Yvette Babb, a portfolio manager at William Blair Investment
Management. South African assets were highly volatile in the first hours of
trading on Monday, but ended the day on a more stable footing.

 

"A formal alliance with the DA would be most supportive and perhaps give
rise to a rally in asset prices. However, we believe there may be an
enduring rise in the South African risk premium given the increase in
implementation risks," Babb added.

 

Despite the setback at the polls, the ANC remains the country's largest
party. Finance Minister Enoch Godongwana on Monday said the ANC will not
make reckless decisions in selecting a coalition partner, aiming to maintain
investor confidence and economic policy continuity.

 

Current coalition talks involve potential alliances with the EFF, the MKP
and the DA. The ANC ruled out a demand by the MKP that President Cyril
Ramaphosa step down, and is considering a minority government or a
"confidence and supply" agreement to maintain stability.

 

Citigroup expects the ANC to rule as a minority government, creating
"parliamentary uncertainty and instability," economist Gina Schoeman said in
a note to clients. A pact with the DA would be welcomed by financial
markets, as it could accelerate economic reforms and privatization
initiatives, and is seen as a more likely scenario, Schoeman said.

 

South Africa's sovereign-risk premium eased Monday after jumping the most
since January by the close of trading Friday. The extra yield that investors
demand to own the nation's dollar debt rather than Treasuries stands at 319
basis points, according to JPMorgan Chase & Co. data.

 

"The higher risk premium that would arise as a result of a coalition between
the ANC, EFF, or the MK Party is reason alone to not enter such a
coalition," said Schoeman, which sees a 15% probability of this outcome.

 

For Sebastien Barbe, head of emerging market research at Credit Agricole,
the strong performance of the MKP adds to uncertainty for the rand. A
coalition with the DA would be more favorable for the currency compared to
one with the MKP or EFF, he said.

 

"The rand at current levels is not particularly stretched, and the carry is
decent, so this may limit some possible depreciation pressure that would
come from political uncertainty," said Barbe. "But i would say the rand risk
is the the downside in the short term."-newzim

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

US dollar drifts higher from multi-month lows; yen gains

(Reuters) - The U.S. dollar on Tuesday edged higher from its more than
two-month lows against the euro, sterling and Swiss franc, as investors
consolidated gains in other currencies ahead of a key nonfarm payrolls
report later this week.

The greenback, however, pared gains against a basket of currencies led by
the euro, extending losses versus the yen after U.S. job openings fell more
than expected in April to their lowest in more than three years, according
to the Job Openings and Labor Turnover Survey, or JOLTS report.

-

Job openings, a measure of labor demand, were down 296,000 to 8.059 million
on the last day of April, the lowest since February 2021.

Market participants had their focus on the JOLTS data ahead of Friday's U.S.
job report, which is expected to show 185,000 new jobs created in May, up
from 175,000 in April.

"I would look at what's coming now as basically noise ahead of the important
data coming out, which is the jobs report, on Friday and the Federal Reserve
meeting next week," said Eugene Epstein, head of structuring for North
America at Moneycorp in New Jersey. "Certainly we had the JOLTS data which
was pretty weak. That is still good news for the Fed."

-

JOLTS

The JOLTS report followed data on Monday showing a second straight month of
slowdown in manufacturing activity and an unexpected decline in construction
spending.

U.S. factory orders, on the other hand, rose for a third straight month in
April, boosted by demand for transportation equipment. Data showed factory
orders rose 0.7%, matching the revised pace in March.

In afternoon trading, the dollar index was up 0.1% at 104.12, having fallen
to its lowest since mid-April overnight at 103.99.

The euro, the biggest component in the dollar index, fell 0.2% to $1.0879 .

The European Central Bank is holding a meeting on Thursday and is widely
expected to cut interest rates.

The Bank of Canada is meeting on Wednesday and investors see a roughly 80%
chance the BoC would cut its benchmark interest rate for the first time
since March 2020.

The U.S. dollar was last up 0.4% at C$1.3682 .

"If the BOC and the ECB cut rates, which are already priced in, I would
focus on the tone of the statement and see if there is a divergence from the
Fed. That is really the key more than the cuts," Epstein said.

 

YEN RISES TO THREE-WEEK HIGH

The yen, on the other hand, rose to a three-week peak against the greenback,
as Bank of Japan officials warned they are keeping a close eye on the
currency, and a Bloomberg report said the central bank could soon discuss
reducing bond purchases.

The dollar was last down 0.8% at 154.74 yen .

BOJ Deputy Governor Ryozo Himino said on Tuesday the central bank must be
"very vigilant" to the impact of the yen's fluctuations on inflation, in
guiding monetary policy.

 

Bloomberg said the BOJ would address slowing its bond purchases at its
two-day policy meeting next week. That could push up yields in the coming
weeks and may come before an interest-rate hike in July.

Alex Loo, FX and macro strategist at TD Securities in Singapore, said
investors are also likely unwinding carry trades, leading to gains in the
yen and Swiss franc, given Monday's losses in the Indian rupee and Mexican
peso after the recent election results.

In carry trades, investors borrow in low-yielding currencies such as the yen
or Swiss franc to purchase higher-yielding ones such as emerging market
currencies.

 

The Mexican peso was still down on the day against the dollar, but not as
much as on Tuesday when losses were more than 4%. The dollar was last up
1.1% at 17.857 pesos.

The Indian rupee also fell versus the greenback, which last traded up 0.5%
at 83.524 rupees, amid a lack of clarity about the performance of the
alliance led by Indian Prime Minister Narendra Modi after it lost its
outright majority.

In Britain, sterling hit its highest since mid-March at $1.2818 before
falling to sit 0.3% lower at $1.2777.

Against the Swiss franc, the dollar also slid to its lowest since March of
0.8884 francs. It was last down 0.7% at 0.8898 francs. Data showed Swiss
inflation held steady at 1.4% year-on-year in May.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold price remains stuck in a familiar range around 50-day SMA

 

Gold price (XAU/USD) attracted some sellers on Tuesday and dropped to the
$2,316-2,315 area, back closer to a multi-week low touched the previous day
in the wake of a modest US Dollar (USD) strength. The attempted USD recovery
from over a two-month low, however, lacked follow-through on the back of
growing acceptance that the Federal Reserve (Fed) will start cutting
interest rates later this year, bolstered by softer US macro data. The
expectations keep the US Treasury bond yields depressed, which, in turn, is
seen benefitting the non-yielding yellow metal during the Asian session on
Wednesday. 

 

Apart from this, geopolitical risks stemming from the ongoing conflicts in
the Middle East lift the safe-haven Gold price back closer to the 50-day
Simple Moving Average (SMA). Despite a combination of supporting factors,
the XAU/USD remains confined in a one-week-old trading range as investors
seem reluctant to place aggressive directional bets and prefer to wait for
the release of the crucial US monthly employment details, or the Nonfarm
Payrolls (NFP) report on Friday. In the meantime, the US ADP report on
private-sector employment and the US ISM Services PMI should provide some
impetus later today. 

 

 

Daily Digest Market Movers: Gold price draws support from softere USD, Fed
rate cut bets

The US Dollar staged a modest bounce from over a two-month low touched on
Tuesday and exerted downward pressure on the Gold price, though dismal US
macro data helped limit losses. 

The Job Openings and Labor Turnover Survey, or JOLTS report, showed that job
openings fell more than expected, by 296K to 8.059 million in April, or the
lowest in more than three years.

This follows the disappointing release of the US ISM Manufacturing PMI on
Monday, which showed a surprising weakness in business activity and pointed
to signs of a cooling US economy.

Meanwhile, there is a risk that the US economy might be softening more than
anticipated cemented bets for a September rate cut by the Federal Reserve,
dragging the US Treasury bond yields lower.

The rate-sensitive two-year US government bond and the benchmark 10-year
Treasury yield languish near a two-week low, capping the USD and lending
support to the non-yielding yellow metal. 

Traders now look forward to Wednesday's US economic docket, featuring the
release of the ADP report on private-sector employment and the ISM Services
PMI to grab short-term opportunities.

The focus, however, remains glued to the official monthly employment data,
popularly known as the Nonfarm Payrolls report, which will determine the
next leg of a directional move for the XAU/USD.

Technical Analysis: Gold price needs to move above $2,350 hurdle for bulls
to seize back control

>From a technical perspective, the Gold price now seems to have found
acceptance below the 50-day Simple Moving Average (SMA). Moreover,
oscillators on the daily chart have just started gaining negative traction
and support prospects for further losses. A subsequent slide below the
multi-week low, around the $2,315-2,314 area touched on Tuesday, will
reaffirm the bearish bias and drag the XAU/USD below the $2,300 mark,
towards testing the $2,280 horizontal support. Some follow-through selling
will be seen as a fresh trigger for bearish traders and pave the way for an
extension of the recent corrective decline witnessed over the past two weeks
or so.

 

On the flip side, any meaningful upside now seems to confront stiff
resistance near the $2,349-2,350 supply zone. The next relevant hurdle is
pegged near the $2,360-2,364 area, which, if cleared decisively, should
allow the Gold price to climb further towards the $2,385 intermediate hurdle
en route to the $2,400 mark. The momentum could extend towards the $2,425
zone and eventually lift the XAU/USD to the $2,450 region, or the all-time
peak touched in May.

 

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against
listed major currencies today. US Dollar was the strongest against the
Japanese Yen.

 

 


 

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 

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Skype:         Bulls.Bears 



 

 

 	

 

 

 	

DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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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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