Bulls n Bears Daily Market Commentary : 10 December 2020

Fri Dec 11 09:26:10 CAT 2020

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Bulls n Bears Daily Market Commentary : 10 December 2020

 <http://www.zb.co.zw/> 

ZSE commentary

Market Turnover ZWL$87,356,544.15 with foreign buys at ZWL$14,427,043.30 and
foreign sales were ZWL$20,208,097.45 Total trades were 301

The All Share Index continues to gain ground as it adds 46.72 points  to
close at 1,948.23 points. PADENGA  rose by $3.2976 to $19.8476, HIPPO VALLEY
ESTATES  added

$2.5991 to $35.1991 and INNSCOR  was $2.2026 stronger at $33.1495. CBZ
recovered $1.1262 to $45.2052 and SEEDCO traded $1.0050 higher at $21.0050.

Trading in the negative; DELTA eased $0.6159 to $23.3840, AFDIS lost $0.5981
to settle at $21.5000 and ZIMRE HOLDINGS LIMITED  was $0.1123 weaker at
$2.6002. FIRST MUTUAL PROPERTIES also decreased by $0.0964 to $2.1012 and
SIMBISA traded $0.0468 lower at $8.4531.-zse

Global Currencies & Equity Markets

South Africa

South African Rand Eyes 14.50 after Breaking Key Resistances on the Charts 

The Rand softened on Thursday following a sustained run of outperformance
and as investors digested a volley of mixed economic figures, although a
return to highs not seen since late January could be only a matter of time
following this week's breakout on the charts, according to technical
analysts.

South Africa's Rand retreated from all major currencies except a
Brexit-blighted Pound Sterling on Thursday while also ceding ground to most
other emerging market units as investors digested the latest current account
balance and industrial production figures.  

October's mining and manufacturing production figures indicated that South
Africa's recovery slowed early in the final quarter following strong growth
previously, although the slowdown took place even before the country's
second wave of coronavirus infections truly gathered pace in November.  

Manufacturing production fell -3.9% in October when compared with the same
period a year ago, a greater fall than the -1.9% seen previously but a
smaller decline than the -5.1% anticipated by economists. 

But mining production fell by -6.3% in October, a larger fall than both the
-4.7% anticipated by economists as well as the -3.4% seen in September. This
and the waining economic recovery that it speaks of came in contrast with a
third-quarter surge in the current account surplus.

South Africa's current account balance rose to 5.9% of GDP last quarter, up
from a deficit of -2.9% in the prior period, following strong export growth
that helped to boost the trade in goods and services surplus that would
normally be supportive of almost any currency.

However, softening October industrial activity provides an early taste of
what could be just around the corner for the economy in light of South
Africa's second wave of coronavirus infections, which led the government to
resort to localised forms of 'lockdown' as a means of containment last week.

The Rand was already a relative outperformer for the week as well as month
before Thursday and so may have been liable for a period of consolidation or
even underperformance anyway.

Thursday's figures came hard on the heels of Tuesday's Statistics South
Africa data suggesting that GDP rose by an annualised rate of 66.1% last
quarter, a significant outperformance of the market consensus for a 52.6%
increase.  

Last quarter's rebound was far greater than the historic -51.7% collapse
observed in the prior period when vast parts of the economy came to a
standstill as a result of government curbs on activity aimed at containing
the coronavirus. 

However, all this came before President Cyril Ramaphosa placed Nelson
Mandela Bay, the Sarah Baartman District in the Eastern Cape and the Garden
Route District in the Western Cape into a form of 'lockdown' last week in
response to a second coronavirus wave. 

It wasn't clear on Thursday whether the Rand's softness resulted from mixed
economic figures or if it simply reflected a currency that was pausing for
breath following a sustained rally. However, technical analysts at Credit
Suisse remained confident that the downtrend in USD/ZAR is not yet over. 

AFRICA-FX-Ugandan currency firm, Kenya's, Zambia's stable, Nigerian
rangebound

Uganda's currency will likely gain against the U.S. dollar next week, while
Kenya's and Zambia's are expected to be stable and Nigeria's Naira
rangebound.

KAMPALA, - Uganda's currency will likely gain against the U.S. dollar next
week, while Kenya's and Zambia's are expected to be stable and Nigeria's
Naira rangebound.

UGANDA

The Ugandan shilling UGX= is seen firmer as big importers, such as the
manufacturing sector, slow activities ahead of the year-end.

At 0820 GMT commercial banks quoted the shilling at 3,675/3,685, stable from
last Thursday's close.

As importer appetite slows, he predicted the local currency could post some
modest gains.

KENYA

The Kenyan shilling KES= is expected to remain stable in the week ahead, due
to low dollar demand as companies close ahead of the festive season.

The shilling was trading at 111.40/111.60 on Thursday, down from 111.10/30
at the end of trading a week earlier.

ZAMBIA

The kwacha ZMW= is likely to hold steady against the dollar, supported by
foreign currency conversions by companies preparing to pay taxes due next
week.

On Thursday, commercial banks quoted the currency of Africa's second largest
copper producer at 21.0450 per dollar from 21.0175 at the close of business
a week ago.

NIGERIA

The naira NGN= is seen trading within a range next week across markets after
the currency received a boost from the central bank's easing of restrictions
on diaspora remittances.

The naira firmed to 476 per dollar on the black market on Thursday from 478
previous session and recovering from a 3-1/2 year low of 500 naira it hit
last week on the unofficial market, where the currency trades freely.

The currency was quoted at 381 per dollar on the official market, a level
set by the central bank in July. The naira sold at 392.79 on the
over-the-counter spot market NAFEX=FMDQ, quoted by investors and importers,
in thin trade.

The World Bank said on Thursday that Nigeria's steps to unify its multiple
exchange rates have not been enough, adding that remittances this year were
likely to fall to 2015 levels of $20.2 billion from $26.4 billion last year.

 <mailto:info at bulls.co.zw> 

Global Markets

USD PRICE ACTION SNAPS LOWER AGAINST MOST FX PEERS AS WEAKNESS RESUMES

The US Dollar traded on its back foot during Thursday's trading session. USD
price action edged 0.34% lower on balance as measured by the US Dollar
Index, which marks the first down day this week. US Dollar weakness was
notable across most major currency pairs, but the slide by GBP/USD helped
offset the Greenback's decline thanks to no deal Brexit risk weighing
negatively on the Pound Sterling.

That said, a large driver of US Dollar downside today was likely fueled by
the 0.5% pop by EUR/USD price action in the wake of this morning's ECB rate
decision. Movement toward reaching a fiscal stimulus deal hinted at by US
politicians, who have reportedly reached an agreement on state and local
aid, could have contributed to the resumption of US Dollar selling pressure
as well.

>From a technical perspective, the pivot lower by USD price action coincided
with the US Dollar Index rejecting its downward-sloping 8-day simple moving
average. This could suggest US Dollar bears still remain broadly in control.
Nevertheless, recent consolidation on the DXY Index looks to have formed an
intermittent range between the 90.500-91.235 levels. Breaching this bottom
barrier could motivate a push below the 90.00-handle whereas eclipsing the
potential technical resistance zone highlighted might open up the door for a
relief bounce toward the 92.00-price mark.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Global oil prices settle above $50 for the first time since March on vaccine
optimism

Oil futures settled higher Thursday, with the global Brent crude benchmark
above $50 for the first time in nine months, on progress toward a U.S.
COVID-19 vaccine that may lead to a boost in the economy next year.

Brent oil had finished Wednesday a couple pennies higher and U.S. benchmark
West Texas Intermediate crude saw a modest decline, mostly shaking off
pressure from a sharp rise in U.S. crude inventories - the largest weekly
increase since April.

Meanwhile, the oil market also took note of reports that suggest Chinese
demand is exceeding pre-COVID levels, and there are reports of an "uptick"
in Chinese refinery runs, Flynn told MarketWatch.

WTI crude for January delivery CL.1, +0.56% CLF21, +0.56% rose $1.26, or
2.8%, to settle at $46.78 a barrel on the New York Mercantile Exchange.

The global benchmark, February Brent crude BRN00, +0.40% BRNG21, +0.40%,
rose $1.39, or 2.8%, to $50.25 a barrel on ICE Futures Europe.

Prices for WTI and Brent, based on the front months, marked their highest
settlements since March 4, according to Dow Jones Market Data.

An all-day regulatory meeting Thursday is the next step toward the likely
authorization of the first COVID-19 vaccine in the U.S. The vaccine,
developed by Pfizer Inc. PFE, -0.29% and BioNTech SE BNTX, +5.48%, saw its
rollout in the U.K. begin earlier this week after regulators in that country
authorized it for emergency use.

Even if a vaccine gets approval in the U.S. soon, "it will be months before
enough people are vaccinated to restore economies," said James Williams,
energy economist at WTRG Economics. "It will be March or April before we see
big reductions in COVID."

In May and June, we may get the dual benefit of a "seasonal decline in the
virus and and a large percent of the population vaccinated," he told
MarketWatch.

On that note, oil's resilience has frustrated some analysts.

While the rise in crude inventories was attributed to a surge in imports,
increases in gasoline and distillate inventories offered a disturbing
picture on fuel demand, he said.

Total products supplied, a proxy for demand, averaged 18.9 million barrels a
day over the last four week period ended on Dec. 4, down 7.5% from the same
period last year, the EIA reported Wednesday.

On Nymex Thursday, January gasoline RBF21, +0.17% tacked on 3.2% to $1.3166
a gallon and January heating oil HOF21, +0.45% rose 2.6% to $1.4357 a
gallon.

Natural-gas futures also finished higher after the EIA reported on Thursday
that domestic supplies of the fuel fell more than expected, down 91 billion
cubic feet for the week ended Dec. 4. On average, the data were expected to
show a fall of 78 billion cubic feet for the week, according to analysts
surveyed by S&P Global Platts. The decline was bigger than the five-year
average fall of 61 billion cubic feet, the survey said.

January natural gas NGF21, +0.12% settled nearly 4.6% higher at $2.553 per
million British thermal units.

INVESTORS DIARY 2020

Company

Event

Venue

Date & Time

Zimbabwe

National Unity Day

Zimbabwe

22/12/2020

Christmas Day

25/12/2020

Boxing Day

26/12/2020

New Year's Day

01/01/2021

Counters trading under cautionary

ART

Seed co Int.

Dairibord

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

Bulls n Bears 

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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
subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
warranty is made or guarantee given as to its accuracy or completeness. All
opinions expressed and recommendations made are subject to change without
notice. Securities or financial instruments mentioned herein may not be
suitable for all investors. Securities of emerging and mid-size growth
companies typically involve a higher degree of risk and more volatility than
the securities of more established companies. Neither Faith Capital nor any
other member of Bulls 'n Bears nor any other person, accepts any liability
whatsoever for any loss howsoever arising from any use of this report or its
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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.

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