Bulls n Bears Daily Market Commentary : 03 September 2024

Wed Sep 4 10:40:34 CAT 2024

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Bulls n Bears Daily Market Commentary : 03 September 2024

ZSE commentary 

Heavies ZSE records losses for the 5th consecutive session ...

The ZSE recorded losses for the fifth consecutive session to see the primary
All Share Index dropping a further 3.57% to 200.98pts while,the Blue-Chip
Index fell 4.95% to 200.98pts. The Agriculture Index fell 4.41% to 180.39pts
as the Mid Cap Index slipped 0.83% to 171.84pts . Proplastics led the
laggards of the day on a 13.70% drop to $2.3275, followed by banking group
CBZ Holdings that trimmed 9.30% to $10.0434. Seed producer Seed Co eased
9.03% to close at $3.5002 while, Star Africa tumbled 8.83% to $0.0100.
Banking group NMB capped the fallers of the day on a 8.72% dip to end the
day pegged at $2.7384. In contrast, First Mutual Properties headlined the
top performers of the day on a 14.66% jump to $0.3509 while, Nampak ticked
up 13.68% to $1.2050 . Retailer Ok Zim surged 11.63% to $0.8931 while,ART
Corporation advanced 7.14% to settle at $0.3000 . Fintech group Ecocash
completed the gainers of the day on a 2.51% uplift to end the day pegged at
$0.5188. The market closed with a negative breadth of one as ten counters
recorded losses against nine gainers.

Activity aggregates were mixed in the session as seen in volumes which
ballooned 62.28% to 5.5lm shares while, turnover shed 9.18% to $6.83m. A
total of 25,986 units exchanged hands in the ETF category. Morgan & Co Multi
sector  ETF stepped  up 5.19% to  end  the  day  pegged  at $0.5000. Tigere
REIT declined by 0.13% to close at $0.9998 after 79,292 units exchanged
hands in the session. OKZim anchored today's aggregates after contributing
55.26% of the total volume traded. Other notable volume drivers were Star
Africa (11.47%), Ecocash (10.38%) and Nampak (9.41%). Top value drivers of
the day were Ok Zim (39.80%), Econet (20.54%) and Delta (19.24%).

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity 

South South Africa

South African rand weakens ahead of Q2 GDP data

(Reuters) - The South African rand was weaker in early trade on Tuesday,
ahead of the release of second quarter gross domestic product (GDP) data.

At 0659 GMT, the rand traded at 17.8875 against the dollar, about 0.4%
softer than its previous close.

Statistics South Africa is set to release the country's GDP figures for the
second quarter of 2024 at 0930 GMT. Domestic investors will use the data to
look for signs of the health of Africa's most industrialised economy.

"Economic expansion at only 0.5% y/y in Q1 marked a disappointing start to
the year. Suppressed GDP growth is expected to continue in Q2," said ETM
Analytics in a research note.

"The absence of load-shedding (power cuts) through Q2 did not seem to have a
marked effect on the high-frequency production data released throughout the
quarter," ETM Analytics added.

Power cuts have hampered South Africa's economic growth for over a decade,
with outages on a record 335 days last year, but state-owned power utility
Eskom has managed to keep the lights on for over five months without
scheduled blackouts.

ETM Analytics said the third quarter GDP print will "mark the beginning of
any meaningful shift."

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South Africa's benchmark 2030 government bond was unchanged in early deals,
with the yield at 9.225%.

Nigeria

Naira faces pressure in black Market, Trades at N1,635/$

The dollar index remained near its weekly high, while the Nigerian naira
fell below a key support line. The local currency dropped below the N1,600/$
support level in the black market.

Market fundamentals indicate renewed demand pressure and an expanding supply
gap, leading to another round of naira depreciation.

The naira's value fell from N1,625 per dollar last weekend to N1,635/$
yesterday.

The local currency is under severe pressure this month, struggling to
maintain the critical N1,500 support level, according to market indicators,
despite slight improvements in some macroeconomic conditions in the Nigerian
foreign exchange market.

Fundamentals suggest that if the local currency cannot maintain its current
levels, it may decline towards N1,800/$. Even ardent supporters of free
market economics may now doubt that the naira will strengthen to its March
highs this quarter.

The Central Bank of Nigeria plans to issue treasury bills valued at N2.2
trillion in the fourth quarter of 2024. This substantial issuance, a direct
response to the nation's current economic difficulties, aims to stabilize
the naira while managing liquidity in the financial market.

In response to soaring inflation, the Nigerian apex bank has adopted a tight
monetary policy, raising interest rates on treasury notes to provide more
incentives in the Nigerian capital market. The interest rates on 364-day
bills increased from approximately 15-18% at the end of 2023 to 21.49% in
the first half of 2024.

U.S. Dollar Index Hits Two-Week High

The dollar strengthened to its highest level since August 20, driven by
rising long-term Treasury rates and inflation data indicating a smaller rate
cut. The dollar index consolidated around 101.67 index points after reaching
a peak of 101.79, a level not seen since August 20.

For the first time since July 2023, it fell as low as 100.51 index points
last week following Fed Chair Powell's statement that the easing campaign
would begin at the next policy meeting. Data on U.S. gross domestic product
also suggested that the economy is strong enough to allow the Federal
Reserve to be less aggressive in loosening policy.

Currently, traders fully price in a quarter-point reduction in the Fed rate,
with a 33% chance of a 50-basis point cut this month. Expectations for a
larger decline were 36% a week ago.

U.S. payroll data, due on Friday, will be significant as Federal Reserve
Chair Jerome Powell has shifted from combating inflation to preparing to
protect against job losses. Analysts believe the employment data will
influence the extent of the expected rate cut by the Federal Reserve.
Markets have already been pricing in a 25-basis point cut for weeks.

 <mailto:info at bulls.co.zw> 

Global Markets

Global Global Markets

Safe-haven yen gains, Aussie wobbles as edgy markets face US jobs test

(Reuters) - The safe-haven Japanese yen rallied on Wednesday while riskier
currencies like the Australian dollar and sterling languished as traders
ducked for cover following the worst sell-off in almost a month on Wall
Street and big losses for Asian stocks.

The catalyst was ostensibly some soft U.S. manufacturing data, which fanned
worries about a hard landing for the world's biggest economy, with traders
already nervous ahead of crucial monthly payrolls data on Friday.

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"The bears are back with a bang," said Michael Brown, senior research
strategist at Pepperstone, while adding that the poor factory figures on
their own did not justify a market response of such scale.

"It does, however, speak to the heightened sensitivity of participants to
incoming data, particularly downside surprises."

The yen strengthened as much as 0.4% to 144.89 per dollar before last
trading up about 0.2% at 145.15 as of 0525 GMT, following a 1% rally
overnight against a broadly stronger dollar.

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The dollar-yen pair tends to track long-term U.S. Treasury yields, which
dropped nearly 7 basis points (bps) overnight and continued to decline in
Asian hours to stand at 3.8253% as investors flocked to the safety of bonds.

The dollar, though, was firm against most other major peers, as it tends to
draw safety bids even when the U.S. economy is the focus of concern.

Sterling was flat at $1.3117, after weakening 0.23% overnight. The euro rose
0.13% to $1.1058, following a 0.26% decline in the previous session.

The Swiss franc , another safe haven, strengthened about 0.26% to 0.8480 per
dollar.

The Aussie slipped a further 0.13% to $0.67025, extending Tuesday's 1.2%
tumble. It had earlier dropped as much as 0.4%.

Cryptocurrencies also faltered, with bitcoin and ether slipping about 2.9%
and 3.4%, respectively.

Risks to the U.S. soft-landing scenario - which had been gaining traction
recently in markets - saw traders raise odds of a 50 basis point (bp)
Federal Reserve interest rate cut on Sept. 18 to 38% from 30% a day earlier,
according to the CME Group's FedWatch Tool.

Economists surveyed by Reuters expect Friday's report to show an increase of
165,000 U.S. jobs in August, up from a rise of 114,000 in July.

Ahead of that, investors will keep a close eye on job openings data on
Wednesday and the jobless claims report on Thursday.

U.S. markets had been closed for the Labor Day holiday on Monday and came
back Tuesday to a weak Institute for Supply Management (ISM) survey that
suggested factory activity in the country would remain subdued for a while.

"That was supposed to show a gain, but actually showed a decline, and has
made people wonder once more about the Fed possibly being too late to act,"
said Sam Stovall, chief investment strategist at CFRA.

"This may be a short week but it will be an important and crucial one for
investor confidence," he added. "People are going to remain on edge."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price Gold holds steady as traders brace for US payrolls data

(Reuters) - Gold prices held steady on Wednesday as investors braced for a
monthly U.S. payrolls report that could influence how swiftly and deeply the
Federal Reserve cuts interest rates this year.

Spot gold held its ground at $2,491.01 per ounce, as of 0624 GMT. U.S. gold
futures steadied at $2,522.20.

Before the non-farm payrolls report on Friday, job openings data on
Wednesday and the ADP employment and jobless claims reports on Thursday will
be in focus.

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Traders see a 41% chance of a 50-basis-point (bp) rate cut on Sept. 18 and a
59% chance of a 25-bp reduction, according to the CME Group's FedWatch Tool.

"If the jobs data is weak, it will increase the probability of a 50-bp cut
and raise worries about growth slowdown, which will be supportive for gold,"
said Kyle Rodda, a financial market analyst at Capital.com.

"But from a technical viewpoint, positioning is a bit too long for gold and
this might limit upside," said Rodda, adding that prices were likely to
scale new highs in the longer run, even if there was a pullback in the
short-term because of positioning.

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Data on Tuesday showed that U.S. manufacturing contracted at a moderate pace
in August amid some improvement in employment.

Bullion is considered a safe asset during political and economic uncertainty
and tends to thrive in a low rate environment.

So far this year, gold has gained 21%, hitting an all-time high of $2,531.60
on Aug. 20.

Reuters Graphics

Reuters Graphics

Spot silver fell 0.4% to $27.93 per ounce.

Platinum gained 0.4% to $906.40 and palladium was flat at $938.75. The two
metals are primarily used in engine exhausts to reduce emissions.

"In Germany, consumers turning away from BEVs (battery electric vehicles)
has resulted in about 50,000 additional sales of catalysed vehicles, which
will help to improve palladium demand in the short term," analysts at
Heraeus said in a note.

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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