Bulls n Bears Daily Market Commentary : 17 February 2022

Thu Feb 17 17:05:00 CAT 2022

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Bulls n Bears Daily Market Commentary : 17 February 2022

 <http://www.firstcapitalbank.co.zw/> 

ZSE commentary

The ZSE stocks maintained its bullish trend in today’s session although marginally. Activity levels were at 470 trades. OK Zimbabwe was the most active stock at 36 trades followed by Delta and Econet at 32 and 29 trades respectively. Investor sentiment was positive after the session yielded 17 risers against 16 decliners while four (4) of the active stocks remained unchanged. ZB Holdings anchored both volume and value aggregate trading 2,029,800 shares with a value of ZW$132.20 million. The All-Share Index added 0.58% to close at 15,015.76 points. The Top 10 Index added 0.91%. The Top 15 Index also added 0.78%. The Medium Cap Index was down by 0.44% to 24,379.68 points whilst the Small Cap Index shaded 0.30% to 394,029.83 points.

Leading the risers pack of the day was Rio Zimbabwe closed at 5,000c and Star Africa was up by 6.32%. First Mutual Properties added 5.14% and First Capital Bank  added 5.09% to 377.18c. Mashonaland Holdings was up by 6.00%. Mitigating the gains were losses in ZB Holdings and General Beltings which shaded 17.50% and 12.55% respectively. Nampak was down by 5.66%. Wildale and ZIMRE Holdings shaded 4.24% and 3.51% respectively. The ETFs traded 21,025 units worth ZW$179,812.10 in 60 trades. The Old Mutual Top 10 ETF added 3.77% to close at 830.16c while the Morgan and Co Multi Sector ETF added 2.57% to close at 1,392c. On the VFEX, Padenga remained unchanged at US 21c after 5,177 shares were traded.-wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South African rand weaker as reported attacks in Ukraine lift dollar

JOHANNESBURG: The South African rand was weaker early on Thursday, as the dollar was boosted by Russian-backed separatists in eastern Ukraine accusing government forces of attacking their territory.

Ukraine denied its troops had opened fire. Such incidents have happened many times in recent years, but the latest episode comes as Russia has massed troops on the border and the West has warned the country could invade Ukraine.

At 0700 GMT, the rand traded at 15.0375 against the dollar, 0.3% weaker than its previous close.

The dollar was up 0.2% against a basket of currencies.

South African rand gains as gold hits 8-month high

The rand has been resilient recently, despite markets being on edge over Ukraine tensions, supported by the country's strong terms of trade, relatively high real yields and fresh reform pledges by President Cyril Ramaphosa.

Inflation data on Wednesday was in line with economists' expectations, dipping to 5.7% year-on-year in January from 5.9% in December, and supporting expectations that the South African Reserve Bank will continue to raise interest rates only gradually to continue to support an economic recovery.

The government's benchmark 2030 bond was slightly firmer in early deals, with the yield falling 4 basis points to 9.06%.

Nigeria

Naira Falls to N416.50 Per Dollar at Spot 

The Naira depreciated against the United States Dollar at the Investors and Exporters (I&E) segment of the foreign exchange (FX) market on Wednesday.

At the midweek session, the exchange rate of the Nigerian currency to its American counterpart was N416.50/$1 compared with N416.00/$1 it closed on Tuesday. This indicated that the value of the Naira depreciated by 0.12 per cent or 50 kobo.

This occurred as the demand for forex rose at the spot market by 37.4 per cent or $35.56 million to $130.73 million from the $95.17 million recorded the previous session, according to data from the FMDQ Securities Exchange.

It was observed that the domestic currency also depreciated against the British Pound Sterling at the session by 83 kobo as it was sold at N564.68/£1 compared with N563.85/£1 and against the Euro, the local currency lost 73 kobo to trade at N474.12/€1 in contrast to N472.39/€1 it was exchanged on Tuesday.

At the Peer-2-Peer (P2P) market, the value of the Naira to the Dollar went down by N1 to close at N574/$1 in contrast to N573/$1 it was exchanged at the last session.

Meanwhile, the crypto market was mixed on Wednesday with seven of the 10 digital coins monitored by Business Post across the various trading platforms ending in the negative territory.

The three gainers were led by Ripple (XRP), which appreciated 1.3 per cent to close at N497.44 as Dash (DASH) climbed by 1.2 per cent to trade at N47,773.33 and Ethereum (ETH) grew by 0.1 per cent to sell for N1,824,024.19.

But Litecoin (LTC) lost 1.4 per cent to sell at N74,597.26, Cardano (ADA) went down by 1.3 per cent to N642.30, Dogecoin (DOGE) made a 0.9 per cent loss as it traded at N87.59, while Bitcoin (BTC) fell by 0.5 per cent to close at N25,473,733.45.

Further, Binance Coin (BNB) recorded a decline of 0.3 per cent to finish at N177,625.20, Solana (SOL) saw a 0.2 per cent depreciation to sell at N61,379.06, while the US Dollar Tether (USDT) declined by 0.1 per cent to settle at N582.70.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar treads water as Ukraine headlines fuel caution

(Reuters) - The U.S. dollar treaded water on Thursday and the Japanese yen held on to its earlier gains after a Russian news report of mortar fire in eastern Ukraine jangled market nerves and boosted the appeal of safe haven bets.

Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area, the RIA news agency said, a report later denied by Ukraine. read more

While the greenback retreated from its Asian highs after the news broke, investors remained wary that Russia will invade the Ukraine again despite rising optimism at the start of this week that a diplomatic solution would be found to prevent conflict.

Against a basket of its rivals , the dollar steadied at 95.747 after rising above 96 in early Asian trading.

But in a sign that markets were not panicking yet, the rouble remained below a November 2020 high of 80 hit last month, while bond yields were only modestly higher.

"This strongly suggests that market participants remain optimistic overall that conflict will be avoided," MUFG strategists said in a client note.

The geopolitical news dwarfed the Fed's minutes of its January meeting, where policymakers agreed that it was time to tighten monetary policy but also that decisions would depend on a meeting-by-meeting analysis of data, according to minutes of the most recent policy meeting.

Short-dated U.S. Treasury yields fell and the yield curve steepened after the minutes as traders reassessed the probability of a 50 bps hike at the Fed's March meeting. Money markets were pricing in a 72% likelihood of a 50 bps hike next month compared to 80% at the start of the week.

The euro rebounded from earlier lows after falling as much as 0.4% after the Ukraine news. But Ukraine's denial and the location of the reported attack within already contested territory calmed things and the euro last sat at $1.1382.

The yen and the Swiss franc clung on to earlier gains, up 0.2% and 0.1% respectively versus the greenback.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold hits 8-month high as Ukraine-Russia conflict escalates

(Reuters) - Gold touched an eight-month high on Thursday, after Russian news reports of a mortar fire in eastern Ukraine boosted demand for the safe-haven metal and as less hawkish signals from U.S. Federal Reserve's last meeting minutes underpinned bullion.

Spot gold rose 0.8% to $1,883.17 per ounce by 1153 GMT, after rising as much as 1.3% to $1,892.91, its highest since June 11. U.S. gold futures gained 0.7% to $1,885.10.

Russian-backed rebels and Ukrainian forces traded accusations on Thursday that each had fired across the ceasefire line in eastern Ukraine, raising alarm at a time when Western countries have warned of the possibility of a Russian invasion any day. read more

If Russia invades, then gold is likely to gain, but to see a sharp reversal that sends gold markedly lower would likely require Russian troops to actually be seen leaving the border, said Matt Simpson, senior market analyst at City Index.

Minutes of the latest policy meeting on Wednesday showed that while policymakers agreed that it would "soon be appropriate" to raise the Fed's benchmark overnight interest rate from its near-zero level, they would re-asses the rate hike timeline at each meeting. read more

Higher interest rates tend to increase the opportunity cost of holding non-interest-paying gold.

Palladium jumped 1.7% to $2,317.60.

Caught in gold's slipstream, spot silver gained 0.2% at $23.58, platinum jumped 1.2% to $1,074.52, hitting a three-month high earlier.

The Thomson Reuters Trust Principles.

Copper falls as Russia-Ukraine tensions rise

(Reuters) - Copper prices fell on Thursday, with wider markets in cautious mood as reports of artillery fire in east Ukraine heightened fears of conflict between Russia and Ukraine.

Stock markets edged lower, bond prices rose and the dollar strengthened slightly, making metals costlier for buyers outside the United States.

Benchmark copper on the London Metal Exchange (LME) was down 1% at $9,895 a tonne in official trading having earlier fallen as much as 1.7%.

Copper reached a record high of $10,747.50 a tonne in May but has since bumbled along between around $9,000 and $10,000 as the economy of China, the largest metals consumer, slowed.

Prices are still too high and will likely fall in the coming weeks or months as copper supply increases, said Commerzbank analyst Daniel Briesemann, adding that the decline would soon reverse.

Russia is a major producer of aluminium and nickel.

Yangshan copper import premiums fell to $38 a tonne from $140 in October last year and stockpiles in Shanghai Futures Exchange warehouses have risen to 106,572 tonnes from 40,359 tonnes in late January. ,

PBOC: Data on Wednesday showed China's factory-gate inflation and consumer price growth softened, potentially leaving more room for the People's Bank of China to ease policy to support the economy. read more

U.S.: The number of Americans filing new claims for jobless benefits unexpectedly rose last week. read more

TIN: China's refined tin production in January fell 3.4% from the previous month, researchers Antaike said. read more

METALS PRICES: LME aluminium was down 0.5% at $3,240 a tonne, zinc rose 0.5% to $3,601, nickel climbed 1.5% to $23,750, lead was flat at $2,339 and tin was down 0.3% at $43,575.

The Thomson Reuters Trust Principles.

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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