Bulls n Bears Daily Market Commentary : 27 June 2024

Fri Jun 28 06:49:01 CAT 2024

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Bulls n Bears Daily Market Commentary : 27 June 2024

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

EcoCash lifts activity on buoyant ZSE; Zimra H1 collections at ZWG34.4b vs
ZWG35.4b target

HARARE - Another big trade in EcoCash supported turnover as Zimbabwe Stock
Exchange shares continued their record ahead of half-year close.

Turnover was high at ZWG13.38 million after 45.47 million shares traded as
ZWG flow continues to improve. EcoCash led on both volume and activity at
43.08 million shares worth ZWG7.38 million from the same players; a foreign
investor selling to a local manufacturing firm in the edible oils industry.

As a result, foreigners were net sellers at ZWG7.37 million against buyers
at ZWG210 883. Trades totalled 176 with EcoCash the most active at 20.

The All Share Index was 1.04% higher to 124.13 in a session which yielded 12
risers against seven fallers.

The Top Ten Index put on 0.90% to 131.03. Econet led the heavyweight gains
after putting on 5.58% to 243.68c and BAT advanced 2.92% to 2058.33c.  

Volume leader EcoCash was 5.28% lower to 17.12c.

The Medium Cap Index added 0.84% to 113.10. Cafca led the risers with a
14.92% gain to 714c and ZB Financial Holdings rose 14.29% to 280c ahead of
its AGM tomorrow.

Seed Co, which is set to release its March results soon, added 8.35% to
189.61c and Zimre Holdings put on 8% to 27c.  OK Zimbabwe added 6.59% to
53.3c in the wake of its March finals where the group reported improved
profitability at operating level.

Nampak was the day's worst performer following a 14.24% loss to 41.16c. The
group published its March interim results which showed a decrease in the
topline and profitability due to lower sales volumes at some of its key
units.

Willdale was 6.53% lower to 3.73c and Star Africa dropped 2.50% to 0.75c.
TSL, which is announcing its April results today, pared 0.81% to 120.96.

The VFEX saw improved activity across the board with trades amounting to 72.
Volume closed at just under a million shares on turnover of US$326 673.
Foreigners sold US$10 331 in Simbisa.  The All Share was 0.76% higher to
102.11.

Edgars led the risers with an 11.11% gain to 2 US cents and Zimplow was
5.56% higher to 1.9 US cents. In its trading update for the five months to
May, Zimplow reported that its topline declined 20% to US$10.9 million after
the El-Nino drought weighed down farming activity.
https://www.theanchor.co.zw/zimplow-revenue-declines-20-in-5-months-to-may/

 First Capital put on 2.45% to 3.76 US cents and Innscor added 2.23% to
44.98 US cents.

Meanwhile, the Zimbabwe Revenue Authority says it has so far collected
ZWG34.4 billion in net revenue in the year to date against an H1 target of
ZWG34.5 billion.

Commissioner-general Regina Chinamasa told the AGM this morning, that this
was a positive achievement post the currency conversion. The new revenue
target is ZWG90.8 billion from the year from the previous ZWL52.4 trillion.

Gross collections in the year to date are at ZWG35.8 billion. Chinamasa said
Q2 net collections currently stand at ZWG18.7 billion against a target of
ZWG19.9 billion. 

 ZIMRA Commissioner General, Regina Chinamasa, responds to queries during
the Authority's 7th AGM, while Deputy Minister of Finance, David Mnangangwa
looks on. -finx

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South Africa

South African rand drops on news report of discord over cabinet posts

(Reuters) - The South African rand fell sharply on Thursday as traders were
spooked by a local media report that there was a major disagreement between
the pro-business Democratic Alliance (DA) party and President Cyril
Ramaphosa over cabinet posts.

At 1050 GMT, the rand traded at 18.36 against the dollar, around 1% weaker
than its previous close.

Ramaphosa's African National Congress (ANC) and the DA emerged as the two
largest parties in the unity government after the ANC lost its parliamentary
majority in an election last month.

The DA is expected to get cabinet positions in return for supporting
Ramaphosa's re-election as president.

News website News24 reported that Ramaphosa had backtracked on an offer to
give the DA the minister of trade, industry and competition position,
replacing it with tourism minister, although the overall number of
ministerial positions offered remained the same at six.

News24 said the DA's leadership had decided to tell Ramaphosa that if he
does not stick to a prior agreement struck earlier in the week then "the
deal is off" between the two parties.

Financial markets are on edge over the composition of the cabinet, as it
will give an indication of whether the ANC intends to meaningfully share
power with parties including the DA.

"As the cabinet announcement delay continues and rumours circulate, the rand
is likely to experience further selling pressure," said Zain Vawda, market
analyst at OANDA.

The Johannesburg Stock Exchange's Top-40 index was last down around 0.5%.
The benchmark 2030 government bond was weaker, as the yield rose 15 basis
points to 9.975%.

Nigeria

Naira Depreciates Further, Exchanges At N1,510/$

The depreciation of the Naira continued yesterday as the local currency
exchanges at N1, 510.10 to one US Dollar at the official rate, Daily Trust
can report.

The dollar which closed at N1,507  on Wednesday gained three naira at the
close of business on Thursday according to the Nigerian Autonomous Foreign
Exchange Market (NAFEM) updated daily by the FMDQ Group.

The depreciation has continued despite interventions by the Central Bank of
Nigeria (CBN) and various policy decisions aimed at stabilising the foreign
exchange market.

The rise in the rate of exchange since the unification policy of the CBN has
resorted in the rise in inflation and worsened the cost of living.

MA

 <mailto:info at bulls.co.zw> 

Global Market

Japanese yen weakens to fresh 38-year lows; top currency diplomat replaced

The yen has crossed the 161 mark against the dollar for the first time since
1986.

Japan reportedly appointed Atsushi Mimura as its top currency diplomat,
replacing Masato Kanda, according to Nikkei. Mimura is the director general
of the Japanese finance ministry's international bureau.

Dong Chen, chief Asia strategist and head of Asia research at Swiss private
bank Pictet, still expects the yen to stay "fairly weak" despite warnings of
intervention from Japanese officials.

The Japanese yen weakened to fresh 38-year lows on Friday, crossing the 161
mark against the dollar for the first time since 1986 and reaching a high of
161.27, according to LSEG data.

The last time the currency was at this level was in December 1986. The
currency has struggled and again weakened past the 160 level on Thursday.

The yen has been steadily deprecating since the Bank of Japan ended its
negative interest rate policy and scrapped its yield curve control policy in
March.

Following the move, the currency crossed the 150 mark against the dollar,
reaching 160 in late April before the country's finance ministry intervened.

Japan's finance ministry confirmed that it intervened between April 26 to
May 29 to the tune of 9.7885 trillion yen ($62.25 billion).

Dong Chen, chief Asia strategist and head of Asia research at Swiss private
bank Pictet, said that he still expects the yen to stay "fairly weak"
despite warnings of intervention from Japanese officials.

"To be very honest, actually, I don't think that the Japanese authorities
can do a lot about [the] yen, and the market has shown that. Because despite
all the verbal interventions, or actual interventions that Japan Ministry of
Finance has done over the past, they didn't manage to stop the slide of
[the] yen."

Dong explained that this is because the interest rate differential between
the U.S. and Japan remains very wide, and this will keep the yen weak unless
this differential is depressed "more notably."

The benchmark U.S. federal funds rate stands at 5.25% to 5.5%, while the
Bank of Japan's benchmark interest rate is at 0%-0.1%.

Compared to intervention, Dong said rising bond yields in Japan or Federal
Reserve rate cuts would be a "more powerful force" for reversing the yen's
decline.

Separately, Japan has also reportedly appointed Atsushi Mimura as its top
currency diplomat, replacing Masato Kanda, according to Nikkei. Mimura,
currently director general of the Japanese finance ministry's international
bureau, is expected to take over on July 31.

Nikkei also reported that current vice finance minister Eiji Chatani will be
replaced by Hirotsugu Shinkawa, director-general of the finance ministry's
budget bureau. This change will take effect on July 5.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold gains 1% on dollar weakness as focus turns to US PCE data

(Reuters) - Gold prices rose more than 1% on Thursday from the over two-week
low touched in the previous session, as the dollar softened and the
spotlight shifted to key U.S. inflation data for clues on the Federal
Reserve's policy path.

Spot gold was up 1.2%, at 2,324.53 per ounce as of 1804 GMT, after falling
to its lowest level since June 10 on Wednesday.

U.S. gold futures settled 1% higher, at $2,336.6.

"Some of the data that came out was supportive to the gold market. It was
essentially the wholesale inventories that came in lower than expected. The
final GDP figure is significantly lower. So gold futures are getting a boost
on dollar index coming off," said Phillip Streible, chief market strategist
at Blue Line Futures.

Ebbing economic momentum was underscored by data showing business spending
on equipment declined in May, while a slump in exports pushed up the goods
trade deficit. In its third estimate of gross domestic product for the
January to March quarter, the government confirmed that economic growth
moderated sharply in the first quarter.

Making gold more attractive for other currency holders, the dollar weakened
0.2% against a basket of currencies, while benchmark 10-year yields fell to
4.2845%.

Investors have largely stuck to their view of around two interest-rate cuts
this year, according to LSEG's FedWatch data, even though the U.S. central
bank has projected only one.

Lower interest rates reduce the opportunity cost of holding non-yielding
bullion.

Data for the Personal Consumption Expenditures Price Index (CPE), a key
inflation report and the Fed's preferred inflation gauge, is due on Friday.

Markets were also on alert for signs of Japanese authorities intervening in
the yen as it languished near a 38-year low. Economic uncertainty tends to
boost bullion's appeal.

Spot platinum was down 2.2%, at $988.75, while palladium was steady at
$929.00 and silver gained 0.5%, to $28.90.

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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