Bulls n Bears Daily Market Commentary : 04 April 2024

Fri Apr 5 08:08:35 CAT 2024

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Bulls n Bears Daily Market Commentary : 04 April 2024

 <mailto:sales at dulys.co.zw?subject=Request%20Quote> ZSE commentary

ZSE takes a breather ahead of Monetary Statement...

statement to be announced tomorrow at 12pm. The primary All-Share Index lost
0.13% to 914,533.75pts while, the Blue- Chip Index fell 1.02% to
410,610.21pts. The Agriculture Index rose 1.96% to 2,308.96pts while, the
Mid Cap Index firmed up 2.39% to 3,407,619.86pts. Banking group CBZ Holdings
led the laggards of the  day on a 13.93% retreat to $9,639.3625, followed by
brick manufacturer Willdale that dropped 8.78% to close at a VWAP of
$100.3475. Telecoms giant Econet eased 1.75% to close at $4,890.9726 while,
General Beltings shed 1.46% to $135.0000. Star Africa completed the fallers
of the day on a 0.12% decline to end the day pegged at $16.9000. Partially
mitigating today's losses were gains in NTS that surged 100% to $320.0000
while, Fidelity climbed 15.00% to $1,086.7500. Nampak stepped up 14.96% to
$1,018.0000 while  Zimre  Holdings  Limited  jumped  14.88%  to  settle  at

$512.0000 . Seed producer Seed Co capped the winners of the day on a 14.41%
uplift to end the day pegged at $4,518.1527. Fourteen counters recorded
gains against six that faltered to leave the market with a positive breadth
of eight.

Activity aggregates were mixed in the session as volume traded fell 18.30%
to 1.54m shares while, turnover grew 129.66% to $7.46bn. Econet, Star Africa
and Delta were the top volume drivers after contributing 57.47%, 8.48% and
8.35% respectively. The top value drivers of the day were Econet (58.04%),
Delta (29.31%) and Meikles (4.09%). In the ETF Section, OMIT ETF went up
14.20% to $215.0000 while, MIZ ETF inched up 5.00% to close at a VWAP of
$21.0000. Datvest ETF soared 14.08% to end the day pegged at $44.0000 after
5,982 units exchanged hands. A total of 290,044 units exchanged hands in the
REIT section which saw Tigere REIT gaining 3.68% to close at $1,100.0000.

Global Currencies & Equity Markets

South Africa

South African rand stable against softer dollar, stocks rise

(Reuters) -South Africa's rand was broadly steady against a softer dollar on
Thursday, shrugging off a disappointing local survey that showed private
sector activity in the country contracted in March.

At 1533 GMT, the rand traded at 18.6675 against the dollar ZAR=D3, near its
previous close of 18.6700.

The S&P Global South Africa Purchasing Managers' Index showed private sector
activity fell to 48.4 in March from 50.8 in February as stronger price
pressures and drought conditions affected customer demand. A reading above
50 shows growth.

The dollar index =USD was last down 0.19% against a basket of other major
currencies.

Federal Reserve Chair Jerome Powell on Wednesday made balanced and familiar
remarks on the direction of future interest rates. Gold prices rallied on
his comments, while emerging market currencies including the rand gained.

On the stock market, the Top-40 .JTOPI closed 1.81% higher, led by Impala
Platinum IMPJ.J and Sibanye Stillwater SSWJ.J, which were up 10.05% and
9.23% respectively.

South Africa's benchmark 2030 government bond ZAR2030= was stronger, with
the yield down 10 basis points to 10.435%.

Nigeria

Naira crash pushes raw material imports to N3tn - NBS report

Imports of raw materials into the country rose by 25 per cent to N3tn in
2023.

This is according to the Foreign Trade Statistics data published by the
National Bureau of Statistics.

The major raw materials imported during the period included cane sugar,
other lubricating oils meant to be mixed further, preparations of milk
containing vegetable fats and oils, mixtures of odoriferous substances,
sheets for veneering, among others.

Conversely, Nigeria could only export raw materials worth N1.8tn between
2022 and 2023, recording a N3.6tn balance of trade.

Speaking with The PUNCH, the Chief Executive Officer of the Centre for the
Promotion of Private Enterprise, Muda Yusuf, linked the increase in raw
material imports (in naira terms) to the depreciation of the naira.

He said, "I think it is because of the naira depreciation. If you were
importing something that was $1m when the exchange rate was N450, now you
are importing products worth $1m and the exchange rate is N1,500.

"That is three times already if you multiply it in naira. So, in dollar
terms, the import may have even reduced. We have to consider that."

In the last few years, manufacturers had lamented that over-reliance on
imported raw materials had been an albatross on the real sector of the
economy.

During an annual general meeting of the Apapa branch of the Manufacturers
Association of Nigeria, the immediate past MAN President, Mansur Ahmed, said
that excessive reliance on imported raw materials had significantly weakened
the Nigerian manufacturing sector.

He noted, "Our manufacturing sector is weak because it is dependent on
imported materials that we then process. We must therefore scale up or scale
down. Our manufacturers have to go back and do the transformation.

"We in manufacturing need to focus on this issue. We need to build
infrastructure. I was in a meeting where the Vice President inaugurated the
National Council on Infrastructure."

Mansur recommended a public-private partnership that aimed to encourage
backward integration, import substitution and other measures that would curb
excessive import of raw materials.

Recently, in a statement released in response to the recent hike in the
Monetary Policy Rate by the Central Bank of Nigeria, MAN expressed worry
that the resulting limited access to credit would limit backward
integration, research and development and innovation needed to enhance
productivity and rapid industrial-led economic growth.

It declared, "Further reduce the reliance of the country on imported
products and raw materials by providing incentives for investment in
backward integration and local sourcing to reduce the pressure on the dollar
to the barest minimum."

 <mailto:info at bulls.co.zw> 

Global Global Markets

Dollar hits two-week low, moves lower against yen

(Reuters) - The dollar hit a two-week low on Thursday as economic data
supported expectations for quick interest rate cuts in the U.S., and fell
against the battered yen.

An unexpected slowdown in U.S. services growth, supporting the idea of
bringing interest rates down, had pushed the dollar lower on Wednesday.

Still, the U.S. currency was able to pare some earlier losses after
Minneapolis Federal Reserve President Neel Kashkari said rate cuts might not
be required this year if inflation continues to stall.

Richmond Fed President Thomas Barkin said on Thursday that inflation data at
the start of this year "has been a little less encouraging," and raises the
question of "whether we are seeing a real shift in the economic outlook, or
merely a bump along the way."

The dollar index , which measures the U.S. currency against six rivals, was
down 0.077% at 104.14 after hitting 103.910, its lowest level since March
21.

The major focus for the rest of the week will be on the release of the
monthly U.S. employment report on Friday. Economists polled by Reuters are
forecasting 200,000 jobs were added in March.

"Powell seems to still be targeting a June rate cut and that's why I think
that this labor report, the reaction could be amplified, particularly if we
see non-farm payrolls coming in on the lower side of expectations or below
expectations," said Paresh Upadhyaya, director of fixed income and currency
strategy at Amundi US.

The yen was close to its 34-year low versus the greenback as the Bank of
Japan's historic policy shift to end eight years of negative interest rates
has failed so far to bolster the currency.

BOJ Governor Kazuo Ueda said the central bank could "respond with monetary
policy" if exchange-rate moves affect the country's inflation and wages in
ways that are hard to ignore, the Asahi newspaper reported late Thursday.

The rates picture, with U.S. 10-year yields at more than 4% and Japan's
still close to zero, is keeping big Japanese investors' cash abroad, where
it can earn better returns, depriving the yen of support from repatriation
flows.

The yen was up 0.27% versus the dollar at 151.28, after hitting 151.975 last
week.

Japanese authorities will likely intervene in the currency market if the yen
breaks out of a range it has been in for years and weakens well beyond 152
per dollar, former top Japanese currency official Tatsuo Yamazaki said on
Thursday.

"I'm not sure they'll draw the line right at 152, but I think that somewhere
near 152 they have to jump in there," said Steve Englander, head of global
G10 FX research and North America macro strategy at Standard Chartered Bank
in New York.

The Swiss franc dropped around 0.6% against the dollar after data showed the
Swiss consumer price index rose by a lower-than-expected 1.0% from a year
ago in March.

The Swiss franc fell on Thursday to 0.9848 against the euro, its lowest
level since early May 2023. A day earlier, it dropped to 0.9095 against the
dollar, its lowest level since early November 2023.

Analysts said the further drop in Swiss inflation in March reinforced the
view that the Swiss National Bank would cut rates by an additional 50 basis
points this year.

The euro was up 0.12% on Thursday and back to the middle of a range it has
kept for a year at $1.085.

European inflation came in softer than expected on Wednesday, reinforcing
expectations for a European rate cut in June.

Traders gave a leg up to the Australian and New Zealand dollars in response,
sending the Aussie above its 200-day moving average and to a two-week high
of $0.66180.

The New Zealand dollar has regained a foothold above $0.60 and was last
trading 0.33% higher at $0.603. Traders expect New Zealand rate cuts to
begin in August but Australian rates to be on hold until November.

Chinese markets were closed for a holiday.

In cryptocurrencies, bitcoin was last up 3.3% at $67,918, while ether was
last 0.6% higher at $3,324.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold consolidates near all-time high on US rate cut hopes

(Reuters) - Gold prices took a breather on Thursday after hitting an
all-time high earlier in the session on expectations for lower U.S. interest
rates this year, as investors await more clarity on the timing of the cuts.

Spot gold was steady at $2,300.49 per ounce as of 2:50 p.m. EDT (1850 GMT)
after hitting a record high of $2,304.09 earlier in the day.

U.S. gold futures settled 0.2% lower at $2,308.5.

"It's a continuation of the idea... propagated by the Powell speech the
other day that the Federal Reserve is getting set to cut rates," said Bart
Melek, head of commodity strategies at TD Securities.

"That typically is a very accretive thing for gold, particularly since it
looks like they (the Fed) are quite prepared to reduce interest rates at a
time where inflation is going to be significantly above their 2% target."

Fed officials including U.S. central bank chief Jerome Powell on Wednesday
continued focusing on the need for more debate and data before interest
rates are cut, a move financial markets expect to occur in June.

Data showed the number of Americans filing new claims for unemployment
benefits increased more than expected last week as labor market conditions
gradually ease.

Focus now shifts to U.S. March non-farm payrolls due on Friday which could
shed more light on the timing of the Fed's first rate cut.

Strong central bank buying and safe-haven inflows amid growing geopolitical
tensions have boosted demand for gold, helping to drive the price up more
than 25% since October.

"It's heavily overbought and needs to correct to blow some of the froth. Fed
cuts are priced in, in my view," said StoneX analyst Rhona O'Connell.

Elsewhere, spot silver was flat at $27.22 per ounce after hitting its
highest since June 2021. Platinum rose 0.3% to $939.65, and palladium gained
1.6% to $1,029.91.

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Independence Day

April 18

Workers day

1 May

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

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opinions expressed and recommendations made are subject to change without
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 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

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