Bulls n Bears Daily Market Commentary : 19 May 2025

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Bulls n Bears Daily Market Commentary : 19 May 2025

 

 	



 

 	


ZSE commentary

 

ZSE rebounds in new week...

 

The ZSE market rebounded in the week opening session as the primary All
Share Index put on 0.39% to 193.71pts while, the Blue-Chip Index rose 0.30%
to 186.40pts. The Mid Cap Index went up 0.68% to 243.68pts while, the
Agriculture Index was stable at 192.27pts as none of its constituents
registered trades in the session. Zimre Holdings headlined the top
performers of the day on a 14.89% jump to $0.3280, followed by retailer
OKZIM that surged 14.73% to $0.3870. FML soared 14.58% to close at $4.4800
while, telecoms giant Econet completed the gainers of the day on a 0.41%
lift to end the day pegged at $2.7512. Trading in the negative territory was
Star

Africa that slipped 24.09% to $0.0290 while, Mashonaland Holdings eased
10.38% to $0.9500. Beverages giant Delta completed the laggards of the day
on a 0.58% retreat to end pegged at a VWAP of $13.4143.

 

Activity aggregates were depressed in the session as volume traded succumbed
98.27% to 828,900 shares while, turnover tumbled 74.75% to $10.45m. Delta
highlighted the session claiming 93.20% of the total volume traded and
99.13% of turnover. There were no trades recorded in the ETF section. The
Tigere REIT was unchanged at $1.2125 as 90,072 units exchanged hands.

 

 

 

VFEX commence new week in losses...

 

The VFEX commenced the new week in losses as the All-Share Index lost 0.20%
to 110.38pts. Fast foods group Simbisa dropped 1.27% to $0.3110 while,
banking group First Capital tumbled 0.93% to settle at $0.0531. Conglomerate
Innscor inched up 0.28% to end the day pegged at $0.4714.

 

Activity aggregates declined in the session as volume traded went down
99.55% to 18,918 shares while, turnover dipped 98.18% to $6,131.07. Innscor
(58.16%); First Capital (31.10%) and Simbisa (10.74%) were the top volume
drivers of the day. Innscor highlighted today's turnover after contributing
84.60% to the total value traded.—efesecrieties

 

 <mailto:info at bulls.co.zw> 

 

South Africa

 

South African rand stable before budget and Trump meeting

The South African rand was stable on Monday as traders held off on big bets
before this week’s budget speech and a planned meeting between President
Cyril Ramaphosa and U.S. President Donald Trump in Washington.

 

At 0730 GMT the rand traded at 18.01 against the dollar , up about 0.1% on
Friday’s close.

 

The rand has been gaining for weeks, supported by speculation that the
government will announce a lower inflation target imminently and the belief
that the coalition government will stay intact despite budget squabbles.

 

It will face a stern test on Wednesday, when Ramaphosa and Trump are due to
meet, the finance minister will present a third version of the 2025 budget
in parliament, and domestic inflation and retail sales  figures will be
released.

 

The Trump meeting is especially fraught with risk as he has repeatedly
criticised South Africa since returning to the White House in January.

He has cut all financial aid, expelled South Africa’s ambassador and granted
about 50 white South Africans refugee status, having deemed them victims of
racial discrimination, albeit without providing evidence.

 

“The biggest risk to the rand this week will be President Ramaphosa’s visit
to the U.S.,” ETM Analytics said in a research note.

 

Finance Minister Enoch Godongwana makes his third attempt to pass a budget
after disputes with coalition partners over plans to increase tax scuppered
two previous ones.

 

Godongwana will outline how he plans to plug a 75 billion rand ($4.1
billion) revenue hole after giving in to pressure to scrap a proposed
value-added-tax hike.

 

The yield on the benchmark 2030 government bond was up one basis point at
8.89%.

 

Source: Reuters

 

 

 

Nigeria

 

Naira appreciates to N1,597/$1 in official market ahead of crucial MPC
meeting 

 

 

The naira appreciated marginally to N1,597/$1 on Monday at the official
foreign exchange market, according to data published by the Central Bank of
Nigeria (CBN).

 

This represents a slight improvement from Friday’s closing rate of
N1,599.01/$1.

 

In the parallel market, the naira also recorded a minor gain, trading at
N1,627/$1 on Monday, compared to N1,628/$1 on Friday, based on data from
Nairametrics market sources in Lagos.

 

 

The modest appreciation reflects the naira’s continued show of resilience
and relative stability over the past week.

 

Intra-day trading on Monday revealed ongoing volatility, with the currency
fluctuating between a high of N1,601.5/$1 and a low of N1,580/$1.

 

Market eyes MPC decision amid inflation concerns 

All eyes are now on the Central Bank of Nigeria’s Monetary Policy Committee
(MPC), which is set to hold its milestone 300th meeting from May 19 to 20,
2025. Industry analysts expect a cautious but firm stance in response to
current economic conditions.

 

The consensus among economists suggests that the MPC will likely retain the
Monetary Policy Rate (MPR) at 27.5%, aiming to consolidate recent
macroeconomic gains. However, a modest 25 basis point hike is also on the
table, especially as inflation, while showing signs of easing, remains
structurally high.

 

At its last meeting in February, the MPC kept key policy parameters
unchanged:

 

MPR at 27.5%

Liquidity Ratio at 30%

Cash Reserve Ratio (CRR) is at 50% for commercial banks and 16% for merchant
banks.

According to Nairametrics experts who spoke to Nairametrics, they opine that
the MPC may maintain its current posture but is unlikely to rule out a
slight rate hike to reinforce a hawkish stance, particularly in light of
persistent foreign exchange pressures and global uncertainties.

 

BDC sector in crisis as recapitalization deadline nears 

Meanwhile, there is growing anxiety in the Bureau De Change (BDC) sector,
with more than 95% of operators reportedly yet to meet the CBN’s new capital
requirements.

 

In an exclusive interview with Nairametrics, the President of the
Association of Bureau De Change Operators of Nigeria (ABCON), Aminu Gwadebe,
disclosed that fewer than 5% of its members have met the new
recapitalization thresholds introduced by the CBN.

 

Gwadebe warned that the future of most BDC operators is uncertain unless the
regulatory deadline is extended, raising concerns of a potential mass
shutdown across the sector.

 

In May 2024, the CBN raised the minimum share capital for BDCs
significantly:

 

Tier 1 license – N2 billion

Tier 2 license – N500 million

This marked a sharp increase from the previous N35 million required for a
general license.

As the deadline draws closer, stakeholders continue to lobby for a review or
extension to prevent widespread disruptions in the FX retail
market.nairametrics

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

 

Dollar set for more weakness as 'Brand USA' falls further out of favor

 

(Reuters) - Trade-related uncertainties, ballooning fiscal debt and weakened
confidence about enduring U.S. exceptionalism have weighed on U.S. assets,
with the dollar one casualty. Investors see the currency losing more of its
luster as the greenback comes back to earth from lofty valuations.

 

The Trump administration's tariffs salvo this year prompted investors to cut
exposure to U.S. assets after a long period of overperformance. While the
U.S. currency steadied somewhat in recent sessions as investors took heart
from a truce in the ongoing U.S.-China trade war, it came under renewed
selling pressure after ratings agency Moody's cut the United States'
pristine sovereign credit rating by one notch.

The Reuters Tariff Watch newsletter is your daily guide to the latest global
trade and tariff news. Sign up here.

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"There's plenty of room for further depreciation, purely from a valuation
perspective," said George Vessey, lead FX and macro strategist at payments
firm Convera. The "sell America" trade was back in focus after Moody's U.S.
credit downgrade, he said.

The U.S. dollar index (.DXY), opens new tab has tumbled as much as 10.6%
from its January highs, one of the sharpest retreats for a three-month
period, leaving speculators net short the dollar to the tune of $17.32
billion, close to the most bearish position on the buck since July 2023,
according to CFTC data.

Part of the bearishness around the dollar has been due to the currency
trading at a relatively rich valuation - in January trading as high as 22%
above its 20-year average of 90.1 on the dollar index. Currently, the index
is hovering about 10% above its 20-year average level.

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There is room for it to weaken significantly further, for example another
10% slide would take it to the lows touched during President Donald Trump's
first term.

LONG-TERM CONCERNS

Investors and strategists have viewed the dollar as overvalued for years but
betting against the currency has proved painful time and again, as the U.S.
economy powered on. That could be about to change.

Steve Englander, head of global G10 FX Research at Standard Chartered in New
York, said that while recent trade arrangements might calm markets some,
they do not address long-term confidence issues facing the U.S.

"The dollar weakness story is not over," said Englander.

Investors are also concerned about the long-term fiscal picture for the
United States. Analysts say Trump's sweeping tax-cut bill would add $3
trillion to $5 trillion to the nation's $36.2 trillion in debt over the next
decade.

"The combination of diminished appetite to buy U.S. assets and the rigidity
of a U.S. fiscal process that locks in very high deficits is what is making
the market very nervous," George Saravelos, global head of FX research at
Deutsche Bank, said in a note.

The Trump administration has said it backs a strong-dollar policy.

"President Trump has been unequivocally clear about maintaining the strength
and power of the U.S. dollar as the world’s reserve currency," White House
spokesperson Kush Desai said.

FOREIGN HOLDINGS

Despite recent foreign selling, years of U.S. asset appreciation mean the
world still holds trillions in U.S. equities and Treasuries.

Such selling pressure could come from various corners of the globe as more
people zero in on the dollar's recent failure to act as a haven, investors
said.

"That's really what gave people a jolt ... and say ‘Well, if the dollar is
no longer acting as a safe-haven currency, if it's not diversifying us any
longer, should we really be holding this much of it?'" said Peter Vassallo,
FX portfolio manager at BNP Paribas Asset Management.

 

Colin Graham, head of multi-asset strategies at Robeco in London, however,
said that while there had been a rebalancing of portfolios where people
wanted to cut risk, "it hasn't turned into people selling dollars, assets or
equities or Treasuries to repatriate yet." That could still follow, he said.

UNHEDGED RISK

The dollar's strength over the last decade had let market participants hold
U.S. assets without worrying too much about currency risk.

With foreign holdings of U.S. assets in trillions of dollars, per estimates
from banks, including Deutsche Bank, even a modest rise in hedge ratios -
the portion of foreign currency exposure that is protected - could spell
significant selling.

Increased hedging by investors means less direct demand for the dollar and
more dollar selling pressure in the forward markets.

Asian economies including China, South Korea, Singapore and Taiwan have
accumulated massive USD exposure as a result of a decades-long trend of
investing big trade surpluses in U.S. assets.

An unprecedented two-day surge in Taiwan's currency in early May showed
investors how a scramble out of the U.S. dollar could roil markets.

Eurizon SLJ Capital's Stephen Jen and Joana Freire said in a note in early
May that USD hoardings of about $2.5 trillion by Asian exporters and
institutional investors "pose sharp downside risks to the dollar vis-à-vis
these Asian currencies."

One counter-argument to the bearish dollar story, however, is the resilience
of the U.S. economy.

Should economic growth surprise on the upside, it could keep the U.S.
Federal Reserve on hold for longer and support the buck.

Jack McIntyre, portfolio manager at Brandywine Global, noted that U.S.
consumers have remained resilient so far in the face of bets on weakness.
Still, he and others were more inclined to sell rallies in the dollar than
bet on a rebound.

"The story is more kind of looking for opportunities to sell dollars on
strength right now," McIntyre said.

Reporting by Saqib Iqbal Ahmed and Laura Matthews in New York; Additional
reporting by Suzanne McGee in Providence, Rhode Island; Editing by Megan
Davies, Nick Zieminski and Matthew Lewis

 

Our Standards: The Thomson Reuters Trust Principles., opens new tab

 

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

Gold Price Forecast: XAU/USD holds below $3,250 on modest US Dollar strength

 

The Gold price (XAU/USD) edges lower to around $3,230 during the early Asian
session on Tuesday, pressured by a modest US Dollar (USD) rebound. However,
the concerns over the US economic health after Moody's downgrades the US
national credit rating might cap its downside. 

 

The Greenback recovers on Tuesday, capping the upside for the
USD-denominated commodity price. Nonetheless, the economic uncertainties
could boost the safe-haven flows. Moody's cut the US rating to "Aa1" from
"Aaa" on Friday, citing rising debt and interest "that are significantly
higher than similarly rated sovereigns”. The economic uncertainties provide
some support to the safe asset like Gold. 

 

"Overall, over the next few months, I think gold is a good safe bet
considering the downgrade on the United States. It's still to me a
buy-and-hold market," said Bob Haberkorn, senior market strategist at RJO
Futures.

 

 

Financial markets were also shaken when US Treasury Secretary Scott Bessent
said on Sunday that US President Donald Trump would slap tariffs at the rate
he threatened on April 2 if trade partners do not engage in "good faith."

 

 

 


 

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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