Bulls n Bears Daily Market Commentary : 16 May 2022

Tue May 17 07:24:55 CAT 2022

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Bulls n Bears Daily Market Commentary : 16 May 2022

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ZSE commentary

FBC anchors activity aggregates.

Banking group FBC highlighted the first trading day of the week as 3.45m
shares worth $248.64m, representing 71.59% of total volumes traded and
60.31% of the value aggregate. The other notable value driver of the day was
Delta that claimed 12.84% of the aggregate. Volume of shares traded jumped
115.03% to 4.83m while, turnover declined 98.81% to $4.83m. The market
closed with a negative breadth of eleven as twenty counters registered
losses against nine risers. NTS led the laggards of the day on a 14.73% drop
to $13.75000, trailed by the duo of apparel retailers Truworths and Edgars
that dipped 14.29% and 7.85% to close at $1.5000 and $4.5783 respectively.
Banking group First Capital shed 6.70% to settle at $10.0457 while, Axia
capped the top five shakers of the day on a 6.52% retreat to $113.2991.

CFI headlined the winners of the day on 14.78% climb to $264.0000, followed
by Zimre Holdings that surged 10.34% to $5.5282. Mashonaland Holdings put on
9.73% to $3.5412 while, Zimpapers added 7.13% to end pegged at $6.2500 on
scrappy 100 shares. Agric-concern Ariston completed the top five gainers of
the day on a 2.31% rise to $3.5104. The four benchmark indices in our review
weakened further with the mainstream All Share Index trimming 1.44% to
21863.24pts while, the Industrial Index lost an almost identical 1.45% to
72101.47pts. The Blue-Chips Index came off 1.64% to 14095.90pts while, the
Mid-Cap was down 0.84% at 38838.95pts. On the VFEX, Bindura eased 3.16% to
close at $0.0460 on 26,630 shares. The three ETFs tumbled in the session as
the Morgan ETF slipped 9.68% to $22.5807, Old Mutual ETF let go 1.67% to
$9.1001 while, the Datvest ETF fell 0.42% to $1.9693.EFE Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand falls amid growth concerns, power cuts

(Reuters) - The South African rand weakened on Monday amid subdued
risk-taking as investors sought safety due to fears about global growth,
while power cuts on the domestic front clouded the economic growth outlook.

At 1525 GMT, the rand traded at 16.2046 against the dollar, around 0.32%
weaker than its previous close.

Investors have flocked to the safe-haven U.S. dollar on concerns about the
U.S. Federal Reserve's ability to dampen inflation without causing a
recession, along with worries about slowing growth arising from the Ukraine
crisis and the economic effects of China's zero-COVID-19 policy. read more

"The rand is likely to remain vulnerable to weakness this quarter,"
Investec's chief economist, Annabel Bishop.

For the rand, which is largely driven by international factors, the outcome
of substantially weaker U.S. indicators on economic activity could, along
with moderations in U.S. inflation, add some strength, although this could
take a few months, she added.

At home, state power utility Eskom said on Monday it was implementing a
Stage 4 power cut in the evening, a more serious cut than the previously
indicated Stage 3, meaning a larger part of the country will experience
rolling blackouts. read more

Market attention this week is also on a monetary policy decision by the
South African Reserve Bank that will be announced on Thursday.

A Reuters poll published on Friday forecast the bank would make its first 50
basis-point repo rate hike in more than six years, taking it to 4.75% , to
prevent potential second-round effects from higher consumer prices.

Shares on the Johannesburg Stock Exchange (JSE) strengthened on Monday on
the back of stronger commodity prices, even as most global stock indexes
fell including in the United States.

The FTSE/JSE all-share index (.JALSH) ended up 0.82% at 69,212 and the
blue-chip index of top-40 companies (.JTOPI) closed up 0.81% at 62,496
points.

In fixed income, the yield on the benchmark 2030 government bond was down
1.5 basis points at 10.0000%.

Nigeria

Naira sees big fall against dollar

Naira plunged against the U.S. dollar on Monday with a 0.60 per cent
depreciation at the official market.

According to FMDQ, where forex is officially traded, the naira which opened
trading at N417.30 closed at N421.50 to a dollar at the close of business on
Monday.

This implies N2.50 or 0.60 per cent devaluation from N419.00 it exchanged
hands with the greenback currency Friday, last week.

This is the second lowest level the naira exchanged officially with the
dollar in five months after closing at N422.67 to a dollar on January 5,
early this year, and the first time it stretched across the N417.00 and
N419.00 and above benchmark it has been trading in the past four months.

The naira reached an intraday high of N410.00 and slipped to a low of
N444.00 before closing at N421.50 per $1 on Monday.

Forex turnover plummeted by 58.3 per cent with $70.68 million recorded at
the close of business on Monday against the $169.38 million posted in the
previous session last week Friday.

Similarly, the local currency touched N600.00 mark at the parallel market on
Monday.

In Uyo, currency dealers exchanged the naira at N595.00 and sold within the
range of N596.00 and N600.00 to a dollar, while Abuja balck market dealers
at wuse zone 4 said the currency was exchanged at N594.00 and sold at
N595.00 per $1 on Monday.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slips from 2-decade highs; yuan falls on weak China data

(Reuters) - The U.S. dollar index was lower on Monday after hitting a
20-year peak last week, with the global economy in focus after weak economic
data from China highlighted worries about the prospects for a global
slowdown.

Creating a risk-off mood on Monday, China's retail and factory activity fell
sharply in April as extensive COVID-19 lockdowns confined workers and
consumers to their homes. But Shanghai did set out plans for the return to
more normal life from June 1. read more

Following the release of China's data, Bipan Rai, North America head of FX
Strategy at CIBC Capital Markets, said trading was focused on macro economic
data on Monday.

"It's important to highlight that the risks are towards a stronger dollar
and primarily, that's because if you look at the macro economic climate, the
fundamentals don't look good. From a risk-off perspective that should still
support the dollar against most currencies," Rai said.

But he said the greenback was consolidating after its recent strength and
that more range-bound trading sessions were possible: "It makes sense for
some period of consolidation before the next leg higher."

Trading in the dollar may be muted partly because a lot of bad news has
already been priced in but also because investors are waiting for events
such as the U.S. retail sales data release and a public appearance by Fed
Chair Jerome Powell both scheduled for Tuesday, according to Mazen Issa,
senior FX strategist at TD Securities. [nL2N2X52F6]

Still Issa said he doesn't "think we're in a market where we're going to see
the dollar weaken ... It's going to take a lot to get investors out of the
dollar."

The euro was pulled from its earlier lows after European Central Bank
policymaker Francois Villeroy de Galhau said the common currency's weakness
could threaten the ECB's efforts to steer inflation towards its target. read
more

The Australian dollar , which is highly exposed to the Chinese economy,
reversed course as the day wore on and was last up against the dollar after
falling as much as 0.9%.

The dollar index was last down 0.37% at 104.16, after briefly crossing the
105 level on Friday - its highest level since December 2002, after six
successive weeks of gains. Weekly positioning data showed that investors had
built their long dollar bets.

The euro was up 0.26% at $1.0438 but not far from last week's low of
$1.0354, its lowest level since early 2017. Analysts see $1.0340 as a
crucial level of euro support.

HSBC strategists expect the euro to fall to parity against the dollar in the
coming year. "Much weaker growth and much higher inflation leave the ECB
facing one of the toughest policy challenges in G10 (central banks)," they
said.

Crypto markets, which trade around the clock, had a quiet weekend after
turmoil last week driven by TerraUSD, a so-called stablecoin, which broke
its dollar peg. An affiliate of the company behind TerraUSD said it had
spent the bulk of its reserves trying to defend its dollar peg and would use
the remainder to try to compensate some users who had lost out. read more

Bitcoin was last trading at around $29,881, down more than 4%, after having
dropped to $25,400 on Thursday, its lowest mark since December 2020.

Currency bid prices at 3:03PM (1903 GMT)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price back above $1,800 as Treasury yield retreats

Gold prices bounced back emphatically on Monday as a retreat in US Treasury
yields offset headwinds from a relatively firm dollar, driving more
investors towards the safe haven metal.

Spot gold rose 2.0% to $1,813.34 per ounce by 12:20 p.m. ET, after hitting a
three-and-a-half-month low previously. US gold futures had a moderate gain
of 0.3%, trading at $1,814.00 in New York.

Meanwhile, the US dollar inched lower, but still held near a two-decade
peak, making gold expensive for overseas buyers, capping the metal's gains.

Gold's rebound was attributable to a dip in Treasury yields and a small
pullback in the dollar, RJO Futures senior market strategist Bob Haberkorn
told Reuters, adding that the overall trend for the dollar was "still high
as the Fed is being aggressive with its rate hikes."

"All things considered, gold is holding up, it should be significantly lower
. it will find support slightly below the $1,800 level. Also, there is
enormous demand for physical gold and silver," he predicted.

"Many still regard gold as being significantly undervalued, and would be
even more wiling to buy the metal now that prices have weakened," said Fawad
Razaqzada, market analyst at City Index.

(With files from Reuters)

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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