Royal Bank Markets

ABC results inflict knock on counters

Royal Bank

LAST week was a short and sluggish trading week after the Heroes’ Holiday.



ica, sans-serif”>The market eagerly awaited the inflation figure which now stands at a record 399,5%. This is up from the June figure of 364,5%.


The inflation figure should speedily spur the equities market to the 700 000 point mark.


Last week financial counters took a knock as a result of the disappointing results posted by ABC Holdings Ltd.


We recommend a smooth exit from all financial counters with the exception of NMB Holdings Ltd at this juncture, and increased exposure in counters with September year-end interims.


Local money market


The money market opened short on August 8. Reflecting the market shortages, short-term interest rates were indicated in the 90-100% range while 90-day deposit rates were indicated at levels of around 85%.


However, the money market ended the week in surplus with 90-day deposit rates being indicated in the 80% to 90% range while overnight rates were at around 95%.


Local foreign currency market


The Zimbabwe dollar was unchanged at $824 to the United States dollar but was indicated mixed against other currencies.


On the parallel market the Zimbabwe dollar was quoted as weaker with indications of around $4 700 to the US$1 for cash and $5 100 to the US dollar for telegraphic transfers.


International markets


US stocks opened the week on a low point although blue-chips posted modest gains as investors digested upbeat economic data and encouraging retail sales reports from Wal-Mart and Best Buy.


Blue-chips in London slipped back from their early gains from earlier on in the week.


As expected the Bank of England’s Monetary Policy Committee decided to leave interest rates on hold at 3,5% on the back of strong data on consumer borrowing and retail sales.


US equities traded in a tight range, with the market struggling through lacklustre volumes after a massive power blackout hit the northeast US regions and parts of Canada.


International commodity prices


Precious metals strengthened in early trade on August 8, with spot gold firming to US$354 per ounce, while silver and platinum rose to US$5,02 per ounce and US$79,50 per ounce respectively.


The rise in the price of gold was attributed to the US dollar’s weakness against the euro and the Japanese yen.


Brent crude oil was little changed at US$30,65 per barrel a day after a bombing in Baghdad, Iraq.


Gold traded higher at the end of the week underpinned by speculative activity. Silver and platinum were also indicated firm, while on the London Metal Exchange base metals were quoted higher.