Bulls n Bears Daily Market Commentary : 01 March 2022

Tue Mar 1 15:55:44 CAT 2022

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Bulls n Bears Daily Market Commentary : 01 March 2022

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

ZSE commentary

The ZSE stocks closed with gains headlined by heavyweight counters in a
mixed trading session. Activity levels was at 517 trades. OK Zimbabwe was
the most active stock at 40 trades followed by Delta and Star Africa at 33
and 30 trades respectively. Investor sentiment was negative after the
session yielded 22 decliners against 19 risers while four (4) of the active
stocks remained unchanged. OK Zimbabwe anchored volume aggregate trading
347,500 shares and Delta anchored value aggregate with a value of ZW$53.01
million.

The All-Share Index added 0.58% to close at 15,077.20 points. The Top 10
Index added 1.06%. The Top 15 Index added 0.84%. The Medium Cap Index was
down by 0.84% to 24,361.37 points whilst the Small Cap Index shaded 0.49% to
404,554.64 points. Leading the risers pack of the day was Innscor closed at
28,539.58c and Zimplow was up by 3.61%. Simbisa Brands added 3.50% and NTS
added 3.17% to 840c. OK Zimbabwe was up by 2.03%. Mitigating the gains were
losses in First Mutual Properties and First Mutual Holdings which shaded
7.70% and 4.76% respectively. Seed Co was down by 4.36%. Turnall Holdings
and Ariston shaded 3.77% and 3.42% respectively. The ETFs traded 275,196
units worth ZW$3,12,183.95 in 113 trades. The Old Mutual Top 10 ETF shaded
2.58% to close at 1039.60c while the Morgan and Co. Multi Sector ETF added
0.40% to close at 1,451.20c. On the VFEX, Padenga traded 3,949 shares to
close unchanged at US0.21 cents. Wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand steadies against the US dollar as markets pause for breath

The rand steadied against the US dollar early on Tuesday, as markets paused
for breath after tumbling in recent sessions following Russia's invasion of
Ukraine.

At 0650 GMT, the rand was largely steady at about 15.3600 against the
dollar.

The rand had weakened more than 2 percent on Monday, to hit 15.4933, as the
fallout from tougher sanctions imposed by the West on Russia and the
deepening crisis rippled across financial markets and hit risk appetite.

A modicum of calm has returned to currency markets since officials from
Russia and Ukraine held an initial round of ceasefire talks overnight, four
days after Russia invaded its neighbour.

"All eyes remain on the Ukraine and Russian war, which continues to rage on,
despite crippling sanctions on Russia," Citadel global director Bianca Botes
said in a note.

Government bonds firmed in early deals, with the yield on the instrument due
in 2030 falling 2 basis points to 9.43 percent.

REUTERS

Ghana

Cedi now worst among Africa's top currencies

The Ghana cedi is now the worst-performing currency among Africa's top
currencies, according to Bloomberg. Bloomberg pegs the depreciation of the
cedi to the dollar at 8.86% between January 1, 2022, and February 25, 2022.

This is followed by the Zambian kwacha with a depreciation of 6.02%.

In 2020, the international media and research organization rated the Ghana
cedi as the best performing currency in the world against the United States
Dollar.

Ghana and the Zambian economies have been battling with fiscal slippages,
whilst their rising debts have created fears among investors regarding their
economic outlook.

Whereas Zambia agreed to an International Monetary Fund bailout of $1.4
billion in December 2021 for a crucial three-year programme to restructure
its debt, Ghana is adamant about returning to the Bretton Wood institution
for a similar programme to build investor credibility.

Crude oil has been selling above $100 per barrel, but the foreign inflows
from the commodity have done little to help stabilise the cedi.

However, the five-year $4.5 billion Country Partnership Framework from the
World Bank is expected to inject some dollar inflows into the economy and
help shore up the value of the cedi.

The Gambian dalasi, New Sudanese pound and Ethiopian birr are among African
Currencies with the "Worst Spot Returns" by Bloomberg.

Angola Kwanza, Namibian dollar and South Africa are however among African
currencies with the "Best Spot Returns".

 <mailto:info at bulls.co.zw> 

Global Markets

Hong Kong dollar hits 27-month low on flush cash, grim mood

(Reuters) - The Hong Kong dollar struck its weakest level in more than two
years on Tuesday, weighed down by abundant liquidity, U.S. rate hike
expectations and the Russia-Ukraine war.

A rapidly spreading coronavirus outbreak in the city has also hit investor
sentiment. read more

By contrast, after last week's shock rocked financial markets and drove the
safe haven dollar higher, broader currency markets were relatively calm on
Tuesday amid the fast-moving Ukraine crisis.

At its lowest point on Tuesday, the Hong Kong dollar traded at 7.8165 per
dollar, its softest since December 2019.

The ample liquidity conditions followed a decision by the Hong Kong Monetary
Authority (HKMA), the city's de facto central bank, not to expand its
Exchange Fund Bills (EFBs) issuance on Tuesday, said Ken Cheung, chief Asian
FX strategist at Mizuho Bank.

The HKMA has boosted issuance of EFBs at its weekly auctions in recent
months to drain excess liquidity from the market.

By not expanding issuance on Tuesday, the HKMA avoided the risk of draining
too much liquidity, Cheung said. The HKMA is widely expected to mop up
excess liquidity and support the Hong Kong dollar if tightening Fed policy
pushes it to the weak end of its trading band.

Fed funds futures traders have fully priced in a 25 basis point interest
rate hike at the Fed's March meeting, though the odds of a 50 basis point
increase have fallen to around 10%. FEDWATCH

"The pair is likely to remain volatile as the market watches the response
from Russia, with immediate bias favouring the USD amid risk-off sentiment,"
analysts at OCBC Bank said in a note.

The Hong Kong dollar is pegged in a narrow range of 7.75-7.85 per U.S.
dollar. The HKMA is bound to start buying or selling the currency to manage
its value when it hits either end of the band.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price to hit $2,150 on Russian invasion, 'very high inflation path' -
Goldman Sachs

(Kitco News) As the West steps up sanctions against Russia in the aftermath
of a full-scale invasion of Ukraine, Goldman Sachs raised its commodities
price forecasts, citing supply disruptions and an even more problematic
inflation outlook.

The commodities to pay close attention to are the ones Russia is a major
producer of - oil, gas, aluminum, palladium, nickel, wheat and corn.

"The range of near-term price outcomes for commodities has become extreme,
given the concern of further military escalation, energy sanctions or
potential for a cease-fire," Goldman said in a note to clients on Sunday.
"We expect the price of consumed commodities that Russia is a key producer
of to rally from here."

Gold is another safe-haven commodity that is due for a much bigger rally
going forward, according to Goldman.

"The recent escalation with Russia create clear stagflationary risks to the
broader economy, driven by higher energy prices, which reinforce our
conviction in higher gold prices in coming months and our $2,150/toz (troy
ounce) price target," Goldman said.

In reaction to additional sanctions against Russia, gold surged above $1,916
an ounce on Monday. Some gains were lost as the trading session progressed,
with April Comex gold last at $1,905.70. But the precious metal is still set
for the best monthly performance since May.

Goldman explained that gold would play a central role in this conflict as
Russia turns to the precious metal for leverage amid sanctions. Russia's
gold reserves total 2,298.53 tonnes, according to World Gold Council.

"Gold's unique role as the currency of last resort will likely be apparent
if restrictions on Russia's central bank accessing its offshore reserves
leave it leveraging its large domestic gold stockpiles to continue foreign
trade, most likely with China," the bank said.

Gold price could hit $2,000 'in only a matter of days' - analysts

Also, Goldman increased its one-month Brent crude oil price projection to
$115 a barrel from $95, adding that Russia is becoming more isolated as the
West's sanctions kick in. "[For Brent, there is] significant upside risks on
further escalation or longer disruption," the note added.

At the time of writing, Brent was trading above $100 per barrel and the U.S.
West Texas Intermediate (WTI) was at around $96.

>From the macro perspective, Goldman raised its inflation outlook, stating
that it is "increasingly concerned" about the pace of inflation in 2022. "A
very high inflation path in 2022 should make an easy case for steady rate
hikes at all seven remaining" Federal Reserve meetings in 2022, said Goldman
economist David Mericle said in another note to clients.

The bank now expects core inflation to run at 3.7% through the end of this
year. Its previous estimate was at 3.1%. In light of this, Goldman is
estimating to see seven rate hikes in 2022 and another four in 2023.

The first rate hike will likely come on March 16, with the CME Fed WatchTool
projecting a 92.5% chance of a 25-basis-point hike.

Oil prices soar as Ukraine conflict stokes supply concerns

(Reuters) - Oil prices surged on Tuesday as concerns over supply disruptions
after Russia's invasion of Ukraine and related sanctions outweighed talks of
a coordinated global crude stocks release.

May Brent crude futures were up $4.58, or 4.67%, to $102.55 a barrel by 1331
GMT after hitting an intraday high of $104.60. The benchmark touched a
seven-year high of $105.79 after the invasion began last week.

U.S. West Texas Intermediate (WTI) April crude futures were up $4.14, or
4.33%, at $99.86 a barrel after hitting its highest level since July 2014 at
$101.53.

A Russian armoured column bore down on Ukraine's capital Kyiv on Tuesday
after deadly shelling of civilian areas in its second largest city. 

Russia said on Tuesday its forces had cut off the Ukrainian military from
the Sea of Azov north of the Black Sea.

Russia's economic isolation deepened as the world's biggest shipping firm
Maersk (MAERSKb.CO) on Tuesday said it would halt container movement to and
from Russia. Britain meanwhile has banned all ships with any Russian
connection from entering its ports. 

"The fragile situation in Ukraine and financial and energy sanctions against
Russia will keep the energy crisis stoked and oil well above $100 per barrel
in the near-term and even higher if the conflict escalates further," Louise
Dickson, senior oil market analyst from Rystad Energy, wrote in a note.

Major oil and gas companies, including BP and Shell , have announced plans
to exit Russian operations and joint ventures while Total (TTEF.PA) said it
would not invest further capital in its Russian operations. 

Buyers of Russian oil are facing difficulty over payments and vessel
availability due to sanctions with BP cancelling fuel oil loadings from a
Russian Black Sea port. 

Still, the market mood was helped by the United States and allies discussing
a coordinated release of crude stocks to mitigate supply disruption. That
release could reach 60 million to 70 million barrels, media outlets
reported. 

"OPEC will likely stick to its original plan of a monthly 400,000 bpd
increase, which will not alleviate fears," Tamas Varga, analyst at PVM Oil
Associates, said.

The Organization of the Petroleum Exporting Countries and other producers -
including Russia - will meet on Wednesday.

"The U.S. is coordinating an additional SPR (strategic petroleum reserve)
release and today, the IEA's extraordinary meeting should also address the
issue of energy security. These might provide short-term relief," Varga
added.

Members of the International Energy Agency (IEA) began an extraordinary
ministerial meeting on Tuesday which could lead to a coordinated oil stocks
release to help cool off oil prices.

Meanwhile, Asia's factories sustained a brisk recovery in February amid
signs the coronavirus pandemic was having less of an impact on business,
implying an uptick in oil demand. 

Russia, which calls its actions in Ukraine a "special operation", exports
some 4 million to 5 million barrels per day of crude oil, and 2 million to 3
million barrels per day of refined products.

The Thomson Reuters Trust Principles.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Nampak

AGM

March 09, 9AM

Art

AGM

March 10, 2.30PM

Counters trading under cautionary

ART

Seed co Int.

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

Bulls n Bears 

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