Bulls n Bears Daily Market Commentary : 30 May 2024

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Bulls n Bears Daily Market Commentary : 30 May 2024

 

 	

 

 

 	


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

 

 

Zim sees rise in formal employment in Q1; VFEX outpaces ZSE on turnover

HARARE - Zimbabwe recorded an improvement in its national employment rate in
the first quarter of this year owing to increased investor participation in
the formal economy.

According to the ZimStat first quarter labour force survey, the number of
employed persons rose 3.67% to 3.29 million. As a result the employment to
population ratio (EPR) improved to 38.2 from 36.7 in the fourth quarter of
2023.

Formal employment numbers increased to 988 596 from 908 742, a growth of
8.79% due to an aggressive push for formalisation by government and new
investments particularly in the mining sector.

Informal employment numbers recorded a 2% dip to 1.36 million. This dropped
the share of employment for the sector to 41.3% from 43.7% while the formal
sector now sits on 30% from 28.6%  Agriculture employment also rose but this
is due to seasonality of the cropping season while increased poverty pushed
many into household employment at 186 995 from 168 953 in the previous
quarter.

 

For Zimbabwe, a large number of its employed persons are in elementary
occupations at 27.5% and sales workers at 24%. This also means that a large
number earn low wages. According to the survey, 34% earn less than US$90,
23% are in the US$90-181 income band while on the upper end only 4% earn
more than US$816.

Meanwhile, Victoria Falls Stock Exchange turnover significant outpaced the
local currency stock market on Thursday.  Trades in Simbisa, Innscor and
Caledonia supported traded value on the VFEX, which totalled US$449 125 in a
fairly active session.

Volume was at 1.57 million shares in 51 trades. Seed Co International led
the on volume at 493 959 but relatively large parcels were seen in Simbisa,
Innscor and First Capital.

Simbisa brought in the most value at US$124 070 while the sell-off in
Caledonia continued after 5 347 shares exchanged hands at an unchanged price
of US$18. The All Share was down 0.13% to 96.16. 

 

The ZSE on the other hand remained subdued with turnover closing at ZiG380
841, which is just under US$30 000. Volume closed at 703 400 shares in just
162 trades.

The benchmark All Share declined 1.32% to 100.78 weighed down by select
heavyweight losses. Hippo was the day's worst performing after falling
14.98% to 289.05c and Econet lost 11.67% to 159.29c ahead of the release of
its February finals.

As a result of these losses, the Top Ten Index was down 2.09% to 101.97
shrugging off Meikles' 6.83% gain at 279.97c.

The Medium Cap Index gained 0.89% to 100.24 in a relatively mixed session.
Zimpapers led the risers following a 17.85% gain to 4.67c and Dairibord put
on 14.94% to 65c.  ZB Financial Holdings added 5.26% to 200c in the wake of
its delayed December finals where the group reported improved earnings.
-finx

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity Markets 

 

South Africa

 

South African rand falls as election vote count gets underway

(Reuters) - The South African rand fell on Thursday as early poll results
showed the governing African National Congress was on course to lose its
majority, a scenario that could lead to weeks of uncertainty as it tries to
negotiate a coalition with one or more smaller parties.

At 0716 GMT, the rand traded at 18.6525 against the dollar , over 1% weaker
than its previous close. The dollar last traded around 0.1% weaker against a
basket of global currencies.

-

Vote counting was underway on Thursday after South Africans took to the
polls on Wednesday in the most contested election since the end of
apartheid.

The governing African National Congress is projected to get roughly 42% of
the national vote, the country's Council for Scientific and Industrial
Research told the public broadcaster on Thursday.

Around 11.37% of the votes had been tallied at 0716 GMT, and markets are
likely to get a clearer picture of the outcome as counting continues.

-

South Africa's benchmark 2030 government bond was weaker in early deals,
with the yield up 17 basis points to 10.695%.

 

 

 

Kenyan shilling to firm, Ghana cedi expected to weaken

(Reuters) - Kenya's shilling and Zambia's kwacha are expected to gain ground
against the dollar and Ghana's cedi will weaken, while Nigeria's naira and
Uganda's shilling are forecast to hold steady in the next week to Thursday,
traders said.

 

KENYA

Kenya's shilling is expected to gain ground, supported by dollar inflows
from tea exporters and remittances, and low demand from importers waiting
for better rates.

 

Commercial banks quoted the shilling at 130.50/131.50 per dollar, compared
with last Thursday's close of 131.50/132.50.

 

"I see importers staying away for now hoping for better rates. If they keep
off and CBK (central bank) stays away, I see it taking down (the) 130 mark,"
a trader at one commercial bank said.

 

The central bank says it only intervenes to smooth out volatility when the
shilling is moving too fast in either direction, and has no preferred level.

 

NIGERIA

Nigeria's naira could trade around current levels next week, after the
central bank intervened in the market, and its Open Market Operations (OMO)
auctions also attracted foreign inflows that helped ease pressure from
futures contracts that paid out this week.

 

LSEG data showed the naira trading at 1,421 to the dollar on the official
market on Thursday, around the same range a week ago. The unit was quoted at
1,485 on the parallel market on Thursday.

 

"The exchange rate will remain volatile because the fundamentals such as
crude oil receipts remain low," one trader said. "But there is scope to
appreciate because the central bank is keen for the naira not to fall below
a certain threshold."

 

GHANA

Ghana's cedi is expected to extend its decline against the dollar on
persistent strong demand from local businesses.

 

LSEG data showed the cedi was bid at 14.69 per dollar, compared with last
Thursday's closing rate of 14.55.

 

"The local unit continued to face headwinds in recent sessions as FX
illiquidity persists. Flows have been hard to come by, while demand for the
greenback remains elevated - mainly from the manufacturing and commerce
sectors," said Sedem Dornoo, senior trader Absa Bank Ghana.

 

"Up ahead, it is likely the cedi will remain under pressure as FX demand
remains firm."

 

Chris Nettey, head of trading at Stanbic Bank Ghana, said the cedi continued
to weaken despite the central bank's assurances it would take steps to curb
the decline and news the government had secured a draft memorandum of
understanding on debt restructuring from bilateral creditors.

 

"We expect the narrative to continue with an eye on the actions of the
central bank in the coming sessions," he added.

 

The cedi is down by 19% so far this year against the dollar. The Bank of
Ghana says this is due to high import demand, low export revenue and
currency speculation.

 

UGANDA

The Ugandan shilling is seen trading in a stable range in the coming days,
with most players staying on the sidelines as they await reading of the
2024/2025 (July-June) budget, traders said.

 

At 0955 GMT commercial banks quoted the shilling at 3,810/3,820,compared to
last Thursday's close of 3,820/3,830.

 

Uganda's finance minister is expected to present the next financial year's
budget early June although the date has not yet been set.

 

"We're unlikely to see a lot of activity before the budget," said a trader
at one commercial bank adding the shilling will mostly remain in a stable
range around 3,800 against the dollar before then.

 

ZAMBIA

The kwacha may gain marginally against the dollar next week due to positive
sentiment after bondholders accepted Zambia's debt restructuring proposal.

 

On Thursday, the currency of Africa's second-largest copper producer was
trading at 27.10 per dollar from 26.20 a week ago.

 

"The short-term outlook for the local currency is modest gains owing to
bondholder support for debt restructuring," Access Bank said in a note.

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Japanese Yen soars, outperforms, Dollar dips

The Japanese Yen soared against the Greenback as risk aversion hit asset
markets. The USD/JPY pair settled at 156.85, down from 157.40 yesterday.
Japan's 10-year treasury yield settled at 1.05% after reaching 1.1% this
week for the first time since July 2011.

 

Bank of Japan Board Member Seiji Adachi said that the central bank may raise
rates if the Yen falls sharply and leads to further inflation. The Yen also
advanced against other FX rivals.

 

 

The Dollar Index (DXY), which measures the value of the Greenback against a
basket of 6 major currencies, dipped to 104.70 from 105.00 yesterday.

 

A fall in April US Pending Home Sales to the slowest since April 2020
weighed on the Greenback. Pending Home Sales dropped 7.7% in April compared
to March.

 

The Euro (EUR/USD) rebounded to close at 1.0830 from 1.0798 yesterday. The
Eurozone April Unemployment Rate dipped to 6.4%, beating expectations of
6.5%.

 

The Aussie (AUD/USD) rallied to 0.6633 (0.6613). Australia's Private Capital
Expenditure climbed to 1% in Q1, up from 0.9%. Against the Yen, the Aussie
eased to 104.03 (104.06).

 

Sterling (GBP/USD) closed at 1.2732 (1.2697). UK annual inflation rose to
2.3%, up from forecasts at 2.1%. Markets now favor the BOE's first rate cut
in September instead of June.

 

Against the Asian-EMFX currencies, the Dollar eased modestly. USD/CNH
(Dollar-Offshore Chinese Yuan) dipped to 7.2530 (7.2700). The USD/THB pair
(Dollar-Thai Baht) slid to 36.70 from 36.90. USD/SGD settled at 1.3500
(1.3525).

 

Other economic data released yesterday saw the US Initial Unemployment
Claims climb to 219K from 216K previously, higher than estimates at 218K.

 

USD/JPY - The Greenback tumbled against the Japanese Yen to 156.85 from
yesterday's opening at 157.40. The USD/JPY pair traded to an overnight high
at 157.62 before plummeting. The overnight low recorded was 157.37.

 

AUD/USD - The Aussie Battler rallied to 0.6633 against the Greenback, up
from yesterday's 0.6613. The overnight high traded for the AUD/USD pair was
at 0.6648, while the overnight low recorded was at 0.6591.

 

EUR/USD - The Euro rebounded to 1.0830 from 1.0798 boosted by broad-based US
Dollar weakness. Overnight, the shared currency rallied to a high of 1.0845.
The overnight low recorded was at 1.0788. The EUR/JPY cross dipped to 169.85
(170).

 

GBP/USD - The British Pound settled at 1.2732, up from yesterday's 1.2697.
Overnight, the GBP/USD pair climbed to a high at 1.2747 before easing. The
overnight low recorded for Sterling was 1.2681.

 

On the lookout

Today's economic calendar is a busy one and kicks off with Tokyo's May CPI
(y/y f/c 2.0% from 1.8% - ACY Finlogix), Tokyo May Core CPI (y/y f/c 1.9%
from 1.6% - ACY Finlogix).

 

Next up is Japan's April Unemployment Rate (f/c 2.6% from 2.6% - ACY
Finlogix), Japanese April Retail Sales (m/m f/c 0.6% from -1.2%; y/y f/c
1.9% from 1.2% - ACY Finlogix). Japan also releases its Industrial
Production for April (m/m f/c 0.9% from 4.4%; y/y f/c -4.3% from -6.2% - ACY
Finlogix), and Japanese April Housing Starts (y/y f/c -0.2% from -12.8% -
ACY Finlogix). Next up is Australia's Private Sector Credit (m/m f/c 0.4%
from 0.3%; y/y f/c 4.8% from 5.1%).

 

China follows with its NBS (National Bureau of Statistics) May Manufacturing
PMI (f/c 50.5 from 50.4 - ACY Finlogix), Chinese NBS Non-Manufacturing PMI
(f/c 51.5 from 51.2 - ACY Finlogix). Germany starts off European data with
its German April Retail Sales (m/m f/c -0.1% from 1.8%; y/y f/c -1% from
0.3% - ACY Finlogix). The UK follows with its UK May Nationwide Housing
Prices (m/m f/c 0.1% from -0.4%; y/y f/c 1.3% from 0.6% - ACY Finlogix).

 

France releases its May Preliminary Inflation Rate (m/m f/c 0.2% from 0.5%;
y/y f/c 2.4% from 2.2% - ACY Finlogix), and France Q/Q GDP Final Growth Rate
(f/c 0.2% from 0.1% - ACY Finlogix). Italy follows with its GDP Final Growth
Rate (q/q f/c 0.3% from 0.1%; y/y f/c 0.6% from.7% - ACY Finlogix). The UK
releases its April Mortgage Approvals (f/c 61.5K from 61.33K - ACY
Finlogix), UK April BOE Consumer Credit (f/c GBP 1.5 billion from GBP 1.577
billion - ACY Finlogix).

 

The Eurozone follows next with its Eurozone Flash May Inflation Rate (y/y
f/c 2.5% from 2.4% - ACY Finlogix), Eurozone May Flash Core Inflation Rate
(y/y f/c 2.8% from 2.7% - ACY Finlogix). Italy follows with its May
Inflation Rate (y/y f/c 0.8% from 0.8%; m/m f/c 0.2% from 0.1% - ACY
Finlogix).

 

Canada starts off North America with its GDP Growth Rate (q/q f/c 0.6% from
0.2%; annualized GDP f/c 2.2% from 1% - ACY Finlogix). The US rounds up
today's busy economic calendar with its US April Core PCE Price Index (m/m
f/c 0.3% from 0.3%; y/y f/c 2.7% from 2.7% - ACY Finlogix), US April
Personal Spending (m/m f/c 0.3% from 0.8% - ACY Finlogix), US April Personal
Income (m/m f/c 0.3% from 0.5% - ACY Finlogix) and finally US Chicago May
PMI (f/c 41 from 37.9 - ACY Finlogix).

 

Trading perspective

Welcome to Friday. Expect risk-off to dominate Asian trade today with the
Dollar under moderate selling pressure. Caution will prevail with risk-off
dominating. The Japanese Yen will continue to outperform while risk
associated FX led by the Aussie will trade heavy. The fall in US bond yields
will also weigh on the Greenback. Other global rates were lower, but to a
lesser degree than their US counterpart. It's also Friday today and month
end so technical factors will come into play, boosting volatility. Get those
tin helmets on and get ready to rumble!

 

USD/JPY - Expect more choppy trading today in this currency pair. Immediate
resistance lies at 157.10, followed by 157.40 and 157.80. On the downside,
immediate support can be found at 156.50, 156.20 and 155.90. Look for
further choppy trade, likely between 156.00 to 158.00. Watch those US
yields, they will determine where USD/JPY goes next.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

Gold Precious metal experts say demand for gold on the rise as prices
increase and inflation holds steady

BISMARCK, N.D. (KFYR) - Yahoo, CBS, the New York Times and other major news
networks are all saying the same thing: gold is in. With inflation still
hovering around or above the three percent mark, people are looking for
value; they're finding that value in precious metals, specifically in gold.

 

It's not Wall Street. It's Bismarck Gold & Silver Exchange, but just like on
the stock exchange, customers say they're looking to trade in their cash for
something that'll not only retain but also increase its value. The owner
says now's the time to buy.

 

Customers like Roger Kubik have their eye on something specific.

 

"I got a lot of coins that I collect. I like the lunar stuff and sets. I get
the old sets. Some of them are really kind of rare, but I like the religious
ones," said Kubik.

 

 

Most of the customers believe the same thing.

 

"It's a really good investment. I buy stuff for my grandkids here, then it
teaches them to invest. So, why not?" said Kubik.

 

Larry Schneider has been in the business 45 years but says this month, he
saw something he's never seen before.

 

"People are buying more gold probably right now in record numbers than I've
ever seen. And on May 20 of this year, the gold hit an all-time high of
$2,444, which is a record high," said Schneider.

 

Schneider says the gold rush can be boiled down to the value of the dollar
and investor emotion.

 

"There's just too much money being borrowed and too much money is being
printed into the system. We hear rumors now that the United States is doing
about a trillion dollars in debt every 100 days now, and that's got people
very concerned," said Schneider.

 

Because of that, Schneider says the price of gold is rising, yet more people
are buying. He says the goal is wealth preservation; gold has a history of
holding its value despite inflationary trends, which he says is part of the
appeal. And while you can invest in gold on the stock market, Schneider says
there are definitely pros to the physical thing.

 

"The stock market is a broad situation where you're buying futures' markets,
and they can go up and down hundreds of dollars or changes can be very
rapid," said Schneider.

 

Schneider says it wouldn't be wise to invest your entire wallet into metals,
but rather he recommends diversifying by putting about 10-15 percent of your
reserves into gold or silver. Schneider says the price of silver is up more
than $32 an ounce, but he's seen it hit as high as $50 twice since he's been
in business. He says he expects gold to inch past $3,000 an ounce in the
near future based on our government spending. So even though prices are
high, he says it's still a worthwhile investment.

 


 

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 

 

 

 Invest Cellphone:            +263 71 944 1674 | +27 79 993 5557 

Email:               bulls at bullszimbabwe.com

Website:            www.bullszimbabwe.com 

Blog:                 www.bullszimbabwe.com/blog

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LinkedIn:           Bulls n Bears Zimbabwe

Facebook:          www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

 

 	

 

 

 	

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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