Bulls n Bears Daily Market Commentary : 07 March 2023

Wed Mar 8 07:35:42 CAT 2023

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Bulls n Bears Daily Market Commentary : 07 March 2023

 <https://www.facebook.com/Hyundaizimbabwe> ZSE commentary

Market rebounds in Tuesday’s session…

The ZSE reversed prior session losses to see all the benchmark indices that we review close pointing northwards. The AllShare Index went up 0.76% to 29235.22pts while, the Top 10 Index grew 0.41pts to 16884.47pts. The ZSE Agriculture Index was 1.89% higher at 122.92pts as the Mid-cap Index climbed 1.13% to 64801.43pts. Cable manufacturer Cafca held the first position of the gainers after a 14.99% jump to $349.8500 followed by Ariston Holdings that improved 14.91% to $9.9000. Brickmaker Willdale surged 14.52% to $3.5500 while, Turnall was 13.05% stronger at $7.5043. Packaging group Nampak capped the top five winners of the day on a 13.04% surge to $26.0000. Star Africa was the worst performer of the day after a 4.78% retreat to $1.8102. Trailing was CBZ that shed 1.26% to close at $140.0714 as Zimre Holdings eased 0.45% to $10.9500. Proplastics trimmed 0.06% to $79.9500 as Hippo slipped a negligible 0.00196% to settle at $499.9902.

The market enjoyed a positive breath of seventeen as twentytwo counters advanced against five that shrunk. Activity aggregates were improved in the session as reflected in volumes that rose 5.32% to 2.30m shares while, value outturn soared 93.17% to $281.96m. The main value drivers of the day were Delta, Econet and African Sun with a combined81.82% contribution to the outturn. Volume leaders were Econet (22.81%), Truworths (19.85%), African Sun (18.47%), Edgars (12.16%) and Delta (8.32%). On the VFEX, Innscor declined 8.46% to trade at USD$0.7300 while, Simbisa ticked up 0.11% to USD$0.4500. Padenga Holdings stepped up 0.56% to USD$0.2514 on 350 shares. Bindura and the newly listed Axia were stable at USD$0.0201 and USD$0.1400 apiece. The ETFs traded a cumulative 74,899 units worth $470,801.50. Morgan & Co MCS was the only ETF to register price movement as it dropped 5.98% to $21.6250. Tigere REIT was 6.24% weaker at $47.4540 on 2,385 units.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand weakens after cabinet reshuffle

South Africa's economic activity as measured by GDP growth fell 1.3% in the last quarter of 2022, dropping below its pre-pandemic level due to record power cuts, official figures showed Tuesday.

"After recovering in the third quarter of 2022, South Africa's GDP fell by 1.3% in the fourth quarter" from the previous quarter, state statistics agency StatSA said, adding that GDP (gross domestic product) "fell below its pre-pandemic levels".

Economists had not expected the drop in GDP to be so sharp.

Foreign trade and the financial sector were the biggest drags on growth, with exports falling by 4.8%.

Agriculture, mining and manufacturing also dragged down activity.

In the third quarter, GDP expanded by 1.6% in seasonally adjusted terms.

Growth in Africa's most industrialised country suffered from a previously unseen level of power cuts. There were 207 days of outages in 2022 compared to 75 in 2021. "This figure is obviously a shock," said economist Carmen Nel of Matrix Fund Managers.

State-owned Eskom, which supplies 90% of South Africa's electricity, cannot keep up with demand.

Most of its power stations are over forty-five years old and frequently break down. This causes power cuts of up to twelve hours a day, at a daily cost of more than $50 million, according to estimates by the energy minister.

South Africa has also been hit hard by the Covid-19 epidemic, which has increased poverty and joblessness in one of the world's most unequal countries.

The country's economic growth has been slowing down for about two years.

>From 2.5% in 2022, it would fall to just 0.3% in 2023, due to insufficient electricity supply, according to the central bank's forecast.

The energy crisis has forced South African President Cyril Ramaphosa to declare a state of national disaster and appoint a minister in charge of electricity.

Ramaphosa on Monday appointed Kgosientsho Ramokgopa, a 48-year-old civil engineer and former mayor of Pretoria, to the new portfolio.

Nigeria

Naira Records Marginal Gain At Official Market

Naira appreciated by 0.09 per cent at the authorised market on Monday to close at N461.33 per $1.

Naira appreciated slightly against the United States dollar at the Investors and Exporters window on Monday, after recording declines at the spot market amidst worsening currency scarcity across the country.

The gains were recorded Monday as foreign exchange supply within the market session surged significantly.

According to data published on the FMDQ website, where forex is officially traded, the local unit closed at ₦461.33 per $1 on Monday-- the first business day of this week.

This represents a N0.42 or 0.09 per cent increase against N461.75 to a dollar recorded in the previous session on Friday last week.

Nigeria's Naira opened the day's trading at N461:50 per $1 before moving within an intraday low of N462.31 and a high of N446.00. It eventually closed at N461.33.

The authorised market session recorded $ 108.01 million as foreign exchange turnover within the business period, a 59.85 per cent increase from $67.57 million posted on Friday last week.

At the parallel market, currency traders across the country said the dollar was exchanged at N745.00 per $1 and sold at N750.00 to a dollar on Monday.

This is the same range the local currency traded against the greenback at the street market in the past seven days, the currency dealers said.

-Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar jumps as Powell flags higher terminal rate

(Reuters) - The dollar extended gains against a basket of currencies on Tuesday after Federal Reserve Chair Jerome Powell said that the U.S. central bank will stay the course until the job is done, adding that the ultimate level of interest rates is likely to be higher than previously anticipated.

Powell also said that the Fed is prepared to increase the pace of rate hikes if data indicates it is warranted. That comes after the bank slowed the pace of its tightening to 25 basis points at its last two meetings, following larger hikes last year.

“Powell is explicitly talking about a higher target for interest rates. This is something that the market has been talking about but obviously hasn't been fully priced in," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

Fed funds futures traders raised bets that the Fed will hike rates by 50 basis points at its March 21-22 meeting to 56% after Powell's comments. A 25 basis points increase is now seen as a 44% probability.

Investors will be closely watching the Fed's updated "dot plot" of rate expectations at March's meeting for further indications of how high Fed officials expect to raise rates.

"The market is zeroed in on the March 22 'dot plot' for a clear signal" of what the terminal rate is likely to be, said Adam Button, chief currency analyst at ForexLive in Toronto.

Traders are now pricing for the rate to peak at 5.57% in September.

The dollar index was last up 0.70% on the day at 104.97. The euro dropped 0.64% to $1.0615.

The greenback gained 0.45% to 136.50 Japanese yen .

Sterling slipped 0.95% to $1.1913, after getting as low as $1.1880, the lowest since Jan. 6.

The Aussie dollar also continued to underperform, dropping to $0.6605, the lowest since Nov. 22.

It had slid earlier after the Reserve Bank of Australia (RBA) raised its cash rate by 25 basis points to the highest in more than a decade, as was expected, but suggested it might be nearly done tightening. 

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price falls as Powell testimony lifts dollar

Gold erased all of last week’s gains on Tuesday as the dollar jumped after Federal Reserve Chair Jerome Powell indicated rate hikes could come at a faster pace in his testimony to a congressional committee.

Spot gold fell 1.6% to $1,818.96 per ounce by 12:30 p.m. ET, its lowest in a week. US gold futures were down 1.5% in New York to $1,827.10 per ounce.

The Fed will likely need to raise interest rates more than expected in response to recent strong data and is prepared to move in larger steps if the “totality” of incoming information suggests tougher measures are needed to control inflation, Powell told US lawmakers earlier.

The US dollar index gained almost 1% following Powell’s comments, making bullion less affordable for overseas buyers. US stock indexes also fell after the remarks.

“This direct reference to ‘faster tightening’ even if mitigated by ‘if warranted’ is more of a shove than a nudge, putting the precious metals complex under pressure as the dollar surges,” said Tai Wong, a senior trader at Heraeus Precious Metals in New York, in a Reuters note.

“Gold had already retreated from Friday’s strong close, but so far Powell is more direct and aggressive than market had anticipated,” Wong added.

The US jobs report for February is due on Friday. “If Friday’s jobs data shows significant resilience in the US labour market, it would pave the way for even higher US rates and could unwind the month-to-date gains garnered so far by gold,” predicted Han Tan, chief market analyst at Exinity.

(With files from Reuters)

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Nampak

AGM

Boardroom, 68 Birmingham Road, Southerton

March 8, 9am

Art

AGM

virtual

March 9, 2:30pm

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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