Bulls n Bears Daily Market Commentary : 10 February 2025

Tue Feb 11 09:24:40 CAT 2025

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Bulls n Bears Daily Market Commentary : 10 February 2025

ZSE commentary 

ZSE dips amid concerns over monetary policy effectiveness

HARARE - Low investor sentiment prevailed on Monday as Zimbabwe Stock
Exchange shares closed marginally weaker amid concerns on how effectively
the monetary policy statement delivered by the Reserve Bank of Zimbabwe last
week would stabilise the economy, manage inflation, and improve liquidity
conditions.

Key measures in the MPS included adjustments to the foreign currency
retention threshold for exporters to 70% from 75%, widening of the Targeted
Finance Facility (TFF) to provide working capital support specifically to
wholesalers and retailers, enhanced Foreign Exchange Management through
clarifications and refinements, and the deepening of the
Willing-Buyer-Willing-Seller foreign exchange mechanism.

However, economist Tony Hawkins's criticism of the reduction in the foreign
currency retention threshold for exporters highlights significant concerns
regarding the implications of this policy on Zimbabwe's economic dynamics.
His argument centres around three critical points: the negative impact on
exports, the encouragement of imports, and the limited efficacy in
stabilising the exchange rate.

Another economist, Prosper Chitambara notes that although tight liquidity
measures may appear effective in stabilizing prices, the repercussions of
these monetary decisions on the overall economy and the poverty rate are not
as transparently communicated.

At close, the All Share Index was down 0.09% to 191.73, weighed down by
losses in mid-tier stocks. Turnover was at ZWG1.13 million after the sale of
629 100 shares in 112 trades. Foreign participation was insignificant, with
only sales of ZWG1 917 being recorded. Seed Co brought in the most value at
ZWG345 243 while Proplastics had the most volume traded at 203 000 shares.

Investors continue to await further guidance on the directive by the RBZ,
which states that all entities are required to adopt the ZWG as the common
presentation currency for financial statements to enhance transparency,
consistency, and support of the local currency, effective immediately.

The Top Ten Index added 0.19% to 188.71, supported by Delta's 0.47% gain to
1298.52c.

The Medium Cap Index shed 0.87% to 222.65. Willdale was the worst performer
after losing 57.48% to 2.12c, and Tanganda which is set to have a secondary
listing of its Class A shares on the VFEX, was down 14.82% to 152.0c. Nampak
fell 12.50c to 70c and Afdis was 5.71% lower to 660c while Masimba dropped
3% to 319.95c.

Seed Co led the risers with a 9.61% gain to 235.50c, and ZHL recovered 8.32%
to 27.63c. Turnall put on 5.42% taking its market cap to US$8.61 million,
and Proplastics added a fractional 0.99% to 85c.

On the VFEX, turnover was strong at US$1.51 million after relatively strong
volume in Simbisa and Innscor. Total volume was 4.41 million shares, led by
Simbisa at 3.2 million shares and Innscor at 1.08 million. The All Share
fell 1.21% to 100.49.

Seed Co International was the weakest link after falling 14.79% to 17 US
cents. African Sun lost 7.41% to 4 US cents, Axia was 4.62% lower to 8 US
cents, and Simbisa shed 0.35% to 31 US cents.

Zimplow led the risers, gaining 1975% to 2 US cents, and Innscor put on a
fractional 0.02% to 45 US cents

-finx

 <mailto:info at bulls.co.zw> 

South Africa

South African rand, bonds slip on Trump's new tariff threats

(Reuters) - South Africa's rand and bonds weakened on Monday after U.S.
President Donald Trump announced fresh tariff plans, adding to worries over
a global trade war.

At 1011 GMT, the rand traded at 18.4650 against the U.S. dollar, about 0.2%
weaker than its previous close.

The dollar was little changed after Trump said on Sunday he would introduce
new 25% tariffs on all steel and aluminium imports into the U.S., on top of
existing metals duties.

Analysts said South Africa may face further risks after Trump signed an
executive order cutting U.S. financial assistance to the country on Friday,
citing disapproval of its land policy and of its genocide case at the
International Court of Justice against Washington's ally Israel.

"SA needs to forge a path without US assistance, which this government
must've foreseen as a real possibility given its geopolitical position
towards Russia, BRICS and Israel/Palestine," said ETM Analytics in a
research note.

South Africa's longer-dated bonds also slid, with the 2052 maturity falling
as much as 0.47 cents to bid at 88.66 cents on the dollar at 1010 GMT in
contrast to most African sovereigns, which broadly traded flat.

The shorter-dated maturities fell by smaller amounts and the 2025 was
slightly positive.

South Africa's benchmark 2030 government bond was weaker, with the yield up
6.5 basis points to 9.13%.

On the stock market, the Top-40 index last traded about 0.1% higher.

Nigeria

Naira appreciates to N1,605/$1 in parallel market on Monday 

The naira made a significant recovery in the parallel market, appreciating
by N5 against the US dollar on Monday.

It currently trades at N1,605/$1 (selling) and N1602/$1 (buying) according
to Nairametrics sources, a slight improvement from Friday's rate of
N1,610/$1.

This marks a positive shift for the Nigerian currency after a series of
fluctuations in recent weeks.

According to Nairametrics sources, the naira was trading at N1,605/$1
(selling) and N1,602/$1 (buying) in the parallel market as of Monday's
close.

This development follows a fall from Thursday's rate of N1,630/$1, offering
some relief to Nigerians dealing with rising foreign exchange costs.

On the official side, the Central Bank of Nigeria (CBN) data showed that the
naira was trading at N1,477.2/$1 (buying) and N1,478.2/$1 (selling) on
Saturday.

This reflects a clear contrast with the parallel market rate, highlighting
the gap between official and unofficial exchange channels.

The naira ends January on a high note 

In addition, Nairametrics reported that the naira closed January 2025 at
N1,475/$1 at the Nigerian Autonomous Foreign Exchange Market (NAFEM),
marking the currency's best performance since June 2024.

The strongest rate was recorded on June 11, 2024, at N1,473/$1, until the
end of January 2025.

The closing rate of N1,475/$1 represents a notable improvement from the
previous month's rate of N1,535/$1, resulting in a N60 gain or a 3.91%
appreciation month-on-month.

Other currencies against the Naira 

Furthermore, the parallel market has also seen changes in the exchange rates
for other major currencies:

The British Pound (GBP) traded at N2,010.00, reflecting a 1.00% increase.

The Euro remained stable at N1,670.00, with no change observed.

Other shifts include the GBP being exchanged for N2,000.00, up by 0.50%, and
the Euro's rate fluctuating to N1,655.00, up by 0.91%.

The positive movements in the naira exchange rate come amid continued
efforts by the CBN to stabilize the currency and manage the parallel market
volatility. With the new figures, experts will be closely monitoring the
continued performance of the naira as Nigeria navigates its economic
challenges in the new year.

More insights 

The President of the Association of Bureaux De Change Operators of Nigeria,
Aminu Gwadabe, over the weekend, urged the CBN to grant the association
self-regulatory status to aid forward guidance of its members and adopt the
operators' IT platforms to entrench a tech-driven industry and boost
transparency in market operations.

He said this in a statement made available to newsmen on Sunday, where he
also hinged the rally of the naira on the reforms by the CBN.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains, others slip on tariff threats

(Reuters) - The U.S. dollar gained on Monday after President Donald Trump
pledged 25% tariffs on all imports of steel and aluminium, while the
Canadian dollar, Japanese yen, euro and sterling all weakened on concerns
about the impact of any new trade levies.

Canada is a major exporter of steel and aluminium to the U.S., along with
Brazil, Mexico, South Korea and Vietnam, according to government and
American Iron and Steel Institute data.

The yen also dipped on concerns that Japan could also face tariffs.

There is "a little bit of catch-up and also this idea that maybe Japan was
going to escape the worst of it and now could be hit with the steel and
aluminium tariffs," said Marc Chandler, chief market strategist at
Bannockburn Global Forex in New York.

Japanese Prime Minister Shigeru Ishiba expressed optimism on Sunday that his
country could avoid higher U.S. tariffs, saying Trump had "recognised"
Japan's huge investment in the U.S. and the American jobs that it creates.

Trump said on Sunday he will introduce new 25% tariffs on all steel and
aluminium imports into the U.S., on top of existing metals duties.

It came after he said on Friday he planned to announce reciprocal tariffs on
many countries by Monday or Tuesday.

The Canadian dollar weakened 0.11% versus the greenback to C$1.4307 per
dollar, after earlier reaching $1.4379.

The U.S. dollar strengthened 0.38% to 151.97 Japanese yen .

The dollar index rose 0.21% to 108.31 .

The euro dropped 0.2% to $1.0306 . The U.S. is the second-largest market for
EU steel exports.

Sterling weakened 0.36% to $1.2364

Britain has not seen details of U.S. President Donald Trump's proposed steel
and aluminium tariffs and will continue to engage with the Trump
administration as appropriate, a spokesman for Prime Minister Keir Starmer
said on Monday.

The U.S. is Britain's second largest steel export market after the European
Union.

This week's main U.S. economic focus will be consumer price inflation data
for January due on Wednesday.

It is expected to show that both headline and core consumer prices rose by
0.3% last month, for an annual gain of 2.9% and 3.1%, respectively,
according to economists polled by Reuters. (USCPI=ECI), opens new tab,
(USCPF=ECI), opens new tab, (USCPN

 <mailto:info at bulls.co.zw> 

Gold holds steady above $2,900 as Trump reinstates tariffs on metals

Gold price rallied sharply and set a record high above $2,900 on Monday
after the President of the United States (US), Donald Trump, enacted tariffs
of 25% on base metals. Traders seeking safety pushed the non-yielding metal
higher amid fears that Trump trade policies could derail the global economy
and drive inflation higher.

The XAU/USD pair trades at $2,905 after hitting an all-time high of $2,911.
On Sunday, Trump said that steel and aluminum imports into the US are set to
be hit by 25% duties, including proceeds from Canada, the United Arab
Emirates (UAE) and Mexico. This pushed Gold prices higher, with bulls
finally clearing the $2,900 barrier and setting their sights on $3,000 a
troy ounce.

Despite this, the market mood remains positive as Wall Street remains in
positive territory. The Greenback also climbs alongside Gold, while US
Treasury bond yields remain steady, which is usually a headwind for the
prices of precious metals.

Bullion has also benefited from central bank demand. The World Gold Council
(WGC) revealed that banks bought more than 1,000 tons for the third year in
a row in 2024. After Trump's victory, purchases by central banks grew over
54% YoY to 333 tons, the WGC calculated.

Despite this, Federal Reserve (Fed) officials are turning slightly cautious,
which has kept Gold prices from appreciating sharply. Fed Chairman Jerome
Powell's testimony in the US Congress will be scrutinized by traders. Any
hawkish hints could weigh on the yellow metal.

The US economic docket will feature Fed speakers, inflation figures,
employment data and Retail Sales.

Daily digest market movers: Gold price poised to hit $3,000

The US 10-year Treasury bond yield stays firm at 4.489%.

US real yields, which correlate inversely to Bullion prices, drop one basis
point to 2.055%, a tailwind for XAU/USD.

The New York Fed Survey of Consumer Expectations indicated that US consumers
anticipate inflation to stay at 3% in the near term. Additionally, long-term
expectations for five years from now have risen, with consumers now
expecting prices to increase to 3% in December, up from a previous
expectation of 2.7%.

Last week, US employment data was mixed, though the dip in the Unemployment
Rate hints at the strength of the labor market. This might prevent the Fed
from cutting rates soon.

Money market fed funds rate futures are pricing in 39 basis points of easing
by the Federal Reserve in 2025.

XAU/USD technical outlook: Gold prices set to challenge $2,900

Gold's uptrend is set to extend unless a daily close below $2,900 happens,
which could pave the way for a pullback. Momentum remains bullish as the
Relative Strength Index (RSI) is overbought, though as long as it remains
below the most extreme reading of 80, bulls could still push prices higher.

The next resistance would be the psychological figure of $2,950, followed by
$3,000. Conversely, if XAU/USD tumbles below $2,900, the first support would
be $2,850, ahead of the October 31 swing high of $2,790. Further weakness is
seen at the January 27 swing low of $2,730.

INVESTORS DIARY 2025

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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