Bulls n Bears Daily Market Commentary : 17 June 2024

Tue Jun 18 08:12:04 CAT 2024

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Bulls n Bears Daily Market Commentary : 17 June 2024

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

ZSE in marginal gains as heavy and mid cap counters trade mixed...

The ZSE market recorded marginal gains in the session as the heavy and mid
cap counters closed mixed. The All-Share Index was 0.35% up at 111.08pts
while, the Blue-Chip Index added 0.88% to settle at 115.63pts. On the
contrary, the Agriculture Index fell 1.48% to close at 94.72pts while,the
Mid Cap Index shed 0.33% to 109.17pts. Packaging group Proplastics led the
best performers of the day as it charged 15.00% to $0.5520 as 446,900 shares
traded in the name. Banking group CBZ trailed on a 9.29% upsurge to $4.0000
while, Zimre Holdings Limited advanced 6.41% to close at $0.3405. Fintech
company Ecocash inched up 2.94% to $0.2064 while, General Beltings rose
0.41% to $0.0502. Partially offsetting today's gains was Tanganda that
plummeted 15.00% to $1.2575 while, sugar pro_cessor Star Africa lost 14.44%
to $0.0070. Retailer OK Zimbabwe eased 9.93% to $0.4504 while, Nampak was
2.99% weaker at $0.4268. Mashonaland Holdings parred off 0.11% to $0.1405 as
it capped the top five losers Ust of the day.

Activity aggregates were mixed in the session as volumes traded rose by
37.94% to l.21m shares while, turnover declined 28.96% to $2.41m. Volume
leaders of the day were Proplastics, Star Africa, Delta and Tanganda that
contributed a combined 86.52% of the total. In the turnover category, Delta
was the most active stock as it claimed 69.89% of the value traded. The Old
Mutual ETF rose 1.29% to close at $0.1100 while, the Datvest MCS was stable
at $0.0200 as 26,142 units exchange hands. The Tigere REIT was 3.00% lower
at $0.6402 while,  the  Revitus  Opportunities  REIT  was  0.91%  up  at
$0.3366 .

VFEX falters in Monday's trades...

The VFEX All Share Index faltered by 1.53% to 99.65pts mainly weighed down
by Edgars and lnnscor. Edgars dropped 7.69% to close at $0.0180 while,
conglomerate lnnscor retreated 7.24% to $0.4267. Simbisa slipped 0.09% to
settle at $0.3497. On the contrary, hotelier African Sun was 1.94% up at
$0.0420.

Activity aggregates enhanced as volumes traded surged 101.30% to 781,312
shares while, turnover  ballooned 819.11% to $332,588.00 . Activity was
mainly confined in lnnscor that contributed 99.62% of the total volumes and
99.87% of the turnover traded.efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets 

Nigeria

Naira snap early gains against Euro, far right strengthens grip on Europe

The euro skidded against the naira in the unofficial market on Monday after
French President Emmanuel Macron called a snap election following a defeat
in the European Union vote by the far-right.

Recent price action revealed that the euro is now losing major support
against the Nigerian currency, leading the EUR/NGN price to lean bearish.

Growing ambiguity surrounding the upcoming French snap elections is
affecting the euro.

The naira strengthened below the N1600/Euro level in the black market as
traders reevaluated and moderated demand pressure on the European currency.
It closed above N1631/Euro on Friday.

The dollar also showed strength against the European currency, partly due to
the geopolitical implications of the far-right's grip on power in Europe.

Additionally, the dollar's outlook is favourable as summer draws near; the
euro is predicted to struggle to break above 1.10 against the dollar and is
more likely to drop below the 1.05 support level.

The euro plummeted to a 21-month low of $1.075 in early morning London
trading and dropped 50 basis points to a one-month low.

The positive US NFP report, meanwhile, dampened Fed rate cut bets and gave
the US dollar another boost to tame the European currency's upside.

French bond futures declined marginally, and EuroSTOXX 50 equity futures
were down 0.4%, continuing a sharp decline that began late last week.

Investor attention will likely focus on Italy's 10-year government bond
yield differential over benchmark German paper when the rest of Europe's
markets open later today.

Far right grip on Europe

French President Macron chose to hold early parliamentary elections in a
desperate attempt to turn things around.

With 33% of the vote, Marine Le Pen's National Rally party appears on track
to surpass Macron's 15% share in the EU election.

He would be left without a voice in domestic issues should the far-right
National Rally party secure a majority in parliament.

Concerns about France's high debt levels have grown this year, and there may
be a greater focus on the potential effects of the return of political
instability on the country's economy.

Standard & Poor's withdrew its rating on France's sovereign debt last month,
days before the EU election, dealing a severe blow to the government's
management of its finances.

Macron isn't the only entity experiencing a significant setback due to the
recent European parliamentary elections, even though France is making
headlines.

The far-right AfD party in Germany came in second in the polls, highlighting
the increasing momentum leading up to next year's federal election.

Based on projections, they should receive approximately 16% of the vote, a
record high.

In Austria, the far-right Freedom Party has secured the top spot in the
national poll for the first time, garnering close to 26% of the vote

Green parties are the largest losers overall. However, left-wing factions
had better success in countries like Denmark, Finland, and Sweden.

After Sunday's vote, centrist, liberal, and socialist parties were expected
to hold onto their majority in the European Parliament.

However, nationalists opposed to Europe gained the most ground, casting
doubt on the ability of powerful nations to shape EU policy.

Important U.S. elections are in November, and the UK has a general election
on July 4.

However, global financial markets have recently become brittle as
expectations of a rate cut in the United States have decreased, giving the
naira and euro less room to maintain the momentum seen in March.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slips against euro as European political jitters subside

(Reuters) - The dollar slipped against the euro on Monday, as the common
currency recovered from the more than one-month lows hit last week amid
political turmoil in Europe.

The euro was up 0.25% to $1.07305 on Monday, after touching a six-week low
of $1.066775 last week following news of a snap parliamentary election in
France.

European markets have been under pressure after President Emmanuel Macron
called for the snap election after his ruling centrist party was trounced by
Marine Le Pen's eurosceptic National Rally in the European Parliament
elections.

Advertisement . Scroll to continue

Investors have been contemplating the risk of a budget crisis at the heart
of the euro area, as far-right and leftist parties gain momentum ahead of
the French election, pressuring Macron's centrist administration.

Le Pen sought to allay some of those fears over the weekend, saying she
would not seek Macron's resignation and that she is "respectful of
institutions," in an interview with Le Figaro.

Even after the French financial markets endured a brutal sell-off late last
week, European Central Bank policymakers have no plans to discuss emergency
purchases of French bonds, five sources told Reuters.

"As French markets have begun to stabilize a bit since last week, the euro
has responded with a slight touch of recovery," Helen Given, FX trader at
Monex USA in Washington, said.

But Given said the trend remained in favor of the dollar.

"If U.S. retail sales come in weaker than expected tomorrow, as most data
for the U.S. has been in the last few sessions, we could see a more
substantial turnaround, but the underlying dynamic for the pair is driven
very heavily by geopolitics at the moment," she said.

U.S. import prices fell for the first time in five months in May. The
unexpectedly benign report from the Labor Department on Friday, combined
with other recent data showing tame inflation readings, has helped keep a
September interest rate cut by the Federal Reserve on the table.

The dollar index , which tracks the U.S. currency against a basket of six
others, was 0.2% lower at 105.35.

The Fed published updated projections last week that showed the median
forecast from all 19 U.S. central bankers was for a single interest rate cut
this year.

Philadelphia Fed President Patrick Harker said on Monday that if his
economic forecast plays out, the Federal Reserve would be able to cut its
benchmark interest rate once this year.

The pound rose 0.15% to $1.2707 on Monday, though it remained close to the
one-month low of $1.26575 touched in the previous session as traders await a
policy meeting by the Bank of England this week.

Britain's inflation pressures still appear too hot for the Bank of England
to cut rates at its meeting on Thursday, with a majority of economists
polled by Reuters forecasting the first cut would not come until Aug. 1.

The yen remained pinned near a 34-year low against the dollar after the Bank
of Japan on Friday pushed cuts to bond buying amounts. The dollar was last
up 0.2% to 157.73 yen.

Traders remain on watch for signs that Japanese authorities might intervene
to prop up the yen.

"All the fundamentals for the pair are in the favor of USD at the moment,
and though some volatility does remain, the general trajectory has been more
steady than we saw in March and April," Monex's Given said.

"I'd expect to see rhetoric from currency officials heat up around the 160
mark, but as it stands now it would take a lot for BoJ officials to finance
another intervention - at a point, it might no longer be worth it," she
said.

The Mexican peso slipped 0.4% on Monday on concerns about the fallout from
judicial reforms proposed by President-elect Claudia Sheinbaum, while other
currencies in Latin America weakened as U.S. Treasury yields rose on
stronger-than-expected data.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price holds up in the face of Fed hawkishness, silver tests key support
as coin sales diverge - Heraeus

Kitco NEWS has a diverse team of journalists reporting on the economy, stock
markets, commodities, cryptocurrencies, mining and metals with accuracy and
objectivity. Our goal is to help people make informed market decisions
through in-depth reporting, daily market roundups, interviews with prominent
industry figures, comprehensive coverage (often exclusive) of important
industry events and analyses of market-affecting developments.

Gold price holds up in the face of Fed hawkishness, silver tests key support
as coin sales diverge - Heraeus teaser image

(Kitco News) - Gold prices have fared fairly well in the wake of the Fed's
hawkish rhetoric and rate projections, while silver's coin demand is seeing
a significant divergence between major producers as spot prices test
support, according to precious metals strategists at Heraeus.

In their latest precious metals report, the analysts noted that gold prices
have made gains despite the Federal Reserve's renewed hawkishness.

"On 12 June, the US reported a relatively flat headline CPI - a 3.3%
year-on-year increase and unchanged on a seasonally adjusted basis - the
lowest numbers in three years," they noted. "This provided some support for
the gold price, although Fed Chairman Jerome Powell's subsequent signalling
of cautiousness on rate-cutting after a Federal Open Market Committee (FOMC)
meeting made it temporary."

"Currently, members of the FOMC remain divided on whether to support one or
two rate cuts this year," they said, adding that the swap market is still
pricing in a 42% chance that the Fed will deliver 50 basis points of rate
cuts in 2024. "The gold price is still consolidating its gains, with support
around $2,280/oz holding," they said.

The analysts also noted that extreme weather events have disrupted
first-quarter gold production in Australia. "Cyclones and heavy rain that
led to floods resulted in a drop in gold output in Australia to 70 t in
Q1'24 from 77 t in Q4'23," they wrote. "In 2023, Australia was the world's
second-largest gold producer (310 t), second only to China (source:
Statista). However, buoyed by high prices, most miners are maintaining
production forecasts for the year."

Gold is seeing a subdued start to the week, with spot gold opening at
$2,334.87 per ounce in the overnight session before dropping to a daily low
of $2,315.54 around 3 am EDT. It has since recovered somewhat, last trading
at $2,324.71 per ounce for a loss of 0.34% on the day.

Turning to silver, the analysts said that after dropping below $30 per ounce
following the June 7 Fed meeting, the gray metal's spot price oscillated
between $29 and $30 last week, testing key support.

"The gold:silver ratio rebounded to 79 from early June's low of 73 as silver
has underperformed gold, with both metals' prices falling," they noted.

On the physical demand side, Heraeus highlighted the significant divergence
between the Perth and US Mint's silver coin sales this year.

"Perth Mint silver coin sales remained weak, as the May sales of 796,934 oz
significantly trailed previous years," they noted. "May sales data
represented a 58% decrease year-on-year and the lowest May figure in five
years. Year-to-date sales reached 4.12 moz, a 51% drop year-on-year."

They said that the weakness of Perth Mint silver coin sales in 2024 suggests
that higher metal prices have impacted consumer demand.

"The US Mint sales, in contrast, appeared much more robust than in previous
years," they wrote. "During May, sales of 1.75 moz were recorded, a 9.7%
year-on-year rise. Year-to-date sales reached 12.6 moz, a 52% increase
year-on-year."

Silver prices followed gold lower in early trading on Monday and tested key
support at $29.026 per ounce just before 3 am EDT. The gray metal has since
staged a modest recovery but remains in negative territory on the session,
last trading at $29.468 for a loss of 0.30% on the daily chart.

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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