Bulls n Bears Daily Market Commentary : 29 March 2023

Thu Mar 30 04:16:48 CAT 2023

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Bulls n Bears Daily Market Commentary : 29 March 2023

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

ZSE extend gains…

The market extended gains in mid-week session as the primary All-Share Index inched up 0.12% to 37720.92pts while, the Blue-Chip Index stepped up 0.05% to 22323.61pts. The Agriculture Index put on 1.88% to close at 144.08pts while, the Mid-Cap Index rose 0.47% 76148.77pts. British American Tobacco headlined the gainers’ pack on a 5.19% surge to $2,874.8797, followed by Hippo Valley that rose 4.04% to $625.0000. Property concern Mashonaland Holdings added 3.77% to settle at $13.7500 while, Zimre Holdings Limited advanced 3.76% to $12.0000. TSL completed the top five winners’ set on a 2.83% uplift to end pegged at $100.0000. Partially mitigating today’s gains was fintech group Ecocash Holdings that lost 6.27% to $71.5372. Trailing was Star Africa that dropped 4.27% to end at $1.5030. Hotelier African Sun slipped 1.75% to $85.3923 as retailer OKZIM trimmed 1.74% to close the day pegged at $67.9086. Art Holdings capped the laggards of the day on a 1.24% slump to settle at $29.0000. The market closed with a negative breadth of two as twelve counters lost grip against ten gainers.

Activity aggregates enhanced in the session as volumes grew 195.16% to 2.71m shares while, value outturn soared 113.35% to $477.58m. The top value drivers of the day were Econet, Delta, Ok and Ecocash that contributed a combined 93.68% to the aggregate. Econet (34.63%), Ok Limited (22.89%), Star Africa (17.42%) and Ecocash (16.52%) were the top volume drivers of the day. On the VFEX, Axia, Bindura and SeedCo International shed 0.59%, 0.50% and 0.19% to trade at USD$0.1174, USD$0.0198 and USD$0.2611 respectively. On the contrary, Innscor jumped 12.31% to USD$0.7301 while, Padenga climbed 0.28% to USD$0.1810. Morgan and Co MCS and Datvest ETFs retreated 14.54% and 1.39% as the duo ended at $28.5896 and $1.8600 respectively. OMTT ETF inched up 0.25% to $10.9000 while, MIZ rose 3.61% to $2.0000. The Tigere REIT eased 0.04% to close at $50.0000.-efesecurities

Global Currencies & Equity Markets

Nigeria

Naira weakens further at official market 

The Naira continued its poor performance in the Investors and Exporters (I&E) window of the foreign exchange (FX) market on Tuesday, March 28.

Data from FMDQ securities showed that Naira depreciated against the Dollar by 25 Kobo or 0.05 per cent to settle at N461.75/$1 compared with Monday’s closing price of N461.50/$1.

However, in the black market, the Nigerian currency solidified its value against the American currency during the session by N2 to quote at N743/$1, in contrast to the N745/$1 it was exchanged in the preceding session.

READ ALSO:Naira value drops massively against US dollar

Similarly, the local currency gained N1 against the greenback yesterday in the peer-to-peer (P2P) segment of the forex market to N767/$1 versus Monday’s value of N768/$1.

But in the interbank segment of the FX market, CBN data showed the Naira weakened against the Pound Sterling on Tuesday by N2.84 to settle at N565.51/£1 compared with the previously traded rate of N562.67/£1.

While against the Euro, it lost N2.21 to finish at N496.66/€1 versus Monday’s closing rate of N494.45/€1.

South Africa

South African rand, stocks up as global banking fears fade

(Reuters) - South Africa's rand and stocks rose on Wednesday, as regulations to mitigate the U.S. banking crisis boosted global confidence.

Regulators allayed some fears over a global banking system failure sparked by the collapse of U.S. Silicon Valley Bank earlier this month, which restored some risk appetite to markets.

At 1527 GMT, the rand traded at 18.1025 against the dollar, 0.28% stronger than its previous close.

The dollar index , which measures the currency against six rivals, was last up about 0.19% at 102.68.

At the week's halfway point, volumes and activity were low on the Johannesburg Stock Exchange, said Sasfin equity strategist David Shapiro.

"At least we're in a steady incline, slowly clawing our way up just along the board," Shapiro added.

The blue-chip Top 40 index (.JTOPI) closed 0.6% higher, while the broader all-share index (.JALSH) rose 0.57%.

Local stocks were lower than global counterparts with the MSCI All-World index (.MIWD00000PUS), which captures equity performances across 23 developed economies, was up slightly at 0.15%.

Local investors will now turn their focus towards the South African Reserve Bank's (SARB) rate decision on Thursday, with markets expecting a 25-basis-point increase.

The government's benchmark 2030 bond was stronger, with the yield down 7.5 basis points to 9.815%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar rebounds as banking fears fade; yen falls on quarter-end flows

(Reuters) - The dollar rose against most major peers on Wednesday, reversing some of its recent declines, and gained sharply against the yen, which was volatile as the end of the Japanese fiscal year approaches.

The dollar index , which measures the currency against six rivals, was 0.18% higher on the day at 102.67, pulling away from the near seven-week low of 101.91 touched late last week.

"The recent failures in the financial sector of the U.S. appear to be contained and the immediate bleeding has stopped," Helen Given, FX trader at Monex USA, said.

Improving risk sentiment and investor hopes that central banks can once again turn their attention toward fighting inflation was helping support the dollar, Given said.

"Though we see some downside for USD in the second half of the year, dollar strength looks likely to continue on its current path for now," she said.

Global financial markets were roiled in recent weeks as investors balked at the collapse of two U.S. lenders and the rescue of Credit Suisse (CSGN.S), with the dollar coming under pressure as worries grew that the market turmoil may leave the Federal Reserve unable to persist with its inflation-fighting interest rate hikes.

Worries, however, have faded this week as investors took solace from First Citizens BancShares' agreement to buy all of failed lender Silicon Valley Bank's deposits and loans, and the fact that no further cracks have emerged in global banking in recent sessions.

On Tuesday, Michael Barr, the Fed's vice chairman for supervision, told the Senate Banking Committee that Silicon Valley Bank's problems were due to "terrible" risk management, suggesting it could be an isolated case.

"Vice Chair Barr's testimony to Congress yesterday helped provide USD with a little life raft, easing fears that the Fed may not be able to contain the damage of the last few weeks," Given said.

The dollar rose to a one-week high against the yen, which remained volatile in the run-up to the end of the Japanese fiscal year on Friday.

"A decent amount of USD/JPY flow today is end of quarter related," Monex USA's Given said.

"Traders are concerned with real money outcomes at the moment, but as global risk sentiment continues to improve, JPY as a traditional haven looks less appealing," she said.

The dollar was 1.37% higher at 132.71 yen .

Elsewhere, the Australian dollar slipped 0.48% to $0.6677 after a reading of Australian consumer inflation slowed to an eight-month low, adding to the case for the Reserve Bank to pause its rate hiking campaign next week.

The Canadian dollar was 0.2% higher against its U.S. counterpart, on pace for its third straight session of gains, after Bank of Canada Deputy Governor Toni Gravelle said the bank is ready to step in with support if the banking system comes under severe strain, but now it is not even close to being worried about the health of the financial system.

Bitcoin rose 3.88% to $28,329, finding its feet having slid following the problems at the world's biggest cryptocurrency exchange, Binance, which has been sued by the U.S. Commodity Futures Trading Commission (CFTC).

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold rises on dollar dip, banking optimism limits gains

Gold prices dropped on Wednesday as easing worries over a potential bigger fallout from the global banking crisis increased appetite for riskier assets and dampened demand for the safe-haven metal.

Spot gold

  was trading 0.4% lower at $1,966.48 per ounce, as of 0356 GMT, after rising 1% on Tuesday. U.S. gold futures

slipped 0.3% to $1,967.50.

“We’ve seen a natural retracement ... gold is pulling back after a failed ‘bid’ to break above $1,975,” said Matt Simpson, a senior market analyst at City Index.

But some investors “still seem to be holding onto gold ‘just in case’ there’s another skeleton or two lurking in the closet,” he said and that gold might catch another bid heading into the European session.

The dollar index

steadied, making bullion expensive for overseas buyers. Asian shares rose sharply on Wednesday.

While gold would “ultimately” be supported by the financial system uncertainty, prices could become more volatile and find it hard to pick a “sustainable direction” over the coming weeks if inflation remains elevated and U.S. economic data remains hot, Simpson said.

Data on Tuesday showed U.S. consumer confidence unexpectedly increased in March, while February’s U.S. trade deficit in goods widened modestly.

Analysts at Macquarie, in a note, said they expect the U.S. Federal Reserve to “prioritise bringing inflation back to target – with one more rate hike and then no cuts in the early stages of economic contraction – resulting in a period of cyclically weaker gold prices through the second half of 2023.”

The opportunity cost of holding non-yielding gold rises when interest rates are increased to bring down inflation.

Markets are pricing in a nearly 43% chance of the Fed raising interest rates by 25 basis points in May, according to the CME FedWatch tool.

Spot silver

fell 0.2% to $23.20 per ounce, platinum

lost 0.5% at $958.65 and palladium

edged down 0.2% to $1,417.09.

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!

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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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