Bulls n Bears Daily Market Commentary : 21 April 2023

Sat Apr 22 09:24:36 CAT 2023

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Bulls n Bears Daily Market Commentary : 21 April 2023

 <https://www.cloverleaf.co.zw/> 

ZSE commentary

The ZSE All Share index added 368.22 points to close the week at 36,894.04
points. Trading in the positive: BRITISH AMERICAN TOBACCO LIMITED added
$400.0000 to close at $4700.0000, TANGANDA TEA COMPANY LIMITED increased by
$10.0477 to $360.0000 and CBZ HOLDINGS LIMITED went up by $9.06077 to
$185.0000. ECONET WIRELESS ZIMBABWE LIMITED added $4.4639 to close at
$211.0158 whilst MEIKLES LIMITED traded $3.8095 higher at $340.0000.

Losses were recorded in MASIMBA HOLDINGS LIMITED which shed $24.2000 to
close at $145.0500, OK ZIMBABWE LIMITED went down $0.2733 to $57.5403 and
NAMPAK ZIMBABWE LIMITED traded $0.9394 lower at $30.0000. ARISTON HOLDINGS
LIMITED gave up $0.0056 to $10.9944 and TSL LIMITED decreased by $0.0044 to
$102.5456.-zse

 <https://www.cloverleaf.co.zw/> Global Currencies & Equity Markets

South Africa

South African rand weaker as Fed rate bets support dollar

(Reuters) - The South African rand weakened on Friday, as rising
expectations that the U.S. Federal Reserve will raise interest rates by 25
basis points (bps) in May lent support to the dollar.

At 1513 GMT, the rand traded at 18.0800 against the dollar, down 0.33% from
its previous close.

The dollar was marginally firmer at 101.87 against a basket of global
currencies , with money markets now pricing in a roughly 86% chance of 25 bp
hike next month despite jobless claims this week pointing to a slowing
U.S.labour market.

The risk-sensitive rand often takes its cue from global factors like the
outlook for U.S. monetary policy in the absence of major local drivers.

Next week, Statistics South Africa will publish the March producer price
index (ZAPPIY=ECI), and the central bank will release its February leading
business cycle indicator (ZALEAD=ECI) and biannual Monetary Policy Review.

Shares on the Johannesburg Stock Exchange slipped, with both the broader
all-share index (.JALSH) and the blue-chip Top-40 index (.JTOPI) ending more
than 1.2% lower.

The government's benchmark 2030 bond was weaker, with the yield up 5 basis
point at 10.120%.

The Thomson Reuters Trust Principles.

Nigeria

Naira weakens against dollar despite improved liquidity

Naira on Thursday weakened against the dollar across foreign exchange
markets despite improved liquidity.

After trading on Thursday, naira lost 0.25 percent as the dollar was quoted
at N463.67 as against the last close of N462.50 on Wednesday at the
Investors and Exporters (I&E) forex window, data from the FMDQ indicated.

Most currency dealers who participated at foreign exchange market auction on
Thursday maintained bids between N459.82 (low) and N466.00 (high) per
dollar.

The daily foreign exchange market turnover increased by 46.51 percent to
$139.85 million on Thursday from $95.45 million recorded on Tuesday.

At the parallel market, also known as black market, naira depreciated by N1
as the dollar traded for N738 on Thursday compared to N737 on Wednesday.

The naira last week appreciated against the dollar at the parallel market as
some of the dollars said to have been spent by politicians during the
elections have come into the market.

The naira strengthened to 735 per dollar on Friday last week, compared to
742/$1 on Tuesday, at the parallel market.

The International Monetary Fund (IMF) said that there were large exchange
rate spreads in parallel markets in some countries like Burundi, Ethiopia,
Nigeria at times, reaching 90 percent in 2022.

The IMF said this in its regional economic outlook report for sub-saharan
Africa, released at 2023 Spring meetings in Washington D.c.

In Nigeria, the exchange rate spread between the official and parallel
market remained high at N273 per dollar.

The IMF said most currencies weakened in 2022 against the US dollar-the
dominant currency for trade invoicing and external

debt.

In the report, the IMF said the official exchange rates in non-pegged
countries, where the exchange rate is not fixed to another currency on a de
jure basis, depreciated 7 percent on average year over year by the end of
2022, exceeding 20 percent in some cases.

The report noted that pegged countries-where the exchange rate is fixed
(mostly to the euro or the South African rand)-also saw their currencies
weaken against the US dollar.

The exchange rate pressures also manifested in the depletion of reserve
assets, as foreign exchange inflows slowed, and central banks used their
reserves to finance imports and repay foreign debt.

According to the IMF an index - combining depreciation against the US dollar
and reserve depletion - shows that exchange rate pressures were at a
six-year peak in 2022, on average, and were higher in pegged regimes and
non-resource-intensive countries.

"While this note focuses primarily on developments in 2022, pressures
against the US dollar have persisted in the first months of 2023 in many
countries," the IMF said.

Exchange rate pressures stem from both global and domestic factors, the Fund
said adding that the combination of monetary policy tightening in advanced
economies and greater global risk aversion decreased net foreign exchange
inflows to the region and priced out frontier economies from the
international capital market.

 <mailto:ibc at zitf.co.zw> 

Global Markets

US dollar flat to modestly higher as upbeat data backs May rate hike

(Reuters) - The U.S. dollar was little changed to slightly higher against
major currencies on Friday, as business activity data suggested that the
world's largest economy remained resilient, supporting expectations of
another 25-basis-point interest rate increase by the Federal Reserve at next
month's policy meeting.

Against commodity currencies, the greenback gained as well. Overall, the
dollar index was on track for its first weekly gain in nearly two months on
rate increase expectations for May.

Data showed on Friday that S&P Global's flash U.S. Composite PMI Output
Index, which tracks the manufacturing and services sectors, increased to
53.5 this month, the highest since May last year and followed a final
reading of 52.3 in March. It was the third straight month that the PMI
remained above 50, indicating growth in the private sector.

"Although economic activity is cooling, rate differentials are still
dollar-supportive, and the U.S. remains the cleanest dirty shirt on the
global economic landscape," said Karl Schamotta, chief market strategist, at
Corpay in Toronto.

In the case of the euro, a surprising recovery in the euro zone economy in
April underpinned the currency.

The dollar index, which measures the performance of the U.S. currency
against six others, was flat at 101.76 and headed for a weekly gain of about
0.2%, its first since late February.

The greenback's outlook, however, remained tilted to the downside as
investors braced for the end of the Fed's tightening cycle. Fed officials
though have been at pains to point out that inflation remains uncomfortably
high and rates must keep rising.

Money markets on Friday continued to show expectations of a quarter-point
U.S. rate hike next month, which is dollar-positive, followed by a pause in
June. The rate futures market has also priced in rate cuts this year as the
economy slows.

"The buck is no longer strongly supported by the Fed's message on interest
rate hikes and other currencies are flowing as a result of growing optimism
globally about a second half of the year that will see not only lower
inflation, but avoid too strong of a recessionary pressure," said Juan
Perez, director of trading at Monex USA in Washington.

Elsewhere, the recovery in the euro zone unexpectedly gathered pace this
month, thanks to a boom in services sector demand compensating for a
deepening decline in manufacturing.

HCOB's flash Composite Purchasing Managers' Index (PMI), compiled by S&P
Global as well and seen as a good gauge of overall economic health in the
euro zone, jumped to an 11-month peak of 54.4 in April from March's 53.7.

The euro was last up 0.1% against the dollar at $1.0982 , recovering from a
session low of $1.0938.

In other currencies, sterling dipped 0.1% to $1.2431, having dropped by as
much as 0.54% earlier on.

The yen was one of the stronger performers earlier in the session, rising to
a one-week high against the dollar, amid data showing Japanese consumer
inflation held steady above the central bank's target in March. That has put
pressure on the Bank of Japan (BOJ) to ditch its ultra-loose monetary policy
stance.

Incoming Governor Kazuo Ueda chairs his first BOJ policy meeting next week.

The dollar was last slightly lower against the Japanese unit at 134.17 yen.

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!

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
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opinions expressed and recommendations made are subject to change without
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for guideline purposes only and sourced from third parties.

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