Bulls n Bears Daily Market Commentary : 19 February 2024

Tue Feb 20 08:35:44 CAT 2024

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Bulls n Bears Daily Market Commentary : 19 February 2024

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

Mid cap counters weigh on the market.

The ZSE market closed marginally lower in Monday's trade as the All Share
retreated 0.02% to close at 508,108.85pts while, the Mid Cap Index faltered
0.08% to end at 2,128,961.98pts. On the contrary was the Agriculture Index
that edged up 0.60% to 1,484.64pts while, the Blue-Chip Index eked out
narrow gains of 0.03% to 224,953.08pts. A total of twenty-six counters
registered price movements segregated into fourteen losers and twelve
gainers. RTG led the laggards of the day as it declined 14.76% to $366.6500,
trailed by Bridgefort Capital A that is trading under a cautionary after
shedding 12.50% to $35.0000. Meikles continued with its negative performance
as it dropped 9.14% to end at a VWAP of $2,463.9306 while, Edgars took 8.47%
knock to settle at $400.0000. Retailer OK Zimbabwe capped the top five worst
performers of the day as it plummeted 5.12% to $637.3560 after releasing its
Q3 trading update in which quarterly volumes fell by 32%. Partially
offsetting today's losses were gains in Fidelity that garnered 14.99% to
close at $622.0000 while, NTS charged 14.29% to end at $160.0000. Property
concern Mashonaland Holdings was 13.36% higher at $249.8557, where supply
could be found. Dairy processor Dairibord firmed up 10.24% to close trading
at $1,168.3500 while, ART added 6.93% to close at $171.0909 as it fastened
the top five gainers list of the day.

Activity aggregates were mixed in the session as volume of shares traded
faltered 19.54% to see 2.26m shares exchange hands while, turnover jumped
87.34% to $5.11bn. The trio of Delta, OK Zimbabwe and Star Africa drove the
volume aggregates of the day as they claimed a combined 72.66% of the total.
In the turnover category, activity was mainly confined in Delta that claimed
69.80% of the value traded.  Three funds registered price movements as Cass
Saddle ETF and Morgan & Co Made in Zim notched up 2.29% and 1.56%
respectively. The Datvest MCS lost 2.56% to close at $19.0000. In other
news, First Mutual Holdings released a new cautionary statement stating that
they will be appealing to the High Court on corrective orders set out on FML
Life by IPEC.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand firms as markets await budget speech

(Reuters) - The South African rand firmed in early trade on Monday as
investors awaited the finance minister's budget speech on Wednesday.

The rand traded at 18.8725 against the dollar ZAR=D3 by 0700 GMT, 0.12%
stronger than its previous close.

The dollar =USD was last trading down about 0.067% against a basket of
global currencies.

Investor focus this week will be on Wednesday's budget presentation, which
will lay out the government's spending priorities, revenue collection
measures and updated economic forecasts for the coming year.

"Given the economy's weak performance, we anticipate further fiscal slippage
... The finance minister will try to appease markets, but he will more than
likely disappoint," Oxford Economics said in a note.

South Africa's benchmark 2030 government bond ZAR2030= was marginally
stronger in early deals, with the yield down 1 basis point at 10.085%.

Nigeria

Nigeria's naira hits record lows, stocks sink

(Reuters) - The Nigerian naira fell to record lows on both the official and
unofficial markets on Monday, while stocks posted their biggest one-day fall
in more than a year, as jittery investors sold off local assets.

The currency dropped to 1,712 naira per dollar in late trades on the
official market and to around the same level on the unofficial market after
extending losses.

Africa's largest economy has been experiencing crippling dollar shortages
that have pushed its currency to record lows, though central bank Governor
Olayemi Cardoso has said that foreign exchange liquidity is improving.

-

The latest fall on the currency and stock markets comes after data showed on
Thursday that the country's inflation rate had accelerated further in
January, reaching almost 30% in annual terms, driven by soaring food costs.

"Without policy moves in sight to rein in inflation, the naira will continue
to devalue simply on a purchasing power basis. There are also risks that it
could further deter foreign investors, given the increasingly negative real
yield found in Nigerian debt securities," said Kyle Chapman, FX markets
analyst at London-based Ballinger & Co.

-

Stocks on Nigeria's All-Share Index fell 3.15% on Monday after banking,
consumer goods and industrial shares dropped, to post their single biggest
fall since Oct. 2022.

Heavyweight Dangote Cement (DANGCEM.LG), opens new tab and MTN (MTNN.LG),
opens new tab each fell the maximum 10% allowed on the bourse, to help drag
the index (.NGSEINDEX), opens new tab to 102,395.21 points.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar ticks up as investors gauge rates outlook

(Reuters) - The dollar inched higher on Monday after rising for the fifth
week straight on the back of strong inflation data, while the yen traded
near the psychologically important 150 level.

U.S. markets are closed for the Presidents' Day holiday, with trading
volumes likely to be low throughout the day.

The dollar index , which tracks the currency against six peers, was last up
0.13% at 104.35, after rising 0.18% the previous week.

-

It rose to its highest since mid-November last Tuesday to 104.97 after
figures showed U.S. inflation came in stronger than expected in January,
causing investors to dial down the number of interest rate cuts they expect
from the Federal Reserve this year. But it slipped on Thursday after data
showed retail sales fell last month.

"In theory last week should have been a good week for the dollar, but the
dollar didn't really hold on to its gains," Chris Turner, global head of
markets at ING, said.

-

"Are we getting near to the point where the pricing in the Fed cycle is
about right?"

The euro was down 0.12% at $1.0763, after falling to a three-month low of
$1.0695 last week. Sterling was unchanged at $1.2595.

Survey-based purchasing managers' index data, released on Thursday, will
give a sense of the health of the euro zone and UK economies in February.

The minutes from the Fed's last meeting, due on Wednesday, are likely to be
the main release for investors this week.

Investors expect around 90 basis points of Fed rate cuts this year,
according to money market pricing, down sharply from around 145 basis points
at the start of February.

The dollar slipped 0.1% against the yen on Monday, taking it to 150.08 yen.

It remains around 6% higher against the yen this year as Japan has kept its
ultra-loose monetary policy in place. That has created a wide gap between
the two countries' bond yields which has boosted the attractiveness of the
dollar.

-

The rally has prompted speculation among investors that the Japanese
authorities could intervene to boost their currency.

Finance Minister Shunichi Suzuki last week warned that "rapid moves are
undesirable for the economy".

Weekly data from the U.S. markets regulator showed speculators again
increased their net short position against the yen, taking it to a more than
two-month high worth $9.2 billion.

China's onshore yuan barely budged as investors returned from the week-long
Lunar New Year break, despite tourism revenues surging during the holiday.
It last changed hands for around 7.1987 per dollar.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold at $3,000 and oil at $100 by 2025? Citi analysts don't rule it out

Gold prices could soar to $3,000 per ounce, and oil to $100 per barrel
within the next 12 to 18 months subject to any one of three possible
catalysts, according to Citi.

Gold, which is currently trading at $2,016, could surge by about 50%, if
central banks sharply ramp up purchases of the yellow metal, a possible
stagflation, or in case of a deep global recession, Aakash Doshi, Citi's
North America head of commodities research, told CNBC.

Central bank's gold rush

"The most likely wildcard path to $3,000/oz gold is a rapid acceleration of
an existing but slow-moving trend: de-dollarization across Emerging Markets
central banks that in turn leads to a crisis of confidence in the U.S.
dollar," Citi analysts including Doshi wrote in a recent note.

That could double central bank's gold purchases, challenging jewelry
consumption as the largest driver of gold demand, Doshi elaborated. 

Central banks' gold purchases have "accelerated to record levels" in recent
years, as they seek to diversify reserves and reduce credit risk, Citi said.
China and Russian central banks are leading gold purchases, with India,
Turkey, and Brazil, also increasing bullion buying.

The world's central banks have sustained two successive years of more than
1,000 tons of net gold purchases, the World Gold Council reported in
January.

"If that goes again [to] double very quickly to 2,000 tons, we think that
would be actually very bullish for gold," Doshi told CNBC via phone.

A global recession?

Another trigger that could drive gold to $3,000 would be a "deep global
recession" that could spur the U.S. Federal Reserves to cut rates rapidly.

"That means the brakes have been cut, not to 3%, but to 1% or lower - that
will take us to $3,000," Doshi said, noting that this is a low probability
scenario.

Gold prices tend to share an inverse relationship with interest rates. As
interest rates dip, gold becomes more appealing compared to fixed-income
assets such as bonds, which would yield weaker returns in a low interest
rate environment. 

The Fed benchmark interest rate has been between 5.25% and 5.5% since July
2023, the highest since January 2001 when it shot to 6% following the
dot-com bubble burst. Markets expect the Fed to cut rates in May or June.

Stagflation - an increasing inflation rate, a slowing economic growth and
rising unemployment - could be another trigger, though Doshi said there's a
"very low probability" of such a scenario.

Gold is perceived as a safe haven and tends to perform well in periods of
economic uncertainty when investors move away from the riskier assets such
as equities.

These three potential triggers aside, Citi maintains that their base case
for bullion is $2,150 in the second half of 2024, and the price of gold to
average a little over $2,000 in the first half. A new record could be
reached towards the end of 2024, Doshi added.

Oil at $100?

Another wildcard scenario highlighted in Citi's report was for oil prices to
hit triple digits again.

The catalysts for oil to hit $100 per barrel include higher geopolitical
risks, deeper OPEC+ cuts and supply disruptions from key oil producing
regions, Doshi said. 

The ongoing Israel-Hamas war has not hit oil production or exports, with the
only significant impact being the Houthi attacks from Yemen on oil tankers
and other ships traversing the Red Sea.

Major oil producer Iraq has been impacted by the conflict and any further
escalation could hurt other major OPEC+ suppliers in the region, Citi said.

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 

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

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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
report shall be solely responsible for making their own independent
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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