Bulls n Bears Daily Market Commentary : 08 May 2023

Tue May 9 04:31:56 CAT 2023

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Bulls n Bears Daily Market Commentary : 08 May 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

Bulls charge in new week opener .

ZSE gains persisted in the new week as twenty-five bulls charged on two
bears to set a positive breadth of twenty-three. The mainstream All Share
Index jumped 8.79% to 54058.72pts while, the ZSE Top Ten Index advanced
10.22% to close at 32561.63pts. The Agriculture Index put on 5.28% to settle
at 208.98pts while, the Mid-Cap Index rose 4.47% to 103771.89pts. Leading
the winners of the day was lone miner RioZim and beverages group Delta that
surged an identical 15.00% to end pegged at $230.0000 and $1,123.3000
apiece.

VFEX bound First Capital garnered 14.99% to $41.5974 trailed by Meikles that
extended 14.93% to $561.0577. Spirits and wines manufacturer AFDIS capped
the top five winners of the day on a 14.90% lift to $563.0000. Two fallers
of the day were Star Africa and Willdale that declined 0.69% and 0.48% as
the former ended at $2.2835 while, the latter was at $3.9807. Activity
aggregates remained mixed in Monday's session as volumes traded ballooned
3366.67% to 222.79m while, turnover dropped 99.89% to $1.71m. The top volume
drivers of the day were Star Africa, Econet, OKZIM and Ecocash that claimed
a combined 88.78% of the aggregate. Turnover was anchored by Econet, Delta
and Meikles with contributions of 50.16%, 10.54% and 10.35% apiece. The
Morgan and Co MCS added 6.21% to $31.3308 while, the Old Mutual ETF slipped

0.48% to $9.5987. MIZ and Cass Saddle retreated 6.79% and 1.00% apiece.
Cumulatively, 929,008 units worth $7.61m traded in the five ETFs. The Tigere
REIT went up 0.29% to $50.4646 worth 15,635 units. efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand firmer as dollar weakens

(Reuters) - South Africa's rand firmed and stocks rose on Monday, with the
dollar slightly weaker on bets that U.S. interest rates have peaked.

At 1541 GMT the rand traded at 18.2925 against the dollar , up about 0.7%
from its closing level on Friday.

The dollar was down about 0.1% against a basket of major currencies .

Analysts said they expected the rand would mainly respond to global drivers
this week, with the domestic data calendar relatively light.

The most likely local catalysts are expected on Thursday, with the release
of March mining (ZAMNG=ECI) and manufacturing (ZAMAN=ECI) production
numbers.

Data on Monday showed South Africa's net foreign reserves rose to $55.370
billion at the end of April, from $55.229 billion in March, though there was
little impact on the rand.

On the stock market, the blue-chip index of top 40 companies (.JTOPI) ended
up 0.62% while the broader all-share index (.JALSH) closed 0.56% higher.

South Africa's benchmark 2030 government bond was slightly weaker, with the
yield up 3 basis points at 10.160%.

Nigeria

Nigerian naira looks for reprieve ahead of Dangote refinery launch

The Nigerian naira has remained close to its record low despite important
news from the country. The USD/NGN exchange was trading at 460, while the
black market rate stands at 735. On the other hand, the USD/GBP was trading
at 915 in the black market. So, what next for the Nigerian naira?

There are several important news that could have an impact on the Nigerian
naira. First, Nigeria is set to go through major changes in the energy
market as Dangote launches his oil refinery plant in Lagos. The plant will
be able to refine 650k barrels of oil per day at its peak. That will be
enough to supply Nigeria's needs and leave some for export.

Dangote's oil refinery plant will change the dynamics of how the country's
energy sector works. Before the launch, Nigeria produces oil and exports it
in a crude form and then imports refined products. This is usually an
inefficient method. It now means that Nigeria will produce, refine, and use
its oil and then export its spare capacity. This trend will be positive for
the Nigerian naira.

The other important Nigeria naira news is the decision by the country's
parliament to change the country's financing. The parliament passed a bill
that will boost the debt upwards by over 50% in the next few years. This
happened after the government converted loans worth over $49 billion into
bonds that will be paid over decades.

This measure was made to avoid the collapse of the economy. In a statement,
a senate report said :

"Due to the serious shortfall in government revenue, the federal government
in order for the economy not to collapse, was compelled to borrow repeatedly
from the CBN, exceeding the 5% threshold."

What next for the Nigerian naira?

USD/NGN

It is unclear how the soaring debt load will affect the Nigerian naira which
has collapsed in the past few years. The official rate has collapsed by
almost 200% since 2015, making it one of the most underperforming currencies
in the emerging markets.

The other events that could move the Nigerian naira is the upcoming
leadership change that will see Muhammadu Buhari exit. He will be replaced
by Bola Tinubu , who will become the country's next president.

Tinubu has made several pledges, including promising to export more and
import less in a bid to support the Nigerian naira. He has also promised to
end petroleum subsidies that cost the government billions per year.

The post Nigerian naira looks for reprieve ahead of Dangote refinery launch
appeared first on Invezz .

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar edges up as market looks to inflation data

(Reuters) - The dollar edged higher against a basket of its peers on Monday,
shaking off earlier weakness as traders moved past an unsurprising loans
survey toward other economic data that could provide fresh clues on the
Federal Reserve's hiking path.

A quarterly survey of loan officers conducted by the Federal Reserve showed
that banks continue to tighten credit and that there is weaker demand for
business loans.

Following the survey, the dollar index , which measures the currency against
six rivals, rose 0.08% to trade at 101.38, a better showing than the
one-year low of 100.78 reached last month.

"People are now going to be able to finally just move forward towards the
inflation report and that is probably why we are seeing more dollar
strength," said Ed Moya, senior market analyst at OANDA in New York.

Moya said the credit crunch is likely to persist, which could justify
recession calls and make Fed speakers anticipate a soft landing might not be
possible. "But I think this report is supportive of a lot of the softness
with loan demand that stemmed from the Fed's aggressive rate hiking
campaign."

The Fed raised interest rates by 25 basis points last week but sounded
slightly more cautious than other central banks on the outlook, dropping
guidance about the need for future hikes.

So futures traders now see the Fed refraining from a hike in June and for
fed funds to fall later in the year. The Fed's target range stands at 5% to
5.25%, having risen rapidly from 0% since March 2022. ,

The loan survey is the first in a series of closely watched U.S. economic
data this week. Inflation data due on Wednesday could indicate whether the
Fed must do more to rein in inflation. Traders remain watchful of the
debt-ceiling impasse on Capitol Hill, with the Treasury Secretary warning
the government might be unable to pay debts by June 1.

The euro fell 0.15% to $1.1003, after rallying nearly 16% from September
lows, supported by expectations the European Central Bank will keep interest
rates high for longer than the Fed. The ECB last week also slowed the pace
of its interest rate increases but signalled more tightening to come.

Sterling also fell 0.12% to $1.2614. The pound hit a more than one-year peak
against the dollar on Monday, with trading as high as $1.2668, its highest
level since April 2022. The pound remains in focus this week ahead of an
expected Bank of England rate increase on Thursday, and has also been
firming versus the euro.

Elsewhere, the dollar rose 0.2% against the yen to 135.14.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price ticks higher ahead of US inflation data

Gold prices edged higher on Monday as the dollar eased, with the precious
metal regaining ground after last session's retreat and ahead of this week's
US inflation data.

Spot gold gained 0.3% to $2,023.27 per ounce by 12:25 p.m. EDT, while US
gold futures rose 0.5% at $2,036.10 per ounce.

Meanwhile, the US dollar index dipped for a second straight session, making
bullion more attractive to overseas buyers.

"Markets are really just discounting the aftermath of last Friday's payrolls
report, which came on very strong and knocked gold off its highs," said
Daniel Ghali, commodity strategist at TD Securities, in a Reuters note.

Prices are about 3% lower from near record levels reached last week,
pressured after data showed US job growth accelerated in April, pointing to
persistent labor market strength.

Still, "the gravitational pull for gold is higher . as we approach an
upcoming recession, the market pricing for Fed cuts on the horizon is set to
grow and in turn, that should support discretionary traders to deploy their
capital in gold," Ghali added.

Markets saw a 91% chance of the Fed holding rates at their current level in
June, and a 33% chance of a rate cut in July, according to CME's FedWatch
tool.

Later on Monday, the Fed's loan officer survey might show whether and how
hard banks are tightening up on credit after three US lenders failed over
recent weeks.

"If the woes among regional banks are thrust back into the spotlight, that
could trigger another leg up for this safe-haven asset," said Han Tan, chief
market analyst at Exinity.

Along with the US consumer price index due on Wednesday, traders are also
keeping a tab on developments surrounding the debt ceiling.

(With files from Reuters)

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Africa Day

May 25

Heroes' Day

Aug 14

Defence Forces Day

Aug 15

Counters trading under cautionary

CBZH

GetBucks

EcoCash

TSL

Econet

Turnall

First Capital Bank

ZBFH

Fidelity

Zimplow

FMHL

Invest Wisely!

Bulls n Bears 

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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