Bulls n Bears Daily Market Commentary : 01 December 2021

Wed Dec 1 20:30:50 CAT 2021

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Bulls n Bears Daily Market Commentary : 01 December 2021

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ZSE commentary

The ZSE closed in the positive territory although the gains were marginal. Activity levels were bolstered by a trade in Meikles ahead of its unbundling with Tanganda and this boosted both volume and value traded for the day. Activity levels were lower at 306 trades. Econet was the most active stock at 37 trades followed by Delta and Star Africa 28 and 24 trades respectively. Investor sentiment was positive after the session yielded 14 risers against 9 decliners while six of the active stocks remained unchanged. Meikles Limited anchored both volume and value aggregate trading 122 903 771 shares representing 47.72% of its issued shares with a value of ZW$11 552.95 million contributing 97.6% to total turnover.

The All-Share Index added 0.58% to close at 10 757.21 points. The Top 10 Index gained 0.75%. The Top 15 Index also gained 0.74%. The Medium Cap Index was up by 0.19% to 20 405.50 points whilst the Small Cap Index lost 1.41% to 383 497.18 points. Leading the risers pack of the day was Econet adding 10.11% after releasing its half year results. Mashonaland Holdings was up by 4.92%. OK Zimbabwe added 2.17% and Star Africa added 1.63% to 117.41c. Bindura  was up by 1.17%. Mitigating the gains were losses in Zimplow and Cassava which shaded 4.78% and 3.80% to 2366.67c and 4040.42c respectively. Zimre Holdings was down by 1.69% to 383.42c. Proplastics shaded 1.34%. The Old Mutual Top Ten ETF closed at 500c up by 0.86%. On the VFEX, Padenga added 2.56% after 10 200 shares exchanged hands worth US$2 040 to close at US$ 20 cents.wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand, stocks recover on improved risk-taking

(Reuters) - The South African rand and stocks continued their recovery on Wednesday from last week's plunge, as risk appetite returned somewhat to markets, with investors betting that the Omicron COVID-19 variant would not derail the economic recovery.

At 1511 GMT, the rand traded at 15.7950 against the dollar, 0.61% firmer than its previous close.

The currency plunged to its weakest since October 2020 on Friday, breaching 16.00 to the dollar, as the world reacted with alarm to the news of the Omicron variant, which was first detected in southern Africa.

Calm has somewhat returned to markets, following remarks from South African health experts and some drugmakers that COVID-19 vaccines were likely to offer protection against any severe disease from the Omicron variant. read more

Government bonds were also firmer, with the yield on the 2030 instrument down 0.5 basis points at 9.765%.

In the equities market, stocks mirrored gains in world stocks as they also bounced back.

Economic data that South African manufacturing activity expanded at a faster pace in November as business activity and new sales orders grew helped fuel the bullish mood.

The Johannesburg All-Share index (.JALSH) closed 1.03% while the Top-40 index (.JTOPI) climbed 1.13%.

Among the gainers, Impala Platinum (IMPJ.J) and smaller platinum group metals producer Royal Bafokeng (RBPJ.J) gained 4.18% and 4.32% respectively after Impala bought a further 14 million shares in Royal Bafokeng.

The Thomson Reuters Trust Principles.

Nigeria

Forex Transactions at I$E Drop 67.8% as Naira Remains Stable

The Naira sustained its stability against the American Dollar at the Investors and Exporters (I&E) window of the foreign exchange (FX) market on Tuesday, November 30.

Business Post reports that for the third consecutive trading session, the value of the Naira compared with the greenback remained unchanged at N415.07/$1.

This came as forex transactions at the investors’ window moderated during the session as the turnover for the day waned by 67.8 per cent or $103.71 million to $152.98 million from the preceding day’s turnover of $256.69 million.

However, it was a different scenario at the interbank window of the market as the local currency depreciated against its United States’ counterpart by 2 kobo to settle at N411.66/$1 in contrast to the preceding session’s value of N411.64/$1.

But the domestic currency appreciated by 5 kobo against the British Pound Sterling to trade at N549.32/£1 compared to N549.37/£1 it was sold on Monday and against the Euro, it lost N2.46 against to close on Tuesday at N467.28/€1 in contrast to the previous day’s N464.82/€1.

Meanwhile, at the cryptocurrency market, trading closed mixed with six of the 10 tokens tracked by this newspaper pointed northwards.

Ethereum (ETH) recorded a 2.2 per cent appreciation to sell at N2,521,934.26, Binance Coin (BNB) added 1.9 per cent to trade at N258,732.58, Tron (TRX) and Ripple (XRP) both appreciated by 1.3 per cent to trade at N55.53 and N565.76 respectively, Bitcoin (BTC) improved its value by 0.3 per cent to trade at N32,557,706.59, while Dash (DASH) gained 0.2 per cent to sell for N115,000.00.

On the losers’ side, Litecoin (LTC) led with a 0.9 per cent loss to trade at N119,490.51, the US Dollar Tether (USDT) declined by 0.3 per cent to sell for N568.65, Cardano (ADA) also depreciated by 0.3 per cent to trade at N899.11, while Dogecoin (DOGE) moved down 0.2 per cent to sell at N123.06.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar steadies, risk currencies recover from Omicron-driven drop

(Reuters) - The dollar steadied on Wednesday and risk appetite recovered somewhat, but euro-dollar volatility remained elevated as investors weighed up hawkish comments from the Federal Reserve and risks relating to the Omicron variant.

The dollar rose on Tuesday after U.S. Fed Chair Jerome Powell said that the risk of inflation had increased and signalled the central bank may accelerate its bond-buying taper at its meeting later this month. read more

At 1147 GMT, the dollar index was little changed overall on the day at 95.940 . In November, it had its strongest month since June.

Global stock markets and riskier currencies recovered some of the previous session's losses as investors bet that the Omicron variant - which has prompted countries to impose new travel restrictions - would not derail the economic recovery. read more

But in currency markets, volatility remained elevated. One-month euro-dollar volatility gauges hit their highest so far this year on Monday.

ING strategists wrote in a client note that euro-dollar volatility has jumped as the Omicron variant is seen as positive for the euro (because it could slow the Fed's tightening), while Powell's remarks (suggesting inflation is the Fed's primary concern) are seen as negative for the euro.

The euro was down 0.1% on the day at $1.1322 at 1201 GMT .

On Tuesday, a warning from drugmaker Moderna that existing vaccines are unlikely to be as effective against the Omicron variant as they are against other strains, led to a surge of interest in safer assets.

Later, BioNTech's chief executive struck a cautiously positive note, saying the vaccine it makes in a partnership with Pfizer (PFE.N) would likely offer strong protection against severe disease from Omicron. read more

Sterling, considered a risk currency, was up 0.2% at $1.33175, after fears about whether the vaccine will work against the Omicron variant saw it fall to its lowest level since December in the previous day .

The Australian and New Zealand dollars also made gains, carrying them up from one-year lows, after losses last week and on Tuesday. The Aussie was up 0.3% at $0.7149 and the kiwi was up 0.3% at $0.6842 .

The Chinese yuan , a beacon of resilience in a turbulent few days, touched a six-month high of 6.3596 per dollar after better-than-expected manufacturing data from November.

In cryptocurrencies, bitcoin was up around 0.5% at $57,266.93 .

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold regains ground as omicron-led volatility buoys safe havens

Gold gained on Wednesday as some investors used a retreat in the last session to buy bullion as a hedge against overall market volatility amid lingering concerns over the impact of the Omicron coronavirus variant.

Spot gold rose 0.7% to $1,785.38 per ounce by 1224 GMT, after falling as much as 0.9% in Tuesday’s session on Powell’s remarks that the central bank will discuss whether to end bond purchases earlier than expected, in its December meeting.

U.S. gold futures advanced 0.7% to $1,788.10.

But gold’s bounce came alongside a sharp rebound in stock markets as investors used the dip in prices to bet the latest COVID-19 variant would not derail the economic recovery, suggesting safe-haven inflows into bullion might not be as strong as anticipated.

Virus-related concerns are offering gold “limited support,” said Ricardo Evangelista, senior analyst at ActivTrades, with bullion also benefiting from “the usual flight to safe havens that normally follows the levels of volatility registered over the last few session.”

While gold may benefit as questions remain over the new variant, the main narrative remains focused on what the Fed will do and bullion could face pressure if Friday’s U.S. employment data confirms the strengthening of the labour market, Evangelista added.

Reduced stimulus and interest rate hikes push government bond yields up, raising non-interest bearing gold’s opportunity cost.

The United States imposed tougher COVID-19 testing rules for air travellers, and more countries tightened borders amid uncertainty over Omicron.

Gold remains trapped in a $1,770-$1,825 range, StoneX analyst Rhona O’Connell said.

Spot silver edged 0.1% higher to $22.83 per ounce.

Platinum gained 2.1% to $953.98 and palladium climbed 1.5% to $1,764.66.

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Public Holiday in lieu of Boxing Day falling on a Sunday

December 27

Counters trading under cautionary

ART

Seed co Int.

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 contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent 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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