Bulls n Bears Daily Market Commentary : 03 March 2022

Thu Mar 3 16:51:31 CAT 2022

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Bulls n Bears Daily Market Commentary : 03 March 2022

ZSE commentary

The ZSE stocks closed with marginal losses in an unimpressive trading session. Activity levels was at 411 trades. Econet was the most active stock at 30 trades followed by Star Africa and OK Zimbabwe at 29 and 26 trades respectively. Investor sentiment was negative after the session yielded 18 decliners against 14 risers while six (6) of the active stocks remained unchanged. Axia anchored volume aggregate trading 539,000 shares and Innscor anchored value aggregate with a value of ZW$32.18 million. 

The All-Share Index shaded 0.11% to close at 15,087.00 points. The Top 10 Index shaded 0.13%. The Top 15 Index shaded 0.12%. The Medium Cap Index was up by 0.05% to 24,339.78 points whilst the Small Cap Index added 0.10% to 402,764.46 points. Leading the risers pack of the day was African Sun closed at 900c and First Mutual Properties was up by 7.81%. African Distillers added 7.32% and Mashonaland Holdings added 6.15% to 318.46c. FBC Holdings was up by 3.33%. Mitigating the gains were losses in RTG and ZB Holdings which shaded 15.36% and 6.35% respectively. Zimre Holdings was down by 4.01%. Proplastics and Nampak shaded 3.57% and 2.60% respectively. The ETFs traded 229,131 units worth ZW$2,058,292.10 in 84 trades. The Old Mutual Top 10 ETF shaded 4.46% to close at 851.99c while the Morgan and Co. Multi Sector ETF shaded 3.92% to close at 1,393.35c.wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand trades weaker against the US dollar, sheds previous gains 

The rand traded lower early on Thursday, shedding gains from the previous session, with traders turning cautious that Russia's invasion of Ukraine could dampen economic growth.

At 0642 GMT, the rand traded at 15.3360 against the dollar, around 0.2 percent weaker than its previous close. The currency had touched 15.2825 on Wednesday as strong commodity prices offered support.

"With the war still tentatively poised, I can't see a reason to be overly bullish risky assets just yet, despite the commodity play," Warrick Butler, chief trader at Standard Bank, wrote in a note.

"There is still too much uncertainty, although at least we now know the cards the Fed is holding in their hands."

US Federal Reserve Chair Jerome Powell said on Wednesday the central bank would begin "carefully" raising interest rates this month but was ready to move more aggressively if needed – more or less the scenario traders have priced in.

In fixed income, the yield on the benchmark 2030 government bond was up 2.5 basis points to 9.57 percent, reflecting weaker prices. REUTERS

Nigeria

Naira Appreciates by 0.17% at P2P Market

The Naira appreciated against the Dollar at the Peer-2-Peer (P2P) window of the foreign exchange (FX) market on Wednesday by 0.17 per cent or N1 as it sold at N575/$1 compared with N576/$1 it was traded on Tuesday.

Equally, at the midweek session, the Naira appreciated against the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange market by 0.04 per cent or 17 kobo to trade at N416.50/$1 compared with N416.67/$1.

The trading session, however, saw a fall in turnover as $102.07 million was recorded as against the $121.54 million achieved at the preceding session, indicating a $19.47 million or 16.0 per cent decline in the daily turnover.

For yet another session, the local currency remained flat against the British Pound Sterling currency at it stayed at N558.23/£1 and against the Euro, the domestic currency closed flat at N466.37/€1.

At the cryptocurrency market, investors counted more losses as eight of the 10 digital assets were in the negative territory, leaving two in the green territory as Dash (DASH) appreciated by 2.2 per cent to trade at N57,229.10, while the US Dollar Tether (USDT) grew by 0.2 per cent to sell for N585.92.

Solana (SOL) saw a 2.7 per cent depreciation to sell at N57,816.19, Cardano (ADA) declined by 2.3 per cent to trade at N542.21, Litecoin (LTC) saw its value drop 1.8 per cent to sell at N64,759.52, Dogecoin (DOGE) made a 1.4 per cent loss to close at N77.5, Ripple (XRP) depreciated 1.0 per cent to close at N441.27, Bitcoin (BTC) recorded a 0.9 per cent loss as it traded at N24,799,000, Ethereum (ETH) fell by 2.1 per cent to trade at N1,708,773.00, while Binance Coin (BNB) retreated by 0.6 per cent to N169,463.98.

 <mailto:info at bulls.co.zw> 

Global Markets

Euro falls to lowest since 2016 vs sterling, Aussie dollar shines

LONDON- The euro slid to its lowest level in almost six years against Britain's pound and was pinned near 21-month lows versus the dollar as a fresh surge in energy prices heightened worries about the euro area economic outlook.

With Brent crude hitting a nine-year high above $119 per barrel, a dash for resources also gave commodity-linked currencies a lift, with Australia's dollar climbing to its highest since November.

But it was the euro that took the spotlight as it fell to 82.76 pence as London trade got underway. That was the lowest level against sterling since July 2016.

The single currency was down a third of a percent at $1.1083 , holding near Wednesday's low of $1.1058, its lowest since May 2020. It is down 1.5% for the week so far and is heading for a fourth consecutive weekly loss against the U.S. dollar.

"It's still going down," said Kit Juckes, chief global currency strategist at Societe Generale in London, referring to the euro. "Look at gas prices. This is the clinch point in terms of the economic impact of the war, and it is going to hurt."

Euro zone inflation hit a record high of 5.8% last month, data on Wednesday showed. The problem for the European Central Bank, which meets next week, is that while the war in Ukraine is likely to boost inflation further, it is a negative for both growth and inflation in the longer term.

The Australian dollar rose to its highest since mid-November at $0.7323 and was last up 0.2%, as prices for Australian exports such as coal, gas and grains soar on signs that sanctions against Russia are severely disrupting global supplies.

"Soaring commodity prices means commodity-focused currencies not directly linked to the escalating geopolitical tensions like the Aussie and the Kiwi are doing well," said Aaron Hurd, senior portfolio manager, currency, at State Street Global Advisors.

The New Zealand dollar held near Wednesday's one-week top of $0.6798.

And the dollar appeared well-supported after Federal Reserve Chair Jerome Powell said on Wednesday the central bank would begin "carefully" raising interest rates this month, but was ready to move more aggressively if needed.

The dollar index was up 0.1% and the dollar itself was almost a quarter of a percent firmer at 115.79 yen , while sterling slipped 0.13% to $1.3387.

Canada's dollar meanwhile rose to a five-week high of C$1.25870 per dollar, a day after the Bank of Canada's first interest rate hike since 2018.

Elsewhere, the Russian rouble slid to a fresh record low at around 118.35 in Moscow trade after ratings agencies Fitch and Moody's downgraded Russia to "junk" status, citing the impact of Western sanctions.

Hungary's forint was weaker but holding below Wednesday's record lows against the euro as the country's central bank raised its one-week deposit rate NBHK by 75 basis points to 5.35% at a weekly tender on Thursday. That was the biggest rate hike since 2008 as the war in Ukraine roiled Hungarian markets.

Bitcoin edged lower to around $43,447 as an early-week bounce lost steam.

 <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)

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!

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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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