Bulls n Bears Daily Market Commentary : 12 June 2024

Thu Jun 13 08:42:55 CAT 2024

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Bulls n Bears Daily Market Commentary : 12 June 2024

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

Ecocash  highlights activity aggregates...

Fintech  group  Ecocash  highlighted  the  volume  and value aggregates as
30.16m shares worth circa $4.98m exchanged

volumes traded and 67.02% of turnover. The other notable value driver was
Delta with a 10.13% contribution to the turnover. Volumes traded soared
3082.89% to 31.94m shares while, value outturn jumped 185.66% to $7.43m. The
ETFs traded sideways in the midweek session as the Old Mutual ETF dropped
0.97% to $0.1050 while, the Datvest MCS put on 5.26% to $0.0200.
Cumulatively, 49,625 units worth $5,141.05 traded in the two funds . The
Tigere REIT gained 1.49% to close at $0.6600 on 2,340 units worth $1,544.40.

The mainstream All Share Index trimmed 0.01% to close at 106.51pts while,
the ZSE  Top Ten Index  retreated 0.23% to 109.07pts. The ZSE Agriculture
Index and the Mid Cap Index added 0.52% and 0.49% to close at 95 .93pts and
106.95pts respectively. Proplastics charged 14.72% to settle at $0.4015
while, agriculture concern CFI surged 14.24% to $1.6000. Packaging group
Nampak jumped 7.32%  to  $0.4400  on scrappy 550 shares while, banking group
CBZ grew 0.54% to $3.6200. Tea company Tanganda capped the top five winners
of the day on a 0.52% rise to $1.4600. Ecocash declined 13.72% to  $0.1651
as  brick  makers  Willdale  dwindled  11.11%  to $0.0400. Star Africa shed
1.37% to $0.0084 as ART slipped 1.02% to $0.0800. Cigarette manufacturer BAT
lost 0.68% to end pegged at $21.8495.

Simbisa glimmers on the VFEX ...

Fast foods group Simbisa highlighted the activity aggregates in the mid-week
session claiming 96.37% of the total volumes

traded and 98.54% of the value outturn after 77,48l shares worth $27,090.77
exchanged hands. Volume of shares traded plummeted 97.14% to 80,396 while,
turnover tumbled 93 .95% to $27,492 .45.

The VFEX All Share Index was down 0.55% at 99.90pts. Gainers of the day were
Edgars and Simbisa that rose 5.56% and 2.97% to $0.0190 and $0.3496 apiece.
Padenga retreated 5.88% to $0.1600 as African Sun shed 4.76% to $0.0400.
lnnscor closed at $0.4554 after a 0.63% slide..- efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets 

South Africa

South African rand firms, focus on unity government talks

(Reuters) - The South African rand strengthened on Wednesday, as investors
waited for collaboration signs between parties trying to form a government
of national unity before lawmakers' swearing in on Friday.

At 1528 GMT, the rand traded at 18.40 against the dollar , nearly 1%
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 for the first time since it came to power at the end of
apartheid 30 years ago.

The ANC's potential collaboration partners range from the pro-business
Democratic Alliance (DA) to the leftist Economic Freedom Fighters (EFF).

Markets will look for hints on who will form the government before Friday
when lawmakers will be sworn in and the president elected.

"The composition of the future government is crucial for the (rand), as it
largely determines the prospects for reform. Further reforms are urgently
needed, especially in the areas of energy ... and infrastructure,"
Commerzbank said in a note.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 1.3%
higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 9.5 basis points to 10.185%.

Nigeria

Volatile naira renews pension funds' push for offshore investment

Nigeria's pension fund managers are renewing their push to be allowed to
invest more abroad to shield their assets under management from the volatile
naira.

Assets in dollar terms drop 55% on naira devaluation

The renewed push comes as pension assets in dollar terms have dropped by
54.6 percent over a five-year period to $18 billion due to devaluation of
the naira.

Pension assets declined to $15 billion at an exchange rate of N1, 309 per
dollar as at April 2024 from $33 billion at N306 per dollar in 2019

In naira terms, pension assets show misleading growth, rising from N10.21
trillion at the end of December 2019 to N19.78 trillion at the end of April
2024, according to data from the National Pension Commission.

Dave Uduanu, managing director, Access Pensions Limited speaking at the 4th
PenOp National Assembly Retreat organised for members of the House Committee
on Pensions and members of the Senate Committee on Establishment and Public
Service in Lagos, said the erosion in the value of pension assets by
inflation and foreign exchange has been challenging.

Uduanu said that if PFAs had invested even just N5 trillion of pension funds
in dollar-denominated assets over the past five years, the impact of the
naira devaluation would have been less significant.

Seek indexed bonds to hedge inflation

"Pension assets should be invested in offshore assets to help hedge
inflation and currency devaluation."

To manage the rate of inflation, Uduanu said, "Government should issue
inflation-indexed bonds to safeguard the country's savings because this is
what is practised in other parts of the world to track inflation rate."

"In other countries, there are bonds that the government issues where the
coupon tracks inflation rate. For instance, if you issue inflation indexed
bonds, indexed at inflation plus two per cent, if inflation is 14 per cent,
the bond will yield 16 per cent. If by government management or otherwise of
the economy, inflation goes to 23 per cent, the bond will yield 25 per cent.
That means the savings of the country is protected from inflation and
devaluation."

According to him, the government should create more infrastructure funds
that pension funds can invest in, particularly real estate because it can
hedge inflation and create value in the long term.

"We are interested in investing in real estate, but it has to be properly
structured to guarantee protection of investment, he said.

Sa'ad Jijji, managing director of PAL Pensions Limited said pension assets
have continued to grow but because of lack of access to foreign exchange to
the Pension Fund Administrators (PFAs), it has been difficult to manage the
volatility from devaluation of the naira.

He said between 2018 and 2023, the pension industry achieved average annual
growth of 16.3 percent to N18.36 trillion, and by March 2024, the asset had
grown by 7.14 percent to N19.67 trillion.

Jijji said the challenges confronting PFAs in the investment of pension
assets are that they don't have access to foreign exchange, even though
investment regulations allow PFAs to invest in dollar instruments.

"There is no access to FX even though investment regulations allows PFAs to
invest in dollar instruments"

He also identified limited investment opportunities as among the challenges
facing investment of pension assets.

Another challenge Jijji stated is the below-inflation investment returns.

Chika Onwunali, partner at Premium Debate said the recent naira devaluation
has sent shockwaves through the financial services industry including
pensions that has taken a significant hit.

He said the naira devaluation has resulted in over a 50 percent decline in
the dollar value of pension assets, stating that this is a staggering
figure, considering the importance of pension funds in providing financial
security for millions of Nigerians.

While suggesting the need for PFAs to rebalance their portfolios to reduce
their exposure to high-risk assets, he said "there may be no easy solutions,
but stakeholders must work together to mitigate the impact of this decline
and ensure the long-term sustainability of the pension system."

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar and euro trade halted on Russia's biggest exchange due to new U.S.
sanctions

New U.S. sanctions against Russia will shut down trading in dollars and
euros on its leading financial marketplace, the Moscow Exchange

, the bourse and the central bank said on Wednesday.

"Due to the introduction of restrictive measures by the United States
against the Moscow Exchange Group, exchange trading and settlements of
deliverable instruments in U.S. dollars and euros are suspended," the
central bank said.

It added that it would use over-the-counter trading data to set official
exchange rates for the dollar and euro.

The bank rushed out a statement, despite a public holiday in Russia, to
reassure people that their dollar and euro bank deposits were secure.

"Companies and individuals can continue to buy and sell U.S. dollars and
euros through Russian banks. All funds in U.S. dollars and euros in the
accounts and deposits of citizens and companies remain safe," it said.

The Moscow Exchange, Russia's biggest bourse, also said share trading and
money market trades settled in dollars and euros would cease.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices dip in face of fewer rate cuts this year

Investing.com-- Gold prices fell in Asian trade on Thursday, remaining close
to recent lows as the Federal Reserve slashed its outlook for interest rate
cuts this year, presenting more headwinds for the yellow metal.

Losses in gold came even as the dollar declined in overnight trade on a
softer consumer price index reading. But the greenback steadied on Thursday,
as markets digested a more hawkish outlook from the Fed. 

Spot gold fell 0.7% to $2,309.69 an ounce, while gold futures expiring in
August slid 1.2% to $2,325.60 an ounce by 00:45 ET (04:45 GMT). 

Gold, precious metals hit by Fed outlook 

Broader metal prices weakened on Thursday after Fed Chair Jerome Powell said
the central bank only expected to cut interest rates once this year, down
from prior expectations of three cuts.

Some policymakers were even seen calling for no rate cuts in the face of
sticky inflation. The Fed also hiked its inflation forecast for the year. 

The prospect of high for longer rates bodes poorly for gold and other
precious metals, given that it increases the opportunity cost of investing
in non-yielding assets. This notion has kept any record highs in gold prices
brief over the past year. 

Gold was also hit by signs that some major central banks, particularly the
People's Bank of China, had ceased buying the yellow metal in May. 

Still, Citi analysts said in a recent note that gold could push as high as
$3,000 an ounce over the next 12 months.

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disclosure here or remove ads.

Other precious metals also fell on Thursday. Platinum futures fell 1.3% to
$951.55 an ounce, while silver futures fell 3.3% to $29.262 an ounce. 

Copper weakens on dour economic outlook 

Industrial metals also clocked losses on Thursday. Copper prices fell as the
prospect of high for longer rates presented a weak outlook for economic
activity.

Growing concerns over more stimulus measures in top importer China also
weighed on sentiment towards copper, as recent economic readings presented a
mixed recovery in China's economy.

Benchmark three-month copper futures on the London Metal Exchange fell 1.1%
to $9,837.50 a tonne, while one-month copper futures fell 0.5% to $4.5095 a
pound.

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

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