Bulls n Bears Daily Market Commentary : 03 May 2023

Thu May 4 05:12:47 CAT 2023

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Bulls n Bears Daily Market Commentary : 03 May 2023

 <https://www.cloverleaf.co.zw/> 

ZSE commentary

Market records steady gains…

The market recorded steady gains in the midweek session as the primary All share Index added 1.00% to 43026.94pts while, the Blue-Chip Index surged 1.18% to 24836.68pts. The Agriculture Index inched up 1.04% as the Mid Cap Index rose 0.54% to 93607.88pts. CBZ Holdings headlined the winners of the day on a 15.00% jump to settle at $253.0000, followed by TSL Limited that stepped up 14.93% to $117.8000. Ariston ticked up 9.24% to close at $11.0000 while, retailer OKZim Limited advanced 6.32% to end the day pegged at $61.9641.

Bankers First Capital completed the top five gainers’ pack on a 0.95% uplift to $36.9314. Proplastics led the laggards of the day on a 3.98% dip to $169.9500, trailed by First Mutual Properties that retreated 2.53% to close at $19.5493. Star Africa dropped 2.19% to $2.3004 while, milk producers Dairibord slipped 0.93% to settle at $139.0900. Fintech group Ecocash Holdings capped the top five fallers of the day on a 0.73% slump settle at $69.9985. The market closed with a positive breadth of seven as twelve counters recorded gains while, five lost their ground.

Activity aggregates enhanced in the mid-week session as volumes traded ballooned 156.39% to 3.45m shares while, value traded soared 82.78% to $279.45m. OKZIM (47.90%) claimed the lion’s share of the total volume traded. Other notable volume drivers were Star Africa (21.62%), SeedCo (6.66%) and Ariston (6.56%). The top value drivers of the day were OkZim, Delta and SeedCo Limited that claimed a combined 88.39% of the total outturn. The Datvest MCS jumped 11.84% to $1.9701 while, the Old Mutual ETF added 6.19% to $9.2750. The Tigere REIT traded 233,036 units worth $11.76m and closed the day at $50.4510.– efesecurities

Global Currencies & Equity Markets

 <https://www.cloverleaf.co.zw/> South Africa

South African rand gains before Fed rate decision

(Reuters) - The South African rand gained on Wednesday ahead of a Federal Reserve interest rate announcement that will set the tone for markets globally.

At 1508 GMT, the rand traded at 18.2750 against the dollar , over 1% stronger than its closing level on Tuesday.

The dollar was last down around 0.45% against six rivals .

"The rand has seen some reaction ahead of the (Federal Open Market Committee) meeting tonight, in anticipation that the terminal rate will be reached," said Investec Chief Economist Annabel Bishop in a research note, referring to the rate at which the Fed will end its 14-month hiking cycle.

The Fed is widely expected to raise interest rates by 25 basis points when it concludes a two-day meeting on Wednesday.

Markets will be sensitive to the language used by the Fed to give an indication of its future interest rate plans, DailyFX analyst Warren Venketas told Reuters.

"A dovish slant to the decision could see (the dollar-rand exchange rate) back around 18.00 while any inclination or openness to remain aggressive could open up the 18.50 resistance handle once more," he added.

The risk-sensitive rand often takes cues from global factors like U.S. monetary policy in the absence of major local drivers.

The South African Reserve Bank will release its interest rate decision later this month.

On Thursday, local investors will turn their attention to S&P Global's Purchasing Managers' Index (PMI) (ZAPMIM=ECI) for April for clues on the health of the South African economy.

Shares on the Johannesburg Stock Exchange gained on Wednesday, with the blue-chip Top-40 index (.JTOPI) closing 0.96% higher, and the broader all-share index (.JALSH) ending up 0.88%.

South Africa's benchmark 2030 government bond was stronger with the yield down 7 basis points at 10.125%.

Nigeria

Naira Slumps at Peer-to-Peer, Gains at I&E, Black Market

The Naira depreciated against the US Dollar in the Peer-2-Peer (P2P) segment of the foreign exchange (forex) market on Tuesday but appreciated in the Investors and Exporters (I&E) and the black market windows during the session.

Traders exchanged their local currency for the American currency at N750/$1 in the P2P category of the FX market versus N749/$1 it sold in the previous session, indicating that it slumped by N1 at the close of business.

However, in the official market, the domestic currency appreciated against the greenback yesterday by 67 Kobo or 0.14 per cent to trade at N462.33/$1 compared with last Friday’s closing value of N463.00/$1.

It was the first trading session of the week due to the Workers’ Day holiday observed on Monday, and there was not much forex demand pressure on the Nigerian currency.

The value of FX transactions recorded on Tuesday, according to the FMDQ Securities Exchange, was $46.04 million, 35.8 per cent or $25.64 million lower than the $71.68 million reported in the preceding session.

In the parallel market, the Naira gained N1 against the United States Dollar yesterday to quote at N738/$1, in contrast to the previous trading session’s exchange rate of N739/$1.

In the interbank segment, the Nigerian Naira lost 71 Kobo against the Pound Sterling on Tuesday to close at N574.77/£1 versus its previous rate of N574.06/£1 but appreciated against the Euro by N1.68 to sell at N506.11/€1 compared with last Friday’s value of N507.79/€1.

Meanwhile, Bitcoin (BTC) traded above $28,500 in the crypto market yesterday as investors prepare for tomorrow’s Federal Reserve interest rate decision. The US central bank is expected to increase rates by 0.25 per cent, despite the U.S. economy slowing down.

BTC, which is the most valued crypto, added 1.8 per cent to sell at $28,516.07, while its closest rival, Ethereum (ETH) went up by 1.7 per cent to $1,861.98.

Litecoin (LTC) rose by 1.1 per cent to $87.69, Ripple (XRP) jumped by 0.5 per cent to $04637, Cardano (ADA) improved by 0.3 per cent to $0.3868, and Solana (SOL) chalked up 0.2 per cent to sell at $21.86.

Conversely, Binance Coin (BNB) fell by 0.4 per cent to trade at $324.70, and Dogecoin (DOGE) depreciated by 0.2 per cent to $0.0784, while the US Dollar Tether (USDT) and Binance USD (BUSD) remained unchanged at $1.00 each.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar holds losses after Fed hikes, signals pause

(Reuters) - The dollar fell on Wednesday after the Federal Reserve raised interest rates by a quarter of a percentage point and signaled it may pause further increases.

In an overt shift, the central bank no longer said it "anticipates" further rates will be needed, only that it will watch incoming data to determine if more hikes "may be appropriate."

The pause would give officials time to assess the fallout from recent bank failures, wait on the resolution of a political standoff over the U.S. debt ceiling, and monitor the course of inflation.

The Fed did not explicitly commit to ending its hiking cycle, helping to lift the dollar off session lows reached immediately after the central bank released its meeting statement.

"Some people might have been expecting some sort of explicit pause. I don't think that was realistic but this is what a pause sounds like in reality," said Adam Button, chief currency analyst at ForexLive in Toronto.

"The name of the game now is watching economic data and trying to find signs of weakness in the U.S. economy or stubborn strength."

The dollar index was last down 0.42% on the day at 101.42, after hitting 101.05, the lowest since April 26. The euro gained 0.46% at $1.1047 after reaching $1.1093. It is holding just below a 13-month high of $1.1096 reached last week. The dollar also fell 1.02% against the Japanese yen to 135.15.

The April jobs report due on Friday is this week's main economic focus. The dollar briefly bounced after data earlier on Wednesday showed U.S. private employers boosted hiring in April with strong demand in the leisure and hospitality industry, though wage growth slowed.

Other data on Wednesday showed the U.S. services sector maintained steady growth in April as new orders increased amid a surge in exports, but businesses continued to face higher prices for inputs, indicating that inflation could remain elevated.

Consumer price inflation due next week will also offer fresh clues on whether inflation is continuing to ease.

"The Fed continues to walk the tight rope, and that is they're trying to strike a balance between their inflation fighting credibility while trying to engineer a soft landing," said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.

The European Central Bank on Thursday is expected to hike rates by 25 basis points, with a 50 basis point increase also possible but seen as a low probability.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold advances on fresh banking jitters as Fed verdict looms

Bars of gold are seen at the Krastsvetmet company, one of the world's largest producers of precious metals in Moscow, Russia on January 31, 2023. The company produces precious metals in ingots, granules, powders in the form of chemical compounds. Precious metal bars of Krastsvetmet are included in the lists of Good Delivery (high quality of delivery) on international platforms. In 2021, the company produced 203 tons of gold, 484 tons of silver and 102 tons of platinum group meta

Bars of gold are seen at the Krastsvetmet company, one of the world’s largest producers of precious metals in Moscow, Russia on January 31, 2023. 

Gold extended gains on Tuesday and was on track for its biggest daily rise in a month, as yields dropped on renewed fears of contagion in the U.S. banking sector, ahead of the Federal Reserve’s widely anticipated decision to hike interest rates.

Spot gold jumped 1.8% to its highest since April 14 at $2,016.71 per ounce, while U.S. gold futures rose 1.7% to $2,026.20.

“The banking concerns are back... it’s really removing that risk that the Fed was going to possibly be considering a June rate rise,” said Edward Moya, senior market analyst at OANDA.

Shares of U.S. regional lenders extended declines, while Treasury yields fell, as the collapse of First Republic Bank continued to ripple through markets.

Regulators seized First Republic Bank and sold its assets to JPMorgan Chase & Co on Monday, in a deal to resolve the largest U.S. bank failure since the 2008 financial crisis.

The Federal Open Market Committee kicked off its two-day meeting, where it is widely expected to raise rates by 25 basis points.

Markets now priced in 1-in-4 odds of a rate cut in June, seeing no chances of another hike.

While gold is considered a hedge against economic uncertainties, rising rates hurt demand for the zero-yielding asset.

Gold has also been supported by some safe-haven demand from resurgent worries over the banking sector’s health and U.S. debt ceiling uncertainty, Bank of China International analyst Xiao Fu said.

U.S. President Joe Biden on Monday summoned four top congressional leaders to the White House next week after Treasury Secretary Janet Yellen warned the government could run short of cash to pay its bills by June.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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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