Bulls n Bears Daily Market Commentary : 19 September 2024

Fri Sep 20 06:56:21 CAT 2024

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Bulls n Bears Daily Market Commentary : 19 September 2024

ZSE commentary 

ZSE in second consecutive loss on weak heavyweights

HARARE - Zimbabwe Stock Exchange shares closed in negative territory for the
second consecutive day as weakness persisted in select heavyweight stocks.

The All Share Index was down 0.40% to 260.23. Market bias was negative after
12 stocks traded in red while eight gained. In total, 22 counters recorded
trades. Turnover was at ZWG6.12 million led by Delta at ZWG3.85 million.
Trades amounted to 231 with Delta the most active at 39. Traded volume was
at 2.3 million shares with Star Africa leading at 1.51 million. Foreign
participation was insignificant.

The Top Ten Index lost 1.04% to 281.22. Retailer OK Zimbabwe declined 7.20%
to 99.99c taking its market cap to just below US$93 million. , CBZ was 3.41%
weaker to 1 599c and Delta dropped 2.52% to 1 900.03c.  

First Mutual led the blue-chip gains after it added 9.93% to 406.67c FBC
Holdings added 2.05% to 992.41c in the wake of its interims where the group
reported a decline in profitability attributed to a combination of factors,
including a monetary loss of ZWG 774 million, which reflects the adverse
effects of hyperinflation on the net financial assets. Despite the drop in
overall profitability, FBC Holdings has demonstrated resilience through
strong growth in its core revenue streams (See report to follow).

The Medium Cap Index was the standout performer with a 2.70% gain to 198.44.
Willdale led the day's risers with a 14.50% gain to 4.90c and ZB Financial
Holdings was up 13.98% to 1 083.80c

Mash Holdings put on 13.54% to 69.25c as investors continue to cheer
recently released and FMP advanced 13.06% to 67.98c. 

Nampak was the session's weakest link after falling 15% to 102c and volume
leader StarAfrica pared 2.27% to 1.42c.

On the VFEX, turnover was below the psychological average of US$100 000 at
US$72 776.01 after 219 834 shares exchanged hands in 36 trades.  The All
Share Index was down 1.21% to 103.15.  Simbisa dropped a marginal 0.08% to
35.03 US cents and African Sun was the weakest link with a 2.51% loss 3.50
US cents. The hospitality company is currently trading under a cautionary
statement pending the sale of assets believed to be the Kariba Hotel and
Monomotapa.

First Capital was 0.46% higher to 4.37 US cents amid reports of a management
shake-up among its top executives. Innscor, which is due to release its June
finals, added 1.17% to 45.77 US cents.-finx

 <mailto:info at bulls.co.zw> 

Global Markets

South Africa

Rand gains with SA rate cut, weak dollar lifts sentiment

.

The rand strengthened Thursday, as sentiment was boosted by the dollar's
pullback and South Africa's first interest-rate cut in four years.

The currency pared earlier stronger gains, however, to trade 0.4% higher at
at 17.4846 per dollar by 5:30 p.m. in Johannesburg. It earlier rose as much
as 0.9% to touch the strongest level since February 2023.

Lesetja Kganyago, governor of the South African Reserve Bank, announced a 25
basis-point reduction in the benchmark rate to 8%, in line with estimates of
21 of 22 economists surveyed by Bloomberg. 

Win Thin, a strategist at Brown Brothers Harriman & Co., said that after
Wednesday's benign inflation print, "this cut was a done deal." While the
market is pricing steady rates for the next three months, he said he would
not rule out another cut at the SARB's Nov. 21 meeting.

The SARB's decision follows the US Federal Reserve's move to lower its
benchmark interest rate by half a percentage point on Wednesday. The move
has offered relief to emerging-market currencies like the rand as the dollar
pulled back.

Brendan McKenna, FX strategist at Wells Fargo Securities LLC, said that "if
the rand continues to perform well, maybe SARB can pick up the pace of
easing later this year after a gradual start." 

Ugandan

Ugandan shilling firms; commodity, remittance dollar flows help

(Reuters) - The Ugandan shilling was firmer on Thursday, underpinned by
inflows of dollars from commodity exporters and remittances, traders said.

At 0853 GMT, commercial banks quoted the shilling at 3,709/3,719, compared
with Wednesday's closing rate of 3,715/3,725.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar down in Taipei trading

Taipei, (CNA) The U.S. dollar was traded at NT$31.885 at 10 a.m. Friday on
the Taipei Foreign Exchange, down NT$0.047 from the previous close.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold expected to hit another record

Gold expected to hit another record The gold price fell back some US$10 per
ounce after hitting a new record of US$2 589 per ounce on Monday.

The gold price fell back some US$10 per ounce after hitting a new record of
US$2 589 per ounce on Monday, but investors and gold lovers expect it to
continue its upward march to another new high.

"There is a lot of uncertainty in the world now," says Rael Demby, chief
executive officer of The South African Gold Coin Exchange and The Scoin
Shop.

"One thing I can be certain about is that the uncertainty is not going to go
away."Demby says history has shown that gold always thrives in times of
uncertainty.

Recent events have proved this.

Gold started its strong run in 2022, jumping from around US$1 700 to US$2
000 per ounce when Russia invaded Ukraine.

Gold really started to run in October 2023 when Palestinian militant group
Hamas attacked Israel, which fuelled growing conflict in the Middle East.

It is still getting worse, with fears that attacks from and in Iran, Lebanon
and Yemen could escalate into a regional war that could draw other countries
in too.

The explosion of nearly 3 000 radio pagers carried by Hezbollah members in
Lebanon is ratcheting aggression up another notch, and the outlook for the
gold price is a few dollars.

Upside

Gregory Shearer, head of base and precious metals strategy at JP Morgan,
says in a report to clients that the broker has upgraded its gold price
targets for this year and 2025.

"Economic and geopolitical uncertainty tend to be positive drivers for gold,
due to its safe-haven status and ability to remain a reliable store of
value.

It has low correlation with other asset classes, so can act as insurance
during falling markets and times of geopolitical stress," says Shearer,
noting that data also shows there has been a reluctance by physical holders
to sell gold.

"A general aversion to short bullion financially, despite the [outsized]
rally, underscores gold's structurally bullish drivers outside of US
interest rates," he adds.

"Gold's resurgence has come earlier than expected. We have been structurally
bullish gold since the fourth quarter of 2022 and with gold prices surging
past US$2 400 in April, the rally has come earlier and has been much sharper
than expected.

"It has been especially surprising given that it has coincided with [US]
Federal Reserve rate cuts being priced out and US real yields moving higher
due to stronger labour and inflation data in the US.

"Amid fraying geopolitics, increased sanctioning and de-dollarisation, we
observe an increased appetite to buy real assets," he says.

JP Morgan expects the gold price to average US$2 500 per ounce until
year-end and to increase to an average of US$2 600 in 2025 - and says the
risk of the prediction being wrong would be to the upside.

Research by the SA Gold Coin Exchange tallies with this view, with Demby
being a bit more optimistic.

"Gold is on a upward trajectory and we see it above US$2 600 per ounce at
the end of the year.

"Dedollarisation is happening. Brics countries have indicated that a Brics
currency will partly be backed by gold," says Demby.

"Central banks have been big buyers of gold over the last few years.

Russia and Turkey have been buying more gold than they ever did."Data from
the World Gold Council shows that central banks around the world purchased 1
037 tonnes of gold in 2023, led by China. Central bank buying, net of sales,
exceeded 290 tonnes in the first quarter of 2024.

The World Gold Council says it is the fourth strongest quarter of purchases
since the buying binge began in 2022.

It points out that gold purchases increased by 5 percent compared to the
previous quarter despite the sharp increase in the average price quarter on
quarter. -Moneyweb

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
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for guideline purposes only and sourced from third parties.

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