Bulls n Bears Daily Market Commentary : 17 May 2022

Wed May 18 07:56:01 CAT 2022

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Bulls n Bears Daily Market Commentary : 17 May 2022

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ZSE commentary

ZSE continue to lose ground.

The market continued to lose its glitter as it recorded losses for the tenth
consecutive session in a row. The Allshare Index declined 2.23% to close at
21376.04pts while, the segregated Industrials lost an almost similar 2.25%
to settle at 70479.48pts. The Mid-Cap Index lost 0.60% to 38605.48pts while,
the Blue-Chip Index shed 2.81% to 13699.86pts. Digital media group Zimpapers
headlined the worst performers of the day on a 13.78% plunge to end pegged
at $5.3887, trailed by construction group Masimba that trimmed 8.22% to
$63.3333. Smartech Ecocash was 6.23% weaker at $103.1846 while, National
Foods closed the day pegged at $2066.6667 after a 6.06% loss. Hotelier
Rainbow Tourism Group fell 6.04% to trade at $7.0000. Fallers outstripped
risers in the session by a count of eight to see the market close with a
negative breadth.

Brick manufacturer Willdale led the gainers of the day as it surged 13.39%
to settle at $3.5000 while, Turnall advanced 7.00% to close at $6.4200.
Mashonaland Holdings edged up 5.13% to $3.7228 while, dairy producer
Dairiboard added 4.19% to end at $52.0968. Tanganda tea company capped the
top five gainers of the day on a 1.60% rise to $230.0000. Activity
aggregates were depressed in the session as volumes dipped 37.53% to see
3.01m shares swap hands while, turnover succumbed 19.80% to $330.88m. The
trio of African Sun, Delta and First Capital led the volume aggregate as
they claimed a combined 55.31% of the total. Beverages group Delta was the
top value leader of the day as it claimed 54.59% of the turnover while,
Econet claimed 16.81% of the same. The three ETFs traded mixed in the
session, as the Datvest MCS fell 1.79% to $1.9341 while, the Morgan & Co ETF
jumped 2.17% to $23.0710. The Old Mutual Top Ten ETF was 2.21% stronger at
$9.3016. Elsewhere, on the VFEX nickel miner Bindura was stable at US$0.0460
as 21,952 shares worth $1,009.7920 traded..EFE Securities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South Africa's rand firms as dollar retreats from 20-year high

(Reuters) - South Africa's rand firmed on Tuesday, as a pullback in the U.S.
dollar offered support despite continued power cuts that cloud the domestic
economic growth outlook.

At 1501 GMT, the rand traded at 15.9450 against the dollar, 1.28% firmer
than its previous close.

The dollar fought for a footing after falling from near 20-year highs on
Monday, as investors trimmed bets on whether U.S. interest rate hikes will
drive further dollar gains and investor appetite for riskier assets
increased.

On Monday, the stronger dollar and a power crisis at home saw the rand hit
its weakest level since November, 2021.

"Severe US interest rate hikes... will have a marked negative effect on
growth both in the U.S. and globally, and so on the rand, which is already
at very undervalued levels," Investec economist Annabel Bishop said in a
note.

She added that the rand is at risk of weakening further in the rest of this
quarter and the third quarter of 2022, due to a traditionally greater
aversion to risk among investors in the northern hemisphere summer.

State power utility Eskom implemented deeper controlled outages due to more
breakdowns at its generating units, meaning a larger part of the country
experienced rolling blackouts. It said power cuts would continue on Tuesday
evening.

On the Johannesburg Stock Exchange (JSE), the All-Share index (.JALSH) ended
up 0.7% at 69,696 and the blue-chip index of top-40 companies (.JTOPI)
closed up 0.85% at 63,027 points.

Although local economy linked stocks such as banks and financials slipped on
the back of weak investor confidence, mining stocks jumped led by increase
in platinum and coal prices, giving the market a boost.

Tech investor and biggest listed company on the JSE, Naspers (NPNJn.J), was
up 6.7% and its subsidiary Prosus was up 5.8%.

Government bonds firmed alongside the currency, with the yield on the
benchmark 2030 maturity down 3 basis points to 9.985%.

The Thomson Reuters Trust Principles.

Nigeria

Naira Sees Big Fall Against Dollar

The currency depreciated by 0.6 per cent at the Nafex window, and touched
the N600 $1 mark at the parallel market.

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.-Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slips as risk appetite returns

(Reuters) - The dollar fell for a third straight day on Tuesday, pulling
back from a two-decade high against a basket of major peers, as an uptick in
investors' appetite for riskier bets diminished the U.S. currency's appeal.

Upbeat earnings views from Home Depot (HD.N) and United Airlines (UAL.O)
along with optimism around the easing of China's crackdown on tech and
COVID-19, helped to lift risk sentiment.

The U.S. Dollar Currency Index , which tracks the greenback against six
major currencies, was down 0.7% at 103.41, its lowest since May 6. The index
hit a two-decade high last week supported by a hawkish Federal Reserve and
worries over the global economic fallout from the Russia-Ukraine conflict.

"The mood in markets has improved dramatically relative to last week with
most asset classes bouncing and retracing the moves seen last week," Brad
Bechtel, global head of FX at Jefferies, said in a note to clients.

"The result is a rally in equities and sell-off in fixed income with nearly
every currency in the world rallying against the USD," Bechtel said.

The dollar remained subdued after data showed U.S. retail sales increased
solidly in April as consumers bought motor vehicles amid an improvement in
supply and frequented restaurants, showing no signs of demand letting up
despite high inflation. read more

The dollar index pared losses after Federal Reserve chair Jerome Powell said
at a Wall Street Journal event on Tuesday, the Fed will "keep pushing" to
tighten U.S. monetary policy until it is clear inflation is declining. read
more

The dollar's multi-month rally appears to have run out of steam

The euro was up 1% at $1.0535, extending its rebound from a five-year low
touched last week, and putting more distance between the common currency and
parity with the U.S. dollar.

The currency, which benefited from ECB policymaker Francois Villeroy de
Galhau saying on Monday that a weak euro could threaten price stability in
the currency bloc, rose after hawkish comments from Dutch central bank chief
Klaas Knot.

Knot said that not only was the European Central Bank set to hike rates by
25 basis points in July, it was also ready to consider a bigger rise if
inflation proved higher than expected. read more

"We think the euro sell-off is starting to look stretched," said Shaun
Osborne, chief currency strategist at Scotia Bank.

Sterling also took advantage of the softer dollar to jump 1.26% to its
highest level since May 5 after strong labour market data reinforced
expectations that the Bank of England would continue to raise rates to fight
inflation. read more

The Australian dollar , viewed as a liquid proxy for risk appetite, rose
0.52%.

Australia's central bank considered a sharper rise in interest rates at its
May meeting, minutes published on Tuesday showed, in a heavy hint it will
hike again in June.

The Chinese offshore yuan gained 0.8% after a steep slide that has knocked
it about 7% lower since mid-April.

Shanghai logged three consecutive days with no new COVID-19 cases outside
quarantine zones on Tuesday, a milestone that in other cities has signalled
the beginning of lifting restrictions. read more

Meanwhile, bitcoin, the world's largest cryptocurrency, was about flat on
the day at $29,745.69, as it struggled to stay above $30,000 after bouncing
from the multi-month lows hit last week.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold subdued by strong U.S. retail sales, rate hike

Gold edged lower on Tuesday as robust U.S. retail sales data and
expectations of aggressive interest rate increases outweighed support from a
pullback in the dollar.

Spot gold fell 0.2% to $1,821.09 per ounce by 1:27 p.m. ET, while U.S. gold
futures rose 0.3% to $1,819.70.

U.S. retail sales increased strongly in April, suggesting demand was holding
strong despite high inflation and assuaging some fears that the economy was
heading into recession.

Gold seems to have come under some pressure since the data, said Ryan McKay,
a commodity strategist at TD Securities.

"Sentiment for the precious metals market is starting to turn more bearish.
And that could spell bad news for gold here moving forward" with some more
liquidations to come, especially as the Federal Reserve continues to sound a
hawkish tone, McKay added.

Gold is considered a hedge against surging inflation, but rate hikes
translate into higher opportunity cost of holding non-yielding bullion.

"Gold is behaving less like an arrow and more like a feather. It's drifting
a little this way, and a little that way on the winds that drive markets,"
independent analyst Ross Norman said.

Limiting declines in gold, the dollar retreated, making bullion cheaper for
holders of foreign currency.

An uptick in gold earlier in the session, when it attempted to stage a
rebound after sliding to 3-1/2-month lows on Monday, driven by the lower
dollar and U.S. Treasury yields, was not "a shift in sentiment," Norman
added.

Reflecting investor sentiment, holdings of the world's largest gold-backed
exchange-traded fund, SPDR Gold Trust, were at their lowest since early
March.

Spot silver rose 0.5% to $21.71 per ounce, moving further away from a trough
since July 2020 hit on Friday.

Platinum was up 0.7% to $952.47 per ounce while palladium rose 0.6% to
$2,038.74, rising as high as 3% earlier.

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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