Bulls n Bears Daily Market Commentary : 13 February 2024

Wed Feb 14 05:55:55 CAT 2024

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Bulls n Bears Daily Market Commentary : 13 February 2024

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

Heavies weigh on the market

Heavies weighed down the market in Tuesday’s trades as the All Share Index
plummeted 1.88% to settle at 550,881.68pts. The Blue-Chip Index was 1.93%
lower at 245,226.99pts as majority of the counters in the Index closed
pointing south. The Agriculture Index ended the session subdued as it closed
0.08% lower at 1,546.56pts while, the Mid Cap Index added 0.59% to
2,240,030.99pts. Fintech company Ecocash that is trading under a cautionary
led the laggards of the day as it shed 14.93% to $636.1919 while, Meikles
eased 10.28% to end pegged at a VWAP of $3,621.0233 where demand could be
found. Retailer OK Zimbabwe parred off 10.06% to close at $808.9005 while,
packaging company Nampak retreated 4.58% to $500.0000 as 700 shares
exchanged hands. Beverages giant Delta capped the top five laggards of the
day as it succumbed 3.23% to close at $7,900.2340. Partially offsetting
today’s losses were the duo of ART and Cafca that charged 15% apiece to
settle at $149.5000 and $6,612.5000 respectively. Apparel retailer Edgars
buttressed prior session gains as it jumped 14.82% to close at $380.0446 on
the back of firming demand while, First Mutual Holdings climbed 11.80% to
settle at $3,600.0000. Zimre Holdings was 6.61% higher at $182.1386 as it
fastened the gainers list of the day.

Activity aggregates faltered in the session as volume traded declined 76.42%
to see 424,900 shares trade while, turnover dropped 44.23% to $1.03bn.
Volume drivers of the day were Delta, SeedCo and Edgars with respective
contributions of 17.77%, 14.36% and 10.59%. In the value category Delta
claimed 57.82% of the turnover traded, with SeedCo trailing behind with a
13.98% contribution. In the ETF category only three funds registered price
movements, Morgan & Co Made In Zimbabwe ETF was 9.32% up at $17.5712. The
Datvest MCS ETF and Old Mutual Top 10 ETF dropped 0.24% and 6.56% apiece.
The Tigere REIT was 0.01% weaker at $604.95000 as a block trade of 6.76m
units worth $4.09bn traded in the session. The Revitus REIT was stable at
$560.0000 in the session as 900 units traded.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand weakens after mining data, U.S. inflation

(Reuters) - The South African rand weakened on Tuesday after local mining
production figures disappointed, and as U.S. inflation data pushed the
dollar to a three-month peak.

At 1512 GMT, the rand traded at 19.1000 against the U.S. dollar , about 1%
weaker than its previous close.

The dollar was up about 0.68% against a basket of global currencies.

South Africa's total mining output (ZAMNG=ECI), opens new tab rose 0.6% year
on year in December, far below the 4.9% expected by economists polled by
Reuters, Statistics South Africa data showed. Total output rose by a revised
6.9% in November.

"Domestic challenges continue to impede South Africa's production and export
potential," said Investec economist Laura Hodes, adding that "congestion at
the ports has had a significant bearing on the sector."

U.S. inflation rose more than expected in January, reinforcing expectations
that the Federal Reserve will hold interest rates in March and causing the
dollar to jump.

On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab
closed 1.06% lower. The benchmark 2030 government bond was weaker, with the
yield up 5.5 basis points to 10.100%.

Nigeria

Official naira exchange rate beats parallel market in record depreciation in
Nigeria

The naira depreciated to N1,534 per US dollar in the official foreign
exchange market on Monday, February 12, 2024 from N1, 469.97/US$ on Friday
and N1,479.47/US$ on Thursday last week.

Data from FMDQ showed that the indicative exchange rate for the Nigerian
Foreign Exchange Market (NAFEM) fell below that of the unofficial market.

At the parallel market, the local currency also lost some grounds as it
closed at N1, 495/US$ from N1, 490/US$ to the dollar on Friday, February 9,
2024, according to Bureau De Change sources.

Related PostsNaira volatility: Banks to fix forex rates — CBNCBN’s optimism
and Naira’s performance in FX marketIf Cardoso won’t defend the Naira, who
will?

The local currency closed against the British Pound Sterling (GBP) on Monday
at N1,895/£ while the naira to Canadian dollar closed at N1,200/CAD.

Meanwhile, at the parallel market, the exchange rate at one point reached
N1,505/$1 but eventually settled at N1,500/$1, losing 4.33 percent last
week.

The larger decline in the parallel market created a 2.11 percent gap between
the street and the official market.

The Central Bank of Nigeria’s (CBN’s) published gross external reserves
declined 0.71 percent to close the week at $33.12 billion.

The impact of the CBN’s directive to banks to sell down part of their net
long US dollar positions seemed to have been short-lived, even if turnover
in the foreign exchange markets did improve significantly for a while
according to analysts.

The gap between the parallel and the NAFEM market has reopened, however.
This further reinforces the need to improve the supply of US dollars into
the market and “we wait to see whether the reforms attract

foreign portfolio investors and encourage other flows,”says analysts from
Coronation Research.

In searching for way forward in the foreign market, the CBN Governor Olayemi
Cardoso noted several strategies are in place to enhance liquidity and price
discovery in the market.

These include unifying Forex market segments, clearing outstanding Forex
obligations, introducing new BDC operational mechanisms, and enforcing
banks’ Net Open Position (NOP) limit amongst others.

Recall that Mr Cardoso in an interview earlier in the previous week stated
that out of the $7.0 billion Forex backlog inherited, the CBN had cleared
$2.5 billion in verifiable claims, with $2.2 billion outstanding and $2.4
billion having irregularities.

The Governor noted that all these measures would stabilise the exchange
rate, deepen the FX market into a more market-oriented mechanism, and
restore investors’ confidence in the financial markets.

 <mailto:info at bulls.co.zw> 

Global Markets

Yen's slide past ¥150 per dollar prompts stern warnings from Japan

The yen weakened past ¥150 per dollar for the first time since November,
prompting the strongest pushback from Japanese officials in months, as
hotter-than-expected U.S. inflation doused bets on an early U.S. interest
rate cut.

The Japanese currency was around ¥150.73 against the dollar early Wednesday
in Tokyo after a 1% plunge overnight that was part of a broader slide in
Group of 10 (G10) currencies against the dollar. The continued strength in
U.S. prices buoyed speculation that the Federal Reserve will need to keep
interest rates at two-decade highs for several more months.

The currency move triggered a flurry of verbal warnings from Tokyo’s most
senior currency officials.

"Some of the recent rapid moves are in line with fundamentals, but some are
clearly speculative. I think the latter aren’t desirable,” vice finance
minister for international affairs Masato Kanda told reporters Wednesday.

"Authorities are ready to respond 24 hours a day, 365 days a year,” he
added, in his strongest remarks on the currency since November.

His comments were reinforced by Finance Minister Shunichi Suzuki shortly
afterwards. While the yen briefly regained some ground, it soon returned
close to levels before the remarks. The yield on 10-year Japanese debt rose
to 0.76%, the highest since mid-December, suggesting that investors see
slightly more chance of an early move by the Bank of Japan to raise interest
rates.

The yen — which fell to as low as ¥150.89 on Tuesday — has come under
renewed pressure after Bank of Japan Deputy Gov. Shinichi Uchida said last
week that it’s hard to see the bank raising its policy rate continuously and
rapidly. The Japanese currency has already sunk over 23% over the past two
years, more than any major currency tracked by Bloomberg.

Uchida also said that financial conditions will remain accommodative — a
view expressed also by Gov. Kazuo Ueda — even after the BOJ ends its
negative-rate policy, given the current outlook for the economy and
inflation.

"Concerns are growing about verbal intervention from the Japanese
authorities and market players would need to assess the intensity of the
warning from here,” said Keiichi Iguchi, a senior strategist at Resona
Holdings. "Some nervousness will prevail among investors due to intervention
concerns.”

The yen has tumbled more than 6% versus the dollar so far in 2024, the
biggest loser among G10 currencies. It has fallen 3.5% versus the euro, also
the worst performance among developed-nation peers.

Japanese authorities stepped into the foreign-exchange market in September
and October of 2022, in their first efforts to prop up the currency since
1998, and spent around ¥9 trillion ($60 billion).

"The market’s really geared up for yen bullishness on expectations of the
Bank of Japan exiting its negative interest rate policy, but they’re not
gonna be in a hurry to do it and they’re not going to rush into a prolonged
normalization cycle,” said Tom Nakamura, a portfolio manager at AGF
Investments, adding that expectations for yen strength based on actions by
the country’s central bank should start to unwound.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slides below $2,000/oz for first time in two months after US inflation
data

(Reuters) - Gold prices fell below the key $2,000 per ounce level to a
two-month low on Tuesday, as a stronger-than-expected U.S. inflation report
tempered prospects of an early interest rate cut from the Federal Reserve.

Spot gold was down 1.3% at $1,993.29 an ounce by 01:56 p.m. ET (1856 GMT),
its lowest since Dec. 13.

U.S. gold futures settled 1.3% lower to $2007.2.

Data showed U.S. consumer prices increased more than expected in January
amid an increase in the costs of shelter and healthcare.

"That was not the report that the market wanted to see," said Tai Wong, a
New York-based independent metals analyst.

"Fed doves are looking for shelter today as surprisingly stubborn inflation
has dropped the chances of a May rate cut under 50% for the moment," Wong
added.

Fed policymakers will probably wait until June before cutting interest
rates, traders bet after the U.S. CPI data. Higher interest rates increase
the opportunity cost of holding bullion.

Following the inflation data, the dollar jumped 0.7% to a three-month high
against its rivals, making gold more expensive for holders of other
currencies. The U.S. 10-year Treasury yield also rose.

The CPI print triggered "large-scale Commodity Trade Advisor (CTA)
liquidations in gold markets.. but prices would need to revisit the $1,950
per ounce range to spark the next algorithmic selling program," TD
Securities wrote in a note.

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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