Bulls n Bears Daily Market Commentary : 06 June 2024

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Bulls n Bears Daily Market Commentary : 06 June 2024

 

 	

 

 

 	


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

 

 

ZSE extend gains in penultimate session of the week ...

 

The market extended gains in the penultimate session of the week as the
primary All Share Index added 0.62% to 106.83pts while, the Blue-Chip Index
gained 0.24% to 109.63pts. The Agriculture Index grew 4.11% to 97.02pts
while, the Mid Cap Index rose 2.15% to 104.45pts . Hippo topped the winners
of the day on a 15.00% jump to $4.8300 while, hotelier Meikles surged 14.84%
to $3.5600 . Life assurer Fidelity soared 14.67% to $0.8600 while, retailer
OKZim went up 11.68% to close at $0.4479 . Spirit and wines distiller AFDIS
capped the top five gainers of the day on a 11.43% uplift to end the day
pegged at

$2.6000. Fintech group Ecocash Holdings led the worst performers of the day
on a 9.77% retreat to $0.1764, followed by seed producer SeedCo that fell
0.22% to $1.7695 . Zimre Holdings Limited capped the laggards of the day on
a 0.02% decline to end the day pegged at $0.3394. The market closed on a
positive breadth of thirteen after seventeen counters recorded gains against
four that faltered.

 

 

Activ ity aggregates were mixed in the session as volumes traded ballooned
144.16% to 2.59m shares while, turnover dropped 10.71% to $2.63m. The top
volume drivers of the day were EcoCash (51.20%) and Econet (27.52%). The
threesome of Econet, Delta and Ecocash contributed a combined 87.49% to the
turnover . A total of 46,700 units worth $4,726.00 exchanged hands in the
session. OMIT ETF slipped 9.00% to end the day pegged at $0.1000. Tigere
REIT trimmed 0.08% to settle at $0.6595 after as 117,007 units exchanged
hands in the fund.

 

 

VFEX maintains a positive momentum ...

 

The VFEX  market maintained a positive momentum in today's session as the
All-Share Index added 0.77% to 100.64pts. Axia was the top performer as it
jumped 19.37% to $0 .0986. National Foods climbed 1.46% to close at $1.5000
while,fast foods group Simbisa completed the list on a 0.09% uplift. On the
contrary,  banking group  First Capital tumbled 1.61% to $0.0305 while,
Padenga dropped 0.06% to end the day pegged at $0.1700.

Activity  aggregates  were depressed  in the session as volume

26.63 traded succumbed 26.63% to 285,953 shares while, turnover shed 41.64%
to $85,400.44 . Padenga, lnnscor and Simbisa contributed 40.64%, 35 .11% and
20.24% to the total volume traded respectively . The top value drivers of
the day were lnnscor (52.76%), Simbisa (23.68%) and Padenga (23.13%) . -
efesecurities

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity Markets 

 

South Africa

 

South African rand edges higher with focus on ANC talks

(Reuters) - South Africa's rand made a slight recovery early on Thursday,
having slipped the day before when the African National Congress (ANC) said
it would try to form a government of national unity following last week's
election.

 

At 0715 GMT, the rand traded at 18.90 against the dollar , 0.2% stronger
than its previous close.

The ANC lost its majority in the May 29 election for the first time since
coming to power 30 years ago. It said on Wednesday that it had met with all
interested parties keen to contribute ideas to form a government.

 

The party's National Executive Committee will hold high-stakes internal
talks later on Thursday to discuss options.

"Traders are likely to remain on edge until there is some certainty on the
way forward, and we expect trading in the Rand to be fairly volatile and
headline-driven in the short term," said Andre Cilliers, currency strategist
at TreasuryONE.

 

On the stock market, the Top-40 (.JTOPI), opens new tab index was up 0.1% in
early trade.

South Africa's benchmark 2030 government bond was stronger in early trade,
with the yield down 12 basis points at 10.610%.

 

 

 

Ghana

 

Ghana to Hold Rates as Cedi Dive Keeps Inflation High

(Bloomberg) -- Ghana's policymakers are poised to keep interest rates
unchanged for a consecutive meeting to put a lid on high inflation and shore
up its currency.

 

Most economists surveyed by Bloomberg foresee the monetary policy committee
maintaining the benchmark rate at 29% when Governor Ernest Addison gives the
panel's decision later on Monday in the capital, Accra.

 

"I expect the Bank of Ghana to keep the policy rate on hold in May in order
to bolster the cedi and prevent higher import prices from keeping inflation
at the currently elevated level," said Mark Bohlund, a senior credit
research analyst at REDD Intelligence.

 

The cedi has lost about 10% of its value against the dollar since the MPC
kept borrowing costs unchanged at its March meeting, making it the worst
performing currency in the world over the period, and inflation has averaged
25%.

 

The cedi slide has been driven by a slump in cocoa earnings. Revenue from
exports of the beans, which Ghana uses to defend the currency, fell 49% to
$599 million in the first four months of this year. A mix of adverse
weather, disease and a shortage of fertilizer has curbed output in the
world's second-biggest producer of the chocolate ingredient.

 

Sign up here for the twice-weekly Next Africa newsletter

 

Bohlund and Courage Boti, an economist at Accra-based GCB Capital Ltd.,
predict that the MPC may be able to cut rates at its July meeting.

 

The currency could start to recover with a $360 million disbursement from
the International Monetary Fund expected at the end of June, after the
nation received a draft agreement to restructure debts with its official
creditors on Thursday.

 

Ghana is reorganizing most of its $42.2 billion debt, as part of conditions
for a $3 billion IMF program. Reaching a deal on a draft MOU was a condition
to get the $360 million instalment.

 

Favorable base effects could also see inflation slow sharply, said Boti.
"The more appropriate time to look at a rate cut will probably be July, by
which time the currency pressures would have eased and its full impact
assessed," he said.

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Dollar flat ahead of US jobs report, euro digests ECB cut

(Reuters) - The dollar traded sideways on Thursday ahead of Friday's U.S.
employment data that could help the Federal Reserve set a timetable for
easing, while the euro held steady after a widely anticipated European
Central Bank rate cut.

The euro rose 0.17% to $1.0887, approaching the 2-1/2 month peak of $1.0916
hit earlier in the week. Against the Japanese currency it was off 0.09% at
169.57 yen.

 

The dollar index , which measures the greenback against a basket of
currencies including the yen and euro, was 0.09% lower at 104.16, barely
reacting to news that applications for unemployment benefits rose more than
expected last week to 229,000.

 

Weekly jobless claims were also slightly above last week's upwardly revised
221,000. The data supported this week's market narrative that labor market
tightness is ebbing, which would be good for inflation and helped benchmark
U.S. Treasury yields edge lower.

 

Inflation in the 20 countries that share the euro has fallen from more than
10% in late 2022 to just above the European Central Bank's 2% target in
recent months, largely thanks to lower fuel costs and a normalization in
supply after post-pandemic snags.

That progress has stalled recently and what had looked like the start of a
major ECB easing cycle a few weeks ago now appears more uncertain due to
signs that euro zone inflation may prove sticky, as has been the case in the
United States.

 

"It was so much as expected, what ECB has said and done, that when you make
the adjustments for the 25 basis point cuts right now the swaps market
hasn't changed all that much," said Marc Chandler, chief market strategist
at Bannockburn Global Forex in New York.

Chandler was referring to the euro zone/U.S. interest rate differentials
that determine forward pricing for FX pairs and affect spot. He said it is
not unusual for the dollar to weaken ahead of monthly employment release,
then to rally back.

 

The Canadian dollar firmed 0.11% to C$1.37 per U.S. dollar a day after the
Bank of Canada's expected rate cut.

Ahead of Friday's U.S. jobs report, investors are grappling with the
implications for the Fed of several other pieces of U.S. data this week
showing employment growth moderating, albeit along with a pick up in service
sector activity.

 

The Federal Open Market Committee meets next week but is not expected to
lower rates yet. Markets are pricing in two 25 basis points Fed cuts this
year, with the first most likely in September.

 

The euro was also steady against the pound at 85.14 pence though towards the
bottom of its recent range.

Versus the dollar, sterling was almost flat at $1.2790.

YEN RISES

The yen was firm at 155.65 per dollar as investors digested Thursday remarks
from Bank of Japan Governor Kazuo Ueda that it would be appropriate to
reduce the central bank's bond buying as it moves toward an exit from
massive monetary stimulus.

The BOJ holds its two-day monetary policy meeting next week.

 

"This was almost a momentum play from the Japanese central bank - that is,
add in JPY positive news flow when funding currencies - JPY and CHF - were
already being covered and bought back, and the result was the JPY rally
gaining additional legs," said Chris Weston, head of research at
Pepperstone.

 

The Japanese currency had a brief rally earlier in the week as investors
unwound positions in yen-funded carry trades, following a strong election
victory for Mexico's ruling party which sparked concern about disputed
constitutional reform.

That resulted in a squeeze on long peso/short yen positions, which has been
a favourite among carry trades.

 

In a carry trade, an investor borrows in a currency of a country with low
interest rates and invests the proceeds in a higher-yielding currency

 

The peso was down fractionally against the yen <MXNJPY=R> at 8.8703 yen, a
day after rising 2.6%. It had fallen roughly 6% against the Japanese
currency at the start of the week, in the wake of Mexico's election results.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold price consolidates its gains near two-week top, US NFP data looms

Gold price (XAU/USD) is seen oscillating in a narrow trading range during
the Asian session on Friday and consolidating its gains to a two-week high
registered over the past two days. Investors now opt to move to the
sidelines and wait for the release of the closely-watched monthly employment
details from the United States (US). The popularly known Nonfarm Payrolls
(NFP) report will play a key role in influencing the Federal Reserve's (Fed)
future policy decisions, which, in turn, should provide a fresh impetus to
the non-yielding yellow metal.

 

Heading into the key data risk, rising bets for an imminent interest rate
cut by the Fed in September, bolstered by the incoming softer US macro data,
might continue to act as a tailwind for the Gold price. Furthermore, dovish
Fed expectations keep the US Treasury bond yields and the US Dollar (USD)
depressed near a multi-week low, which should further contribute to limiting
the downside for the commodity. Apart from this, geopolitical tensions
stemming from conflicts in the Middle East suggest that the path of least
resistance for the XAU/USD is to the upside. 

 

Daily Digest Market Movers: Gold price bulls turn cautious ahead of the
crucial US jobs report

Growing acceptance that the Federal Reserve will start cutting interest
rates later this year amid signs of a slowdown in the US economy continues
to lend some support to the non-yielding Gold price. 

 

The US Department of Labor (DoL) reported on Thursday that the number of
Americans applying for unemployment insurance benefits increased more than
expected by 229K in the week ending June 1.

This, along with Wednesday's ADP report on private-sector employment,
suggests that the US labor market is cooling, cementing bets for a September
Fed rate cut and weighing on the US Treasury bond yields. 

 

The yield on the benchmark 10-year US government bond languishes near its
lowest level in two months, which, in turn, is seen undermining the US
Dollar and acting as a tailwind for the yellow metal. 

The underlying strong bullish sentiment across the global equity markets
might hold back traders from positioning for any further gains ahead of the
release of the crucial US monthly employment details.

 

The popularly known Nonfarm Payrolls (NFP) report is expected to show that
the US economy added 185K jobs in May as compared to 175K previous and the
unemployment rate held steady at 3.9%. 

Apart from this, Average Hourly Earnings will influence the inflation
trajectory and the Fed's future policy decision, which, in turn, will help
in determining the next leg of a directional move for the XAU/USD.

 

Technical Analysis: Gold price is likely to confront stiff resistance near
the $2,400 round-figure mark

>From a technical perspective, Thursday's sustained move beyond the $2,364
area, or last week's swing high, was seen as a fresh trigger for bullish
traders. That said, mixed oscillators on the daily chart warrant some
caution before positioning for any further gains. Hence, any subsequent move
up is more likely to confront stiff resistance and remain capped near the
$2,400 mark. Some follow-through buying, however, has the potential to lift
the Gold price to the next relevant hurdle near the $2,425 zone en route to
the $2,450 region, or the all-time peak touched in May.

 

On the flip side, the $2,060 horizontal zone now seems to protect the
immediate downside. Any further decline might be seen as a buying
opportunity around the $2,340 region. This should help limit the downside
for the Gold price near the $2,315-2,314 area or the multi-week low touched
on Tuesday. A convincing break below, however, will confirm a breakdown
through the 50-day Simple Moving Average (SMA) and pave the way for deeper
losses. The XAU/USD might then weaken further below the $2,300 round-figure
mark and test the $2,280 support zone.

 

US Dollar price this week

The table below shows the percentage change of US Dollar (USD) against
listed major currencies this week. US Dollar was the strongest against the
Canadian Dollar.

 

 

 


 

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

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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
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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

 

 	

 

 

 	
							

 

 

 

 

 

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