Bulls n Bears Daily Market Commentary : 21 March 2024

Fri Mar 22 08:52:35 CAT 2024

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Bulls n Bears Daily Market Commentary : 21 March 2024

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

ZSE maintains gains in Thursday's trades ...

The ZSE market-maintained gains in the penultimate session of the week as
all the four benchmark indices under our review closed pointing northwards.
The All-Share  Index inched up 2.64% to close at 748,995.77pts while, the
Blue-Chip Index advanced  2.03% to end at 345,093.30pts. The Agriculture
Index went  up 5.39% to settle at 1,667.17pts while, the Mid Cap Index
notched up 7.56% to end at 2,791,426.94pts. Penny cap counter Willdale that
is trading under a cautionary led the gainers of the day as it surged
32.74% to $67.8268 while, Turnall advanced 19.84% to $65.0000. Agriculture
concern CFI inched up 15.00% to close at $2,990.0000 as 1,479 shares traded
in the name while, rarely traded counter  First Mutual Holdings garnered 15.
00% to settle at $5,635.0000. Banking group ZB charged a similar 15.00% to
end the day trading at

$4,626.1000 as it fastened the top five gainers list of the day. Trading in
the negative territory was seed producer SeedCo Limited that shed 0.59% to
end at $2,238.0165 followed by beverages producer Delta fell by 0.41% to end
at a VWAP of

$14,440.5494. Fintech group Ecocash retreated 0.19% to end at $601.9181
while, property company Mashonaland was 0.08% lower at $339.7321. Tea
producer Tanganda lost a negligible 0.0024% to end at $3,888.8036.

Activity aggregates improved in the session as volume traded rose by 0.44%
to see 1.34m shares worth $4.32bn exchange hands in the session. This
represented a 18.70% increase in t1..1rnover. Econet, Star Africca and Delta
led the volume driver of the day they contributed 24.53%, 19.77% and 11.01%
respectively. The duo of Delta and Econet were the top turnover drivers of
the day as they claimed 74.1% of the total value traded. In the ETF
category, the  Datvest MCS charged 7.04% to settle at $25.0475 while, the
Old Mutual Top 10 ETF added 1.15% to settle at $141.6142. The Morgan & CO
Made in Zimbabwe ETF fell 5.14% to $18.4977. The Tigere REIT was 0.17% up at
777.9603 while, Revitus opportunities jumped 1.46% to end at $560.0000.

Global Currencies & Equity Markets

Zambia

Zambia's Kwacha emerges as Africa's best performing currency in 2024

Zambia's kwacha has emerged as the top-performing African currency against
the U.S. dollar this year, boosted by the central bank's aggressive monetary
policy tightening.

・The kwacha has surged by 13.8% to 22.8 against the dollar in 2024.

・Last November, the apex bank raised the statutory reserve ratio for
deposits in both local and foreign currencies by 3 percentage points to
14.5%.

・Analysts, however, stress that the kwacha's sustained strengthening
depends on the country's ability to attract more foreign investment.

The kwacha has surged by 13.8% to 22.8 against the dollar in 2024, as
reported by LSEG data. The central bank took measures such as raising
commercial banks' reserve ratios and increasing interest rates to counter
the currency's decline, which had contributed to rising inflation, Reuters
reported.

Last November, the apex bank raised the statutory reserve ratio for deposits
in both local and foreign currencies by 3 percentage points to 14.5%.

Analysts, however, stress that the kwacha's sustained strengthening depends
on the country's ability to attract more foreign investment.

"The kwacha's performance this year has been remarkable," said Danny Greef,
Co-Head of Africa at research firm ETM Analytics.

Zambian officials attribute the prolonged debt restructuring, now in its
fourth year, to hindering foreign investment and contributing to the
kwacha's weakening.

Despite government initiatives to boost the sector, copper production, a
crucial source of foreign exchange for the southern African state, has also
declined.

"The measures that we have taken... are meant to stem some of the demand,
which we thought was excessive as we anticipate supply, which mainly comes
from the mining sector," Bank of Zambia governor Denny Kalyalya told a
public forum on Tuesday.

The kwacha has weakened slightly this week from 22.5 to $1 but is still more
than 20% stronger than the record low of 27.23 reached on February 6.

"What is expected is an adjustment that will stabilise around the 21-22 per
dollar," economist Munyumba Mutwale said, adding that increased foreign
currency flows were required for the kwacha to make further gains.

The government is now concluding arrangements for new investors to take over
Mopani and Konkola Copper Mines, while other companies including KoBold
Metals are undertaking exploration with commitments to fund new projects.

AFRICA-FX- Kenya's shilling to hold steady, Nigerian naira to firm

A Kenya Commercial Bank Mtaani agent counts Kenya shilling notes on a money
counting machine as she serves a client inside in the banking hall at the
Kencom branch in Nairobi

(Reuters) - Kenya's shilling is expected to hold steady against the U.S.
dollar in the next week to Thursday, while Nigeria's naira will strengthen,
traders said.

GHANA

Ghana's cedi is expected to weaken further in the coming week due to
persistent dollar demand from local corporates, mainly in the manufacturing
and energy sectors, traders said.

Refinitiv Eikon data showed the cedi trading at 12.9950 to the dollar on
Thursday, compared to 12.8800 at last Thursday's close.

"Cedi, this week, has been under a lot of pressure amid limited dollar
supply," said Chris Nettey, Head of Trading at Stanbic Bank Ghana.

"We expect the current trend to be curbed if the central bank continues to
increase its intervention levels," he added.

Andrews Akoto, Head of Trading at Absa Bank Ghana, said a potential increase
in remittance inflows ahead of the Easter and Eid-ul-Fitr holidays could
help boost the currency.

KENYA

Kenya's shilling is expected to hold steady, with importer demand matching
supply, pausing three weeks of gains.

Commercial banks quoted the shilling at 132.10/133.10 per dollar, compared
to last Thursday's closing rate of 134.00/135.00.

"Not much flows or activity on either side of the market at the moment," a
trader at one commercial bank said.

The shilling, which is up 18% against the dollar this year, is close to a
one-year high, and was last bid at 132.00 per dollar on March 30, 2023,
according to LSEG data.

NIGERIA

Nigeria's naira is expected to strengthen on the official and parallel
markets next week, after the central bank said it has cleared all verified
foreign exchange backlogs by paying $1.5 billion to settle outstanding
obligations.

LSEG data showed the naira was quoted at 1,450 to the dollar on the official
market on Thursday, versus around 1,600 last week. The unit was quoted at 1,
520 in street trading on Thursday, compared to 1,610 last week.

"The market is beginning to price in an appreciation in the currency," one
trader said.

"It appears the CBN (Central Bank of Nigeria) is now on top of the forex
situation and their policies are kicking in," he added.

UGANDA

The Ugandan shilling is expected to firm as typical end-month dollar inflows
from non-governmental organisations lend support, traders said.

Commercial banks quoted the shilling at 3,870/3,880, compared to last
Thursday's close of 3,880/3,890.

"A bit of support may come from the usual charity flows that come through
toward month-end," said an independent foreign exchange trader in the
capital Kampala.

Charities receive their donations in hard currency and convert some of it to
pay salaries at the end of the month.

He said the local unit was likely to oscillate in the 3,850-3,880 range in
the coming days.

ZAMBIA

The Zambian kwacha is likely to continue to remain on the back foot next
week due to limited supply of hard currency on the market.

On Thursday, the currency of Africa's second-largest copper producer was
trading at 26.1000 per dollar, down from 25.0000 at the close of business a
week ago.

"The local unit is expected to decline in value in the near term," Access
Bank (ACCESS.GH), opens new tab said in a note on Thursday.

 <mailto:info at bulls.co.zw>

Global Markets

Dollar resilience draws in a couple of key technical questions

The market reaction to the post-Fed reaction seems to be "oops, we might
have overreacted". The dollar stormed back in trading yesterday and has
completely erased the drop on Wednesday. What's more is that the greenback
is now threatening some key technical levels on the charts. Let's get
straight into that.

For one, EUR/USD is now back down to test its 200-day moving average (blue
line) at 1.0838 again. The key level is what helped to arrest the drop from
earlier this week and is now challenged once more. A break below that will
see sellers exert more downside control and look towards 1.0800 next. Keep
above and buyers will still have some room to work with going into next
week.

GBPUSD D1 22-03

GBP/USD daily chart

The BOE did not surprise yesterday as they left rates unchanged and stuck to
a similar guidance in February. Yet, markets are of the view that there are
dovish elements at play. The only thing I can point to was the change in
bank rate votes, whereby Haskel and Mann no longer stuck to their hawkish
dissents last month.

In any case, that seems to be enough to weigh down the pound yesterday as
the dollar also held more resilient.

The fall in GBP/USD now sees the pair close in on a test of its 100-day
moving average (red line) next. The key level is seen at 1.2630 and will be
an important technical support layer for buyers to defend. Adding to that
will be the 200-day moving average (blue line) seen nearby at 1.2593
currently.

That makes the region around 1.2593-30 a particular important one at the
moment. For buyers, keep above that and they will have some supportive
platform to work with. But if price does break below that, sellers will be
in control and look towards the 1.2500 mark next.

USDJPY W1 22-03

USD/JPY weekly chart

The last key chart in play at the moment is of course none other than
USD/JPY. The pair has surged higher after the BOJ decision earlier this week
initially. And with the dollar being more resilient, it is keeping near the
highs of the week at 151.55 now.

Some verbal intervention from Tokyo did help to nudge the pair down from a
high of 151.86 earlier. But it is clear that the upside pressures are
building as traders shun the BOJ decision to end negative rates.

The 2022 and 2023 highs around 151.90-94 is still the key resistance level
to watch at the moment. If buyers can break through that, it will be clear
skies until Tokyo decides to be more forceful to rein in the upside momentum
next.

Overall, the three charts above are pointing to a somewhat similar mood
board or sentiment. And that is the dollar is looking to make more headway
in trading this week, despite its initial setback. So, be sure to keep a
close watch on the technicals as we look to wrap up the week. They will be
the best gauge in determining whether this bout of dollar resilience has
legs to run.

 <mailto:info at bulls.co.zw>

Commodities Markets

Price Gold takes a breather after record, Fed-fuelled rally

(Reuters) - Gold eased slightly on Thursday, hitting pause after a
blistering rally that got an extra fillip after Federal Reserve Chair Jerome
Powell hinted that the central bank was on course for three interest rate
cuts in 2024.

Spot gold fell 0.3% to $2,180.49 per ounce at 1:50 p.m. EDT (1750 GMT) after
hitting an all-time high of $2,222.39 earlier in the session.

U.S. gold futures settled 1.1% higher at $2,184.7.

Also driving gold's correction, the dollar bounced back up 0.8%, after
slipping to a one-week low, making bullion more expensive for overseas
buyers.

"Overnight aggressive buying seems to have run out of steam and gold prices
are correcting, given that rates markets have only marginally discounted the
risk of more rate cuts for 2024," said Daniel Ghali, commodity strategist at
TD Securities.

Traders are now pricing in a 72% chance that the Fed will begin cutting
rates in June, up from 65% before the rate decision.

Despite recent high inflation readings, Powell said the central bank is
still likely to reduce interest rates by three-quarters of a percentage
point by end-2024.

"Gold is still one of our favorite trades for 2024 as an attractive
portfolio hedge for equity investors," BofA Research said in a note dated
March 20, adding unprecedented central buying was another reason to be
bullish on gold.

Lower interest rates on other assets boost the appeal of holding
non-yielding bullion.

"The mood in the gold futures market is very bullish. So your hedge funds or
any other short-term traders or trend followers are positioned for higher
prices, and I think this is the segment that is in the driving seat while
the physical gold market is rather soft," said Julius Baer analyst Carsten
Menke.

Silver fell 3.2% to $24.80 per ounce, platinum gained 0.2% to $908.70 and
palladium lost 1.4% to $1,007.48.

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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