Bulls n Bears Daily Market Commentary : 13 March 2023

Tue Mar 14 05:19:29 CAT 2023

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Bulls n Bears Daily Market Commentary : 13 March 2023

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

Delta anchors activity aggregates.

Beverages group Delta accounted for 50.08% of the total volumes and 70.53%
of the value outturn as circa 1.25m shares worth $740.90m exchanged hands in
the counter. Hippo was the other notable volume and value driver claiming
16.74% of the former and 19.90% of the latter. Activity aggregates were
mixed in the session as shares totalling 2.52m yielded a turnover of
$1.05trillion on the market. ART headlined the gainers' pack on a 13.81%
jump to $25.9000, trailed by packaging group Nampak surged 7.62% to
$28.0000. Delta advanced 6.03% to $592.0574 having traded a high of
$620.0000. Fintech group Ecocash improved 5.74% to $68.8116 while, its
parent Econet company inched up 5.37% to $192.6211. Banking group NMB led
the decliners of day after retreating 6.87% to $42.0000. Following was
Mashonaland that tumbled 6.49% to $10.2857 as Ariston trimmed 1.46% to end
pegged at $11.2000. Proplastics slipped 1.39% to $70.0000 as Hippo completed
the top five winners of the day on a 0.16% lift to $500.0108. The gainers
and fallers' spectrum were equally distributed at ten apiece.

The primary All share Index edged up 2.85% to 30905.71pts while, the ZSE Top
Ten Index extended 3.98% to 18051.27pts. The ZSE Agriculture Index added
0.07% to 127.02pts while, the Mid-Cap Index rose 0.02% to 65950.30pts. The
VFEX market was mixed in the session as Simbisa put on 0.87% to end at
USD$0.4300. Innscor and Axia trimmed 0.16% and 0.14% to close at USD$0.6981
and USD$0.1380. The Datvest and the MIZ ETF declined 11.82% and 0.25% apiece
while, the Old Mutual and the Cass Saddle ETFs rose 0.76% and 0.09%
respectively. Cumulatively, 50,455 units worth $245,304.27 traded in five
ElectrETFs. The Tigere REIT shed 4.91% to $48.1330 on 17,909 units.
-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand strengthens as markets bet on less-hawkish Fed stance

(Reuters) - The South African rand firmed on Monday as the dollar fell
sharply on expectations that the largest U.S. bank failure since the 2008
financial crisis would prompt the Federal Reserve to slow the pace of its
interest rate hikes.

At 1531 GMT, the rand traded at 18.1850 against the dollar , about 0.8%
firmer than its previous close.

The dollar was down about 0.7% against a basket of global currencies as
investors speculated the Fed would no longer raise rates by 50 basis points
this month after the sudden collapse of Silicon Valley Bank.

Investors will scrutinise Tuesday's U.S. inflation data to predict how
hawkish the central bank may be.

Jitters surrounding the collapse of Silicon Valley Bank, under U.S.-listed
SVB Financial Group (SIVB.O), prompted concerns over whether other banks
could be facing similar problems.

On the Johannesburg Stock Exchange, shares in the banking sector (.JBANK)
were down around 4%.

"Our bank shares have been clobbered, absolutely clobbered," said Sasfin
equity strategist David Shapiro, adding the move was in line with the
selloff in banking shares globally.

Nigeria

Naira depreciates at official market

Naira recorded a marginal loss against the United States dollar at the
authorised market on Monday, data published on the FMDQ website, where forex
is officially traded, revealed.

According to the market data posted, the Nigerian naira which opened trading
at N461.50 to a dollar closed at N461.67 per $1 on Monday.

Within the day's business hours, the local currency experienced an intraday
high of N445.96 and dropped to a low of N462.50 per dollar before it
eventually closed at N461.67/$1.

The rate reflects a N0.17 or 0.04 per cent depreciation from N461.50 to a
dollar the domestic unit traded in the previous session last week Friday.

Amidst the lingering cash crunch in the country, the foreign currency
inflows into the Nigerian Autonomous )Foreign Exchange Fixing (NAFEX market
is pegged at $77.64 million on Monday.

At the unauthorised market, currency traders in Uyo said the dollar was
exchanged at N743.00 and sold at N745.00 on Monday.

This is a N2.00 appreciation from N745.00 per $1 the currency exchanged
against the greenback last Friday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar sags as US banks' collapse has markets wagering on no Fed hike

(Reuters) - The dollar languished near a multi-week low on Tuesday as fears
of a broader systemic crisis following the collapse of a U.S. tech-focused
lender left traders speculating that the Federal Reserve could pause its
aggressive rate-hiking cycle.

Market jitters continued to set the tone for a second straight trading day
in the wake of the sudden collapse of Silicon Valley Bank (SVB) and
Signature Bank, although U.S. President Joe Biden on Monday vowed to take
action to ensure the safety of the U.S. banking system.

Over the weekend, U.S. authorities launched emergency measures to shore up
banking confidence.

The fallout sent traders scaling back their bets on how much further the Fed
would continue raising interest rates, sparking a sharp rally in Fed funds
futures and sending the U.S. dollar tumbling.

The greenback was nursing deep losses from the previous session in early
Asia trade, and was last marginally higher against the Japanese yen at
133.42, having slid 1.4% on Monday.

Similarly, sterling edged 0.19% lower to $1.2159, though it remained near
its one-month peak of $1.2200 hit in the previous session. The euro fell
0.09% to $1.0719, but was likewise not far from Monday's one-month top of
$1.07485.

The collapse of SVB - the largest bank failure since the 2008 financial
crisis - has highlighted whether the Fed's rate increases, which took rates
from near zero percent a year ago to more than 4.5% at present, had exposed
cracks among key players within one of the world's largest and most heavily
interconnected banking sectors.

"The SVB crisis highlights the fact that ... when you lift interest rates by
quite a lot, you usually find out there's a few people swimming naked," said
Rodrigo Catril, senior currency strategist at National Australia Bank.

"And that argument applies not just to the U.S., but around the globe ...
Regardless of the fact that the authorities in the U.S. have provided that
security assurance that depositors will be ok, investors don't know if
they're going to be ok, and therefore they're running for the door."

Market pricing now shows a 31% chance that the Fed would keep rates on hold
at its policy meeting next week, with rate cuts expected as early as June
and through the end of the year.

The Fed's rate hikes and expectations of how much higher U.S. rates would go
have been a huge driver of the dollar's rally.

Against a basket of currencies, the U.S. dollar index rose 0.09% to 103.77,
after sliding 0.9% on Monday and hitting a one-month low of 103.47.

The Aussie fell 0.29% to $0.6648, reversing some of its 1.3% jump in the
previous session, while the kiwi shed 0.18% to stand at $0.6209, having
similarly surged 1.4% on Monday.

A key U.S. inflation report is due later on Tuesday, which could add to the
Fed's conundrum on whether it should stay on its rate-hike path to tame
persistent price pressures, or to hold back on tightening monetary policy
further to give the banking system some breathing space.

Goldman Sachs' analysts on Sunday said they no longer expect the Fed to
deliver a rate hike at its March 22 meeting in light of the recent stress.

"Rather than proceeding with more monetary tightening ... the Fed finds
itself in a terrible bind," said Eric Vanraes, a portfolio manager at Eric
Sturdza Investments. "It is highly probable that there will be no
50-basis-point increase in Fed funds on 22 March.

"Longer term, the tremors in the U.S. banking system in recent days should
kill off the Fed's restrictive monetary policy of large rate hikes."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold Prices Fall as Traders Cut Fed Rate Hike Bets

Gold prices (/GC) surged on Monday, rising about 2.5% and extending its move
higher from Friday when the collapse of Silicon Valley Bank sent investors
fleeing for safety. A sharp pullback in Treasury yields and the US Dollar is
helping to support the yellow metal as investors bet that the mayhem in
financial markets around contagion fears stemming from last week's events
will force the Federal Reserve to slow its pace of rate hikes.

Rate traders now see a 70% chance that the Fed will deliver a 25-bps rate
hike later this month before starting to cut later this summer, according to
Fed funds futures. The policy-sensitive 2-year yield fell almost 50 basis
points to 4% on Monday, its largest 1-day percentage drop since November
2021.

Will Gold Prices Move Higher as Traders Assess Contagion Risk?

Investors believe that the Fed will have to slow down due to the stress that
rate hikes are putting on the banking sector, which is now impossible to
ignore; the SPDR S&P Regional Banking ETF KRE fell 12.31% to the lowest
level traded since late 2020. Meanwhile, larger banks like JP Morgan ended
the day with a relatively modest loss of 1.8%. The U.S. considers JPM to be
a systemically important bank (SIB), which essentials means it's too big to
fail.

JP Morgan and other SIBs may benefit from the turmoil as depositors at
regional banks move to protect their capital from regional banks that may be
exposed to some of the same factors that helped to precipitate SIVB's
failure. Chair Jerome Powell and other Fed members made clear that they were
willing to stomach some economic pain and the loss of jobs throughout the
economy, but the systemic risk of more regional bank failures may prove too
much for them to swallow.

So far, the government has not bailed out SVB, although there have been
steps taken to protect depositors, especially those that are within current
FDIC insurance limits (250K). A bank bailout, especially for a non-SIB,
would likely be unpopular when higher prices are straining Americans'
pocketbooks. In the coming weeks, gold traders may want to focus on comments
from Fed members and the Treasury to get a grip on what may happen next. For
now, gold prices may find more support in the post-SVB-collapse environment.

Gold Price Chart Compelling After Break Above Key SMA

Monday's move put gold firmly above the psychologically important 1,900
level, which may inspire some bullish confidence among technical traders.
Prices also sliced above the 50-day Simple Moving Average (SMA). Considering
the sharp move higher from last week, a pullback may be warranted. If so,
prices may hold support around the 50-day SMA and 1,900 level before
resuming the upward trend.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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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