Bulls n Bears Daily Market Commentary : 16 February 2023

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Bulls n Bears Daily Market Commentary : 16 February 2023

 

 	

 <mailto:info at bulls.co.zw> 

 

 	


ZSE commentary

 

Bearish sentiment on the bourse.

A bearish sentiment continued on the market in Thursday's  session as the
All-Share Index dropped 2.87% to settle at 27,511.60pts. The ZSE Top 10
Index was the major decliner amongst the indices we review after shedding
3.68% to 16,992.02pts as profit taking in selected counters took its toll.
The Mid Cap Index parred 0.91% to 56,129.15pts. Spurred by CFI and Ariston,
the Agriculture Index gained 0.63% to 112.88pts. Headlining the laggards of
the day was SeedCo Limited that retreated 10.45% to end pegged $200.0000
while, beverages group Delta trailed behind on a 7.45% loss to $500.4757.
Telecommunication group Econet trimmed 6.96% to $190.1676 while, sugar
processor Star Africa plunged 4.55% to $1.7800, post the release of its Q3
trading update in which sales volumes rose by 8% from prior comparable
period.

 

Bankers CBZ capped the top five worst performers of the day on a 3.89% fall
to $140.0000. Agriculture concern CFI led the risers of the day on a 14.99%
jump to $568.6500 while, cable manufacturer Cafca advanced 14.98% to
$304.2500. Turnall edged up 12.55% to $5.0000 as clothing retailer Edgars
jumped 8.33% to settle at $13.0000. Ariston fastened the top five gainers'
pack on a 7.68% ascent to $4.8457. Activity aggregates faltered in the
session as volume of shares traded tripped 35.73% to 3.41m shares, worth
circa $1.55bn. Delta drove the volume aggregate of the day as it contributed
46.47% of the total, trailed by Innscor and NMB with respective
contributions of 25.58% and 11.59%. Delta and Innscor were the value leaders
of the day as the duo claimed a combined 94.26% of the turnover. The ETF
Index

was 13.09% weaker at 363.3823pts as Morgan & Co Multi Sector ETF dragged the
index down following a 1.80% loss. A total of 43,910 units worth
US$375,396.12 traded in the session. On the VFEX, the All-Share Index was up
0.25% to 106.7763pts anchored by Padenga and Simbisa. On the same note,
tomorrow is the last day for Innscor to trade on the ZSE, following the
shareholders' approval of its delisting. efesecurities

 

 

Global Currencies & Equity Markets

 

 

 

South Africa

 

South African rand weakens against dollar; stocks rise

(Reuters) - South Africa's rand weakened on Thursday after President Cyril
Ramaphosa defended his decision to appoint a minister of electricity to try
to end crippling power cuts.

 

At 1609 GMT, the rand traded at 18.1500 against the dollar, 0.68% weaker
than its previous close.

 

Some lawmakers said the appointment would add a layer of bureaucracy as
state utility Eskom is overseen by the public enterprises minister while the
energy minister is responsible for procuring additional power generation
capacity.

 

"(The power crisis) requires the undivided attention of a political
principal who does not need to split their time and energies among different
important responsibilities," Ramaphosa said, responding to a debate by
lawmakers on his State of the Nation Address.

 

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indexes closed about 1% higher, mostly helped by gains in the resources
index (.JRESI).

 

The government's benchmark 2030 bond was weaker in afternoon trade, with the
yield up 4.5 basis points at 10.025%.

 

 

Nigeria

 

Naira Redesign: Nigerians lament as banks, motorists, others reject old
notes

As tension continued to rise over the scarcity of the newly redesigned N200,
N500, and N1,000 currency notes, commercial banks, motorists and major sales
outlets across the country have refrained from the collection of old notes.

 

A PREMIUM TIMES survey within the week showed that many Nigerians are still
in possession of the old naira notes due to poor circulation of the newly
designed currency, but are not able to carry out their daily transactions
because banks have commenced the implementation of the CBN deadline for the
phasing out of the new notes.

 

Across Abuja, Lagos and other major cities visited, our reporters observed
that commercial banks, transport workers and some shopping outlets refused
to accept the old notes since Monday, despite a Supreme Court order
restraining the CBN from phasing out the old notes.

 

Some business owners who spoke to PREMIUM TIMES lamented they do not know
what to do with the old notes in their possession as banks battle with the
scarcity of the new notes amid public outrage.

 

President Muhammadu Buhari Thursday announced that the CBN will extend the
use of the old N200 notes. But in what analysts consider an affront to the
Supreme Court, the president insisted that the CBN directive on the phasing
out of the old N500 and N1,000 notes remains.

 

Background

On 26 October, 2022, Nigeria's CBN announced the introduction of redesigned
200, 500 and 1,000 naira notes into the country's financial system. But
since the notes were unveiled, Nigerians across different parts of the
country have been struggling to access it from banks and ATM cash points.

 

As Nigerians expressed frustration over their inability to access the new
notes, the CBN extended the deadline for the phasing out of the old notes
from 31 January to 10 February. Yet, many Nigerians have had a hard time
getting the new notes.

 

Last week, the Supreme Court gave an order restraining the CBN from going
ahead with the implementation of the 10 February deadline set for the
phasing out of the notes.

 

 

But both Mr Buhari and the CBN governor, Godwin Emefiele, refused to adhere
to the court order.

 

On Wednesday, the Supreme Court adjourned the suit filed by some state
governments to challenge the 10 February deadline set by the CBN to end the
use of old naira notes to 22 February later this month.

 

Millions of Nigerians have continued to grapple with hardship amid the cash
crunch that has worsened business transactions and stifled trade in the
informal economy.

 

Abuja

In some parts of the Lugbe axis of Nigeria's capital city, Abuja, our
reporters observed that the old naira notes are being rejected in places
like parks, fuel stations and marketplaces among others despite the
extension of their validity by the Supreme Court.

 

"On Friday, I went to see my daughter in Gwagwalada on my way back to Lugbe.
The driver of the cab I entered was asking me if I had the new naira note
with me. I asked him why he asked and he said he won't take me to my
destination if I'm going to pay with the old note," says a Lugbe resident,
Idowu Agunbiade, in an interview PREMIUM TIMES.

 

At first, Mr Agunbiade said, he thought the taxi driver was joking, but
everything changed when he arrived at his destination.

 

"When we got to our destination, I gave him the old note, but he outrightly
rejected it, insisting on the new note. I was so shocked and I ended up
transferring N300 to him," he said.

 

"That's when I got to understand that this money crisis is not funny again.
The country has become something else where you have your money and you
can't spend it because of the CBN policy."

 

Similarly, a POS operator, Aina Wale, narrated how a bank refused to collect
his old naira note. Mr Aina also alleged that his bank refused to collect
old notes from him, noting that he is still has about N100, 000 of the old
notes in his possession.

 

"Come and see, this is a total of N150,000. I don't know what to do with it.
I went to my bank on Monday to deposit this money and they rejected it. The
bank official that attended to me said I should go to CBN and deposit the
money. I am so heartbroken right now," he said.

 

"If they want to withdraw and I tell them what I have is an old note they
will just hiss and go.I wish the government can help extend the policy so I
can deposit this money."

 

Another resident, Ngozi Isaac, said she was so surprised to have learnt
about the refusal to collect the old currency by banks.

 

"I was so surprised when my husband came back home on Monday and he said he
was at the bank earlier to deposit just N10,000 and the bank refused to
collect the money," she said.

 

At Lugbe car wash park, a cab driver, who gave his name as Adamu, said he
stopped accepting the old notes because the ones he collected over the
weekend were still with him.

 

"I can't spend it because people are rejecting it," he said.

 

On his part, a meat seller in Lugbe who gave his name as Baba Aisha said he
stopped collecting the old naira notes on 9 February, following the deadline
given by the CBN.

 

He explained that some of his customers informed him that the court had
extended the deadline but if he accepts it, nobody will accept it from him.

 

"I think there is so much confusion about the whole thing, so the best thing
I did was to stop collecting it at all," he said.

 

Gudu

On Wednesday, Aminu Gwadebe, a vulcanizer in Gudu, said he has also been
rejecting the old notes. He complained that he had some old notes with him
but did not know how to change them.

 

"Look, this is what I worked for over the weekend and the bank has refused
to collect it, as it is I am stranded now," he said, showing our reporters a
bundle of N200 old notes.

 

However, an onion seller, Musa Abubakar, said he still collects the old
notes from his customers because he does not want his onion to get damaged.

 

"The new and old money is scarce now, so I had no option but to collect
anyone that my customers bring. If I don't sell out my onion it will spoil
and I don't want to lose both my onion and the money," he said.

 

South-west

In several places in the nation's commercial centre, Lagos, petty traders
and artisans are rejecting the old notes.

 

PREMIUM TIMES observed that commercial buses plying the routes between Ogba
and Lagos Island were not accepting the old currency early Wednesday.

 

However, the drivers said the chairman of the drivers union later ordered
members to start accepting them from commuters. Likewise, commercial
motorcycle riders are also still collecting the notes in some parts of the
state.

 

"Old notes are not being accepted starting from today (Tuesday)," said a
staff member working in the Business and Commercial Clients Unit at Stanbic
IBTC Bank's Lagos headquarters.

 

"The CBN brought out a process that if you still have the money, you will
bring the money to them individually. They will collect the money from you,
they will do some investigation, they will interrogate you (on) why you
still have the money, what type of business you are doing and all the rest,"
he added.

 

On Thursday, the Lagos State government warned residents against rejection
of the old notes.

 

The CBN in its earlier memo communicating the 10 February deadline extension
had said a seven-day grace period, beginning on February 10 to 17 February,
would be allotted to allow depositing their old notes at the CBN after the
February deadline.

 

But many Nigerians are yet to understand how feasible and seamless the
procedure would be.

 

Rejection

Meanwhile, PREMIUM TIMES gathered from bank officials and customers
Wednesday that the banks are rejecting the old notes in compliance with CBN
directives.

 

A bank staffer who declined to have his name in print emphasised that the
currency reform would have a reverse effect in the days ahead, noting that
the ramifications may be dire for the populace.

 

"There are still lots of old notes in circulation apart from the ones some
people have stashed away. So stopping it now and not pumping in more new
notes I believe will cause a lot of pressure. Starting from Wednesday, the
pressure will be so much," he explained.

 

"Come to think of it, most politicians still have that money. So they will
want to instigate the masses. If the pressure is huge, there will be an
outburst."

 

Also, another cash officer at one of the Stanbic IBTC branches in Lagos who
does not want his name in print as he was not authorised to speak on the
matter, said he is aware banks like Ecobank, Zenith and Stanbic IBTC have
stopped taking the old notes from customers.

 

"For now banks are just playing safe since they don't know the policy
direction the CBN might want to take," he said.

 

"As of Monday morning, we had to evacuate everything we had in old notes and
move everything to the CBN because nobody knows what the CBN is going to
do."

 

He said that banks evacuate cash to the CBN only on weekdays, noting that
some other banks did it over the weekend to avoid the risk of the cash being
rejected by the apex bank.

 

Protests, Destruction

In the midst of the uncertainties, many Nigerians have taken to the streets
on major cities to protest the hardship caused by the policy.

 

In parts of southern Nigeria, many protesters were said to have sustained
injuries and some were arrested for vandalising bank properties.

 

Protesters

Protesters

On Wednesday in Benin City, Edo State, residents attacked some of the banks
in the city, including Ecobank, Firstbank and UBA, according to the police
spokesperson in the state, Chidi Nwabuzor. Similarly, groups of protesters
have also hit the streets in Delta, Akwa Ibom, Ogun and Oyo states on recent
weeks.

 

The protest necessitated some banks to suspend activities and several shops
and market stores were shut.

 

Experts Speak

Speaking on the developments, CEO of Dairy Hills Limited, Kelvin Emmanuel,
said the decision of the Supreme Court and President Buhari's Thursday
broadcast reflect the lack of coordination in policy making in Nigeria.

 

"The people who say the deliberate hoarding of new naira notes as well as
the hoarding of the old notes by the Central Bank as a strategy to curb vote
buying is not covered anywhere in sections 19 & 20 of the CBN Act, and is an
invitation to Anarchy. This is because, if pandemonium breaks out across the
entire nation, there will be no elections in Nigeria," he said.

 

On his part, Kazeem Oyinwola, an Abuja-based legal practitioner and
consultant, said by virtue of section 287(1) of the 1999 Constitution (as
altered) 'The decisions of the Supreme court shall be enforced in any part
of the Federation by all authorities and persons, and by courts with
subordinate jurisdiction to that of the supreme Court.'

 

"Thus, to this extent, the Federal Government, and by extension, the Central
Bank of Nigeria, is bound by the interim injunction granted against it by
the Supreme Court to the effect that the old naira notes continue to be
legal tender pending the determination of the Motion on Notice filed by the
Kaduna State Government," he said.

 

Mr Oyinwola said the refusal of the federal government to comply with the
verdict of the Supreme Court in this regard does not only constitute
executive lawlessness but also violates the provision of section 287 of the
Constitution.

 

He said: "Should the executive and its agents be seen to be flagrantly
violating the constitution by virtue of which they're in office? The answer
is no. And that's why the decision of Emefiele to the extent to which he
insisted that the old naira notes cease to be legal tender from February 10,
2023 is not only irresponsible but constitutes shameless but reckless
disregard for the constitution of the federation.

 

 

"Let me also add that under no circumstance can a party unilaterally modify
the decision of a court to suit its own position. The effect of the interim
injunction of the Supreme Court is that the old notes of N1000, N500 and
N200 remain legal tenders. Can the federal government now modify the
decision to say only the N200 notes should remain legal tenders? This is
executive lawlessness, a federal government having scornful disregard for
the judicial institution. This should only happen in a banana republic!"

 

On Thursday, the federal government announced that the old 200 naira note
should be accepted as a legal tender for the next 60 days, and that there is
no going back on the phasing out of the old 500 and 1000 naira notes, which
has already taken effect.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Markets

 

Dollar rises to six-week peak as strong U.S. retail sales bolster
higher-rates scenario

(Reuters) - The dollar climbed to a six-week peak against a currency basket
after the release of hotter-than-expected U.S. retail sales data on
Wednesday, bolstering investors' expectations that the Federal Reserve would
keep monetary policy tight for some time to fight stubbornly high inflation.

 

The greenback also ascended to a fresh six-week peak versus the yen.

 

Data showed that U.S. retail sales surged 3.0% last month, increasing by the
most in nearly two years. The numbers for December were unrevised to show
sales dropping 1.1%. Economists polled by Reuters had forecast sales would
increase 1.8%, with estimates ranging from 0.5% to 3.0%.

 

On Tuesday, the U.S. government reported that consumer prices accelerated on
a monthly basis in January, rising 0.5%, due in part to higher rental and
food costs. The gain matched economists' expectations in a Reuters poll and
was well above the 0.1% month-on-month rise in December. Year-on-year prices
rose 6.4%, down from 6.5% in December but above economists' expectations of
a 6.2% gain.

 

"What all this has done, is it's pushed that terminal rate, just 25 basis
points higher than in January. So, now, the terminal rate has been pushed to
about 5.25," said Ivan Asensio, head of FX at Silicon Valley Bank in San
Francisco, referring to the U.S. central bank's benchmark overnight interest
rate.

 

"It's not just that we have renewed expectations for now 25 (basis points
higher) in March and then 25 as expected in May, but also the possibility
that rates have to stay higher for longer. So, where is the plateau? Every
day that goes by, the 2% (inflation) target for the Fed seems a bit far into
the distance," he added.

 

In afternoon trading, the dollar index rose 0.6% to 103.90 , after hitting a
six-week peak of 104.11.

 

Against the yen, the dollar surged to 134.355 yen , the highest since Jan.
6. It was last up 0.8% at 134.16 yen.

 

The currency pair's consolidation around 127 has extended, wrote Shaun
Osborne, chief FX strategist, at Scotiabank, and the technical picture for
the U.S. dollar has developed more positively through February so far."

 

He added that U.S. dollar gains above the 133.10 yen zone suggest
additional, corrective gains to the 136.50/137 area will follow.

 

The euro, meanwhile, fell 0.5% against the dollar to 1.0682 .

 

Euro

In December, Fed policymakers' median projection saw the central bank's
policy rate peaking at 5.1% this year. But interest rate futures markets
have priced a peak above 5.2% hitting in July, and traders are becoming less
sure that cuts are coming in 2023. Rates currently stand at 4.5% to 4.75%.

 

Deutsche Bank economists said they now expect the Fed to raise the policy
rate to as high as 5.6%, having previously expected a 5.1% peak.

 

U.S. CPI inflation is cooling

Sterling dropped 1.3% to $1.2022 in the wake of data showing British
inflation cooled more than expected in January to an annual rate of 10.1%,
alleviating some of the pressure on the Bank of England to keep hiking
interest rates.

 

Also on investors' radars was an announcement by Scottish First Minister
Nicola Sturgeon that she would step down after more than eight years in the
job.

 

The Australian dollar fell 1.3% to US$0.6897. Australia's central bank chief
Philip Lowe told members of parliament that rates still had a ways to rise.

 

Meanwhile, China's yuan traded onshore hit more than a one-month low at
6.8576 to the dollar, which was last up 0.3% at 6.8515.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold rebounds from 1-month lows as dollar cools

Gold prices bounced off one-month lows on Thursday, as the dollar gave up
most of its gains and as some investors seized the chance to pick up the
bullion at relatively cheaper levels.

 

Spot gold firmed 0.4% to $1,842.67 per ounce by 2:45 p.m. ET. U.S. gold
futures rose 0.4% to settle at $1,851.80.

 

Following strong PPI data and a "compelling case for 50bps at the last
meeting" from Cleveland Fed President Mester, gold made new lows, said Tai
Wong, a senior trader at Heraeus Precious Metals in New York.

 

However, two-year yields and the dollar moving to session lows triggered
some short-covering in gold after the recent sharp, unpleasant drop,
supporting bullion along with some short-term bargain-hunters looking for a
quick scalp, Wong said.

 

Gold prices fell as much as 6.8% from near 10-month highs reached earlier
this month to Thursday's lows.

 

Data showed the U.S. producer price index bounced to 0.7%, higher than
consensus forecast of 0.4%, while jobless claims data showed a resilient
labor market.

 

Following the data, benchmark U.S. 10-year Treasury yields rose to over
one-month peaks, while the dollar extended gains to a six-week high, making
greenback-priced gold expensive for holders of other currencies.

 

"Inflation appears to be slowing, but at too slow a pace - it's possible
that rates will have to remain higher for longer and that is not a positive
context for gold," said Daniel Ghali, commodity strategist at TD Securities.

 

Two additional rate hikes of 25 basis points are expected by the U.S.
central bank in March and May. Financial markets are now betting on another
increase in June.

 

Rising U.S. interest rates and bond yields increase the opportunity cost of
holding zero-yield bullion.

 

Spot silver gained 0.4% to $21.71 per ounce, platinum rose 1% to $924.02,
and palladium rose 4.2% to $1,525.39.

 

 

 

 


 

INVESTORS DIARY 2023

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

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
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for guideline purposes only and sourced from third parties.

 

 	

 

 

 	

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