Bulls n Bears Daily Market Commentary : 04 May 2022

Thu May 5 11:34:50 CAT 2022

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Bulls n Bears Daily Market Commentary : 04 May 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

Market records marginal gains in mid-week session.

The market rebounded in Wednesday's trades, as three of the indices in our
review closed in the black. The All-Share Index gained 0.75% to close pegged
at 27839.98pts while, the old Industrials added an almost similar 0.76% to
end at 91855.41pts. The Blue-chip Index advanced 1.04% to 18485.18pts while,
on the contrary the Mid-Cap Index was the only loser amongst the indices as
it lost 0.09% to 45560.28pts. Agricultural concern CFI headlined the
gainers' list of the day as it jumped 15.00% to trade at $230.0000 while,
National Tyre Services was up 14.92% at $13.8000 on scrappy shares.
Logistics group Unifreight surged 13.13% to $33.9375 as Nampak ticked up
11.91% to end the day at $26.9955. Dairy manufacturer Dairibord capped the
top five winners' list on a 7.75% charge to settle at $55.0000.

Insurer First Mutual Holdings led the laggards of the day as it declined
14.77% to $19.8543 followed, by digital media group Zimpapers that trimmed
14.03% to $5.2133. Property concern Mashonaland Holdings reversed
yesterday's gains as it retreated 5.57% to $5.5243 while, Turnall shed 5.41%
to trade at $7.0000. Hotelier RTG capped the top five worst performers on a
4.79% slip to $7.6167. Activity aggregates enhanced in the session as
volumes traded rose by 46.53% to 4.11m shares while, turnover ballooned
298.80% to $689.08m. Tanganda, Econet, Zimpapers and OK Zimbabwe led the
volume leaders with respective contributions of 20.52%, 14,39%, 12.30% and
10.68%. Anchoring the value outturn were Tanganda, Econet, Delta and SeedCo
with a combined contribution of 83.87%. The three ETFs traded mixed in the
session as Datvest MCS rose 9.50%, Morgan & CO was up 5.24% and Old Mutual
Top Ten let go of 2.17%. On the VFEX, Bindura edged up 3.75% to US$0.0500 as
a total of 1.09m shares worth $54,035.4920 exchanged hands in the counter.
Elsewhere, Proplastics released FY21 results in which the company reported a
profit after tax of $233m which was a 70% uplift from prior comparable
period in inflation adjusted terms.-EFE Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand falls after Fed outcome

In early trade the rand was at R15.57 against the dollar, around 0.8% weaker
than its previous close.

The rand weakened in early trade on Thursday, as markets digested the US
Federal Reserve's decision to raise interest rates while striking a less
hawkish tone regarding future hikes.

At 0650 GMT, the rand traded at R15.57 against the dollar, around 0.8%
weaker than its previous close.

The US Federal Reserve raised rates by an expected 50 basis points, with its
Chair Jerome Powell ruling out large, aggressive interest rate hikes for the
year as the central bank seeks to contain inflation without triggering an
economic recession.

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

At home, continued power cuts also depressed sentiment.

State power utility Eskom was implementing another round of rotational power
cuts for a third day after breakdowns at generating units. The power cuts
have sapped South Africa's economic growth in recent years.

In fixed income, the yield on the benchmark government bond maturing in 2030
was down 5 basis points at 9.845%.

Nigeria

Naira Gains At Official Market

Naira gained by 0.2 per cent at the official window on Wednesday.

Naira recorded a significant gain against the U.S. dollar at the official
market on Wednesday, data published by FMDQ, where forex is officially
traded, showed.

The local unit which opened trading at N417.00 closed at N418.00 to a dollar
at the close of business on Wednesday-- the first business day after the
Eid-ul- fitr and worker's day break.

This implies a N1.00 or 0.2 per cent appreciation from N419.00 it exchanged
hands with the hard currency at the close of trade last week Friday.

The naira touched an intraday high of N410.00 and a low of N444.00 before
closing at N418.00 per $1 on Wednesday.

Forex supply increased by 2.61 per cent with $162.70 million recorded at the
close of business on Wednesday, against the $158.55 million posted in the
previous session on Friday last week.

Abuja and Uyo street market dealers exchanged the naira at N583.00 and
N586.00 to a dollar and sold at N586.00 and N588.00 per $1 on Wednesday
respectively.

Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar falls to one-week low as Powell pushes back against 75 bp hike

(Reuters) - The dollar fell to a one-week low against a basket of currencies
on Wednesday after Federal Reserve Chairman Jerome Powell played down the
prospect of a 75 basis point rate hike, even as he said the U.S. central
bank will act aggressively to stamp out inflation.

Powell said in a press conference following the Fed's policy statement that
the U.S. central bank is not actively considering a 75 basis point increase,
but that additional 50 basis point jumps should be on the table for the next
couple of meetings.  

It came after the Fed raised its benchmark overnight interest rate by 50
basis points, the biggest increase in 22 years, in a widely expected
decision.  

"The market was pricing in essentially a 50/50 chance that you see a 75
basis point hike by July, between June and July, and so I think the most
important takeaway here that I think the market was really fixated on, was
whether or not a 75 basis point hike is on the table, and he (Powell)
basically pushed back on that," said Mazen Issa, senior fx strategist at TD
Securities in New York.

The dollar index dropped sharply after Powell's comments, falling to a
one-week low of 102.48, before retracing back to last be at 102.62, down
0.76% on the day.

The U.S. central bank also said that its $9 trillion balance sheet would be
allowed to decline by $47.5 billion per month in June, July and August and
the reduction would increase to as much as $95 billion per month in
September.

Investors have been evaluating whether the rally that sent the dollar index
it to its highest level in 20 years last week has much further room to run
at least in the short-term, with much of the Fed's expected hawkishness
already priced into the market.

However, the Fed is expected to tighten policy more than peers. Europe, for
example, is struggling from weaker growth and energy disruptions due to
sanctions imposed on Russia after its invasion of Ukraine.

The euro rose to $1.0606, up 0.82% on the day, and is up from $1.0470 on
Thursday, which was the lowest since January 2017.

The U.S. dollar has also benefited from safe-haven flows as COVID-19
restrictions in China trigger concerns about global growth and new supply
chain disruptions.

Beijing shut scores of metro stations and bus routes and extended COVID-19
curbs on many public venues on Wednesday, focusing efforts to avoid the fate
of Shanghai, where millions have been under strict lockdown for more than a
month.  

The Aussie dollar outperformed for the second day, after the Reserve Bank of
Australia on Tuesday raised its cash rate by a surprisingly large 25 basis
points to 0.35%, the first hike in over a decade, and flagged more to come
as it pulls down the curtain on its massive pandemic stimulus.  

The Aussie gained 2.03% to $0.7241.

U.S. data on Wednesday showed that private employers hired the fewest
workers in two years in April amid persistent labor shortages and increasing
costs, which are hitting small businesses the hardest.  

This week's major U.S. economic release will be the government's jobs report
for April released on Friday.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Oil jumps $5 a barrel as EU nears ban on Russian oil

(Reuters) - Oil prices jumped on Wednesday, as the European Union, the
world's largest trading bloc, spelled out plans to phase out imports of
Russian oil, raising concerns about further market tightness as those
nations hunt for adequate supply.

Crude benchmarks have risen steadily over the past two months following
Moscow's invasion of Ukraine. Until now, the European Union has been
reluctant to fully cut off imports of Russian oil and gas, and its plans
still do not suggest a full ban for all EU members.

Europe imports some 3.5 million barrels of Russian oil and oil products
daily, and also depends on Moscow's gas supplies.

"Inventories are so tight, so against this backdrop, when you're talking
about this ban, there are a lot of questions on how (Europe) is going to
make up for this," said Phil Flynn, senior analyst at Price Futures Group.

Brent crude futures settled up $5.17, or 4.9%, to $110.14 a barrel. West
Texas Intermediate crude futures settled at $107.81 a barrel, up $5.40, or
5.3%.

European Commission President Ursula von der Leyen on Wednesday proposed a
phased oil embargo on Russia, as well as sanctioning Russia's top bank.  

The Commission's measures include phasing out supplies of Russian crude
within six months and refined products by the end of 2022, von der Leyen
said. She also pledged to minimise the impact of the move on European
economies.

Hungary and Slovakia, however, will be able to continue buying Russian crude
oil until the end of 2023 under existing contracts, an EU source told
Reuters.  

Russia could offset the loss of one of its primary customers by selling oil
to other importers including India and China. Neither country has stopped
buying from Moscow.

Needs for much greater supplies are not likely to be met at a meeting on
Thursday of the Organization of Petroleum Exporting Countries and allied
producers. OPEC+ is expected to stick to its plan for a gradual ramp-up of
monthly production.  

In the United States, crude stocks rose modestly last week, according to the
U.S. Energy Information Administration. Stocks were up 1.2 million barrels
as the United States released more barrels from its strategic reserves.

Fuel stocks fell, in part due to stronger exports of products since Russia's
invasion as buyers have sought other sources.

The markets largely shook off the Federal Reserve's announcement that it
would raise interest rates by a half percentage point to try to bring down
rising inflation.  

"The market was up so strong before the announcement I think (the Fed) was a
foregone conclusion," said Gary Cunningham, director of market research at
Tradition Energy.

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!

Bulls n Bears 

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