Bulls n Bears Daily Market Commentary : 09 May 2024

Fri May 10 08:48:37 CAT 2024

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Bulls n Bears Daily Market Commentary : 09 May 2024

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

ZSE records losses for the fourth consecutive session...

All-Share Index dipped 0.67% to 93 .76pts while, the Blue- Chip Index fell
0.82% to 91.73pts. The Agriculture Index lost 0.83% to 88.43pts while,the
Mid Cap Index dropped 1.85% to 95 .34pts. Brick manufacturer Willdale led
the laggards of the day on a 20 .00% decline to $0.0400, followed by
Proplastics that trimmed 14.92% to settle at $0.4780 . First Mutual Holdings
retreated 14.58% to $1.6400 while, Nampak slipped 11.11% to $0.4000. Tea
producer Tanganda capped the fallers of the day on a 7.26% slide to end the
day pegged at $1.8000. Partially mitigating today's losses was Zimre
Holdings Limited that jumped 11.53% to $0.3354, trailing was Turnall that
gained 8.27% to close at $0.0275 .Star Africa stepped up 8.26% to $0.0097
while, seed producer Seed Co Limited inched up 2.69% to $1.3334. Telecoms
giant Econet fastened the top five performers of the day on a 1.64% uplift
to end the day pegged at $1.2198.Eleven counters recorded losses against
seven that gained to leave the market with a negative breadth of four.

Act ivity aggregates declined in the session as volumes traded plunged
85.61% to l.Olm shares while, turnover succumbed 82.08% to $1.80m. The top
volume drivers of the day were Star Africa {33.16%), Delta (15.75%) and FBC
(11.91%) . Delta, FBC and Meikles dominated the total value traded after
contributing 63 .01%, 12.88%,and 10.42% respectively. A total of 14,403
units exchanged hands in the ETF section. Cass Saddle ETF shot up 14.00% to
settle at $0.0057 while,MIZ ETF surged 4.73% to $0.0100.  OMTI ETF firmed
up 1.85% to

$0.1100 after 9,603 units exchanged hands in the penultimate session. Tigere
REIT shook off 0.32% to end the day pegged at

$0.5795 after 800,797 units traded.

VFEX extends gains in the penultimate session ... 

The VFEX market extended gains in the penultimate session of the week as the
All-Share Index added 0.83% to 99.21pts. Hotelier African Sun headlined the
top performers of the day on a 18.88% jump to $0.0592 while, lnnscor went up
5.52% to end the day pegged at $0.4419. In contrast, Axia faltered 17.33% to
$0.0744 while, Padenga tumbled 4.06% to $0.1631. National Foods shed 1.70%
to close at $1.3025 while, fast foods group Simbisa lost 1.41% to $0.3500 .
Banking group First Capital completed the laggards of the day on a 1.18%
loss to end the day pegged at $0.0251.

Activity aggregates were mixed in the session as volumes traded fell 64.73%
to 98,152 shares while, turnover shed 56.29% to $18,492.34 . The trio of
Padenga, lnnscor and Axia contributing a combined 94.76% of the volume
aggregate . The top value drivers of the day were Padenga (64.69%), lnnscor
(27.07%) and Axia (3.36%).-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand firms as dollar slips on claims data

(Reuters) - South Africa's rand strengthened on Thursday as the dollar
weakened after recent U.S. economic data signalled a softening U.S. labour
market.

At 1536 GMT, the rand traded at 18.49 against the dollar , up 0.5% from its
previous close.

The dollar index was down about 0.2% against a basket of currencies after
U.S. data showed claims for unemployment benefits rose last week to the
highest level in more than eight months.

-

U.S. market participants have looked to a softening labour market as a sign
that consumers will begin to slow spending and in turn help cool inflation.

The rand, like most emerging market currencies, takes direction from U.S.
economic data points in addition to local events.

Statistics South Africa data earlier in the day showed manufacturing output
fell 6.4% year-on-year in March, after rising by a revised 4.0% in February.

-

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 0.56%
higher.

South Africa's benchmark 2030 government bond was weaker, with the yield up
1.5 basis points at 10.530%.

Nigeria

Businesses pay 23% more in import duties on volatile naira

Businesses and manufacturers that import critical production inputs are now
paying 23 percent more as Customs import duties with the naira retreating
against the United States dollar after weeks of stability in April.

The cost of clearing imports went up by 23 percent to N1,412.573/$ as of May
8 compared to a year-to-date low of N1,150.16/$ recorded on April 23 when
the naira rallied against the dollar after supply of the greenback surged
due to reforms by the Central Bank of Nigeria (CBN).

This also represents a 48 percent increase in the cost of clearing compared
to the N951.941/$ rate previously used in January before the FX duty rate
became volatile.

The naira rally in April brought significant relief to importers who had
grappled with a spike in the cost of clearing imports at the ports.

"The infamous tweaking of import duty rates is destabilising importers and
further sapping their investments dry," said Jonathan Nicole, former
president of the Shippers Association of Lagos State.

In advanced countries, there are standard windows for calculating import
duties and such is not subjected to tweaking at will by government
authorities, according to Nicole.

"Our economic policies have failed, and the resultant effect of these
inconsistencies in rates is for importers to abandon their goods in the
ports or relocate to countries where there is import policy stability,"
Nicole told BusinessDay by phone.

He called on the Central Bank to devise a means to stabilise both the naira
and the cargo clearing exchange rate to gain investor confidence.

The cost of clearing imports became volatile last year with the 2023 Customs
Act. The Act allowed the CBN to use the prevailing exchange rate to
determine the rate for calculating import duty.

Ijeoma Ezeasor, secretary general of the National Shippers Association of
Nigeria, lamented that manufacturers didn't plan for the CBN to take over
the fiscal policy administration in addition to monetary policy.

She said manufacturers are the worst hit because most of the goods ordered
and paid for in 2020 when COVID-19 disrupted the supply chain, are now
coming into the country and are being cleared with new and higher exchange
rates.

"It is a bit of a crisis for manufacturers and exporters of locally
manufactured goods because the numbers are no longer adding up. The economy
is chaotic, and we need to know who is in charge of the economy, especially
in terms of fiscal administration. The CBN is not putting the impact of the
volatile rates on planning and cost of doing business," she added.

Giving insight into how the exchange rate for paying duties evolved in
almost a year, Muda Yusuf, CEO of the Centre for the Promotion of Private
Enterprise (CPPE), told BusinessDay that the Nigeria Customs Service Acts
2023 empowers the Central Bank to determine the exchange rate for
computation of import duty.

"From a legal and technical point of view, it is legal for CBN to fix the FX
rate for import duties. Once the exchange rate of naira to dollar goes up or
down, the rate for the computation of import duty does the same explaining
the current volatility in the import duty environment," Yusuf explained.

Ideally, he said, the exchange rate for computing import duty should be
within the fiscal policy space because it relates to trade.

"The fiscal policy authorities are more in tune with the realities of
business; thus, the FX rate for import duty is used to regulate trade flow
and should be within their purview," he advocated.

Yusuf called for a review of the 2023 Customs Act and quarterly hedging of
the exchange rate at N1,000 or N1,100 to protect businesses.

Also, Obiora Madu, director general of the African Centre for Supply Chain,
said the issue of determining import duty rates should be handled between
fiscal and monetary policy authorities.

He said that the CBN's trade and exchange department can carry out exchange
control responsibilities, which explains why the unit is in charge of
determining FX for clearing goods at the port.

Madu, however, said that Nigeria needs to look for what works for the
nation's economy if the country wants to grow trade and enable the
manufacturing sector that brings in raw materials through the port to create
jobs.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar softens after claims data, pound recovers from BoE-led low

(Reuters) - The dollar weakened against most currencies on Thursday after
economic data showed more signs of softening in the U.S. labor market, while
the pound rebounded from earlier lows after the Bank of England opened the
door for an interest rate cut.

Weekly initial claims for state unemployment benefits increased 22,000 to a
seasonally adjusted 231,000, the highest level since the end of last August
and above the 215,000 expected by economists in a Reuters poll.

-

The data followed last week's weaker-than-anticipated U.S. payrolls report
and other data that showed job openings fell to a three-year low in March.

Market participants have looked towards a softening labor market as a sign
that consumers will begin to slow spending and in turn help cool inflation.
Data next week will include readings on consumer prices (CPI), producer
prices (PPI) and retail sales.

"We did have a knee-jerk reaction in yields and the dollar lower this
morning after the jobless claims number came in above expectations," said
Karl Schamotta, chief market strategist at Corpay in Toronto.

Schamotta said there were some seasonal distortions in the claims report
that may have led to the higher reading, but added that recent economic data
"kind of suggests that we're seeing a deceleration in the world's largest
economy, and if we do see a sequential decline in U.S. consumer/producer
price indices next week as well as the retail sales number, then that could
prick that U.S. exceptionalism trade that's been dominating markets for
quite a long time."

The greenback showed little reaction to comments from Federal Reserve Bank
of San Francisco President Mary Daly, who said she still sees a "really
healthy" labor market and inflation that remains too high.

The dollar index , which measures the greenback against a basket of
currencies, fell 0.22% at 105.28, with the euro up 0.28% at $1.0775.

Sterling strengthened in the wake of the U.S. data and was last at 0.18% at
$1.2518. The pound had dropped to a low of $1.2446, its weakest level since
April 24, after the Bank of England (BoE) paved the way for an interest rate
cut.

-

The BoE's Monetary Policy Committee had voted 7-2 to keep the central bank's
key policy rate at a 16-year high of 5.25%, with Deputy Governor Dave
Ramsden joining Swati Dhingra in voting for a cut to 5%. BoE Governor Andrew
Bailey said it was possible the central bank would need to cut rates by more
than investors expect.

- -

Against the Japanese yen the dollar edged 0.03% higher at 155.52 as hawkish
opinions from Bank of Japan members helped slow the yen's fall. The dollar
has been slowly recovering against the Japanese currency after it tumbled
3.4% last week, its biggest weekly percentage drop since early December
2022.

The yen had earlier strengthened to 155.15 per dollar, after the BOJ's
summary of opinions showed board members were overwhelmingly hawkish at
their April policy meeting, with many citing the need for steady interest
rate hikes.

BOJ Governor Kazuo Ueda said the central bank will scrutinize the yen's
recent declines in guiding monetary policy.

Market participants suspect Tokyo spent some $60 billion last week to stall
the yen's slide after it hit its weakest level in 34-years against the
dollar around 160 yen.

In a note on Thursday, Deutsche Bank's head of FX research, George
Saravelos, reiterated that "as long as the BOJ sees no urgency to rapidly
normalize policy, the fundamental backdrop for the JPY (yen) will not
change."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold set for best week in five on renewed US rate-cut hopes

(Reuters) - Gold prices firmed on Friday, poised for their best week since
early April, following U.S. economic data that boosted bets of an interest
rate cut from the Federal Reserve.

Spot gold gained 0.3% to $2,353.43 per ounce by 0450 GMT, hitting their
highest in more than two weeks. Prices have risen 2.3% so far this week.

U.S. gold futures rose 0.9% to $2,360.40.

Data on Thursday showed that the number of Americans filing new claims for
unemployment benefits increased more than expected last week.

-

"Gold has regained its mojo this week courtesy of some softer U.S. macro
data. Initial jobless claims figures were worse than expected, which comes
hot on the heels of the weaker NFP (nonfarm payrolls) figures last Friday,
indicating that the jobs market may be starting to loosen up," said Tim
Waterer, chief market analyst at KCM Trade.

Traders expect the Fed to start its easing cycle in September. Lower
interest rates reduce the opportunity cost of holding gold.

-

The inflation reports have the potential to shift the "needle with regards
to the expected rate cutting timeline," said Waterer, adding that if
inflation was shown to be edging lower, gold could be a beneficiary.

The U.S. producer price index and consumer price index data are due next
week.

There is "considerable" uncertainty about where U.S. inflation will head in
the coming months, San Francisco Fed President Mary Daly said on Thursday.

Elsewhere, a senior Israeli official said the latest round of indirect
negotiations in Cairo to halt hostilities in Gaza had ended and Israel would
proceed with its operation in Rafah.

"Enduring geopolitical risks will likely outweigh incrementally positive
news from China regarding its economic outlook," analysts at ANZ wrote in a
note.

"Gold demand will remain relatively strong in 2024."

Spot silver rose 0.2% to $28.38, platinum firmed 0.7% to $984.50 and
palladium added 0.3% to $970.00. All three metals were up for the week.

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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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
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 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
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