Daily Trading Update

Published News

Can Zim cash in on the gold price rally?

Zimbabwe’s mineral commodity producers will enjoy limited benefit from the current upsurge in international prices as it is nearly impossible to ramp up production in the short term, industry experts have said. Commodity markets are being squeezed from increased demand as economies recover from the coronavirus pandemic as well as the impact from geopolitical factors that are affecting supplies. As a result, prices for metals and other internationally traded commodities are climbing at the fastest rate since 1995, pointing to a very good year for producers. Gold extended its rally towards a record high on Tuesday, after investors made a beeline for the traditional safe-haven metal on mounting fears around the Russia – Ukraine crisis. While the gold price has since retreated below US$2 000 per ounce, it is still trading 15.16 percent higher than a year ago. As at mid – morning yesterday, the gold price was up 2,44 percent for the week. Gold miners are expected to benefit from the rush to safe haven amid the Ukraine crisis.

Fuel price hike sparks mayhem.

The recent increase in the prices of fuel has triggered a massive hike in prices of most basic commodities. The Zimbabwe Energy Regulatory Authority on Wednesday increased fuel prices for the second time in five days, with petrol going up from US$1,51 per litre to $1,67 and diesel from US$1,51 per litre to US$1,68. Confederations of Zimbabwe Retailers president Denford Mutashu implored government to focus on internal alternatives through sourcing and production to curtail the negative economic reflex triggered by the Russo – Ukraine war. “We should brace for price increases on basic and non – essential products as the global geopolitics play out triggered by the Russian – Ukraine war. It is high time we focus on internal alternatives through domestic sourcing and production. Prices of fuel and gas are set to remain unstable for the unforeseeable future although there is relief from the intervention of the Arab world that has committed to increase production and supply of crude oil”

Market Commentary

“The ASI continue trading in the red zone”

As sellers continue to dominate the market, the ZSE ASI fell another 50 basis points to close the session at 14655.18 points. The amount of market activity surged substantially, with $553 million in shares changing hands. Delta, the telecommunications behemoth, topped the value aggregates with ZWL$217 million in trades, while FCB, the commercial bank, dominated the volume aggregates with 3.3 million shares traded. Econet received $70.3 million and Hippo $39.3 million in other notable exchanges. Market sentiment was adversely biased, with 20 of the 40 equities rising, ten falling, and ten remaining unchanged, as indicated by market breadth. The plastics company outpaced the market by 11.11 percent, while the reinsurer recovered from previous day losses by 7.06 percent to $3.91. Afdis is up 6.67 percent, while Wildale, the brickmaker, is up 3.97 percent to $2.96.

On the other hand, the hoteliers African Sun slipped 12.62%, while NMB lose steam trading in the red zone, subtracting 10.72 percent to settle at $12.49. FMP stock dropped 4.95 percent, while Star Africa stock dropped 7.51 percent. Meanwhile, the Russia-Ukraine conflict has brought some good fortune to the nickel miners, with Bindura trading just on the circuit breaker, jumping by 20%, boosted by the recent spike in nickel prices on the global market.


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