Bulls n Bears Daily Market Commentary : 14 March 2024

Fri Mar 15 07:24:49 CAT 2024

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Bulls n Bears Daily Market Commentary : 14 March 2024

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

ZSE momentum continues on across the board gains; ZWL down 66% YTD on
interbank

HARARE - Zimbabwe Stock Exchange equities remained firm on Thursday on
across-the-board gains, although turnover momentum is subdued.

The All Share Index was 3.84% higher to 569,457.44 in a session, which
yielded 21 risers. It now sits on a year-to-date gain of 170.10%.  Trades
amounted to 236 after 4.56 million shares worth $6.55 billion exchanged
hands. Econet contributed the most to value at $1.76 billion, while Nampak
saw the most volume at 2.01 million shares.

Meanwhile, the ZWL has now lost 65.7% of its value on the interbank market
since the start of the year to date, with the 2024 Monetary Policy Statement
(MPS) well overdue as authorities remain tight-lipped.

The ZWL now trades at 17 203 against the USD on the interbank market, while
the widely used parallel market rate stands at 20 000 per USD.

Notably, the disparity between the official rate and the PMR has narrowed
down to 16% from around 48% mid-January this year, which can be attributed
to the low liquidity levels of the local currency on the market. However,
more concerning is the disparity between the heavily discounted ZWL cash
rate of 5000 on the parallel market and the official rate, which has
resulted in serious price distortions across the market. The gap between the
cash rate and the official rate now stands at 244%. The gap between the cash
rate and the parallel market rate stands at 300%.

Elsewhere on the ZSE, the Top Ten Index rose 4% to 256 190.26. Econet
maintained positivity with a 14.87% rise to 260761.93c taking its
year-to-date gain to 208.25%.  First Mutual was 4.61% higher to 376 605.63c
and Delta added 2.28% to 1012843.02c or 57.86 US cents using the official
exchange rate.

The Medium Cap put on 2.42% to 2 214 853.91. ZB Financial Holdings, Seed Co
and Tanganda each gained 15% to 230000c, 224240c and 257890c respectively.  

Cafca put on 11.57% to 1 350 000c and Meikles extended its rally gaining
10.43% to 435 066.04c. Milk processor Dairibord was 4.57% higher to 110
000c.

Only three stocks traded in the negative; Edgars which fell 14.49% to
30753.13c or FMP down 5.17% to 55 000c and Proplastics which saw a
fractional decline.

On the ETF's, the Morgan & Co MS led the risers with a 14.83% gain to 80
556.21c and the OMTT rose 14.41% to 10 525.70c. A total 108 816 units
traded, yielding a turnover of $53.74 million. 

Recovery stock African Sun was the outstanding performer on the VFEX with a
13.67% gain to 3.41 US cents. Other gains were seen in Padenga which added
7.52% to 14.01 US cents and Simbisa, which put on a marginal 0.29% to 34.42
US cents. Simbisa is targeting to open 38 new counters in the second half of
its financial year to close it off with a total of 606 stores.

Axia led the fallers after losing 15.24% to 7.51 US cents ahead of the
release of its half year results. First Capital reversed yesterday's gains
with a 0.99% loss to 2.01 US cents and Innscor pared 0.16% to 44.03 US
cents.

Total turnover was weak at US$76 973 after 290 914 shares traded while the
VFEX All Share was near flat at 95.46 after fractional movement. -finx

Global Currencies & Equity Markets

South Africa

South African rand extends losses after mining, manufacturing data

(Reuters) - South Africa's rand extended its losses against a strong U.S.
dollar on Thursday after a mixed batch of local mining and manufacturing
data.

At 1518 GMT, the rand traded at 18.7875 against the dollar , almost 1.2%
weaker than its previous close.

South Africa's manufacturing output (ZAMAN=ECI), opens new tab rose 2.6%
year-on-year in January, statistics agency data showed, higher than
economists polled by Reuters had expected. December output was revised
upwards to 1.3% year-on-year.

But new mining figures showed an unexpected downturn. Total mining output
(ZAMNG=ECI), opens new tab was down 3.3% year-on-year in January, while gold
production (ZAGLD=ECI), opens new tab was down 12.7% year-on-year.

A bigger factor in the rand's weakness may have been the rising dollar ,
which was last trading up almost 0.6% against a basket of currencies after
U.S. inflation data.

Like most emerging market currencies, the rand takes direction from global
factors such as U.S. monetary policy in addition to domestic economic
releases.

On the Johannesburg Stock Exchange, the Top-40 index (.JTOPI), opens new tab
closed 0.63% lower. The benchmark 2030 government bond fell, with the yield
up 3 basis points to 10.240%.

 <mailto:info at bulls.co.zw> 

Global Markets

Gold retreats as dollar, yields firm on higher US inflation data

(Reuters) - Gold slid on Thursday after a larger-than-expected rise in
February's U.S. producer price index (PPI) cooled expectations of early rate
cuts by the Federal Reserve, boosting Treasury yields and the dollar.

Spot gold was down 0.6% at $2,161.39 per ounce as of 2:32 p.m. EDT (1832
GMT), moving away from a record peak of $2,194.99 hit on March 8.

U.S. gold futures settled 0.6% lower at $2,167.5.

The dollar (.DXY), opens new tab gained 0.6% against its rivals, making gold
less attractive for other currency holders, while benchmark U.S. 10-year
note yields rose to a more than one-week high.

-

"I expect to see continued pressure (on gold), with all of the data showing
the U.S. economy is strong, the labor market still strong," said Chris
Gaffney, president of world markets at EverBank.

"It really makes investors question just how quickly the Fed's going to
decide to start cutting (rates)."

U.S. producer prices increased more than expected in February amid a surge
in the cost of goods like gasoline and food, which could fan fears that
inflation is picking up again.

-

Higher inflation adds pressure on the Fed to keep interest rates elevated,
weighing on non-yielding assets such as gold.

However, traders continue to bet on interest rate cuts in June, pricing in
about a 60% chance, compared with 72% before the CPI data earlier this week,
according to the CME Group's FedWatch Tool, opens new tab.

The Fed is expected to hold rates steady at its policy meeting next week,
but the focus will be on the "dot plot" projections.

"Gold is an uncertainty hedge, an inflation hedge with higher inflation and
more uncertainty. I think that provides a good floor for precious metals
pricing," Gaffney added.

Spot platinum fell 0.8% to $930.95 per ounce, while palladium rose 0.8% to
$1,067.79.

Silver slipped 0.8% to $24.83, after hitting a more than three-month high
earlier in the session.

-

 <mailto:info at bulls.co.zw> 

Commodities Markets

Price Gold price edges higher in a familiar trading range, manages to hold
above $2,150 level

Gold price (XAU/USD) came under some renewed selling pressure on Thursday
and dropped back closer to the weekly low in reaction to the
hotter-than-expected US Producer Price Index (PPI). The data pointed to
still-sticky inflation and cooled market expectations for early interest
rate cuts by the Federal Reserve (Fed). This, in turn, triggered a fresh leg
up in the US Treasury bond yields and boosted the US Dollar (USD), which
turned out to be a key factor that drove flows away from the non-yielding
yellow metal.

The markets, however, are still pricing in a greater chance that the US
central bank will start cutting interest rates in June. This, along with the
risk-off impulse, assisted the Gold price to attract some buyers ahead of
the $2,150 level and gain follow-through traction during the Asian session
on Friday. The XAU/USD, meanwhile, remains confined in a familiar range as
traders seek more clarity about the Fed's rate-cut path before placing fresh
directional bets. Hence, the focus remains glued to the FOMC meeting next
week.

Daily Digest Market Movers: Gold price draws some support from June Fed rate
cut bets and softer risk tone

Data released on Thursday showed that the US producer prices increased more
than expected in February, which might force the Federal Reserve to keep
interest rates elevated and prompt some selling around the Gold price.

The US Bureau of Labor Statistics reported that the Producer Price Index for
final demand rose by a 1.6% YoY rate in February as compared to the previous
month's upwardly revised print of 1% and the 1.1% market estimates.

Separately, the US Department of Labor (DOL) published the usual Initial
Jobless Claims data, which showed that the number of individuals filing for
unemployment insurance for the first time unexpectedly fell to 209K last
week.

This, to a larger extent, overshadowed softer US Retail Sales figures, which
rose by 0.6% in February and pointed to a slowdown in consumer spending
during the first quarter amid rising inflation and high borrowing costs.

Meanwhile, the CME Group's FedWatch Tool indicates that the markets are
still pricing in about a 60% chance that the Fed will cut interest rates at
the June policy meeting, helping limit losses for the non-yielding yellow
metal.

Investors turn more cautious over the possibility of more hawkish signals
from the Fed, which is evident from a generally weaker tone around the
equity markets and lends additional support to the safe-haven XAU/USD.

Russia moved tactical nuclear weapons from its borders into neighbouring
Belarus, closer to NATO territory, after President Vladimir Putin threatened
a wider military showdown with NATO over the alliance's backing for Ukraine.

Traders now look to Friday's US economic docket - featuring the release of
the Empire State Manufacturing Index, Industrial Production figures and the
Preliminary University of Michigan Consumer Sentiment Index.

The focus, however, will remain glued to the upcoming FOMC monetary policy
meetings, starting next Tuesday, which might provide fresh cues about the
Fed's rate-cut path and determine the near-term trajectory for the metal.

Technical Analysis: Gold price bulls have the upper hand while above $2,150
pivotal support, or the weekly low

>From a technical perspective, the range-bounce price action since the
beginning of the current week comes on the back of the recent blowout rally
and might still be categorized as a bullish consolidation phase. The lower
boundary of the said trading range near the $2,152-2,150 area might continue
to protect the immediate downside. A convincing break below could drag the
Gold price to the next relevant support near the $2,128-2,127 zone. The
corrective slide could extend further towards the $2,100 round figure, which
should act as a strong base for the XAU/USD.

On the flip side, the $2,178-2,180 region now seems to have emerged as an
immediate strong barrier, which if cleared should allow the Gold price to
challenge the record peak, around the $2,195 area touched last week. Some
follow-through buying beyond the $2,200 mark will be seen as a fresh trigger
for bullish traders and set the stage for the resumption of a
well-established uptrend witnessed since the beginning of this month.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against
listed major currencies today. US Dollar was the strongest against the New
Zealand Dollar.

-

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

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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