Bulls n Bears Daily Market Commentary : 20 April 2023

Fri Apr 21 01:17:17 CAT 2023

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Bulls n Bears Daily Market Commentary : 20 April 2023

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ZSE commentary

Mid cap counters lift the market…

The market rebounded in the penultimate session of the week  anchored by mid-cap counters that buttressed prior sessions gains. The All-Share Index gained 1.11% to 36,525.83pts while, the ZSE Top 10 Index edged up 0.79% to 21,112.54pts. The Agriculture Index rose 0.37% to 154.81pts as the Mid Cap Index firmed 0.97pts to 78,992.24pts. Headlining the gainers of the day was construction group Masimba Holdings that surged 15.00% to end at $169.2500, trailed by cigarette manufacturer

BAT that inched up 6.83% to $4300.0000. Spirits and wines  producer AFDIS put on 6.12% to settle at $342.9622 while, General Beltings Holdings garnered 5.45% to $2.3405.

Mashonaland Holdings fastened the top five gainers of the day as it closed pegged at $15.8000 following a 5.33% jump. Seed manufacturer SeedCo Limited led the laggards of the day as it pared 7.50% to $185.0000, followed by Star Africa that dropped 0.18% to $1.9000. Proplastics was subdued at $108.9500 after dropping 0.05% while, Ecocash Holdings continued to lose ground as it fell 0.04% to $39.9703. Beverages manufacturer Delta capped the fallers of the day as it trimmed a mere 0.02% to close at $795.9405. Foreign purchases stood at $256,375.00 as investors cherrypicked TSL while, foreign selling amounted to $968.90m with Delta accounting for 97.41% of the total. Activity aggregates were mixed in the session as turnover ballooned by 189.17% to  $1.26bn while, volume of shares traded declined 58.80% to 3.86m. The duo of Ecocash and Delta drove the volume aggregate of the day as they claimed a combined 73.41% of the total. In the value category, Delta highlighted the session as it

claimed a massive 79.16% of the outturn. Tigere REIT was  0.02% weaker at $50.6098. The ETF Index was 12.36% higher at 536.90pts buoyed by gains in Cass Saddle and Morgan &Co Multi Sector ETF. efesecurities

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Global Currencies & Equity Markets

South Africa

South African rand little changed as caution reigns on global markets

(Reuters) - The South African rand was steady in early trade on Thursday, as caution reigned on global financial markets before a barrage of central bank meetings in the coming weeks.

At 0600 GMT, the rand traded at 18.1875 against the U.S. dollar , near Wednesday's close of 18.1900.

The rand has mainly tracked global drivers this week, reacting little on Wednesday to March inflation readings (ZACPIY=ECI), (ZACPI=ECI) that came in higher than expected and February retail sales (ZARET=ECI) that were worse than forecast.

No major domestic economic data releases are due on Thursday.

The dollar was also little changed against a basket of currencies .

Nigeria

Naira Crashes to N755/$1 at P2P, Appreciates at Official, Parallel Markets

The Naira closed weaker against the United States currency on Wednesday, April 19, at the Peer-2-Peer (P2P) window but recorded a stronger outcome at the Investors and Exporters (I&E) and the parallel market sides of the foreign exchange market.

In the P2P arm of the market, the Nigerian Naira lost N5 against the Dollar during the midweek session to settle at N755/$1, in contrast to the N750/$1 it was exchanged on Tuesday.

But in the official market, the Naira appreciated against its American counterpart by 75 Kobo or 0.16 per cent to trade at N462.50/$1 compared with the previous day’s exchange rate of N463.25/$1 as the forex turnover for the session broadly went up by 55.1 per cent or $52.57 million to $148.02 million from Tuesday’s $95.45 million.

Also, in the black market, the domestic currency was strengthened against the greenback yesterday by N2 to sell at N737/$1 compared with the preceding day’s value of N739/$1.

However, in the interbank wing of the FX market, the local currency was down against the Pound Sterling at the midweek session by N1.18 to close at N573.84/£1 versus N572.66/£1 and against the Euro, it shed N16.70 to trade at N505.75/€1 compared with N489.05/€1 it ended on Tuesday.

Meanwhile, the digital currency market recorded a negative outcome on Wednesday as most of the tokens tracked by Business Post had red stains on them.

Bitcoin (BTC) lost 3.9 per cent to finish at $29,162.21, Ethereum (ETH) dropped 5.9 per cent to end at $1,966.76, Litecoin (LTC) depreciated by 8.7 per cent to trade at $92.41, Solana (SOL) shed 7.9 per cent to sell at $22.83, and Ripple (XRP) recorded a 5.9 per cent slide to quote at $0.4913.

Further, Cardano (ADA) shrank by 5.8 per cent to $0.4158, Binance Coin (BNB) went down by 5.5 per cent to $323.76, and Dogecoin (DOGE) declined by 5.4 per cent to $0.0879, while Binance USD (BUSD) and the US Dollar Tether (USDT) remained unchanged at $1.00 apiece.

 <mailto:ibc at zitf.co.zw> 

Global Markets

Dollar weakens as soft data backs US recession outlook

(Reuters) - The U.S. dollar fell on Thursday as weak data reinforced expectations the world's largest economy is likely headed toward recession, further supporting the view that the Federal Reserve could pause in June after another expected rate hike next month.

The greenback hit session lows against the yen and euro after data showed higher weekly jobless claims, a precipitous drop in mid-Atlantic business activity, and lower existing home sales.

But comments from Cleveland Fed President Loretta Mester saying that the U.S. central bank still has more interest rate increases ahead helped the dollar cut its losses. She noted, however, that the Fed's rate hikes over the last year to quash high inflation is nearing its end.

Her comments came a day after New York Fed President John Williams said inflation was still at problematic levels and the U.S. central bank would act to lower it.

"The rhetoric coming from the Fed...is that they're looking to keep rates higher for longer," said Alvise Marino, macro strategist, at Credit Suisse in New York.

He added though that with the U.S. data, "we could see loss of interest rate support for the dollar," noting that "the market has a pretty aggressive view that the Fed is going to be cutting rates this year."

Thursday's data showed U.S. initial claims rose modestly to 245,000 in the latest week, while the week before was revised to show 1,000 more claims than previously reported.

A separate report from the Philadelphia Fed showed its measure of factory activity in the mid-Atlantic region plunged to the lowest level in nearly three years in April. Manufacturers in the region expected activity to remain subdued over the next six months.

It's not much different in the U.S. housing sector. Existing home sales slid 2.4% to a seasonally-adjusted annual rate of 4.44 million units last month. They had increased in February for the first time in a year.

"It's increasingly clear that the U.S. economy is headed for recession. It's just a matter of time," said Erik F. Nelson, macro strategist at Wells Fargo Securities in London.

"A U.S. recession would be bad for the dollar. If the U.S. is leading the world into recession, it's hard to see a big demand for the dollar."

U.S. rate futures have priced in a nearly 90% chance of a 25 basis-point rate increase next month, and a roughly 69% probability of a pause in June .

In afternoon trading, the dollar index , which tracks the greenback's value against a basket of major currencies, slipped 0.1% to 101.84 after sliding on Friday to its lowest since early February.

So far this year, the dollar index has fallen 1.6% after sharp gains of more than 8% in 2022.

Against the yen, the dollar sank 0.3% to 134.30 yen . It fell 0.5% versus the Swiss franc to 0.8934 francs .

The euro was flat at $1.0962, not too far from a one-year high touched last week against the dollar.

The European Central Bank is expected to raise rates for a seventh straight meeting on May 4, lending support for the euro. Policymakers are converging on a 25-bps hike, even if a larger move is not yet off the table.

Elsewhere, sterling slipped 0.1% to $1.24, moving away from a 10-month high of $1.2545 touched on Friday. Hotter-than-expected CPI figures in Britain boosted bets for a rate increase from the Bank of England in May.

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Currency bid prices at 4:00PM (2000 GMT) <mailto:info at bulls.co.zw> 

Commodities Markets

Gold flirts with $2,000 level on softer US economic data

(Reuters) - Gold prices firmed above the key $2,000 level again on Thursday as the dollar and Treasury yields pulled back after soft U.S. economic data strengthened the case for a pause in interest rate hikes by the Federal Reserve.

Spot gold climbed 0.7% to $2,006.26 per ounce by 1:40 p.m. EDT (17:40 GMT), after hitting a two-week low of $1969.1 in the previous session. U.S. gold futures settled 0.6% higher at $2,019.10.

Weekly U.S. jobless claims edged up last week, suggesting the labor market was gradually slowing, while another set of data showed fewer existing home sales and much lower-than-forecast factory activity in the mid-Atlantic region.

"We saw a disastrous Philly Fed and jobless claims continuing to head higher, so the economy is weakening, some parts more than others," said Edward Moya, senior market analyst at OANDA.

The data pushed the dollar index 0.2% lower, while benchmark Treasury yields also fell.

"For gold to make that run back to record highs, you need the June rate hike completely off the table," Moya added.

Markets are pricing in an 88% chance of a 25-basis-point hike in May, which a Reuters poll found would be the final one, with the Fed holding rates steady for the rest of 2023.

"This week has had some aggressive Fed speak from its speakers and a continuation of that narrative could give the greenback a boost, leaving gold exposed on the downside," DailyFX analyst Warren Venketas wrote in a note.

New York Fed President John Williams said on Wednesday inflation was still at problematic levels and the Fed would act to lower it.

Traders will scan further remarks by Fed policymakers this week, before their blackout period on April 22 ahead of the central bank's May 2-3 meeting.

Platinum gained 0.4% to $1,094.55 per ounce, its highest in more than three months. Spot silver rose 0.1% to $25.29 while palladium slipped 1.7% to $1,588.94.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Workers’ Day

May 1

Africa Day

May 25

Counters trading under cautionary

CBZH

TSL

Fidelity

Willdale

FMHL

ZBFH

GetBucks

Zimre

Seed Co

Invest Wisely!

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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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