Bulls n Bears Daily Market Commentary : 15 March 2022

Tue Mar 15 21:47:44 CAT 2022

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Bulls n Bears Daily Market Commentary : 15 March 2022

ZSE commentary

The ZSE shares continues slipping further ahead of the March 26 by elections with both volume and turnover declining in today’s session. Activity levels were at 352 trades. Delta was the most active stock at 55 trades followed by Star Africa and Simbisa at 19 and 18 trades respectively. Investor sentiment was strongly negative after the session yielded 25 decliners against 4 risers while five (5) of the active stocks remained unchanged. Star Africa anchored volume aggregate trading 780,500 shares and Hippo anchored value aggregate with a value of ZW$95.33 million.

The All-Share Index shaded 1.18% to close at 14,362.66 points. The Top 10 Index shaded 1.22%. The Top 15 Index shaded 1.10%. The Medium Cap Index was down by 1.18% to 24,116.02 points whilst the Small Cap Index added 0.37% to 399,545.47 points. Leading the risers pack of the day was Proplastics closed 6.66% higher and Mashonaland Holdings was up by 4.44%. Turnall added 4.17% and Simbisa added 0.35% to 18,070.03c. Mitigating the gains were losses in NMB Holdings and Zimre Holdings which shaded 11.69% and 7.03% respectively. Medtech Holdings was down by 6.91%. African Sun and African Distillers (AFDIS.zw) shaded 6.58% and 6.38% respectively. The ETFs traded 991,562 units worth ZW$1,904,144.14 in 186 trades. The Old Mutual Top 10 ETF shaded 0.84% to close at 793.74c while the Morgan and Co Multi Sector ETF shaded 2.88% to close at 1416.36c. The Datvest MCSI ETF shaded 7.95% to close at 173.01c. On the VFEX, Bindura traded 240,369 shares to close 0.05% higher at US 5.42 cents.wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand firm, focus on Fed meeting

(Reuters) - South Africa's rand firmed slightly on Tuesday, as the market's attention turned to this week's U.S. Federal Reserve meeting where an interest rate hike is expected.

At 1516 GMT, the rand traded at 15.1082 against the dollar, 0.1% stronger than its previous close.

The Fed is set to raise rates for the first time since the pandemic at its meeting, which concludes Wednesday, with traders looking for indications about the pace of future rate hikes.

"Tomorrow's FOMC (Federal Open Market Committee) rate decision is what everyone will be waiting for and so I guess there will be quite a lot of water treading whilst one eye will be kept on the headlines ticker," Warrick Butler, chief trader at Standard Bank, wrote in a note.

Traders also expected risk appetite to be kept in check by the Russia-Ukraine crisis, and a retreat in recent commodity price highs.

In fixed income, the yield on the benchmark 2030 government bond was down 4 basis points to 9.785%.

The benchmark all-share index (.JALSH) closed down 1.85% at 70,576, extending declines from its record high of 77,536 on March 2. The bluechip top-40 index (.JTOPI) ended down 1.92% at 64,245.

Shares in Chinese tech giant Tencent (0700.HK), which South African tech investor Naspers Ltd has a large stake in, fell for a third day in Hong Kong.

The Wall Street Journal reported on Monday that Tencent could be fined hundreds of millions of yuan for violating some central bank regulations on WeChat Pay, its mobile network. read more

Naspers fell 3.7%, while Prosus , the Amsterdam- and JSE-listed company through which Naspers holds up to 28.8% in Tencent, dropped 6.4%. Naspers and Prosus together account for over 7% of the benchmark index.

The Thomson Reuters Trust Principles.

Nigeria

Naira Depreciates Further to N578/$1 at P2P FX Window 

The Naira further depreciated at the Peer-2-Peer (P2P) window of the foreign exchange (FX) market on Monday by N1 against the United States Dollar to close at N578/$1 compared with N577/$1 it was traded last Friday.

However, at the spot market or the Investors and Exporters (I&E) window, the local currency closed flat against the American currency at N416.50/$1.

Against the British currency, the Pound Sterling, the domestic currency appreciated by N3.09 to trade at N542.68/£1 compared to the previously traded rate of N545.77/£1.

This was repeated against the Euro at the market segment yesterday as the Nigerian currency appreciated by N2.71 to settle at N455.80/€1 in contrast to the preceding day’s N458.51/€1.

At the cryptocurrency market, investors counted more losses as seven of the 10 digital coins tracked by Business Post were in the negative territory, with Dogecoin (DOGE) recording the biggest loss after it dropped 1.5 per cent to trade at N68.69.

Cardano (ADA) went down by 1.3 per cent to sell for N480.85, Ripple (XRP) declined by 0.9 per cent to trade at N438.52, Ethereum (ETH) fell by 0.7 per cent to close at N1,537,153.00, Solana (SOL) decreased by 0.5 to trade at N48,272.73, Binance Coin (BNB) retreated by 0.3 per cent to N152,346.21, while the US Dollar Tether (USDT) contracted by 0.1 per cent to close at N596.97.

On the flip side, Dash (DASH) rose by 1.6 per cent to sell at N55,958.59, Litecoin (LTC) moved up by 1.5 per cent to trade at N62,611.50 and Bitcoin (BTC) appreciated by 0.7 per cent to N23,921,519.00.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar firms as oil prices moderate, taking momentum from euro

(Reuters) - The U.S. dollar index recovered after falling on Tuesday as volatile oil prices impacted the euro and markets grappled with the significance of talks between Russia and Ukraine and indications that COVID lockdowns will crimp economic growth in China.

The dollar index against major currencies was up less than 0.1% in the New York afternoon as markets awaited statements on Wednesday from the U.S. Federal Reserve after a meeting on monetary policy.

The euro was last down less than 0.1% to $1.0933 after having been up nearly 0.5%. The British pound was up 0.2% to $1.3027.

The Japanese yen continued trading at its weakest levels to the dollar in five years as the greenback gained 0.1% to 118.335 yen.

The dollar index had lost nearly 0.5% overnight after oil prices fell below $100 a barrel, bolstering the euro. The index recovered after oil turned up from a low for the day and was last at $99.14, up 3% since Russia invaded Ukraine on Feb. 24.

Brent crude futures dropped as much as 8% after concerns over supply were eased by ongoing Ukraine ceasefire talks and as rising COVID-19 cases in China suggested slower economic growth and less demand for oil. read more

The European economy and the single currency are especially sensitive to the war and to the price of oil.

"This (the drop in oil price) reflects the hope that the talks between the Russian and Ukrainian negotiators might lead to an imminent and peaceful solution after all," Commerzbank forex analysts said in a note to clients.

Early in the day, major currency pairs had been relatively steady as markets waited to hear on Wednesday the tone of U.S. Federal Reserve comments on interest rate policies in coming months.

Traders want to see if the Fed gives hints to how quickly it will raise rates again after putting through the quarter-point increase they expect to be announced on Wednesday.

"The path that the Fed lays out for the rest of the year is going to be more interesting than the actual rate hike itself," said Minh Trang, senior FX trader at Silicon Valley Bank.

The Fed's policy statement and economic projections are due at 2 p.m. EDT (1800 GMT) and will be followed by a press conference. The central bank's effort to bring down surging inflation without triggering a recession is being challenged further by the impact of the Ukraine war. read more

Ukraine President Volodymyr Zelenskiy said on Tuesday that Kyiv was prepared to accept security guarantees that stop short of its long-term objective of the NATO alliance membership, which Moscow opposes. Peace talks with Russia, via video link, resumed on Tuesday, the first time a round of talks ran into a second day. read more

The dollar's rise since May last year makes the tone of Fed comments on Wednesday more important.

Its recent gains have come on its safe haven status during the Ukraine war and on expectations that U.S. interest rates will rise faster than rates on other currencies. The Bank of Japan, for example, is not expected to raise interest rates when it meets on Friday. read more

"The dollar is at pretty high levels. We would need a hawkish surprise from the Fed to see a further rise, but I think the bar is quite high for that," Matthew Ryan, senior market analyst at Ebury, said.

"It will be difficult for the dollar to stage any meaningful rally after the Fed policy meeting."

In cryptocurrencies bitcoin and ether were less than 1% changed for the day with bitcoin at $39,350 and ether at $2,604.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price extends decline ahead of Fed policy meeting

Gold prices declined for a third consecutive day as commodities continued a rout ahead of a key US Federal Reserve meeting, where policy makers are expected to raise interest rates.

Spot gold fell 1.4% to $1,925.42 per ounce by 12:15 p.m. ET, erasing most of its gains for the past two weeks. US gold futures plunged 1.8% to $1,925.80 per ounce in New York.

Gold’s reversal comes days after rallying to within just $5 of a record high, as Russia’s invasion of Ukraine caused commodities to surge, threatening a combination of low growth and high inflation. Prices of key products including oil have cooled since then, easing those concerns.

Bullion has risen this year in part because of its appeal as a hedge against higher consumer prices. Months of speculation about a new wave of rate hikes look to be coming to a head on Wednesday, when the US central bank is expected to begin tightening in order to rein in inflation.

A report Tuesday showed prices paid to US producers rose strongly in February on higher costs of goods, underscoring inflationary pressures that set the stage for a Fed rate increase this week. 

“Gold prices have moved lower in the past three days mainly because the oil prices have fallen,” which brings some good news that inflation may ease off a little, Naeem Aslam, chief market analyst at Ava Trade, said in a Bloomberg note.

“The first rate hike move from the US quite often signals a low point in gold, so we’ll see what kind of signal they send tomorrow, and how hawkish their statement is, which will probably determine the short-term outlook from here,” Saxo Bank analyst Ole Hansen told Reuters.-Bloomberg and Reuters

The silver price is testing a strong support zone

(Kitco News) - Silver has dropped back around 2% on Tuesday in the European session. The grey metal has had a pretty decent run of late pushing past the $27/oz hand but after the last week, the price has moved back to $24/80/oz today. With tensions between Russia and Ukraine high all of the major metals caught a bid. Now it seems there has been a retracement across the board as platinum, palladium, and gold have all moved lower. There are talks between Russia and Ukraine today and the upcoming Fed meeting to consider this week.

Looking closer at the daily silver futures chart below, The price is moving towards a big confluence area. The downward-sloping trendline which was previously broken to the upside is about to be retested. There is also the green area which was a previous consolidation wave high and low volume node on the volume profile indicator close by. These three factors mean the $24.60/oz area could be sticky for the bears and might provide some support as the market heads into the U.S. open.

If the price does drop below the zone then the middle of the next distribution could be next up. The black line at $23.39/oz looks firm as the price has stalled there on four occasions on this chart alone. Then the main area is the consolidation low on the chart at the blue shaded area. The price is pretty far from that zone and the bulls still seem to be in charge for now as the price is still making higher high and higher low price waves.

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 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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