Bulls n Bears Daily Market Commentary : 15 February 2024

Fri Feb 16 07:25:46 CAT 2024

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Bulls n Bears Daily Market Commentary : 15 February 2024

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

ZSE shares remain in red as Dairibord's 1.8% trade lifts turnover

HARARE - The stock market remained in the negative territory on Thursday but
saw a turnover boost after trades in Dairibord. Dairibord led on volume and
value after 6.43 million shares worth $7.1 billion traded.

The shares, making up nearly 1.80% of the total issued shares, were bought
by a local shareholder who is consolidating existing shares in the milk
processor, from OMIG. Dairibord, which recently said it expects further
volume growth on its beverages and steri-milk units due to various capex
investments, was the day's worst performer, losing 15% to 110 500c reducing
its market cap to US$32.71 million but growth prospects in the stock remain
quite limited in the long run.

Total turnover was at $8.6 billion on volume of 7.62 million shares in a
subdued 119 trades as caution continues to prevail ahead of the long-awaited
Monetary Policy Statement, which is now set to be announced by month end.

The wider market was down 1.65% to 516 231 mostly on the back of losses
mid-cap stocks. Market bias was strongly negative with only four stocks
trading in the positive.

The Top Ten Index lost 1.09% to 227 819.83. EcoCash lost 7.22% to 59027.85c
and Econet dropped 1.3% to 181 057.12c. Market leader Delta dropped 0.49% to
57.49 US cents or 695 295.01c and banking stock FBC was 1.75% lower to 280
000c

The Medium Cap Index fell 2.65% to 2 163 951.85. OK Zimbabwe, which has now
adopted what it is touting as a fair USD pricing model, fell 14.99% to 65
027.96c and fellow retailer Meikles declined 11.90% to 319025.61c. 

Ariston added a marginal 0.12% while they were marginal gains in Mash
Holdings and Edgars.

Truworths led the risers with a 7.14% gain to 7500c but General Beltings was
4.42% lower to 13900c. The Small Cap Index gained 7.07% to rise past a key
level at 10 547 667.90.

On the VFEX, the All Share was 0.44% lower to 97.93. Simbisa was 2.97% lower
to 31.05 US cents and Innscor pared 1.69% to 43.01 US cents.   

African Sun put on 3.33% to 3.10 US cents with much smaller volume than seen
yesterday at 13 550 shares worth US$419.44. Yesterday, African Sun saw a big
volume of 49.95 million, which was just portfolio restructuring by its main
shareholders.

Total turnover was subdued at US$39 345.20 after only 121 236 shares traded.
-finx

Global Currencies & Equity Markets

South Africa

Rand strengthens after good retail sales figures

The rand gained some strength against the dollar on Wednesday after positive
December retail sales figures were released by Statistics South Africa.

At 3pm the rand was trading at around R19.09 against the dollar, about 0.3%
stronger than its previous close.

The rand was strengthened even further on Thursday morning and was trading
at around R19.02 to the dollar at 9.45am.

In terms of other major currencies, the rand was trading at around R20.43 to
the euro and around R23.88 to the pound.

Nigeria

Black market naira dips to 1,600 as gap with official rate widens

The naira fell to a record low of 1,600 per dollar on Thursday, according to
data obtained from multiple traders, as foreign exchange shortages persist
on the parallel market, commonly referred to as black market.

The naira depreciation followed a strong demand for dollars by speculators
as well as individuals traveling for business, tourism, education and
health, according to currency dealers.

With the current exchange rate, naira has lost 1.26 percent of its value
against the dollar when compared with the N1,570 per dollar offered by some
traders on Wednesday. Against the N1,400 which the dollar was sold for on
the first trading day of February, the naira lost 11.95 percent at the black
market.

The naira however gained by 0.3 percent to N1498/$ in the official market on
Thursday, according to data from FMDQ Securities Exchange, which calculates
the rate. The currency gained after the Central Bank of Nigeria (CBN) sold a
little above $100 million to banks that did not get dollars in Tuesday's
sale of about $86 million.

The gap between the official and parallel market seems to be widening again
despite the CBN's best efforts to tame the gap. The gap, which had narrowed
to under 2 percent only last week, jumped to 6 percent on Thursday.

A street trader at the Airport told BusinessDay that dollars are scarce in
the parallel market because the CBN has blocked their source of dollar
supply.

In a pivotal move aimed at bolstering dollar supply in the country, the CBN
on July 10, 2023 announced the revocation of a longstanding ban on diaspora
remittance payouts in Naira currency. The decision signifies a significant
shift in policy, enabling banks and International Money Transfer Operators
(IMTOs) to disburse funds to beneficiaries in local currency.

In response to the circular, banking institutions and IMTOs are gearing up
to implement operational adjustments to accommodate the revised remittance
framework by issuing notice to their customers.

Furthermore, the Central Bank's decision is expected to engender a ripple
effect, catalyzing increased remittance inflows and bolstering the country's
foreign exchange reserves.

The FX market in Nigeria experienced a significant 56.58 percent decline in
dollar supply on Wednesday, just two days after witnessing a surge in
liquidity driven by the CBN's interventions.

An analysis of the FX market auction showed that banks and other key players
in the market sold a total of $117.87 million on Wednesday, a sharp drop
from the $271.50 million recorded just the day before on Tuesday at the
official FX market.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar steady before data; yen rises despite GDP surprise

(Reuters) - The dollar held steady on Thursday as investors waited for data
on U.S. retail sales and jobless claims, while the yen climbed despite the
Japanese economy falling into a recession.

The dollar index , which measures the currency against six peers, was
slightly lower at 104.6, just below a three-month high of 104.97 touched on
Wednesday.

Retail sales data, due at 1330 GMT (8.30 a.m. ET), will provide more clues
about the direction of the U.S. economy after inflation came in hotter than
expected on Tuesday.

-

Tuesday's price figures caused investors to rein in their expectations for
Fed rate cuts, triggering a jump in bond yields and the dollar.

"Having been lifted by stronger job numbers and then higher price figures
over recent weeks, the dollar direction today will be determined by the U.S.
consumer," said Chris Turner, global head of markets at ING.

"Barring a huge downside surprise in retail sales or a surge in initial
jobless claims... we do not think the dollar has to come too much lower."

-

The euro was slightly higher at $1.0736 while the pound slipped 0.11% to
$1.2552 after data showed the UK economy edged into a recession in 2023.

The yen rose on Thursday, with the dollar down 0.37% at 150.05 yen despite
Japan's unexpectedly weak gross domestic product figures, which saw the
country lose its title as the world's third-largest economy.

It held under the three-month low of 150.88 touched on Tuesday, buoyed
somewhat after Japan's top currency officials warned against "rapid" yen
moves the previous day.

Commonwealth Bank of Australia currency strategist Carol Kong saw the
technical recession as having little impact on the yen, with the upcoming
spring wage negotiations more important to the Bank of Japan's (BOJ) policy
outlook.

"Markets have continued to price a high chance of a BOJ rate hike in April
despite the negative GDP print," Kong said.

In cryptocurrencies, bitcoin ticked up 1.2% to $52,380. It rose as high as
$52,555 in Asian trading, topping the 25-month high of $52,079 touched on
Wednesday after the total value invested in bitcoin surpassed $1 trillion
for the first time since November 2021.

-

On Thursday, investors saw a roughly 45% chance the Fed will cut rates by
May, according to money market pricing. That's down sharply from the start
of February when a cut by then was seen as a certainty.

Australia's dollar was up 0.12% at $0.65. The Swiss franc was around 0.3%
stronger at 0.8829 francs to the dollar, after falling to a nine-week low
earlier this week as inflation slowed.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices set for second weekly dip as traders rethink rate-cut bets

(Reuters) - Gold was headed for a second straight weekly fall on Friday
after an unexpected spike in U.S. consumer prices made traders rethink their
rate-cut expectations, though bullion recouped some of the losses following
a drop in consumer spending.

Spot gold was flat at $2,003.40 per ounce, as of 0427 GMT, and has lost over
1% for the week so far. U.S. gold futures were also steady at $2,015.30 per
ounce.

-

"There is no war premium, gold ETF holdings are withdrawing, Fed officials
striked hawkish tone, CPI came on the higher side, and with dollar (.DXY),
opens new tab likely on a positive side - there is no particular reason for
going long on gold," Jigar Trivedi, a senior analyst at Reliance Securities.

Data this week showed inflationary pressures remained intact as U.S. import
prices increased by the most in nearly two years in January while consumer
prices (CPI) rose more than expected last month. Market now awaits another
inflation report - the U.S. producer price index (PPI) - due at 1330 GMT.

-

"No significant bounce-back in gold is expected and it's possible that
prices touch the $1970/oz-1960/oz level ... sentiment will be on the lower
side only," Trivedi said.

Recovering some losses for the week, bullion rose about 0.6% on Thursday
after U.S. retail sales saw biggest month-on-month decline since Feb. 2023.

Federal Reserve (Fed) Bank of Atlanta President Raphael Bostic said on
Thursday that he was not yet ready to call for interest rate cuts and had
pencilled in two cuts for 2024, lower than the Fed's collective "dot plot"
projection of three cuts released in December.

The Fed will update those forecasts at its policy meeting next month, where
it is expected to hold interest rates steady. Traders see the first cut
likely arriving in June.

Spot platinum fell 0.7% to $892.04/Oz, palladium dropped 1.5% to $938.55,
while silver edged 0.1% higher to $22.93.

-

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Robert Gabriel Mugabe Youth Day

Feb 21

Nampak

AGM

Virtual (FTS Platform)

28 Feb 9am

Art

AGM

virtual (escrow platform)

March 7. 2:30

2024 auction tobacco marketing season opens

13 march

Good Friday

march 29

Easter Monday

1 April

Independence Day

April 18

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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opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
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for guideline purposes only and sourced from third parties.

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