Bulls n Bears Daily Market Commentary : 07 January 2025

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Bulls n Bears Daily Market Commentary : 07 January 2025

 

 	



 

 	


ZSE commentary 

 

Zimre's 1.3% trade lifts ZSE volumes in another red session

 

HARARE - A 1.32% trade of Zimre Holdings shares helped sustain turnover in
another lacklustre Zimbabwe Stock Exchange session on Tuesday.

A total of 24 million ZHL shares, making up just above a percent of the
group, exchanged hands, helping lift trading volumes for the day. The deal
was done by ABC Stockbrokers through a nominee company, but NSSA is the
buyer as it increased its shareholding in the group from 22%. The shares are
worth ZWG 3.37 million.

At close, total traded volume was 26.36 million shares, with turnover at
ZWG11.25 million. Trades were subdued at 151. It was Econet that led the
turnover contributions at ZWG3.42 million. Foreign sales were at ZWG146 768
against purchases of ZWG1 968. 

 

The All Share Index was down 1.61% to 209.72 in a session where gains were
quite restricted across the board with no stock rising above 3%.

Econet closed 9.87% lower to 283.45c, and FBC, which recently announced a
new credit line of US$30 million for exporters, dropped 4.97% to 950.30c.
EcoCash shed 0.69% to 28.17c. These losses saw the Top Ten Index fall 1.97%
to 207.16. Delta had a very fractional gain. 

 

The Medium Cap Index declined 0.62% to 209.4. Tanganda was the day's worst
performer after falling 14.99% to 215.20c and Star Africa lost 12.19% to
1.93c.

There were gains in Seed Co, which added 2.75% to 227.01c, and Nampak was up
a marginal 0.08% to 114c ahead of the finalisation of its transaction to
change major shareholders. Proplastics was 0.04% up to 148.25c. 

 

VFEX turnover was poor at US$3 487 after 184 851 shares exchanged hands.
The All Share was down to 101.22 from 101.79 yesterday. Edgars was the worst
performer, losing 10.57% to 1.1 US cents, and Axia, which is continuing with
its expansion drive on TV Sales & Home and Transerv, dropped 6.09% to 8.02c.

Simbisa closed 5.96% lower to 31.57 US cents. 

 

There were gains, however, in First Capital, up 3.80% to 4.37 US cents, and
Innscor, which added 1.73% to 45.96 US cents.finx

 

 

 <mailto:info at bulls.co.zw> 

 

South Africa

 

South African rand claws back as Trump tariff debate weakens dollar

 

At 0636 GMT, the rand traded at 18.5650 against the U.S. dollar, about 0.1%
firmer than its previous close. The greenback last traded about 0.1% weaker
against a basket of currencies.

South Africa's rand firmed early on Tuesday against a softer dollar on hopes
for less aggressive tariffs by U.S. President-elect Donald Trump when he
takes office later this month.

 

At 0636 GMT, the rand traded at 18.5650 against the U.S. dollar, about 0.1%
firmer than its previous close. The greenback last traded about 0.1% weaker
against a basket of currencies.

 

 

The Washington Post reported on Monday that Trump aides were exploring
tariff plans that would represent a marked softening from promises he had
made during his 2024 presidential campaign.

 

While the news initially weakened the dollar, Trump's subsequent denial
reversed some of the U.S. currency's declines.

 

"It helped bolster the ZAR's performance as it staged a recovery at the
start of the first full trading week of the year," said ETM Analytics in a
research note.

 

South Africa's benchmark 2030 government bond was slightly firmer in early
deals, with the yield down 2.5 basis points to 9.005%.

 

 

 

 

Nigeria

 

Naira gains 125/$ one month after EFEMS

Nigeria's currency has appreciated by N125 to a dollar one month after the
launch of the Electronic Foreign Exchange Matching System (EFEMS).

 

Analysts say this may be an indication that the naira's rebound journey has
just started, noting that the local curerency will have a positive run in
2025.

 

According to the Central Bank of Nigeria (CBN), the naira strengthened by 8
percent as the dollar was quoted at N1, 535 on January 3, 2025, as against
N1,660 traded on December 2, 2024, the official launch date of EFEMS
trading, indicating a N125 gain over the period.

 

The introduction of EFEMS was first announced by the CBN on October 3, 2024,
as part of a series of reforms aimed at addressing speculation and enhancing
transparency in Nigeria's foreign exchange market. This system was
specifically designed for authorised dealers operating within the Nigerian
Foreign Exchange Market (NFEM) and became operational on December 2, 2024,
after a successful two-week trial period conducted in November 2024.

 

Cardoso's Take

 

Olayemi Cardoso, governor of the CBN, highlighted the significance of this
reform, stating, "Over the past year, we have undertaken critical reforms to
unify Nigeria's exchange rate, eliminating distortions and restoring
transparency. This unification has enabled us to clear the outstanding
foreign exchange obligations, giving businesses-ranging from manufacturers
to airlines-the confidence to plan and invest in the future. To further
enhance the functionality of the foreign exchange market, we are introducing
an electronic FX matching system, which has proven effective in other
markets."

 

EFEMS' Positives

 

Ayodele Akinwunmi, who serves as a senior relationship manager at FSDH
Merchant Bank, attributed the recent improvements in the foreign exchange
market to the CBN's latest policy measures.

 

He emphasised that these policies have significantly enhanced both the
supply of foreign exchange and the transparency of market operations.
According to him, customers are now able to access foreign exchange more
readily to meet their financial obligations, and the prevailing exchange
rates are better aligned with market realities.

 

 

Akinwunmi also highlighted how seasonal factors, particularly the typically
lower demand for dollars during the Christmas holiday period, have played a
role in bolstering the naira's value during this time.

 

Similarly, Aminu Gwadabe, president of the Association of Bureaux De Change
Operators of Nigeria (ABCON), underscored the critical role of the CBN's
interventions in the EFEMS in influencing the naira's appreciation. He
emphasised the need to further enhance liquidity in the retail foreign
exchange market, particularly through the involvement of Bureaux De Change
(BDCs).

 

Gwadabe proposed that BDCs be utilised as strategic instruments to manage
exchange rate volatility effectively and to help achieve the exchange rate
targets set in the national budget. He expressed confidence that a more
robust engagement of BDCs in the market could contribute to greater
stability and predictability in exchange rates.

 

EFEMS' challenges remain

 

While EFEMS has delivered promising results, industry experts stress that
challenges remain.

 

Muda Yusuf, chief executive of the Centre for the Promotion of Private
Enterprise (CPPE), acknowledged the CBN's progress in stabilising the
foreign exchange market but pointed out that the unregulated black market
continues to pose significant hurdles.

 

"The measures taken by the CBN are yielding some positive results, but it is
a work in progress," Yusuf explained. "Speculators and manipulators in the
market are constantly devising new tricks, so this must be a continuous
effort."

 

 

The naira's recent appreciation comes after a turbulent year marked by
significant instability. In 2024, the currency experienced a sharp
depreciation, losing 40.9 percent of its value against the dollar in the
official market, despite an increase in external reserves. This decline
underscores the persistent challenges facing Nigeria's currency market, even
amid efforts to stabilise the economy.

 

The EFEMS initiative, while still in its early stages, represents a critical
step towards addressing these challenges, analysts say.

 

 

Dollar demand declines

 

Meanwhile, the dollar demand by various sectors of the Nigerian economy,
also referred to as foreign exchange (FX) utilisation, fell by 11 percent to
$5.7 billion in the third quarter (Q3) of 2024 from $6.4 billion in the
second quarter (Q2) of the same year, primarily driven by a reduction in
invisible transactions.

 

This marks a notable decline from the previous quarter, as FX usage for
non-physical transactions, which include services such as travel, insurance,
and remittances, saw a sharp drop of 32 percent, falling to $2.2 billion in
Q3 of 2024 from $3.3 billion in Q2 of 2024.

 

According to data from the CBN Quarterly Statistical Bulletin compiled by
FBNQuest, invisible transactions now account for approximately 39 percent of
total FX utilisation, down from 51 percent in Q2 2024. The financial sector,
which has historically been a dominant consumer of foreign exchange in this
category, was the key driver behind the steep quarterly decline.

 

The FX consumption by the financial services sector dropped by 34 percent
quarter-on-quarter (q/q), reaching nearly $2.0 billion ($1.99bn) in Q3 2024
compared to $3.03 billion in Q2, 2023.

 

 

On the other hand, foreign exchange demand for merchandise imports saw a
modest increase of 10.4 percent q/q, rising to $3.45 billion in Q3, 2024
from $3.12 billion in Q2, 2024. This uptick in demand for physical goods
brought the share of merchandise imports in total FX utilisation to about 61
percent, up from 49 percent in the previous quarter. Within this category,
the industrial sector emerged as the largest consumer, accounting for
roughly 53 percent of the total forex used for imported raw materials,
machinery, and equipment. Additionally, forex demand for food products- the
second-largest category in merchandise goods-rose by 16 percent
quarter-on-quarter to $633.6 million in Q3 2024 from $547.7 million in Q2
2024.

 

Overall, the trend in FX utilisation has shown a decline since the first
quarter of 2023, largely due to decreased demand following the substantial
devaluation of the Naira. However, with the CBN's continued efforts to
enhance FX liquidity and improve access to foreign currency, it is expected
that demand for dollars will see a modest rebound in the coming months. The
CBN's ongoing measures, including streamlining FX trading and boosting
market transparency, are anticipated to ease pressure on the foreign
exchange market and facilitate more stable access to foreign currency across
various sectors of the economy.

 

Naira Rebound in 2025

 

Zeal Akaraiwe, CEO at Graeme Blaque Advisory, in an interview with
BusinessDay, said 2025 could be a turning point for the naira.

 

"Personally, I maintain an optimistic outlook on the naira's trajectory and
believe the year could mark a significant turning point, reversing many of
the challenges that have weighed on the currency in recent years," Akaraiwe
said.

 

 

He said the optimism is underpinned by notable improvements in Nigeria's
macroeconomic environment.

 

According to Uche Uwaleke, director of the Institute of Capital Market
Studies at Nasarawa State University, "With increased domestic refining
capacity, we expect a significant decline in fuel imports, which will ease
pressure on foreign exchange demand and strengthen the naira."

 

He further highlighted the potential impact of increased earnings from the
export of petroleum products.

 

"As Nigeria boosts its export capacity, foreign exchange inflows will
improve, supporting the local currency," Uwaleke further said.

 

 

 

 <mailto:info at bulls.co.zw> 

 

Global Markets

 

Dollar firms as solid US data suggests Fed likely to slow easing cycle

(Reuters) - The dollar strengthened on Tuesday as U.S. economic data showing
a generally stable jobs market and a still robust services sector suggested
that the Federal Reserve will likely slow the pace of its current
rate-cutting cycle.

 

The greenback rose to a near six-month peak against the yen after the U.S.
data. It was last up 0.2% at 157.875 yen . Earlier in the global session,
the dollar hit its highest since July of 158.425 yen.

 

Data showed that U.S. job openings unexpectedly increased in November,
although hiring slowed during the month. Job openings, a measure of labor
demand, rose 259,000 to 8.098 million by the last day of November, according
to the Bureau of Labor Statistics' Job Openings and Labor Turnover Survey,
or JOLTS report. Hires, however, dropped 125,000 to 5.269 million in
November.

 

JOLTS

U.S. services sector activity also accelerated in December, while a surge in
a measure of prices paid for inputs to a near two-year high pointed to
elevated inflation. The Institute for Supply Management's non-manufacturing
purchasing managers index (PMI) increased to 54.1 last month from 52.1 in
November.

 

"The really big surprise in the report was the jump in the prices paid index
to an eleven-month high of 64.4 in December from 58.2 - perhaps this
reflects higher transportation costs or delivery charges in the holiday
season," wrote Dave Rosenberg, founder and president of Rosenberg Research,
in a note to clients.

"Suffice it to say that the (ISM) report was enough to push the markets to
now expect a little more than one Fed rate cut for the year, and that has
now been delayed to July from June."

 

Following the data, the U.S. rate futures market has priced in a 95% chance
of a pause in rate cuts this month, and a 4.8% probability of easing,
according to LSEG estimates. Rate futures have also implied just 37 basis
points of cuts in 2025, compared with two cuts expected under the Fed's "dot
plot" or rate forecasts.

 

Investors are also assessing whether President-elect Donald Trump's actual
policies on tariffs will be consistent with his hard-line rhetoric.

Market participants have been pricing in a scenario where the implementation
of widespread tariffs could boost U.S. inflation, potentially limiting the
Fed's ability to cut interest rates and thereby supporting the dollar.

 

But they wondered whether officials are preparing to water down some of
Trump's campaign promises. Trump on Monday denied a Washington Post report
that said his aides were exploring tariff plans that would only cover
critical imports.

Karl Schamotta, chief market strategist, at Corpay in Toronto thinks,
however, that the market is betting Trump "will ultimately implement a
narrower set of tariffs on major trading partners, and is downgrading U.S.
inflation and rate expectations in line with that."

In afternoon trading, the U.S. dollar index , which measures the currency
against six major units, rose 0.2% to 108.55, after dropping as low as
107.74 overnight, its weakest since Dec. 30.

 

On Jan. 2, the index hit a high of 109.58, a more than two-year peak, due to
expectations that Trump's promised fiscal stimulus, reduced regulation, and
higher tariffs would boost U.S. growth.

 

The euro, on the other hand, fell 0.4% to $1.0352 , extending its fall after
the economic numbers. The currency earlier rose after Tuesday's Eurostat
data showed inflation in the 20 nations sharing the euro rose to 2.4% last
month from 2.2% in November.

Meanwhile, euro zone households increased their inflation expectations in
November, an ECB poll showed. Inflation in the 20 euro zone nations picked
up to 2.4% last month from 2.2% in November, Eurostat said on Tuesday.

Investors are also looking to ahead to Friday's U.S. nonfarm payolls report.
A Reuters poll showed a consensus forecast of 160,000 in December, down from
227,000 new jobs created in November.

 

"The health of the U.S. labor market is paramount to expectations for the
Federal Reserve's actions this year so it's likely that, save for major news
on the incoming administration, we could see calmer FX waters through Friday
morning," said Helen Given, FX trader, at Monex USA in Washington.

 

In cryptocurrencies, bitcoin tumbled more than 5% to $96,322.43, after
earlier hitting a three-week high.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets

 

Gold gains after US dollar slides as markets mull Trump tariffs

 

Gold prices rose on Tuesday on a weaker U.S. dollar as traders pondered
whether President-elect Donald Trump's tariff plans would be less aggressive
than expected, while investors awaited U.S. jobs data to gauge the Federal
Reserve's interest rate trajectory.     

 

Spot gold was up 0.4% at $2,644.79 per ounce, as of 0548 GMT. U.S. gold
futures rose 0.3% to $2,655.00.

 

 

"Gold prices have managed to stabilise amid some cooling off in the U.S.
dollar overnight, but higher U.S. Treasury yields may remain a key overhang
for further gains," IG market strategist Yeap Jun Rong said. [USD/]

 

The benchmark 10-year Treasury yield hit the highest since May 2024 on
Monday, while the dollar hovered near a one-week low. [US/] 

 

The dollar slid against its peers after a media report said that Trump's
aides were exploring plans that would apply tariffs only on sectors seen as
critical to U.S. national or economic security. However, Trump denied the
report, deepening uncertainty about future U.S. trade policies.

 

Bullion is considered a hedge against uncertainty and inflation, but high
rates reduce the non-yielding asset's appeal.

 

Investors are awaiting the U.S. jobs report, due on Friday, which could help
shed more light on the Fed's policy path.

 

U.S. job openings data is also scheduled later in the day, while ADP
employment numbers and minutes from the Fed's December meeting are expected
on Wednesday.

 

 

"The U.S. non-farm payrolls will be the key risk event this week and a
stable unemployment rate at 4.2% may justify a more gradual rate-cutting
process, which could see gold prices consolidate further within its tight
range for now," Yeap said.

 

Last month, the central bank projected fewer rate cuts in 2025, with
policymakers expressing concerns over still-high inflation. 

 

Spot silver gained 0.6% to $30.12 per ounce on Tuesday, platinum added 0.6%
to $938.55 and palladium ticked up 0.4% to $924.52.

 

 

 

 

 


 

INVESTORS DIARY 2025

 


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

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LinkedIn:           Bulls n Bears Zimbabwe

Facebook:          www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

 

 	

 

 

 	

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
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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
notice. Securities or financial instruments mentioned herein may not be
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investigation into the business, financial condition and future prospects of
any companies referred to in this report. Other  Indices quoted herein are
for guideline purposes only and sourced from third parties.

 

 	

 

 

 	


 (c) 2025 Web: www.bullszimbabwe.com Email: bulls at bullszimbabwe.com Tel: +27
79 993 5557 | +263 71 944 1674

 

 	

 

 

 	
							

 

 

 

 

 

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