Bulls n Bears Daily Market Commentary : 13 April 2023

Fri Apr 14 07:58:29 CAT 2023

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Bulls n Bears Daily Market Commentary : 13 April 2023

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ZSE commentary

Bearish sentiment prevails…

The ZSE faltered in Thursday’s session to see heavies Econet and Ecocash leading the fallers pack of the day. The primary AllShare Index fell 1.58% to 36206.03pts while, the Blue-Chip Index was down 2.15% to close at 20761.33pts. The ZSE Agriculture Index slipped 0.09% to 150.98pts as the Mid-Cap Index retreated 0.04% to finish at 80134.30pts. The day’s fallers were led by telecoms giant Econet which gave up 10.05% to end pegged at $164.6679, followed by Ecocash that dropped 8.82% to $48.0859. Sugar processor Star-Africa declined 2.59% to $1.6243 as packaging group Nampak lost 2.54% to $30.9500. Completing the top five shakers’ list was bankers First Capital that slid 2.33% to $30.0655. Leading the risers of the day was Zimre Holdings Limited which rose 4.54% to $11.0000,followed by retailer OK Zimbabwe that rebounded 1.81% to $61.0909.

Bankers NMB advanced 1.58% to $61.0000 while, Zimplow went up 1.01% to finish at $36.5000. FBC Holdings capped the winners’ set after gaining 0.40% to $125.5000. Activity aggregates traded mixed in the session as volumes went down 11.71% to 3.00m shares while, turnover surged 54.79% to $1.35bn. Delta and Econet dominated the value and volume sections contributing 81.17% of the former and 92.36% of the latter. On the VFEX, 28,241 shares worth USD$12,568.86 traded. Innscor fell 2.03% to USD$0.6318 while, Axia slipped 1.39% to end at USD$0.0991. SeedCo International shed 0.41% to USD$0.2900 while, Simbisa Brands was down 0.21% to USD$0.4200. National Foods and Padenga were the only risers adding 0.43% and 0.10% to USD$1.8100 and USD$0.2000 respectively. The ETF traded a cumulative 16,710 units worth $168,179.00 for the day. Datvest came off 0.54% to $1.8400 while, the Old Mutual ETF declined 1.85% to $10.0190. Morgan and Co MCS was flat at $31.0000. The Tigere REIT added 0.56%

to $50.5301 on 1,335 units. efesecurities

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Global Currencies & Equity Markets

South Africa

Rand and JSE buoyed by lower US producer prices

SA investors share positive global mood as US economic picture brightens but economists sound note of caution

The rand gained the most in two months on Thursday while the JSE tracked firmer global markets after another positive inflation report from the US.

The Bureau of Labor Statistics reported that the producer price index (PPI) in March fell 0.5% from a month earlier, below all estimates in a Bloomberg survey. On an annual basis the PPI rose 2.7% from a year ago — the smallest gain in more than two years, Bloomberg reported...

Nigeria

Naira reverses gain, falls at official and black market 

The Nigerian Naira suffered a sharp reversal in fortunes on Wednesday, falling at both the official and black-market exchanges after Wednesday’s gain.

At the official exchange rate, the Naira fell by data from FMDQ securities showing that Naira depreciated against the greenback during the session by 79 Kobo or 0.17 per cent to settle at N463.67/$1, in contrast to the previous day’s value of N462.88/$1.

This decline happened amid a slight jump in the value of forex as the trades recorded in the official market by 5.3 per cent or $4.29 million to $85.19 million from $80.90 million.

READ ALSO:Naira appreciates at official, black markets

It was the same at the black market, the Naira lost N2 against the United States currency at the midweek session closing at N738/$1 compared with Tuesday’s closing price of N736/$1.

Also, in the Peer 2 peer market, the exchange rate of the Naira to the Dollar was N748/$1 yesterday compared with the preceding day’s N742/$1, representing a decline of N6.

However, at the interbank segment of the forex market, the domestic currency closed flat against the Pound Sterling at N573.03/£1 but lost 76 Kobo against the Euro to trade at N502.87/€1 versus the preceding session’s N502.11/€1.

 <mailto:info at bulls.co.zw> 

Global Markets 

Dollar dips as producer prices cool, euro hits one-year high

(Reuters) - The dollar fell to a two-month low against a basket of currencies and a one-year low against the euro on Thursday after U.S. producer prices unexpectedly fell in March, boosting expectations that the Federal Reserve is near the end of its rate hiking cycle.

The producer price index (PPI) for final demand dropped 0.5% last month. In the 12 months through March, the PPI increased 2.7%. That was the smallest year-on-year rise since January 2021 and followed a 4.9% advance in February.

It comes after consumer price index (CPI) inflation data on Wednesday came in at 5% year-on-year in March, down from 6% in February. Core inflation - which strips out volatile food and energy prices - picked up to 5.6%, from 5.5% the previous month.

“We are headed back to a low inflation world, that’s the message of the market right now," said Adam Button, chief currency analyst at ForexLive in Toronto. "The next big trade is that the inflation scare is over."

Fed funds futures traders are pricing for the Fed's benchmark rate to peak at 5.01% in June, from 4.830% now, before falling back to 4.34% in December.

The next major U.S. economic release will be retail sales on Friday, which will be analyzed for how inflation is affecting consumer spending.

Other data on Thursday showed that the number of Americans filing new claims for unemployment benefits increased more than expected last week, a further sign that labor market conditions were loosening up as higher borrowing costs dampen demand in the economy.

The dollar index fell to 100.84, the lowest since Feb. 2. The euro reached $1.10680, the highest since April 1, 2022.

The single currency is being boosted by a relatively more hawkish European Central Bank that is expected to keep raising rates to tackle inflation.

"We have seen a dramatic swing in interest differentials in favour of the euro," said Ben Laidler, global markets strategist at eToro.

"The combination of falling U.S. inflation and rising recession risks have driven expectations of three Fed interest rate cuts this year compared to further hikes from the still-hawkish ECB."

The ECB needs to keep raising rates given stubbornly high underlying inflation and its next move could be either a 25 or a 50 basis point increase, Governing Council member Bostjan Vasle said on Thursday.

ECB policymaker Joachim Nagel also said that core inflation rates in the euro zone will begin improving in the coming months, but the ECB still has a way to go with monetary policy.

The dollar fell 0.32% against the yen to 132.77 . The Aussie dollar , which is sensitive to risk appetite, reached $0.67965, up around 1.4% on the day and the highest since Feb. 24.

Australian employment blew past expectations for a second month in March while the jobless rate held near 50-year lows, an unambiguously strong report that suggests the central bank's tightening campaign may not be over yet.

Currency bid prices at 3:00PM (1900 GMT)

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold, silver hit 13-mo. highs on tame U.S. PPI, slumping USDX

(Kitco News) - Gold and silver prices are sharply higher in midday U.S. trading Thursday and scored 13-month highs. The metals bulls are being fueled by a tame U.S. inflation report, a slumping U.S. dollar index and rising crude oil prices. Gold bulls are now confident they can breach the all-time record high of $2,078.80, basis nearby Comex futures, sooner rather than later. June gold was last up $28.40 at $2,053.20 and May silver is up $0.437 at $25.90.

Today’s U.S. producer price index report for March showed a decline of 0.5% from February versus expectations for a steady reading. The report helped to put more downside pressure on the U.S. dollar index, which hit a 2.5-month low today. The tamer PPI report follows a slightly milder consumer price index report released Wednesday that came in at up 5.0%, year-on-year, compared to market expectations for a rise of 5.1%. However, the core CPI number came in 0.1% higher than expected.  

Five reasons why you should be overweight gold in today's uncertain markets - abrdn's Minter

Global stock markets were mixed overnight. U.S. stock indexes are higher at midday. The other key outside markets today see Nymex crude oil prices are a bit weaker after hitting a five-month high Wednesday, presently trading around $82.50 a barrel. The benchmark 10-year U.S. Treasury note yield is presently fetching 3.422%.

Technically, June gold futures bulls have the strong overall near-term technical advantage. Prices are in a four-week-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the all-time high of $2,078.80, scored in March of 2022. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the April low of $1,965.90. First resistance is seen at today’s high of $2,063.40 and then at $2,078.80. First support is seen at today’s low of $2,028.30 and then at Wednesday’s low of $2,015.70. Wyckoff's Market Rating: 9.0

May silver futures bulls have the strong overall near-term technical advantage. Prices are in a steep four-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $27.50. The next downside price objective for the bears is closing prices below solid support at $23.50. First resistance is seen at today’s high of $26.115 and then at $26.50. Next support is seen at today’s low of $25.515 and then at Wednesday’s low of $25.175. Wyckoff's Market Rating: 9.0.

May N.Y. copper closed up 410 points at 412.20 cents today. Prices closed nearer the session high and hit a three-week high today. The copper bulls have the overall near-term technical advantage. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at the January high of 435.90 cents. The next downside price objective for the bears is closing prices below solid technical support at the April low of 392.60 cents. First resistance is seen at today’s high of 414.30 cents and then at 417.45 cents. First support is seen at today’s low of 405.35 cents and then at 400.00 cents. Wyckoff's Market Rating: 6.5.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Independence Day

April 18

Workers’ Day

May 1

Africa Day

May 25

Counters trading under cautionary

CBZH

TSL

Fidelity

Willdale

FMHL

ZBFH

GetBucks

Zimre

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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