Bulls n Bears Daily Market Commentary : 12 April 2022

Wed Apr 13 08:16:37 CAT 2022

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Bulls n Bears Daily Market Commentary : 12 April 2022

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ZSE commentary

The ZSE shares opened the week, sending a very strong positive sentiment
registering strong gains, however, in subdued turnover and volume. Strong
performance was recorded across all benchmark indices. Activity levels were
lower at 411 against 593 trades recorded at the close of last week. First
Capital was the most active stock at 36 trades while both Delta and Star
Africa tied at 33 trades respectively. Investor sentiment was positive after
the session yielded 29 risers against 4 decliners while 4 of the active
stocks remained unchanged. Ecocash holdings limited anchored volume
aggregate trading 365,000 shares and Hippo anchored value aggregate with a
value of ZW$63.9 m.

The All-Share Index added 3.52% to close at 17,822.95 points. The Top 10
Index added 3.07%. The Top 15 Index added 3.26%. The Medium Cap Index was up
by 4.94% to 29,879.83 points whilst the Small Cap Index gained 2.9% to
454,253.37 points. Leading on gains was NMB Bank and Tanganda  which closed
20% higher respectively. Nampak was up by 19.87%. Tanganda added 19.87% and
CFI added 15.34%. Offsetting gains were losses in Zimplow  and Medtech which
shaded 9.03% and 7.41% respectively. General Beltings Holdings was down by
1.65%. Hippo shaded 0.01% to close at 30001.80 cents. The ETFs traded
231,729 units worth ZW$719,154.23 in 134 trades. The DMCS-ETF  added 0.78%
to close at 189.19c while MCMS-ETF was up 0.22% to 1500c and OMTT- ETF was
marginally up 0.047% to 844.05c. On the VFEX, there no trades recorded
during today's trading session.wealthaccess

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Emerging market shares fell on Tuesday, pressured by a rise in US bond
yields ahead of March inflation data.

By late Tuesday morning, the JSE's all-share index was down a percent at 73
686 points. Investec (-5%) was among the biggest losers, while Harmony gave
up more than 3%

Later on Tuesday, data is expected to show US consumer prices increased by
the most in 16-1/2 years in March, serving as the latest prompt to
strengthen the Federal Reserve's hawkishness.

US Treasury yields hit 3-year highs, helping the dollar hold strong against
most emerging market currencies. 

"With real yields heading higher, and the Fed now decisively turning
hawkish... the scope for relative-value trades in EM FX is now looking
diminished," strategists at JPMorgan said in a note.

However, the rand firmer at R14.56/$.

Major central banks have started to turn off pandemic-induced stimulus taps
as the war in Ukraine has exacerbated inflation which was already on the
rise.

Emerging market stocks, which had fared better than the S&P 500 and MSCI's
all country index in the first two months of the year, have started to
underperform since the start of Russia's invasion, down almost 10%.

On the day, losses for the broader emerging markets index was limited by a
rally in China shares as some lockdown measures were lifted in Shanghai,
while regulations on the country's gaming sector were also eased after a
multi-year crackdown.

Russia, meanwhile, flagged a possible contraction in growth this year of
more than 10%, according to a report. The rouble fell past 80 a dollar,
extending losses after the central bank lifted some capital controls

In Turkey, industrial production expanded by a larger than anticipated 13.3%
year-on-year in February, data showed.

Turkey's lira was down 0.2% with the central bank seen keeping the key
interest rate unchanged this week, despite inflation at 61%.

Sri Lankan bonds rose after the central bank temporarily suspended foreign
debt payments to avoid a hard default.

Sovereign dollar bonds in crisis-hit Sri Lanka fell more than 1 cent after
the central bank decided to divert its limited foreign reserves for imports
of essential items such as fuel instead.

Better mechanisms for dealing with sovereign debt stress will be needed to
stave off defaults in poor countries, the International Monetary Fund said
on Monday.

Fitch on Tuesday warned Pakistan's political volatility adds to external
financing risk.

Pakistan bonds fell after Monday's rally following the appointment of
Shehbaz Sharif as prime minister. Stocks rose 0.1%, extending the previous
session's near 4% jump, while the currency jumped more than 1%.

Nigeria

Naira gains at official market

Naira clinched a meagre gain against the U.S. dollar at the official market
on Tuesday, a day after the local currency fell.

According to data posted by FMDQ where forex is officially traded, naira
closed at N416.62 to a dollar at the close of business, translating to a
N0.38 or 0.09 per cent appreciation from N417.00 it exchanged on Monday.

The local currency hit an intraday high of N410.00 and a low of N444.00
before closing at N416.62 on Tuesday.

The spot market foreign exchange turnover increased by 13.51 per cent with
$144.29 million recorded as forex supply at the close of business on Tuesday
against $127.12 million posted on Monday.

Street traders in Uyo exchanged the cureency at N584.00 and sold at N588.00
to a dollar on Tuesday, while Abuja currency exchangers said the naira
exchanged hands with the greenback currency at N585.00 to a dollar, and sold
at N587.00 per $1.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar rebounds as Brainard assures markets Fed will stay the course

(Reuters) - The dollar rebounded on Tuesday after digesting slightly
softer-than-expected U.S. inflation data, while the euro extended losses
ahead of a policy-setting meeting at the European Central Bank.

Federal Reserve Governor Lael Brainard said on Tuesday that there were some
signs of "welcome" cooling in the latest inflation readout, but emphasized
that the central bank is still proceeding with a series of interest rate
hikes, as well as an effort to trim its balance sheet.

"I'll be looking to see whether we continue to see moderation in the months
ahead," Brainard told the Wall Street Journal in an interview, referring to
inflation in the "core" goods category. read more

The U.S. Consumer Price Index showed that prices rose 8.5% in March compared
with a year ago, boosted by the soaring cost of gasoline but tempered by a
moderation in prices of used cars and trucks. The core CPI fell short of
estimates, landing at 6.5%.

Brainard's comments highlighted that the Fed "is not pivoting at this
point," providing an assurance for the greenback after a morning of choppy
trading, said Bipan Rai, head of FX strategy at CIBC Capital Markets in
Toronto.

"The path of least resistance is still for tighter policy, and also for an
aggressive unwind of the balance sheet, and as a result of that, I think the
dollar is stabilizing a little bit," he said.

The dollar index rose 0.26%, with the euro down 0.51% to $1.0828.

Benchmark 10-year U.S. Treasury yields eased to 2.727%, after reaching
2.793% on Monday, the highest since January 2019.

The inflation numbers initially suggested the Fed might not need to be as
aggressive in the second half of this year as some had originally expected,
said Edward Moya, senior market analyst at OANDA.

"While this doesn't change anything that the Fed will do over the next
couple of meetings, it does support the idea that maybe they won't have to
be as aggressive with tightening policy later on in the year, and that's why
we saw the dollar drop somewhat following the initial reaction," said Moya.

The euro declined Tuesday as markets shifted their attention to the ECB
policy meeting due later this week, with money markets pricing in about 70
basis points of interest rate tightening by December.

"The big focus for the ECB this week is whether or not the timeline to
remove accommodative policy settings has shrunk, given the fact that the
chorus of voices on the governing council have become more hawkish," said
Rai.

Investors will likely look for any indication that the ECB will wind down
its asset purchase program, which could tee up a rate hike in September, Rai
said.

Still, any rebounds in the euro will likely be limited due to the Russian
war against Ukraine, said Moya. In addition to pushing up gasoline prices,
the war, now in its second month, has led to a global surge in food prices
as Russia and Ukraine are major exporters of commodities including wheat and
sunflower oil. read more

"There's just this overall belief that until you have a resolution with the
war in Ukraine, their economic outlook is really going to be a big question
mark, and that's not necessarily going to be good for flows for the euro,"
said Moya.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold gains over 1% as Treasury yields ease post inflation data

(Reuters) - Gold advanced more than 1% on Tuesday as Treasury yields eased
after U.S. inflation data largely met expectations, reducing the likelihood
of long-term aggressive policy tightening by the Federal Reserve.

Spot gold was up 0.7% at $1,967.61 per ounce by 2:39 p.m. ET (1839 GMT),
having hit its highest in nearly a month earlier in the session. U.S. gold
futures settled up 1.4% at $1,976.10.

The benchmark 10-year U.S. Treasury yield slipped after data showed
inflation accelerated in March, but less than many market participants had
expected. read more

While gold is considered an inflation hedge, rising prices can lead central
banks to hike interest rates, pushing up bond yields and increasing the
opportunity cost of holding zero-yield bullion.

"If we're going to continue to see core inflation not surging to the same
extent (as headline inflation), the Fed ... may not be as aggressive as when
core was moving higher," said Bart Melek, head of commodity strategies at TD
Securities.

Federal Reserve Governor Lael Brainard said the combined effort of trimming
its balance sheet and a series of rate hikes would help bring down
inflation, adding a moderation in "core goods" inflation, excluding energy
and food prices, is a "welcome" signal. read more

"This doesn't change anything over the short term," with the Fed still
expected to raise rates by 50 basis points next month to tame inflation,
said Edward Moya, senior market analyst with OANDA.

Gold continued to find support as a safe haven from developments surrounding
Ukraine, with Russian troops massing for a new offensive. read more

Palladium fell 3.5% to $2,346.66 per ounce on profit-taking, after hitting
its highest since March 24 at $2,550.58 on Monday following the suspension
of trading of the metal sourced from key producer Russia in London.

Platinum was down 1.2% at $964.79. read more

The suspension could exacerbate near-term palladium supply tightness,
Standard Chartered analysts said in a note.

Spot silver rose 1.1% to $25.35 per ounce.

The Thomson Reuters Trust Principles.

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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