Bulls n Bears Daily Market Commentary : 21 March 2023

Wed Mar 22 00:41:46 CAT 2023

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Bulls n Bears Daily Market Commentary : 21 March 2023

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

The ZSE All Share Index has further increased to 38,025.14 points after adding 2,271.15 points . DELTA rose by $86.9672 to close at $804.0014, HIPPO VALLEY ESTATES gained $64.4474 to end at $570.0000 and ECONET traded $26.0911 stronger at $284.7869. AFDIS DISTILLERS also increased by $13.4585 to $298.4585 and SEEDCO was $9.8688 firmer at $230.1927.

Trading in the negative is BRITISH AMERICAN TOBACCO which lost $62.3500 to $2,707.5000, MASIMBA HOLDINGS was $1.0000 weaker at $120.0000 and ZB FINANCIAL HOLDINGS traded $0.5000 weaker at $117.5000. WILLDALE LIMITED decreased by $0.2993 to $3.7000 and ARISTON HOLDINGS  dropped by $0.2246 to close at $11.0000.

OLD MUTUAL ZSE TOP 10 gained $0.8917 to $8.8952, MORGAN & CO MULTI SECTOR EXCHANGE TRADED FUND also increased by $0.0867 to $22.036 and MORGAN & CO MADE IN ZIMBABWE EXCHANGE TRADED FUND was stronger by $0.0291 to $1.4748.

Trading in the negative is DATVEST MODIFIED CONSUMER STAPLES EXCHANGE TRADED FUND decreasing by $0.0250 to $1.8505 and CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND  lost $0.0117 to close at $2.0815.

TIGERE REAL ESTATE INVESTMENT TRUST lost $2.4949 to close at $48.1251.-zse

Global Currencies & Equity Markets

South Africa

South African shares shrug banking crisis, rand slips

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%.

Nigeria

Naira Trades N740/$1 at Black Market, N461.50/$1 

The Naira opened the week stronger against the US Dollar in the black market, the Peer-2-Peer (P2P), and the Investors and Exporters (I&E) segments of the foreign exchange (forex) market on Monday, March 20.

In the parallel market window, the Nigerian Naira gained N7 against the greenback to quote at N740/$1 compared with last Friday’s exchange rate of N747/$1.

In the P2P segment, the value of the local currency appreciated by N6 against the American currency to sell for N748/$1, in contrast to the preceding session’s N754/$1.

Similarly, the domestic currency improved against the US Dollar in the official market window by 33 Kobo or 0.07 per cent to trade at N461.50/$1 compared with N461.83/$1.

The local currency was strengthened in the spot market yesterday amid an FX demand pressure, which pushed the turnover for the day higher by 43.1 per cent or $37.85 million to $125.66 million from $87.81 million.

However, in the interbank segment of the market, the Naira lost N2.70 against the Pound Sterling to quote at N559.15/£1, in contrast to the previous session’s N556.45/£1 and against the Euro, it depreciated by N2.12 to close at N490.11/€1 versus last Friday’s N487.99/€1.

Meanwhile, the cryptocurrency market turned red on Monday as the Federal Reserve and other major central banks made coordinated moves to enhance market liquidity.

Litecoin (LTC) went southwards by 3.9 per cent to trade at $78.91, Dogecoin (DOGE) fell by 2.8 per cent to $0.0718, Ethereum (ETH) declined by 1.0 per cent to $1,743.47, Cardano (ADA) dipped by 0.7 per cent to $0.3382, and Binance Coin (BNB) lost 0.3 per cent to sell for $334.40.

However, Bitcoin (BTC) gained 1.2 per cent to quote $27,849.66 as markets responded to the deepening global banking crisis, amid the decision of UBS to buy Credit Suisse, a move engineered by Swiss authorities.

Also, Ripple (XRP) rose by 0.07 per cent to trade at $0.3836, Solana (SOL) grew by 0.06 per cent to sell at $22.43, as the US Dollar Tether (USDT) and Binance USD (BUSD) traded flat at $1.00 each.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar holds its breath as market awaits Fed policy decision

(Reuters) - The dollar pared earlier losses and sterling fell on Tuesday as traders reckoned banking stress could keep the Federal Reserve and the Bank of England from hiking interest rates much further, or at all, later in the week.

Investors' focus has moved to a slew of central bank meetings due this week after days of volatility in markets caused by worries over the stability of the global banking sector.

The dollar index fell 0.058% to 103.270, while sterling edged 0.59% lower to $1.2204.

Markets are pricing in an 85% chance of a 25-basis-point rate hike when the Fed announces its monetary policy decision on Wednesday. The peak for the Fed's benchmark overnight interest rate was seen at 5.5% only a few weeks ago, against about 4.8% now. IRPR

The dollar has followed those expectations lower, though general nervousness in financial markets has tempered selling.

Sentiment is fragile as investors are concerned over the outlook for the banking sector after shares of U.S. lender First Republic (FRC.N) tumbled nearly 50% on Monday on fears it will need a second rescue.

"(The Fed) should signal that inflation is still the focus here, but obviously properly address what has been done, and highlight what they can do to further prevent any further contagion beyond First Republic," said Edward Moya, senior market analyst at OANDA.

U.S. Treasury Secretary Janet Yellen told bankers on Tuesday that she is prepared to intervene to protect depositors in smaller U.S. banks that might be suffering deposit runs if they pose a risk of contagion.

"It seems that after a couple of weekends of pushing policy support and certain (Treasury) officials suggesting that they'll do whatever it takes to guarantee deposits, what it suggests to me is that hikes can go on," said Mazen Issa, senior FX strategist at TD Securities in New York.

Sterling moved a bit lower, staying close to an almost seven-week high against the dollar, after data showed Britain recorded a budget deficit of 16.68 billion pounds ($20.4 billion) in February, far above expectations in a Reuters poll.

On Tuesday, minutes from the Australian central bank's March 7 policy meeting showed officials had agreed to consider the case for a rate pause at the April meeting, even before the recent bout of volatility weighed on the Australian dollar , which fell 0.88% versus the greenback at $0.666.

"In places like Canada or Australia, where those central banks have essentially said that they're done with the interest rate tightening phase, those are the currencies that are lagging against the currencies where hikes still remain in the curve," Issa said.

The euro last was up 0.39% to $1.0761.

In cryptocurrencies, bitcoin last rose 0.32% to $28,168.00 after hitting a nine-month high on Monday. The world's largest cryptocurrency rose 26% last week, its best weekly gain since April 2019.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold dips 2% as banking fears recede in run-up to Fed decision

(Reuters) - Gold dropped about 2% on Tuesday as Treasury yields jumped and easing worries over a banking crisis prompted some investors to cautiously return to riskier assets, while markets await the U.S. Federal Reserve's next interest rate decision.

Spot gold dipped 2.1% to $1,938.19 per ounce by 1:31 p.m. EDT (1731 GMT). U.S. gold futures , too, fell 2.1% to settle at $1,941.10. The precious metal hit $2,009.59 on Monday, its highest since March 2022, but has since retreated.

"We're seeing a little bit less risk aversion in the marketplace today... but mainly it's just heavy profit-taking by the shorter-term futures traders after gold prices hit 12-month highs yesterday," said Jim Wyckoff, senior analyst at Kitco Metals.

Risk assets, including equities and oil prices, rebounded after the rescue of Credit Suisse calmed nerves about a bigger banking crisis. That made gold, traditionally used a safe asset during financial instability, less attractive.

All eyes are on the Fed policy decision on Wednesday, with some top central bank watchers saying it could pause further rate hikes.

"The surprise to the marketplace would be if the Fed did nothing and that would be probably significantly bullish for the metals markets," Wyckoff said.

Markets are pricing in an 13.6% chance the Fed will stand pat and an 86.4% likelihood of a 25-basis-point hike, according to the CME FedWatch tool. Higher rates reduce the appeal of non-yielding gold.

"We could see some marginal selling activity below the $1,950/oz mark, but expect that the combination of strong physical demand and resurgent investor flows should keep (gold) prices from tumbling," TD Securities said in a note.

Holdings of the largest gold-backed exchange traded fund New York's SPDR Gold Trust have registered consecutive inflows.

Gold ETF holdings

In other metals, spot silver fell 1.2% to $22.25 per ounce, platinum dropped 2% to $968.73 and palladium slid 1.7% to $1,391.14.

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 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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