Bulls n Bears Daily Market Commentary : 10 May 2023

Wed May 10 21:46:49 CAT 2023

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Bulls n Bears Daily Market Commentary : 10 May 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

ZSE takes a breather in mid-week session.

ZSE took a breather in the midweek session as the primary AllShare Index
dropped 0.79% to 58885.96pts while, the BlueChips Index lost 2.55% to
35576.01pts. In contrast, the Agriculture Index rose 0.09% to $222.49 while,
the Mid-Cap Index firmed up 5.47% to 111996.55pts. Masimba Holdings
headlined the gainers of the day after a 15% jump to $290.9500, followed by
First Mutual Properties that surged 14.00% to $31.4639. Bankers First
Capital put on 13.81% to $47.8355 while, milk processors Dairibord advanced
13.80% to end the day pegged at $182.2973. Mash Holdings capped the top five
gainers' pack on a 13.51% to close at $21.0000. Turnall led the laggards of
the day on a 10.59% slump to $7.6000 while, BAT slipped 7.50% to settle at
$6,289.9750. Conglomerate Meikles trimmed 6.73% to end pegged at $601.8028
while, beverages manufacturer Delta eased 3.12% to $1,244.3835.

Tea producers Tanganda completed the top five losers' pack on a 2.69%
decline to close at $470.0000. The market closed with a positive breadth of
three after fourteen counters recorded gains against eleven fallers.
Activity aggregates were depressed in the session as volumes traded
succumbed 8.52% to 54.01m shares while, the value outturn plummeted 43.79%
to $1.90bn. Turnall claimed a massive 96.03% of the volume aggregate. Top
value drivers of the day were Delta (57.29%), Turnall (20.74%) and Econet
(11.08%). Foreigners were net sellers in the session as purchases amounted
to $26.79m while, sales stood at $115.17m. In the ETF section, Datvest and
MIZ ETFs climbed 14.98% and 0.24% to $3.3000 and $2.2454 respectively.
Morgan and Co MCS ETF ticked up 2.14% to $32.0000 as the Old Mutual ETF
inched up 0.42% to $10.1121. The Tigere REIT gained 0.31% to close at
$50.6144.efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand drops to 3-year low on loadshedding fears

(Reuters) - The South African rand plunged to a three-year low on Wednesday
after a steep drop in the previous day, while international and domestic
government bonds also fell, as fears grew of scheduled blackouts known as
loadshedding worsening during winter.

At 1530 GMT, the rand was trading at 18.8750 against the U.S. dollar, its
weakest level since early May 2020. On Tuesday, the rand had fallen about
1.7%.

South Africa's sovereign dollar bonds dropped, with longer dated maturities
falling the most. At 1505 GMT the 2052 maturity was down 0.77 cents in the
dollar to 82.8 cents, having fallen more than 1 cent earlier in the day . At
one point the yield rose above 9%, its highest in almost six months.

South Africa's struggling state utility Eskom told parliament on Tuesday
that there would be a 45-day delay in returning a generating unit online,
according to local media.

The delay is likely to add further pressure on the grid during winter, when
loadshedding across most parts of the country is already more than 10 hours
a day.

"SA bonds and the ZAR (rand) are underperforming their EM counterparts,"
Kieran Siney of ETM Analytics said in emailed comments on Wednesday morning.

"Until there is a concrete plan to resolve SA's energy crisis that the
market buys into, the underperformance will persist, notwithstanding the
attractive yields on offer and deep undervaluation in the ZAR."

The government's local bonds also dropped, with yields on the benchmark 2030
bond rising 23 basis points to 10.560%, the highest level since December .

ETM Analytics said in a separate note on Wednesday morning that misleading
headlines on Tuesday had sparked the market rout by giving "the impression
that was losing control of the grid".

"SA is in trouble, the grid is under pressure, Eskom does face multiple
threats, but none of this is anything new," it said.

On the stock market, the blue-chip index of top 40 companies (.JTOPI) ended
down 0.17% while the broader all-share index (.JALSH) was flat.

  The Thomson Reuters Trust Principles.

Nigeria

Naira recovers, as dollar rate falls amid complaints from MTN, others  

The Naira closed the official market with a 0.11 per cent increase in value,
as the Dollar rate settled at N462.25 kobo/$1 on Tuesday.

At the end of trading the previous day, the foreign exchange rate was
N462.78/$1, indicating the price of the Dollar fell by N0.53 kobo in the
official window.

The exchange rate between the Naira and the Dollar hovered as high as
N466/$1 during intraday trading on Tuesday but fell as low as N460/$1 before
breaking at N462.25 kobo/$1.

These were the prices investors and exporters bought the Dollar yesterday
when they traded $98.84 million in foreign exchange.

This is a 0.49 per cent or $490,000 drop in foreign exchange transactions,
as traders in the investors and exporters' window had exchanged $99.33
million on Monday.

Investors were unhappy with the low supply of foreign exchange in the
official market, as the lack of it means they have to approach the black
market where the Dollar costs above N740.

The Chief Executive Officer of MTN Nigeria, Karl Toriola, stated in the
company's first quarter 2023 financial statements that the network provider
faces operational challenges due to foreign exchange supply constraints and
exchange rate volatility.

"supply chains were compounded by exchange rate volatility and the
availability of foreign currency needed for capex," Toriola said in the
financial statement.

Recall that British Airways, Emirates Airlines and some foreign airlines
suspended operations in Nigeria over the inability to access foreign
exchange in the official market.

Emirates Airlines complained that the company is unable to repatriate its
ticket sales in Nigeria due to insufficient forex supply and it is harming
the firm.

The scarcity of Dollars resulted in foreign airlines' trapped funds rising
to $743.7 million in January 2023, from $662 million in December 2022.

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If you like what we do, and are ready to uphold solutions journalism, kindly
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Your support would help to ensure that citizens and institutions continue to
have free access to credible and reliable information for societal
development.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar weakens, euro edges higher after inflation data

(Reuters) - The dollar fell against other major currencies on Wednesday on
news that U.S. inflation slowed more than expected, increasing the
likelihood that the Federal Reserve could pause its interest rate hikes.

U.S. Labor Department data showed April inflation cooled to 4.9%, the
smallest year-over-year increase in two years. However, so-called core
inflation remained sticky at 5.5%, suggesting interest rates may need to
stay high for some time to tame it.

"The U.S. dollar did soften modestly on the news that core U.S. CPI
inflation edges a little lower in April. However, the data provides little
by way of resolution for Fed hawks and doves," said Jane Foley, head of FX
strategy at Rabobank London.

"At 5.5%, core CPI inflation is well above the 2% target and does little to
alter our house view that the Fed will be unable to cut interest rates this
year."

Following the data, the euro rose 0.24% to $1.0987 while sterling was up
0.14% to $1.2640.

The Japanese yen was last seen at $134.50 as the dollar slipped 0.52%.

Against a basket of currencies, the dollar index fell 0.2% to 101.38 after
hitting a low of 101.21.

"There's continued angst in the market that the Fed isn't finished hiking
rates," said Adam Button, chief currency analyst at Forexlive.

"Even though the employment inflation report was only slightly lower than
expected, you could see a sigh of relief in the market. And that meant
selling the dollar fairly aggressively. So ... I think the market has been
holding its breath ahead of this report."

Economists polled by Reuters expected core U.S. consumer prices to rise 5.5%
on a year-on-year basis for April.

A stronger-than-expected reading would have proved a headache for the Fed,
which signalled last week it was open to pausing its aggressive tightening
cycle after delivering 10 consecutive rate hikes since March 2022.

Fed funds futures traders are pricing in a pause before expected rate cuts
in September. The Fed's target range stands at 5% to 5.25%. ,

Reuters Graphics

Button believes it is far too soon to start talking about rate cuts.

"I think the market is ready to move past the inflation narrative. But what
the Fed needs to see is rising unemployment before it even thinks about
cutting rates," he said.

"I think even if inflation goes down to 2%, the Fed won't cut rates until it
looks like a recession is imminent or certain. So the growth part of the
equation will be much more important from here for the market and for the
Fed."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold eases on profit taking after US inflation data

(Reuters) - Gold prices edged lower on Wednesday as optimism over the
Federal Reserve cutting interest rates this year faded after U.S. inflation
report, triggering profit-taking among some investors.

Spot gold was down 0.2% at $2,030.70 per ounce by 2:06 p.m. EDT (1806 GMT).

U.S. gold futures settled 0.3% lower at $2,037.10.

"There's still risks the Fed will have to keep rates higher for longer...
Gold is going to need more rate cuts to become aggressively priced in for it
to continue its rally," said Edward Moya, senior market analyst at OANDA.

Gold rose as much as 0.7% after data showed U.S. Consumer Price Index (CPI)
rose 4.9% in April from a year earlier but lower than expectations of a 5%
increase, before turning negative. Month-over-month CPI in April rose 0.4%
after gaining 0.1% in March.

The data disrupted the modest momentum that had been building for an 11th
straight interest rate hike in June, with the bulk of futures tied to the
Fed's rate betting on a pause.

But gold may struggle in the short term with core inflation unchanged from
last month and well above the Fed's target, said Ole Hansen, head of
commodity strategy at Saxo Bank.

While gold is considered a hedge against inflation, rising interest rates
dull non-yielding bullion's appeal.

Some analysts have said gold could attempt another run to record highs,
given persistent economic worries, including a potential U.S. debt ceiling
default.

"Much more attention should be given to the state of the banking system and
the brinkmanship in the debt ceiling talks," said StoneX analyst Rhona
O'Connell.

Markets now look forward to April's producer price index (PPI) due at 8:30
a.m. EDT on Thursday for more cues.

Spot silver fell 1% to $25.35 per ounce, platinum rose 0.4% to $1,109.60 and
palladium gained 2.1% to $1,602.7.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Africa Day

May 25

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

Counters trading under cautionary

CBZH

GetBucks

EcoCash

TSL

Econet

Turnall

First Capital Bank

ZBFH

Fidelity

Zimplow

FMHL

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
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subscribe for any securities. The information contained in this report has
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