Bulls n Bears Daily Market Commentary : 31 May 2022

Wed Jun 1 07:07:25 CAT 2022

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Bulls n Bears Daily Market Commentary : 31 May 2022

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ZSE commentary

Market upbeat in month-end session.

The ZSE remained upbeat in month end session to see four indices under our
analysis close in the black. The All-Share Index jumped 7.29% to 23072.46pts
while, the Top 10 Index soared 9.35% to 15337.16pts. The Mid-Cap Index
rebounded 1.48% to 37634.85pts as the ZSE Agriculture added a marginal 0.07%
to finish the session at 120.71pts. Topping the risers list was telecoms
giant Econet which ticked up 14.84% to $238.4234 while, fintech group
Ecocash Holdings followed on 13.72% upsurge to $111.8443. Delta and Innscor
Africa rose 12.44% and 11.18% to end at $389.9924 and $525.5290
respectively. Hotelier African Sun completed the top five gainers on a 8.61%
uplift to end at $15.9413.

Logistics company Unifreight led the laggards of the day as it dropped 4.29%
to $33.5000, trailed by Ariston that declined 2.70% to $3.7976. Zimplow
trimmed 0.91% to $19.1111 as clothing retailer Truworths let go 0.74% to
$2.0000. Banking group First Capital capped the top five losers on a
marginal 0.40% slide to $9.8622. Eighteen counters advanced against nine
that lost ground leaving the market with a negative breadth of nine.
Activity aggregates improved as turnover ballooned 73.18% to $1.05bn while,
volume garnered 94.88% to 5.03m shares. Volume drivers of the day were Axia,
Delta, Simbisa, OKZIM and Econet with a shared contribution of 65.05% to the
aggregate. Top value drivers of the day were Delta, Innscor, Econet, Simbisa
and Axia which accounted for a combined 78.76% of the outturn. Foreigners
were net sellers in the session as outflows stood at $28.85m while, inflows
amounted to $1.38m. ETFs traded a total of 202,294 units as all the counters
closed in the positive territory. Datvest went up 0.18% to $1.9639, Morgan
and Co closed 3.07% stronger at $23.9087 while, Old Mutual ETF grew 1.35% to
$10.0799. 

EFE Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand weaker as dollar recovers, markets up slightly

(Reuters) - The South African rand slipped on Tuesday, as the dollar bounced
back supported by demand for safe havens over ongoing inflation concerns.

At 1549 GMT, the rand traded at 15.6050 against the dollar, 0.89% weaker
than its previous close.

The dollar index strengthened as Treasury yields climbed and worries over a
further acceleration in global inflation kept investors' risk appetite at
bay. read more

The South African government on Tuesday outlined new measures to curb
steeply rising domestic fuel prices and ease pressure on consumers. The
National Treasury said the cost of extending the fuel levy reduction is
estimated at 4.5 billion rand in foregone revenue.

Data on Tuesday showed South Africa recorded a trade surplus of 15.49
billion rand in April, down from a revised surplus of 47.20 billion rand in
March.

Its unemployment rate fell to 34.5% in the first quarter of 2022 from 35.3%
in the final quarter of last year.

Other data showed that private-sector credit in South Africa rose by 5.99%
year-on-year in April after rising by 5.92% in March.

The government's benchmark 2030 bond was weaker, with the yield up 1.7 basis
points to 9.835%.

While rising crude oil prices, which hovered around $123 a barrel, stoked
inflation worries amongst investors, the local stock market stayed upbeat on
the back of the fall in unemployment and an acceleration in private sector
credit growth.

Shares on the Johannesburg Stock Exchange (JSE) rose on Tuesday helped by
local banking stocks, industrials and real state companies even as major
global indexes fell on inflation worries.

The benchmark all-share index (.JALSH) rose 0.19% to 72,095 points and the
blue-chip index of top 40 companies (.JTOPI) closed up 0.15% to 65,431
points.

However, miners played a spoilsport with Gold Fields (GFIJ.J) leading the
pack, losing a fifth of its market value in a single day after the company
said it had agreed to acquire Canada-based Yamana Gold (YRI.TO) in a $6.7
billion deal. Investors were concerned the company was paying huge premium
for the asset. read more

The Thomson Reuters Trust Principles.

Nigeria

Naira gains at official market

The naira gained at both the official and unofficial markets on Tuesday.

Naira strengthened by 0.24 per cent against the U.S. dollar at the official
market on Tuesday, a day after it fell at the spot market.

Data published by FMDQ, where forex is officially traded, showed the naira
closed at N419.50 to a dollar on Tuesday.

This represents a N1.02 or 0.24 per cent appreciation from N420.25 it
exchanged hands with the greenback currency in the previous session on
Monday.

The domestic currency which opened at N418.54 reached an intraday high of
N412.38 and a low of N444.00 before closing at N419.50 per $1 on Tuesday,
the second business day of the week and the last business day of the month.

Forex supply plummeted by 19.82 per cent with $ 98.52 million recorded at
the close of business on Tuesday as against the $122.91 million posted in
the previous session on Monday.

Similarly, the naira which touched the N600 and above mark fortnight ago
clinched a significant gain at the black market across states in the
country.

In the Uyo black market, the naira was exchanged at N595.00 and sold at
N598.00 to a dollar on Tuesday, as against N603.00 and N605 it exchanged and
sold in the previous session on Monday.

Also, at Abuja street market, currency dealers said the naira was exchanged
at N595.00 and sold N597.00 per $1 on Tuesday.

By implication, the spread between the spot market (N418.00) and the
parallel market (N603.00) is pegged at N185.00 leaving a margin of 30.7 per
cent.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hits two-week peak to yen amid U.S. yield rise

(Reuters) - The dollar rose to a two-week high versus the yen on Wednesday,
lifted by higher Treasury yields as global inflation worries flared anew.

The dollar index , which measures the currency against six major peers,
including Japan's, rose 0.19% to 101.94, extending a 0.38% rally from
Tuesday, when data showed euro-area consumer inflation soaring to a record.
read more

The greenback climbed 0.28% to 129.07 yen , and earlier touched 129.185 for
the first time since May 18.

Benchmark 10-year Treasury yields touched 2.884% overnight, the highest
since May 19.

The euro slipped 0.15% to $1.0718, continuing its retreat from the
more-than-one-month peak of $1.0787 hit on Monday after the European Central
Bank shifted to a more hawkish posture.

The dollar index swooned to a one-month low of 101.29 on Monday after
pulling back from a nearly two-decade high above 105 reached in mid-May, as
U.S. inflation and other economic indicators showed signs of peaking amid
the Federal Reserve's aggressive policy tightening.

Markets have priced half-point interest rate rises for the Fed's meetings
this month and next, in line with what policymakers have been signalling,
but the outlook beyond that is murky.

A closely watched monthly U.S. jobs report, due on Friday, may offer new
clues.

"It's still too early to call a long-term DXY peak," Westpac strategists
wrote in a client note, referring to the dollar index.

"An aggressive 180bp in ECB rate hikes are priced through to end-2023, about
the same as the Fed, yet it's hard to see the ECB moving toe to toe."

The dollar index could range between 101 and 105 for "a while" before its
bull trend resumed, they wrote.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price holding below $1,850 following better-than-expected U.S. consumer
confidence numbers

(Kitco News) - The gold market remains under pressure and below $1,850 an
ounce. Still, the precious metal is seeing little reaction from
stronger-than-expected U.S. consumer confidence.

American consumer confidence index fell to 106.4, down from April's revised
reading of 108.6, the U.S. Conference Board reported Tuesday. Economists
expected to see a sharper drop in the index to a reading of around 103.9.

The gold market is not seeing much reaction to the latest economic data; the
yellow metal is seeing some renewed selling pressure as the U.S. dollar
attracts some new buying interest. August gold futures last traded at
$1,847.70, down roughly 0.5% on the day.

The report noted that consumers' views on current economic conditions and
future expectations dropped in May. The Present Situation Index fell to
149.6, down from April's reading of 152.9; at the same time, the
Expectations Index dropped to 77.5, down from the previous level of 79.0.

Hedge funds turn bullish on gold but remain heavily bearish on silver

"The decline in the Present Situation Index was driven solely by a perceived
softening in labor market conditions. By contrast, views of current business
conditions-which tend to move ahead of trends in jobs-improved. Overall, the
Present Situation Index remains at strong levels, suggesting growth did not
contract further in Q2," said Lynn Franco, Senior Director of Economic
Indicators at The Conference Board. "That said, with the Expectations Index
weakening further, consumers also do not foresee the economy picking up
steam in the months ahead. They do expect labor market conditions to remain
relatively strong, which should continue to support confidence in the short
run."

The report also noted that inflation holding near its highest levels in 40
years remains a critical issue for consumers and is impacting consumption.

"Purchasing intentions for cars, homes, major appliances, and more all
cooled-likely a reflection of rising interest rates and consumers pivoting
from big-ticket items to spending on services. Vacation plans have also
softened due to rising prices,' said Franco. "Looking ahead, expect surging
prices and additional interest rate hikes to pose continued downside risks
to consumer spending this year."

Copper steady on hopes of demand boost from China

Copper prices touched their highest in over three weeks on Tuesday on hopes
that lifting China's lockdown restrictions will boost demand, but a stronger
dollar chipped away at the gains.

Three-month copper on the London Metal Exchange CMCU3 was little changed at
$9,540 a tonne by 1037 GMT, after earlier hitting its highest since May 5 at
$9,591.50.

U.S. Comex copper HGcv1 gained 0.8% to $4.34 a lb.

Shanghai authorities removed lockdown fences on Tuesday, preparing to lift a
two-month lockdown at midnight, while China's cabinet announced a package of
33 stimulus measures to revive its pandemic-ravaged economy.

"The news from China is just enough to create a refocus in the market
towards a possibility of a pick up in demand," said Ole Hansen, head of
commodity strategy at Saxo Bank in Copenhagen.

"If we haven't seen it already, we're very close to having seen a bottom in
industrial metals, where we can bounce."

Copper slid 18% during about two months after touching a record high of
$10,845 a tonne in early March on fears about a slowdown in China and
inflation disrupting economies elsewhere.

In May, LME copper is on track for its second monthly decline with a drop of
2.2%.

But weak inventory levels were a sign of underlying strength in the market,
Hansen added.

"It's quite telling that despite worries about growth and demand there
hasn't been a pick-up of inventory levels at a time of year when you would
expect some stock build."

* Data showed China's factory activity contracted at a slower pace in May,
as restrictions on some plants were lifted.

* The dollar =USD rose against its rivals, making greenback-denominated
metals more expensive for buyers using other currencies. USD/

* LME tin CMSN3 added 0.6% to $34,790 a tonne but was set to tumble 13.6% in
May, its worst monthly performance since 2012.

* LME aluminium CMAL3 shed 1% to $2,860 a tonne and nickel CMNI3 dropped
2.3% to $28,600, but zinc CMZN3 rose 1.2% to $3,948.50 and lead CMPB3 was
slightly firmer at $2,175.50.

.

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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