Bulls n Bears Daily Market Commentary : 22 March 2022

Tue Mar 22 15:11:53 CAT 2022

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Bulls n Bears Daily Market Commentary : 22 March 2022

ZSE commentary

The ZSE shares firmed in the positive as heavyweight counters continue
lifting the bourse. Activity levels were higher at 615 trades. Econet was
the most active stock at 69 trades followed by Delta and Simbisa at 51 and
39 trades respectively. Investor sentiment was flat after the session
yielded 19 risers against 19 fallers while six (6) of the active stocks
remained unchanged. Econet anchored volume aggregate trading 2,093,000
shares and Delta anchored value aggregate with a value of ZW$299.02 million.
The All-Share Index added 2.51% to close at 15,854.72 points. The Top 10
Index added 3.32%. The Top 15 Index added 2.93%. The Medium Cap Index was up
by 0.13% to 25,104.79 points whilst the Small Cap Index shaded 2.23% to
383,004.29 points. Leading the risers pack of the day was Art Corporation
closed 18.75% higher and National Foods was up by 15.60%. Proplastics added
8.85% and NMB Holdings added 8.36% to 1,273.21c. Mitigating the gains were
losses in Ariston Holdings and Star Africa which shaded 9.00% and 8.63%
respectively. Zimpapers was down by 7.42%. African Distillers and General
Beltings Holdings  shaded 5.77% and 5.54% respectively. The ETFs traded
2,982,475 units worth ZW$5,436,784.61 in 140 trades. The Old Mutual Top 10
ETF added 16.42% to close at 921.32c while the Morgan and Co Multi Sector
ETF shaded 1.75% to close at 1370.66c. The Datvest MCSI ETF added 0.05% to
close at 168.92c.wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand weakens as US rate-hike bets lift dollar

In early trade the rand was at R14.96 against the dollar, around 0.4% weaker
than its previous close.

The rand weakened against a stronger dollar early on Tuesday as investors
braced for more aggressive US rate hikes, with traders' focus also on local
interest rate decision and inflation data.

At 0615 GMT, the rand traded at R14.96 against the dollar, around 0.4%
weaker than its previous close.

The dollar strengthened after US Federal Reserve Chair Jerome Powell on
Monday delivered his most muscular message to date on his battle with
too-high inflation as he flagged a more aggressive tightening of monetary
policy than previously anticipated.

Higher rates in developed markets tend to drain capital from higher-yielding
but riskier emerging markets such as South Africa, weighing on their
currencies.

Focus at home was also on interest rates, with the South African Reserve
Bank set to announce its repo rate decision on Thursday.

The central bank is expected to hike its repo rate to 4.25% to try to
assuage inflationary risks, according to a Reuters poll of economists who
said prices could rise faster than they had expected before Russia's
invasion of Ukraine.

Ahead of that, Statistics South Africa will publish February consumer price
inflation numbers on Wednesday.

Government bonds also weakened, with the yield on the benchmark 2030
maturity rising 13 basis points to 9.785%.

Nigeria

Naira gains at official market

The local currency depreciated further at the black market.

Naira clinched a meagre gain against the U.S dollar at the official market
on Monday, extending appreciation run at the spot market segment to two
business days.

According to data published on the Central Bank of Nigeria's website, the
naira closed at N416.32 to a dollar at the close of business Monday. This
implies a N0.07 or 0.02 per cent appreciation from N416.39 it traded on
Friday last week.

In the past weeks, the currency has been considerably stable at the
over-the-counter window, with the naira trading within the range of N416.00
and above benchmark.

The lowest rate the naira exchanged hands with the greenback currency at the
official market last week was N416.45, the CBN data showed.

However, the local unit depreciated further at the parallel markets across
states in the country.

READ ALSO: Naira loses at official market

Currency exchangers in Uyo and Abuja said naira was exchanged at N582.00 and
sold at N585.00 to a dollar at the black market on Monday.

This is about N10.00 devaluation from N575.00 to a dollar range it exchanged
at the street market fortnight ago.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains ground after Powell comments

(Reuters) - The dollar strengthened against a basket of major currencies on
Monday, in the wake of comments from U.S. Federal Reserve Chair Jerome
Powell that opened the door for the central bank to take a more aggressive
monetary policy path.

The greenback had been fluctuating between slight gains and losses earlier
in the day, and weakened slightly after comments from Atlanta Federal
Reserve Bank President Raphael Bostic. The policymaker said he sees six rate
hikes this year and two for 2023, a more dovish stance than most of his
colleagues as he has concerns about the effects of the conflict between
Russia and Ukraine on the U.S. economy. 

But the dollar gained ground after Powell said the central bank must move
"expeditiously" to bring too-high inflation under control, and will, if
needed, use bigger-than-usual interest rate hikes to do so. 

"He keeps saying the same thing over and over, that we've got to get
inflation down and whatever it takes that's what we're going to do. The
market unfortunately is hanging on to old norms, that they'll just do a
quarter (of a percentage point) every time," said Sameer Samana, senior
global market strategist at Wells Fargo Investment Institute in St. Louis.

"The Fed is kind of rewriting that playbook - we may have to go every
meeting, we may have to do something more than 25 basis points, and we might
have to do rate hikes and quantitative tightening at the same time."

Markets have been volatile over the past month as the situation in Ukraine
has escalated, increasing the prices of commodities such as oil and putting
upward pressure on already high inflation.

The Fed raised its key interest rate by 25 basis points last week for the
first time since 2018 as it attempts to combat rising prices while trying to
avoid a policy error which could send the U.S. economy into recession.
Investors are now focused on the potential speed and size of future rate
hikes. 

The dollar index rose 0.123%, with the euro down 0.24% to $1.1022.

Ukraine defied a Russian demand that its forces lay down arms in the
besieged port city of Mariupol before dawn on Monday. 

While many central banks around the globe have been hiking rates, with the
Fed the latest to do so, the Bank of Japan on Friday maintained its massive
stimulus program and held rates steady, while warning of increased risks
from the Ukraine crisis to a delicate economic recovery. 

That disparity has served to weaken the yen, with the Japanese currency
trading near six-year lows versus the dollar despite its safe-haven status.

European Central Bank President Christine Lagarde said on Monday that the
Fed and ECB will also move out of sync, as the war in Ukraine has very
different impacts on their respective economies. 

The Japanese yen weakened 0.17% versus the greenback at 119.38 per dollar,
after touching 119.46 yen, its lowest level since February 2016.

Sterling was last trading at $1.3168, down 0.06% on the day.

In cryptocurrencies, Bitcoin last fell 1.84% to $40,973.32 while Ethereum ,
last fell 1.33% to $2,908.60.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold eases as U.S. Fed's plan to curb inflation lifts yields

(Reuters) - Gold prices fell on Tuesday, pressured by the U.S. Federal
Reserve head's hawkish approach to tackling inflation, which lifted Treasury
yields and the dollar.

Spot gold was down 0.5% to $1,925.83 per ounce by 1243 GMT. U.S. gold
futures fell 0.2% to $1,925.80.

Fed Chair Jerome Powell said on Monday the central bank must move
"expeditiously" to raise interest rates to rein in lofty inflation, possibly
"more aggressively", to keep an upward price spiral from getting entrenched.
read more

The yield on the benchmark 10-year U.S. Treasury note hit its highest since
May 2019, also pressuring non-interest yielding gold, as traders wagered on
big rate hikes from the Fed through the rest of the year.

Additionally, the dollar index was up 0.1% against its rivals, making gold
more expensive for holders of other currency.

Gold prices eased due to the precious metal's inverted correlation with the
U.S. dollar, ActivTrades senior analyst Ricardo Evangelista said in a note.

"The greenback strengthened as the 10-year Treasury yield reached 2.3% for
the first time since 2019," he said.

However, gold is taking Powell's comments relatively well due to support
from an overnight spike in crude oil prices, which is inflationary and hurts
growth, said Saxo Bank analyst Ole Hansen.

Analysts have also said economic and political risks linked to Russia's
invasion of Ukraine would continue to be closely monitored by the gold
market, with any big developments likely to trigger sharp price action in
either direction. read more

Rising gold exchange-traded fund holdings show that despite day-to-day price
fluctuations, asset managers are moving back into gold to diversify, and as
a hedge against inflation and an economic downturn, Ole Hansen added.

Spot silver fell 1.1% to $24.91 per ounce and platinum dropped 1.5% to
$1,021.39. Palladium dipped 2.2% to $2,527.16 per ounce.

Register now for FREE unlimited access to Reuters.com

Reporting by Bharat Govind Gautam in Bengaluru; Additional reporting by
Seher Dareen; Editing by Bernadette Baum and Jan Harvey

Our Standards: The Thomson Reuters Trust Principles.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

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