Bulls n Bears Daily Market Commentary : 18 March 2024

Tue Mar 19 08:17:27 CAT 2024

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Bulls n Bears Daily Market Commentary : 18 March 2024

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ZSE commentary

Bullish sentiment prevails in Monday’s session as demand continues to firm up ...

The bullish sentiment prevailed in Monday’s trades as demand in selected counters continued to skyrocket. A total of twenty counters registered trades in the session segregated into fifteen gainers, five that sailed stable and a nil position of losers. The All-Share Index garnered 7.43% to end at 667,849.02pts while, the Blue-Chip Index edged up 8.64% to settle at 307,868.65pts. The Agriculture Index added 3.79% to end at 1,373.93pts while, the Mid-Cap went up 2.21% to close at 2,419,502.76pts. Leading the gainers of the day was BridgeFort Capital Class A that garnered 21.43% to close at $85.0000 as scrappy 201 shares traded. Dairy processor Dairibord inched up 15.00% to $1,265.0000 while, bankers ZB followed as they rose by a similar 15.00% to end at $1,265.0000. Cable manufacturer CAFCA also edged up 15.00% to close trading at a VWAP of 15,525.0000 while, beverages producer Delta closed at a VWAP of $13,353.0399 as 74,900 shares traded in the name despite, closing heavily bid.

Activity aggregates enhanced in the session as volumes traded jumped 80.14% to 2.10m shares while, turnover increased by 87.91% to see $6.41bn exchange hands. Activity was mainly confined in Delta that claimed 66.27% of the volume and 63.79% of the turnover. The other notable volume driver was Seedco limited that contributed 11.54% of the total. In the turnover category, Delta was the other notable value driver as it claimed 14.38% of the total. In the ETF category, only three funds registered price movement in the session as they all closed pointing northwards. The Old Mutual Top 10 ETF garnered 9.26% to close at $115.0000 while, the Datvest MCS advanced 1.82% to $20.3636 as it only traded 550 shares in the session. The Morgan & CO Made In Zimbabwe was 1.30% higher at $19. 5000. In the REIT category, the Tigere REIT climbed 0.98% to $760.1871 while, Revitus Property Opportunities scaled up 1.83% to $551.9286.-efe

Global Currencies & Equity Markets

South Africa

South African rand slips ahead of CPI, central bank meetings

South Africa's rand weakened in early trade on Monday, at the start of a week that will include South African inflation figures and several major central bank rate decisions.

At 0705 GMT, the rand traded at 18.8000 against the U.S. dollar , about 0.3% weaker than its previous close.

The dollar was last trading down about 0.04% against a basket of global currencies.

Central banks in the United States, Japan, UK and Australia will all announce rate decisions this week, with most expected to leave policy unchanged, Reuters reported.

On the stock market, the Top-40 (.JTOPI), opens new tab index was up 0.73% while the broader all-share (.JALSH), opens new tab was 0.63% higher in early trade. 

South Africa's benchmark 2030 government bond was weaker in early deals, with the yield up 2 basis points to 10.385%.

Nigeria

Naira closes below the N1,600/$1 at official market 

The official market observed a modest increase in the value of the Naira against the dollar, concluding at N1,597.24 to $1, marking a 0.34% enhancement from the prior closing figure of N1,602.75 to $1 from the preceding week’s end.  

This recent closing figure of N1,597.24 to the dollar signifies the first instance of a rate ending beneath the N1,600/$1 mark since March 5th, 2024.  

Additionally, data from NAFEM disclosed a slight rise of 2.20% in forex dealings, reaching $140.45 million as opposed to the $137.43 million noted earlier. 

More insights   

On Monday, within the Investors and Exporters (I&E) window, the naira saw mixed results against major global currencies. 

The I&E FX window recorded a high of N1640/$1 and a low of N1,400.00, indicating a fluctuation of N240/$1. 

In the parallel market, the naira appreciated by 0.78% against the US dollar, trading at N1,608 compared to the previous figure of N1,614 per dollar.  

Against the pound sterling, the naira modestly gained by 0.74%, ending at N2,030/£1 from the earlier rate of N2,045/£1.  

It also made gains against the euro by 0.58%, closing at N1,725/€1 up from last week’s Friday rate of N1,735/€1.  

The country’s foreign reserves saw a slight increase of $2.71 million as of March 14, 2024, amounting to $34.416 billion—a 0.008% rise from the previous day’s reserves of $34.413 billion.  

Nigeria’s foreign reserves have been on an upward trajectory for 20 days (approximately 3 weeks), starting from February 13, 2024. 

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar up, yen steady as BOJ policy shift looms

(Reuters) - The dollar edged higher on Monday ahead of a slew of central bank meetings this week, with the Bank of Japan potentially set to end negative interest rates and the market waiting for the Federal Reserve's latest projections for its rate cut plans.

In addition to Japan and the United States, central banks in Britain, Australia, Norway, Switzerland, Mexico, Taiwan, Brazil and Indonesia are all due to meet this week.

The dollar index , which measures the U.S. currency against six other major currencies, rose 0.145% at 103.600. It has strengthened just over 2% this year as the U.S. economy has fared better than expected, leading investors to rein in bets that the Fed will cut rates quickly and deeply this year.

Markets are now pricing in less than three cuts of 25 basis points each in 2024, down from almost double that at the year's start, LSEG data shows. Futures show about a 51% chance of the first rate cut coming by June, also down sharply from earlier expectations, according to CME Group's FedWatch Tool.

The yield on benchmark 10-year Treasury notes rose to a three-week high of 4.348%. The advance adds to dollar strength as the market sees rates staying higher for longer.

The focus on Wednesday will be on whether Fed policymakers change their projections, or dot plots, for the economy and rate cuts for this year and the next two. The Fed in December projected 75 basis points of easing in 2024.

"I think they're going to stay with three cuts, but if they change, it's more likely to be to two cuts, rather than four," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York. "One thing that could surprise people would be that the median dot goes up for unemployment."

The Japanese yen traded little changed, up 0.05% at 149.16 per dollar.

The yen has had a whirlwind few weeks, weakening to 150.88 to the dollar last month. It then rebounded to a one-month high of 146.48 at the start of March, on the back of stronger-than-expected economic data and rising bets that the BOJ is preparing to end eight years of negative interest rates.

Bigger-than-expected pay hikes by major Japanese firms have cemented expectations that the BOJ will exit ultra-loose monetary policy, potentially as soon as at its meeting on Tuesday.

"Recently there have been some signs and some statements from a few of the members of the Bank of Japan signaling that they feel this is a time to not maintain an accommodative financial environment," said Juan Perez, director of trading at Monex USA in Washington. "But this week it’s really doubtful that they’re going to make a move. They would shock markets."

April was more likely for the BOJ to exit its ultra-easy monetary policy as a jump in inflation could occur when Japanese subsidies for household energy ends that month, Chandler said.

The euro last bought $1.0871, down 0.15% while sterling was at $1.27245, down 0.12% ahead of the Bank of England meeting on Thursday when the central bank is expected to hold rates at 5.25%.

Australia's central bank is due to meet on Tuesday and is widely expected to hold rates steady. The Australian dollar fell 0.05% against the U.S. dollar to $0.656.

The U.S. dollar rose 0.52% against the Swiss franc. Some investors think the Swiss National Bank could cut interest rates on Thursday, with inflation having long been within its 0-2% target range.-

 <mailto:info at bulls.co.zw> 

Commodities Markets

Price Gold price hangs near one-week low, looks to Fed decision on Wednesday for fresh impetus

Gold price (XAU/USD) struggles to capitalize on the previous day's bounce from the $2,145 region, or over a one-week low and oscillates in a range during the Asian session on Tuesday. The robust US consumer and producer inflation figures released last week fuelled speculations that the Federal Reserve (Fed) will stick to its higher-for-longer interest rates narrative. This remains supportive of elevated US Treasury bond yields, which is seen underpinning the US Dollar (USD) and acting as a headwind for the non-yielding yellow metal.

The markets, however, are still pricing in the possibility that the Fed will begin its rate-cutting cycle as early as June. This, along with ongoing geopolitical tensions, offers some support to the safe-haven Gold price. Traders also seem reluctant to place directional bets ahead of the crucial two-day FOMC monetary policy meeting starting this Tuesday. The Fed decision is due on Wednesday and will be looked for cues about the rate-cut path, which will play a key role in driving the USD and provide fresh impetus to the precious metal.

Daily Digest Market Movers: Gold price traders seem non-committed amid uncertainty over Fed's rate-cut path

The stronger US inflation data fuelled speculations that the Federal Reserve will keep interest rates elevated, which, in turn, fails to assist the non-yielding Gold price to build on Monday's bounce from over a one-week low.

Markets are now pricing in less than three 25 basis point rate cuts this year and about a 51% chance that the Fed will begin the rate-cutting cycle at the June meeting, down sharply from expectations at the start of the year.  

Expectations that the Fed will stick to the higher-for-longer interest rates narrative push the yield on benchmark 10-year US government bond to a three-week high, underpinning the US Dollar and capping the commodity.

The prolonged Russia-Ukraine war, along with the unrest in the Middle East, might continue to offer some support to the safe-haven XAU/USD and help limit deeper losses ahead of the crucial FOMC meeting starting today.

Ukraine stepped up drone strikes on Russian oil refineries last week, while Israeli Prime Minister Benjamin Netanyahu confirmed plans to push into Gaza's Rafah enclave, contributing to a climate of uncertainty.

The focus, meanwhile, will be on whether Fed policymakers change their projections, or dot plots, for the economy and rate cuts for this year and the next two, which will determine the near-term trajectory for the XAU/USD.

Technical Analysis: Gold price needs to break below the $2,145 support for bears to seize near-term control

>From a technical perspective, the recent pullback from the record peak stalled near the $2,145-2,144 support zone, which should now act as a key pivotal point for the Gold price. A convincing break below will expose the next relevant support near the $2,128-2,127 zone before the XAU/USD extends the corrective decline further towards the $2,100 round figure.

On the flip side, the $2,175-2,176 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 set the stage for the resumption of the uptrend witnessed since the beginning of this month.-

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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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.

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