Bulls n Bears Daily Market Commentary : 05 March 2021

Fri Mar 5 17:55:18 CAT 2021

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Bulls n Bears Daily Market Commentary : 05 March 2021

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

ZSE commentary

The ZSE shares managed to maintain gains this week amid renewed optimism for economic growth. The ZSE All share index put on 2.16% to 4 615.87 in a session which

yielded 22 risers against 17 fallers. Activity levels declined marginally to 502 trades on a higher turnover of ZW$119.3 million. Total traded volume was at 9 367 207 million shares with Bindura and Medtech trading over 2 million shares each. Top gains were in the Small Cap Index which put on 5.44% to 34 496.32. Nampak, NTS and Turnall led the overall risers with over 19% each. The Small Cap Index was the best performer after it gained 5.44% and the Top 10 Index, Top 15 Index closed higher after gaining 2.38% and 2.26% respectively. The Medium Cap Indices also closed the day in the positive territory adding 1.61% to 10 442.02. 

The packaging manufacturer Nampak led the top 5 risers after gaining 19.98% to 989c. National Tyre Services and Turnall followed the riser’s pack gaining 19.93% and 19.91% respectively. Wildale  and Fidelity  followed after gaining 17.27% to close at 76.27c and 16.88% to 500c respectively. The gains were reversed by losses in Rio Zimbabwe and Mashonaland Holdings  which shaded 12.49% to 2100c and 10.78% to 180.33c respectively. First Capital Bank followed the shakers pack after losing 6.89%. ZIMRE Holdings  was down 4.01% to 194.74c. Axia  pared 3.77% to 1536.76c. The Old Mutual Top Ten ETF shaded 0.62% to 180.37c after 595 517 units with a value of ZW$1 074 137.50.wealthaccess

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

Global Currencies & Equity Markets

South Africa

South African Rand Outlook: ZAR Battered as Rising Bond Yields Persist

Emerging Market (EM) currencies have felt the pinch globally as the U.S. Dollar reminded currency markets of its power as the worlds reserve currency. The Rand was one of the worst hit by an uptick in U.S. bond yields this past week as South African linked commodity prices also took a tumble – iron ore, spot platinum and spot gold. Yesterday’s speech by Fed Chair Powell failed to put concerns over rising yields at ease which could be to the detriment of the Rand in the short to medium-term.

The chart below outlines the positive correlation between the U.S. treasury yields (yellow) and the USD/ZAR spot rate (blue), while the white line represents the MSCI Emerging Market Currency Index which highlights the recent EM decline.

Nigeria

Naira strengthens on I&E window

Naira gained significantly against the U.S. dollar at the Investors & Exporters (I&E) window of the foreign exchange market on Thursday, data from the FMDQ Security Exchange where forex is officially traded showed.

However, the currency remained stable on the parallel market.

Naira closed at N406.50 at the trading session of the I&E window on Thursday. This represents a N4.5 or 1.10 per cent appreciation from N411.00, the rate at which it closed at the previous session on Wednesday.

This happened as naira experienced an intraday high of N389.25 and a low of N427.45, before closing at N406.50 on Thursday.

The appreciation of the domestic currency occured as turnover increased by 101.81 per cent, with $66.99 million recorded as against the $33.15 million posted on Wednesday.

However, at the unofficial market, data posted on abokiFX.com, a website that collates parallel market rates in Lagos showed the domestic currency remained unchanged.

According to the data posted, the currency closed at N480.00, the same rate it exchanged hands with the greenback currency in the past three consecutive days.

By implication, the spread between the unofficial market and the I&E window exchange rate is pegged at N73.50, which translates to a gap of 18.08 per cent.

The CBN’s official rate on Thursday was still N379 per dollar.

 <https://www.facebook.com/Hyundaizimbabwe/> 

Global Markets

Dollar gains across the board as Powell sticks to script

(Reuters) - The dollar rose to multi-month highs against the euro, yen and Swiss franc on Friday after Federal Reserve Chair Jerome Powell expressed no concern about a recent sell-off in bonds and stuck to his stance of keeping interest rates low for a long time.

At a Wall Street Journal forum on Thursday, Powell said the sell-off in Treasuries was not "disorderly" or likely to push long-term rates so high the Fed might have to intervene more forcefully, re-igniting a sell-off in Treasuries.

He also reiterated a commitment to maintain ultra-easy monetary policy until the economy is "very far along the road to recovery."

The euro slipped 0.4% to a three-month low of $1.19255 following a 0.7% slump overnight.

The dollar reached a nine-month high of 108.45 yen , gaining 0.5% against the Japanese currency.

Japanese Finance Minister Taro Aso declined to comment on the yen's decline when asked about how the depreciation would affect the economy.

The dollar index hit a three-month high and last stood at 91.960 in early London deals after gaining 0.7% on Thursday.

The dollar's gains came as the benchmark 10-year Treasury yield jumped back above 1.5%, rising as high as 1.55% in European trade. Last week, it soared to a one-year peak of 1.614%.

Impending U.S. fiscal stimulus is adding fuel to expectations of higher inflation, as the accelerating roll-out of COVID-19 vaccines boosts confidence in an economic recovery.

Riskier currencies, including the Australian and New Zealand dollars, slid along with stocks as investor sentiment again turned sour.

The Aussie weakened 0.6% to $0.7673, a three-week low, extending Thursday's 0.7% drop. The kiwi fell 0.6% to $0.7140.

In the cryptocurrency market, bitcoin fell 3.7% to $46,571. Ether dropped 5.52% to $1,453.29.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices today fall to lowest in 10 months, down ₹12000 from record highs

Gold suffered further losses today amid weak global cues. On MCX, gold futures were down 0.44% to ₹44344 per 10 gram in its eighth day of decline in past nine sessions that has taken prices to more than 10-month lows. Silver futures were down 0.4% to ₹65635 per kg. In global markets, gold continued its downward trend with prices declining 0.2% to $1,693.79 per ounce.

The precious metal is down more than 2% this week amid a hardening of US bond yields and a stronger US dollar. Higher yields increase the opportunity cost of holding bullion, which pays no interest. Among other precious metals, silver rose 0.2% to $25.35 an ounce, but was down 5% for the week so far.

Gold may remain under pressure as long as prices stay below the support of $1760, Geojit said in a note. "Immediate downside targets are seen at $1670 followed by $1620. A direct turn above $1820 is required to negate the view and take prices higher," the brokerage said.

MCX gold has support at ₹43,880 and resistance at ₹46,450, Geojit said.

The benchmark US 10-year yield topped 1.5% after Fed chief Jerome Powell on Thursday said inflation will likely pick up in the coming months. Investors are increasingly worried ultra-loose monetary policies of central banks - a key pillar of a year-long equity surge - will be wound down to deal with an expected spike in prices.

He however cautioned that the increase will be temporary, and won’t be enough for the Fed to alter its low-interest rate policies.

Powell also reiterated that the Fed would not tighten its policies until its goals of full employment and consistently high inflation had been met, and that was likely to be some time away.

The Fed chief said the central bank was ready to step in when needed but traders were left disappointed that he did not indicate the bank would act on the rise in yields such as increasing its bond purchases.

Despite the recent fall in gold prices that has taken the precious metal ₹12,000 lower than its August highs of ₹56,200, many analysts remain positive on the precious metal.

Meanwhile, outflows from gold ETFs continued, putting further pressure on gold. The amount of gold held by exchange traded funds fell by 84.7 tonnes worth $4.6 billion in February, the World Gold Council (WGC) said. Also, the holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust fell 0.4% on Thursday. (With Agency Inputs)

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 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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