Bulls n Bears Daily Market Commentary : 28 March 2022

Tue Mar 29 07:39:22 CAT 2022

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Bulls n Bears Daily Market Commentary : 28 March 2022

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ZSE commentary

The ZSE shares opened this week near flat with a marginal loss in a mixed
trading session. Activity levels were at 488 trades. Delta was the most
active stock at 36 trades followed by Star Africa and Innscor at 32 and 27
trades respectively. Investor sentiment was positive after the session
yielded 22 gainers against 10 fallers while eight (8) of the active stocks
remained unchanged. NMB Holdings anchored volume aggregate trading 2,107,500
shares and Delta anchored value aggregate with a value of ZW$36.87 million.
The All-Share Index shaded 0.05% to close at 15,574.66 points. The Top 10
Index shaded 0.27%. The Top 15 Index shaded 0.18%. The Medium Cap Index was
up by 0.79% to 25,896.30 points whilst the Small Cap Index added 2.00% to
407,683.19 points.

Leading the risers pack of the day was Proplastics and Nampak closed 16.45%
and 11.92 higher respectively. Zimpapers was up by 10.68%. CBZ Holdings
added 10.56% and African Sun added 5.09%. Mitigating the gains were losses
in National Foods and First Mutual Properties  which shaded 10.29% and 7.03%
respectively. Mashonaland Holdings was down by 4.55%. Tanganda and First
Capital Bank  shaded 3.04% and 2.49% respectively. The ETFs traded 624,479
units worth ZW$1,350,930.9 in 184 trades. The Old Mutual Top 10 ETF shaded
16.93% to close at 886.50c while the Morgan and Co Multi Sector ETF added
1.37% to close at 1430.78c. The Datvest MCSI ETF added 2.06% to close at
179.21c. On the VFEX, Bindura traded 351,639 shares to close at US 6.00
cents up 16.73%.wealthaccesssecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

S.Africa's rand pulls back as dollar firms, markets slightly down

(Reuters) - South Africa's rand retreated from a five-month high against the
dollar on Monday as the greenback strengthened, with China's re-imposition
of a lockdown in Shanghai impacting risk taking.

At 1608 GMT, the rand traded at around 14.7006 against the dollar, 1.01%
weaker than its close on Friday when it touched 14.4738, the strongest level
since Oct. 21, after the central bank raised the repo rate.

"(The rand) has now reached its short-term technical support level around
the 14.5000 level, where it has met with USD buying interest - this as the
situation in Ukraine continues and the Chinese continue to battle another
wave of COVID-19 infections," Nedbank analysts wrote in a note.

Shanghai, China's financial hub, went into a lockdown on Sunday as
authorities ordered a two-phased shutdown, with firms and factories to
suspend manufacturing, or work remotely during the nine-day period in order
to carry out COVID-19 testing. read more

Investor focus was also on peace talks between Russia and Ukraine set to
take place in Turkey this week.[nL2N2VV0AC]

Shares on the Johannesburg Stock Exchange (JSE) marginally fell from their
Friday close as investors sat on the fences awaiting clarity on where the
Russia-Ukraine war and peace talks between the two sides were headed.

The benchmark index (.JALSH) closed down 0.18% to 74,194 points, while the
blue-chip index (.JTOPI) ended down 0.21% to 67,436 points.

The local stock market, which has found favour with foreign investors since
February as they turned away from Russia, has had a largely whipsaw month
driven by the rise and fall in commodity prices, amid inflationary
pressures.

"By far, inflation is still a bigger concern for the stock market than the
Russia-Ukraine war," said Wayne McCurrie, portfolio manager with FNB.

He said while it was hard to predict the course for inflation, a resolution
to the Ukraine conflict could ease prices and that could bring commodity
stocks under pressure.

Government bonds also weakened, with the yield on the benchmark 2030
maturity down 3.5 basis points to 9.655%.

The Thomson Reuters Trust Principles.

Nigeria

Naira loses at official market

Naira fell slightly against the U.S. dollar at the official market on
Monday, extending the currency's depreciation to two successive business
days.

This occurred as the foreign exchange supply skyrocketed significantly.

The naira closed at N416.60 to a dollar at the close of business Monday,
data published by FMDQ where forex is officially traded showed.

This represents N0.27 or 0.10 per cent depreciation from N416.33 it traded
in the previous session on Friday last week.

By implication, this is the weakest new rate the naira touched at the
over-the-counter market in the past two weeks.

The domestic currency experienced an intraday high of N410.00 and a low of
N444.00 before closing at N416.33 on Monday, the same range it revolved
before the close of business last week Friday.

Forex supply plummeted by 68.9 per cent with $202.06 million posted on
Monday as against the $119.64 million recorded in the previous session on
Friday last week.

In Uyo, black market traders exchanged the naira at N584.00 and sold within
the range of N587.00 and N589.00 to a dollar on Monday.

Likewise, currency dealers at the Abuja street market said the currency was
exchanged at N583.00 and sold at N586.00 to a dollar at the close of
business on Monday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar hits 6-year high vs yen as BOJ moves against rising bond yields

(Reuters) - The dollar hit a six-year high versus the yen after the Bank of
Japan moved to contain rising bond yields, while U.S. Treasury yields soared
to new multi-year highs, highlighting a divergence between the BOJ and other
major central banks.

Treasury 10-year yields vaulted above 2.5% to three-year highs , with the
U.S. Federal Reserve expected to deliver a half-point interest rate rise in
May as it tackles rising inflation, having kicked off its tightening cycle
this month. read more

"We now expect the FOMC to hike by 50 bps at the next two meetings before
shifting back to a 25-bps-per meeting cadence for the reminder of the year,"
said Michael Gregory, deputy chief economist at BMO Capital Markets
Economics.

Interest rate hike expectations helped lift the dollar to its highest in two
weeks against a basket of six major peer currencies, last up 0.313% at
99.158, at 3:20 p.m. Eastern Standard Time (1920 GMT).

Against the yen, the dollar surged as much as 2.5% to its highest level
since August 2015 and the biggest one-day rise since March 2020. Yen losses
in March surpass 7% and the currency is set for its biggest monthly and
quarterly falls since 2016. The dollar was last up 1.34% against the
Japanese currency at 123.715 yen.

Struggling to swim against the tide lifting interest rates higher globally,
the BOJ staunchly defended its 0.25% yield cap on Monday by offering to buy
an unlimited amount of government bonds (JGBs) for the first four days of
this week.

While that did not stop 10-year yields hitting the upper limit of the BOJ's
policy band, it sent the yen spiralling.

"On net, JGBs mostly shook off what was just a repeated gesture to defend
the 10-year yield ceiling but the signal toward expanding money supply
contributed to yen softness alongside the more dominant Federal Reserve
effects on the dollar," said Derek Holt, head of capital markets economics
at Scotiabank Economics.

Big energy import bills and the loss of tourism revenues mean "the weight on
the yen is likely to remain for the next year," said Colin Asher, senior
economist at Mizuho.

The Japanese currency also lost ground against the euro, which is
increasingly underpinned by expectations the European Central Bank will join
the rate hike club this year.

The euro gained 1.27% to 135.895 yen, a four-year high.

The euro edged up 0.03% against the greenback to 1.0984 . The single
currency's fortunes this week could be determined by inflation figures from
major European economies, with the bloc's harmonised HICP inflation seen
edging up to 6.5% in March.

Analysts at Monex said given the yen's weakness and risks to the euro from
the Ukraine-Russia conflict, the dollar would likely stay buoyant,
especially if Friday's jobs data proved strong.

"Should wage growth continue to tick up despite the recent increase in
labour supply, money markets are likely to fully price two 50 bp hikes from
the Fed in May and June," they added.

In commodity currencies, the Australian dollar dipped 0.33% to $0.74895, but
was not far off its recent four-month high.

In cryptocurrencies, bitcoin rose 2.53% to a year-to-date high of
$48,050.90.

It bitcoin holds above $47,000, it could be in for a major breakout, said
Edward Moya, senior analyst at Oanda.

"Once bitcoin crosses the $50,000 level, that should trigger further retail
and institutional interest," he said.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price falls 1% as higher dollar, yields curtail safe haven demand

Gold prices slumped on Monday as both the US dollar and Treasury yields
strengthened, sapping demand for the safe haven asset after last week's
gain.

Spot gold fell 1.1% to $1,935.48 an ounce by 11:45 a.m. ET, erasing most of
its gains from the last two sessions. US gold futures were down 1.0% to
$1,935.00 per ounce in New York.

Meanwhile, both the dollar index and US bond yields rose, driven by
expectations that the US Federal Reserve will lead an aggressive wave of
global central bank tightening.

The 10-year Treasury yields earlier moved past 2.5%, above a technical trend
line that has served as a ceiling since the late 1980s, and are now at their
highest since April 2019.

Wall Street banks increasingly expect the Fed to raise interest rates more
aggressively than policymakers are projecting, with Citigroup economists now
seeing four straight half-point moves amid persistent inflation. Money
market traders see four smaller increases by the European Central Bank
within a year.

"Weaker gold price can be attributed to the US dollar, which is continuing
to appreciate. And on the other hand, bond yields are climbing further,"
Daniel Briesemann, an analyst at Commerzbank AG, told Bloomberg.

Still, bullion is up almost 6% this year as Russia's invasion of Ukraine
continues to bolster demand for safe havens. Holdings in exchange-traded
funds backed by the metal rose for a 10th straight week.

Jim Wycoff, senior analyst at Kitco Metals, told Reuters that he does not
see a "serious downside price pressure for any of the (metal) markets in the
near term because of inflation worries."

"Anytime we have inflationary pressures like we're seeing now, history shows
that the metals markets have been sought after and I suspect that's going to
continue to be the case," he added.

Oil slides more than 8% as Shanghai lockdown prompts demand fears

Oil prices dropped more than 8% at one point on Monday as new lockdowns in
Shanghai prompted fears of a slowdown in demand.

"Today's price slide is attributable first and foremost to concerns about
demand now that the Chinese metropolis of Shanghai has entered into a
partial lockdown," said Commerzbank.

China is the world's largest oil importer.

Another round of peace talks between Russia and Ukraine also weighed on
prices.

Oil declined more than 8% at the lows of the day on Monday as concerns over
new lockdowns in China and the potential impact on demand sent prices
tumbling.

West Texas Intermediate crude futures, the U.S. oil benchmark, slipped 8.25%
to trade at $104.50 per barrel. International benchmark Brent crude traded
7.4% lower at $111.61 per barrel.

However, both contracts recovered some losses during afternoon trading on
Wall Street. WTI ended the day at $105.96 for a loss of about 7%. Brent
settled 6.77% lower at $112.48 per barrel.

"Today's price slide is attributable first and foremost to concerns about
demand now that the Chinese metropolis of Shanghai has entered into a
partial lockdown," Commerzbank said Monday in a note to clients.

China is the world's largest oil importer, so any slowdown in demand will
weigh on prices. The nation uses around 15 million barrels per day, and
imported 10.3 million barrels per day in 2021, according to Andy Lipow,
president of Lipow Oil Associates.

"The magnitude of [the] sell-off reflects fears that Covid lockdowns in
China could spread, significantly impacting on demand at a time when the oil
market is trying to find alternatives to Russian oil supplies," Lipow said
Monday.

Another round of peace talks between Ukraine and Russia is slated for this
week, which Commerzbank said was also contributing to oil's slide.

Crude is coming off its first positive week in the last three, with WTI and
Brent ending the week 8.79% and 10.28% higher, respectively.

The oil market has been marked by heightened volatility since Russia's
invasion of Ukraine at the end of February. Prices shot above $100 per
barrel the day of the invasion and kept climbing. WTI topped $130, rising to
its highest level since 2008, while Brent almost reached $140.

But prices didn't remain there for long, and on March 14 WTI traded under
$100. The volatile action reflects, in part, the many unknowns around the
future of Russia's oil.

The International Energy Agency warned that three million barrels per day of
Russian oil output is at risk come April as Western sanctions prompt buyers
to shun the nation's oil. But analysts have noted that Russian oil is still
finding buyers for the time being, especially from India.

Traders say the recent volatility also stems from non-energy market
participants using crude as an inflation hedge. In recent weeks, open
interest has decreased, making the market susceptible to even larger
intraday swings.

Despite Monday's slide, oil held above $100.

"We still expect that Brent crude will continue to rally as the market
continues to price in a rise in energy supply risk amid immense supply
disruptions," TD Securities said Monday.

"The right tail in energy markets is still fat... The set-up is still ripe
for higher energy prices," the firm added.

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
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