Bulls n Bears Daily Market Commentary : 18 May 2023

Fri May 19 05:19:26 CAT 2023

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Bulls n Bears Daily Market Commentary : 18 May 2023

ZSE commentary

Market stays firm.

The ZSE maintained gains in Thursday's session as the primary All-Share
Index advanced 3.54% to 81689.75pts while, the Top Ten Index climbed 3.09%
to 50486.33pts. The Mid-Cap Index improved 5.23% to end at 143866.26pts
while, the ZSE Agriculture Index finished 4.23% stronger at 287.17pts.
Property outfit Mashonaland Holdings led the risers of the day with a 15.00%
jump to $25.3000, followed by General Beltings that surged 14.99% to
$4.0850. Seed Co Limited extended 14.78% to $449.0000 as hotelier Rainbow
Tourism Group added 14.75% to $44.2500. Clothing retailer Truworths capped
the gainers' set on a 14.62% lift to $5.8000. Headlining the losers' pack
was  ecocash Holdings that dropped 1.25% to $149.8461 while, logistics unit
Unifreight trailed after slipping 0.90% to $99.0000. Zimplow Holdings shed
0.49% to $96.0161

as telecoms giant Econet Wireless completed the set on a 0.11% decline to
$600.0009.

Activity aggregates improved as volume of shares traded jumped 54.74% to
7.81m while, value outturn soared 124.27% to $3.04bn. The quartet of OKZim,
Delta, Econet and Tanganda emerged as counters of choice contributing 90.36%
of the volume aggregate and 96.59% of the value outturn. On the ETF section,
726,791 units worth $8,093,567.00 traded. The Old Mutual ETF and Morgan & Co
MCS were up 3.30% and 9.01% to end pegged at $15.4834 and $45.2385
respectively. The Datvest MCS slid 0.70% to $4.7700 as the MIZ gave up 0.01%
to $2.8003. The Tigere REIT firmed up 0.03% to $66.8500 on 26,870 units..
sefesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand extends losses as dollar gains on debt ceiling talks

(Reuters) - South Africa's rand extended the previous day's losses on
Thursday as the U.S. dollar hovered near a seven-week high on optimism over
U.S. debt ceiling talks.

At 1529 GMT, the rand traded at 19.3625 against the dollar , almost 0.5%
weaker than its previous close. On Wednesday, it fell around 1%.

The dollar was last trading up 0.61% at 103.52 against a basket of global
currencies, after U.S. government leaders agreed to negotiate to avoid a
damaging debt default.

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

It has been weighed down at home by South Africa's power crisis, with state
utility Eskom warning on Thursday that it may have to increase scheduled
outages to an even higher level.

"The broad R19.00/R19.50 range remains intact for now, but (there) is a
distinct feeling of unease over the rand," said Andre Cilliers, currency
strategist at TreasuryONE.

"The G7 meeting kicks off today with South Africa not being invited,
load-shedding continues unabated, and there is some concern over the S&P's
credit rating review tomorrow," he said.

Local investors will turn their focus towards an interest rate decision by
the South African Reserve Bank (SARB) next week, with analysts expecting
another hike.

"With the rand's substantial weakness... the risk to the inflation outlook
on balance is still on the upside, and the SARB is widely expected to hike
at its meeting next week," said Investec analyst Annabel Bishop in a
research note.

Stock market ended lower, with both the Top-40 (.JTOPI) index and the
broader all-share (.JALSH) down over 0.9%.

South Africa's benchmark 2030 government bond was weaker, with the yield up
11 basis points at 11.165%.

Nigeria

Naira dips to record low ahead of Tinubu's swearing-in

With less than two weeks to the inauguration of the President-elect, Bola
Tinubu, the naira has taken a tumble to reach a record low of N465.07
against the dollar.

According to Bloomberg on Thursday, the Central Bank of Nigeria allowed the
nation's currency to weaken by the most in almost five months.

The naira weakened to a record 465.07 per dollar as of 1.11 p.m. Nigerian
time, the biggest drop since December 29, 2022.

Tinubu, who will be sworn in as president on Monday, May 29, has pledged to
end the practice of maintaining multiple exchange rates and pursue a more
flexible policy.

In a research note on Wednesday, a fixed-income analyst at
Johannesburg-based Absa Group Ltd, Nikolaus Geromont, projected that the
naira could weaken as much as 15 per cent after Tinubu becomes president.

He said, "We expect the naira to be upwardly adjusted to 530/USD after the
presidential inauguration."

.

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar hits seven-week high, bolstered by data, debt ceiling hopes

(Reuters) - The dollar rose to seven-week peaks on Thursday as another round
of solid economic data further pared back bets on easing by the Federal
Reserve, with the greenback also boosted by expectations of a U.S. debt
ceiling deal to a avert potential default.

The dollar index, a measure of the greenback's value against six major
currencies, touched a new seven-week high of 103.63, and was last up 0.7% at
103.56 .

Against the yen, the dollar rose to a six-month peak of 138.74 and was last
up 0.7% at 138.715 yen .

Negotiators for the White House and congressional Republicans met again on
Capitol Hill to discuss their search for common ground on lifting the $31.4
trillion debt ceiling, and plan to meet again on Friday, a White House
official said.

Top U.S. congressional Republican Kevin McCarthy also said on Thursday he
expected a bill to raise the government's $31.4 trillion debt ceiling on the
House floor next week, according to news reports. He noted that negotiations
are at a better place than last week.

"It's pretty clear that some people were shorting the dollar as a hedge in
anticipation of a crisis, but now with all the signals that we will find a
resolution in the next few days, people are unwinding these positions so the
dollar is strengthening," said Thierry Wizman, global FX and rates
strategist at Macquarie in New York.

Apart from debt ceiling negotiations, investors also looked at U.S. economic
data, which in recent weeks have reflected strength.

Thursday's reports showed lower-than-expected U.S. initial jobless claims of
242,000 in the latest week, compared with forecasts of 254,000.

Another piece of data indicated a milder-than-expected fall in the
Philadelphia Federal Reserve's manufacturing index to -10.4 in May from
-31.3 in April. Markets were forecasting a contraction of -19.8.

"A raft of stronger-than-expected data is intersecting with a hawkish shift
in communications from Fed officials to push rate expectations across the
front end of the curve," said Karl Schamotta, chief market strategist, at
Corpay in Toronto.

"Traders are building up tail risk protection on a hike at the June meeting,
and trimming bets on rate cuts through the latter half of the year as the
Fed's long-standing 'higher-for-longer' mantra gains new resonance."

The market has priced in a roughly 33% chance that the Fed raises the
benchmark interest rate at its June meeting by 25 basis points. Around a
month ago, markets were pricing in around a 20% chance of a cut.

Fed officials on Thursday pushed against a rate-hike pause next month,
citing persistently high inflation.

Dallas Fed President Lorie Logan on Thursday, for instance, said she is
concerned that "much too high" inflation is not cooling fast enough to allow
the Fed to pause its interest-rate hike campaign in June.

Elsewhere, the Chinese yuan fell to a six-month low against the dollar,
which surged to 7.0608 in the offshore market. The dollar was last up 0.6%
at 7.052 yuan.

"For the last several weeks, we are seeing poor data from China," said
Macquarie's Wizman. "Until China can show that its recovery is on track and
it can really grow in excess of 5%, it maybe tough for the dollar to get to
weaken again and may be the only way it can is for China to announce some
stimulus measures."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slides as robust US data drives hawkish Fed bets

Gold extended declines on Thursday after more strong economic readings from
the U.S. further soured bets that the Federal Reserve may ease up on
interest rates hikes, with bullion also pressured by optimism for a debt
ceiling deal.

Spot gold fell 1.3% to $1,956.1346 per ounce by 3:24 p.m. EDT, after earlier
touching its lowest since April 3 at $1,951.73.

A lower-than-expected number of new U.S. jobless claims last week was
accompanied by a milder fall in a business index from the Philadelphia Fed.

Along with a relatively vibrant jobs market, some optimism over the debt
ceiling negotiations has also strengthened the dollar and supported
equities, denting safe-haven demand a bit, said David Meger, director of
metals trading at High Ridge Futures.

"We're no longer as positive on the gold market as we've been for really
several months."

Pressuring gold, Wall Street turned higher and the dollar and 10-year
Treasury yields climbed to multi-week peaks on the economic data.

Markets were now pricing in around a 20% chance of another rate hike in
June, compared with 20% bets for a cut around a month ago.

Non-yielding bullion suffers when higher rates boost returns on competing
assets like bonds.

Dallas Fed President Lorie Logan said inflation is not cooling fast enough
yet to allow the Fed to pause rate hikes in June, while Fed Governor Philip
Jefferson said it was too early to judge the full impact of the rapid
increases so far.

Both sit on the Fed committee that sets monetary policy.

"Gold's failure to hold technical support at the 50-day moving average will
likely encourage further tests of the downside," said independent analyst
Ross Norman.

Silver dipped 1.3% to $23.4624 per ounce, platinum was down around 1.7% at
$1,050.4442 while palladium was also down 1.4% at $1,466.1979.

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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