Bulls n Bears Daily Market Commentary : 15 May 2024

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Bulls n Bears Daily Market Commentary : 15 May 2024

 

 	

 

 

 	


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

 

Delta anchors activity aggregates ...

Beverages concern Delta anchored the volume and value aggregates as 216,302
shares worth $1.54m exchanged hands. The trades represented 53.22% of the
tota l volumes traded and 96.58% of the turnover . Other notable volume
drivers of the day were Star Africa and Zimre Holdings with respective
contributions  of  21.98%  and  14.82%. Volumes  declined

94.28% to 404,900 shares while, turnover dipped 83 .62% to

$1,584,295.23. Cumulatively, 35,475 units worth $757.25 exchanged hands in
three ETFs, with no price movement being registered on the bourse. The
Tigere REIT ticked up 0.06% to

$0.5950 while, the Revitus Property Opportun ities slipped 4.55% to $0.2100.

 

 

 

Marginal gains were recorded on the bourse in mid-month trades as the
All-Share Index put on 0.33% to 94.86pts while, the ZSE Top Ten Index
charged 0.62% to 93.13pts. The ZSE Agriculture Index added 0.16% to 90.21pts
while,the Mid Cap Index rose 0.94% to end pegged at 97.15pts. Gainers of the
day were  led  by  First  Mutual  Holdings  that  jumped  8.04% to

$1.9050 trailed by, Meikles that surged 4.55% to $2.3000. Hippo improved
0.85% to $3.5400 while, Econet advanced 0.74% to settle at $1.2593 . Brick
makers Willdale capped the top five winners of the day on a 0.28% lift to
$0.0352. Partially mitigating today's gains were losses in property concern
FMP that succumbed 7.69% to $0.2400. Star Africa followed on a 4.41% tumble
to $0.0086 as Ecocash trimmed 2.44% to end at $0.2341. OK Zimbabwe let go
0.09% to $0.5295 while, Delta retreated 0.02% to $7.1005 ahead of its
analyst briefing this afternoon.

 

 

VFEX All Share lnde>< tumbles...

The VFEX All-Share Index trimmed 0.89% to close at 98.89pts weighed down by
First Capital, Axia and Padenga. Banking group First Capital lost 17.93% to
trade at $0.0206 while, Axia shed 7.76% to $0.0701. Padenga retreated 3.67%
to settle at $0.3495 . lnnscor rose 1.81% to $0.4324 as African Sun stepped
up 1.58% to $0.0641. Fast foods group Simbisa added 0.03% to $0.3495.

 

Activity aggregates were depressed in the session as seen in volumes traded
that dropped 9.14% to 1,414,532 shares while, value outturn plunged 90.13%
to $62,065.25. Volume drivers of the day were First Capital, Axia and
Padenga that claimed a combined 99.64% of the outturn. Value drivers of the
day were First Capital, Axia and Padenga with respective contributions of
33.57%, 33.02% and 28.99%.efesecurities

 

 <mailto:info at bulls.co.zw> 

 

 

Global Currencies & Equity Markets

 

South Africa

 

South African rand firms after local retail sales, US inflation data

(Reuters) - South Africa's rand held onto its gains on Wednesday, after
encouraging domestic retail sales figures and a U.S. inflation report.

At 1400 GMT, the rand traded at 18.3525 against the dollar , 0.22% stronger
than its previous close.

The dollar index was last trading down 0.25% against a basket of currencies.

 

U.S. consumer prices increased less than expected in April, boosting
expectations that the Federal Reserve may cut interest rates in September.

 

South African retail sales rose 2.3% year on year in March after decreasing
by a revised 0.7% in February, Statistics South Africa figures showed.

 

On the stock market, the Top-40 index (.JTOPI), opens new tab was trading
0.8% higher while the broader all-share (.JALSH), opens new tab index was up
0.7%.

 

South Africa's benchmark 2030 government bond was stronger, with the yield
down 10 basis points at 10.415%.

 

 

 

Nigeria

 

Naira loses grip in black market as U.S dollar takes front foot

The U.S dollar index was back on the front foot on Wednesday, making modest
gains after earlier losses from renewed bets on Federal Reserve rate cuts
this year, while the naira traded near its low amid high demand for the
haven currency in Africa's largest economy

 

At the NAFEM spectrum, the naira dropped to N1,416.57 per dollar from
N1,354.21 per dollar on Monday, according to data from FMDQ

 

On the black market, the value of the Naira dropped from N1,410 per dollar
on Monday to N1,415 per dollar on Tuesday.

 

 

Consequently, the rate differential between NAFEM and the parallel market
dropped from N55.79 per dollar on Monday to N1.57.

 

Price action highlights naira short sellers have taken control in May, amid
dwindling FX liquidity, as the bears station on the N1400 price support. The
other reason is profit-taking among Nigerian naira holders who have started
to move back to the greenback despite Economic and Financial Crimes
Commission (EFCC) clampdown on currency traders in Abuja and Lagos.

 

The Securities and Exchange Commission (SEC), acting on behalf of the
Federal Government, plans to delist the naira from all peer-to-peer
cryptocurrency platforms to stabilize the country's foreign exchange market
amid the crackdown on digital assets traded through unofficial channels.

 

This move coincides with the FG's increased efforts to combat dollar
racketeering and exchange rate manipulation.

 

The nation's financial watchdog stated certain entities manipulated the
value of the naira and the exchange rate through the usage of P2P networks.

 

Emomotimi Agama, the recently appointed SEC DG, verified that the government
was working on a new set of regulations to control the cryptocurrency
industry.

 

U.S dollar index resumes bullish trend

The U.S. dollar index, which measures the greenback's strength against the
Japanese yen, Euro, British pound sterling, and three other major peers,
rose by 0.14% to 105.5 index points, adding to Tuesday's 0.3% advance.

 

Despite last week's Non-Farm Payroll (NFP) data falling short of
expectations, the price action indicates that the US dollar is likely to
find support this week.

 

The dollar has continued its upward trend despite a weaker-than-expected
jobs report and Federal Reserve officials' attempts to allay talks of a rate
hike.

 

Although the U.S. central bank has reinforced expectations that rates would
likely drop by year's end, investors are still closely monitoring it and the
timing of Fed rate cuts, which will likely impact currency movements and
further strengthen the greenback against most currencies, including the
naira.

 

The amount of rate cuts priced into the market has not changed, despite
Minneapolis Fed President, Neel Kashkari's comments on Tuesday that it is
premature to declare that inflation has stopped.

 

On Monday, additional Federal Reserve members reiterated statements made by
Federal Reserve Chair Jerome Powell on Wednesday about the ongoing
improbability of rate increases.

 

Interest rates will be lowered "eventually" by the central bank, according
to New York Fed President John Williams, but he did not specify when.

 

Thomas Barkin, a top Fed official, also stated that the current interest
rate environment is sufficiently restrained to cool the U.S. economy and
return inflation to the central bank's target of 2%. This week's economic
schedule is light, with the University of Michigan's consumer sentiment
index on Friday serving as the focal point.

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Market

 

Dollar swoons after data suggests rate cut in September

(Reuters) - The dollar slumped against major currencies on Wednesday after
U.S. consumer prices in April showed inflation had resumed trending lower in
the second quarter, raising hopes the Federal Reserve can deliver an
interest rate cut as early as September.

Also boosting optimism that the Fed was closer to a rate cut was a reading
of U.S. retail sales that was unexpectedly flat last month, as higher
gasoline prices pulled spending away from other goods in a sign the consumer
was retrenching a bit.

 

After inflation proved "sticky" in the first quarter, with housing rental
rates and other prices remaining stubbornly high, the market welcomed the
CPI data. But slowing retail sales provided the real news for the market.

"You go to see the lead actor in the movie, but the supporting actor steals
the show and it's retail sales, which is really driving the price action
today across the board," said Roosevelt Bowman, senior investment strategist
at Bernstein Private Wealth Management in New York.

 

The Australian dollar and other currencies known as high-beta because of
their volatility performed well, he said.

"Some of the higher-beta currencies that have been under pressure this year,
that have been favorite sell positions against the dollar, they're doing
quite well today," he said.

 

However, Bowman said the day's data wouldn't change the Fed's outlook on
near-term inflation but led the market to buy duration in the form of
Treasuries and to sell the dollar.

 

The Australian dollar gained 0.97% to 0.6687, while the Mexican peso rose
0.81% to 16.6971 per dollar.

Futures traders priced in a higher probability of rate cuts, with 24 basis
points seen for when the Fed meets in September, and almost 51 bps of cuts
by December, according to LSEG data.

 

The dollar index , which measures the greenback against a basket of major
currencies including the yen and the euro, fell to a fresh one-month low at
104.30, and was last 0.66% lower at 104.35.

 

One of the dollar's biggest declines was against the yen as it weakened
0.96% to 154.94. The drop would likely keep at bay currency intervention by
the Bank of Japan and Japanese other authorities, said Marvin Loh, senior
global macro strategist at State Street in Boston.

"The BOJ is going to like the dollar-yen at 155 again," he said. "The fast
money was definitely willing to push the dollar again higher after the
intervention."

The dollar's surge to a 34-year peak of 160.245 yen on April 29 triggered
two rounds of aggressive yen buying that traders and analysts suspect was
the work of the BOJ and Japan's Finance Ministry.

 

The consumer price index rose 0.3% last month after advancing 0.4% in March
and February, the Labor Department's Bureau of Labor Statistics said. In the
12 months through April, the CPI increased 3.4% after climbing 3.5% in
March.

Economists polled by Reuters had forecast the CPI gaining 0.4% on the month
and advancing 3.4% year-on-year.

 

The unchanged reading in retail sales last month followed a slightly
downwardly revised 0.6% increase in March, the Commerce Department's Census
Bureau said on Wednesday. Retail sales were previously reported to have
risen 0.7% in March.

 

Fed Chair Jerome Powell gave a bullish assessment on Tuesday of where the
U.S. economy stands, with an outlook for continued above-trend growth and
confidence in falling inflation that, while eroded by recent data, remains
largely intact.

 

In other major currencies, the euro rose 0.52% to $1.0877 and sterling rose
0.69% to 1.2675.

The dollar dropped 1.3% to 10.6729 versus the Norwegian krone after hitting
10.6671,its lowest level since April 10, with analysts saying the gap
between U.S. and Norwegian rates might have peaked.

 

Bitcoin rose 6.12% to $65,397.00.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold rally continues with buyers eyeing $2,400 as inflation recedes

Gold price extended its uptrend for the second straight day on Wednesday and
hit a three-week high of $2,390 after data revealed by the US Bureau of
Labor Statistics (BLS) showed inflation is ebbing, increasing the odds for a
Federal Reserve (Fed) rate cut in 2024. Hence, US Treasury bond yields are
plunging, while the Greenback tumbles to a five-week low as depicted by the
US Dollar Index (DXY).

 

The XAU/USD trades at $2,384 and gains more than 1%. Despite standing above
3% on an annual basis, consumer inflation slowed in monthly figures, easing
pressure on the Fed. US Treasury yields along the short and long ends of the
curve are diving between 8 and 10 basis points.

 

 

Other data announced by the US BLS witnessed a deterioration in consumer
spending, as Retail Sales in April remained unchanged at 0% MoM, below
estimates of a 0.4% increase.

 

Elsewhere, Fed officials continued to make headlines. Minneapolis Fed
President Neel Kashkari said that with higher government debt, it might take
higher borrowing costs in the near term to achieve 2% inflation. He said
he's surprised by consumers' spending and added that the big question is
"how restrictive monetary policy is."

 

Daily digest market movers: Gold shines amid dropping US yields as rate cut
expectations rise

Gold prices are underpinned by lower US Treasury yields and a battered US
Dollar. The US 10-year Treasury note yields 4.352% and is down 9 basis
points (bps) from its opening level. DXY falls 0.66% to 104.33.

On Tuesday, Fed Chair Jerome Powell commented that he expects inflation to
continue heading lower but wasn't as confident about the disinflation
outlook as he had previously been.

BLS reveals that April's Consumer Price Index rose by 0.3% MoM, below
estimates and March's 0.4%. Core CPI rose by 0.3% MoM as expected but
beneath the prior reading of 0.4%.

Other data showed that Retail Sales missed estimates of 0.4% and came at 0%
MoM, below March's 0.6%. In the twelve months to April, Retail Sales grew by
3%, below the 3.8% increase of the previous reading.

Further data will be featured during the week, led by Initial Jobless Claims
and Industrial Production on May 16.

The New York Federal Reserve released its monthly Survey of Consumer
Expectations on Monday, showing that the year's inflation expectations
increased to 3.3% vs. 3% in March. The data came after the University of
Michigan Consumer Sentiment poll showed that inflation expectations for a
one-year outlook rose from 3.2% to 3.5%.

Interest rate cut expectations toward the end of the year edged up from 35
basis points on Tuesday to 42 bps, according to data provided by the Chicago
Board of Trade.

Technical analysis: Gold price clears May 10 high, on its way towards $2,400

 

 

Gold price's rally was prolonged for the second straight day, yet it was shy
of challenging the $2,400 figure. Once buyers surpassed $2,378, the May 10
high paved the way for a new trading range within the $2,380 to $2,400
range.

 

Momentum favors buyers as the Relative Strength Index (RSI) remains bullish
with readings above 60. Therefore, the path of least resistance is upward.

 

That said, the XAU/USD first resistance would be $2,400. Once surpassed, the
immediate supply zone would be the April 19 high at $2,417, followed by the
all-time high at $2,431.

 

Conversely, if sellers moved in and pushed prices below $2,359, that could
sponsor a leg down toward the May 9 low of $2,306, followed by the $2,300
figure. Once surpassed, the next stop would be the 50-day Simple Moving
Average (SMA) at $2,249.

 

 

 

 

 

 

 


 

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 

 

 

 Invest Cellphone:            +263 71 944 1674 | +27 79 993 5557 

Email:               bulls at bullszimbabwe.com

Website:            www.bullszimbabwe.com 

Blog:                 www.bullszimbabwe.com/blog

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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
Faith Capital (Pvt) Ltd for general information purposes only and does not
constitute an offer to sell or the solicitation of an offer to buy or
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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 

 	

 

 

 	


 (c) 2024 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

 

 	

 

 

 	
							

 

 

 

 

 

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