Bulls n Bears Daily Market Commentary : 01 February 2023

Wed Feb 1 17:18:24 CAT 2023

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Bulls n Bears Daily Market Commentary : 01 February 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE All Share Index gained further by 647.76 points to close the session at 23,461.00 points. DAIRIBORD LIMITED led the movers by $8.4300 to close at $68.2800, NMB BANK rose by $4.0208 to $40.0000 and FBC HOLDINGS was $5.5825 stronger at $66.0500. ZIMRE HOLDINGS also increased by $0.5862 to $7.6600 and TANGANDA was $12.7517 firmer at $168.0000. 

Trading in the negative: GETBUCKS lost $1.5200 to $20.0000, WILLDALE eased $0.0787 to $2.9713 and MEIKLES traded $3.2519 weaker at $158.1648. CBZ  also decreased by $2.0000 to $145.0000 and ARISTON was $0.0513 lower at $4.5279.-zse

Global Currencies & Equity Markets

Cedi to remain stable against dollar

The Ghana cedi is expected to remain stable and probable improve its value against the dollar in the coming days and weeks.

This is due to significant steps made by the government to achieve the Domestic Debt Exchange programme target.

The completion of the programme will pave the way for the crucial International Monetary Fund Board approval of a support programme for Ghana.

The Ghana cedi has in the past week exhibited stability against the US dollar after a poor performance in January 2023.  

It gained a marginal 0.78% value to the American greenback last week to trade at about ¢12.85 one US dollar.

The Central Bank last week sold about $22 million on the spot market to help tame the corporate demand.

The government last week reached an agreement with the crucial stakeholders (the Ghana Association of Banks, the Ghana Insurance Association, and the Ghana Association of Securities Industry) of the Domestic Debt Exchange Programme.

It, however, yesterday, January 31, 2023, extended the deadline for the Domestic Debt Exchange Programme to February 7, 2023.

It therefore encouraged all stakeholders to participate in the programme, an essential step towards meeting its debt sustainability targets and restoring macroeconomic stability and economic growth.

This many analysts, Joy Business, engaged believed is crucial to securing the Board Level Agreement with the IMF that will positively impact on the outlook of the foreign exchange market and consequently the cedi.

Nigeria: Naira Stable At Forex Markets Amid New Note Scarcity

Naira closed at N461.50 per $1 at the spot market on Tuesday, the same rate it traded in the previous session on Monday.

Naira maintained stability against the United States dollar at the Investors and Exporters window on Tuesday, amidst poor circulation of the newly designed naira notes in the country.

According to data published on FMDQ website, where forex is officially traded, the local unit closed the day's market at N461.50 per $1 on Tuesday, the same rate it was exchanged for in the previous session on Monday.

Within this period, the domestic currency rate soared to an intra-day high of N446.00 and stooped to a low of N462.00 per dollar before settling at N461.50 at the close of business.

The official window opened at N461.50 and closed at the same rate but had $85.04 million posted as foreign exchange turnover recorded within the period.

Similarly, the currency exchange rate remained unchanged at the parallel market on Tuesday amidst intensified efforts by the anti-graft agencies and the State Security Services (SSS) to curb newly designed naira notes hawking by street marketers and mobile cash point operators as Nigerians scramble for new notes withdrawal.

In recent weeks, Nigerian citizens and commercial banks across the country have been lamenting over their inability to access the newly designed naira notes.

While this subsists, many Nigerians on social media have expressed reservations about the circulation of the new notes, with many fuming that they are yet to see or feel the new naira notes.

Others have also complained of hoarding on the part of the commercial banks, while some mobile cash point vendors are said to be exploiting the situation by hawking the new note.

In Abuja and Uyo, currency dealers said the hard currency was exchanged at N750.00 per dollar and sold at N755.00 to a dollar on Tuesday, as against the N748.00 per $1 mark it was exchanged for in the previous market on Monday.

-Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar slips against euro ahead of Fed rate decision

(Reuters) - The dollar edged lower against the euro on Wednesday ahead of an eagerly-awaited Federal Reserve policy decision with investors hoping the U.S. central bank will signal the end of its interest rate hiking cycle.

After a series of jumbo rate hikes in 2022 to tame inflation, the market expects a quarter-of-a-percentage-point increase in the Fed benchmark interest rate to 4.75%. It would be the smallest increase since the central bank kicked off its tightening cycle 10 months ago with one the same size.

Less clear is whether the central bank will continue to signal further rate hikes as evidence mounts that inflation and the economy are both losing momentum.

The dollar index, which measures the U.S. currency against six major peers, fell 0.15% to 101.96 by 0843 GMT. It also slipped in the previous session, in part because of a report showing U.S. labour costs had increased in the fourth quarter at their slowest pace in a year.

With investors pricing in the Fed reaching the end of its rate-hike cycle, the index is far from the 20-year high of 114.78 it touched on Sept. 28. It has fallen for four straight months.

Fed Chair Jerome Powell's words will be closely watched, investors said.

"While Fed officials have insisted that rates will stay high for some time to come, the markets simply don’t believe them, especially when several key inflation indicators have shown that prices are still coming down on a steady trajectory," said Michael Hewson, Chief Market Analyst at CMC Markets UK.

Carol Kong, currency strategist at Commonwealth Bank of Australia said "recent progress on inflation has encouraged market participants to expect the Fed to quickly pivot from interest rate hikes to interest rate cuts".

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rates today at life-time high after budget 2023 proposal.

Gold rates today climbed to a new life-time high of ₹58,060 per 10 gm on Multi Commodity Exchange (MCX). Gold future contract for February 2023 started rising amid budget speech of Finance Minister Nirmala Sitharaman and went on to climb to its record high by the time FM finished her speech in the parliament. Highlighting the connect between the gold price rise and FM Sitharaman's budget speech, commodity market experts said that gold price today hit new high because of the budget proposals to increase the import duty on silver Dore, bars and articles to align them with that on gold and platinum.

On why gold prices are rallying today, Nirpendra Yadav, Senior Commodity Research Analyst, Swastika Investmart said, "The government of India increased the import duty on gold bars and gold Dore earlier this fiscal year to 12.5% and 11.85%. Now in the union budget for 2023, Government has decided to increase the duty on articles made therefrom to enhance the duty differential. Which will further increase the gold prices in the domestic market. And the increase of import duty on Silver Dore, bars and articles will support the silver prices in the near term. On the other hand, higher duty on precious metals will support the India Rupee."

Speaking on the reason for gold rates today climbing to a new all-time high, Anuj Gupta, Vice President — Research at IIFL Securities said, "Gold prices in domestic market are rising due to the new government of India's (GoI's) proposal to increase the import duty on silver Dore, bars and articles to align them with that on gold and platinum. The budget proposal has gone down well among the bullion market participants and the rally in precious yellow metal may further continue as US Fed officials are also dropping hint to go slow on interest rate hike. "

Anuj Gupta of IIFL Securities advised gold investors to hold further as gold prices are expected to go up to ₹58,500 per 10 gm levels in immediate short term. He said that in medium term, gold price is expected to hit ₹60,000 in domestic market as the budget proposal is going to boost demand of physical gold in the domestic market leading to demand supply constraint for the precious commodity.

Predicting profit booking on higher levels, market expert Sugandha Sachdeva said, “On the other hand, global cues are indicating some pressure on gold with key resistance in sight at $1950 per ounce, where a rebound in the dollar index from multi-month lows is capping prices at higher levels. The US Fed has been soaking on all the excess liquidity and markets are now looking forward to any signals by the US Fed towards winding down its aggressive rate hike cycle by March that shall further set the tone of prices."

Expecting positive impact of budget 2023 proposals on gems and jewelry business, Colin Shah, MD at Kama Jewelry said, “The move to not impose any capital gains on the conversion of physical gold to electronic gold receipts and vice versa will help further gold monetization. This announcement may help in reducing the import of gold."

While presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman said, "Customs Duties on Dore and bars of gold and platinum were increased earlier this fiscal. I now propose to increase the duties on articles made therefrom to enhance the duty differential. I also propose to increase the import duty on silver Dore, bars and articles to align them with that on gold and platinum."

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Axia 

EGM to approve the delisting of Axia from the ZSE and listing on VFEX

virtual

February 2 –  (9am)

Robert Mugabe National Youth Day

February 21

Cafca 

AGM

virtual 

February 23  - (12pm)

Ariston 

AGM

Centenary Room, Royal Harare Golf Club

February 24 - 3:30pm

Good Friday

April 7

Easter Saturday

April 8

Easter Sunday

April 9

Easter Monday

April 10

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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