Bulls n Bears Daily Market Commentary : 08 February 2024

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Bulls n Bears Daily Market Commentary : 08 February 2024

 

 	

 

 

 	

 <https://www.dulys.co.zw/> 
ZSE commentary

 

Dairibord Pfuko ginger now makes up 5% of maheu volume; ZSE rises in
improved activity

HARARE - Dairibord has had to increase the price of its popular Pfuko maheu
by 60% over the past two weeks as maize, a crucial raw material in maheu
production is now facing elevated prices.

Pfuko maheu prices have surged by 60%, from US$0.50 to US$0.80 in informal
retail shops. CEO Mercy Ndoro explained that the surge in maize prices and
the recent introduction of VAT on the product, have necessitated the price
hike. The recommended retail prices are at US$0.63 and US$0.70 for
traditional and buttermilk flavors, respectively. The new sugar tax will
also impact the company, going forward.

           

In response to the looming lower harvest, due to the El-Nino induced
drought, Ndoro was optimistic that local millers should have the capability
to import in order to meet domestic demand.  

 

Ndoro said the Pfuko ginger flavour, which hit the market in November 2023,
has been well-received, accounting for 5% of the total maheu volume sold
within the past three months. The company remains optimistic about the
ginger flavor's growth potential, aiming for double-digit market share in
the near future by ramping up production at the Chitungwiza plant.

On milk supply, Ndoro said Dairibord spends at least US$400 000 annually on
development initiatives. These include funding support through partnerships
with financial institutions for out grower initiatives, heifer schemes and
artificial insemination programmes, feed formulation and nutrition support.
The company is also enhancing milk transportation through partnerships with
stakeholders such as Mobility for Africa for small-scale farmers. The dairy
sector is targeting a raw milk output of 110 million litres this year.

The company has 13 milk collection centres nationwide and has 98 large scale
producers and 480 small scale producers on its supply chain.

Ndoro also said the group has significant capex expenditure plans mainly for
beverages and Steri-milk to enhance capacity and close the demand-supply gap
for both domestic and export markets.

Meanwhile, Dairibord shares gained 4.82% on the Zimbabwe Stock Exchange to
180 000c as it moved its year to date gain to 196.54% and market cap to
US$58 million.

The broader market maintained gains as investors continued to await the
release of new measures to usher in price and exchange rate stability from
the fiscal and monetary authorities. The All Share Index gained  1.74% to
568 812.10.

Activity was high at 412 trades after 2.63 million shares exchanged hands.
Turnover was at $6.14 million led by Delta $2.6 billion and Seed Co at $2.19
billion after 783 700 shares traded.  Seed Co was also the most active at 68
trades. Foreigners bought $1.26 billion, mostly in Delta and sold $260.23
million worth of shares.

 

The Top Ten Index was the strongest link with a 2.96% advance to 256 187.24.
TSL was the standout performer among the heavyweights with a 15% gain to 232
040c and RTG was 13.98% higher to 29 976c. CBZ rose 13.31% to 1 019 000c in
a low volume trade of 500 shares.

EcoCash shed 1.18% to 74 953c and Econet pared 0.99%.

Struggling miner RioZim, which missed out on the January rally, maxed out to
119 025c. NMB put on 14.71% to 260 000c consolidating gains made since the
beginning of the year, which have seen it end in the top ten most
capitalised counters at $1 trillion. As a result of the gains, the Medium
Cap Index put on 1.82% to 2 158 655.68  

 

Tanganda was the day's worst performer with a 15% gain to 243 100c and
Meikles dropped 9.38% to 470 310c.  Turnall shed 4.49% to 8500c and Edgars,
which is set to migrate to VFEX, dropped 1.69% to 25 099c or 2.26 US cents.

Bridgefort Capital, currently trading under caution pending the acquisition
of fintech assets and a migration to VFEX, led the risers gaining 100% to 4
000c. The Small Cap Index closed 0.44% higher.

VFEX turnover was subdued at US$21 820 as the All Share traded in negative
territory. Seed Co International was the worst performer with a 9.21% loss
to 23.95 US cents. Nedbank was 8.33% lower to US$11 after 931 units traded.
Simbisa Brands dropped 2.19% to 36.18 US cents and Innscor pared 0.09%.

Gains were seen in First Capital at 5.5% to 2.11 US cents and Padenga was 1%
higher to 14.16 US cents.-finx

 

 

Global Currencies & Equity Markets

 

 

South Africa

 

Rand case a tough test for Compcom

The result achieved in the country's highest court over the rand/dollar
manipulation scandal will confirm whether or not the Competition Commission
has botched this particular case, which could put the credibility of its
work in question, a mercantile law expert has said.

 

This comes as the Commission approached the Constitutional Court for leave
to appeal a Competition Appeal Court (CAC) judgment handed down last month,
which upheld an appeal by majority of the respondent banks accused of
rand/dollar currency manipulation for at least six years.

 

 

In June 2020, the Commission had referred the case to the Competition
Tribunal against 28 local and foreign banks alleged to have colluded with
one another to fix the foreign exchange rate in respect of the US dollar and
the South African rand (USD/ ZAR) currency pair between September 2007 to at
least September 2013.

 

While the respondent banks were ordered by the Tribunal in March last year
to file their answering affidavits, they opted to appeal to the CAC.

 

The CAC delivered its judgment last month and ordered four of the 21
respondent banks to file, within 40 days, their answering affidavits with
the Tribunal. However, it also upheld the appeal by 17 respondent banks
which sought a CAC order to set aside the March 2023 Tribunal decision.

 

The respondent banks ordered by the CAC to file their answering affidavits
are BNP Paribas, JPMorgan Chase and Co, HSBC Bank Plc, and Credit Suisse
Securities (USA) LLC.

 

In its current application for leave to appeal, the Commission is appealing
the CAC order to the Concourt against 13 respondent banks: Bank of America
Merrill Lynch International Designated Activity Company; JPMorgan Chase Bank
N A; Australia and New Zealand Banking Group Limited; Standard Bank of South
Africa Limited; Nomura International Plc; Commerzbank AG; Macquarie Bank
Limited; HSBC Bank USA National Association; Merrill Lynch Pierce Fenner &
Smith Inc; Bank of America National Association; Nedbank Limited; FirstRand
Bank Limited; and Standard Americas Inc. Absa Bank Limited, Barclays Capital
Inc and Barclays Bank Plc applied for leniency. Citibank N A and Standard
Chartered Bank have settled with the Commission.

 

Dr Tinashe Kondo, a senior lecturer in competition law in the Department of
Mercantile and Labour Law at UWC, said the Concourt has locus standi in
competition matters.

 

 

"Section 62 of the Competition Act 89 of 1998 provides for the rules on
appellate jurisdiction. Section 62(4) states that 'an appeal from a decision
of the Competition Appeal Court in respect of a matter within its
jurisdiction in terms of subsection (2) lies to the Constitutional Court,
subject to section 63 and its respective rules'.

 

"The decision by the Competition Commission to approach the Constitutional
Court in respect of the rand-fixing saga is indeed a welcome and anticipated
development. Given the fanfare that has taken place with respect to the
proceedings, especially after the judgment of the Tribunal, there was no way
in which the Competition Commission would not pursue this to the highest
court. As indicated by the Competition Commissioner, Doris Tshepe, "(t)his
appeal will provide the Constitutional Court with an opportunity to
pronounce on whether the South African competition authorities have
jurisdiction to investigate and prosecute firms that are based outside of
the Republic whose anti-competitive conduct affects the South African
economy".

 

Among many issues, two issues rise to the forefront that will be essential
in the proceedings in the Concourt, which are jurisdiction and that of the
criteria to establish a single overarching conspiracy by a cartel, Kondo
said.

 

 

"It would be ideal that the leave to appeal be granted in order that the
highest court in the land give finality to the issues. More so, the result
will confirm whether or not the Competition Commission has botched this
particular case. This would be a competition tragedy of note given that the
Commission has enjoyed widespread success in the past few decades. This
might perhaps signal the decline of a once-favoured institution by many."

 

 

Nigeria

 

Naira depreciates to N1,500/$ in parallel market

The naira yesterday depreciated to N1,500 per dollar in the parallel market
from N1,465 per dollar on Tuesday.

Similarly, the naira depreciated to N1,479.47 per dollar in the Nigerian
Foreign Exchange Market (NAFEM).

 

 

Data from FMDQ showed that the indicative exchange rate for NAFEM rose to
N1,479.47 per dollar from N1,418.78 per dollar on Wednesday, indicating
N60.69 depreciation for the naira.

 

 <mailto:info at bulls.co.zw> 

 

 

 

Global Markets

 

Yen nears 10-week low, dollar strengthens as traders adjust rate
expectations

The currency market witnessed adjustments as traders recalibrated their
expectations concerning the timing of interest rate changes by the Bank of
Japan (BOJ) and the potential for rate cuts by the Federal Reserve.

 

The yen found itself hovering near a 10-week low on Friday, while the dollar
continued its upward trajectory towards a fourth consecutive weekly advance.

 

According to a Reuters report, the currency market witnessed adjustments as
traders recalibrated their expectations concerning the timing of interest
rate changes by the Bank of Japan (BOJ) and the potential for rate cuts by
the Federal Reserve.

 

The yen, barely flinching after Japanese Finance Minister Shunichi Suzuki's
statement that he was "watching FX moves carefully," remained little changed
at 149.315 per dollar in early Asian trading.

 

The yen's lack of response to Suzuki's warning underscores the nuanced
considerations at play in the currency market.

 

Meanwhile, BOJ Deputy Governor Shinichi Uchida's recent remarks contributed
to the yen's weakened position, stating that it is "hard to imagine" a rapid
increase in rates even after ending the negative interest rate policy.

 

In the realm of the dollar, the dollar index, measuring the currency against
six major peers, stood steady at 104.15.

 

The dollar's resilience was evident as it gained 0.1 per cent following
fresh data pointing to the robustness of the US labour market.

 

This follows a week where the dollar index has climbed 0.18 per cent,
propelled by strong monthly payrolls data and a hawkish stance from Fed
Chair Jerome Powell.

 

Traders, once anticipating early Fed rate cuts, now lay just 16.5 per cent
odds for a rate cut at the Fed's next policy meeting in March, a significant
shift from 65.9 per cent odds a month ago.

 

Reuters cited Richard Franulovich, Westpac's head of foreign exchange
strategy, who predicts a potential rally toward 105.50 for the dollar index,
emphasising latent upside fuel for the US currency.

 

He notes that while pricing for the March Federal Open Market Committee
(FOMC) has been reduced, there is still potential for a USD rally in
subsequent FOMC meetings.

 

Franulovich anticipates US resilience extending well into 2024, contributing
to a potentially bumpy disinflation last mile.

 

Turning attention to other currencies, the euro remained relatively stable
at $1.0774, and the sterling showed little movement at $1.2619. Both
currencies demonstrated resilience amid efforts by the European Central Bank
and Bank of England officials to counter market expectations of early rate
reductions.

 

New Zealand's dollar, on the other hand, gained 0.34 per cent to $0.6117,
supported by bets for a delayed start to Reserve Bank rate cuts or the
potential for further hikes, following stronger-than-forecast job market
data.

 

In the realm of cryptocurrency, bitcoin traded little changed at around
$45,300, maintaining its position as a significant player in the
ever-evolving financial landscape.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets





Gold inches lower on firm dollar, yields; palladium extends fall

(Reuters) - Gold prices edged lower on Thursday, hurt by a stronger dollar
and elevated bond yields as hopes for an early interest rate cut from the
U.S. Federal Reserve diminished, while palladium extended its decline on a
dim long-term demand outlook.

 

Spot gold fell 0.13% to $2,031.58 per ounce, as of 1:42 p.m. ET (1842 GMT).

U.S. gold futures settled 0.2% lower at $2,047.9 per ounce.

 

 

The dollar index (.DXY), opens new tab gained 0.1%, making bullion more
expensive for other currency holders.

-

"The reality on the ground is that the U.S. economy continues to be fairly
firm and that means that the Fed has very little latitude at this stage to
start cutting rates," said Bart Melek, head of commodity strategies at TD
Securities.

"For gold to rally, we have to start seeing evidence that the economy indeed
is slowing down in a material way and that inflation is trending lower on a
sustained basis," Melek added.

-

Several Fed speakers on Wednesday gave a range of reasons for feeling little
urgency to start easing policy in the United States soon, or to move quickly
once they do.

Traders now see about 61% probability of an interest rate cut from the Fed
in May, according to the CME Fedwatch tool, opens new tab. Lower interest
rates decrease the opportunity cost of holding non-yielding bullion.

Spot palladium shed 1.3% to $882.85 per ounce, after hitting $856.38, its
lowest in five years, earlier in the session.

-

Palladium prices fell below those of sister metal platinum for the first
time since April 2018 on Thursday, as growing demand concerns and bets on
stable supply weighed on the metal.

 

Both platinum and palladium are used by automakers in catalytic converters
to clean car exhaust fumes.

"A renewed switch of metals used in autocatalysts by carmakers is unlikely
in the near future as cars are produced over longer cycles. Hence, it is
possible that palladium trades at a sustained discount to platinum," UBS
analyst Giovanni Staunovo said.

Elsewhere, silver rose 1.6% to $22.55 per ounce and platinum was up 0.6% at
$884.91.

 

 

 

 


 

INVESTORS DIARY 2024

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

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
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for guideline purposes only and sourced from third parties.

 

 	

 

 

 	

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