Bulls n Bears Daily Market Commentary : 27 February 2024

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Bulls n Bears Daily Market Commentary : 27 February 2024

 

 


 

 

 


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

 

 

ZSE maintains positive momentum…

 

The market maintained its positive momentum in the second session of the week as the primary All Share Index rose 1.11% to 502,323.96pts while, the Blue-Chip Index gained 1.69% to 222,032.24pts. The Agriculture Index lost 0.70% to 1,389.41pts while, the Mid Cap Index fell 0.76% to 2,089,360.86pts. Beverages giant Delta headlined the top performers of the day on a 5.51% jump to $7,747.5547 followed by apparel retailer Edgars that surged 5.25% to close at $399.9500. Milk processor Dairibord gained 2.56% to $1,000.0000 while, Willdale inched up 2.02% to $54.8090. Cafca capped the top five winners of the day on a 0.57% uplift to end the day pegged at $8,800.0000. On the contrary, Meikles led the laggards of the day on a 9.80% slid to $2,473.4948 while, TSL declined 5.23% to $2,175.0000. Retailer Okzim eased 0.73% to $580.6993 as fintech group Ecocash Holdings retreated 0.60% to settle at $531.8859. Star Africa completed the top fallers list of the day on a 0.53% drop to end the day pegged at $7.2907.  The market closed on a positive breadth of one after nine counters recorded gains against eight that faltered.

 

 

Activity aggregates were depressed in the session as volumes traded succumbed 80.81% to 1.25m shares while, turnover declined 59.42% to $2.30b. The top volume drivers of the day were FBC (24.28%), TSL (21.95%) and Edgars (17.51%). The trio of FBC, TSL and Delta contributed a combined 72.60% to the total value traded.  A total of 129,960 units exchanged hands in the ETF category. MIZ ETF edged up 5.56% to close at $19.0000 while, OMTT ETF soared 8.69% to end the day pegged at $85.8649. There was no activity on the REIT section.-efesecurities

 

 

 

Global Currencies & Equity Markets

 

 

South South Africa

 

South African rand recovers some losses, weakness persists

 

(Reuters) - South Africa's rand traded stronger on Tuesday but remained above the 19.0 mark after two days of heavy losses last week.

 

At 1508 GMT, the rand traded at 19.1100 against the dollar ZAR=D3, almost 1% stronger than its previous close.

 

 

The dollar index =USD was up about 0.05%.

 

There were no major South African data releases on Tuesday. Producer price inflation, M3 money supply and private sector credit extension, trade and budget balance figures for January will be released later this week.

 

"The ongoing volatility in market expectations around U.S. interest rate cuts has led to marked volatility in the rand... with a trend of overall weakness for the domestic currency," said Annabel Bishop, chief economist at Investec.

 

The rand has also suffered from political risk ahead of national elections in May and negative sentiment following last week's annual budget speech.

 

On the stock market, the Top-40 .JTOPI index and the broader all-share .JALSH closed about 0.7% lower.

 

South Africa's benchmark 2030 government bond ZAR2030= was stronger, with the yield down 4 basis points to 10.200%.

 

 

 

 

Nigeria

 

 

Naira face fierce dollar amid improved FX liquidity

 

The naira traded near its all-time low despite improved liquidity.

 

Market Fundamentals show despite the $2.2 billion facility from the African Import Export Bank (AFREXIMBANK), the naira is still under pressure due to the rising demand for the dollar.

 

The naira declining trend continues despite recent efforts by the Central Bank of Nigeria (CBN) to support the foreign exchange market through interventions, raising worries about possible effects on the overall economy.

 

Although the dollar was quoted at N1,435.53, which was higher than the N1,461.90 reported on Thursday at the Nigerian Autonomous Foreign Exchange Market (NAFEM), according to statistics from the FMDQ, it still traded near its all-time low

 

However, the amount of dollar transactions, or the daily turnover of the foreign exchange on Nigeria’s official market increased from $156.86 million on Thursday to $440.13 million on Friday.

 

The U.S. dollar index surged to a seven-week high on data indicating that companies added significantly more jobs in January than anticipated, decreasing the likelihood of Federal Reserve interest rate cuts shortly.

 

Last month, nonfarm payrolls climbed by 353,000 in the United States, exceeding economists’ projections of a gain of 180,000. The average hourly wage grew by 0.6% following a 0.4% gain in December.

 

ABCON President Aminu Gwadabe highlighted that though the $2.2 billion Afrexim Bank crude prepayment facility was a welcome development, given the current circumstances, he wasn’t optimistic that such would be enough to stimulate the market. “For example, if we put $2.2 billion into the market, we have been seeing demand in the I&E window alone, ranging from $150 million to $250 million daily, so the $2.2 billion will be exhausted in ten days.”

 

Within the week, the CBN expanded the regulatory framework by removing the ceiling on the allowed amount based on the closing rate of the previous day for International Money Transfer Operators (IMTOs). With this modification, IMTOs have more freedom to choose how much to convert to currencies.

 

The action came after Nigeria’s apex bank announced restrictions on banks’ foreign exchange holdings, citing worries about the escalating foreign exchange exposures on their balance sheets because of the local currency’s depreciation vs the US dollar.

 

Even after Fed Chair Jerome Powell stated on Wednesday that a rate decrease in March was improbable, the dollar has been weakening in recent days in tandem with declining Treasury yields.

 

Due to growing worries about the financial stability of regional banks in the United States, Treasuries profited from the demand for safe havens. Yet, these worries subsided on Friday as regional bank stocks in the United States somewhat recovered from a severe two-day sell-off, which contributed to an increase in yields.

 

Consequently, following a good January for the greenback and higher Treasury yields over the month, repositioning is also largely responsible for the recent movements in the haven currency and Treasury yields further complicate the fortune for the naira

 

According to the CME Group’s FedWatch Tool, traders are now pricing in a 21% possibility of a rate cut in March, down from 38% on Thursday, and a 75% probability for May, down from 94%.

 

 

 <mailto:info at bulls.co.zw> 

 

Japanese Global Markets

 

Rupee turns flat against US dollar in early trade

 

The rupee turned flat at 82.89 against the US dollar in early trade on Wednesday, February 28, 2024, resisting pressure amid unabated outflow of foreign funds and increased month-end demand of the American currency.

 

According to forex analysts, crude oil prices hovering above USD 83 per barrel also weighed on the domestic currency, however, positive equity markets provided cushion and capped a steep fall in the rupee.

 

Investors were also awaiting cues from US GDP data to be released later in the day and domestic GDP (Gross Domestic Product) numbers later this week, they said.

 

At the interbank foreign exchange, the local currency opened at 82.90 and then inched up to trade at the previous day's closing level of 82.89 against the greenback.

 

On Tuesday, the rupee settled 1 paisa lower at 82.89 against the US dollar.

 

The dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.09 per cent higher at 103.92.

 

Gaurang Somaiya, forex and bullion analyst Motilal Oswal Financial Services, said the dollar index traded neutral against its peers after the US data showed the consumer confidence index for February dropped lower than anticipated.

 

Also, the data on durable goods orders revealed a contraction.

 

"Currently, Fed watch tool suggests that market participants are pricing rate cuts to begin no time before June, and the upcoming core PCE (Personal Consumption Expenditures) price index tomorrow and GDP figures today will be heavily watched for," he said, adding that the USD-INR (Spot) is expected to trade "sideways and quote in the range of 82.80-83.20".

 

Brent crude futures, the global oil benchmark, were trading 0.49 per cent lower at USD 83.24 per barrel.

 

In the domestic equity market, the 30-share BSE Sensex was trading 17.46 points or 0.02 per cent higher at 73,112.68 points.

 

The broader NSE Nifty rose 10.10 points or 0.05 per cent to 22,208.45 points.

 

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they sold shares worth ₹1,509.16 crore on a net basis, according to exchange data.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

 

Gold Gold prices steady as lower yields counter stronger dollar

(Reuters) - Gold prices steadied on Wednesday, as lower U.S. Treasury yields partially offset a firmer dollar, while traders awaited key inflation data and remarks from Federal Reserve officials this week to gauge when the central bank is likely to cut rates.

Spot gold held its ground at $2,030.57 per ounce, as of 0355 GMT. U.S. gold futures fell 0.2% to $2,039.70 per ounce.

 

 

Benchmark 10-year U.S. Treasury yields slipped to 4.2914% from 4.3150% on Tuesday, while the dollar index (.DXY), opens new tab rose 0.1%.

 

 

"The anticipation is that the PCE report, along with the upcoming Gross Domestic Product data (due at 1330 GMT), might act as catalysts for gold to break out of its current trading range within the $2,020-$2,050 area," said Luca Santos, analyst, ACY Securities.

Data on Tuesday showed U.S. durable goods orders posted the largest drop in nearly four years in January. U.S. consumer confidence also slid in February.

 

 

Markets now await the U.S. Federal Reserve's preferred gauge of inflation - the core personal consumption expenditures (PCE) price index - on Thursday.

Fed Governor Michelle Bowman on Tuesday reinforced the U.S. central bank's patient stance on easing, given upside risks to inflation.

At least 9 more Fed officials are due to speak this week.

Traders are betting on about 79 basis points (bps) of rate cuts for 2024, with a 63% chance of the first quarter-point (25 bps) cut coming in June, according to LSEG's interest rate probability app.

Lower interest rates boost the appeal of holding non-yielding bullion.

On the technical front, spot gold may retest support at $2,025/Oz, a break below could be followed by a drop to $2,015/Oz, according to Reuters market analyst Wang Tao.

 

Spot platinum fell 0.1% to $887.20/Oz, while palladium dropped 0.5% to $931.57/Oz, while silver rose 0.1% to $22.45/Oz.

 

 

 


 

INVESTORS DIARY 2024

 


Company

Event

Venue

Date & Time

 

 


 

 

 

 

 

 


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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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 <http://www.bullszimbabwe.com>  Email: bulls at bullszimbabwe.com <mailto:bulls at bullszimbabwe.com>  Tel: +27 79 993 5557 | +263 71 944 1674

 

 


 

 

 

							

 

 

 

 

 

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