Bulls n Bears Daily Market Commentary : 29 February 2024

Fri Mar 1 06:10:53 CAT 2024

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Bulls n Bears Daily Market Commentary : 29 February 2024

 <mailto:sales at dulys.co.zw?subject=Request%20Quote> 
ZSE commentary

ZSE ends month in black.

The market ended the month of February in the black as the primary All Share
Index gained 1.71% to 525,570.76pts while, the Blue-Chip Index added 2.05%
to 235,643.91pts. The Agriculture Index put on 0.38% to 1,401.85pts while,
the Mid Cap Index firmed up 0.57% to 2,092,048.38pts. Zeco Holdings topped
the winners list of the day on a 13.00% jump to $0.0452 followed by fintech
group Ecocash Holdings that surged 9.74% to $669.0000. Nampak stepped up
9.43% to $487.4600 while, milk processor Dairibord advanced 5.07% to settle
at $1,050.6667. Retailer Okzim capped the top five performers of the day on
a 3.56% uplift to end the day pegged at $600.0000. Contrastingly,
Proplastics led the laggards of the day on a 3.55% slid to $1,350.0000
while, Meikles lost 1.22% to $2,422.5000. Banking group CBZ Holdings
declined 0.63% to $7,900.0000 while, Star Africa retreated 0.33% to close at
$8.2775. Seed producer Seed Co completed the top five fallers list of the
day on a 0.01% drop to end the day pegged at $2,350.1822. Ten counters
recorded gains against eight that faltered to leave the market on a positive
breadth of two.

Activity aggregates enhanced in the session as volume traded ballooned
91.83% to 1.3m shares while, value traded grew 407.04% to $3.11b. The top
volume drivers of the day were Econet (44.40%), Ok (16.48%) and SeedCo
(15.23%). The trio of Delta, telecoms giant Econet and SeedCo contributed a
combined 93.04% to the total value traded.  OMTT ETF shot up 4.89% to
$91.4246 while, MIZ ETF advanced 5.26% to end the month pegged at $20.0000.
Morgan and Co Multi Sector ETF and Datvest ETF inched up 0.82% and 0.30% to
close at $615.0000 and $18.5556 respectively. Tigere REIT went up 2.46% to
end the month pegged at $614.7992 after 31,409 units exchanged hands in the
last session of the month. -efe

Global Currencies & Equity Markets

South South Africa

South African rand firms despite mixed data; shares rise

(Reuters) - South Africa's rand firmed on Thursday as investors digested a
mixed bag of data, including producer inflation and trade balance figures.

The rand traded at 19.1850 against the U.S. dollar at 1640 GMT, 0.4%
stronger than its previous close.

Producer inflation (ZAPPIY=ECI), opens new tab rose to 4.7% year on year in
January from 4.0% in December, statistics agency data showed. Analysts had
predicted 4.8%.

The country's trade deficit (ZATBAL=ECI), opens new tab of 9.44 billion rand
($490.91 million) recorded in January was wider than a shortfall of 5.20
billion forecast by economists, according to revenue service data.

-

"South Africa's export potential continues to be impeded by a still muted
global environment as well as the country's myriad of domestic specific
challenges, including the significant logistical constraints," Investec
analyst Lara Hodes said in a research note.

Other data showed that South Africa recorded a budget deficit (ZABUDM=ECI),
opens new tab of 54.66 billion rand in January, compared to a deficit of
78.63 billion rand in the same month a year earlier.

-

Central bank data showed South Africa's January M3 money supply growth
(ZAM3=ECI), opens new tab was at 6.58% year on year and credit growth at
3.16%.

M3 is a measure of money supply released by the South African Reserve Bank,
which includes all currency in circulation, bank deposits and debt
securities, among others.

South Africa's financial conduct regulator told Reuters it was taking on
more staff as part of a crackdown on money laundering and terrorism
financing.

On Friday, the new CEO of state power utility Eskom Dan Marokane formally
begins his tenure.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed up
0.81% while the broader all-share (.JALSH), opens new tab was 0.73%
stronger.

South Africa's benchmark 2030 government bond was marginally weaker, with
the yield up 1 basis points to 10.140%.

Nigeria

Naira Gains To N1,400/$1 After CBN Order On Excess Dollars

Nigeria's currency is recovering from its losses against the United States
dollar at the parallel and official markets after the Central Bank of
Nigeria (CBN) intervention to improve supply of the greenback in the
economy.

This is as the Association of Bureau de Change Operators of Nigeria (ABCON)
has debunked news of shutdown of foreign exchange sales in Abuja, saying, it
is misinformation targeted at creating confusion in the market.

Naira gained 8.57 per cent in less than 24 hours to N1,400 on Thursday after
tipping at N1,520 per dollar on Wednesday at the parallel market, commonly
called black market, data collated from different street traders revealed.

The CBN removed the cap on the allowable limit of -2.5 per cent to +2.5 per
cent around the previous day's closing rate for the IMTOs. This adjustment
signifies a shift in the regulatory framework, providing IMTOs with more
flexibility in determining exchange rates.

This comes after the banking and financial institutions regulator on
Wednesday announced limits on how much banks can hold in foreign currencies
and expressed concern about the growth of forex exposures on their balance
sheets after the local currency tumbled against the U.S. dollar.

One of the street traders told BusinessDay that there is enough dollars in
the market due to the CBN's new forex policy and that demand has reduced as
the Chinese, who are major consumers of dollars, have gone on holiday.

 <mailto:info at bulls.co.zw> 

Japanese Global Markets

US Dollar Index holds above the 104.00 barrier, investors await US PMI data

The US Dollar Index (DXY) recovers above the 104.00 barrier during the early
Asian trading hours on Friday. The prospect that the Federal Reserve (Fed)
might delay rate cuts amid high US inflation lifts the US Dollar (USD)
Index. The DXY is trading at 104.13, gaining 0.01% on the day. 

The US Personal Consumption Expenditure (PCE) Price Index eased from 2.6% in
December to 2.4% in January YoY. Meanwhile, the Core PCE climbed by 2.8% YoY
in January compared to the December's reading of. 2.9%. Both figures came in
line with the market expectation, according to the US Bureau of Economic
Analysis. 

Investors anticipate the Fed to start cutting the interest rate by summer.
However, the timing and details of the easing policy are uncertain as
inflation could be more stubborn than previously;y expected and it triggered
the speculation that the Fed to hold the rate high for longer. 

Several Fed officials emphasized that the policymakers will wait for the
additional evidence of inflation data before consider to lower the interest
rate. Atlanta Fed President Raphael Bostic said that the recent inflation
data indicates the road back to the central bank's 2% inflation target will
be "bumpy. Chicago Fed President Austan Goolsbee stated that he expects the
first rate cuts later this year, but he cannot specify the timeline. 

Investors will take more cues from the US ISM Manufacturing PMI, Michigan
Consumer Sentiment Index, and S&P Global Manufacturing PMI, due on Friday.
Fed's Williams, Logan, Waller, Bostic, Daly, and Kluger are set to speak
later in the day. These events could provide a clear direction to the US
dollar Index. 

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold hits 1-month high as dollar dips after U.S. PCE data

(Reuters) - Gold scaled a one-month high on Thursday as the dollar slipped
after U.S. inflation data came in line with expectations, with traders'
attention turning to further commentary from Federal Reserve officials for
cues on interest rate cuts.

Spot gold was up 0.6% at $2,046.29 per ounce as of 14:10 p.m. ET (1910 GMT).
U.S. gold futures gained 0.6% to settle at $2,054.7.

Silver rose 1.1% to $22.68 per ounce, platinum rose 0.2% to $880, and
palladium ticked 1.4% higher to $941.25.

-

"Gold bulls just needed an excuse to buy, and they found it," with the data
only on consensus after recent strong inflation readings, said Tai Wong, a
New York-based independent metals analyst, adding gold could face technical
resistance around $2,065.

Data showed the U.S. personal consumption expenditures price index rose by
0.3% in January, while the core PCE price index gained 0.4%, pressuring the
dollar, which makes gold cheaper for investors holding other currencies.

-

"However, the Fed's preferred gauge of inflation running at 0.4% for the
month won't bring a rate cut any closer than June," Wong added.

Although gold is traditionally considered an inflation hedge, higher
interest rates to rein in the elevated prices discourage investment in
bullion since it pays no interest.

Markets are currently pricing in a 62% chance of a Fed rate cut in June, the
CME FedWatch Tool showed.

Earlier this week Fed officials said the door is opening for rate cuts,
which could likely arrive later this year.

"The steady stream of Fed speak has noted that there's no rush in lowering
rates and that news is priced into the market," said David Meger, director
of metals trading at High Ridge Futures.

"If there is a potential change that would allude to the idea of lowering
interest rates even a smidgen sooner, it will be positive for gold."

Reuters Graphics

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

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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