Bulls n Bears Daily Market Commentary : 07 April 2021

Wed Apr 7 14:39:49 CAT 2021

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Bulls n Bears Daily Market Commentary : 07 April 2021

 <https://www.cbz.co.zw/> 

ZSE commentary

The stock market continues to slid into the negative territory despite activity metrics picking up in today’s session. Turnover improved to ZW$136.99 million from a trade of 9 244 300 shares which exchanged hands in 429 trades. This was above recent averages at 335 trades. Star Africa was the most active stock at 39 trades followed by Padenga and Delta. OK Zimbabwe was the most liquid counter as it anchored both volume and value traded at 7 246 600 shares and ZW$108.99 million respectively. The benchmark All Share Index was down by 2.08% and the Top 10 Index was down 1.66%. The Top 15 Index shaded 2.66% to 2 867.82. The Medium Cap Index traded lower at 10 411.64 depreciating by 2.90%, whilst the Small Cap Index shaded 0.34% to close at 47 406.67.

Leading the risers pack of the day was the ZIMRE Holdings  and Bindura with a 9.52% and 5.89% share appreciation respectively. First Mutual Properties  added 8.54% to 520c. Medtech Holdings  appreciated by 4.81%. First Capital Bank gained 4.34% to close at 207.18c. Leading in the shakers pack was First Mutual Life  which pared 17.15% followed by the Simbisa Brands  shading 12.02%. RTG and Truworths pared 8.40% and 7.38% respectively. Please find a summary of the market activity as shown below; The Old Mutual Top Ten ETF closed at 182.39c down 0.29% after 37 600 units with a value of ZW$68 577 in 19 trades exchanged hands.-wealthaccess

 <https://www.firstmutual.co.zw/> 

Global Currencies & Equity Markets

South Africa

South African rand hovers near five-week peak as dollar softens

JOHANNESBURG (Reuters) - South Africa’s rand retreated in early trade on Wednesday, though the unit hovered near its five-week best as a softer U.S. dollar and global economic recovery hopes boosted demand for riskier but high-yielding currencies.

At 0630 GMT, the rand traded at 14.5350 against the dollar, 0.21% weaker than its previous close. The currency was not far off its five-week high of 14.4900 hit in the previous session.

The dollar softened to a two-week low against a basket of currencies on Wednesday after U.S. bond yields declined as traders rolled back aggressive expectations that the Federal Reserve will tighten its policy earlier than pledged.

Locally, investor focus is on manufacturing activity and business confidence data expected later in the day. The data will give some insights into the health of an economy that last year suffered its worst annual decline in a century, after the COVID-19 pandemic disrupted economic activity.

Government bond firmed in early deals, and the yield on the instrument due in 2030 fell 2 basis points to 9.445%.

Nigeria

Naira slides at official market

Naira fell marginally against the U.S dollar at the I&E window of the foreign exchange market on Tuesday, data posted on the FMDQ Security Exchange where forex is officially traded showed.

The currency, however, remained stable at the black market.

Naira, Africa’s most populous country’s currency closed at N410.50 at the trading session of the I&E window, this represents N1.20 or 0.29 per cent devaluation from N409.30 the rate at which it closed at the previous session on Thursday, last week.

The local unit experienced an intraday high of N394.00 and a low of N419.30, before closing at N410.50 on Tuesday.

This occurred as turnover increased by 14.77 per cent, with $40.80million recorded as against the $35.55 million posted on Thursday, last week.

Meanwhile, the domestic currency remained unchanged gainst the U.S dollar at the unofficial market on Tuesday, data posted on abokiFX.com, a website that collates parallel market rates in Lagos showed.

According to the data posted, the naira closed at N485.00 at the black market on Tuesday, the same rate it exchanged hands with the greenback since April 1.

As a result of this, the spread between the unofficial market and the I&E window exchange rate is pegged at N74.50, which translates to a gap of 15.36 per cent.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hovers near two-week low after U.S. yields slip

The dollar hovered near two-week lows after U.S. bond yields eased from recent highs, while market participants waited for the Federal Reserve’s meeting minutes due later in the session to help determine the future path for the dollar.

The previous quarter saw a spike in U.S. Treasury yields and the dollar’s strongest rally in years, on rising expectations that accelerating U.S. economic growth and inflation could force the Fed to abandon its pledge to keep interest rates near zero until 2024.

The International Monetary Fund said on Tuesday that unprecedented public spending to fight the pandemic would push global growth to 6% this year.

But the bond market has stabilized so far this week, with the 10-year U.S. Treasury yield at 1.64%, down from its peak of 1.776% at the end of March.

At 0716 GMT, the dollar was at 92.368 against a basket of currencies, close to a two-week low, having fallen from its recent high of 93.439, which it hit on March 30.

Market participants were waiting for the Fed meeting minutes, due to be released later in the session, for hints about the Fed policymakers view on rising yields.

U.S. money markets are pricing in a 25 basis point hike in December 2022.

Euro-dollar was steady at $1.18705, having strengthened so far in April.

So far in 2021, the euro has been driven by prospects of the economic recovery from COVID-19 in Europe lagging that of the United States and Britain, but the euro has picked up over the past week.

Europe’s benchmark equity index, the STOXX 600, closed at a record high on Tuesday, recovering all of its pandemic-driven losses.

Final euro zone and UK PMIs for March will be published throughout the morning.

The Australian dollar fell against the dollar, down 0.4% at 0.76385, while the New Zealand dollar was down 0.3%, both pausing their upward trajectory of the last two weeks.

The Canadian dollar also fell, hurt by a third wave of the COVID-19 pandemic in the country.

Elsewhere, finance officials from the Group of 20 major economies are poised to back a $650 billion boost in the IMF’s emergency reserves and extend a freeze on debt payments as part of an effort to help developing countries still struggling to combat the COVID-19 pandemic.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today fall, a day after seeing big jump, silver rates drop

Gold and silver prices edged lower in Indian markets, a day after clocking sharp gains. On MCX, gold futures were down 0.33% to ₹45,767 per 10 gram while silver declined 0.28% to ₹65,715 per kg. In the previous session, gold had jumped ₹600 or 1.25% per 10 gram while silver had surged 2% or ₹1,300 per kg. In global markets, gold today edged lower after hitting a two-weak high in the previous session.

Gold prices in India have rebounded from one-year low levels of ₹44,100 hit last week, helped by a rebound in global rates and coronavirus concerns.

Spot gold was down 0.2% to $1,739.46 per ounce. The precious metal had jumped to $1,745.15 in the previous session, lifted by a fall in US Treasury yields and a softer US dollar.

On MCX, gold faces resistance at ₹46,150 and support at ₹44,100, it said.

Among other precious metals, silver fell 0.3% to $25.10 while palladium was down 0.4% to $2,674.91.

However, ETF outflows continued to be a headwind for gold. The holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund or ETF, fell 0.4% to 1,029.04 tonnes on Tuesday from 1,032.83 tonnes on Monday.

A decline in US bond yields and rising Covid-19 cases around the globe has supported gold, says Kshitij Purohit, Lead – International & Commodity at CapitalVia Investment Advisor.

Like gold, international silver is also trading with marginal bullish momentum and is sustaining above 50-SMA, he added.

Global stock markets today hovered near all-time highs while the US dollar and Treasury yields were steady. The investor sentiment was lifted after the IMF upgraded its global growth forecast for the second time in three months but the body warned about a divergence between advanced and lesser-developed economies. Also, the latest US labor-market data showed job openings rose to a two-year high in February.

Meanwhile, gold traders will be watching comments from US Federal Reserve Chairman Jerome Powell who takes part in a panel discussion about the global economy on Thursday. The Fed will also publish minutes from its March meeting today.

Oil Prices Under Pressure Following Large Gasoline Build

The American Petroleum Institute (API) on Tuesday reported a modest draw in crude oil inventories of 2.618 million barrels for the week ending April 2.

Analysts had predicted a smaller draw of 1.436 million barrels for the week.

In the previous week, the API reported a build in oil inventories of 3.910 million barrels after analysts had predicted a much smaller build of 107,000 barrels.

Plains All American tanks at main Cushing area as of April 2.

After tanking on Monday, oil prices were trading up on the day prior to the data release as fears in the market calmed regarding additional supplies that might be brought onto the market should the talks over the Iranian nuclear deal end with lifting U.S. sanctions.

At 4:02 p.m. EDT, WTI traded at $59.40, or 1.28% higher on the day. Brent crude traded up at $62.79 per barrel or 1.03% up on the day.

As U.S. oil inventories shrink, U.S. oil production rose modestly to 11.1 million bpd during the week ending March 26, according to the latest data from the Energy Information Administration. It is the second increase in as many weeks.

The API reported a build in gasoline inventories of 4.553 million barrels for the week ending April 2—after the previous week's 6.012-million-barrel barrel draw. Analysts had expected a 221,000 barrel draw for the week.

Distillate stocks saw an increase in inventories this week of 2.810 million barrels for the week, after last week's 2.595-million-barrel increase.

Cushing inventory figures fell by 84,000 barrels.

Post data release, at 4:34 p.m. EDT, the WTI benchmark was trading at $59.45--$1 shy of last week’s levels. Brent crude was trading at $62.83 per barrel.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Independence Day

18/04/21

Public Holiday in lieu of Independence Day falling on a Sunday

19/04/21

Workers Day

01/05/21

FCB

AGM 

virtual

06/05/21 : 3pm

Africa Day

25/05/21

Counters trading under cautionary

ART

Seed co Int.

Dairibord

Starafrica

Medtech

Turnall

Seed co

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 constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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