Bulls n Bears Daily Market Commentary : 06 December 2021

Tue Dec 7 05:23:47 CAT 2021

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Bulls n Bears Daily Market Commentary : 06 December 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares closed with marginal gains trading sideways as the bourse is
lacking impetus for a strong positive move. Activity levels were at 440
trades. Econet was the most active stock at 46 trades followed by Delta and
Star Africa at 36 and 32 trades respectively. Investor sentiment was
negative after the session yielded 21 fallers against 8 risers while four of
the active stocks remained unchanged. OK Zimbabwe anchored volume aggregate
trading 1 692 900 shares and Econet anchored value aggregate with a value of
ZW$147.12 million contributing 49.66% to total turnover.

The All-Share Index added a paltry 0.05% to close at 10 895.58 points. The
Top 10 Index gained 0.45%. The Top 15 Index also gained 0.39%. The Medium
Cap Index was down by 1.01% to 20 248.24 points whilst the Small Cap Index
also shaded 0.01% to 383 853.48 points.

Leading the risers pack of the day was Nampak adding 13.74%. Medtech B was
up by 11.11%. Econet added 7.35% and NMB Holdings added 3.80% to 1100c.
Bindura  was up by 2.88%. Mitigating the gains were losses in National Tyre
Services and RTG which shaded 13.46% and 12.14% to 540c and 437c
respectively. African Sun was down by 11.63% to 578.88c. Ariston and ZIMRE
Holdings shaded 10.59% and 9.08% respectively. The Old Mutual Top Ten ETF
closed unchanged at 500c after 35 371 units worth ZW$176 855 exchanged
hands.-wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand firmer on early signs Omicron causing mild infections

(Reuters) - The South African rand firmed on Monday on signs the Omicron
coronavirus variant driving a fourth wave of COVID-19 infections in the
country may be causing mainly mild infections.

At 1500 GMT, the rand traded at 15.9025 against the dollar, 1.04% firmer
than its previous close.

Anecdotal accounts from South African doctors and experts suggest that
Omicron may be causing less severe clinical symptoms than other coronavirus
variants, though they caution that more research is needed before definitive
conclusions can be drawn. read more

The rand sold off late last month after the variant was first detected in
southern Africa, prompting countries including Britain and the United States
to impose travel restrictions on the region for fear Omicron could spread
quickly even among vaccinated people. read more

Analysts at ETM Analytics said in a note that the rand was likely to recover
as fears over Omicron gradually ease, but they said the extent of the
recovery could depend on market expectations for U.S. Federal Reserve
monetary policy tightening.

The government's benchmark 2030 bond firmed alongside the currency, with the
yield falling 12.5 basis points to 9.475%.

On the Johannesburg Stock Exchange, Thungela Resources (TGAJ.J) topped the
bourse after the thermal coal miner said it is likely to return to
profitability in respect of headline earnings per share for the 2021
financial year.

Thungela also said it may declare additional returns to shareholders above
the targeted minimum pay-out ratio of 30% of adjusted operating free cash
flow.

Thungela, a new spin-off from Anglo American (AAL.L), jumped 15.01% to 80.99
rand, a near two-month high.

Lender Nedbank Group (NEDJ.J) was the number three gainer, up 3.30% to 173
rand after it said its full-year profits would almost double as performance
across all industry segments has reached pre-pandemic levels.

Overall the Johannesburg All-Share (.JALSH) closed 0.3% firmer, with the
Top-40 index (.JTOPI) up 0.45%.

The Thomson Reuters Trust Principles.

Nigeria

Naira sustains gain at official market despite drop in FX turnover

Naira appreciated against the US dollar on Friday to close at N414.73/$1,
representing a 0.02% gain compared to N414.8/$1 recorded in the previous
trading sessions as Nigeria's external reserve increased by $69 million, the
first time in over a month.

Forex turnover at the official market dropped by 37.4% to $139.67 million
from $223.18 million recorded in the previous day.

However, the naira depreciated against the US dollar on Friday, dropping by
0.53% to close at N570/$1 as against N567/$1 that was recorded in the
previous trading session. This is according to information obtained from BDC
operators interviewed by Nairametrics.

Nigeria's foreign reserve reduced by 0.09% on Thursday, 2nd December to
close at $41.12 billion compared to $41.15 billion recorded as of the
previous day. The recent decline in the nation's external reserve is
attributed to the intervention by the apex bank in the official forex
market.

Trading at the official NAFEX window

The exchange rate at the Investors and Exporters window appreciated by 7
kobo to close at N414.73/$1 on Friday, compared to N415.8/$1 recorded over
the past six trading sessions.

The opening indicative rate closed at N414.06/$1 on Friday, which represents
a 12 kobo depreciation compared to N413.94/$1 recorded in the previous
trading session.

An exchange rate of N461.27/$1 was the highest rate recorded during
intra-day trading before it settled at N414.73/$1, while it sold for as low
as N404/$1 during intra-day trading.

Forex turnover at the official window declined by 26.2% to $103.01 million
on Friday.

According to data tracked by Nairametrics from FMDQ, forex turnover at the
I&E window dropped from $139.67 million recorded on Thursday 2nd December
2021 to $103.01 million on Friday 3rd December 2021.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar ticks up as Treasury yields partly claw back fall

The dollar ticked higher on Monday as Treasury yields rose off last week's
2-1/2-month lows following news that initial observations suggested those
suffering from the Omicron COVID-19 strain only had mild symptoms.

The Omicron news from South Africa helped reverse some of the moves from
Friday, when Wall Street had sold off heavily.

That selloff had taken 10-year Treasury yields below 1.4% for the first time
since late-September and boosted the safe-haven yen and Swiss franc. The
dollar had tumbled as much as 0.4% lower against the Japanese currency. 

Friday's greenback losses also followed a below-forecast jobs report, though
the data did little to shake market expectations the Federal Reserve will
accelerate the pace of unwinding stimulus and raise interest rates starting
next year.

The dollar index inched 0.10% higher at 96.29, within range of November's
16-month peak of 96.938. It was also 0.2% higher against the yen at 113.05
yen and rebounded 0.4% to the franc.

Dollar long positions climbed for a second straight week to the highest
since June 2019, according to data from the U.S. CFTC, while bearish euro
positions rose to stand at the highest since March 2020.

The euro slipped a quarter percent to the dollar.

Pesole said a further dollar long build-up was likely, given diverging
policy expectations, especially against the euro.

Meanwhile, the Australian dollar was up 0.5% to $0.7035, scraping itself off
a 13-month low. The kiwi rose 0.1% to $0.6750.

Riskier currencies were also supported by a slight re-steepening of the
Treasury yield curve, where the gap between two and 10-year yields widened
slightly after touching the narrowest in a year on Friday.

Analysts reckon the curve will flatten further, however, especially if
inflation data due later in the week reinforces policy tightening
expectations from the Fed.

Elsewhere, cryptocurrencies nursed big losses from a wild weekend that at
one stage crushed bitcoin more than 20%. Bitcoin found support around
$49,000 on Monday.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Crude oil price

Oil prices rose in the early hours of Monday with Brent crude going up by
2.03% to close at $71.30 per barrel after Saudis boosted the prices of its
crude, signalling confidence in the demand outlook despite the spread of
Omicron variant of the coronavirus.

The oil price gain is also buoyed by a diminishing prospect of a rise in
Iranian export as indirect U.S.-Iran talks on reviving a nuclear deal
appeared to hit an impasse.

On Sunday, Saudi Arabia raised January official selling prices for all crude
grades sold to Asia and the United States by up to 80 cents from the
previous month.

The price hikes were implemented despite a decision last week by the
Organization of the Petroleum Exporting Countries and their allies including
Russia, a group known as OPEC+, to continue increasing supplies by 400,000
barrels per day in January.

Oil benchmarks rebounded after falling last week for their sixth week in a
row for the first time since November 2018 on concerns that the new
coronavirus variant Omicron could impact global economic growth and fuel
demand.

The West Texas Intermediate gained 2.14% to trade at $67.68 per barrel.
However, Natural gas dropped by 7.14% to trade at $3,837 while OPEC Basket
dropped by 2.23% to trade at $70.03 per barrel.

On the other hand, Nigerian crude, Bonny Light was up by 2.26% to trade at
$70.68 per barrel.

Gold eases on firmer dollar, bets for faster Fed tightening

(Reuters) - Gold prices edged lower on Monday, pressured by a stronger
dollar and rising expectations that the U.S. Federal Reserve could reduce
its asset purchases at a faster pace amid signs of a tighter labour market.

Spot gold fell 0.2% to $1,780.63 per ounce by 0820 GMT, while U.S. gold
futures dropped 0.1% to $1,782.70.

The dollar index edged 0.1% higher, raising bullion's cost to buyers holding
other currencies.

Bullion rose 1% on Friday after data showed U.S. employment growth slowed
considerably in November. read more

But the data did little to alter expectations of the Fed tapering its
stimulus measures at a faster pace, as policymakers likely respond to signs
of a tightening labour market with the unemployment rate plunging. read more

Reduced stimulus and interest rate hikes tend to push government bond yields
up, raising the non-interest bearing metal's opportunity cost.

Limiting gold's decline, U.S. 10-year Treasury yields were not far from
Friday's more than two-month low and 30-year yields were close to their
lowest since January. Weaker yields decrease gold's opportunity cost.

Physical demand in China and India should start to wane in December,
weighing on gold, Cooper added.

Investors now eye U.S. consumer price data on Friday.

Spot silver fell 0.8% to $22.33 an ounce. Platinum rose 0.2% to $934.38,
while palladium declined 1.1% to $1,789.54.

The Thomson Reuters Trust Principles.

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
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opinions expressed and recommendations made are subject to change without
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