Bulls n Bears Daily Market Commentary : 13 April 2021

Tue Apr 13 16:43:44 CAT 2021

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Bulls n Bears Daily Market Commentary : 13 April 2021

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

ZSE commentary

The ZSE market continued to extend losses in today's session as investors
continued to be on the sidelines into the second week of the second quarter.
Turnover however improved by 5.81% to ZW$179.2 million from a trade of 9 070
800 shares which exchanged hands in 428 trades. Delta was the most active
stock at 58 trades followed by OK Zimbabwe and Star Africa. The market
breadth was negative after 24 stockcdepreciated against only 13 that
appreciated in a total of 41 stocks which traded. Medtech

Holdings was the most liquid counter as it anchored volume aggregate at 2
736 500 shares and Innscor anchored value aggregate at ZW$71.65 million. The
benchmark All Share Index was down by a 1.18% and the Top 10 Index was down
by 1.77%. The Top 15 Index shaded 1.46% to 2 739.64. The Medium Cap Index
traded lower to 10 090.20 depreciating by 0.37%, whilst the Small Cap Index
added 1.08% to close at 47 589.82.

Leading the risers pack of the day was the Zimplow and African Sun with a
5.88% and 5.86% share appreciation respectively. National Tyre Services
added 4.00% to 1040c. The real estate giant Mashonaland Holdings
appreciated by 2.55%. ZB Financial Holdings gained 2.50% to close at
3792.50c. Leading in the shakers pack was Dairibord trading under cautionary
which pared 14.10% followed by the Art Corporation shading 8.80%. Edgars and
Meikles  pared 6.53% and 4.33% respectively. Please find a summary of the
market activity as shown below; The Old Mutual Top Ten ETF closed at 173.04c
down 2.30% after 23 300 units with a value of ZW$40 318 in 21 trades
exchanged hands.-wealthaccess

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

Global Currencies & Equity Markets

South Africa

South African rand edges lower in cautious trade

JOHANNESBURG, (Reuters) - The South African rand weakened slightly early on
Tuesday, dragged down by a souring of global sentiment towards emerging
markets as the dollar began to climb again.

At 0700 GMT the rand ZAR=D3 was 0.12% weaker at 14.5800 per dollar, having
closed at 14.5625 overnight in New York.

Investors were mostly holding fire on large bets ahead of U.S. inflation
data that will give further indications on the direction of lending rates in
the world's biggest economy.

Accommodative monetary and fiscal policy there has fuelled flows to riskier
emerging market assets, but a steady rise in Treasury yields has raised
fears of a quicker rise in rates.

Domestically, February mining output data ZAMNG=ECI at 0930 GMT is the only
big-ticket release.

Higher global commodity prices since late 2020 have supported the currencies
of resource exporters such as South Africa while also boosting tax revenue.

Bonds were also weaker, with the yield on the benchmark 2030 government
issue ZAR2030= up 2 basis points at 9.375%.

Nigeria

Naira gains at black market as external reserves increases by $620 million
in 2 weeks

The opening indicative rate closed at N410.88 to a dollar on Monday. The
naira appreciated against the dollar at the parallel market on Monday, 12th
April 2021 to close at N482 to a dollar. This represents a N3 gain when
compared to the N485/$1 that was recorded on Friday, April 9, 2021.

Meanwhile, the exchange rate between Naira and the US Dollar closed at
N409.75/1$ in the Importers and Exporters window, where forex is traded
officially.

Naira depreciated against the US Dollar at the NAFEX window on Monday to
close at N409.75/$1. This represents a 0.18% drop when compared to N409/$1
recorded on Friday, as the country's external reserve increased by $620
million in 2 weeks.

Naira depreciated against the US Dollar at the Investors and Exporters
window on Monday to close at N409.75 to a dollar. This represents a 75 kobo
drop when compared to N409/$1 recorded on Friday, 9th April 2021.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar edges up before U.S. inflation dataPublished 4 hours ago on
13/04/2021Dollar edges up as markets wait for U.S. inflation data

LONDON (Reuters) -The dollar edged higher on Tuesday, helped by a pick-up in
U.S. Treasury yields, while riskier currencies dipped, as markets waited for
inflation data in the United States.

The dollar has fallen in April so far, after surging in the first three
months of 2021 on expectations that a combination of monetary stimulus and
government spending would cause inflation to spike.

U.S. CPI data for March is due at 1230 GMT and is expected to show a rise in
inflation.

get any work done online gawdo.com

Markets will also be paying attention to how yields react to a 30-year
Treasury auction.

The inflation figure alone was unlikely to move the dollar, said Ned
Rumpeltin, head of European currency strategy at TD Securities, but any
reaction in U.S. yields could create a knock-on effect on currency markets,
particularly in the dollar-yen pair.

At 1103 GMT, the dollar was up 0.1% against a basket of currencies, at
92.221, moving away from recent three-week lows.

get any work done online gawdo.com

Dollar-yen was down 0.2% at 109.150.

The 10-year U.S. Treasury yield was at 1.6677%, still well below the 1.7760%
level reached on March 30, which was the highest in over a year.

Likewise, Rumpeltin said that the inflation number could be driven by
factors other than demand.

Worries that the U.S. Federal Reserve would scale back - or "taper" - its
quantitative easing programme was seen as the biggest risk among investors
in BofA's fund manager survey released on Tuesday.

Overnight data showed China's exports rose in March, with import growth
rising to four-year highs, signalling an improvement in global demand.

Asian stock markets were broadly positive after the data, but the boost did
little to support currency markets. In London trading, China's offshore yuan
was down 0.1% against the dollar, changing hands at 6.5536.

The euro was down 0.2%, at $1.18935, with European shares just below
all-time highs.

The Australian dollar, which is seen as a liquid proxy for risk appetite,
was down 0.2% versus the U.S. dollar at 0.7609.

On Monday, Australia abandoned its goal to vaccinate nearly all its
population by the end of 2021.

The New Zealand dollar was steady . The Reserve Bank of New Zealand is due
to meet on Wednesday and is expected to keep rates constant.

Elsewhere, Bitcoin hit a record of $62,741 on Tuesday, extending its 2021
rally to new heights a day before the listing of Coinbase shares in the
United States.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips to one-week low on higher Treasury yields

(Reuters) - Gold prices fell to their lowest in more than a week on Tuesday
after the metal's appeal was dented by higher Treasury yields and as
investors awaited U.S.

inflation data.

Spot gold was 0.2% lower at $1,729 per ounce by 1200 GMT, having earlier
dipped to its lowest since April 5 at $1,722.67. U.S. gold futures eased
0.2% at $1,729.70.

Benchmark 10-year Treasury yields scaled an one-week peak, increasing the
opportunity cost of holding gold, which pays no interest, while the dollar
also firmed.           

Investors are await the U.S. Consumer Price Index (CPI) data for March at
1230 GMT. A Reuters survey expects CPI to rise 2.5% year-over-year in March.

Bullion is used as a hedge against inflation.

Boston Federal Reserve Bank President Eric Rosengren said on Monday it was
unlikely the economy would overheat this year, and the Fed had the tools to
counter any surprise jumps in inflation.

Elsewhere, silver rose 0.5% to $24.97 per ounce, while palladium  was up 1%
at $2,702.74 after climbing to its highest since March 18 at $2,710.

Platinum shed 0.2% to $1,168.30, having earlier allen to its lowest in about
two weeks at $1,160.50.            

Crude oil will climb above $70; energy security could reappear on the radar

Energy security concerns are bubbling beneath the surface. While OPEC+ can
provide the necessary crude as demand recovers in the near term, there may
be a lack of firepower from the rest of the oil producing fraternity further
down the line. The recent rise in oil prices could be just what the world
needs.

The global physical oil benchmark Dated Brent is hovering in the low
$60s/barrel, having risen more than 50 per cent since demand-led optimism
over the Covid-19 vaccine rollout back in November. And oil prices could
shift higher again once the market shakes off the latest bout of coronavirus
jitters.

S&P Global Platts Analytics predicts oil prices will climb above $70/barrel
around mid-2021, as improved supply and demand fundamentals starting from
May lead to substantial stock draws through to August.

While large oil consuming countries such as India may crank up the volume
over their displeasure and many OPEC+ countries may be eager to ditch
compliance to their production-cut deal or push to pump more, both consumers
and producers alike may want to consider the benefits should oil prices stay
in their arguable sweet spot.

While the warning signs over a supply crunch in the coming years are well
documented, they have been overshadowed by the pressing needs of consumer
economies ravaged by Covid and producer countries crippled by low oil
prices. But these very low oil prices along with the energy transition push
have accelerated supply concerns.

Many analysts have tried to put huge numbers on the likely shortfall in
spending on upstream oil projects in the coming years, signaling that even
with higher prices driving investment in new projects, there is a long way
to go before this spending starts to plug the gap.

Saying that, there is a strong correlation between the average oil price and
sanctioned non-OPEC oil projects in recent years. Indeed, there is already
evidence of a pick-up in approved oil investments, with some deferred
projects in 2020 getting their due.

US oil production, noted over recent years for its stellar shale growth and
ability to bring on crude at short notice, is unlikely to return to its
pre-Covid peak of 13 million b/d until the middle of the decade, according
to Platts Analytics.

But there are glimmers of hope. While many US oil companies are still in a
precarious financial position, low well breakevens and positive cash flow
this year are stimulating shale output at current prices.

In the meantime, as OPEC+ starts to raise output to meet growing oil demand,
the amount of spare capacity in the system begins to dwindle. Platts
Analytics sees the amount of crude that can be sustainably produced at short
notice halving by September to less than 4 million barrels per day (b/d),
with most of that left in the hands of Saudi Arabia.

While global spare capacity has over the past decade averaged close to 2
million b/d, according to Platts Analytics calculations, attacks on Saudi
Arabia oil facilities - which appear to have become a more frequent
occurrence of late - become a bigger risk factor when oil buffers are
reduced.

OPEC+ may finally take a bigger share of the market given weaker competition
and increased demand, but an overreliance on the oil producing pact with
less spare capacity has its own risks.

Middle East geopolitics are notoriously unpredictable, with recent history
marked by Iran sanctions, Libya's internal political dispute, disruptions at
pivotal waterways, such as the Strait of Hormuz and Bab el-Mandeb, and the
attack on Saudi Arabia's Abqaiq oil infrastructure.

While the container ship that got stuck in the Suez Canal rattled supply
chains more than oil markets, it should serve as a reminder of how
vulnerable chokepoints are for tankers to deliver crude and key oil products
- especially when oil balances are thinner.

Energy security comes at a price for both the consumer and the producer, as
the former looks to diversify crude streams and the latter tries to ensure
better returns. Guaranteed stable supply matched with regular demand is in
the interest of all parties. Getting this wrong could prove costly.

London-based Paul Hickin is associate director at S&P Global Platts. Views
are his own.

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
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for guideline purposes only and sourced from third parties.

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