Bulls n Bears Daily Market Commentary : 30 November 2020

Mon Nov 30 17:31:49 CAT 2020

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Bulls n Bears Daily Market Commentary : 30 November 2020

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

ZSE commentary

The All Share Index ended the month higher at 1,595.59 adding 13.90 points .
Trading in the positive were CAFCA  which advanced by $12.1946 to $73.2500,
ZB FINANCIAL HOLDINGS went up to $20.0000 by $2.5000 while MASIMBA HOLDINGS
LIMITED closed the day at $6.0000 after gaining by $0.9506. DAIRIBORD was
$0.6000 stronger at $9.1000 while HIPPO VALLEY ESTATES was marginally higher
at $22.0158 after strengthening by $0.2158.

Gains were offset by losses in; ZIMPLOW which was $0.1000 down at $4.5000,
MEIKLES closed the day at $16.0600 after loosing $0.0400 and PROPLASTICS
eased $0.0299 to $5.8500.SEED CO LIMITED fell by $0.0142 to settle at
$17.9858 while CASSAVA SMARTECH traded $0.0070 lower at $3.7930.-zse

Global Currencies & Equity Markets

African currencies week ahead: Kenyan, Zambian, Nigerian currencies seen
under pressure

NAIROBI: The currencies of Kenya, Zambia and Nigeria are expected to come
under pressure versus the US dollar next week, according to traders, while
Tanzania's and Uganda's hold steady.

KENYA - Kenya's shilling is expected to continue to weaken against the
dollar on the back of demand from importers across all sectors and slow
inflows from horticulture and agriculture exporters and remittances.

Commercial banks quoted the shilling at 109.95/110.15 to the dollar,
compared with last Thursday's close of 109.75/109.95.

ZAMBIA -- The kwacha will likely remain weak versus the dollar next week as
demand for hard currency continues to exceed supply.

On Thursday, commercial banks quoted the currency of Zambia, one of the
world's largest copper producers, at 20.9700 per dollar from a close of
20.9204 a week ago.

TANZANIA -- Tanzania's shilling is expected to hold steady versus the dollar
as inflows from agricultural exports offset pressure on the currency from
demand for manufacturing and energy imports.

Commercial banks quoted the shilling at 2,314/24 on Thursday, the same
levels recorded at last week's close.

UGANDA -- The Ugandan shilling is seen in a stable range against the dollar
in the coming days, underpinned by some inflows from coffee exporters.

At 1001 GMT commercial banks quoted the shilling at 3,695/3,705, compared to
last Thursday's close of 3,700/3,710.

NIGERIA -- The naira is expected to be weaker on the black market in the
week ahead, traders said on Thursday, as central bank policies restrict
access to the official window, thereby funnelling demand to the parallel
market that holds less than 5% of trades.

The naira was quoted at 487 per dollar on the black market on Thursday, a
level it touched previous day. The currency was quoted on the official
market at 381 per dollar, a level it has been at since July.

South Africa

Rand runs out of steam

JOHANNESBURG - The rand lost momentum as the risk rally showed signs
slowing, but remained near multi-week highs against the greenback according
to NKC Research.

A favourable external backdrop shaped by vaccine optimism and a policy-led
softening in the greenback shelter the local unit, while carry appeal
remains alive and well as foreign investors seek to benefit from an expected
compression in the risk premium in local currency bonds.

We believe that the Fed minutes from the November policy meeting underscored
the FOMC's very dovish forward guidance, supporting our call that rate
lift-off does not take place until mid-2024.

While officials at the time of the meeting were content with the current
composition, size and maturity duration of its QE purchases, we assess that
worsening economic conditions will lead officials to extend the duration of
QE Treasury asset purchases, and possibly ramp up the size.

The Fed could act before the next FOMC meeting slated for December 15-16,
with the most opportune time being November 30, when the Fed announces its
next round of monthly asset purchases.

We see it taking this action mainly as insurance against the mounting
downside risks to the economy in the near-term and as a policy signal that
reinforces the Fed's dovish forward guidance.

At the close of local trade, the rand quoted 0.53 percent weaker at
R15.26/$, after trading in the range of R15.15/$ - R15.34/$.

South African bourse

The JSE All Share (-0.03 percent) ended slightly lower heading into the
weekend, dragged by losses in large tech and industrial stocks. In the
overall emerging market sphere, the MSCI Emerging Market Index (1.11
percent) traded lower.

Brent crude oil

The Brent oil price was mixed on Friday but remained on track for a fourth
consecutive weekly gain ahead of this week's Opec+ meeting. At the close of
local trade, benchmark Brent crude futures quoted 0.08 percent higher at
$47.94pb. Crude prices traded steady during Asian trade this
morning.-BUSINESS REPORT

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar plumbs two-year low as Fed comes in to focus

SYDNEY (Reuters) - The dollar fell to a more than two-year low on Monday and
is set to log its largest monthly fall since July, as a combination of
vaccine optimism and bets on more monetary easing in the United States
drives investors out of the world's reserve currency.

Against a basket of currencies, the greenback slipped 0.1% to 91.707, its
lowest since April 2018. The risk-sensitive New Zealand dollar hit a
two-and-a-half year high and is headed for its best monthly percentage gain
in seven years.

The euro and Australian dollar each rose slightly to three-month peaks. The
Aussie is up more than 5% for the month, the kiwi 6.4% and the euro 2.7%.

Sterling stood at $1.3325, having climbed steadily this month to its highest
since September, as investors wagered a Brexit deal would be brokered even
as the deadline for talks loomed ever larger.

The dollar index is down some 2.4% for November as promising trial results
for three major vaccine candidates excited investors about an eventual end
to the coronavirus pandemic. It is nearly 11% below a March peak of 102.990.

Nervousness about a wave of new infections across Europe and the United
States, and fresh lockdowns, have provided some support to safe-haven
currencies and a slight brake on the dropping dollar.

However, as the drawn-out U.S. election has distracted lawmakers from
passing any sort of fiscal spending package, investors have begun to expect
that the Fed will step in, probably with more bond buying, when it next
meets in December.

Testimony from Fed chair Jerome Powell before Congress on Tuesday and
Wednesday, as well as U.S. labour market data this week will be closely
watched for clues as to the central bank's thinking and the broad shape of
the economy recovery.

The Japanese yen was a fraction firmer at 104.07 per dollar on Monday and
has gained a little over half a percent through November as the death toll
from the pandemic climbed towards 1.5 million people.

November also marks a sixth consecutive monthly gain for the Chinese yuan,
which has soared some 9% from a low in May.

That equals a similar run of monthly gains in 2013, but it is far larger in
magnitude as China leads the world out of the coronavirus pandemic and
capital inflows push the currency to new heights.

It last sat at 6.5743 per dollar in offshore trade, more or less steady as
investors await the November purchasing managers' index due at 0100 GMT.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold tanks again heading into the EU session

(Kitco News) - Gold has had a tough start to the week as the yellow metal
has dropped around 1% during the Asian session. This bearishness has
continued since the price broke the consolidation low of $1818.84 per ounce
on 23rd November. There is a potential support level at $1747.74 to keep an
eye on this week. Silver (-2.60%) is also in the red and looks to be heading
to the current consolidation low $21.66 per ounce and interestingly this
move in the two major precious metals comes despite the dollar index trading
0.14% lower overnight.

The major indices in Asia closed lower as the Nikkei 225 fell 0.79%, ASX
dropped 1.26% and the Shanghai Composite fell 0.18%. One of the initial
moved lower in the past came as the US manufacturing PMI number came in
higher than expected this time around the same thing has happened as the
Chinese PMI number improved.

In terms of news overnight, Citi has lowered its forecast for the price of
gold to $1700 for 2021. They expect net investment into gold ETFs to hit 800
tons in 2020, 75 tons less than previously predicted. 

Tensions between the Chinese and Australian government rose during the Asian
session as Australian PM Morrison stated China should be ashamed of a fake
photo tweet. This is in reference to Lijian Zhao who is the spokesman & DDG,
Information Department, Foreign Ministry tweeting about the official war
crimes inquiry in Australia that has found some soldiers in Afghanistan
murdered Afghanis. 

There was also some data from Japan and China, Japanese industrial
production for October (preliminary) improved to hit 3.8% m/m vs expected
2.2%. Retail sales (Japan) for October slightly disappointed to print at
0.4% m/m vs the analyst consensus of 0.5%. The big news, however, was that
Chinese manufacturing PMI (Nov) hit 52.1 vs the expected reading of 51.5 and
non-manufacturing PMI (Nov) 56.4 vs exp 56.0.

In regards to the Brexit saga, UK's Dominic Raab sounded a positive tone on
a Brexit trade deal over the weekend. The U.K. Foreign Secretary said the
big issue to resolve in the trade deal talks with the EU is fishing rights.
He added the two sides "ought to" be able to get to an agreement on fishing,
given the progress negotiators have made on other issues. EU's Barnier said,
"we continue to work with patience and determination".

Looking ahead to today's session highlights include the OPEC meeting,
Chilean copper production, CPI from Germany, UK leading figures and US
pending home sales. There will also be comments from BoE's Tenrayro, ECB's
Hakkarainen and ECB's Lagarde. -kitco

Oil prices fall as OPEC+ members debate 2021 output policy

LONDON (Reuters) - Oil prices tumbled on Monday on uncertainty about whether
OPEC+ would agree to extend large output cuts at talks this week, but
vaccine hopes still kept benchmark crudes on track to rise more than a fifth
in November.

Brent crude for January delivery, a contract that expires on Monday, dropped
80 cents, or 1.7%, to $47.38 a barrel by 1110 GMT. The more actively traded
February Brent contract was down 79 cents at $47.46.

U.S. West Texas Intermediate crude for January fell 70 cents, or 1.5%, to
$44.83 a barrel.

Members of the Organization of the Petroleum Exporting Countries, Russia and
others, a group known as OPEC+, will consider extending existing cuts for
three to four months or increasing output gradually from January, OPEC+
sources said.

OPEC+ had been due to ease its existing production cuts by 2 million barrels
per day (bpd) from January.

Hussein Sayed, analyst at FXTM, said fuel demand had recovered in Asia but
not in Europe and the Americas, presenting OPEC+ with a "challenging choice
on whether to delay or bring back more oil to the market."

Goldman Sachs said the surge in COVID-19 cases in the winter would not
prevent the oil market rebalancing as a result of vaccine progress, saying
it saw Brent rising to $65 in 2021.

A Reuters poll of 40 economists and analysts forecast Brent would average
$49.35 a barrel next year.

Brent and WTI are still set to rise more than 20% in November, the strongest
monthly gains since May, boosted by hopes that three promising vaccines
could support economic recovery and lift fuel demand.

Supporting the demand outlook, China expanded factory activity at its
fastest in more than three years in November.

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

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
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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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