Bulls n Bears Daily Market Commentary : 21 May 2024

Wed May 22 03:42:29 CAT 2024

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Bulls n Bears Daily Market Commentary : 21 May 2024

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

ZSE records ma rginal gains...

The ZSE market recorded marginal gains as the primary All Share Index gained
0.07% to 95.62pts while, the Blue-Chip Index fell 0.47% to 93.81pts. The
Agriculture Index added 1.04% to 93.74pts while, the Mid Cap Index edged up
1.15% to 99.23pts. FMP headlined the top performers of the day on a 14.86%
jump to $0.3170, followed by insurer Fidelity that climbed 13.80% to
$0.6600. Seed producer Seed Co surged 9.05% to $1.8286 while, Proplastics
advanced 4.58% to close at $0.4000. Fintech group Ecocash Holdings led the
laggards of the day on a 13.66% drop to $0.1761 while, banking group FBC

$0.0070 while, Turnall eased 1.45% to $0.0271. Nampak capped the top five
lo.sers of the day on a 0.46% slide to end the day pegged at $0.4400. The
market closed with a positive breadth of six after fourteen counters
recorded gains against eight that faltered .

Activity aggregates were mixed in the session as volume traded declined
22.59% to 550,600 shares while, value outturn grew 93.53% to $1.53m. The top
volume drivers of the day were Delta (30.48%), Econet {22.94%) and Dairibord
(20.96%). The threesome of Delta and Econet contributed a shared 88.84% to
the total value traded. A total of 6,440 units exchanged hands in the ETF
section. MIZ ETF tumbled 15.00% to $0.0085 while, OMTI ETF was unchanged at
$0.1100 as 1,440 units traded. Revitus REIT edged up 2.33% to $0.2200 while,
Tigere REIT closed 0.82% higher at $0.6351.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets 

South Africa

South African rand firms to 10-month high a week before election

(Reuters) - The South African rand strengthened to a 10-month high on
Tuesday, a week before a general election, with analysts citing rising
expectations that the outcome of the vote was unlikely to disrupt markets.

At 1601 GMT, the rand traded at 18.0750 against the dollar , 0.62% stronger
than its previous close. It earlier firmed to 18.0300, a level not seen
since August last year.

The dollar index was last trading around 0.05% stronger against a basket of
global currencies.

-

A tracking poll by think-tank Social Research Foundation showed support for
South Africa's governing African National Congress has risen in the weeks
leading up to the May 29 election, suggesting it may only need a small
coalition partner or could even win a majority.

"There is little doubt that the global environment has played a role, but
the market's positive mood vis-a-vis the ZAR seems to be due mostly to the
optimism around a market-friendly election outcome," said HSBC in a research
note.

-

Earlier on Tuesday, data from the central bank showed South Africa's
composite leading business cycle indicator fell 1.9% month-on-month in
March.

The indicator collects data on business confidence, money supply and other
factors and hints at the outlook for the economy.

On the stock market, the Top-40 (.JTOPI), opens new tab index closed 0.4%
lower.

South Africa's benchmark 2030 government bond was stronger, with the yield
down 3 basis points to 10.270%.

Nigeria

Nigeria's central bank raises benchmark rate to 26.25%

(Reuters) - Nigeria's central bank raised its benchmark lending rate by 150
basis points to 26.25% from 24.75% NGCBIR=ECI, in a decision announced on
Tuesday.

Analysts had widely predicted another hike given inflation has continued to
soar and the local naira currency NGN=D1 has been highly volatile.

The decision is the third rate increase this year, after hikes of 200 basis
points in March and 400 basis points in February.

Inflation reached a 28-year high of 33.69% year-on-year in April NGCPIY=ECI,
spurred by the government slashing petrol and electricity subsidies and
twice devaluing the naira. 

 <mailto:info at bulls.co.zw> 

Global Markets

FOREX Dollar firm as Fed officials urge patience on rate cuts

(Reuters) - The U.S. dollar edged up against the euro on Tuesday, as Federal
Reserve policymakers said it is prudent for the U.S. central bank to wait
several more months to ensure that inflation really is back on a path to the
2% target before commencing interest rate cuts.

Against other currencies, the greenback was mostly flat ahead of the U.S.
Memorial Day holiday next week.

"Amid a paucity of economic data catalysts this week, trading ranges have
narrowed across currency markets. The dollar remains on a solid footing
however, bolstered by a drumbeat of high for long messages from Fed
officials," said Karl Schamotta, chief market strategist, at Corpay in
Toronto.

-

Fed Governor Christopher Waller told the Peterson Institute for
International Economics in Washington, on Tuesday, he would need to see
several more months of good inflation data before he would be comfortable
supporting an easing in the stance of monetary policy.

Waller, however, did put a pin in any speculation that interest rates may
need to rise again for demand to soften enough to ease price pressures
further, saying the latest inflation data is "reassuring" and the
probability of a rate hike is "very low."

-

Atlanta Fed Chair Raphael Bostic also spoke on Tuesday and warned against
cutting rates too quickly. The Fed, he said, needs to be cautious about
approving its first rate cut to be sure it does not touch off pent-up
spending among businesses and households, and put the central bank in a
position where inflation starts "bouncing around."

"Fed speakers are driving the market - and they, so far, haven't said
anything traders didn't expect," said Helen Given, FX trader, at Monex USA
in Washington.

"Barring a surprise from the FOMC (Federal Open Market Committee) minutes
tomorrow afternoon, it's likely that this could stay a fairly quiet week."

Fed Chair Jerome Powell, in his press briefing after the Fed held rates
steady earlier this month, also ruled out rate hikes.

"What that does is it takes out the tail-risk scenario that the Fed is still
thinking about hikes because they are effectively questioning their
assumption that rates are restrictive enough," said Vishal Khanduja, co-head
of Broad Markets Fixed Income at Morgan Stanley Investment Management.

The euro was 0.05% lower at $1.0852.

Investors will be watching Thursday's data from the European Central Bank
negotiated wage tracker and the euro zone Purchasing Managers' Index which
could provide further clues about the monetary cycle in the euro area.

On Tuesday, the U.S. currency slipped 0.04% against the Japanese yen to
156.20.

This dollar-yen pair has moved in tight ranges in the past couple of trading
days after a tumultuous start to May in the wake of suspected rounds of
currency interventions by Tokyo to prop up the yen.

Fears of intervention from Japanese authorities have deterred traders from
pushing the yen to new lows. The yen dropped to more than 160 per dollar on
April 29, its weakest in 34 years.

CRYPTO GAINS

In cryptocurrencies, ether was set for its largest two-day gain in nearly
two years and bitcoin approached a record high on speculation about the
outcome of applications for U.S. spot exchange-traded funds that would track
the world's second-biggest cryptocurrency.

Ether was 6.5% higher at $3,728.70 after earlier hitting $3,838.80, its
highest level since mid March. It surged nearly 14% in the previous session
- its largest daily percentage gain since November 2022.

Bitcoin broke above the $70,000 level and was last trading up 0.25% higher
at $69,707. It hit its all-time high at $73,803.25 in March.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold retreats from peak high amid Fed wary stance

Gold price retraces during Tuesday's North American session after hitting an
all-time high of $2,450. Yet it retreated below the April 12 high of $2,431
as the Greenback recovers some ground. A scarce economic docket keeps
traders leaning on Fedspeak, which remained cautious of signaling the
beginning of rate cuts.

The XAU/USD trades at $2,418, down 0.28% after reaching a high of $2,433.
Wall Street indices remain in the green, a headwind for the safe-haven
status for the golden metal. Even though it's sought as a "hedge" for
inflation, investors seem reluctant to give away profits from the US stock
market.

Additionally, officials of the Federal Reserve (Fed) continued to cross the
wires and adhere to its stance of keeping interest rates on hold until the
disinflationary process evolves.

Despite that, US Treasury bond yields edged lower. The US 10-year benchmark
note dropped three-and-a-half basis points to 4.41%, while the 10-year yield
on the Treasury Inflation-Protected Securities (TIPS), which correlates
inversely to Gold prices, dropped three basis points to 2.081%.

Data from the Commodities Futures Trading Commission (CFTC) showed that
hedge funds boosted bullish bets on Gold futures to a three-week high in the
week ending May 14.

The US economic docket during the week before the latest Fed meeting minutes
was released on Wednesday. On Thursday, US Initial Jobless Claims are
expected to show the labor market is cooling, along with the Chicago Fed
National Activity Index.

Daily digest market movers: Gold price falls despite falling US yields
following hawkish Fed comments

Gold price retreats amid falling US Treasury yields and a weaker US Dollar.
The US Dollar Index (DXY), which tracks the Greenback's performance against
a basket of six other currencies, is virtually unchanged at 104.64, putting
a lid on XAU/USD prices.

Last week's inflation data showed that underlying prices are easing. That
reignited traders' expectations that the US central bank would resume easing
policy. However, they must be cautious as Fed officials pushed back against
just one reading that inflation is moderating.

Atlanta Fed President Raphael Bostic stated that he is not in a hurry to
reduce interest rates and prefers to keep them steady, emphasizing that the
Fed's top priority is still addressing inflation.

Fed Governor Christopher Waller acknowledged that April's CPI showed
progress but mentioned that he needs to see several months of favorable
inflation data before he can support a rate cut. Meanwhile, Michael Barr,
the vice-chair of supervision, remarked, "We still need to finish the job on
inflation."

On Monday, Vice-Chair Philip Jefferson said it's too easy to tell when the
disinflation process will resume while stating that the policy rate is
restrictive. Cleveland Fed President Loretta Mester stated that inflation
risks are tilted to the upside.

Data from the Chicago Board of Trade shows investors are expecting 35 basis
points of Fed easing toward the end of the year.

Technical analysis: Gold price slides below $2,450 as bears target $2,400

Gold's uptrend remains intact, but a daily close below the May 20 low of
$2,407 could pave the way for a pullback. That event could form a 'dark
cloud cover,' a two-candle chart pattern that implies the XAU/USD can print
a leg down before extending its rally.

Momentum is on the back of buyers as depicted by the Relative Strength Index
(RSI) in bullish territory. However, the RSI is aiming lower, and once it
clears the 50-midline, look for further declines.

On the upside, XAU/USD's first resistance would be the April 12 high of
$2,431, followed by the all-time high of $2,450.

Conversely, if XAU/USD retreats below $2,400, that could expose the May 13
low at $2,332, followed by the May 8 low of $2,303. Once those levels are
surpassed, the 50-day Simple Moving Average (SMA) at $2,284 will be up next.

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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