Bulls n Bears Daily Market Commentary : 29 April 2024

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Bulls n Bears Daily Market Commentary : 29 April 2024

 

 	

 

 

 	


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

 

Tigere REIT's 11.7% trade highlights stock market activity

 

A total of 84.12 million units worth nearly ZiG 40 million (US$2.97 million)
sailed through as a negotiated trade at 47.50c per unit, with the Public
Service Commission Pension Fund shooting through the top five register
through the purchase, which was booked over by MMC. The PSCPF, which has
long announced that it will target property assets for stable returns, is
now the second-largest shareholder in the property company after Frontier
Real Estate. 

 

In normal trades, Tigere was near flat at 56.04c.  Revitus REIT was
unchanged at 22c in a single transaction of 539 shares. 

 

Meanwhile, SDHT Property Fund initially associated with property group Seeff
Properties  and which is in the market with a US$7 million REIT offer, is
finalising papers to become a stand-alone entity.

Elsewhere on the equities market, the All Share added a marginal 0.07% to
99.10 in a session, which yielded nine risers against six decliners.
Investors' concerns are on the alternative market exchange rate amid reports
of rising ZiG liquidity to support trades. Dealers are trading within the
range of 16-21, the trading rate at most formal stores is now at 14 -16
while the official exchange rate is at 13.44. Banks will start releasing new
ZiG notes and coins tomorrow.   

 

Turnover was at ZiG 2.46 million after 884,900 shares exchanged hands in a
paltry 131 trades.  Delta led on both turnover and volume after 272,200
shares worth ZiG 1.93 million were traded. Foreigners were net buyers at ZiG
1.79 million against sellers of ZiG 57 246.50. 

 

The Top Ten Index put on 0.45% to 97.42. Delta put on a marginal 0.46% to
710.11c but on the opposite end, EcoCash dropped 2.91% to 30c. 

 

The Medium Cap closed 0.07% higher to 104.31. NMB maxed out at 165.60c, as
did Fidelity Life at 50.60c. Ariston put on 14.68% to 4.82c, and Mash
Holdings, which published its dividend announcement today, was 6.43% higher
to 14.9c. Seed Co recovered 4.56% to 134.22c with a last transaction price
of 128c.

 

Dairibord was the day's worst performer, with a 14.97% fall to 102.25c, and
Nampak lost 10.79% to 50c.  Willdale, which is currently undergoing
recapitalization, shed 3.38% to 5.31c.

 

On the VFEX, the All Share was 1.49% higher to 97.97, although in subdued
turnover of just US$417. African Sun was the standout performer with a 5.63%
gain to 3 US cents, Innscor added 5.10% to 47 US cents, and First Capital
put on 3.73% to 2.50 US cents. There were no fallers.

Zimplow did not trade in the wake of its delayed December finals, where the
group reported a decline in profitability after high operating costs
weighed. Revenue was down 28% on prior year to US$32 million mainly due to
dampened demand in the agricultural cluster. Pre-tax profit was US$0.68
million, which was 74% below the prior year.-finx

 

 

Global Currencies & Equity Markets

 

South  Africa

 

South African rand firms ahead of local economic data, FOMC

(Reuters) - South Africa's rand firmed on Monday ahead of local economic
data releases and the Federal Reserve's policy review later in the week.

 

At 1511 GMT, the rand traded at 18.6550 against the U.S. dollar , about 0.8%
stronger than its previous close.

The dollar index was last trading down 0.26% against a basket of currencies.

 

The rand ended last week on a higher note after analysts said a recent Ipsos
poll suggested there was no alternative to the governing African National
Congress, despite a fall in the party's popular support.

 

South African investors will turn their attention toward March money supply,
trade and budget balance figures on Tuesday for clues on the health of the
economy.

 

Global market focus will be on the U.S. Federal Open Market Committee (FOMC)
meeting statement on Wednesday with investors already anticipating a delay
in its rate cuts.

 

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 1.49%
higher, while the broader all-share index (.JALSH), opens new tab was up
1.44%.

 

South Africa's benchmark 2030 government bond was stronger, with the yield
down 12.5 basis points to 10.660%.

 

 

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

 

Global Yen jumps against dollar on possible intervention

 

(Reuters) - Japan's currency surged as much as 5 yen against the dollar from
a fresh 34-year low hit earlier on Monday, with traders citing yen-buying
intervention by Japanese authorities for the first time in 18 months.

 

The outsized move and volatile trading throughout the day for the yen kicked
off a busy week for traders, with the U.S. Federal Reserve capping off its
two-day policy meeting on Wednesday, the U.S. jobs report on Friday, and
European inflation data throughout the week, starting with Germany and Spain
on Monday.

 

The dollar fell as far as 154.4 yen in several rapid moves that knocked it
from an intraday high of 160.245, its highest since 1990, sparking
speculation the Bank of Japan had intervened.

 

The greenback was last at 156.01 yen, down 1.47%. Trading in Asia was
thinner than normal due to Japan's Golden Week holiday. The dollar also saw
another sharp decline shortly after midday, dropping from 156.495 to 155.05
in a span of six minutes.

"The timing actually makes sense because you're going to have a thinner
market, so they're going to get more effect out of whatever they do and
that's why they chose to do it relatively early in the Asian market, they
can push it around more," said Joseph Trevisani, senior analyst at FX Street
in New York.

 

Japan's top currency diplomat Masato Kanda declined to comment when asked if
authorities had intervened, though traders said they had and the Wall Street
Journal said Japanese authorities had intervened, citing people familiar
with the matter.

 

Markets had been anticipating that Japan might intervene to prop up the yen
after the currency fell more than 10% against the dollar this year.

"When any central bank starts to intervene, it does put traders on watch. It
makes traders rethink the sizing of their position," said Nate Thooft, chief
investment officer and senior portfolio manager, Multi-Asset Solutions Team
at Manulife Investment Management in Boston.

"Just the fact they may now be intervening probably does cause some pause
among the market makers and the traders that have been on the side of a
weaker yen to be able to basically downsize their risk exposure and/or take
some chips off the table because they've been right ... it helps the BOJ
achieve what they want to achieve."

 

The Commodity Futures Trading Commission's weekly commitments of traders
report showed that non-commercial traders, a category that includes
speculative trades and hedge funds, had increased their yen short positions
to 179,919 contracts in the week ended April 23, the largest since 2007.

 

The yen had weakened sharply on Friday after the Bank of Japan kept policy
settings unchanged and offered little insight into the reduction of its
Japanese government bond purchases.

 

Japan's suspected intervention by the central bank comes ahead of the Fed's
May 1 policy announcement, with markets widely expecting the U.S. central
bank will keep interest rates unchanged, according to CME's FedWatch Tool,
opens new tab, given the solid labor market and recent inflation data that
was hotter than anticipated.

 

Investors have continually had to dial back expectations for the timing and
magnitude of U.S. rate cuts this year, and the divergence in policy stances
from the Bank of Japan and the Fed have fueled the yen weakness.

 

"Over time with this interest differential between the BoJ and the Fed and
the obvious reluctance of the BoJ to do anything about that, to change their
decades-old policy, now essentially zero interest rates, it's tough to build
up any momentum for the Japanese yen going the other way to strengthen,"
said Trevisani.

 

In addition, other major central banks such as the European Central Bank and
the Bank of England are seen as more likely to begin to cut rates in the
near future.

 

The dollar index fell 0.31% to 105.63, with the euro up 0.25% at $1.0719.
Sterling strengthened 0.54% to $1.2558.

European inflation data this week will help shape the path of interest rates
for the ECB. Spain's European Union-harmonized inflation rate stood at 3.4%
in the 12 months through April, up from 3.3%. Data from Germany showed
inflation rose slightly in April due to higher food prices and a smaller
drop in energy prices.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold Prices in Holding Pattern ahead of Fed; Fakeout Sends USD/JPY Tumbling

 

Gold prices fell on Monday, but the decline was modest, with many traders on
the sidelines and avoiding making large directional bets ahead of
high-profile events later in the week, such as the FOMC monetary policy
announcement and the release of U.S. employment data. Against this backdrop,
volatility could be limited at least until Wednesday afternoon, when the
U.S. central bank's decision/guidance is expected.

 

Focusing on price action analysis, trendline support at $2,320 could bring
stability to the market and prevent the recent pullback from gaining
momentum. However, a breach of this technical indicator could encourage the
bears to launch an attack on $2,295. Continued losses from this point
forward could pave the way for a retrenchment towards $2,260, the 38.2% Fib
retracement of this year's rally.

 

In case of a bullish rebound from current levels, resistance can be spotted
at $2,355, followed by $2,395, which corresponds to a key trendline extended
off the all-time high. Overcoming this barrier may prove challenging for
bulls, but if a breakout emerges, a move toward $2,420 is conceivable,
followed by a potential retest of last week's record.

 

 

Want to understand how retail positioning can impact USD/JPY's journey in
the near term? Request our sentiment guide to discover the effect of crowd
behavior on FX market trends!

 

USD/JPY rallied late last week, with prices blasting past the upper boundary
of a medium-term ascending channel to reach new multi-decade highs. However,
this bullish momentum quickly reversed on Monday. Sellers emerged when the
exchange rate flirted with the 160.00 mark, pushing the pair back down
towards 156.00, suggesting the breakout may have been a fakeout.

 

The cause of Monday's bearish reversal remains unclear. Intervention by the
Japanese government to stem the yen's bleeding and curb speculation is a
possibility. This uncertainty, coupled with the fear of being caught off
guard by further intervention, may keep USD bulls at bay for the time being.
With buyers on the sidelines and upward pressure fading, USD/JPY could see a
slight pullback in the coming days.

 

In the event of USD/JPY continuing in a downward trajectory in the near
term, support is seen at 154.65, followed by 153.20. On further weakness,
all eyes will be on 152.00 mark, located slightly above the 50-day simple
moving average. Further down, channel support emerges at 150.90. On the flip
side, if bulls regain control and spark a decisive breach of 157.00, a
retest of the 160.00 level could be in the cards.

 

 


 

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

Website:            www.bullszimbabwe.com 

Blog:                 www.bullszimbabwe.com/blog

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LinkedIn:           Bulls n Bears Zimbabwe

Facebook:          www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

 

 	

 

 

 	

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
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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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