Bulls n Bears Daily Market Commentary : 02 March 2022

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Bulls n Bears Daily Market Commentary : 02 March 2022

 

 	

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

 

 	


ZSE commentary

 

 

The ZSE stocks closed with marginal gains in an unimpressed mixed trading
session. Activity levels was at 452 trades. Star Africa was the most active
stock at 39 trades followed by Simbisa and OK Zimbabwe at 34 and 23 trades
respectively. Investor sentiment was negative after the session yielded 18
decliners against 14 risers while seven (7) of the active stocks remained
unchanged. Simbisa anchored both volume and value aggregate trading 613,700
shares with a value of ZW$114.18 million.

 

The All-Share Index added 0.17% to close at 15,103.04 points. The Top 10
Index added 0.25%. The Top 15 Index added 0.14%. The Medium Cap Index was
down by 0.14% to 24,327.02 points whilst the Small Cap Index shaded 0.54% to
402,371.14 points. Leading the risers pack of the day was CFI Holdings
closed at 12,240c and Art Corporation was up by 3.27%. Ecocash Holdings
added 2.76% and Simbisa added 2.00% to 18,604.88c. Tanganda was up by 1.72%.
Mitigating the gains were losses in Star Africa and Proplastics which shaded
8.77% and 7.14% respectively. Mashonaland Holdings was down by 4.95%.
Zimplow and OK Zimbabwe shaded 2.86% and 2.55% respectively. The ETFs traded
468,364 units worth ZW$5,775,721.69 in 97 trades. The Old Mutual Top 10 ETF
shaded 14.22% to close at 891.79c while the Morgan and Co. Multi Sector ETF
added 0.06% to close at 1,450.27c. On the VFEX, Padenga traded 17,111 shares
to close unchanged at US0.21 cents.. wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

 

Global Currencies & Equity Markets

 

 

 

Ghana

 

Cedi not depreciating, US dollar appreciating rather – Banker

Chartered banker, Eric Nii Boi Quartey, has discredited reports that the
Ghana Cedi has overtaken the Zambian Kwacha to become the worstperforming
currency in Africa.

He stated that it is rather the dollar, which is used as a major trading
currency in the world that is appreciating against the Cedi.

 

According to a Bloomberg report cited on myjoyonline.com, the Ghana Cedi has
overtaken the Zambian Kwacha as the worst-performing currency in

Africa.

 

The report noted that Ghana and Zambia are not able to address challenges in
relation to their large debt stock, revenue mobilisation and expenditure

management.

 

Speaking on Adom FM’s morning show, Dwaso Nsem on Tuesday, March 1, 2022, Mr
Quartey said the report could not be accurate.

 

According to him, the two countries face different challenges, therefore,
should not be compared to each other.

 

He however blamed the depreciation of the local currency, Cedi on
non-compliance with banking regulations in Ghana and the act of hoarding
dollars

in foreign exchange accounts over fears of losing capital.

 

This, he said, puts pressure on the Cedi, thereby, causing economic
depression.

Meanwhile, an Economist at the University of Ghana, Professor Ebo Turkson
said, “Government has not failed in the management of the cedi; the

depreciation is due to the unnecessary pressure on the cedi coming from the
demand side.”

 

The Cedi currently trades at GH¢7.15 pesewas against major trading
currencies at some forex bureau.

 

 

 

 

 

Nigeria

 

Naira drops 0.2% to trade N578/$1 at parallel market

 

The naira, on Wednesday, depreciated further against the dollar at the
parallel section of the foreign exchange market.

 

Bureaux De Change operators (BDCs), popularly known as ‘abokis’, who spoke
to TheCable in Lagos, quoted the naira at N578 to the dollar at the street
market.

 

The figure is N1 or 0.2 percent lower than the N577 it traded two weeks ago.

 

The street traders put the buying price of the dollar at N574 and the
selling price at N578, leaving a N4 profit margin.

 

A parallel market (street market) is characterised by noncompliant behaviour
with an institutional set of rules.

 

The Central Bank of Nigeria (CBN) has often maintained that the parallel
market is not the true reflection of the naira.

 

On the official market side, the local currency closed flat against the
dollar on Tuesday at N416.67, according to information obtained from FMDQ
OTC Securities Exchange — a platform that oversees official foreign-exchange
trading.

 

Analysts have predicted that the naira may depreciate in the coming days due
to ongoing conflict between Russia and Ukraine.

 

They said that while the CBN may have enough supply to support the forex
market over the short term, declining foreign inflows and weakening of the
external reserves could force further currency depreciation in the medium to
long term.

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

Global Markets

 

Rouble hits record low in Moscow, remains volatile outside Russia

(Reuters) - The rouble touched a record low of 110 to the dollar in Moscow
on Wednesday and crawled back near 100 in other trading platforms, though it
continued under pressure as Russia's financial system teetered under the
weight of Western sanctions imposed over the invasion of Ukraine.

 

The Russian stock market remained closed and trading on bonds showed wide
bid-ask spreads and little-to-no volume.

 

The rouble fell 4.5% to 106.02 against the dollar in Moscow trade , earlier
hitting 110.0, a record low. It has lost 30% of its value against the dollar
since the start of the year. Against the euro , it shed 2.5% on Wednesday to
finish the day at 115.40.

 

But trading outside of Russia , saw the currency rebound to end the day up
6% to 100 on the EBS platform and 7.6% at 97.6 elsewhere.

 

The currency is still over 20% weaker than where it traded at during the
first half of February.

 

On the EBS platform, the rouble has this week had the three widest daily
ranges since 2010, with Monday the widest range on record.

 

"Who gosh-darn knows what's going to happen tomorrow," said Colin Stewart,
head of Americas at Quant Insight in New York.

 

"It's just too volatile."

 

Russia has responded to the currency weakness by more than doubling its
benchmark interest rate to 20% and telling companies to convert 80% of their
foreign currency revenues on the domestic market as the central bank, which
is now under Western sanctions, has stopped foreign exchange interventions.

 

The weak rouble will hit living standards in Russia and fan already high
inflation, while Western sanctions are expected to create shortages of
essential goods and services such as cars or flights. read more

 

Many international companies have announced plans to exit Russia, while the
country's credit ratings are coming under pressure as a result of the
crisis.

 

Credit rating agency Moody's said it was reviewing Russia's rating for a
downgrade, a move that "reflects the negative credit implications for
Russia's credit profile from the additional and more severe sanctions being
imposed."

 

JPMorgan said about $4.2 billion in Russian debt is at risk of being kicked
out of investment-grade bond indexes.

 

Meanwhile, Scope Ratings said capital controls "raise significant questions
surrounding the Russian state's willingness to service its debt owed to
foreign residents" a day after cutting its Russia rating to junk status.

 

The measures, Scope added, make Russia "more vulnerable to banking and
liquidity crises."

 

In a separate note, JPMorgan said there was a deep recession in the making
for Russia and the bank was reassessing its regional macro forecasts.

 

"The most recent measures targeting the CBR have completely changed the
picture," JPMorgan said.

 

"Russia's large current account surplus could have accommodated large
capital outflows, but with accompanying CBR and SWIFT sanctions, on top of
the existing restrictions, it is likely that Russia's export earnings will
be disrupted, and capital outflows will likely be immediate."

 

Several Russian banks have been barred from the SWIFT global financial
network that facilitates transfers between banks.

 

As households and businesses in Russia have rushed to convert the falling
rouble into foreign currency, banks raised rates for foreign currency
deposits to attract those flows.

 

Russia's largest lender Sberbank (SBER.MM) is offering to pay 4% on deposits
of up to $1,000, while the largest private lender Alfa Bank is offering 8%
on three-month dollar deposits. For rouble deposits, Sberbank offers a 20%
annual return.

 

Sberbank said on Wednesday it was quitting almost all European markets,
blaming big cash outflows and threats to its staff and property, after the
ECB ordered the closure of its European arm. read more

 

The bank's London-traded shares fell to 4.5 cents from $16 at the start of
the year.

 

A U.S.-traded ETF of Russian companies and others heavily exposed to Russia
fell 13% on Wednesday, for a 72% drop since mid-February.

 

Moscow calls its actions in Ukraine a "special operation" that it says is
not designed to occupy territory but to destroy its neighbour's military
capabilities and capture what it regards as dangerous nationalists.

 

Register now for FREE unlimited access to Reuters.com

 

The Thomson Reuters Trust Principles.

 

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold price falls over 1% as uptick in risk sentiment drives down havens

Gold prices dropped from their highest in over a year on Wednesday as risk
sentiment was buoyed by reports that Russia is ready to hold a new round of
talks with Ukraine.

 

 

Spot gold declined 1.5% to $1,915.72/oz by 12:10 p.m. ET, still holding near
a 13-month high. US gold futures fell 1.3% to $1,919.90/oz on the Comex,
which saw a spike in trading volume that led to a $17 decrease within the
span of a minute.

 

Meanwhile, US equities gained and bond yields edged higher after Federal
Reserve Chair Jerome Powell signaled interest rate hikes could start this
month despite uncertainties surrounding the military conflict in Ukraine.

 

Bullion is coming off its best monthly performance since May amid mounting
concern that the raft of sanctions against Russia could dim the outlook for
global growth and further stoke inflation. The metal has edged higher again
so far in March, despite the latest blip.

 

Analysts told Reuters that gold’s moves may have been driven by a large sell
order, though it was not clear who or what prompted the move.

 

Meanwhile, Commerzbank analyst Daniel Briesemann noted that gold prices
could go up despite a US rate hike in March as “everything is dependent on
how the Russia-Ukraine conflict develops.”

 

Gold-backed exchange-traded funds continued to increase their holdings over
recent weeks, adding 14 tonnes on Tuesday in the biggest daily inflow in
more than a month, according to an initial tally by Bloomberg.

 

Threats to supplies of grain, energy and metals are adding to price
pressures, with a Bloomberg index of commodities jumping the most since 2009
to a record high. Gold is widely viewed as a hedge against inflation.

 

Traders are now dialing down rate-hike bets, including pricing out any risk
of a half-point March liftoff by the Fed, according to the Bloomberg report.

 

(With files from Bloomberg and Reuters)

 

 

Copper, nickel prices spike as Europe scrambles for metal

On Wednesday, copper prices continued to rise with May futures jumping to a
high of $4.7050 a pound ($10,373 a tonne) in New York, levels last seen
during the bellwether metal’s October spike – in sight of record territory.

 

 

Aluminum hit a record high of $3,590 a tonne and the price of nickel raced
to an 11-year peak above $25,000 a tonne.

 

Concerns about supply disruption and low global stockpiles are behind the
move higher, trumping concerns over the impact of the Ukraine invasion on
global growth, rising interest rates in the developed world and a slowing
economy in China.  

 

Chile, responsible for more than a quarter of global copper production,
recorded its lowest January output since 2011, government figures showed on
Monday.  

 

While warehouse inventories have been rising in China as the country’s
copper refiners, responsible for more than half the world’s output, restock,
global levels remain stressed. In February, global copper inventories held
by LME, Shanghai Futures Exchange and Comex in New York fell to just 200,000
tonnes – scarcely enough to cover three days of global consumption.

 

Russian disruption

“There are more signs that geopolitical risks have turned into supply
disruptions,” investment bank ING said in a report quoted by Shanghai Metals
Market, after the world’s three largest container shipping companies
suspended shipments to Russia.

 

ING said there are signs metal flows in Russia are increasingly limited due
to transport problems.

 

Rusal is the biggest aluminum producer outside of China and Norilsk accounts
for about 10% of refined nickel output globally.  Global nickel stockpiles
are at their lowest levels since 2019. 

 

Bloomberg reports supplies are especially tight in Europe and spiking
premiums for cash metal in Europe had prompted traders to switch to
break-bulk vessels to ship metal all the way from warehouses in Malaysia’s
Port Klang –even before the war broke out:

 

“Large volumes of aluminum as well as copper flow regularly from St.
Petersburg in Russia to the European ports of Rotterdam and Vlissingen and
are at threat of disruption as the chaos in shipping markets spreads.”

 

 

 

 

 

 


 

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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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
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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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