Bulls n Bears Daily Market Commentary : 06 April 2022

Thu Apr 7 07:14:39 CAT 2022

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Bulls n Bears Daily Market Commentary : 06 April 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares closed today's session with gains across the board headlined
by small cap stocks. Activity levels were higher at 542 trades. Econet was
the most active stock at 47 trades followed by Delta and FCA at 43 and 32
trades respectively. Investor sentiment was positive after the session
yielded 20 risers against 14 decliners while six (6) of the active stocks
remained unchanged. First Capital Bank anchored volume aggregate trading
6,041,500 shares and Delta anchored value aggregate with a value of
ZW$100.26 million. 

The All-Share Index added 0.93% to close at 16,455.89 points. The Top 10
Index added 0.97%. The Top 15 Index added 0.86%. The Medium Cap Index was up
by 0.60% to 27,331.61 points whilst the Small Cap Index added 7.45% to
446,962.15 points. Leading the risers pack of the day was Edgars and Turnall
closed 18.64% and 18.33% higher respectively. National Foods was up by
14.27%. African Sun added 13.62% and Rio Zimbabwe added 9.09%. Mitigating
the gains were losses in Ecocash Holdings and NMB Holdings and which shaded
4.96% and 3.87% respectively. General Beltings Holdings was down by 3.70%.
Hippo and Mashonaland Holdings  shaded 3.33% and 2.34% respectively. 

The ETFs traded 175,196 units worth ZW$785,733.80 in 120 trades. The Old
Mutual Top 10 ETF shaded 0.34% to close at 843.13c while the Morgan and Co
Multi Sector ETF shaded 1.65% to close at 1454.82c. The Datvest MCSI ETF
shaded 0.78% to close at 186.94c. On the VFEX, Padenga traded 13,374 shares
to close at US$ 21.04 cents down 0.04%.

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Nigeria

Naira Loses At Official Market

The domestic currency recorded a 0.10 per cent devaluation against the U.S.
dollar at the Nafex window on Tuesday.

Naira fell slightly against the U.S. dollar at the official market on
Tuesday, a day after it recorded no movement at the spot market window.

Nigeria's naira closed at N416.83 per $1 at the close of business Tuesday,
representing a N0.21 or 0.10 per cent devaluation from N416.62 it traded in
the last two consecutive sessions of the NAFEX window, data published by
FMDQ where forex is officially traded showed.

This is the lowest official rate the naira has traded at the
over-the-counter market this week.

Naira reached an intraday high of N410.00 and a low of N444.00 before
closing at N416.83 on Tuesday, with $106.50 million recorded as forex
turnover at the close of the day's business.

In Uyo and Abuja, black market currency traders exchanged naira at N584.00
and sold at N587.00 to a dollar on Tuesday, the same rate it has been
trading since Monday last week.-Premium Times.

South Africa

Rand falls versus stronger dollar

In early trade the rand was at R14.73 against the dollar, 0.4% weaker than
its previous close.

The South African rand fell in early trade on Wednesday, as hawkish comments
from US Federal Reserve officials bolstered the dollar.

At 0605 GMT, the rand traded at R14.73 against the dollar, 0.4% weaker than
its previous close.

The dollar scaled its highest in nearly two years as Fed officials pushed
for a quick reduction in the central bank's bloated balance sheet, with one
of them expressing openness to hefty rate increases of half a percentage
point.

Higher rates in developed markets tend to drain capital from higher-yielding
but riskier emerging markets such as South Africa.

Government bonds weakened alongside the currency, with the yield on the
benchmark 2030 maturity rising 3.5 basis points to 9.615%.

South Africa looking at introducing 'digital rand'

The South African Reserve Bank (SARB) is actively experimenting with digital
currency and distributed-ledger technology, but this cannot be done in
isolation from the wider financial industry, says governor Lesetja Kganyago.

Kganyago was speaking on the findings of Project Khokha 2 on Wednesday (6
April) - a project which aims to explore the use of tokenised money,
blockchains and digital currency in South Africa.

A distributed ledger is a digital record of transactions and contracts
maintained in a decentralized form across different locations. The
technology underpins cryptocurrencies such as Bitcoin and is being
experimented with in large parts of the global financial system.

DLTs are currently most closely associated with blockchains - the system
underpinning cryptocurrencies like Bitcoin. However, blockchain technology
is only one type of application of DLTs.

"We recognise that digital currency innovation cannot be explored in
isolation. The SARB continues to draw on the insights emerging from various
initiatives, including (but not limited to) our ongoing study into the
feasibility, desirability and appropriateness of a retail central bank
digital currency (CBDC), to enrich our understanding of digital currency
implications."

He added that the Reserve Bank's experimentation during Project Khokha 2,
saw the central bank develop two forms of tokenised money to allow for
settlement:

The first form of money was a tokenised form of central bank money which was
a liability of the central bank issued onto a specific DLT owned and
operated by the SARB in the PoC. This form of money was used to purchase
SARB debentures in the primary market.

The second form of money was issued by commercial banks as a stable coin and
used for purchasing SARB debentures in the secondary market.

"The insights gained through practical exploration should lead to greater
regulatory clarity - both for innovators and for regulators - and should be
in the broader interest of ensuring a level playing field for all market
participants, Kganyago said.

Regulators should move with caution when considering developments before
amending rules and should be "fully appreciative" that regulated entities
need clarity to commit to distributed-ledger markets, he said.

Digital dollar 

US federal reserve Chair Jerome Powell outlined four qualities a
hypothetical digital currency in the US must have while adding that no final
decision has been made on whether to proceed with creating one.

Speaking at an event in March, Powell said a central bank digital currency
would need to:

Ensure user privacy;

It would need to be "identity verifiable," similar to the way US bank
accounts are identifiable to prevent money laundering;

It would need to be "intermediated," or widely embraced by the current
banking system;

Serve as a widely accepted means of payment.

The Fed chair warned that crypto assets "have been used to facilitate
illicit activity," and this needs to be prevented. He said some also present
financial stability concerns.

US central bankers are conducting research and experiments with digital
currencies though Powell has stopped short of recommending a digital dollar,
saying such a move would need more input from US lawmakers and stakeholders.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar hits highest in nearly two years on expected rate increases

The dollar surged to a nearly two-year high on Wednesday after minutes of
the last Federal Reserve meeting reinforced expectations of multiple half
percentage-point rate increases to control soaring inflation.

The dollar index, which measures the greenback's value against six major
currencies, climbed to 99.7780 , its strongest level since late May 2020. It
was last up 0.2% at 99.70.

Fed officials viewed the hefty rate increases as appropriate at future
meetings, especially if inflation pressures intensify, minutes showed. They
would also have preferred a 50 basic point rise in the target range for the
federal funds rate at the March meeting.

"There's a realization that some of the doves have come over to the 50 basis
point hike territory and that is likely what we're going to see at the next
several meetings going forward as inflationary pressures remain elevated,"
said Ryan Detrick, chief market strategist at LPL Financial in Charlotte,
North Carolina.

"The Ukraine conflict uncertainty likely prevented a 50 basis point hike
last month, so it could put a little cold water on extremely hawkish policy.
But still, we know multiple hikes are coming very soon," he added.

Fed officials also agreed to reduce the balance sheet by $95 million per
month - $60 billion of its Treasury holdings and $35 billion of
mortgage-backed securities - over three months, according to the minutes of
the March meeting.

Analysts at Action Economics said the $95 billion balance sheet run-off was
close to expectations of $100 billion per month.

The U.S. currency also hit the nearly two-year milestone on Tuesday after
Fed Governor Lael Brainard, usually a more dovish policymaker, said she
expected a combination of rate increases and a rapid balance sheet runoff to
bring U.S. monetary policy to a "more neutral position" later this year.
Further tightening would follow as needed, she added.

Analysts said the Fed minutes were less hawkish than Brainard's comments.

The dollar held gains against the yen, which tracks U.S. two-year yields
reflecting Fed policy expectations, traded slightly higher at 123.78.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold steady as inflation, Ukraine worries counter U.S. rate hike bets

Gold prices held steady after Wednesday's release of the minutes of the
Federal Reserve meeting in March, as the metal's appeal as a safe haven and
inflation hedge offset an expected 50 basis point rate hike by the U.S.
central bank.

Spot gold was little changed at $1,923.50 per ounce by 3:08 p.m. ET and U.S.
gold futures settled down 0.2% at $1,923.10.

"You'll see gold trade a little lower between now and the close today, but
there was really no big surprise in those (Fed) minutes," said RJO Futures
senior market strategist Bob Haberkorn, adding that the downside to gold was
limited.

"The markets were expecting that half a point hike."

Fed officials noted that one or more 50 bps increases in the target range
could be appropriate at future meetings, the next one being in May,
particularly if inflation pressures remained elevated or intensified,
according to the March 15-16 policy meeting minutes.

The Fed raised rates by 25 bps after their March meeting, and the minutes
showed that the economic effects of Russia's invasion of Ukraine late in
February prevented a 50-bps hike.

Rising U.S. interest rates and higher yields increase the opportunity cost
of holding bullion, which is also used as a hedge against rising inflation.

Gold prices could, however, continue rising for the next two quarters, as
the Fed would be unable to raise rates quick enough to combat the high
inflation, Haberkorn added.

The dollar surged to a nearly two-year highs while, dimming gold's appeal.

"There's still a number of things that could trigger another rally in gold.
Inflation continuing to rise beyond current expectations, Ukraine/Russia
talks collapsing or a recession," said Craig Erlam, senior market analyst at
OANDA.

Among other precious metals, silver rose 0.4% to $24.40 per ounce, platinum
fell 1.5% to $953.88, and palladium fell 2.2% to $2,189.43.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

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
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