Bulls n Bears Daily Market Commentary : 21 April 2021

Thu Apr 22 06:32:10 CAT 2021

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Bulls n Bears Daily Market Commentary : 21 April 2021

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

ZSE commentary

The ZSE closed today’s session with gains largely on heavyweight counters (Innscor, Delta and Econet). Turnover declined to ZW$104.8 million from a trade of over 7.5 million shares which exchanged hands in 412 trades. Bindura was the most active stock at 52 trades followed by Simbisa and Star Africa. The market breadth was positive after 20 stocks appreciated against 15 that depreciated in a total of 40 stocks which traded. OK Zimbabwe was the most liquid counter as it anchored volume aggregate after it traded 1 251 400 shares and Delta led the value aggregate at ZW$27.33 million.

The benchmark All Share Index was up 1.40% and the Top 10 Index was up by 2.26%. The Top 15 Index added 1.89% to 2 899.17. The Medium Cap Index traded higher to 10 671.03 appreciating by 0.21%, whilst the Small Cap Index also shaded 1.47% to close at 44 152.74. Leading the risers pack of the day was Padenga and Art Corporation with a 14.52% and 9.27% share appreciation respectively. Ariston Holdings  added 8.94% to 185.19c. Medtech Holdings appreciated by 8.17%. Dairibord gained 7.46% to close at 1501.10c. Leading in the shakers pack was Bindura which pared 11.15% followed by the construction giant Masimba Holdings shading 9.26%. First Capital Bank  and African Distillers pared 8.46% and 4.17% respectively. Please find a summary of the market activity as shown below; The Old Mutual Top Ten ETF closed at 171.48c up 0.87% after 48 538 units with a value of ZW$83 232 in 19 trades exchanged hands..-wealthaccess

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

Global Currencies & Equity Markets

South Africa

South Africa’s rand firmer on high-yield hunt, stocks inch up

South Africa’s rand firmed on Wednesday, erasing losses from the previous session as investors continued to see value in the high-yielding, high-risk currency despite an uptick in local inflation.

At 1530 GMT the rand was 0.45% firmer at 14.2400 per dollar, having tripped to a two-day low of 14.3300 on Tuesday.

Headline consumer price inflation rose to 3.2% year-on-year in March from 2.9% in February, data from Statistics South Africa showed, mainly due to sharp increases in energy and fuel prices.

Price-growth remains well within the lower end of the central bank's 3% to 6% target, meaning a hike in lending rates similar to those in other emerging markets remains unlikely with the local regulator emphasising inflation was contained.

Shares on the Johannesburg Stock Exchange (JSE) pared losses in the final trading hour on Wednesday, closely following the turn in the U.S. market at 1400 GMT.

The Dow Jones Industrial Average (.DJIA), after opening lower 1330 GMT, slowly gained momentum and turned positive as a slew of positive results started flowing, especially led by health insurers.

On the local market, the benchmark all-share index (.JALSH) ended 0.46% up to 67,146 points. The blue-chip index of top 40 companies (.JTOPI) closed up 0.46% to 61,399 points.

The local banks, however, posted losses as concerns around the slow vaccination drive and a resultant slower economic recovery lingered, she added. The bank index was down 0.6%.

Our Standards: The Thomson Reuters Trust Principles.

Nigeria

Naira gains at official market

The Naira gained marginally against the U.S. dollar at the I&E window of the foreign exchange market on Wednesday, as foreign exchange supply decreased.

Data posted on the FMDQ Security Exchange where forex is officially traded showed that the domestic unit closed at N410.00 at the trading session of the NAFEX window.

Wednesday’s performance represents 0.16 per cent appreciation from N410.67 it traded in the previous session on Tuesday.

The last time the currency touched N410.00 and above was on April 19.

The naira experienced an intraday high of N394.00 and a low of N422.00 before closing at N410.00 on Wednesday.

This occurred as forex turnover plummeted by 59.66 per cent, with $40.13 million recorded as against the $99.49 million posted in the previous session on Tuesday.

However, the naira remained stable against the U.S. dollar at the unofficial market on Wednesday, data posted on abokiFX.com, a website that collates parallel market rates in Lagos showed.

The data posted showed that the naira closed at N486.00 at the black market, the same rate it exchanged hands with the greenback in the previous session on Tuesday.

By the aforementioned status of the forex markets, the spread between the parallel market and the official market exchange rate is pegged at N76.00 which translates to a gap of 15.64 per cent.

This came to be as the Central Bank of Nigeria (CBN) on Tuesday threatened to sanction deposit money banks and authorised bureau de change operators who reject old and lower denomination of the United States dollar bills.

The apex bank in a circular signed by its director, currency operations department, Ahmed Umar, directed all DMOs, BDC and the general public to accept both old series and lower denominations of USD that are legal tender.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar losses bounce after Canada tips toward higher rates 

NEW YORK (Reuters) -A U.S. dollar rebound against major currencies was interrupted on Wednesday after Canada’s central bank signaled an interest rate hike in 2022 and reduced the scope of its asset-buying program.

The dollar index, which tracks the U.S. currency against six major peers, turned down after the announcement from the Bank of Canada and was off by 0.1% at noon (1600 GMT) in New York after having been up as much as 0.24% for the day. The greenback lost about 1% against the Canadian dollar.

Earlier the U.S. dollar had rebounded from a seven-week low hit overnight against major currencies as broad weakness in stock markets triggered by a resurgence of COVID-19 cases in India and Japan encouraged a retreat to the safe-haven appeal of the greenback.

get any work done online

The safety bid had also supported the Swiss franc and the Japanese yen as the bright outlook for a global recovery dimmed.

But the catalyst for the move between the two North American dollars on Wednesday was a reminder that the outlook for changes in interest rates have been key to currencies as recoveries unfold. The greenback weakened through much of April as U.S. interest rates declined and as traders bet that vaccinations would open up a stronger global economic recovery and drive demand for riskier and higher-yielding currencies.

The greenback’s bounce had come with softer U.S. Treasury yields as investors reconsidered how long it might take before inflation forces the Federal Reserve to tighten monetary policy and as they saw prices for oil and stocks hit on Tuesday by the prospect of a slower global recovery because of more COVID-19 cases.

The Fed’s Open Market Committee meets next week and the European Central Bank decides policy on Thursday. Though neither is expected to signal a change in policy now, traders may hold back from big bets for a few days, said Joseph Manimbo, senior market analyst at Western Union Business Solutions.

Some analysts have said that a new inclination by the Bank of Canada to tighten monetary policy could prove to foreshadow changes by other central banks.

The Bank of Canada sharply raised its outlook for the economy and reduced the scope of its large-scale asset-buying program while keeping its key interest rate steady. It said the pandemic will be “less detrimental” to the economy than it had thought.

The benchmark 10-year Treasury yield climbed to 1.58% on the news from Canada and then hovered just above 1.57%, not far from the 1.60% level at the start of the week, as the note consolidated gains after a reversal that had driven yields to a 14-month high at 1.7760% last month.

The biggest casualty of the dollar’s rise in Wednesday trading was the euro, with the single currency weakening as much as 0.24%. It was last flat at $1.2029 after touching a seven-week high of $1.2079 overnight.

The Japanese yen, often seen as a safer refuge than the dollar, gained against the greenback to 107.86 but then drifted back to 108.14 on Wednesday morning.

India reported its highest daily toll of 1,761 deaths from COVID-19, while Canada and the United States extended a land-border closure for nonessential travelers.

In cryptocurrencies, bitcoin traded around $56,000, consolidating after its dip to as low as $51,541.16 on Sunday. It set a record high at $64,895.22 on April 14.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today rise to over 2-month highs, up ₹4,000 so far this month

Gold prices edged higher in Indian markets today, drawing support from firm global rates. On MCX, gold futures rose 0.4% to ₹48,040 per 10 gram while silver gained 0.9% to ₹69,363 per kg. MCX was closed for trading for the first half due to a public holiday. Tracking a rally in global rates and a weakening rupee, gold rates have rebounded ₹4,000 per 10 gram in Indian markets so far this month.

In global markets, gold rates were flat, giving up early gains. Spot gold was up 0.1% at $1,778.19 after rising as much as 0.6% early in the session. Weakening US bond yields supported gold but gains were capped by a stronger dollar.

The US dollar today rebounded from a seven-week low hit overnight, making gold expensive for holders of other currencies. On the other hand, benchmark 10-year U.S. Treasury yields dropped below 1.6%, reducing the opportunity cost of holding non-yielding bullion.

Among other precious metals, silver was up 0.1% at $25.89 per ounce. Palladium gained 0.4% to $2,778.93, while platinum was flat at $1,187.

Gold traders are are closely watching an auction of 20-year U.S. Treasuries later today, which will be an important gauge of global demand for fixed income.

US stock futures were mixed today after a sharp fall on Wall Street overnight. Recent optimism about rising vaccination rates in the United States, Britain and the European Union is shifting to concern that record coronavirus infections in many countries.

Copper up with equities, but virus surge limits gains

(Reuters) - Copper prices firmed on Wednesday alongside a rebound in equities and a weaker dollar, though investor fears over rising coronavirus cases limited gains.

Three-month benchmark copper on the London Metal Exchange (LME) was up 1.3% at $9,440 per tonne at 1620 GMT.

Expectations for a boom in copper demand in the transition to a lower carbon economy and global economic recovery have pushed prices back up towards a near 10-year high of $9,617 a tonne hit in February.

Early indications of a rebound in European corporate earnings supported prices while a weaker dollar made commodities more attractive.

SUPPLY: Miners BHP Group and Antofagasta posted lower quarterly copper production due to COVID-19 restrictions on their workforce in Chile. But BHP still raised its guidance for this year.

VACCINE: The pace of China’s massive inoculation campaign has slowed, Reuters calculations showed. Meanwhile, cases are rising in India and Japan.

STOCKS: Inventories of copper in LME-registered warehouses continued their downward trend, falling 900 tonnes to 159,450 tonnes. Last week, they touched their highest since November. MCUSTX-TOTAL

The amount of cancelled inventory - stock earmarked for delivery - was high at 48%, usually a sign of a shortage of metal.

SPREADS: The LME cash copper contract is at a premium of about $8 a tonne over the three-month contract, indicating a low availability of nearby metal. MCU0-3

REFINED OUTPUT: China’s refined copper output rose 18.2% year-on-year in March but the monthly total of 870,000 tonnes was the lowest since July, data from the National Bureau of Statistics showed.

OTHER PRICES: LME aluminium rose 2.5% to $2,367 a tonne, after touching its highest since May 2018.

Zinc was steady at $2,814 a tonne, lead gained 0.1% to $2,031 a tonne, tin added 0.4% to $26,925 a tonne, and nickel gained 0.7% to $16,150 a tonne. 

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

BAT

AGM

Cresta Lodge, Msasa

30/04/21 10am

Workers Day

01/05/21

FCB

AGM 

virtual

06/05/21 : 3pm

NMB

AGM

virtual

1205/21 :  3:30pm

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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