Bulls n Bears Daily Market Commentary : 11 June 2024

Wed Jun 12 08:47:22 CAT 2024

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Bulls n Bears Daily Market Commentary : 11 June 2024

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

ZSE maintains a positive momentum ...

The market maintained a positive momentum as the primary All Share Index
added 0.66% to 106.52pts while, the Blue-Chip Index g-ained 0.88% to
109.32pts. The Agriculture Index put on 0.36% to 95.43pts while, the Mid Cap
Index rose a negligible 0.003% to 106.43pts. Logistics company Unifreight
headlined the top performers of the day on a 15.00% jump to $0.3335,
followed by banking group FBC that surged 5.83% to close at

$1.9500. Proplastics stepped up 3.70% to $0.3500 while, TSL advanced 3.65%
to $1.1000. Retailer OK Zimbabwe capped the winners of the day on a 3.07%
rise to end the day pegged at $0.4611. In contrast, Nampak led the laggards
of the day on a 7.46% retreat to $0.4100 while, telecoms giant Econet
trimmed 2.70% to settle at $1.6678. Fintech group Ecocash Holdings lost
2.51% to $0.1914 while, Meikles slipped 0.95% to settle at $4.0929. Masimba
Holdings capped the fallers of the day on a 0.02% decline to end the day
pegged at $1.5393. The market closed with a positive breadth of three after
twelve counters recorded gains against nine that faltered.

Activity aggregates were mixed in the session as volume traded succumbed
36.05% to m shares while, turnover increased by 4.83% to $2.60m . The top
volume drivers of the day were FBC (36.54%), Econet (17.09%), Delta (14.36%)
and Nampak (8.13%). The trio of Delta, FBC and Econet contributed a combined
85.52% of the total value traded. The OMIT ETF rose 0.33% to end the day
pegged at $0.1060  as 620 units exchanged hands in the session. The Morgan
and Co MCS was stable at $0.3800 as scrappy 44 units traded. Tigere REIT
tumbled 1.47% to close at $0.6503 on 157,285 units.- efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets 

South Africa

South African rand gains as unity government talks continue

(Reuters) - The South African rand gained in early trade on Tuesday, as
political parties continued talks to try and form a government of national
unity in the country, days away from the first sitting of lawmakers.

At 0725 GMT, the rand traded at 18.6450 against the dollar, around 0.44%
stronger than its previous close.

The African National Congress (ANC) last week said it would look to form a
government of national unity after it lost its parliamentary majority in an
election in May, the first time since it came to power at the end of a
apartheid 30 years ago.

Potential partners include the pro-business Democratic Alliance (DA) and the
leftist Economic Freedom Fighters (EFF).

"The ongoing talks will remain at the front of investors' minds ahead of
Friday when the National Assembly will hold its first sitting," said Rand
Merchant Bank analysts in a research note.

New lawmakers will be sworn-in, and the speaker, deputy speaker and next
president will be elected.

South Africa's benchmark 2030 government bond was stronger in early deals,
with the yield down 4.5 basis points to 10.33%.

Nigeria

Naira appreciates against dollar by 0.02%

The Naira on Monday slightly appreciated at the official market trading at
N1,483.62 to the dollar.

Data from the official trading platform of the FMDQ Exchange, a platform
that oversees the Nigerian Autonomous Foreign Exchange Market (NAFEM),
revealed that Naira gained 37 kobo.

This represents a 0.02 per cent gain when compared to the previous trading
date on Friday when it traded at N1,483.99 to the dollar.

However, the volume of currency traded reduced to $161.69 on Monday down
from $269.27 million recorded on Friday.

Meanwhile, at the Investor's and Exporter's (I&E) window, the Naira traded
between N1,505 and N1,410 against the dollar.

Tinubu still paying fuel subsidy, shocking - AtikuJUST IN: Senate passes
anti-doping billUPDATE: 14 trapped at collapsed mining site in NigerICT
contest: Nigerian students' big winDue process will be applied in Binance
executive's trial - FG

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar stalls as market braces for CPI test, Fed outlook

(Reuters) - The dollar steadied on Wednesday after hitting a four-week high
against peer currencies overnight as market players awaited key U.S.
inflation data and the Federal Reserve's updated economic projections due
later in the day.

The U.S. dollar has rebounded after Friday's stronger-than-expected jobs
report raised the prospect of inflation remaining sticky while growth stays
strong, making the U.S. central bank less likely to cut rates in the coming
months.

Markets are pricing in a roughly 56% chance of a cut in September, according
to the CME FedWatch tool, down from 77.8% one week ago.

Investors will have a chance to assess the inflation situation when U.S.
Consumer Price Index numbers are released at 1830 GMT on Wednesday, just
hours before the Fed concludes its two-day policy meeting.

Economists polled by Reuters expect headline consumer price inflation to
ease to 0.1% from 0.3% last month, and core price inflation to remain steady
on the month at 0.3%.

Meanwhile, the Fed is widely seen holding rates at 5.25% to 5.5%, putting
the focus on policymakers' updated economic projections known as the "dot
plot" and Chair Jerome Powell's news conference for clues regarding the
timing and pace of cuts.

"Consensus seems to be that the number of cuts in 2024 will be downgraded
from three currently to two" in the latest dot plot, said Kieran Williams,
head of Asia FX at InTouch Capital Markets.

Powell is likely to strike a relatively dovish tone, however, given
disappointing growth indicators since the last Fed meeting, Williams said.

The dollar index , which measures the greenback against a handful of other
major peers, firmed at 105.29, after touching its strongest level since May
14 at 105.46 overnight.

The euro held steady at $1.073675 , keeping off Tuesday's low of $1.07195,
its weakest level since May 2.

Sterling was flat at $1.2739 ahead of UK gross domestic production figures
for April.

During Asian trading hours, data showed China's consumer inflation rose at a
steady pace in May, while producer price declines narrowed slightly, adding
to signs that government efforts to prop up the economy were starting to
bear fruit.

The offshore Chinese yuan was little changed at 7.2696 per dollar.

BOJ'S BALANCING ACT

The Bank of Japan (BOJ) will also meet this week, where it is widely
expected to keep interest rates steady and consider whether to offer clearer
guidance on how it plans to reduce its huge balance sheet.

"The BOJ will have to walk a tightrope in its policy meeting this week to
avoid inadvertently stoking JPY outflows, while also supporting growth and
preventing disorderly JGB markets," said Wei Liang Chang, currency and
credit strategist at DBS.

The dollar held the yen pinned at 157.235 , although the currency pair
remained off the one-week high of 157.40 touched the previous day.

Japan's wholesale inflation jumped in May at the fastest annual pace in nine
months, data showed on Wednesday, a sign the weak yen was adding upward
pressure on prices.

Although Japan's central bank will likely discuss bond buying cuts to
preempt yen selling pressure, Wednesday's U.S. CPI and Fed meeting will be
crucial in determining dollar/yen volatility this week, Chang added.

"The hurdle for another upside surprise to U.S. rates and the USD looks
quite high though, and we do not expect a retest of the 160 level in
USD/JPY," Chang said.

The yen's decline to a 34-year low of 160.245 per dollar at the end of April
triggered several rounds of official Japanese intervention totalling 9.79
trillion yen ($62.31 billion).

Overnight implied dollar/yen volatility touched a one-month high of 13.37%
on Wednesday ahead of the key events.

In cryptocurrencies, bitcoin last rose 0.15% to $67,381.00.

($1 = 157.1100 yen)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price struggles to gain ground as traders await US CPI and Fed decision

Gold price (XAU/USD) struggles to capitalize on its modest gains registered
over the past two days and trades with a negative bias during the Asian
session on Wednesday. The downtick, however, lacks follow-through as traders
keenly await the release of the latest consumer inflation figures from the
United States (US) and the outcome of the highly-anticipated Federal Open
Market Committee (FOMC) meeting later this Wednesday. This should provide
fresh cues about the timing when the Federal Reserve (Fed) will start
cutting interest rates, which will determine the near-term trajectory for
the non-yielding yellow metal.

Heading into the key data/event risks, investors have been scaling back
their bets for an imminent interest rate cut by the Federal Reserve (Fed) in
September amid a strong US labor market and sticky inflation. This assists
the US Dollar (USD) to stand tall near a one-month peak and turns out to be
a key factor acting as a headwind for the Gold price. The downside, however,
seems cushioned in the wake of renewed political uncertainty in Europe and
persistent geopolitical tensions. This warrants some caution for bearish
traders and before positioning for an extension of the recent pullback from
the all-time peak. 

Daily Digest Market Movers: Gold price fails to attract buyers amid Fed rate
jitters, stronger USD

.         Reduced bets for an imminent interest rate cut by the Federal
Reserve in September, along with China's decision to pause buying, turn out
to be key factors capping the upside for the Gold price. 

.         The current market pricing indicates that the Fed could cut rates
by only 25 basis points this year, either at the November or December policy
meeting, which continues to underpin the US Dollar.

.         The USD Index (DXY), which tracks the Greenback against a basket
of currencies, stands tall near its highest level since May 9 and
contributes to keeping a lid on the Dollar-denominated commodity.

.         Traders, however, now seem reluctant and prefer to wait for more
cues about the likely timing when the Fed will start cutting interest rates
before placing fresh directional bets around the XAU/USD.

.         Hence, the focus will remain glued to Wednesday's release of the
latest US consumer inflation figures and the crucial FOMC monetary policy
decision, due to be announced later during the US session.

.         Stronger jobs and wage data released on Friday raised concerns
that inflation may remain sticky amid a still resilient US economy, which,
in turn, will reaffirm higher for longer interest rates narrative. 

.         The headline US Consumer Price Index is expected to ease to 0.1%
in May from the 0.3% previous, and the yearly rate is seen unchanged at
3.4%, still well above the Fed's annualized target of 2%. 

.         Moreover, Core CPI is anticipated to hold steady at 0.3% during
the reported month and edge lower to the 3.5% YoY rate from 3.6% in April,
reaffirming stubbornly high inflationary pressure. 

.         Meanwhile, the US central bank is expected to leave interest rates
unchanged and release updated economic projections, including the so-called
"dot plot", which will influence the precious metal.

Technical Analysis: Gold price seems vulnerable below 50-day SMA, $2,285
support holds the key

>From a technical perspective, the $2,300 round figure now seems to act as
immediate support ahead of the $2,285 horizontal zone. Against the backdrop
of Friday's breakdown below the 50-day Simple Moving Average (SMA), some
follow-through selling below the latter will be seen as a fresh trigger for
bearish traders. Given that oscillators on the daily chart are holding in
the negative territory, the Gold price might then accelerate the slide
towards the next relevant support near the $2,254-2,253 region. The downward
trajectory could extend further towards the $2,225-2,220 area en route to
the $2,200 mark.

On the flip side, any strength beyond the $2,325 hurdle is more likely to
attract fresh sellers and remain capped near the 50-day SMA support
breakpoint, currently pegged near the $2,345 region. This is followed by the
$2,360-2,362 supply zone, which, if cleared decisively, should allow the
Gold price to retest last week's swing high, around the $2,387-2,388 area
and reclaim the $2,400 mark. A sustained strength beyond the latter will
negate any near-term negative bias and pave the way for a further
appreciating move in the near term.

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
Euro.

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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