Bulls n Bears Daily Market Commentary : 18 February 2021

Fri Feb 19 05:58:05 CAT 2021

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Bulls n Bears Daily Market Commentary : 18 February 2021

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

ZSE commentary

The All-Share Index closed the day 1.22% higher to 4 005.94. The session's
gains were mainly on the back of small cap stocks gains. The Small Cap Index
gained marginally by 1.45% as it eases on the massive gains which were
recorded in the previous trading sessions. Heavyweight stocks gained a
paltry 0.14% where telecoms and smartech giants Econet and Cassava shaded
4.52% and 0.83% respectively. National Tyre Services led the top 5 risers
after gaining 19.98% to 56.75c. Mashonaland Holdings followed after gaining
19.95% to close at 115.75c. The listed packaging manufacturer Nampak
followed the risers gaining 19.80% to 720c followed by Turnall gaining
15.38% to close at 150c. the Nickel giant Bindura anchors the top 5 risers
of the day after gaining 14.21%. The gains were reversed by losses in
Fidelity which shaded 12.04% to 256.73c, Medtech followed the shakers pack
after losing 3.36%. Econet was down 4.52% to 1749.66c and Zimplow and
Cassava pared 1.20% and 0.83% respectively.

Daily turnover improved to ZW$4.98 million, as Econet led with $1.9 million
while FCA at $1.3 million and Axia $0.7 million were the other high turnover
stocks in the session. The Old Mutual Top Ten ETF added 1.05% to 180.00c
after 45 100 units with a value of ZW$81 180 closing with a market
capitalization of ZW$144 million..-wealthaccess

Global Currencies & Equity Markets

Kenya shilling, Zambian kwacha and Nigeria's naira to weaken

Kenya's shilling, Zambia's kwacha and Nigeria's naira are expected to weaken
against the dollar in the next week to Thursday, traders said.

(Reuters) - Kenya's shilling, Zambia's kwacha and Nigeria's naira are
expected to weaken against the dollar in the next week to Thursday, traders
said.

KENYA

Kenya's shilling KES= is expected to come under pressure due to month-end
dollar demand from importers.

Commercial banks quoted the shilling at 109.45/65 to the dollar, compared
with last Thursday's close of 109.35/55.

UGANDA

The Ugandan shilling UGX= is seen trading in a broadly stable range amid a
general slow uptake of dollars both in the interbank market and from
importers.

Commercial banks quoted the shilling at 3,660/3,670, unchanged from last
Thursday's close.

TANZANIA

Tanzania's shilling TZS= is expected to remain stable donor inflows from
development partners and foreign investors supporting dollar demand.

Commercial banks quoted the shilling at 2,311/2,329 on Thursday, nearly the
same levels from last week's close of 2,314/2,324.

NIGERIA

The naira NGN= is seen easing on the spot market after it lost ground on the
derivatives market and hit a record intra-day low on the over-the-counter
market this week, traders said.

The naira fell to 423.15 per dollar this week on the spot market, quoted by
importers and foreign investors.

It was quoted at 381 naira on the official market, a level set in July and
backed by the central bank. The currency sold at 478 naira on the black
market on Thursday.

Dollar scarcity hit Nigeria after last year's oil price crash slashed
government revenues, piling pressure on the currency and funnelling demand
to the black market.

ZAMBIA

The kwacha ZMW= will likely continue to weaken on limited foreign exchange
inflows amidst rising expenditures, especially on imports of farming inputs.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 21.6100 per dollar compared to 21.5350 at the close of
business a week ago.

South Africa

Rand steps back after recent rally

- The rand succumbed to pressure from global risk and allocation shifts - in
response to rising United States Treasury yields - as well as profit taking
according to NKC Research.

On Wednesday, the Johnson & Johnson (J&J) Covid-19 vaccination programme was
launched with President Cyril Ramaphosa and health minister Zweli Mkhize
among the first to receive the jab.

This came after AstraZeneca vaccinations were placed on hold earlier this
month amid concerns that the jab doesn't provide adequate protection against
the local variant.

Ramaphosa indicated on Wednesday that 80,000 doses of the J&J vaccine were
being prepared for distribution.

Having recently hit a one year high against the greenback, the near-term
outlook for the rand will be dominated by the budget speech which will take
place on February 24, but over the longer term we continue to expect a
policy-led correction in the dollar which will support the rand.

At the close of local trade, the rand quoted 0.33 percent weaker at
R14.71/$, after trading in range of R14.53/$ - R14.83/$.

BUSINESS REPORT ONLINE

 <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 edges up as dollar and Treasury yields ease

(Reuters) - Gold bounced off a 2-1/2-month low as the U.S. dollar and
Treasury yields eased on Thursday, though analysts said optimism over
economic recovery left bullion vulnerable to further corrections.

Spot gold rose 0.7% to $1,788.16 an ounce by 1308 GMT, having touched its
lowest since Nov. 30 at $1,768.60 on Wednesday. U.S. gold futures advanced
0.6% to $1,783.20.

The dollar retreated, bolstering gold's appeal to other currency holders.

Benchmark 10-year Treasury yields pulled back after hitting their highest
since the end of February 2020 on Wednesday, reducing the opportunity cost
of holding non-yielding bullion.

Also supporting gold, the U.S. Federal Reserve on Wednesday reiterated its
pledge to keep interest rates near zero until inflation and employment pick
up.

However, gold is having a tough time trying to win over investors as an
inflation hedge, with other assets favoured instead, FXTM's Tan said.

Optimism over an economic recovery was bolstered by strong U.S. retail sales
data on Wednesday.

On the technical front, a dip in gold's 50-day moving average below the
200-day moving average could lead to more selling, analysts said.

Autocatalyst metal platinum also advanced 1.5% to $1,271.94 an ounce.

Elsewhere, palladium rose 0.4% to $2,380.53 and silver lost 0.2% to $27.29.

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 

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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
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subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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