Bulls n Bears Daily Market Commentary : 22 April 2024

Tue Apr 23 07:24:27 CAT 2024

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Bulls n Bears Daily Market Commentary : 22 April 2024

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

ZSE records gains in week-opener ...

The ZSE market recorded gains in the opening session of the week as the
All-Share Index rose 0.35% to 96.33pts while, the Blue-Chip Index firmed up
0.46% to 93.42pts. The Mid Cap Index inched  up 0.23% to  102.55pts while,
the Agriculture top performers of the day on a 12.76% jump to $0.5863,
followed by wine and spirit distillers AFDIS that surged 2.16% to settle at
$2.2500. Beverages giant Delta climbed 1.58% to $6.3946 while, fintech group
Ecocash Holdings edged up 1.32% to $0.3050. Turnall c_apped the winners of
the day on a 0.26% uplift to end the day pegged at $0.0271. Star Africa led
the laggards of the day on a 50.05% retreat to $0.0020, followed  by
Mashonaland  Holdings that  dipped  14.95% to $0.1280. Seed producer SeedCo
dropped 2.81% to $1.7495 while, Nampak declined 2.39% to close at $0.4783.
Brick manufacturer Willdale capped the top five fallers of the day on a
2.15% decline to end the day pegged at $0.0491. The market closed on a
negative breadth of  three after six counters recorded gains against nine
that faltered.

Activity aggregates enhanced in the session as volume of shares traded
ballooned  1,344.32% to 3.06m shares while, turnover swelled 148.80% to
$1.16m. The top volume driver of the day was Art that claimed 88.58% of the
aggregate. The trio of Delta, Art and Econet anchored the value aggregate
after contributing a combined 96.13%. A total of 28,760 units exchanged
hands in the ETF section. Datvest ETF went up 0.04% to $0.0214 while, OMTI
ETF advanced 0.23% to close at $0.1094. Tigere REIT slipped 2.08% to settle
at $0.5581 after scrappy 1,342 units exchanged hands..-efsecurities

Global Currencies & Equity Markets

South Africa

South African rand slips after a week of volatile trading

(Reuters) - South Africa's rand slipped on Monday after a week of volatile
trading driven by tensions in the Middle East.

At 1552 GMT, the rand traded at 19.1450 against the U.S. dollar , 0.37%
weaker than its previous close.

The rand lost ground last week as reports of an Israeli strike on Iran
caused fears of heightened conflict and pushed traders toward the safe-haven
dollar.

The dollar was last trading 0.1% firmer against a basket of currencies.

In South Africa, a leading business cycle indicator is due on Tuesday and
March producer price inflation will be released on Thursday.

Analysts said focus will also be on upcoming U.S. personal consumption
expenditure (PCE) price index and Q1 GDP report for hints on the Federal
Reserve's potential rate cuts.

Investec chief economist Annabel Bishop said domestic risk aversion remained
high ahead of a national election on May 29.

On the stock market, both the Top-40 (.JTOPI), opens new tab index and the
broader all-share (.JALSH), opens new tab index closed around 0.3% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 2 basis points to 10.755%.

The Reuters Daily Briefing newsletter provides all the news you need to
start your day.

Nigeria

Naira Surges Against Dollar, Hits 5-month High

The Naira experienced a significant rally against the US Dollar, breaking
through critical resistance levels to trade below N1,000 in some segments of
the black market as of late Sunday.

This performance aligns with earlier predictions by Goldman Sachs and comes
amid heightened global geopolitical tensions.

"The Naira's current bullish momentum is projected to persist, potentially
pushing the exchange rate below N1000 per US dollar in the upcoming months,"
economists from the American investment bank, Goldman Sachs, commented.

This upturn in the Naira's value follows a period of volatility where it
suffered considerable devaluations since last June. Efforts by Nigerian
financial authorities, including successive interest rate hikes now pegged
at 24.75%, and strategic foreign exchange interventions have notably
contributed to this stabilization.

"The Central Bank of Nigeria's (CBN) aggressive monetary policy adjustments
and the implementation of new market strategies have been central to the
recovery of the Naira from its prior losses," a CBN spokesperson stated
during the latest Monetary Policy Committee (MPC) meeting.

Additionally, the geopolitical landscape has influenced market movements.
The recent Iranian strike on Israel spurred a flight to safety, which
bolstered the US dollar against other currencies.

However, the dollar steadied after initial gains, with Israeli ministers
indicating no immediate plans for retaliation, which somewhat eased market
fears.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar touches new 34-year peak vs yen on US rate outlook

(Reuters) - The U.S. dollar climbed to a fresh 34-year peak against the yen
in quiet trading on Monday, with investors taking their cue from the Federal
Reserve's higher-for-longer interest rate stance, even as they remained
alert to any signs of intervention by Japan to prop up its struggling
currency.

The dollar rose to 154.85 yen versus the Japanese currency, its highest
since mid-1990. It was last up 0.1% at 154.82 yen, a whisker away from the
155-level that is next on traders' radars for possible intervention.

The yen hit fresh lows ahead of the Bank of Japan's (BOJ) policy meeting on
Friday.

Market players took note of the fact that Japan has refrained from
intervening in the currency market despite the yen hitting several 34-year
lows this year.

"I think the MOF (Ministry of Finance) has acknowledged that currency
fundamentals have been moving in the wrong direction, i.e. dollar/yen has
been going higher because U.S. yields have been going...higher," said Calvin
Tse, managing director and head of Americas macro strategy at BNP Paribas in
New York.

"I think they've been very wary to stand in the way of that. However, if we
see an environment where, let's say U.S. yields start to weaken ... then
that provides them, at least in their (MOF) minds, with a window of
opportunity to act. So long story short, I don't think they will be
intervening if the ... driver of dollar/yen is higher U.S. yields," he
added.

In late afternoon trading, the dollar index, a gauge of the greenback's
value against six major currencies, was flat to slightly higher at 106.13 .
It was off five-month highs hit last week after comments from Federal
Reserve officials and a run of hotter-than-expected inflation data forced a
paring back of U.S. rate-cut expectations.

Cooling Middle East tensions, which had driven the dollar, gold and oil
sharply higher on Friday and battered stock markets, also helped temper
volatility. Tehran downplayed Israel's retaliatory drone strike, in what
appeared to be a move aimed at averting regional escalation.

Last week, Deutsche Bank's index of currency volatility (.DBCVIX), opens new
tab hit 7.18, the highest level since February. On a weekly basis, the
volatility index rose 9.7%, its biggest gain since June 2023.

Besides the BOJ meeting, the market is looking at U.S. first-quarter gross
domestic product data on Thursday and the inflation metric the Fed targets,
the personal consumption price expenditures (PCE) index, due out on Friday.

Markets are expecting a 0.3% increase in the headline PCE number in March,
unchanged from the previous month, and a year-on-year gain of 2.6%, compared
with 2.5% in February, according to a Reuters poll.

"A hot number puts the Fed in a tricky spot since it starts to run out of
runway ahead of the November election," wrote TD Securities in a research
note led by Mark McCormick, global head of FX and EM strategy.

In addition, TD added that a combination of higher inflation and risk-off
sentiment increases the chances of former U.S. President Donald Trump's
victory.

"That outcome could see the market price in Fed hikes next year, reflecting
a mix of corporate tax cuts and tariffs - both inflationary," the TD report
said.

The issue of the strong dollar also prevailed at last week's International
Monetary Fund and World Bank spring meetings in Washington, and the U.S.,
Japan and South Korea released a rare joint statement on the issue.

A rethink on Fed policy easing has led to a general repricing of global
rate-cut timelines, but expectations for the European Central Bank (ECB) and
the Bank of England (BoE) to start cutting by the middle of this year are
still intact.

The euro , which is heading for its biggest monthly drop against the dollar
since January, was little changed at $1.0651, while sterling slipped 0.1% to
$1.2352.

In cryptocurrencies, bitcoin was last up 3.6% at $66,384. The world's
largest cryptocurrency completed its "halving" at the weekend, a phenomenon
that happens roughly every four years and aims to reduce the rate at which
bitcoins are created.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices doubled over five years: World Gold Council

John Reade, Chief Market Strategist for Europe and Asia at the World Gold
Council, has announced that gold prices have seen a remarkable surge,
doubling over the past five years since 2019. He emphasized that this trend
is independent of the dollar's value.

During the "Gold As An Asset Class and Financial Instrument" press
conference on Monday, Reade highlighted that the price per ounce globally
has risen by an estimated $250. This increase is attributed to the fallout
from various global crises, ranging from the COVID-19 pandemic to the
ongoing Russian-Ukrainian conflict.

Reade underscored gold's resilience as a commodity, contrasting it with more
volatile goods like wheat and oil. He revealed that approximately 220 tonnes
of gold were extracted in the last year, spurred by heightened demand and
trading activity among central banks and gold investment entities.

The strategist also noted the significant growth in the Egyptian gold market
in 2023, stating: "Gold serves as a beacon of stability amidst market
fluctuations and is a valuable investment asset."

He further explained that emerging markets, particularly India and China,
have seen a surge in gold production and trade, now accounting for half of
the global gold market share-a stark shift from the US dominance in the
1980s.

Reade anticipates substantial increases in gold prices soon, citing the
consistent purchasing by central banks as a driving factor.

He pointed out the particularly strong demand for gold in China and Turkey,
which is intensifying amid global political shifts.

"We urge investors to incorporate gold into their financial and investment
portfolios and to seek diversification. The Council is dedicated to
enhancing investor education about gold's significance. Gold not only
diversifies but also stabilizes financial portfolios. Furthermore, any
reduction in U.S. interest rates is likely to have a favourable impact on
gold prices," Reade advised.

He also mentioned the dynamic role of gold as an investment vehicle within
the Egyptian market, as evidenced by its robust presence in the financial
portfolios of institutions.

Andrew Naylor, Regional CEO for the Middle East and Head of Public Policy at
the World Gold Council, reported a sixtyfold increase in gold trade within
the Turkish market in 2023.

Naylor remarked on Egypt's storied connection with gold, noting a
substantial rise in the country's capital market, in tandem with India's
market growth, reflecting a strong intermarket relationship.

He observed that gold trading in Egypt has made significant strides,
becoming a traditional savings medium for numerous Egyptian households.

Sameh Eltorgoman, Founder and CEO of Evolve Investment Holding, expressed
his company's ambition to collaborate with the World Gold Council to enhance
Egypt's gold market infrastructure and foster integration with international
markets.

Eltorgoman asserted that Egypt possesses all the necessary elements-from
consumer interest and metal availability to investment demand-to emerge as a
key player in the African gold market.

He shared Evolve's vision, in partnership with the World Gold Council, to
aid in the advancement of Egypt's gold markets and their incorporation into
the global marketplace.

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

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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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
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companies typically involve a higher degree of risk and more volatility than
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