Bulls n Bears Daily Market Commentary : 26 June 2024

Thu Jun 27 08:15:35 CAT 2024

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Bulls n Bears Daily Market Commentary : 26 June 2024

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

NMB highlights activity aggregates in mid-week trades...

Banking group NMB highlighted activity aggregates in the mid- week session
as a circa of 2.93m shares worth $5.46m exchanged hands. The trade
represented 78.36% of the volumes traded while, in the same vein NMB claimed
82.72% of the turnover. The other notable volume driver was Ecocash that
claimed 11.44% of the total while, in the turnover category beverages
producer Delta contributed 13.90% of the total. Activity aggregates were
mixed in the session as volumes traded fell by 89.06% to 3.74m shares while,
turnover rose by 6.34% to $6.60m. In the ETF category, the Old Mutual Top 10
ETF was 4.38% higher at $0.1200. The Tigere REIT inched up 2.93% to $0.6500
as 7,000 units exchanged hands.

Wines and spirits producer Afdis led the gainers of the day as it advanced
14.12% to $3.9941, trailed by banking group CBZ that charged 12.87% to
$6.4900. ZB banking group surged 12.39% to settle at $2.4500 while, Ecocash
ticked up 9.53% to

$0.1807. Brick manufacturer Willdale soared 7.77% to $0.0399 as it fastened
the top five gainers of the day. ART led the laggards of the day as it
plummeted 14.94% to $0.0757 while, Zimre Holdings Limited trimmed 13.79% to
$0.2500. Packaging group Proplastics shed 13.64% to $0.6218 while, Fidelity
declined 11.36% to $1.0500. TSL capped the top five worst performers of the
day on a 3.11% drop to $1.2195. The All- Share Index ticked up 1.64% to
122.84pts while, the Blue-Chip Index was 2.13% up at 129.87pts. The Mid Cap
Index rose 0.42% to 112.16pts while, the Agriculture Index eked out
negligible gains of 0.01% to 103.17pts. Elsewhere, retailer OK Zimbabwe
released its FY24 results in which they reported a PAT of
ZWL$931.93bn.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand edges lower as cabinet announcement nears

(Reuters) - The South African rand edged lower on Wednesday, as an
announcement on President Cyril Ramaphosa's cabinet appeared imminent amid
uncertainty over key appointments in the executive.

At 1541 GMT, the rand traded at 18.2450 against the dollar , 0.1% weaker
than its previous close.

The African National Congress (ANC) lost its parliamentary majority in an
election last month for the first time since the end of apartheid three
decades ago, forcing it to share power with smaller rivals.

Financial markets wait with bated breath over the make up of the new
cabinet, after 10 political parties signed up to form a government of
national unity(GNU).

Ramaphosa and the pro-business Democratic Alliance (DA) are on the verge of
reaching an agreement on the composition of the cabinet, local newspaper
BusinessDay reported.

According to the report, Ramaphosa has concluded talks with the DA - the
market favourite - and other signatories of the GNU.

"Appointments from the Democratic Alliance could bolster the rand, while
familiar ANC names might have the opposite effect," said Zain Vawda, market
analyst at OANDA.

Markets will keep an eye on key portfolios like finance, trade, industry and
competition and small business development, Vawda said.

Officials from the ANC and the DA told Reuters that an announcement could
come on Wednesday or Thursday with the latter now appearing more likely.

Focus is also turning to economic data. South Africa will report monthly
producer inflation figures on Thursday while money supply and trade and
budget balance data are expected on Friday.

"High volatility is expected as market participants navigate a busy economic
calendar," said Nkosilathi Dube, a financial market analyst at Trive South
Africa.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 0.5%
lower.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 3 basis points at 9.825%.

Kenya

Kenya's dollar bonds fall as protests threaten fiscal plan

Kenya's dollar bonds fall as protests threaten fiscal plan Kenya's 2031 debt
security fell yesterday to its lowest price since being issued in February,
2024

Kenya's sovereign dollar bonds are sinking as anti-government protests
threaten to derail President William Ruto's US$2,3 billion plan to balance
the budget and make the country's debt sustainable.

The nation's 2031 debt security fell yesterday to its lowest price since
being issued in February, pushing Kenyan bonds as a group to one of the
worst performances among emerging and frontier markets since June 18, when
demonstrations began. 

Kenya - like several other developing nations - faces an urgent need to
carry out fiscal reforms as it seeks to cut elevated debt levels, contain
soaring interest costs and secure funding from the International Monetary
Fund. 

But people are signalling little tolerance for further pain after post-Covid
inflation spikes left them trapped in a cost-of-living crisis. President
Ruto's options are narrowing even as he looks to rein in a budget deficit
running at 3,3 percent and an interest burden that takes away a third of
government revenue.

"Pictures of huge protests will always scare investors, hence the
underperformance" in bonds, said Soeren Moerch, a money manager at Danske
Bank AS. "It will be interesting to see if government will back down, and
let the protesters win and not do much-needed tax reforms for a better
future for all Kenyans."

The East African nation's securities have handed investors a negative 1,3
percent since June 18, the biggest losses after Gabon and Egypt in a
Bloomberg Index of developing-nation sovereign dollar bonds. The EM average
was a positive return of 0,3 percent in that time.

The protests began after President Ruto pushed for taxes on everything from
motor vehicles to mobile-money transfers to help stabilise the state's
finances. Kenya agreed to an economic plan with the IMF in 2021 that commits
the government to reducing the budget deficit, boosting revenue collection
and curbing wasteful spending.

Concerns about Kenya's long-term solvency are growing, Hasnain Malik, a
strategist at Tellimer, wrote in a note dated June 21. Although the nation's
short-term external liquidity issues had been mostly resolved, its latest
fiscal performance has been disappointing, he said.

"Additionally, there is significant opposition to the ambitious budget," he
wrote. "This underscores the challenges Kenya faces in making its debt
sustainable."

It's President Ruto's toughest test yet. Last year, his administration faced
similar protests that left more than 50 people dead, but those didn't have
the nationwide reach seen in the current marches. In the past, his biggest
foe was opposition chief Raila Odinga, but this time around, it's the young
Kenyans who have earlier been apolitical.

The protests are already having their impact. Lawmakers have dropped some of
the more contentious proposals, like a 16% levy on bread. The rollback will
create a 200-billion shilling shortfall in government finances, according to
Treasury figures.

However, the demonstrators are demanding the whole tax plan be abandoned.

"Kenya needs to raise the revenue - one way of the other - and reforms are
always painful in the short run," said Moerch. - Bloomberg

MA

 <mailto:info at bulls.co.zw> 

Global Markets

Yen weakens past 160 against the dollar, reigniting intervention speculation

The yen weakened to 160.82 against the greenback according to FactSet data,
breaching the previous record of 160.03 on April 29 and reaching its weakest
level since 1986.

Carol Kong, economist and currency strategist at the Commonwealth Bank of
Australia is of the view that "we may be closer to another FX intervention."

The Japanese yen

hit a near-38 year low against the U.S. dollar late Wednesday, raising
expectations that authorities could intervene in currency markets again.

The yen weakened to 160.82 against the greenback according to FactSet data,
breaching the previous record of 160.03 on April 29 and reaching its weakest
level since 1986.

The last time the yen crossed the 160 level, the currency subsequently
strengthened sharply during the trading session, prompting analysts to
speculate about an intervention.

Japan's Ministry of Finance later confirmed the intervention in May, saying
that it had spent 9.7885 trillion yen ($62.25 billion) on currency
intervention between April 26 and May 29, according to a Google-translated
statement.

That was the first time that the Japanese government has undertaken such a
market measure since October 2022, according to ministry records.

Carol Kong, economist and currency strategist at the Commonwealth Bank of
Australia, is of the view that "we may be closer to another FX
intervention."

She also said that the U.S. May personal consumption expenditures data - set
to be released on Friday - might provide a catalyst for Japan to intervene
if it is stronger than expected and pushes the USD/JPY pair sharply higher.

Kong noted the continued decline in the yen prompted Japan country's top
currency diplomat Masato Kanda to step up warnings.

Reuters reported that Kanda said Japanese authorities were "seriously
concerned and on high alert" about the yen's rapid decline.

"It is generally accepted that the current weakness in the yen is not
necessarily justified, therefore believed to be driven by speculators,"
Kanda told reporters on Wednesday. He added that authorities "have been
preparing to act against excessive volatility."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold falls to two-week low as higher dollar, yields dent appeal

(Reuters) - Gold prices slipped 1% to their lowest level in more than two
weeks on Wednesday, weighed by a stronger dollar and higher bond yields,
while traders looked forward to U.S. inflation data due later this week.

Spot gold was down 0.8%, at $2,301.16 per ounce by 2:03 p.m. ET (1803 GMT),
its lowest since June 10.

U.S. gold futures settled 0.8% lower, at $2,313.2.

"At this point, market may very well be responding to the firmer U.S. dollar
and we continue to price in the possibility that the U.S. Federal Reserve is
unlikely to move (interest rates) earlier in the summer," said Bart Melek,
head of commodity strategies at TD Securities.

The dollar rose 0.4% to a near two-month peak against its rivals, making
gold more expensive for other currency holders, while benchmark U.S. 10-year
yields hit a near two-week high. USD/US/

The focus this week will be on the U.S. Personal Consumption Expenditures
Price Index, the Fed's preferred inflation gauge, which could shed light on
the central bank's interest-rate path.

Also on the radar are U.S. first-quarter gross domestic product estimates
and a crucial debate between President Joe Biden and Republican rival Donald
Trump on Thursday.

Data out on Tuesday showed U.S. consumer confidence eased in June amid
worries about the economic outlook, but households remained upbeat about the
labor market and expected inflation to moderate over the next year.

Fed Governor Michelle Bowman said on Tuesday that holding the policy rate
steady "for some time" would probably be enough to bring inflation under
control, but reiterated a willingness to raise borrowing costs if needed.

Higher interest rates increase the opportunity cost of holding non-yielding
bullion.

Elsewhere, spot silver lost 0.1% to $28.88 per ounce, palladium slipped 2%,
to $929.25, while platinum climbed 3.1%, to $1,011.88.

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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