Bulls n Bears Daily Market Commentary : 20 March 2023

Tue Mar 21 01:40:45 CAT 2023

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Bulls n Bears Daily Market Commentary : 20 March 2023

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

Bulls rage in Monday's session.

Bullish sentiment prevailed on the bourse in week opening trades as
twenty-two bulls charged against two bears. The ZSE All Share Index surged
6.05% to 35753.99pts while, the ZSE Top Ten Index jumped 6.89% to
21362.03pts. The Mid-Cap Index advanced 3.08% to 70468.80pts while, the
Agriculture Index put on 1.76% to 131.72pts. Leading the winners' pack was
fintech group Ecocash that garnered 14.94% to end pegged at $83.2357.
Banking group First Capital swelled 14.81% to $22.4491 while, brick
manufacturer Willdale soared 14.27% to $3.9993. Meikles edged up 13.78% to
close at $310.0000 while, telecoms giant Econet climbed 10.02% to settle at
$258.6958. The two fallers of the day were Zimre Holdings and BAT that
marginally trimmed 0.19% and 0.01% to close at respective prices of $11.4005
and $2,769.8500.

Activity aggregates were mixed in Monday's session as volume of shares
traded declined 21.67% to 3.45m while, turnover charged 48.81% to $1.08bn.
Volume drivers of the day were SeedCo Limited, OKZIM, Ecocash and Zimre
holdings that accounted for a combined 87.70% of the outturn. SeedCo Limited
and Econet anchored the value aggregate with respective contributions of
54.30% and 11.77%. Foreigners were net sellers in the session as outflows
stood at $0.23m while, inflows amounted to $6.08m. Simbisa was the sole
gainer on the VFEX as it inched up 2.51% to USD$0.4250. Bindura shed 5.03%
to USD$0.0189 as Padenga slipped 3.81% to trade at USD$0.2400. A total of
2,876 shares worth USD$811.5150 exchanged hands on the VFEX. Cass Saddle and
MIZ improved 1.12% and 0.40% to close at $2.0932 and $1.4457 apiece. Losers
amongst the ETFs were Old Mutual ETF, Datvest MCS and Morgan and Co MCS
which lost 0.95%, 0.18% and 0.0032% respectively. Cumulatively, 2.90m units
worth $36.18m traded in the five ETFs. The Tigere REIT went up 0.08% to
$50.6200 on 4,744 units.-efesecurities

Global Currencies & Equity Markets

South Africa

South African shares shrug banking crisis, rand slips

(Reuters) - South African shares strengthened on Monday despite a global
banking crisis as investors rushed into safe haven resource stocks, while
the risk-sensitive rand weakened.

At 1616 GMT, the rand traded at 18.5250 against the dollar, 0.65% weaker
than its previous close as risk-appetite waned for emerging market
currencies amidst the banking crisis.

On the bourse, the resources sector (.JRESI) closed 4.41% higher on concerns
over a global banking crisis as investors snapped up gold shares, analysts
said.

"We're seeing safety in resources," said Sasfin equity strategist David
Shapiro.

Overall, shares on the Johannesburg Stock Exchange rose, with the blue-chip
Top 40 (.JTOPI) closing 2.68% higher while the broader all-share index
(.JALSH) ended up 2.4%.

South African markets opened against a tense mood across the country that
saw many businesses closed as thousands of protesters marched through South
Africa's cities, calling on President Cyril Ramaphosa to resign over the
lack of jobs and electricity. Security forces guarded malls and streets to
prevent any violence and looting.

Tuesday is a public holiday in South Africa and markets will remain closed,
but when business resumes on Wednesday, local investors will be looking at
monthly inflation figures (ZACPIY=ECI) to be released on Wednesday for clues
on the health of South African economy.

A Reuters poll found on Monday that South Africa's Reserve Bank will raise
interest rates for the last time in this cycle by 25 basis points on March
30, in anticipation of slower inflation and a weak economy due to power
disruptions.

The government's benchmark 2030 bond was stronger with the yield down 6
basis points to 9.975%.

The Thomson Reuters Trust Principles.

Nigeria

Naira remains in short supply as banks ration currency, contend with queues:
Nigeria

A week after the Federal Government and the Central Bank of Nigeria (CBN)
cleared the air on the legality of the old N500 and N1000, the local
currency remains elusive and commanding higher premiums at Point of Sale
(PoS) terminals.

Checks reveal that some sort of rationing is currently taking place because
the banks have limited quantity of the old notes, a development that has
made it difficult to meet the cash request of bank customers.

The apex bank had on Monday last week announced that the old and newly
redesigned banknotes remain legal tender until December 31. The announcement
brought relief to Nigerians who had gone through hardship as a result of the
cash crunch occasioned by the CBN naira redesign policy since December 2022.

Most banks had returned the old naira notes collected from customers in the
last few months before the CBN directed full compliance with the Supreme
Court's ruling, which extended the validity of old N200, N500 and N1000
notes to December 31, 2023.

Related News Monetary Policy Committee to raise rates on GDP, inflation
considerations NGX, CBN, SEC partners to promote financial literacy TIS
renames Lifetime Award category

A top bank official confirmed that the banks have insufficient supply and
that there may not be better circulation of money even in the new week due
to logistics challenges.

"We will wait for the CBN to supply us," he said, adding that the amount
banks get from the CBN is not enough to meet customers' needs.

During a visit to some banks in Lagos, customers said though the banks have
begun dispensing the old naira notes, they are limiting the amount that can
be withdrawn over the counter and at ATMs to N10,000 and in most cases
N5,000.

Findings also revealed that some vendors have refused to accept the old
naira notes despite the CBN's new directive.

While analysing the impact of the naira scarcity, finance experts were
unanimous that February was a bizarre month in Nigeria, where a sudden
extinguishing of about 75 percent of cash in circulation almost brought the
economy to a screeching halt. 

It was widely expected that inflation would decline by 0.86 percent to 20.96
percent. However, rather than decline, inflation stayed flat.

There are various reasons for this outcome but one of the principal factors
responsible for this moderation in inflation was a sharp drop in the
velocity of circulation of money outside the banking system, the analysts
stated.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar down as investors digest Credit Suisse rescue, eye US regional banks

(Reuters) - The dollar slid on Monday as investors reacted to UBS' cut-price
takeover of its beleaguered rival Credit Suisse (CSGN.S).

UBS (UBSG.S) agreed to buy Credit Suisse on Sunday for 3 billion Swiss
francs ($3.23 billion) and assume up to $5.4 billion in losses, in a shotgun
merger engineered by Swiss authorities.

The U.S. dollar index - which measures the currency against six major peers
- was last down 0.501% at 103.270 the day after the merger was announced,
touching its lowest level since Feb. 15.

Meanwhile, growth assets such as bitcoin enjoyed a bounce. The world's
largest cryptocurrency hit a nine-month high on Monday and last rose 4.62%
to $28,065.00.

"I think whenever people feel like you don't have to do a flight to quality,
the dollar is going to take a hit," said Thomas Anderson, managing director
at moneycorp North America.

Also weighing on the dollar are concerns about regional U.S. banks, despite
several large banks depositing $30 billion last week into First Republic
Bank (FRC.N), the U.S. lender drawing the most unease from investors. First
Republic shares tumbled as much as 50% on Monday and were last down about
39%.

"In particular, there are risks developing, or at least some degree of
uncertainty, with the regional U.S. banks that I think are weighing on U.S.
assets at this point as well," said Bipan Rai, North America head of FX
strategy at CIBC Capital Markets in Toronto.

Under the UBS-Credit Suisse deal, holders of $17 billion of Credit Suisse
Additional Tier-1 (AT1) bonds will be wiped out. That angered some of the
holders of the debt, who thought they would be better protected than
shareholders, and unnerved investors in other banks' AT1 bonds.

The euro was last up 0.54% against the dollar at $1.0724, while the British
pound was last trading at $1.2281, up 0.87% on the day.

The dollar rose 0.24% against the Swiss franc at 0.928.

The Federal Reserve's latest decision on interest rate hikes is due on
Wednesday and adds an additional layer of uncertainty for investors.

Rates currently stand at 4.5% to 4.75%. Traders now expect a peak in rates
in May at around 4.8%, followed by a steady series of cuts into the end of
the year, but will be closely watching the forecast for future rate moves
that the Fed is expected to unveil on Wednesday.

"The path of least regret, at least from our view, is to keep (forecasts)
consistent with where they were in December. Given that the risks have now
risen to the domestic financial sector, I think that's probably the prudent
course of action for them," Rai said.

The Japanese yen - long seen as a safe haven at times of stress -
strengthened 0.28% versus the greenback at 131.47 per dollar.

Australia's dollar rose 0.33% versus the greenback at $0.672, while the
Canadian dollar rose 0.52% versus the greenback at 1.37 per dollar.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold flirts with record highs after topping $2,000 an ounce

(Reuters) - Gold traded at record highs in some currencies on Monday and
neared all-time peaks in U.S. dollar terms after banking sector turmoil sent
prices of the safe haven asset rocketing 10% in a matter of days.

Banking stocks and bonds continued to plummet on worries that more problems
may emerge after several U.S. banks and Switzerland's Credit Suisse (CSGN.S)
collapsed or required rescue.

In U.S. dollars, gold shot as high as $2,009.59 from $1,815 on March 9 and
was within sight of its 2020 peak of $2,072.50.

Gold traded at record highs in some currencies after banking sector turmoil
sent prices of the safe-haven asset rocketing 10% in a matter of days

In other currencies, records had already fallen. Gold rose above 3,000
Australian dollars and 165,000 Indian rupees for the first time and traded
around 1,880 euros, just 20 euros shy of its euro record.

"It's all about risk hedging," said StoneX analyst Rhona O'Connell.

"A Swiss bank is supposed to be the be all and end all of safe havens," she
said. "If something else happens in the banking sector, you can expect gold
to go higher."

Gold had fallen back to around $1,980 an ounce by 1230 GMT, with technical
indicators suggesting that the rally may have gone too far too fast.

All eyes were on a U.S. Federal Reserve meeting on Wednesday.

Rising U.S. interest rates had put pressure on gold by increasing returns on
competing assets like bonds but investors now believe the Fed must slow or
stop its tightening to ease pressure on banks, despite inflation remaining
high.

Investors believe the Fed must slow or stop its tightening to ease pressure
on banks

"Its ALL about the Fed," MKS PAMP strategist Nicky Shiels wrote in a
research note, predicting rates would remain unchanged on Wednesday.

The failure of Silicon Valley Bank this month was "a gamechanger" for gold,
she said. "The Fed will have to choose between higher inflation OR a
recession/financial instability and either outcome is bullish for gold,
which puts all time highs in play."

Some investors may sell gold to take profit in the short term but bullion's
upward trend should continue, said Saxo Bank analyst Ole Hansen.

"Peak rates have on three previous occasions during the past 20 years
triggered a prolonged period of gold strength. Given the current situation a
repeat cannot be ruled out."

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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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
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whatsoever for any loss howsoever arising from any use of this report or its
contents or otherwise arising in connection therewith. Recipients of this
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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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