Bulls n Bears Daily Market Commentary : 07 April 2022

Fri Apr 8 06:39:33 CAT 2022

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Bulls n Bears Daily Market Commentary : 07 April 2022

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ZSE commentary

The ZSE shares closed with gains in a mixed trading session which saw the
market cap firming above the 2 trillion mark. Activity levels were higher at
468 trades. FCA was the most active stock at 39 trades followed by Econet
and OK Zimbabwe at 38 and 34 trades respectively. Investor sentiment was
positive after the session yielded 23 risers against 13 decliners while five
(5) of the active stocks remained unchanged. First Capital Bank anchored
volume aggregate trading 3,949,100 shares and BAT anchored value aggregate
with a value of ZW$48.68 million. The All-Share Index added 0.87% to close
at 16,599.79 points. The Top 10 Index added 0.83%. 

The Top 15 Index added 0.92%. The Medium Cap Index was up by 1.17% to
27,650.60 points whilst the Small Cap Index shaded 4.07% to 428,762.88
points. Leading the risers pack of the day was Zimplow and FBC Holdings
closed 19.45% and 9.76% higher respectively. First Capital Bank was up by
8.31%. Lafarge added 7.93% and African Distillers added 6.82%. Mitigating
the gains were losses in Edgars  and African Sun and which shaded 15.81% and
13.71% respectively. General Beltings Holdings was down by 10.50%. Get Bucks
and ZB Holdings shaded 9.09% and 8.33% respectively. 

The ETFs traded 112,939 units worth ZW$475,555.78 in 106 trades. The Old
Mutual Top 10 ETF added 0.23% to close at 845.06c while the Morgan and Co
Multi Sector ETF added 0.42% to close at 1461c. The Datvest MCSI ETF added
0.54% to close at 187.95c. On the VFEX, Bindura traded 13,445 shares to
close at US$ 5 cents.-wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand falls as dollar rises after hawkish Fed minutesInvestors struggle with
uncertainty.

South Africa's rand fell on Thursday, struggling against a stronger dollar
after meeting minutes showed the U.S. Federal Reserve preparing to move
aggressively to head off inflation.

By 20:49, the rand traded at around 14.7397 against the dollar, 0.46% weaker
than its previous close.

Many Fed officials said they were prepared to raise interest rates in
half-percentage-point increments in coming policy meetings to tame
inflation, according to the minutes released on Wednesday.

Hawkish Fed comments tend to weigh on the rand, because higher rates in
developed markets drain capital from higher-yielding but riskier emerging
markets such as South Africa.

"The rand weakened. on both the hawkish tone from the Fed, underscored
particularly in the minutes, and the recent softening of a number of
commodity prices, including coal, SA's top commodity export," Investec's
Annabel Bishop said in a note.

"A more rapid US interest rate hike cycle than in SA will be particular
cause for rand weakness, and the rand has also weakened on this concern."

Shares on the Johannesburg Stock Exchange fell for the fourth consecutive
day as investors struggled with uncertainty around the impact of the
Russia-Ukraine crisis on commodities, amid a lack of local growth triggers.

This uncertainty both locally and globally has pushed the market into a
"choppy patch" and has confused investors, said Greg Davies, head of wealth
at Cratos Capital, which has led to days of "mini bull markets" or continued
yet gradual fall.

"The situation in Ukraine vacillates between possible peace and more
aggression almost on an hourly basis. And also locally, it's tough to pick
up a theme," he said.

The benchmark all-share index fell 0.47% to 74,008 points and the blue-chip
index of top 40 companies ended down 0.45% to 67,003 points.

In fixed income, the yield on the benchmark 2030 government bond fell 4
basis points to 9.555%.

AFRICA-FX-Kenya's shilling to weaken, Zambia kwacha to stabilise

(Reuters) - Kenya's shilling is expected to ease against the dollar in the
next week to Thursday, while Zambia's kwacha is seen holding steady, traders
said.

KENYA

Kenya's shilling KES= is forecast to weaken due to increased importer demand
from companies in the energy and manufacturing sectors.

Commercial banks quoted the shilling at 115.20/40 per dollar, compared with
last Thursday's close of 114.90/115.10.

On Thursday, the shilling touched a new all-time low of 115.25/45 per
dollar, according to Refinitiv data.

"Demand is coming in from all sectors; oil companies, importers. We expect
the shilling to continue weakening," a trader at one commercial bank said.

UGANDA

The Ugandan shilling UGX= may extend its recent gains, drawing support from
central bank mopping up of excess liquidity from the money markets.

Commercial banks quoted the shilling at 3,542/3,552, compared to last
Thursday's close of 3,575/3,585.

"My reading is we could see some very limited and slow movement on the
downward side (strengthening)," said a trader at one of the commercial
banks, adding the removal of excess liquidity would trim demand for U.S.
dollars.

The Bank of Uganda on Thursday used a seven-day repurchase agreement to mop
up excess liquidity although it was unclear how much local currency
liquidity they had mopped up.

ZAMBIA

The kwacha ZMW= is likely to hold steady as Zambia's central bank continues
to steadily offload dollars into the market.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 17.5250 per dollar from 18.0900 at the close of business
a week ago.

"The local unit is expected to trade steadily against the greenback in the
short term as the central bank continues to provide sufficient dollar
liquidity to meet current market demand," Access Bank ACCESS.GH said.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar inches up to new two-year peak, set for best week in four

(Reuters) - The dollar extended a squeeze higher on Friday, reaching a new
near two-year peak against a basket of peers and a one-month high versus the
euro, supported by the prospect of a more aggressive pace of Federal Reserve
interest rates hikes.

The dollar index rose as high as 99.904 in early Asia trade, its best level
since May 2020.

The index is up 1.2% this week, which would be its biggest advance in one
month, backed by hawkish remarks from several Federal Reserve policy makers
who are calling for a faster pace of interest rate increases to curb rapid
inflation.

This week's release of the minutes of the Fed's March meeting showed "many"
participants were prepared to raise interest rates in 50-basis-point
increments in coming months

"Recent gains in the dollar index seem fairly sustainable over the remainder
of the month as markets settle on the idea of a much more aggressive Federal
Reserve in Q2," said Simon Harvey, head of FX analysis at MonFX

"However, we believe further upside in the dollar is unlikely without a
recalibration of the Fed's terminal rate in markets. This is largely due to
the limited upside in current Fed pricing based upon current fundamentals."

On the other side of the dollar's rally, the euro dropped to a new one-month
low of $1.0856 in early trade on Friday, hurt by new Western sanctions on
Russia, with the European Union moving towards a ban on Russian coal set to
take effect from August. read more

The European Central Bank is also grappling with inflation but "while ECB
members have sounded relatively hawkish to the recent inflation shock,
providing EUR/USD with a modicum of support around the 1.09 handle,
sustained pressure from European energy prices and calls for further
sanctions on Russian energy exports to the eurozone suggest further declines
in EUR/USD are likely," said Harvey.

The common currency has also been dragged down by uncertainty around the
outcome of the French election, as far-right candidate Marine Le Pen gains
in the polls threatening the re-election hopes of incumbent Emmanuel Macron.
Polls still show Macron ahead though.

The dollar extended its gains against the Japanese yen , rising to as much
as 124.23, its highest in over a week and testing last month's near
seven-year high of 125.1.

The yen has steadied this month after tumbling in March, but remains under
pressure as the U.S. raises interest rates and the Bank of Japan is
intervening in the bond market to keep rates low.

Slightly lower oil and other commodity prices saw commodity currencies like
the Australian and Canadian dollars , take a breather after gaining strongly
in recent weeks.

Sterling was at the low end of its recent range at $1.30695.

In cryptocurrency markets, bitcoin was trading around $43,300 just off its
overnight two-week low of $42,742.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold moves higher as investors refocus on inflation and Ukraine

Unquestionably market sentiment oscillates amongst the investment community
focusing upon inflationary pressures and Ukraine or on the Federal Reserve's
tightening of their monetary policy. Inflationary pressures and the war in
Ukraine create bullish market sentiment for the safe-haven asset class,
specifically gold. In contrast, reactions to the Federal Reserve's monetary
policy, which includes a series of rate hikes and runoff of their balance
sheet assets, lead to bearish market sentiment in gold.

It seems that from day to day, market participants will move back and forth
between these factors. As for today, market participants are once again
putting their primary focus on the inflation continuing to move higher and
the war in Ukraine. In regards to the war, it seems highly unlikely that a
peaceful resolution will be forthcoming any time soon. Rather concerns have
emerged over the excessive military action and targeting of civilians in
Ukraine. The war in Ukraine has also affected levels of global inflation,
taking them higher. Currently, Ukraine and Russia collectively export a
large percentage of wheat and other agricultural products to countries in
the European Union, and the war has pressured agricultural products such as
wheat higher.

As of 4:10 PM EDT, gold futures basis most active June 2022 contract is up
to $11.50 or 0.60% and is currently fixed at $1934.80. Gold traded to a high
today of $1941.70 and a low of $1923.30. Concurrently the dollar has been
extremely strong this weekend, providing moderate headwinds for gold prices.
The entire precious metals complex on the futures markets has shown gains on
the day.

Silver futures are up almost a full percent (+0.97%) or $0.23 and are
currently fixed at $25.695. Palladium futures are trading 2.62% higher on
the day at $2242 per ounce. However, it must be noted that there has been
exceedingly high volatility and downside selling pressure over the last five
weeks. During the week of March 7, palladium traded to a record high just
above $3400 an ounce and, compared to current pricing, has given up roughly
30% in value. Russia is one of the primary producers of platinum and
palladium and provides roughly 30% of the palladium used in the automotive
industry's production of catalytic converters.

Additional sanctions by the United States and the European Union further
isolate Russia. Still, it also increases the probability of dramatic
military action as a response or rationale for escalating their military
campaign.

Lastly, market participants continue to focus on the minutes from the March
FOMC meeting, which were released yesterday, and statements made by Federal
Reserve members, which indicate a much more hawkish tone and pace at which
they will tighten their monetary policy to decelerate the pace at which
inflation is rising.-kitco.com 

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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