Bulls n Bears Daily Market Commentary : 05 March 2024

Wed Mar 6 10:38:02 CAT 2024

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Bulls n Bears Daily Market Commentary : 05 March 2024

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

ZSE record losses for the 3rd time in a row

The ZSE market recorded losses for the third time in a row as the primary
All Share Index lost 0.44% to 518,819.44pts while, the Blue-Chip Index fell
0.36% to 231,637.87pts. The Agriculture Index went down 2.39% to 1,380.31pts
while, the Mid Cap Index sank 0.51% to 2,105,547.20pts. Turnall led the
fallers of the day on a 36.02% drop to $41.5885 followed by cigarette
manufacturer BAT that trimmed 15.00% to $39,791.0500. Fintech group Ecocash
Holdings slipped 3.72% to settle at $645.0000 as brick manufacturer Willdale
Limited eased 3.38% to $50.0000. Beverages giant Delta capped the laggards’
top five list of the day on a 1.19% slid to end the day pegged at
$8,222.5318.  Partially mitigating today’s losses were scrappy gains in
General Beltings that jumped 22.18% to $138.9000. Milk processor Dairibord
surged 10.49% to $1,050.0000 while, telecoms giant Econet added 7.63% to
$1,937.8882. Meikles advanced 0.76% to $2,473.7500 while, retailer OKzim
completed the winners list on a 0.01% uplift to end the day pegged at
$593.9941.  Six counters recorded gains against thirteen that faltered to
leave the market with a negative breadth of seven. 

Activity aggregates were depressed in the session as volume traded declined
by 64.76% to 645,000 shares while, value traded succumbed 36.26% to $1.8b.
The top volume drivers of the day were SeedCo (28.40%), Econet (21.67%) and
Delta (15.22%).  The trio of Delta, SeedCo and Econet contributed a combined
83.98% to the total value traded.  A total of 42,135 units exchanged hands
on the ETF section which saw OMTT ETF lose 9.97% to close at $81.0342. Cass
Saddle ETF edged up 12.13% to close at $8.5000.  Datvest ETF retreated 0.06%
to $19.5000 while, the MIZ ETF declined 7.14% to end the day pegged at
$19.5000. Tigere REIT inched up 0.49% to $632.0493 after 34,500 units traded
in the second session of the week.efe

Global Currencies & Equity Markets

South africa

South African rand stable as gold prices surge

(Reuters) - South Africa's rand was stable in early trade on Wednesday, with
analysts pointing to a surge in gold prices as the reason for the currency's
recovery.

At 0640 GMT, the rand traded at 18.9550 against the U.S. dollar ZAR=D3,
compared with its previous close of 18.9650.

The currency, hurt by weak economic data, has lost more than 3% against the
greenback since the beginning of the year.

"The recent gold price surge has offered the rand some relief," ETM
Analytics said in a research note, adding that the recovery will likely be
limited.

Gold prices held above the $2,100 level on Wednesday, near a record peak hit
in the previous session.

In the absence of local data points, investors will be monitoring U.S.
Federal Reserve Chair Jerome Powell's congressional testimony that will
provide guidance on the country's monetary policy.

South Africa's benchmark 2030 government bond ZAR2030= was almost unchanged
in early deals, with the yield at 10.105%.

Nigeria

Binance to discontinue Nigerian currency services as legal squabble deepens

Binance on Tuesday announced that it will discontinue all Nigerian naira
services, amid an ongoing legal dispute between the U.S. cryptocurrency firm
remains and Africa’s most populous country.

In an update posted on its website, Binance said that, starting this Friday,
any remaining naira balances in user accounts will be automatically
converted to Tether

, a cryptocurrency stablecoin pegged to the U.S. dollar.

The company will not support any deposits of Naira after 2 p.m. UTC on
Tuesday and will no longer support withdrawals of the currency after 6 a.m.
UTC on Friday, the announcement said.

Nigeria is also one of the world’s biggest crypto markets, but the Nigerian
government has demanded almost $10 billion in compensation from Binance,
which it accuses of manipulating foreign exchange rates via currency
speculation and rate fixing, and arrested two of the firm’s senior
executives last week, according to multiple media reports.

The Nigerian naira has lost almost 70% of its value over the past few
months, as Africa’s largest economy faces a currency crisis

 <mailto:info at bulls.co.zw> 

Global Markets

Strong U.S. economy sends dollar bears into hibernation

(Reuters) - A stronger-than-expected U.S. economy is buoying the dollar,
frustrating investors who had bet the currency would wilt under a barrage of
interest rate cuts that have yet to materialize.

The dollar index (.DXY), opens new tab, which measures the buck against a
basket of its peers, is up 2.4% year-to-date. Net bets on the dollar in
futures markets swung positive last month for the first time since late
November, Commodity Futures Trading Commission data showed.

-

Driving the U.S. currency's stubborn strength is a robust U.S. economy that
has made the Fed hesitant to ease monetary policy too quickly and risk an
inflationary rebound.

U.S. gross domestic product grew at a 3.2% annualized rate in the fourth
quarter. By contrast, the eurozone's economy stagnated last year, China
faces a deepening property crisis, and Japan unexpectedly slipped into
recession at the end of 2023.

-

While the U.S. economy has remained resilient, "there is no significant
evidence Europe and China are picking up," said Thierry Wizman, global FX
and rates strategist at Macquarie, who has become more neutral on the dollar
after his bearish outlook last year. "That's the reason people have had this
change of heart" on the dollar, he said.

The dollar's strength will be tested this week as investors brace for Fed
Chairman Jerome Powell to testify before lawmakers on Wednesday and Thursday
and await U.S. employment data at the end of the week. Signs that the Fed is
sticking with its "higher for longer" messaging on rate cuts or that the
U.S. economy continues to stay strong could support the dollar's rally.

Investors are pricing in some 85 basis points of rate cuts for 2024,
compared to more than 150 basis points they had factored in early January,
futures tied to the Fed's policy rate showed.

Among the dollar bulls is Ugo Lancioni, head of currency at Neuberger
Berman, who is betting on the greenback to continue rising thanks to U.S.
outperformance even though he believes it has grown expensive relative to
other currencies.

-

"Our call right now is purely a relative growth type of call," he said.

Getting the dollar's trajectory right is important for investors, given the
currency's central role in global finance.

A strong dollar could weigh on the outlook for U.S. multinationals as it
makes it more expensive to convert their foreign profits into dollars, while
also making exporters' products less competitive abroad. About a quarter of
S&P 500 companies generate more than 50% of revenues outside the U.S.,
FactSet data showed.

Dollar strength could also complicate other central banks' efforts to fight
inflation as it makes their currencies cheaper. The European Central Bank,
which concludes its monetary policy meeting on Thursday, has also pushed
back against rate cut talk due to sticky inflation. Signs that the euro
zone's policymakers might further delay easing could boost the euro at the
dollar's expense.

Strategists are still broadly bearish on the dollar, though the dollar's
persistent strength is testing their outlook. While the median forecast
among currency strategists is for the dollar to weaken over the rest of the
year, some 80% believed there was a risk of the dollar exceeding their
target, a Reuters poll showed in February.

Paul Mielczarski, head of macro strategy at Brandywine Global, sees the
dollar's recent rebound as more of a "tactical rally as opposed to a change
in the underlying trend overall."

Mielczarski is encouraged by nascent signs of improving growth outside the
U.S., including strength in the global semiconductor cycle, which benefits
currencies like the Korean won.

Others, however, see more reasons for dollar strength - especially if former
U.S. President Donald Trump gains the upper hand in a presidential
reelection race that has been deadlocked for months.

Analysts at Capital Economics wrote that Trump's proposed tariff increases
could shift the Fed back to a tightening bias on monetary policy and set off
a wider trade war that spurs safe haven demand for the U.S. currency. The
dollar initially rallied after Trump won the 2016 election but fell 10.5%
during his term.

While that may be far off, investors will still likely be hesitant to renew
bearish bets against the greenback, Macquarie's Wizman said.

"I think it's a 'show me' story," he said. "The amount of skepticism on the
part of traders is high."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Price of gold hits record high amid geopolitical tensions and investor
jitters

The price of gold has hit a record high amid investor jitters over tensions
in the Middle East and speculation that US interest rates will be cut by the
summer.

Investors piled into the “safe haven” asset on Tuesday, with the spot price
reaching a record $2,141.59 (about £1,685) for an ounce, beating the
previous record of $2,135 in December, before easing back again to about
$2,128.

The US Federal Reserve is increasingly expected to cut interest rates – now
at 23-year highs – in June. Reductions in borrowing costs typically push
gold higher because it does not offer any interest.

The precious metal is also used as a reliable store of value during periods
of political and financial uncertainty. It has risen by more than $300 an
ounce since the start of the Israel-Hamas war and some analysts believe it
could break the $2,300 mark.

Ricardo Evangelista, a senior analyst at ActivTrades, said: “Concerns
surrounding global economic prospects, geopolitical tensions, and shifting
expectations towards earlier interest rate cuts have fuelled increased
demand for the precious metal, leading to its upward price trajectory.”

Patrick Farrell, the chief investment officer at Charles Stanley, argued
that the gold price would probably soon peak. He said: “It has been a grim
year for many commodities. A confluence of weakening economic growth,
particularly from China, plus an adjustment after some post-pandemic
exuberance, has seen the prices for energy, industrial metals and ‘energy
transition’ commodities such as copper and nickel drop.

“Gold, in contrast, has reached new highs as geopolitical tensions have
increased. This situation may be about to reverse.”

Farrell said those tensions were now “priced in” to the current gold price,
and that returns on other investments were rising, meaning gold would fall.

The pile into gold comes despite a lack of endorsement from one of the
world’s best-known investors. In a speech at Harvard in 1998, Warren Buffett
said gold “gets dug out of the ground in Africa, or someplace. Then we melt
it down, dig another hole, bury it again and pay people to stand around
guarding it. It has no utility. Anyone watching from Mars would be
scratching their head.”

Russ Mould, the AJ Bell investment director, noted Buffett’s argument, and
added: “Unusually, the market is shrugging off the Sage of Omaha’s words of
wisdom and embracing gold instead.”

While commodities such as gas have fallen this year, investors have put
funds behind other assets including bitcoin – which has also reached a
record, breaking $69,000 on Tuesday – and overseas stock markets, driven by
enthusiasm for artificial intelligence. The FTSE 100 has missed out on the
rally, as it has few technology stocks.

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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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.

 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

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