Bulls n Bears Daily Market Commentary : 19 March 2024

Wed Mar 20 05:48:09 CAT 2024

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Bulls n Bears Daily Market Commentary : 19 March 2024

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

ZSE rises further as Fewsnet warns poor harvest, EXR instability will impact
economy hard 

HARARE - While exchange rate volatility and ZWL devaluation are expected to
be addressed in the Reserve Bank of Zimbabwe's 2024 monetary policy
statement, which is due to be presented "soon,"  the Famine Early Warning
Systems Network (Fewsnet) has warned that the expected poor harvest is
expected to impact household food access throughout the post-harvest period,
along with high food prices and limited access to income earning
opportunities.

This, according to Fewsnet's latest outlook report (February-September
2024), will strain the economy. USD price increases for basic commodities
are anticipated, impacting household purchasing power, while at the same
time, high fuel and transportation costs may negatively affect livelihoods
and market access, especially for poor households.

In addition, engagement in informal artisanal mining is expected to
increase, while typical sources of income are projected to remain below
normal.

According to the report, because of the poor harvest and high food prices,
one in five households is likely to be in severe crisis due to limited
access to income. This is despite government-announced efforts to mitigate
against the poor maize harvest, which is now projected below 1 million
tonnes.

"Exchange rate instability and ZWL devaluation are expected to impact food
prices and market conduct," noted the report. The ZWL is now being quoted at
22000-24000 on the alternative market, and as such, inflation is projected
to continue rising, with food inflation being a significant driver.

Meanwhile, Zimbabwe Stock Exchange shares extended gains at the start of the
week as investors continued to anticipate the MPS, which will give currency
and exchange rate direction. The All Share Index remained in record
territory after rising 7.43% to 667 849.02 in a session that yielded 18
risers with no stocks trading in the negative.

A total of 257 trades were recorded after 2.38 million shares exchanged
hands. Turnover was at $6.95 billion, the bulk of which came from Econet at
$4.44 billion.

The Top Ten Index jumped 8.64% to 307 868.65. Delta gained 15% to 1 335
303.99c and CBZ also rose by the same to 977 265c taking its market cap to
US$291.74 million. Volume and value leader Econet put on 1.92% to 281
152.96c as investors continued to cheer the interim dividend, while EcoCash
was 1.31% higher to 59 987.16c.

The Medium Cap put on 2.21% to 2 419 502.77. Cafca, Dairibord and ZB all hit
limit up to 1 552 500c, 126 500c and 304 175c respectively. Tanganda jumped
14.99% to 296 535c with a year to date gain of 209.86% Willdale was 0.91%
higher to 5045.68c ahead of an EGM to approve its recapitalisation plan,
which includes the sale of idle land.

Bridgefort Capital was the day's leading stock with a 21.43% gain to 8500c.
As a result, the Small Cap Index put on 0.26%.

VFEX turnover was subdued at US$48 190.51 after 612 451 shares traded. The
All Share added 0.39% to 95.88. Padenga led the risers with a 7.33% gain to
14.05 US cents. Innscor put on 1.61% to 44.74 US cents, and Natfoods added a
marginal 0.44% to 127.56 US cents.

Axia was the worst performer after losing 11.38% to 7.09 US cents and
struggling miner Bindura shed 1.82% to 1.08 US cents.=finx

Global Currencies & Equity Markets

South Africa

Rand weakens ahead of Fed policy decisionIn early trade the rand was at
R19.02 to the dollar.

The rand weakened in early trade on Tuesday, as the US dollar traded higher
ahead of the Federal Reserve's monetary policy decision due on Wednesday.

The dollar was last trading up about 0.18% against a basket of global
currencies.

Recent US economic data has pointed to stubbornly high inflation, causing
investors to temper their expectations of the pace and scale of Federal
Reserve rate cuts this year.

"As the Fed fund futures data adjusts and drags US bond yields higher, it
follows that most currency markets will rock onto the back foot versus the
USD," ETM Analytics said in a research note, adding that the rand was no
exception.

Like most emerging market currencies, the rand often takes its cues from
global factors such as US monetary policy.

In South Africa, the focus this week will be on February inflation figures
due Wednesday. Economists polled by Reuters have predicted that annual
inflation will inch up to 5.5%, from 5.3% in January.

South Africa's benchmark 2030 government bond was weaker in early deals,
with the yield up 4 basis points to 10.535%.

Nigeria

Naira rises to N1,580/$ in parallel market

The naira yesterday appreciated to N1,580 per dollar in the parallel market
from N1,590 per dollar on Monday.

Similarly, the naira yesterday appreciated N1,560.57 per dollar in the
Nigerian Foreign Exchange Market (NAFEM).

Data from FMDQ showed that the indicative exchange rate for NAFEM fell to
N1,560.57 per dollar from N1,572.86 per dollar on Monday, indicating N12.29
appreciation for the naira. The market recorded an intraday high of N1,626.5
per dollar and an intraday low of N1,415 per dollar resulting in a N211.5
margin.

The volume of dollars traded (turnover) in the market fell by 38 percent to
$195.13 million from $315.21 million traded on Monday. Consequently, the
margin between the parallel market rate and NAFEM widened to N29.43 per
dollar from N17.24 per dollar on Monday.

 <mailto:info at bulls.co.zw> 

Global Markets

Yen slides to four-month low despite historic BOJ shift; dollar firm

(Reuters) - The yen tumbled to a four-month low on Tuesday after the Bank of
Japan's momentous, widely anticipated decision to end its negative interest
rate policy, while the dollar strengthened ahead of the Federal Reserve's
latest outlook for rates.

In a historic shift from decades of massive monetary stimulus, the Japanese
central bank ended eight years of negative interest rates and other remnants
of unorthodox economic policy after a two-day meeting of policymakers.

-

As most investors had already priced in a change, the yen dropped more than
1%, weakening in U.S. trading hours to 150.96 to the dollar after the news.

The yen was last down 1.19% at 150.91 to the dollar. Against the euro , the
Japanese currency similarly slid 1.1% to 163.99, also its weakest in four
months.

"They're very much in favor of trying to normalize the way the money market
and the financial system work locally," said Brad Bechtel, global head of FX
at Jefferies in New York. "I think they've done a lot of big steps to get
there."

-

With Japan's first rate hike in 17 years, the BOJ said it would guide the
overnight call rate - its new policy rate - in a range of zero to 0.1%,
adding it expected "accommodative financial conditions" to be maintained for
the time being.

That is likely to keep pressure on the yen, as U.S.-Japanese rate
differentials remain stark. It will also attract foreign investment into
Treasury bonds and keep the dollar strong.

"The market has taken it as a green light to increase the short yen
positioning that was already in place, given the forward guidance from the
BOJ was fairly cautious, and not really enough to draw further hawkish
repricing in the Japanese rate market," MUFG currency strategist Lee Hardman
said.

DOLLAR DOMINANCE

This week's raft of central bank decisions are dominating action in the
currency market, headlined by the Fed.

-

The U.S. central bank will deliver its policy outlook on Wednesday, when it
is widely expected to keep rates unchanged at 5.25% to 5.50%. The market is
awaiting clues on the likely course of monetary policy through policymakers'
economic projections for this year through 2026.

"Anytime the Fed and the BOJ are moving policy settings at about the same
time, it's always the Fed that rules and dominates the price action, even in
dollar/yen," said Gareth Berry, Macquarie's FX and rates strategist.

"So the BOJ's decisions generally are, as far as the yen is concerned, a
matter of secondary importance."

The dollar index , which measures the performance of the U.S. currency
against six others, is around its highest in two weeks, up 0.33% on the day
at 103.90.

Recent data showing a resilient U.S. economy has suggested inflation is
still sticky enough to deter the Fed from cutting rates too much or too
quickly this year, which has boosted the dollar.

The Australian dollar dropped after the Reserve Bank of Australia (RBA) left
rates unchanged on Tuesday, as expected, but watered down its guidance over
the likelihood of further rate hikes.

The Aussie slid 0.85% to an almost two-week low of $0.6504, dragging the New
Zealand dollar down 0.5% to $0.6055.

Elsewhere, a broadly stronger dollar pushed the euro and sterling to
two-week lows.

The euro was last down 0.08% at $1.0863, while sterling fell 0.2% to
$1.2723.

In cryptocurrencies, bitcoin fell as much as 7% to skim two-week lows, after
last week's record highs triggered some profit taking.

Bitcoin, the largest cryptocurrency by market value, was last down 4.07% at
$62,624.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Price Gold loses footing as US dollar rises; Fed in focus

(Reuters) - Gold prices retreated on Tuesday as the dollar strengthened a
day before the Federal Reserve signals its interest rate stance at the end
of the U.S. central bank's two-day policy meeting.

Spot gold fell 0.2% to $2,155.93 per ounce as of 2:18 p.m. EDT (1817 GMT),
hovering close to the one-week low reached on Monday.

U.S. gold futures settled 0.2% lower at $2,159.7.

The dollar gained 0.2%, having touched a more than two-week high earlier in
the session, making gold more expensive for overseas buyers.

-

Gold is seeing "some exhaustion to the upside as the positions moved swiftly
over the past week or two and now it's taking a bit of a breather as the Fed
pricing comes off a bit," said Ryan McKay, commodity strategist at TD
Securities.

"For now we're not expecting a rally anytime soon. But at the same time,
we're not expecting a big sell-off either because the physical markets
remain strong and positioning is still fairly bullish."

-

Gold prices hit a record peak of $2,194.99 per ounce on March 8, but prices
dipped nearly 1% last week after the release of hotter-than-expected
February U.S. consumer prices and producer prices reduced hopes of early Fed
rate cuts due to the threat of persistent inflation.

Higher inflation prompts the Fed to keep interest rates elevated, weighing
on non-yielding gold.

Although the Fed is widely expected to hold rates steady on Wednesday, the
market is awaiting comments from Fed Chairman Jerome Powell afterwards for
its latest rate outlook.

Meanwhile, the Bank of Japan (BOJ) ended eight years of negative interest
rates and other remnants of its unorthodox policy.

Spot silver fell 0.5% to $24.91 per ounce, platinum lost 1.8% to $894.19,
palladium slipped 3.8% to $992.50.

-

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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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
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