Bulls n Bears Daily Market Commentary : 17 February 2021

Wed Feb 17 14:08:38 CAT 2021

 <http://www.bullszimbabwe.com> Bullszimbabwe.com         <mailto:bulls at bulls.co.zw> Views & Comments        <http://www.bullszimbabwe.com> Bullish Thoughts        <http://www.twitter.com/BullsBears2010> Twitter         <https://www.facebook.com/BullsBearsZimbabwe> Facebook           <http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn          <mailto:info at bulls.co.zw?subject=Unsubscribe> Unsubscribe

Bulls n Bears Daily Market Commentary : 17 February 2021

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

ZSE commentary

Zimbabwe Stock Exchange shares continued to cool off in today’s trading as the current trading updates being released by companies continue to show how business is being affected by the current coronavirus-induced lockdown.

The All-Share Index closed the day 2.55% lower to 3 961.71 after some stocks had overheated way ahead of fundamentals. The session's losses were mainly on the back of

top 10 losses. The small cap index gained marginally by 1.59% as it eases on the massive gains which were recorded in the previous trading sessions. Heavyweight stocks lost a significant 3.28% where consumer staples Delta and OK Zimbabwe shaded 1.14% and 7.70% respectively. Proplastics led the top 5 risers after gaining 20.00% to 2400c. Unifreight followed after gaining 19.98% to close at 319.75c. The only listed tyre manufacturer NTS followed the risers gaining 19.90% to 47.30c followed by AfDis gaining 13.94% to close at 3480c. First Mutual Properties anchors the top 5 risers of the day after gaining 4.35%. The gains were reversed by losses in Simbisa which shaded 11.78% to 1852.47c, Rio Zim followed the shakers pack after losing 11.13%. Zimre was down 10.04% to 215c and CBZ Holdings and OK Zimbabwe pared 9.27% and 7.70% respectively.

Daily turnover improved to ZW$114.7 million, as Delta led with $48 million while Innscor at $18.5 million and Cassava $11.4 million were the other high turnover stocks in the session. The Old Mutual Top Ten ETF loses 0.85% to 178.13c after 36 900 units with a value of ZW$65 729 in 17 trades exchanged hands.-wealthaccess

Global Currencies & Equity Markets

Zambia

Zambia Central Bank Hikes Rate to Fight Surging Inflation

Zambia became the second country in the world to increase its benchmark interest rate this year as it seeks to bring down “spiraling” inflation that’s at a five-year high.

The monetary policy committee lifted the rate to 8.5% from 8%, Governor Christopher Mvunga told reporters Wednesday in Lusaka, the capital. That is the first increase since November 2019 and follows tightening by its eastern neighbor, Mozambique, last month.

The MPC’s decision was a “delicate act of balancing between” the need to fight inflation and to prop up the economy and came after two days of complex deliberations, Mvunga said. The central bank stands ready to tighten policy further with inflation seen moving further from the bank’s 6% to 8% target range over the next two years, he said.

Zambia's central bank raised it key interest rate due to surging inflation

Wednesday’s move reversed some of the 350 basis points of cuts announced by Mvunga’s predecessor last year, before he was replaced in August. It shows the central bank is serious about tackling inflation that accelerated to 21.5% in January, and supporting the kwacha after it weakened 32% against the dollar in the past 12 months.

The move should help boost capital inflows into the southern African nation that became the continent’s first pandemic-era sovereign defaulter in November. The cooper producer is seeking to restructure as much as $12 billion in external debt and negotiate a loan from the International Monetary Fund to boost foreign-exchange reserves that have plunged to a record low.

A lag in the effects of currency depreciation and sustained high fiscal deficits will still put pressure on inflation, Mvunga said.

South Africa

South Africa's rand retreat as global risk demand slumps

JOHANNESBURG (Reuters) - South Africa’s rand weakened early on Wednesday after a sharp fall in the previous session as global risk demand retreated and some investors took profits on the local currency’s recent rally.

At 0700 GMT the rand was 0.56% weaker at 14.7350 per dollar, its softest level in seven days, following a rally to a one-year best earlier in the week as investors betting on a faster global economic recovery chased the high yield on local assets.

But overnight trade saw investors reassess bets on the pace and distribution of a global recovery, with signs of quicker economic activity and inflation in the United States prompting fresh demand for the greenback and U.S. bonds.

Locally, delays in the COVID-19 vaccine rollout and caution ahead of the budget speech next week dampened demand.

The country paused the rollout of AstraZeneca’s vaccine this month, after preliminary trial data showed it offered minimal protection against mild to moderate illness from the country’s dominant coronavirus variant.

Bonds also weakened, with the yield on the benchmark 2030 government issue up 6.5 basis points to 8.690%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hits 5-month high against yen as inflation talk boost U.S. yields

(Reuters) - The dollar held the upper hand against low-yielding currencies on Wednesday, hitting a five-month high against the yen as U.S. bond yields jumped on the prospects of further economic recovery and a possible acceleration in inflation.

Bitcoin traded just below the $50,000 mark, a day after the cryptocurrency hit that level for the first time, bringing its total market capitalisation to more than $900billion, as traders bet on its further acceptance among major companies.

The dollar's index against six other major currencies jumped back from a three-week low of 90.117 hit on Tuesday to last stand at 90.665.

Soaring U.S. bond yields boosted the dollar, with the10-year yield rising to as high as 1.333% from around 1.20% at the end of last week.

The yen, which is sensitive to U.S. yields, reacted the most with the dollar jumping to as high as 106.225 yen, its highest since September, before retreating to 105.91 yen.

A sign of dwindling bets on the dollar's fall against the yen is apparent in the options market, where short-term dollar call options, or bets on the dollar, have become more expensive than dollar puts, bets against the currency.

The one-week risk reversal spread is now in favour of dollar calls for the first time in almost five years.

Biden tried to build public support for his $1.9 trillion coronavirus relief plan in a town hall.

The euro slipped slightly to $1.2085 though its fall was less pronounced due to its gains earlier on Tuesday following strong German economic sentiment data.

The New York Federal Reserve's Empire State manufacturing report released on Tuesday offered an upbeat economic picture, with a rise in its "prices paid index" stoking fear of faster inflation.

That optimism was echoed by St. Louis Fed President James Bullard, who told CNBC that U.S. financial conditions were" generally good," and that inflation was likely to heat up this year.

San Francisco Fed President Mary Daly, however, said pressures on inflation are still downward, pushing against critics warning low interest rates and government spending could over heat the U.S. economy and spark high inflation.

The positive mood on the economic outlook is under pinning risk-sensitive currencies.

The British pound held firm at $1.3895, having reached its highest level since April 2018 on Tuesday. Against the euro, the pound traded at its highest level since early Mayat 87.02 pence per euro.

The Australian dollar stood at $0.7750, down slightly but still not far from Tuesday's one-month high of$0.7805.

The offshore Chinese yuan stepped back slightly to 6.4359per dollar after hitting a 2-1/2-year high of 6.4010earlier in the week.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today fall close to lowest levels in 8 months, after 5-day drop

Gold prices in India skidded for fifth day in a row, tracking softer global rates. On MCX, April gold futures were down 0.27% to ₹46772 per 10 gram, falling close to its lowest levels since June, while silver futures rose marginally to ₹69,535 per kg. 

The recent fall in global rates and import duty cut in Budget has pushed gold rates in India to near multi-month lows. In August gold had hit a record high of ₹56,200 per 10 gram.

In global markets, gold prices fell near two-week lows amid a stronger US dollar and hardening of US bond yields. Spot gold was down 0.2% to $1,791.36 per ounce. Silver shed 0.1% to $27.20.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Dairibord

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

Bulls n Bears 

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> info at bulls.co.zw  

Website:         <http://www.bullszimbabwe.com> www.bullszimbabwe.com  

Blog:            <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bullszimbabwe.com/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 

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.

(c) 2021 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> info at bulls.co.zw Tel: +263 4 2927658 Cell: +263 77 344 1674

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 34378 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 31034 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0003.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 21689 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0004.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130914 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20210217/43bc120c/attachment-0001.obj>