Bulls n Bears Daily Market Commentary : 08 May 2024

Thu May 9 07:23:33 CAT 2024

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Bulls n Bears Daily Market Commentary : 08 May 2024

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

NMB highlights activity aggregates...

Banking group NMB highlighted today's activity aggregates as a circa of
6.18m shares worth $8.90m exchange hands in the session. The trade accounted
for 87.76% of the volumes and 88.68% of the turnover traded.  The other
notable activity driver was Econet that claimed 6.58% of the volume and
5.54% of the values. Today's turnover  ballooned by 1,378.48% to $10.04m
while, volume jumped by 512.13% to see 7.04m shares exchange hands. The
Tigere REIT was 1.46% lower at $0.5814 while, the Revitus Properties
Opportunities was stable at $0.2200. A total of 93,865 units worth
$54,390.70 exchanged hands in the REIT category. They were no trades in the
ETF category.

Insurance company First Mutual Holdings that is trading under a cautionary
led the laggards of the day as it eased 14.86% to close pegged at $1.9200.
Dairibord lost a near similar percentage to FML as it shed 14.85% to settle
at $0.5639 while, sprits and wines producer Afdis was 13.83% lower at

$1.9000. Property concern FMP shed 13.48% to $0.2600 while, banking group ZB
Financial Holdings eased 13.37% to end at

$2.2000 as it capped the top five losers list of the day. Life assurer
Fidelity led the best performers of the day on a 14.62% jump to end at
$0.5800 while, Zimre Holding Limited trailed on a 7.40% rise to $0.3007.
Seed technology group SeedCo limited edged up 2.61% to close trading at
$1.2985 while, sugar processor Star Africa was 1.94% higher at $0.0089. TSL
fastened the top five gainers list of the day, as it eked out a negligible
0.19% gain to $1.0625. The All-Share Index lost 2.30% to end at 94.39%
while, the Blue-Chip Index was 2.52% lower  at  92.49pts. The  Mid-Cap
Index retreated  3.93% to 97.14pts while, the Agriculture  index was 0.80%
weaker  at 89.17pts .

VFEX rebounds in the mid-week session ...

The VFEX market rebounded in the mid-week session as the All-Share Index
gained 1.86% to 98.40pts. Hotelier African Sun led the gainers of the day as
it advanced 18.57% to $0.0498 while, Zimplow jumped 16.96% to settle at
$0.0200 . Conglomerate lnnscor notched up 4.60% to $0.4188 whi le, Edgars
charged 3.17% to $0.0130. Banking group First Capital was 2.42% firmer at
$0.0254. Partially offsetting today's gains was Simbisa that dropped 1.31%
to $0.3550.

Activity aggregates improved in the session a$ volumes traded increased by
203.52% to 278,311 shares while, value traded rose 40.62% to $42,304.72. Top
volume drivers of the day were Padenga and African Sun that claimed 78.63%
and 18.97% respect ive ly. In the turnover category, activ ity was mainly
confined in Padenga that claimed 87.94% of the turnover .-efesecurities

Global Currencies & Equity Markets

South Africa

SA rand weakens against the dollar

Cape Town - Data from the central bank showed that South Africa's rand
weakened against the dollar early on Wednesday, pulled down by souring risk
sentiment.

The rand traded at 18.58 per dollar, 0.38% softer than its previous close,
with the dollar index last trading up 0.14% against a basket of currencies,
Reuters reported.

As with most emerging market currencies, the rand is risk-sensitive and
takes its cues from global drivers such as the direction of dollar in
addition to local economic data.

"Risk sentiment has fallen a touch as geopolitical tensions in the Middle
East are on the rise again," said Andre Cilliers, currency strategist at
TreasuryONE.

Israeli forces on Tuesday seized the main border crossing between Gaza and
Egypt in Rafah, the southern Gaza city where more than one million displaced
Palestinians have sought shelter during Israel's seven-month-old offensive.

Central bank data earlier showed South Africa's net foreign reserves rose to
$57.851 billion at the end of April, from $57.513 billion in March.

According to IOL, the dollar index rose above 105.5, hitting one-week highs
as hawkish remarks from a Federal Reserve official lifted the currency.

"There was little by way of new developments yesterday. Markets did,
however, keep a close eye on Fed speak, which, once again, talked down the
chance of any imminent rate cuts." Bianca Botes, a director at Citadel
Global, said.

The JSE index edged lower, to around 76830 points, after three successive
sessions of gains, mainly pressured by resource-linked stocks and
telecommunication companies, according to Trading Economics.

Nigeria

Naira closes weak at N1,421 on official market

The naira, on Wednesday closed at N1,421/$ at the Nigerian Autonomous
Foreign Exchange Market (NAFEM) according data from FMDQ Securities.

This represents a 1.27 percent depreciation from N1,403/$ quoted on Tuesday
at NAFEM.

The dollar supplied by willing sellers and willing buyers increased by 2.5
percent to $164 million on Wednesday from $160.77 million recorded on
Tuesday.

During the daily trading, the intraday high was quoted flat at N1,440/$
lower than N1,445 per dollar on Tuesday. The intraday low closed at N1,335
stronger than N1,301 on Tuesday.

Likewise, at the parallel market also known as the black market, the naira
weakened by 0.34 percent to N1,450/$, from the N1,445/$ quoted yesterday,
according to traders who spoke with BusinessDay.

Analysts at Coronation Registrars Limited have said that the uncleared
backlog from businesses and investors contributed to the FX market's
instability.

"The backlog of FX demand from investors and businesses may still be an
issue. Although an audit designated some US$2.4bn of these demands as not
legitimate, that does not remove the demand itself. And, it will likely take
months to clear all the various backlogs. So, we expect the FX market to be
unsettled for a while, but with the potential to stabilise considerably
later in the year," they stated.

Last week, the gap between the official and street markets had been cleared.
However, analysts at Coronation Registrars Limited stated that it did not
signify the liberalisation of the FX market.

Instead, it is expected that the gap between both markets may widen in the
coming days.

 <mailto:info at bulls.co.zw> 

Global Global MArkets

Dollar gains on rate outlook, yen weakens for third day

(Reuters) - The dollar gained on Wednesday as investors bet on the U.S.
economy outperforming peers and was higher for the third day against the
Japanese yen, keeping investors wary of the risk of intervention from Tokyo.

In Europe, the Swedish crown came under pressure after the central bank cut
interest rates and said it expected two more cuts this year, while the pound
was stuck in negative territory ahead of a Bank of England meeting on
Thursday.

The move in Sweden was a reminder that dollar is likely to remain strong as
long as other central banks cut rates before the U.S. Federal Reserve.

The yen remained front of mind for currency traders as Japanese officials
issued a stronger warning over the impact of the weak currency on the
economy.

"Carry trades are still attractive and the market is still more inclined to
buy the dip in dollar/yen," said Vassili Serebriakov, an FX strategist at
UBS in New York.

"I don't think the market is ignoring the risk of intervention, but ...
unless there's a significant change in the U.S. economic outlook we don't
think there will be a significant change in the setup for the FX markets
either," Serebriakov added.

Analysts have said any intervention from Tokyo would only offer temporary
respite for the yen, given the wide gap between interest rates in the U.S.
and Japan.

Traders believe Japanese authorities spent some $60 billion last week on
propping up the yen after it hit its weakest in 34-years against the dollar
around 160 yen.

The dollar was last up 0.59% against the yen at 155.6 , up from last week's
low of 151.86.

FED ABOVE ALL

Investors are focused on the pace and timing of Fed rate cuts. The latest
data showing weaker-than-expected U.S. jobs creation, together with an
easing bias from the U.S. central bank, have cemented expectations that
rates will likely be lower by year-end.

The dollar was last up 0.11% at 105.54 against a basket of currencies ,
above last week's one-month low. The euro dipped 0.08% to $1.0745. Sterling
weakened 0.1% to $1.2492.

In the meantime, central banks in Europe have already started cutting
interest rates. The Swiss National Bank cut in March ahead of Wednesday's
move by Sweden's Riksbank.

The European Central Bank has signalled its intention to cut in June,
assuming the data points in the right direction, and the BoE is gradually
smoothing the way to its first cut.

"What we're looking at is a raft of European central banks going over the
next few months, whether or not it's June, or August. We've got a near 50%
chance of the Fed cutting in September, but I think that's probably the one
that could get pushed out," XTB research director Kathleen Brooks said.

"For now, and particularly today, the focus is on Europe cutting first and
we're seeing that upward pressure on the dollar," she said.

While traders are pricing in an expected Fed rate cut in September, that
move will also depend on whether inflation continues to ease back closer to
the U.S. central bank's 2% target.

"Its going to be hard to go more dovish from here in terms of Fed
expectations I think in the near term and that's why that bias to buy the
dollar is still going to be in place," said UBS' Serebriakov.

Boston Fed President Susan Collins said on Monday that the current setting
of monetary policy would slow the economy in the way she believed would be
necessary to get inflation back to the target.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price gathers strength, investors await US data, Fedspeak for fresh
catalyst

Gold price (XAU/USD) trades with a positive bias on Thursday amid the
absence of top-tier economic data releases at mid-week. However, multiple
headwinds, such as the firmer US Dollar (USD) and the hawkish comments from
the US Federal Reserve (Fed) are likely to cap the upside of the precious
metal in the near term. 

On the other hand, the growth in global gold demand was mainly driven by
strong over-the-counter market investment, persistent central bank
purchasing, and rising demand from Asian buyers, including China and India,
per the WGC's most recent report. Furthermore, the risk-averse environment
and the uncertainties surrounding geopolitical tensions in the Middle East
might boost traditional safe-haven assets like gold. 

Gold traders await some fresh catalysts. The US weekly Initial Jobless
Claims is due on Thursday. Also, San Francisco Fed President Mary Daly, in
the dovish wing of the US central bank, is set to speak later in the day.
The dovish remarks from Fed officials might cap the downside of the gold
price for the time being. 

Daily Digest Market Movers: Gold price remains firm amid the multiple
headwinds

Boston Fed President Susan Collins said it will take longer than previously
thought to bring inflation down to the 2% target, emphasizing that the rate
will likely stay higher for longer. 

New York Fed president John Williams and Minneapolis Fed president Neel
Kashkari also indicated that they favor holding rates at current levels for
longer.

Investors have priced in a nearly 55% chance of a quarter-percentage-point
rate cut from the Fed in September, down from 85% before the US employment
report last week, according to CME's FedWatch Tool.

The first reading of the University of Michigan Consumer Sentiment Index is
expected to drop from 77.2 in April to 76.0 in May.

Hamas has agreed to a draft ceasefire agreement that is "far from meeting
Israel's demands, according to Israeli Prime Minister Benjamin Netanyahu. 

The People's Bank of China (PBoC) increased its gold reserves by 60,000 troy
ounces in April, extending its streak of consecutive purchases to 18 months.

Technical Analysis: Gold price stays bullish in the longer term

The gold price edges higher on the day. The yellow metal's long-term outlook
remains positive, with XAU/USD trading above the key 100-day Exponential
Moving Average (EMA) on the daily chart. 

In the near term, the gold price has been caught in a descending trend
channel since mid-April. The consolidative theme remains intact as the
14-day Relative Strength Index (RSI) hovers around the 50-midline. 

The initial support level for the precious metal is seen near the $2,300
psychological mark. The next contention level is located at the lower limit
of a descending trend channel of $2,260. Extended weakness could drag
XAU/USD to a low of April 1 at $2,228, followed by the $2,200 round level.  

If we see enough gold demand, the yellow metal could head for a high of May
6 at $2,232. Further north, gold may draw in enough buyers to test the upper
boundary of a descending trend channel at $2,345. The additional upside
filter to watch is the $2,400 round mark, en route to an all-time high near
$2,432. 

US Dollar price this week

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

INVESTORS DIARY 2024

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

Bulls n Bears 

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