Bulls n Bears Daily Market Commentary : 25 April 2024

Fri Apr 26 07:50:04 CAT 2024

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Bulls n Bears Daily Market Commentary : 25 April 2024

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

ZSE closes 1.57% higher in Thursday's trades.

The ZSE market closed 1.57% higher in the penultimate session of the week as
it ended pegged at 98.76pts. The Blue-Chip Index notched up 2.27% to close
at 96.36pts while, the Mid-Cap Index added 0.61% to close at 104.12pts. On
the contrary, the Agriculture Index was 3.01% lower at 96.85pts. A total of
sixteen counters registered trades in the session, segregated into ten
risers and four losers. Sugar processor Star Africa led the gainers of the
day as it charged 45.09% to end at $0.0065 while, brick manufacturer
Willdale edged up 9.56% to close at $0.0550. Zimre Holdings was 8.10% firmer
at $0.2800 while, beverages producer Delta advanced 6.36% to end at $7.0315.
Fintech group Ecocash Holdings fastened the top five gainers of the day as
it added 2.23% to close at $0.3104. Partially weighing down the market was
SeedCo Limited that retreated 13.75% to end at $1.5008 while, General
Beltings was 8.26% higher at $0.0500. Sugar producer Hippo was 7.39% lower
at $3.5005 while, CFI parred off 5.48% to $1.3005. Telecommunication group
Econet eased 2.85% to settle at $1.4087.  

Activity aggregates faltered in the session as volumes traded fell by 43.67%
to see 1.72m shares exchange hands while, turnover declined 19.75% to
$2.95m. Top volume drivers of the day were Mashonaland Holdings (+30.80%),
OK Zimbabwe (+17.62%), Hippo Valley (+16.69%), Star Africa (+12.53%) and
Delta (+11.73%). The duo of Delta and Hippo Valley drove the value aggregate
of the day claiming a shared 82.17% of the total. In the ETF category, only
two funds registered trades in today's trades. The Old Mutual Top 10 ETF was
7.83% weaker at $0.1000 while, the Datvest MCS was 6.54% weaker at $0.0200.
The Tigere REIT inched up 2.19% to end at $0.5700 while, the Revitus REIT
was stable at $0.2200 as 333 units exchanged hands in the
fund.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand strengthens after producer inflation data

(Reuters) - The South African rand rose on Thursday, after monthly domestic
producer inflation came in as expected.

At 1550 GMT, the rand traded at 19.0400 against the dollar , nearly 0.9%
stronger than its previous close.

The dollar was last trading down 0.11% against a basket of other major
currencies.

Statistics South Africa data showed producer inflation rose slightly to 4.6%
year on year in March from 4.5% in February, in line with the expectations
of analysts polled by Reuters.

-

The central bank said this week that bringing consumer inflation back to the
midpoint of its target range was likely to be a "bumpy and protracted"
journey.

The South African Reserve Bank has held its main interest rate at 8.25%
(ZAREPO=ECI), opens new tab since May 2023 to combat price pressures.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 0.2%
lower while the broader all-share (.JALSH), opens new tab index was down
0.25%.

-

Anglo American Platinum (AMSJ.J), opens new tab fell 9.48% after BHP Group
(BHP.AX), opens new tab bid $38.8 billion for its parent Anglo American
(AAL.L), opens new tab.

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.

Goldman Sachs had earlier adjusted its forecast in March, predicting that
the Naira would strengthen to N1200 per dollar by 2024. The firm cited
increased capital inflows and a series of policy initiatives aimed at
bringing stability to the foreign exchange market as key drivers behind this
optimistic outlook.

Finance Minister Wale Edun also unveiled plans for higher inflows of US
dollars, including the sale of foreign currency bonds in the second quarter.
This move is part of broader efforts to attract overseas capital with
high-yield short-term debt products.

Despite the rallying Naira and strategies to boost economic inflows,
Nigeria's gross foreign reserves have declined, even as global commodity
prices, particularly crude oil, continue to rise. Nigeria's oil grades are
currently trading at a premium over the ICE Brent benchmark, which could
potentially offset the negative fiscal impacts of reduced production
volumes.

"The ongoing geopolitical unrest in the Middle East and the anticipation of
further instability have had significant ripple effects on global markets,
influencing commodity prices and currency valuations alike," explained an
industry analyst.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar sags after mixed US growth and inflation report, except against yen

(Reuters) - The U.S. dollar fell on Thursday, except against the yen,
vacillating after data showed unexpected slowing in economic growth and an
unwelcome inflation acceleration, potentially tying the Federal Reserve's
hands on a pivot to easier interest rates.

While the dollar was hardly shaken against the beleaguered yen, it otherwise
only popped briefly after the Commerce Department reported that U.S. gross
domestic product grew at a 1.6% annualized rate in the January-March period,
slower than the 2.4% rate expected by economists polled by Reuters.

-

The report also showed that underlying inflation as measured by the core
personal consumption expenditures (PCE) price index rose 3.7% in the first
quarter, eclipsing forecasts for a 3.4% rise.

The inflation surprise puts an even greater-than-usual focus on the release
on Friday of PCE price index data for March. The PCE index, and core PCE
index factoring out food and energy prices are among the Fed's most
important gauges of price behavior. Inflation remains stubbornly above the
U.S. central bank's 2% inflation target.

-

"The market reaction to the (GDP) data tells all you need to know about what
investors are focused on and it's mostly inflation and not growth," said
Boris Kovacevic, global market strategist at Convera in Vienna, Austria.

"The print on the 3.7% PCE does suggest that tomorrow's PCE number will be
higher."

The yen, meanwhile, hit a fresh 34-year low versus the dollar and a 16-year
low against the euro on Thursday as investors expect a Bank of Japan (BOJ)
policy meeting that ends on Friday to not be hawkish enough to support the
Japanese currency.

The dollar index , a measure of the U.S. currency's value against six
rivals, reversed a small overnight loss after the data caused benchmark
Treasury yields to rise, topping at 106.00. It was last at 105.60, off
0.21%.

Conversely, the greenback fell as low as 155.31 yen after the GDP data, but
quickly reversed to stand 0.19% higher at 155.63.

It peaked at a 34-year high of 155.75 yen, while the euro/yen pairing surged
to 167.025, a 16-year peak.

-

Investors guessed the dollar/yen 155 level would be a line in the sand for
Japanese authorities, above which the BOJ could intervene to shore up the
currency. But it's a moving target and the market has been on high alert for
such central bank action since the yen fell below 152 per dollar about two
weeks ago.

"I think that Japanese officials have been very clear that they are not
really looking at a particular level," said Marc Chandler chief market
strategist, at Bannockburn Global Forex in New York.

"We should expect a hawkish hold from the BOJ where they hold policy and
they talk about how the weakness of the yen could contribute to inflation
and which they'd respond to."

The euro went up 0.26% to $1.0725. Sterling strengthened 0.35% to $1.2504.

Following the GDP data, the U.S. rate futures market was pricing in a 58%
chance of a Fed rate cut in September, down from 70% late on Wednesday,
according to CME Group's FedWatch tool.

Rate futures traders on Thursday were factoring in a 68% chance that the
Fed's first rate cut since 2020 could happen at its meeting in November.

"The inflation figures ... potentially even point to the need for a further
tightening," said Stuart Cole, chief macro economist, at Equiti Capital in
London. "We know that returning CPI (consumer price index) to target is the
Fed's main objective and therefore, on balance, today's figure probably
pushes an interest rate cut further down the road."

In cryptocurrencies, bitcoin gained 0.80% at $64,492.00. Ethereum rose 0.94%
at $3158.95.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price flatlines as traders look to US PCE Price Index for some
meaningful impetus

Gold price (XAU/USD) struggles to capitalize on the previous day's modest
gains and oscillates in a narrow range during the Asian session on Friday
amid mixed fundamental cues. The US GDP report released on Thursday pointed
to a significant loss of growth momentum at the start of 2024 and an
unwelcome pickup in inflation. This, along with the subdued US Dollar (USD)
price action, acts as a tailwind for the precious metal, which is considered
as a hedge against inflation. The upside, however, remains capped in the
wake of hawkish Federal Reserve (Fed) expectations. 

Investors seem convinced that the US central bank will keep interest rates
higher for longer amid sticky inflation. This remains supportive of elevated
US Treasury bond yields and lends support to the Greenback. Apart from this,
a positive tone around the equity markets further contributes to keeping a
lid on the safe-haven Gold price. Traders also seem reluctant and prefer to
wait for the release of the US Personal Consumption Expenditures (PCE) Price
Index for cues about the Fed's rate-cut path, which should determine the
next leg of a directional move for the XAU/USD. 

Daily Digest Market Movers: Gold price traders await more cues about the
Fed's rate-cut path before placing directional bets 

The US GDP report released on Thursday showed a sharp deceleration in
economic growth and stubborn inflation, which, in turn, is seen as a key
factor lending support to the Gold price.

According to the data published by the US Commerce Department, the world's
largest economy grew by 1.6% at an annualized rate in the first quarter,
marking the weakest reading since mid-2022.

Additional details of the report revealed that underlying inflation rose
more than expected, by 3.7%, in the first quarter, reaffirming bets that the
Federal Reserve will keep rates higher for longer.

The yield on the benchmark 10-year US government bond shot to the highest
level in more than five months in reaction to the mixed data and acts as a
headwind for the non-yielding yellow metal.

This, along with easing fears about a further escalation of geopolitical
tensions in the Middle East, undermines the safe-haven precious metal and
should contribute to capping the upside.

The US Dollar bulls, meanwhile, prefer to wait for more cues about the Fed's
rate cut path, putting the focus squarely on the release of the Personal
Consumption Expenditures (PCE) Price Index.

The crucial inflation data will play a key role in influencing the Fed's
future policy decisions and driving the USD demand, which should help in
determining the near-term trajectory for the commodity. 

Technical Analysis: Gold price consolidates in a range, $2,300 holds the key
for bulls and should act as a strong base

>From a technical perspective, the XAU/USD, so far, has been struggling to
make it through the 100-period Simple Moving Average (SMA) on the daily
chart. The said barrier is currently pegged near the $2,345 region and
should now act as a key pivotal point amid mixed oscillators on the daily
chart. Meanwhile, a sustained strength beyond will be seen as a fresh
trigger for bullish traders and lift the Gold price to the next relevant
hurdle near the $2,371-2,372 region. The subsequent move up could extend
further towards the $2,400 round figure en route to the all-time peak,
around the $2,431-2,432 area touched earlier this month.

On the flip side, bearish traders are likely to wait for some follow-through
selling and acceptance below the $2,300 mark before placing fresh bets. The
Gold price might then extend the corrective decline further towards the
$2,260-2,255 intermediate support before eventually dropping to the $2,225
area and the $2,200-2,190 region, representing the 50-day Simple Moving
Average (SMA).

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 

 Invest Cellphone:            +263 71 944 1674 | +27 79 993 5557 

Email:               bulls at bullszimbabwe.com

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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
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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.

 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

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