Bulls n Bears Daily Market Commentary : 14 February 2022

Mon Feb 14 18:51:28 CAT 2022

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Bulls n Bears Daily Market Commentary : 14 February 2022

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ZSE commentary

The ZSE saw a 1.30% rise in capitalization in a mixed trading session. Gains were supported by mid-cap stocks and select blue-chip stocks. Activity levels were at 496 trades. Star Africa was the most active stock at 41 trades followed by Delta and Tanganda at 33 and 32 trades respectively. Investor sentiment was negative after the session yielded 21 fallers against 15 risers while 4 (four) of the active stocks remained unchanged. Star Africa anchored volume aggregate trading 3 263 800 shares and Delta anchored value aggregate with a value of ZW$65.88 million.

The All-Share Index added 1.21% to close at 14 247.43 points. The Top 10 Index added 0.74%. The Top 15 Index also added 1.45%. The Medium Cap Index was up by 2.96% to 23 251.81 points whilst the Small Cap Index added 0.06% to 397 300.04 points. Leading the risers pack of the day was Seed Co closed at 17115c and OK Zimbabwe was up by 11.63%. Zimre Holdings added 8.28% and Nampak added 5.96% to 1324.52c. Cassava was up by 5.94%. Mitigating the gains were losses in Mashonaland Holdings and Wildale which shaded 13.51% and 5.15% respectively. Delta was down by 4.31%. Get Bucks and Lafarge both shading 3.47%. The ETFs traded 42 534 units worth ZW$388 325.70 in 58 trades. The Old Mutual Top 10 ETF shaded 0.50% to close at 801.33c while the Morgan and Co Multi Sector ETF shaded 4.22% to close at 1303.79c. On the VFEX, Bindura remained unchanged at US 4.50c after 33 600 shares were traded..-wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South African rand pauses, resilience could be tested by Ukraine fears

(Reuters) - The South African rand was flat early on Monday, but its recent resilience in the face of hawkish signals from global central banks could be tested by warnings that Russia could invade Ukraine at any time.

At 0637 GMT, the rand traded at 15.2200 against the dollar, the same as its close on Friday.

The United States on Sunday said Russia might create a surprise pretext for an attack on Ukraine, as it reaffirmed a pledge to defend "every inch" of NATO territory. read more

Analysts at ETM Analytics said the rand had been supported of late by South Africa's strong terms of trade, relatively high real yields and fresh reform pledges by President Cyril Ramaphosa.

But the standoff over Ukraine has the potential to rock global markets, they said in a research note.

Other potential drivers this week include January consumer inflation (ZACPIY=ECI) numbers and December retail sales (ZARET=ECI) on Wednesday. Economists polled by Reuters predict annual inflation will ease to 5.7% in January from 5.9% in December, while retail sales will rise 2.2% year on year in December compared to 3.3% in November.

Both releases will provide further clues about price pressures and the health of Africa's most industrialised economy, as markets try to predict whether the South African Reserve Bank will raise its main lending rate (ZAREPO=ECI) for the third consecutive time at its next monetary policy meeting in March.

The government's benchmark 2030 bond was also little changed early on Monday, with the yield at 9.19%.

The Thomson Reuters Trust Principles.

Nigeria

Naira recorded a meagre appreciation against the U.S. dollar at the official market as concerns on the Central Bank of Nigeria (CBN) stopping the sales of forex to commercial banks eased.

Data recorded on the FMDQ website where forex is officially traded showed the local currency closed at N416.00/$1 on Friday.

This represented a 0.16 per cent or 67 kobo appreciation when compared with N416.67/$1 of the previous session at the Investors and Exporters (I&E) segment of the foreign exchange market.

The growth posted by the I&E window was buoyed by a low turnover of forex transactions, which stood at $84.65 million, 28.9 per cent or $25.1 million lower than the $109.75 million achieved a day earlier.

Similarly, at the Interbank market, data from CBN showed that Naira closed at N416.91to the US dollar compared to N417.51/$ it exchanged on Thursday last week.

On the same market, it was a flat trade between Naira and British pounds at N566.73/£1 and also remained unchanged against the Euro to settle at N477.42/€1.

It was also good performance for Naira at the parallel market as it gained N1 or 0.17 per cent to close at N573/$1 compared to N574/$1 it was transacted at the previous session.

Read also: Naira falls to N580 per dollar, as CBN moves to stop sale of forex to banks

Naira’s good performance came after the CBN clarify an earlier report on the sale of dollars to banks.

Godwin Emefiele at the end of the Bankers Committee meeting held on Thursday, February 11, 2022, was reported to have said forex sales to banks will be stopped at the end of 2022.

Emefiele’s words, “The era is coming to an end when, because your customers need 100 million dollars in foreign exchange or 200 million dollars, you now want to pack all the dollars and pass it to CBN to give you dollars.

However, in a statement credited to anonymous sources from CBN, several media reports said there was no immediate plan as earlier reported.

 <mailto:info at bulls.co.zw> 

Global Markets

Canadian dollar touches 10-day low amid Ukraine uncertainty

(Reuters) - The Canadian dollar edged lower against the greenback on Monday, as investors weighed warnings that Russia could invade Ukraine at any time and a major trade route between Canada and the United States reopened.

World shares skidded and the safe-haven U.S. dollar (.DXY) gained ground against a basket of major currencies as the United States said Russia might create a surprise pretext for an attack on Ukraine. read more

Still, hints by Ukraine at possible concessions to Russia helped cap the price of oil, one of Canada's major exports. read more

U.S. crude prices fell 0.6% to $92.55 a barrel, while the Canadian dollar was trading 0.1% lower at 1.2752 to the greenback, or 78.42 U.S. cents. It touched its weakest intraday level since Feb. 4 at 1.2783.

North America's busiest trade link reopened for traffic late Sunday evening, ending a six-day blockade, the Canada Border Services Agency said, after Canadian police cleared the protesters fighting to end COVID-19 restrictions. read more

Canada's inflation report for January, due on Wednesday, could offer clues on the outlook for Bank of Canada interest rate hikes. Money markets expect the central bank to tighten next month for the first time since October 2018 to fight inflation.

Canadian government bond yields were higher across the curve, tracking the move in U.S. Treasuries.

The 10-year was up 3.3 basis points at 1.904%, after touching on Friday its highest intraday level in nearly three years at 1.961%.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold resumes rally, palladium gains support on Russia-Ukraine discord

(Reuters) - Gold prices extended gains to a fresh three-month peak on Monday as concerns around the Russia-Ukraine conflict supported bullion's safe-haven appeal and sparked fears of supply disruption in the palladium market.

Spot gold gained 0.3% to $1,864.94 per ounce by 10:27 a.m. ET (1527 GMT), after hitting its highest level since Nov. 18. U.S. gold futures gained 1.5% to $1,869.60.

U.S. stock indexes continued their slide on worries over higher interest rate environment and after the U.S. warned Russia might create a surprise pretext for an attack on Ukraine. read more

Non-yielding gold is considered a hedge against higher inflation. Markets now await producer prices data for January and minutes from the U.S. central bank's January monetary policy meeting later this week.

Palladium was up 0.2% at $2,311.93, having hit an over two-week peak.

Russia is one of the world's largest palladium-producing countries, and any escalation in conflict between Russia and Ukraine could lead to supply disruptions, analysts said.

Silver rose 0.9% to $23.78 per ounce, while platinum was steady at $1,027.75.

The Thomson Reuters Trust Principles.

London copper prices gain as inflation jitters mount

(Reuters) - London copper rose on Monday, as oil price strength prompted investors' quest for a hedge against stubborn inflation, though a firmer dollar capped gains in the greenback-priced red metal.

Three-month copper CMCU3 on the London Metal Exchange (LME) was up 0.4% at $9,899.5 a tonne, as of 0555 GMT, while the most-traded March copper contract SCFcv1 on the Shanghai Futures Exchange fell 1.6% to 71,330 yuan ($11,217.70) a tonne.

He also added latest rise in warehouse inventories is a reflection of the backwardation making material very expensive to hold.

Copper prices are often viewed as a gauge of global economic health and investors often buy commodities as a hedge against expectations of broadening inflationary risks.

Oil prices hit their highest level in more than seven years on fears that a possible invasion of Ukraine by Russia could trigger U.S. and European sanctions that would disrupt exports from the world's top producer in an already tight market. O/R

Tensions in Europe propped the dollar index =USD up 0.1%. USD/

Data last week showed, warehouses monitored by the Shanghai Futures Exchange saw large inflows, with copper surging 164%. It was the first weekly stocks data since China closed for New Year holidays.

FUNDAMENTALS

* LME aluminium CMAL3 gained 2.9% to $3,226 a tonne, nickel CMNI3 climbed 2.4% to $23,595 a tonne, lead CMPB3 was flat at $2,280, zinc CMZN3 rose 0.8% to $3,656 and tin CMSN3 was 0.4% higher at $43,700.

* ShFE aluminium SAFcv1 fell 0.7% to 22,805 yuan a tonne, nickel SNIcv1 rose 1.5% to 176,340 yuan, zinc SZNcv1 dipped 0.8% to 25,610 yuan, lead SPBcv1 gained 0.6% to 15,395 yuan and tin SSNcv1 slipped 1.7% to 333,200 yuan.

* A Peruvian community said on social media on Sunday that it will restart a road blockade against MMG's 1208.HK Las Bambas mine, even as a second community agreed to a 45-day truce in its blockade.

* Being too "abrupt and aggressive" with interest rate increases could be counter-productive to the Federal Reserve's goals, San Francisco Federal Reserve Bank President Mary Daly said on Sunday.

* For the top stories in metals and other news, click TOP/MTL or MET/L

($1 = 6.3587 Chinese yuan)

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Cafca

AGM

Feb 24, 12PM  

Ariston

AGM

Royal Harare Golf Club

Feb 24, 3PM

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 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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