Bulls n Bears Daily Market Commentary : 13 May 2024

Tue May 14 08:33:06 CAT 2024

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Bulls n Bears Daily Market Commentary : 13 May 2024

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

ZSE advances further in Monday's trades.

The ZSE market advanced further in Monday's trades as all the four indices
we review closed pointing northwards. The All-Share Index was 0.25% higher
at 94.24pts while, the heavy cap Index rose 0.49% to 92.23pts. The
Agriculture Index was 0.38% firmer at 89.21pts while, the Mid cap Index
added 0.30% to end at 96.17pts. Fintech company Ecocash that is trading
under a cautionary notched up 11.78% to close at $0.2400 while, insurance
company First Mutual Holdings was 6.10% up at $1.7400. Tea producer Tanganda
closed at $1.8525 following a 2.92% ascent while, hotelier Rainbow Tourism
Group jumped 1.17% to $0.2125. Sugar processor Star Africa inched up 1.02%
to $0.0099. Retailer Ok Zimbabwe led the laggards of the day on a 8.96% drop
to $0.4907 as scrappy 2,200 shares traded in today's session.
Telecommunications giant Econet eased 2.60% to end at $1.2515 while,
beverages group Delta was 0.19% lower at $7.1004. Packaging company
Proplastics shed 0.11% to settle at $0.4495. General Beltings capped the top
five worst performers of the day as it lost a negligible 0.001% to $0.0502
as only 300 shares traded in the name.

Activity aggregates were depressed in today's trades as volumes traded fell
by 5.23% to see 2.96m shares worth $4.45m exchange hands. This represented a
13.68% decline in turnover. Econet led the volume drivers of the day as it
claimed 87.89% of the total traded. In the turnover category, activity was
mainly seen in Econet and Delta as they claimed a combined 93.20% of the
turnover traded. In the ETF category, only two funds registered trades in
today's session as Morgan & Co Made In Zimbabwe was stable at $0.0100 on
14,650 units exchanging hands. In the same vein, Old Mutual Top 10 ETF was
stable at $0.1100 as 2,250 units traded. The Tigere REIT was 5.11% higher at
$0.6307 as 14,740 units traded in today's session.efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand firms against weaker dollar; US data in focus

(Reuters) - The South African rand strengthened against a weaker dollar on
Monday, as investors awaited key U.S. data that could offer clues on the
Federal Reserve's future interest rate path.

At 1625 GMT, the rand traded at 18.3400 against the dollar , around 0.5%
stronger than its previous close.

The dollar was last down around 0.16% against a basket of global currencies.

"The rand seems to be enjoying the fact that the dollar is struggling to
gain ground as the market digests weakening economic outcomes in the
(United) States," said Danny Greeff from ETM Analytics.

-

This week, investors are turning their attention towards U.S. inflation and
retail sales data.

On the stock market, the Top-40 (.JTOPI), opens new tab and the broader
all-share (.JALSH), opens new tab indices closed around 0.3% higher.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 5 basis points at 10.465%.

Nigeria

Naira slumps, exchanges at over N1,500 against dollar

The naira continued its depreciation against the US dollar in the foreign
exchange market.

Data from the parallel market section and FMDQ showed further depreciation
against the dollar on Monday.

At the parallel market, a Bureau De Change operator in Wuse Zone 4, Mistila
Dayyabu, told DAILY POST that the naira was sold as high as N1,517 per
dollar on Monday before settling at N1,500 per dollar.

"On Monday morning, the dollar was sold at N1,517 per dollar. However, on
hearing the information about the coming of the Economic and Financial
Crimes Commission operatives, we started selling at N1,500 this evening, "
he said.

The figure increased from the N1, 450 per dollar it traded at the weekend.

Similarly, at the official market, FMDQ data showed that they dipped to
N1478.11 per dollar on Monday from N1466.31 last Friday.

This represents an N11.8 drop from the N1466.31 recorded last Friday.

Earlier, the Central Bank of Nigeria Governor, Olayemi Cardoso, said the
apex bank's Monetary Policy Committee will do everything to bring down
soaring Nigeria's inflation, which stood at 33.22 per cent in March 2024.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar eases as market awaits key inflation data

(Reuters) - The dollar eased versus most major currencies on Monday amid
expectations key U.S. data this week will show a slowing pace of inflation
and growth at a time European economies have surprised to the upside and
could be bolstered by interest rate cuts.

The dollar has outperformed this year on the narrative of U.S.
exceptionalism, as much of the world was still in recovery mode from the
pandemic while the U.S. economy was surprisingly strong.

-

The Federal Reserve is now expected to cut rates by 25 basis points as early
as September and perhaps again in December, a recent shift from an outlook
that feared the U.S. central bank might even raise rates again to tame
"sticky" inflation.

The economic picture is changing somewhat in the second quarter and dollar
strength could fade with weaker employment data as suggested by last week's
jobless claims, said Kaspar Hense, senior BlueBay portfolio manager at RBC
GAM in London.

-

"We think the data is softening a bit, not only inflation but also the labor
market," Hense said. However, "there is a question mark on inflation and if
inflation will be constantly and significantly higher in the U.S. as it has
been."

The consumer price index on Wednesday is expected to show core CPI rose 0.3%
month-over-month in April, down from 0.4% the prior month, according to a
Reuters poll.

The Fed will cut its key interest rate twice this year, starting in
September, according to a stronger majority of economists polled by Reuters
who broadly raised their inflation forecasts for a second consecutive month.

"The dollar seems to be driven by rates to a large extent. Some of the
dollar strength could fade into weaker employment data," Hense said.

-

-

While the market expects inflation to decelerate, Fed Vice Chairman Phillip
Jefferson said on Monday that until it's clear price pressures are
moderating, he supports holding rates steady.

U.S. retail sales also will be reported on Wednesday and industrial
production on Thursday.

-

Marc Chandler, chief market strategist at Bannockburn Global Forex in New
York, said softer CPI, softer retail sales and softer industrial production
should weigh on the dollar because it helps reaffirm the cap on interest
rates.

"We should also get more data in the coming days that Europe is recovering,"
he said, referring in particular to the ZEW indicator for economic sentiment
in Germany.

Markets are pricing in about an 80% chance policymakers will cut rates when
they meet in September, with almost 44 basis points (bps) of reductions in
total expected in 2024, LSEG data shows.

The dollar index , which measures the U.S. currency against a basket of six
peers, fell 0.11% to 105.20, while the euro was up 0.16% at $1.0788.
Sterling was up 0.27% at $1.2558 before labor market data on Tuesday.

INTERVENTION JITTERS

Regarding the yen, traders are wary of the continuing risk of currency
intervention by Japanese authorities.

The dollar has again crept up against the yen after a 3% decline early in
May, its steepest weekly percentage drop since early December 2022 after two
bouts of suspected intervention by Japanese authorities to strengthen its
currency.

The spikes in yen strength appear to have spooked some yen bears, at least
for now.

The dollar strengthened against the yen 0.26% to 156.20, its strongest since
May 2.

The yen was briefly supported when the Bank of Japan sent a hawkish signal
by cutting its offer amount for a segment of Japanese government bonds in
the Asian morning.

China's offshore yuan rose 0.07% to 7.2399 while the onshore yuan fell to
its lowest since April 30 at 7.2332, as traders waited for the United States
to announce new China tariffs.

The Chinese central bank said over the weekend that new bank lending fell
more than expected in April and broad credit growth hit a record low.

Separate data on Saturday showed Chinese consumer prices rose in April while
producer prices extended declines.

Bitcoin gained 3.69% at $62,713.00.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices drift higher as key US inflation data looms

(Reuters) - Gold prices drifted up on Tuesday, with the spotlight shifting
to key inflation reports due this week, which could offer more insights on
the pace and scale of the U.S. Federal Reserve's interest rate cuts this
year.

Spot gold was up 0.4% at $2,344.39 per ounce by 0557 GMT after falling 1% on
Monday.

U.S. gold futures rose 0.3% to $2,350.00.

-

The U.S. producer price index data is scheduled for release at 1230 GMT,
followed by the consumer price index on Wednesday. The CPI data is expected
to show core inflation rose 0.3% month-over-month in April, down from 0.4%
the prior month, according to a Reuters poll, pulling the annual rate down
to 3.6%.

-

"If gold manages to hold above $2,320- $2,330 range, that is a sign of
positiveness. That means short-term momentum will be bullish and with that
support after a weaker CPI data, potentially gold could test the all-time
high level in the short-term," said Kelvin Wong, a senior market analyst for
Asia Pacific at OANDA.

However, currently "gold prices are supported by ongoing stagflationary risk
scenario that is kind of ignoring the whole higher cost of holding gold."

-

Bullion is known as inflation hedge but elevated interest rates reduce the
opportunity cost of holding gold.

Last week's weak jobs report and a softer-than-expected U.S. payrolls report
for April have increased expectations for rate reductions this year. The Fed
will cut its key interest rate twice this year, starting in September,
according to a stronger majority of economists polled by Reuters.

Spot silver rose 0.8% to $28.41 per ounce and palladium gained 0.8% to
$968.43.

Platinum was up 0.6% to $1,002.90, after hitting a near one-year peak on
Monday.

BHP Group(BHP.AX), opens new tab is likely to sweeten its $43 billion
takeover offer for Anglo American for a second time and possibly add cash,
investors in both companies said, after the London-headquartered target
rejected a higher bid.

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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