Bulls n Bears Daily Market Commentary : 18 June 2024

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Bulls n Bears Daily Market Commentary : 18 June 2024

 

 	

 

 

 	


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

 

ZSE extend gains in Tuesday's session...

The ZSE extended gains in Tuesday's session as the All-Share Index rose 0.96% to 112.15pts while, the Blue-Chip Index firmed up 0.65% to 116.39pts. The Agriculture Index went up 0.54% to 95.23pts while, the Mid Cap Index added 1.37% to 110.66pts. Spirit and wines distiller AFDIS headlined the top performers of the day on a 15.00% jump to $2.9900, followed by life assurer Fidelity that surged 14.95% to close at $1.1845. Proplastics climbed 13.44% to $0.6262 while, retailer OKZim charged 13..22% to settle at $0.5099. Tea producer Tanganda capped  the top five  winners  of the  day on a 4.97%  uplift to $1.3200. In contrast, hotelier RTG eased 2.73% to $0.2432 while, Zimre Holdings Limited dropped 2.38% to end the day pegged at $0.3324. The market closed with a positive breadth of eleven as fifteen counters recorded gains against four that faltered.

 

Activity aggregates faltered in the session as volumes traded dropped 10.43% to .08m shares while, turnover declined 74.03% to $624,909.83. Top volume drivers of the day were OKZim (38.26%), Ecocash (21.05%), Willdale (9.41%) and Proplastics (9.24%). The trio of OKZim, Delta and Econet contributed a combined 68.33% to the total value traded. The Morgan and Co Multi Sector ETF was the only fund to trade in the session as 350 units exchanged hands at a stable price of $0.4200. The Revitus REIT retreated 1.81% to close at $0.3305 while, the Tigere REIT tumbled 0.32% to end the day pegged at $0.6381.

 

 

 

lnnscor highlights the session...

 

lnnscor  highlighted  the  session  as  82,569  shares  worth

$34,782 .84 exchanged hands in the name. The trade accounted for 89.01% of the total volumes traded and 85.15% of turnover. Volumes traded succumbed 88.13% to 92,766 shares while, turnover tumbled 85 .31% to $48,849.58

 

The VFEX All Share Index lost 1.53% to 99.65pts. Apparel retailer Edgars led the laggards of the day on a 7.69% retreat to $0.0180 while, lnnscor slipped 7.24% to close at $0.4267. Fast foods group Simbisa capped the fallers of the day on a 0.09% drop to end at $0.3492 . Partially mitigating today's losses was Zimplow that grew 19.33% to $0.0179, trailed by banking group First Capital that ticked up 0.91% to close at $0.0334. Padenga capped the winners of the day on a 0.63% lift to end the day pegged at $0.1600.-efesecurities 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity Markets 

 

South Africa

 

Rand, JSE surge to 1-month high as GNU formation drives risk-on sentiment

 

The JSE yesterday rallied to a 1-month high to within a touch of 80 000 points buoyed by “hot money” in resources, financials and industrial stocks, while the rand strengthened on peaceful establishment of the Government of National Unity (GNU).

 

The risk-on sentiment on the JSE was driven by expectations that the GNU will build on the relationship that the government has had with the private business sector in improving freight, electricity supply and crime prevention, broadening the relationship to strengthen economic growth and the rule of law.

 

 

President Cyril Ramaphosa will be sworn-in for his second term today after the formation of the GNU, which includes five parties and represents over two-thirds of the National Assembly seats, proceeded peacefully in spite of challenges, giving the domestic financial markets a strengthening momentum.

 

The JSE All Share Index surged 3.7% to more than 79 909 points by 5pm, its highest since May 20, as investors returned from a long weekend and responded positively to South Africa’s political developments.

 

Sasol led the charge on the JSE, rising 10.4% to R128.02 a share followed by Truworths at 10.2% to R96 a share while TFG rose 9.5% to R130.38 a share.

 

Makwe Fund Managers’ chief investment officer, Makwe Masilela, said this was probably the first time in a long time that the JSE had seen so much green.

 

Makwe said it was also more of an international theme because there were no real sellers this time around as investors think that the momentum will continue.

 

“And as the momentum continues, then stocks will continue to win. So we are also getting a boost from the fact that markets are getting a better, full reaction to the developments that we’ve been seeing locally since Friday,” Makwe said.

 

 

“Remember, yesterday it was a holiday and other markets were open. So I think it’s now that we are fully reacting to the developments that we see on the political front. But markets will continue to keep a keen interest or an eye on the developments when it comes to the Cabinet formulation.”

 

Two more parties have joined the GNU – the Patriotic Alliance (PA) and GOOD – as the focus now shifts to Ramaphosa’s Cabinet pick, which is expected to be dominated by ANC and DA members.

 

Makwe also said the JSE was getting a boost from the fact that momentum internationally continued to be positive.

 

 

“And maybe just to put it in context, this is hot money. Now they are happy with us and at the click of a button, they’ll buy our stocks. But for whatever reason, that does not mean that they’ve signed a contract that will be here with us forever,” he said.

 

“If another region gets to be more attractive, the guys won’t hesitate to dump us and go to that particular region because they’re just looking for an opportunity to make good returns. My point here is this is just hot money. It can just come in as much as it can go out any time. But so far, I guess let’s celebrate the good news.”

 

Meanwhile, the rand also powered to a 1-month high, rising by 1% to R18.08 and the highest since May 21 as gold also pared earlier gains to trade near the $2 310 an ounce mark, not far from the over-one-month-low of $2 290 touched on June 4.

 

 

Investec chief economist Annabel Bishop said the rand was likely to see further momentum towards the key R18.00/$1 resistance level, although it would be a difficult barrier for the domestic currency to sustainably break through.

 

“The rand is likely to see pressure to track stronger this week, making up for lost ground as the pre- and post-election uncertainty hampered the domestic currency from making prior gains on waning risk aversion in global financial markets,” Bishop said.

 

“The rand’s direction will continue to be determined by global events, particularly the US markets, but it is likely to tick stronger this week on the improving political environment for South Africa, supportive for stronger growth.”

 

 

BUSINESS REPORT

 

 

Ghana

 

Cedi selling at GH¢15.45 to $1 at major forex bureaus

 

 

The Ghana Cedi continues to experience a decline in value against major trading currencies, particularly the US dollar.

 

As of Tuesday, June 18, 2024, checks by GhanaWeb Business showed that the local currency is selling at GH¢15.45 to $1 at some forex bureaus. However, on the interbank forex market, the cedi is going for GH¢14.30 to $1.

 

The decline in the Cedi's value is also evident among other trading currencies such as the British Pound and Euro. For instance, the local currency is going for GH¢19.53 to £1 while selling at GH¢16.53 to €1 at major forex bureaus across the country.

 

International news portal Bloomberg recently ranked the Ghana Cedi as the fourth-worst performing currency among 150 top currencies tracked globally.

 

The latest verdict on the Cedi comes after the Egyptian Pound, Nigerian Naira, and the Lebanese Pound also experienced weakened performances.

 

According to recent data from Bloomberg, the Cedi depreciated by 0.2% to 14.9335 per dollar by the close of trading in Accra on Monday, June 10, 2024.

 

Since the beginning of the year, the local currency has declined in value by 20% against the US Dollar.

 

The recent record-low performance of the Cedi has been attributed to increased demand for the US dollar to purchase petroleum products, pharmaceuticals, and other imported goods.

 

MA

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Dollar eases after US retail sales miss expectations in May

 

(Reuters) - The dollar eased against the euro on Tuesday after retail sales data indicated signs of exhaustion among U.S. consumers, boosting the case for Federal Reserve rate cuts later this year.

 

U.S. retail sales increased less than expected in May as lower prices for gasoline and motor vehicles weighed on receipts at service stations and auto dealerships.

 

The trend in sales growth has been slowing as higher prices and interest rates force households to prioritize essentials and cut back on discretionary spending.

 

 

"It may have come later than initially expected, but the tight financial conditions engineered by the Fed finally appear to be straining household budgets this year," said Stuart Cole, chief economist at Equiti Capital.

"But a softer pace of consumption may actually be welcomed by the Fed, as it makes the task of returning CPI back to target that much easier, especially given the key role domestic consumption plays in driving U.S. economic activity," Cole said.

 

 

The euro was 0.02% higher at $1.073625. The common currency slipped as low as $1.071 earlier in the session.

Against a basket of currencies , the dollar was about flat at 105.30.

"The softer-than-expected retail sales report increases the likelihood that the Fed starts to cut interest rates in a few months," Bill Adams, chief economist at Comerica Bank, said in a note.

Fed Funds futures implied a 67% probability of at least one rate cut by the September Fed meeting, up from 63% a day ago.

 

 

Philadelphia Fed President Patrick Harker said on Monday that he backs only one interest rate cut this year, but left the door open to changing his view depending on incoming data.

 

A long list of Fed officials take to the podium at various venues later in the day, including the Boston Fed's Susan Collins and the Richmond Fed's Thomas Barkin.

 

Last week, mild U.S. inflation readings contrasted with an overall hawkish stance by Fed officials, who trimmed their previous median projection for three quarter-point rate cuts this year to one.

 

Last week's rally in the dollar was mostly driven by a sharp euro selloff after French President Emmanuel Macron called a shock snap election in response to his ruling centrist party's trouncing by Marine Le Pen's eurosceptic National Rally in the European Parliament elections.

 

The euro has stabilised since.

"Over the weekend, France's Le Pen said that she would be ready to work with President Macron and would not seek him out," said Mohit Kumar, chief economist for Europe at Jefferies.

"A portion of the recent risk off moves have been driven by fears of 'Frexit' and euro area breakup," he said. "Those fears are overblown."

The dollar was little changed against the yen at 157.81 yen , holding below Friday's six-week high of 158.26.

Sterling was flat on the day at $1.2705 as investors waited for inflation figures on Wednesday and the Bank of England's interest rate decision the day after that.

 

Meanwhile, the Aussie dollar was 0.6% higher after the Reserve Bank of Australia held rates steady on Tuesday. "The RBA's position was well-telegraphed: they're in wait-and-see mode until they get more inflation data," said NAB's Catril.

In cryptocurrencies, bitcoin fell about 3% to $64,475, a one-month low.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 Gold climbs $11 as central banks highlight plans to increase reserves

 

 

The World Gold Council surveys central banks each year on attitudes around gold and currency reserves. This year, 29% said they plan to increase holdings in the year ahead. That's the highest since the survey began in 2018.

 

gold survey

I think that's even better than it looks because gold prices appreciated in the past year by almost 20%. That means that gold values as a portion of reserves have risen; which would normally mean less buying. Instead, they're planning to increase holdings.

 

The survey also showed that managers expect rising portions of gold reserves in the coming years and lower holdings of US dollars.

 

With that, gold prices bumped $11 higher today to $2329 in a reversal of yesterday's loss.

 

 

 


 

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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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 the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent 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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