Bulls n Bears Daily Market Commentary : 10 May 2022

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Bulls n Bears Daily Market Commentary : 10 May 2022

 

 	

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ZSE commentary

 

Mashonaland Holdings highlights trading session…

Mashonaland Holdings highlighted the activity aggregates as 38.06m shares worth $152.24m exchanged hands. The trade accounted for 95.65% of total volumes traded and 45.52% of turnover. Other notable value drivers were FBC (12.24%), Econet (8.59%), Simbisa Brands (7.08%) and Ecocash (7.01%). Volume of shares traded ballooned 4660.62% to 39.80m while, value outturn jumped 108.39% to $335.03m. Declining stocks outnumbered risers by a count of seventeen, leaving the market with a negative breadth. Leading the losers of the day was tea company Tanganda which reversed prior session’s gains on a 14.82% dip to $232.1524 while, First Mutual Properties shed 14.55% to $8.2099. Life assurer Fidelity trimmed 14.29% to $18.0000, as TSL followed on a 12.88% loss to trade at $115.0000. ART completed the top five losers of the day as it shrunk 12.00% to end pegged $22.0000. The day’s top five winners were led by Medtech Holdings which advanced 11.11% to close at $22.0000. Trailing was media group Zimpapers that surged 10.01% to end pegged at $6.5893. The duo of hoteliers Rainbow Tourism and African Sun rebounded 6.35% and 2.59% to close at respective prices of $7.4444 and $11.9972. Clothing retailers Edgars capped the top five risers’ list as it put on 2.03% to finish at $5.8667.

 

The primary All-Share Index dropped 3.78% to 25685.41pts while, the Industrial Index shed 3.80% to 84705.62pts. The Mid-Cap Index was 4.55% weaker at 42633.45pts while, the Blue-Chip Index slipped 3.56% to 16955.87pts as heavies continued to lose pace. On the VFEX market, Bindura gained 1.02% to USD$0.0495 on 900 shares while, Padenga went up 2.86% to settle at USD$0.2195 as 2,972 shares exchanged hands. A total of 330,314 units worth $1.29m exchanged hands in the EFTs. Old Mutual ETF rose 2.31% to close at $10.4389 while, the Morgan ETF went up 2.29% to $21.0005. Datvest ETF was the sole faller as it came off 1.25% to end at $2.2707..-EFE Securities

 

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Global Currencies & Equity Markets

 

 

South Africa

 

Rand steadies as dollar pauses rally, JSE firms

Emerging market stocks extended a six-day selloff on Tuesday as global growth fears stoked by high inflation, tighter US monetary policy and a slowdown in China weighed on shares, while most regional currencies took a breather after a three-day slide.

 

MSCI's index of emerging market (EM) currencies firmed 0.1% as the dollar slightly weakened, while its stocks counterpart extended a selloff to a seventh straight day, shedding 0.6% and bringing its year-to-date losses to 18%.

 

However, the JSE's All-Share Index was almost one percent firmer, with HCI almost 5% higher and Shoprite gaining 4%. 

 

The currencies and stocks benchmarks plunged 0.5% and 1.6% respectively on Monday after the dollar scaled two-decade highs on concerns around aggressive US policy tightening. A stronger dollar makes high-yielding but riskier EM assets less attractive to investors.

 

"We think the stagflation threat will weigh on EM markets for longer than advanced economies," said Gabriel Sterne, head of strategy services and global EM research at Oxford Economics.

 

"Additionally, downside risks emanating from China are large and not fully factored in to market pricing," Sterne added.

 

Adding to fears, EM economic growth is set to slow "sharply" this quarter, pressured by China, Russia and the spread of tighter monetary conditions, JPMorgan analysts said.

 

Turkey's lira dropped 0.8%, tracking its fourth straight day in the red and bringing the currency back near lows it hit in December, 2021 when unorthodox monetary policies sent the lira into freefall.

 

Turkey's unemployment rate rose to 11.5% in March, while a seasonally adjusted measure of labour underutilisation increased 0.6 percentage points to 22.7%, data showed.

 

Meanwhile, boosting sentiment, China stocks rebounded after its central bank pledged support for the slowing economy a day after COVID-19 lockdowns spooked markets and fed worries about demand.

 

In another bright spot, the South African rand recouped some losses, rising 0.3% a day after domestic power cuts and a stronger greenback dragged the currency to its lowest level this year. The rand was last at R16.12/$, after falling to around R16.26 on Monday.

 

Government bonds also bounced, with the yield on the benchmark 2030 instrument last down 3.9 basis points at 10.16%.

 

Inflation woes intensified as Czech headline inflation was seen soaring to its highest in almost three decades in April while prices in Hungary also rose above forecast.

 

The forint and crown were about 0.5% stronger against the euro in early trade.

 

Elsewhere, Sri Lanka's shorter-dated sovereign dollar bonds slipped a day after protests over the government's handling of the economic crisis turned deadly, killing seven people and injuring more than 200

 

- Additional reporting by Fin24

 

 

 

Nigeria

 

Naira gains at official market

Naira gained marginally against the U.S. dollar at the official market on Tuesday, a day after it recorded a decline.

 

According to data published by FMDQ, where forex is officially traded, the local currency closed at N418.25 to a dollar at the close of business on Tuesday.

 

This implies a N0.75 or 0.2 per cent increase from N419.00 it exchanged in the previous session on Monday.

 

The naira which started trading at N417.70 per $1 oscillated to an intraday high of N412.00 and touched a low of N444.00 before closing at N418.25 to a dollar on Tuesday.

 

The highest and lowest rates the domestic currency has traded this month is the N417.00 and N419.00 to a dollar benchmark respectively.

 

ALSO READ: Naira gains at official market

Foreign exchange turnover rose by 341.30 per cent with $234.54 million recorded at the close of Tuesday’s business against the $53.15 million posted in the previous session on Monday.

 

In Uyo, black market traders exchanged the naira at N588.00 and sold N592.00 to a dollar, while Abuja street market dealers said the currency was exchanged at N585.00 and sold at N587.00 per $1 on Tuesday.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

Global Markets

 

The Euro Is at $1.05—the Lowest It’s Been in Years

The strong dollar trend doesn’t appear to be reversing anytime soon, making travel to Europe from the U.S. that much more affordable right now.

 

If it’s been a while since you’ve traveled to Europe, you could be in for a welcome surprise. Over the past year, the dollar-euro exchange rate has been steadily dropping; as of press time, the dollar was at $1.05 against the euro, the lowest it has been since January 2017. One year ago, the dollar was hovering at $1.20 against the euro.

 

If the euro actually reaches parity against the dollar, it will be the first time in two decades that one U.S. dollar will be the equivalent value of one euro. The U.S. Dollar Index, which tracks the value of the dollar against other currencies, is at its highest level in 20 years. Currency forecasting is challenging given all the complex (and often rather volatile) global economic factors that are in play, but Bloomberg reported on May 10 that financial planners and economists are currently confident that the U.S. dollar will continue to rally.

 

Mark Haefele, chief investment officer at UBS Global Wealth Management, stated in a note to investors that the dollar will likely remain stronger than almost all currencies through this quarter.

 

Meanwhile, the euro has lost value relative to the U.S. dollar as Russia’s invasion of Ukraine has ramped up fears that rising energy costs will dampen economic growth in the 19-country eurozone. The conflict has also made key food commodities in Europe more expensive.

 

Whether or not the currencies hit parity, the fact that they are already this close should serve as welcome relief for Americans heading to Europe in the coming days and weeks, helping to offset the costs of skyrocketing airfares (which have been pushed up by a rise in oil prices and staffing shortages as airlines race to keep up with the rapid rise in demand for travel).

 

For U.S. travelers, the majority of travel in Europe over the past two decades has come with an exchange rate “tax”—U.S. travelers have grown accustomed to calculating an additional 20, 30, 40, or even 50 percent above the rate in euros being charged for their hotel room, café au lait and croissant, glass of vino, or museum admissions. What shows up on our bank statements back in the United States, of course, is the dollar equivalent of what was spent in euros. For many that extra cost can serve as a rather brutal vacation reality check after time spent abroad.

 

Even slight exchange rate changes can make a big difference in a vacation bottom line. For instance, consider your hotel stay abroad, typically one of the biggest budget items (if not the biggest budget item) for any trip. One of favorite new hotels in Paris, Hotel Paradiso, offers guest rooms starting at 176 euros per night. One year ago (at an exchange rate of $1.20 to one euro), that would have been $211 per night. Today, that translates into $185 per night.  

 

The strong dollar news comes as international travel is experiencing a robust rebound after two years of being stunted by the global coronavirus pandemic. U.S. travelers have indicated that they are more than ready to return to Europe regardless of the airfares and the exchange rate. Luxury travel consultancy Zicasso reported that compared to the first quarter of 2021, summer travel bookings for 2022 are currently up 500 percent, with Europe trips constituting 80 percent of those bookings.

 

But for some travelers who have been considering crossing the pond this year and have not yet committed, the strong dollar could present just the push they need go ahead to take the leap.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold rates today fall to near lowest in 3 months, silver prices drop

Gold prices fell in India to near 3-month lows ahead of monthly US inflation data, which analysts say could have some impact on Federal Reserve's monetary policy stance. The US inflation reading is due at 6 pm later in the day. On MCX, gold futures were down 0.3% to ₹50,421 per gram while silver fell 0.5% to ₹60,310 per kg. Gold has come under pressure since price came closer to ₹56,000 in early March as the dollar rallied while US Treasury yields also advanced, curbing investors’ enthusiasm for the safe haven metal.

 

The US Fed last week raised its benchmark overnight lending rate by half a percentage point but many economists are debating whether it has fallen so far behind in its monetary tightening.

 

Gold is seen as a hedge against inflation and a safe store of value during times of political and economic crises, but is highly sensitive to rising short-term U.S. interest rates, which raise the opportunity cost of holding zero-yield bullion.

 

In international markets, spot gold today fell to a 3-month low ahead of the crucial US inflation data. Spot gold was down 0.3% at $1,832.06 per ounce as the dollar index hovered near 20-year highs. A strong dollar makes greenback-priced bullion less attractive for other currency holders.

 

Among other precious metals, spot silver dipped 0.1% to $21.23 per ounce, while platinum edged higher 0.1% to $964.64, and palladium fell 1.2% to $2,040.25.

 

“Gold and silver prices continued to deteriorate despite some relief seen in the US dollar and US bond yields. On Tuesday, gold and silver rallied a bit in the morning session but couldn't hold on to their gains and slipped to close below the importance support levels of $1840 for gold and $21.30 in case of silver. Gold and silver prices crashed on Tuesday after the U.S. Federal Reserve member said aggressive interest rate hikes could be undertaken to control inflation," said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.

 

“The dollar was choppy on Tuesday, fluctuating between modest gains as traders were getting ready for Wednesday's US Consumer Price Index data, which could provide hint on the likely path of the Federal Reserve's monetary policy. Investors have been in a risk-on mood, as the yield on the benchmark US 10-year note eased back below the 3% psychological level and from the highest levels since 2018 at 3.20% scored on Monday."

 

“Gold has support at $1822-1810, while resistance is at $1850-1862. Silver has support at $21.10-20.80, while resistance is at $21.58-21.70. In rupee terms gold has support at ₹50,330–50,110, while resistance is at ₹50,880–51,050, while silver has support at ₹60,140-59,750, and resistance is at ₹61,150–61,510," he 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 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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