Bulls n Bears Daily Market Commentary : 12 March 2021

Fri Mar 12 19:05:37 CAT 2021

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Bulls n Bears Daily Market Commentary : 12 March 2021

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

ZSE commentary

The ZSE closed the week in the negative territory with turnover remaining subdued closing at ZWL$18 368 211.63, corresponding to 6 247 333 shares exchanging hands. Medtech Holdings was the most liquid counter as it anchored volume traded and AfDis anchored value aggregates. However, this movement wasn’t enough to pull the All Share Index and the ZSE 10 into the positive as they closed with a depreciation of 2.52% and 3.37% respectively. The Top 15 Index and the Medium Cap Index also traded weaker to close with 3.35% and 1.31% respectively, whilst the Small Cap Index gained a margin of 2.76% owing to the appreciation of Small cap stocks namely NTS, Truworths, Unifreight and Medtech. The ZSE current market capitalization is ZWL$531 billion.

The market breadth was negative after 28 stocks depreciated while 10 registered gains in total out of the 42 ZSE counters which traded. Leading the gainers of the day was Unifreight (UNIF.zw) with a 20.00% share appreciation followed by National Tyre Services (NTS.zw) with 19.98%. Medtech Holdings continued on it upward trend appreciating by 19.90%. The banking counters NMB and ZBFH gained by 5.14% and 4.13% respectively. Leading in the shakers pack was African Distillers which pared 19.88% followed by Zimpapers shading 19.49%. Please find a summary of the market activity as shown below; 

The Old Mutual Top Ten ETF closed unchanged today at 200c after 91 901 units with a value of ZW$183 802 in 24 trades exchanged hands. Elswhere, the VFEX only listed counter Seed Co International (SCIL.vx) registered it second trade since being listed late last year. It traded 10 047 shares worth US$1 808.46 with the price closing unchanged at 18 cents.-wealthaccess

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

Global Currencies & Equity Markets

South Africa

South Africa's rand falls but set for weekly gains

JOHANNESBURG (Reuters) - South Africa’s rand fell against a stronger U.S. dollar early on Friday, but it looked set for weekly gains after as riskier currencies this week drew support from calmer market sentiment.

At 0615 GMT, the rand traded at 14.9400 versus the dollar, 0.61% weaker than its previous close.

The currency has gained more than 4% since Monday.

Risk appetite has been driven by offshore events, with investors eyeing the speed of the global economic recovery and the pace of U.S. lending rates.

Investors feared the higher Treasury yields and a faster economic recovery in the United States could lead the Federal Reserve to cut short its quantitative easing program and allow lending rates to rise, weakening demand for riskier high yielding currencies like the rand.

But indications from the Federal Reserve that it would tolerate the bond spike, and slower price-growth, have calmed those fears.

Nigeria

Naira gains 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 N409.00 at the trading session of the I&E window on Thursday. This represents a N2.13 or 0.52 per cent appreciation from N411.13, the rate at which it closed at the previous session on Wednesday.

This happened as naira experienced an intraday high of N390.00 and a low of N415.00, before closing at N409.00 on Thursday.

The appreciation of the domestic currency occured as turnover increased by 420.34 per cent, with $192.11 million recorded as against the $36.92 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 N484.00, the same rate it exchanged hands with the greenback currency on Wednesday.

This leaves the spread between the unofficial market and the I&E window exchange rate at N75.00, which translates to a gap of 18.34 per cent.

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

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

Global Markets

Dollar strength in play for EUR/USD, GBP/USD and USD/JPY

EUR/USD, GBP/USD and USD/JPY driven by dollar strength as US yields continue to rise.

EUR/USD fading as ECB dent rise in European 10-year yields

EUR/USD is on the back foot this morning, with yesterday’s European Central Bank (ECB) actions driving a divergence between US and eurozone treasury yields. That widening gap will likely drive EUR/USD lower if it persists, with the currency pair looking to end a recent rebound.

Despite failing to reach a deeper Fibonacci level, we are now seeing a more bearish stance come back into play. A break below trendline support has now taken us towards the $1.1928 support level. A break below that point would signal a potential bearish reversal coming into play which furthers the wider downtrend in play despite recent gains. As such, the ability to break below the $1.1928 should tell us a lot about the near-term outlook for this pair.

GBP/USD pulls back from key resistance

GBP/USD has managed to recover a significant amount over the course of the week, with the pair moving into the key $1.40 handle.

While the price has initially turned lower from that resistance point, the pullback has taken us into trendline support. With that in mind, there is a good chance we see the bulls come back into play before long. Alternatively, a break below the $1.3845 level would be required to bring a fresh bearish view for this pair.

USD/JPY breaks higher from consolidation phase

USD/JPY has finally broken from its recent consolidation phase, with the pair looking likely to continue its impressive uptrend from here.

That uptrend should bring a strong move higher from here, with a decline through the recent swing low of ¥108.35 required to negate that bullish outlook.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rates today fall sharply to near 11-month lows, silver rates plunge

Weighing on gold is general progress on vaccination front which has improved global growth outlook, say analysts

Gold and silver prices fell sharply today in Indian markets in tandem with a similar fall in global rates. On MCX, gold futures were down 1.2% to near 11-month low of ₹44365 per 10 gram while silver declined 1.6% to ₹66,430 per kg. In Thursday's truncated session, gold prices edged 0.11% higher while silver advanced 0.2%. MCX was closed for the morning session on Thursday due to a public holiday.

MCX gold has support at ₹43,450 and resistance at ₹45,420, says domestic brokerage Geojit.

In global markets, gold rates fell 1.2% to $1,700.80 per ounce after a rebound in U.S. Treasury yields and the dollar index. Higher bond yields increase the opportunity cost of holding non-interest paying gold.

Among other precious metals, silver rates slipped 2.4% to $25.45 an ounce

MCX silver has resistance at ₹68,800 and support at ₹64,400, the brokerage said.

However, gold ETFs continued to see outflows, putting pressure on the precious metal. Holdings of SPDR Gold Trust, the the world's largest gold-backed exchange-traded fund, fell 0.5% to 1,055.27 tonnes on Thursday.

On Thursday, the European Central Bank pledged to step up the pace of bond purchases to keep a lid on bond yields. 

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Old Mutual

analysts briefing

24/03/21 | 2:30pm

Willdale

AGM

Boardroom, Willdale Administration Block, Teneriffe, 19.5km peg Lomagundi Road, Mt Hampden

25/03/21 | 11am

TSL

AGM

Virtual | https://eagm.creg.co.zw/eagmzim/ Login.aspx | in the Auditorium, Ground Floor, 28 Simon Mazorodze Road, Southerton

25/03/21 | 12pm

CFI

AGM

Farm & City Boardroom, 1st Floor Farm & City Complex, 1 Wynne Street

31/03/21 | 11am

Good Friday

02/04/21

Easter Sunday

04/04/21

Easter Monday

05/04/21

Independence Day

18/04/21

Public Holiday in lieu of Independence Day falling on a Sunday

19/04/21

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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