Bulls n Bears Daily Market Commentary : 11 December 2020

Fri Dec 11 17:11:31 CAT 2020

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Bulls n Bears Daily Market Commentary : 11 December 2020

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

ZSE commentary

The market closed the week today in the positive territory gaining 2.28% to
close today at a total market capitalization of ZW$235.9billion. The main
stream All Share Index put on 3.20% to close the day at 2010.57, the Medium
Cap Index was 3.55% higher to 3984.29 while the Top 10 Index was up 3.08% to
1 309.02. Headlining the riser's pack was Art which was up 20.00% and TSL up
20.00%, the sugar manufacturing giant Hippo added 19.89%, Mash up 19.75% and
the clothing retail Truworths added 15.66% to close at 18.02c. Significant
losses were noted in the property fim Dawn which shaded 7.69% and Star
Africa went down by 7.33%. Elsewhere, losses for the day were also recorded
in hotelier African Sun (6.40%), Aris (3.56%) and NMB  (1.77%).

Total turnover was at ZW$504.6 million in 326 trades. Rio Zim led the
turnover contribution at ZW$402.5 million which was through a negotiated
deal for 27 469 500 shares at a price of ZW$14.6523. Among the counters that
participated in trading, 14 counters declined against 23 that appreciated.
Total trades were 326 with 2 counters remaining unchanged and 13 with zero
volume.

Global Currencies & Equity Markets

South Africa

South Africa's rand steady but set for weekly gain

JOHANNESBURG, Dec 11 (Reuters) - South Africa's rand was flat in early trade
on Friday, but was set for a weekly gain of more than 1% as positive
economic growth data lifted it to a 10-month peak earlier this week.

At 0635 GMT, the rand ZAR=D3 traded at 15.0200 versus the dollar, compared
with its previous close of 15.0225. The currency was on track to finish the
week 1.5% stronger.

The rand touched its highest level since mid-February this week, boosted by
encouraging third-quarter economic growth data and improvement in global
risk appetite.

But data on Thursday showing manufacturing output fell 3.4% year-on-year in
October while mining output dropped 6.3% brought the rally to a halt.

October retail sales data published on Wednesday also showed a decline, down
1.8% year-on-year.

Ten-year government bond yields ZAR2030= were down a single basis point to
8.92% in early deals.

Zambia

Zambia Turns to Gold to Boost Dwindling Reserves After Default

Zambia, which last month became Africa's first pandemic-era default, plans
to hold gold for the first time since 1995 to bolster foreign-exchange
reserves that have dwindled near record lows.

The central bank on Friday signed gold-purchase deals with a local unit of
First Quantum Minerals Ltd., which produces the precious metal as a
by-product at its Kansanshi copper mine in the southern African nation. It
also signed a deal with a state-owned mining investment company that in turn
buys gold from small-scale producers and owns a small mine.

Zambia's foreign-exchange reserves plunged in recent years as the government
struggled to service its rapidly rising foreign debt, and output of copper
that it depends on for about 70% of export earnings stagnated. Reserves slid
to $1.31 billion in August, barely enough to cover three months of imports.
The kwacha has lost a third of its value against the dollar since the start
of 2020, helping to spur inflation to a four-year high in November

Zambia will buy gold to shore up its foreign-exchange reserves

The Bank of Zambia will buy all the gold from First Quantum's Kansanshi
mine, which produced 145,386 ounces in 2019, according to Isaac Muhanga, a
director at the bank. It will pay market prices for the bullion, in local
currency.

Zambia had to sell its gold reserves about 25 years ago because of dollar
shortages after decades of nationalization and slumping copper prices. At
the time, the economy was also straining under unsustainable external debt
and rampant inflation. Back then, an ounce of gold was worth less than $400.
Today, it's trading at more than $1,830 an ounce.

 <mailto:info at bulls.co.zw> 

Australia

Australian Dollar Looking Tired

The Australian dollar initially shot higher again during the trading session
on Friday, but as risk sentiment starts to sour a bit, it has pulled back.

The Australian dollar has pulled back a bit during the trading session on
Friday as we had broken so strongly to the upside on Thursday. At this
point, it looks as if the Australian dollar is starting to pull back a bit
though, which would be expected after major breakout. Beyond that, we also
have to worry about the risk appetite around the world, which is starting to
sour due to the Brexit situation looking very much like a "no deal Brexit"
is coming.

More likely a direct effect on this market is probably felt due to the fact
that stimulus talks in America seem to be going nowhere suddenly, as the
runoff election in the Georgia Senate seats will continue to keep things
tense between the Republicans and the Democrats. Remember, the Australian
dollar is highly levered to commodities so people will use it as a way to
play the idea of the reflation trade, as commodities will be highly
desirable in a rebuilding stage of the economy.

Looking at the technical analysis, the 50 day EMA is now above the 0.7250
level but looking at this chart it is likely to see plenty of support before
we even get to that level. I think that a pullback and then a continuation
to the upside makes quite a bit of sense, as we have seen the Australian
dollar outperform most other currencies around the world. If we get a
resolution to the stimulus talks in the United States, that will probably be
the "magic bullet" to send this pair much higher. With that being said, this
is a market that looks as if it is a little bit tired in the short term

 <mailto:info at bulls.co.zw> 

Commodities Markets

LME copper price retreats from early morning spike near $8,000/t

The London Metal Exchange three-month copper price came close to $8,000 per
tonne during early morning trading before retreating by 9am on Friday
December 11, with the complex hovering around recent highs on positive
Covid-19 vaccine news out of the United States.

The copper price touched $7,973.50 per tonne on Friday morning, setting a
new 2020 high and returning to levels not seen since late February 2013. By
9am, however, the price deflated to $7,763 per tonne, 1.46% lower than
Thursday's 5pm closing price of $7,878 per tonne. Some 19,540 lots of copper
were traded by the end of the day on Thursday, and on Friday morning volumes
had hit more than 12,000 lots traded shortly after 9am.

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
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