Bulls n Bears Daily Market Commentary : 18 February 2025

Wed Feb 19 09:47:51 CAT 2025

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Bulls n Bears Daily Market Commentary : 18 February 2025

ZSE commentary 

ZSE losses NMB propels today's activity aggregates ...

NMB propelled today's activity aggregates as circa 4.00m shares worth
$14.88m exchanged hands in the session. The banking group claimed 81.65% of
the volume traded and 93.32% of the turnover. The other notable value driver
was OK Zimbabwe that contributed 13.86% to the total traded. Activity
aggregates improved in the session as volumes ballooned 418.84% to 4.90m
shares while, turnover increased by 237.42% to $15.95m . In the ETF
category, the Cass Saddle ETF advanced 14.29% to $0.0800. The Tigere REIT
fell 0.09% to $1.1485 as 1.93m units traded in the name.

Life Assurer Fidelity led the risers list of the day as it edged up 14.86%
to $0.4600 while, seed producer SeedCo Limited garnered 8.94% to $2.8000.
Telecommunication group Econet was 7.42% higher at $2.7453 while, cable
manufacturer Cafca added 1.39% to close at $18.2500. Bankers NMB capped the
top five gainers of the day as it eked out 0.54% to $3.7200. Trading in the
negative category was Ecocash that continued to face selling pressure on the
board as it plunged 13.90% to $0.1976 on 2,900 shares while, Nampak
retreated 13.46% to $0.5192. Sugar processor Star Africa closed the day
pegged at $0.0281 following a 1.70% decline while, retailer OK Zimbabwe shed
1.18% to $0.3050. General Beltings fell 0.35% to $0.0703 as it capped the
top five worst performers' list of the day. The ZSE market recovered in the
session as the All Share Index rose 0.44% to 189.31pts while,  the Blue-Chip
Index was 0.59% firmer at 185.70pts . The Agriculture Index inched up 0.91%
to 155.31pts while, the Mid Cap Index gained 0.04% to 222.44pts.

 <mailto:info at bulls.co.zw> 

South African

South African rand weakens ahead of budget speech

JOHANNESBURG: South Africa's rand edged lower on Tuesday against a buoyant
dollar, ahead of a highly anticipated national budget speech.

At 1503 GMT, the rand traded at 18.4075 against the U.S. dollar, 0.15%
weaker than its previous close.

The dollar last traded about 0.22% firmer against a basket of currencies.

Domestic investor attention will be on the national budget presentation by
Finance Minister Enoch Godongwana on Wednesday.

Analysts anticipate the budget will focus on reforms, fiscal rules and
private-sector inclusion.

South Africa's official unemployment rate fell slightly in the fourth
quarter of last year to 31.9%, helped by job gains in the finance and
manufacturing sectors, statistics agency data earlier showed.

South African rand slips as markets await budget speech

On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed about
0.9% higher.

South Africa's benchmark 2030 government bond was marginally stronger, with
the yield down 1.5 basis points to 9.125%.

Nigeria

Naira strengthens at unofficial market, breaks below N1,600/$

The Nigerian currency showed strength in the black market but dipped for the
third consecutive time against the dollar at Nigeria's official foreign
exchange market.

The naira fell to N1,499.76/$1 on Wednesday from N1,498.95/$1, according to
FMDQ data.

However, it appreciated by N20 in the parallel market, trading at N1,585/$1
from N1,605/$1.

Currency traders in Nigeria's business capital attributed this movement to
the Chinese New Year holiday and the market's reaction to the Central Bank
of Nigeria's (CBN) announcement of the foreign exchange code as key triggers
behind a decline in dollar demand, boosting the naira's value.

Additionally, some traders who held sizable dollar reserves sold their
holdings, increasing supply in anticipation of reduced demand and exchange
rate fluctuations.

CBN updates BDC guidelines

In response, the CBN under Governor Yemi Cardoso updated its guidelines to
improve Bureau de Change (BDC) operations in Nigeria.

These guidelines outline acceptable practices for BDCs, including purchasing
foreign currency from designated entities and handling business and personal
travel expenses.

Furthermore, the CBN replaced the old over-the-counter system with an
automated foreign exchange transaction process to enhance market efficiency
and oversight.

Recent trends indicate increased dollar liquidity in Nigerian banks.
Customers seeking Business Travel Allowance (BTA) and Personal Travel
Allowance (PTA) are now having their requests honored more frequently.

Global currency market trends

The U.S. dollar index, which measures the greenback's strength against six
major peers-including the British pound, Euro, and Swiss franc-stood at
107.81 index points at publication, not far from its overnight low of
107.29. Earlier this week, the index surged to a three-week high of 109.88.

Former U.S. President Donald Trump signaled readiness to impose 25% import
tariffs on Canada and Mexico, though both countries received last-minute
one-month reprieves.

Meanwhile, Washington imposed 10% tariffs on China. In response, China
introduced retaliatory tariffs on U.S. goods, following failed attempts by
U.S. President Joe Biden to engage Chinese President Xi Jinping in trade
discussions.

Most economists agree that trade tariffs could increase U.S. inflation,
prompting the Federal Reserve (Fed) to maintain higher interest rates for an
extended period. Additionally, a weaker-than-expected U.S. ISM Services
report raised the probability of another interest rate cut later this year.

Chicago Federal Reserve President Austan Goolsbee cautioned on Wednesday
that it would be a mistake to overlook the possible inflationary impact of
tariffs, pointing to the COVID-19 pandemic's experience, in which supply
chain disruptions increased inflation.

According to Goolsbee's prepared remarks for the Fed's regional bank's
annual auto symposium in Detroit, the economy is robust, the labor market is
"plausibly" at full employment, and inflation is closer to the Fed's 2 per
cent target.

"But we now face a variety of new supply chain challenges - from natural and
man-made disasters, such as hurricanes and wildfires, to bridge collisions
that shut down major ports, clogged canals, and threats of dockworker
walkouts; geopolitical disruptions; immigration; and, of course, the threat
of significant tariffs and the potential for an escalating trade war,"
Goolsbee described new supply chain challenges.

"The Fed will be in a tough position: It will have to decide whether
inflation is due to overheating or tariffs if we see rising inflation or
stagnant progress in 2025," Goolsbee stated.

Making that distinction will be essential in determining whether or not the
Fed should take action.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar firms, Aussie steady after RBA's 'hawkish' rate cut

(Reuters) - The dollar firmed on Tuesday as traders weighed tariff worries
and the path to U.S. rate cuts, while the Australian dollar held steady near
two-month highs after the Reserve Bank of Australia delivered an expected
rate cut but cautioned on further easing.

The RBA cut its cash rate by 25 basis points to 4.10% on Tuesday in its
first easing since the 2020 pandemic, but was cautious about prospects of
further policy easing.

That left the Australian dollar steady at $0.6351 after an initial burst of
choppiness following the decision. The Aussie touched a two-month high of
$0.6374 on Monday and is up 2.4% in February on easing trade war worries.

Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities,
said the RBA's statement struck the right balance without boxing in the
central bank to delivering a follow-up cut. "That said we retain our
forecast for cuts in May and August."

Swaps imply just a 20% probability for a follow-up cut in April, although a
move in May is still almost fully priced in.

Speaking at a media conference, Australia's top central banker Michele
Bullock said market pricing for two more quarter-point cuts this year was
ambitious and policy makers were more cautious about the outlook.

Kerry Craig, global market strategist at J.P. Morgan Asset Management said
the RBA's move looks more like an "insurance" cut, which keeps it in step
with global central banks, rather than the start of an aggressive easing
cycle.

"This easing cycle will certainly not be a sprint to the end, but rather a
slow walk on the path towards lower rates and further cuts ahead."

Investor focus this week will be on Wednesday's release of minutes of the
Federal Reserve's meeting in January to gauge how policymakers have sought
to weigh the risk of a broader tariff war in the wake of President Donald
Trump's trade policies.

Data last week showed U.S. consumer prices increased at the fastest pace in
nearly 18 months in January, reinforcing the Fed's message that it was in no
rush to resume cutting rates amid growing economic worries.

"Trade policy uncertainty is at a record high ... and given that the labour
market is solid, there is no compelling case to cut rates imminently," ANZ
strategists said in a note.

"An extended pause during the first half of this year looks justified and
will give the Fed time to assess the impact of trade measures on inflation."

ANZ now expects rate cuts to resume in the second half of 2025, with a
further 75 bps of easing anticipated. Markets though are not as optimistic,
with traders pricing in 40 bps of cuts for this year.

In Asia, the yen was on the back foot after its recent gains as strong
growth data bolstered odds of the Bank of Japan raising interest rates again
this year, with July seen as a live meeting.

The yen was last at 152.165 to the dollar, down 0.4% on the day. Japan's
solid October-December GDP data on Monday, coupled with recent inflation
numbers, have helped lift the yen. It is up nearly 4% against the dollar so
far in 2025.

The dollar index , which measures the greenback against six other major
currencies, was 0.27% higher at 107.01, still not far from the two-month low
of 106.56 it touched on Friday.

The euro was 0.27% lower at $1.045475, while sterling eased 0.2% at $1.2593
as traders braced for talks in Saudi Arabia later on Tuesday aimed at ending
the Ukraine war.

The New Zealand dollar fell 0.55% to $0.57195 ahead of the Reserve Bank of
New Zealand meeting on Wednesday, where the central bank is widely expected
to cut rates by 50 bps.

 <mailto:info at bulls.co.zw> 

Gold rises as Trump tariff uncertainty fuels safe-haven demand

(Reuters) - Gold prices rose over 1% on Tuesday as concerns over economic
growth, due to uncertainty surrounding U.S. President Donald Trump's tariff
plans, prompted safe-haven flows into bullion.

Spot gold gained 1.2% to $2,932.79 an ounce as of 2:11 p.m. ET (1911 GMT)
after hitting a record high of $2,942.70 last week.

U.S. gold futures settled 1.7% higher at $2,949.

A line chart titled "Spot gold price in USD per oz" that tracks the metric
over time.

"We are seeing increased safe-haven demand due to the disrupted nature of
the Trump administration and we have also got a bullish chart posture," said
Jim Wyckoff, a senior market analyst at Kitco Metals.

Since taking office last month, Trump has swiftly redrawn the global trade
battlefield with a series of tariffs, while plans are already in motion for
sweeping reciprocal tariffs, aimed squarely at any nation that taxes U.S.
products.

"Central bank buying should also continue to provide support," Commerzbank
analysts said in a note.

The market's focus has now shifted to the U.S. Federal Reserve's January
meeting minutes, due on Wednesday, for clues into the central bank's
interest rate trajectory.

"If the economy starts to sputter because of the trade tariffs and such,
then we could see some lower interest rates," Wyckoff added.

Safe-haven bullion benefits from geopolitical and economic uncertainties and
tends to thrive in a low-interest rate environment as it yields no interest.

"While the broader trend remains intact, the risk of a deeper pullback
cannot be ignored at these elevated levels. For gold to reach new highs, it
may take an escalation in the geopolitical risks, particularly about
Ukraine," said Fawad Razaqzada, market analyst at City Index and FOREX.com.

Among other metals, spot silver was up 0.2% at $32.84 an ounce. Platinum
rose 0.9% to $983.75 and palladium climbed 2.5% to $986.50.

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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