Bulls n Bears Daily Market Commentary : 13 June 2023

Wed Jun 14 04:45:53 CAT 2023

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Bulls n Bears Daily Market Commentary : 13 June 2023

ZSE commentary

The ZSE All Share Index shed 1,230.06 points (0.68%) to close at 180,232.58
points. CBZ HOLDINGS LIMITED led the movers by $360.0000 to close at
$2760.0000, FBC HOLDINGS rose by $53.4500 to $409.95 and FIRST MUTUAL
PTOPERTIES added $11.8000 to $90.7000. DAIRIBORD HOLDINGS LIMITED also
increased by $10.0460 to close at $500.0460 and UNIFREIGHT was $10.0000
stronger at $150.0000.

Trading in the negative: TANGANDA TEA COMPANY LIMITED retreated by $186.0935
to $1495.8462, ECONET WIRELESS lost $110.2206 to $1087.1671 and DELTA eased
$105.4394 to $3915.5507. FIRST MUTUAL LIMITED shed $11.2499 to close at
$75.0001 whilst ECOCASH HOLDINGS LIMITED lost $2.8978 to close at
$197.1022-ZSE

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand little changed ahead of Fed meeting

(Reuters) - The South African rand was little changed on Tuesday as the
dollar slipped ahead of a Federal Reserve monetary policy meeting.

At 1535 GMT, the rand traded at 18.5675 against the dollar , not far from
its previous close.

The dollar was last trading down about 0.25% at 103.32 against a basket of
global currencies.

The U.S. Labor Department's consumer price index report on Tuesday showed
the smallest annual increase in inflation in more than two years, further
fuelling expectations that the Fed would announce a pause in interest rate
hikes on Wednesday.

Locally, Statistics South Africa figures showed the country's total mining
output rose 2.3% year-on-year in April compared with a revised 2.2% fall in
March.

The rand gained almost 1% on Monday on the back of shorter power cuts at
home and reduced tensions between South Africa and the West over Russia,
analysts said.

"We definitely seem to have calmed the market in a way since the Russian
fiasco and infrastructural problems made its mark on the rand but I am
sceptical if they won't slip back into headlines again," said Casparus
Treurnicht, a Gryphon Asset Management portfolio manager.

On the Johannesburg Stock Exchange, both the blue-chip Top-40 index (.JTOPI)
and the broader all-share index (.JALSH) ended over 2% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 5 basis points to 10.715%.

Nigeria

Naira gains 0.66 after CBN governor's suspension

Naira on Tuesday gained 0.66 percent against the dollar at the parallel
market following low demand as speculators adopt a wait-and-see approach,
after the suspension of the governor of the Central Bank of Nigeria (CBN).

After trading on Tuesday, the dollar was quoted at N755 compared to N760
quoted during the morning trading and last week Friday, at the black market.

President Bola Tinubu, on Friday, suspended Godwin Emefiele, following the
ongoing investigation of his office and the planned reforms in the financial
sector of the economy.

"There is no demand for dollars, people are not buying because they are
speculating that the dollar will fall following the CBN governor's
suspension," a trader told BusinessDay.

The official exchange rate was not available on Tuesday at the time of
writing this report as the FMDQ was yet to update the rate on its website.

At the Investors and Exporters (I&E) FX window on Friday, naira fell to
N472.50, against the dollar, lowest ever recorded since the market was
created in 2017.

This represents 0.63 percent (N3) when compared to N469.50/$1 quoted on
Thursday at the official foreign exchange market.

Read also: Naira, stocks cool after Tinubu rally

Most currency traders who participated at the foreign exchange auction on
Friday maintained bids between N460/$1, lower and N477.00/$1, higher.

At the money market on Tuesday, minimal activities were seen on the treasury
bills space, though with a bullish bias. Pockets of demand were seen across
the curve, with wide bid/ask spread on them. The session then closed with a
significant number of trades executed on the December and March NTBs,
according to a report by Parthian Partners Limited, Africa's premier
inter-dealer broker.

The report noted that little or no interest was seen on the special bill
space, as the market was awash with offers. Few birds seen were far off from
offer; hence, low volumes traded were in June-September.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar droops as bets build for Fed pause, yuan at 6-mth low

(Reuters) - The dollar fell to near a three-week low to the euro and a
one-month low versus sterling on Wednesday, after unexpectedly soft U.S.
inflation data cemented the view that the Federal Reserve will skip an
interest rate hike later in the day.

China's yuan sagged to a 6-1/2-month trough, continuing its slide after the
central bank cut rates on Tuesday, amid speculation even more stimulus is on
the way to support the sputtering post-COVID economic recovery.

The dollar index - which measures the currency against six major peers,
including the euro and sterling - was little changed at 103.29 in early
Asian trading, after dipping to the lowest since May 22 overnight at 103.04.

The U.S. consumer price index (CPI) edged up just 0.1% last month, and
notched its smallest year-on-year increase since March 2021 at 4.0%.

That saw bets for a quarter-point hike to U.S. rates later on Wednesday
pared to less than 6% currently, from 21% 24 hours earlier, according to the
CME Group's FedWatch Tool.

"The soft inflation report effectively cements a Fed pause, although I doubt
it will be enough to warrant a dovish undertone as it's not in their
interest with CPI twice the Fed's target," said Matt Simpson, senior market
analyst at City Index, who points to 103 as a key support level for the
dollar index.

"Whilst it was enough to send EUR/USD above 1.0800, it wasn't enough to keep
it there given a hawkish pause seems quite likely."

The euro was little changed at 1.0791, after reaching a high of $1.08235 on
Tuesday. The European Central Bank decides policy on Thursday, with a
quarter-point rate hike widely expected.

Sterling edged 0.08% lower to $1.2602, but after soaring 0.8% in the prior
session and hitting the highest since May 11 at $1.2625.

The dollar eased 0.16% to 140.02 yen . It rose to the highest since June 5
on Tuesday despite the soft U.S. inflation figures, with the Bank of Japan
seen retaining ultra-easy policy settings on Friday.

The Australian dollar was flat at $0.6768, after reaching the highest since
May 10 on Tuesday at $0.6807.

The Aussie garnered additional support from the People's Bank of China's
decision to cut the seven-day reverse repo rate for the first time in 10
months on Tuesday. China is a key destination for Australia's resource
exports.

The next adjustment to rates could come as soon as Thursday, when the
central bank is due to roll over 200 billion yuan ($27.93 billion) in
medium-term lending facility (MLF) loans.

The yuan weakened slightly and touched 7.1785 per dollar in offshore trading
for the first time since Nov. 29.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips as US yields tick higher, spotlight on Fed

Gold slipped on Tuesday as Treasury yields rebounded, while traders firmed
up bets the Federal Reserve would stand pat on interest rates after data
showed U.S. consumer price gains slowed in May.

Spot gold fell 0.6% to $1,944.0499 per ounce, after rising as much as 0.7%
on U.S. inflation data.

U.S. gold futures settled 0.6% lower at $1,957.3.

Benchmark U.S. 10-year Treasury yields rose to 3.807%, making non-yielding
bullion less attractive.

"Gold couldn't hold on to post-CPI gains over growing concern that stubborn
underlying inflation may produce a hawkish Fed dot-plot tomorrow pointing to
fewer-than-expected rate cuts in 2024," said Tai Wong, a New York-based
independent metals trader.

The U.S. consumer price index (CPI) rose 4.0% in May, the smallest annual
increase in more than two years, but stayed well above the Fed's 2% target.

In the 12 months through May, core CPI climbed 5.3%, showing that underlying
price pressures remained strong.

Traders now see a more than 90% chance the U.S. central bank will decide to
forgo an 11th straight interest-rate hike and keep the benchmark rate at
5.00% to 5.25% on Wednesday. Before the report, traders saw about a
one-in-four chance of a June rate hike.

While gold is seen as a hedge against inflation, higher rates to tame price
pressures generally weigh on the non-yielding asset's appeal.

The dollar eased 0.4% to near its lowest in three weeks, putting a floor
under greenback-priced bullion.

"The market participants are acknowledging the idea that we might be near
terminal rates regardless," said Daniel Ghali, commodity strategist at TD
Securities, adding "the market is set up here for an asymmetric reaction to
the upside on a pause."

Silver fell 1.5% to $23.6786 per ounce, platinum dropped 1.3% to $977.0023
while palladium gained 0.5% to $1,357.1104.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

Counters trading under cautionary

CBZH

GetBucks

EcoCash

TSL

Econet

Turnall

First Capital Bank

ZBFH

Fidelity

Zimplow

FMHL

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
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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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