Weaker US dollar spurs metal prices

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Interest rates
During the first week of February, average deposit rates for savings deposits and deposits of one and three months tenors closed the week lower than the previous week, at 2,93%, 6,57% and 7% respectively.

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Commercial bank weighted lending rates for individual and corporate clients stood at 11,64% and 7,3%, respectively.

Clearing and settlement activity
During the week, ending February 5, the total value of transactions processed through the National Payment System (NPS) amounted to US$1 036,6 million, down from US$1 171,43 million registered in the previous week.

Transactions processed through the Real Time Gross Settlement (RTGS) system posted a 23% decline to close the week at US$748,36 million, from US$968,73 million recorded during the previous week.

In value terms, RTGS payments continued to dominate the NPS, accounting for 72,19% of the total value of transactions processed through the system. Mobile, automated teller machines (ATMs), point of sale (POS) and cheque transactions accounted for the rest of the NPS transactions.

Mobile-based transactions accounted for 87,66% of total transactions in volume terms, followed by POS, 6,49%; ATMs, 4,96%; RTGS, 0,76%; and cheques, 0,13%.

International commodity price developments

The international commodity prices of gold, platinum, copper and nickel firmed during the week. Crude oil prices, however, retreated.

The weekly average price of gold increased by 2,1% to US$1 136,41, on the back of a weaker US dollar, amid dampened expectations of further US interest rate hikes in 2016.

Platinum prices firmed by 0,6% from a weekly average of US$879,30 per ounce in the previous week, to an average of US$884,50/oz during the week. A weaker US dollar supported the firming of prices of the precious metal.

Copper prices increased by 0,4% from a weekly average of US$4 592,60 per tonne in the previous week, to close the week at an average of US$4 609,20/t. This was on the back of concerns over weakening demand in China as well as anticipated production cuts in Chile, the largest producer.

Nickel prices registered a 1,3% increase from the previous week, to a weekly average of US$8 473/t during the week. This was largely on account of a weakening US dollar, coupled with efforts by major producers to curtail production in order to shore up prices of the metal.

Crude oil prices stood at a weekly average of US$34,42/barrel during the week, down from US$35,74/barrel recorded in the previous week. Prices were weighed down by the build-up in US inventories.

Equity markets
The ZSE registered losses in some mid-cap and heavyweight counters. Consequently, the industrial index shed 1,37 points (1,33%), from 103,04 points in the previous week, to 101,67 points during the week under review. The mining index, however, remained unchanged at 19,53 points for two consecutive weeks.

The mainstream index was dragged downwards by losses in Lafarge (19,86%), PPC (16,67%), Econet Wireless (4,01%), TSL (1,82%), Zimre Holdings (1,54%) and Delta Corporation (1,36%).
Market turnover and volume

Traded volumes declined by 59,64%, from 16,1 million shares in the previous week to 6,5 million shares, due to depressed demand during the week under review. In tandem, the turnover value declined by 46,97% to US$1,73 million.

Market capitalisation
The market lost US$36,5 million worth of share value, reflecting a 1,31% decline in market capitalisation, to close the week under review at US$2 753,94 million.

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