Bulls n Bears Daily Market Commentary : 20 December 2021

Mon Dec 20 13:28:48 CAT 2021

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Bulls n Bears Daily Market Commentary : 20 December 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares continued in the red opening this week with losses across the
board although marginal. Activity levels were at 369 trades. Delta was the
most active stock at 48 trades followed by Innscor and Star Africa at 31 and
26 trades respectively. Investor sentiment was negative after the session
yielded 16 fallers against 11 risers while three of the active stocks
remained unchanged. Nampak anchored volume aggregate trading 3 771 000
shares and Delta anchored value aggregate with a value of ZW$60.63 million.
The All-Share Index shaded 0.38% to close at 9 876.43 points. The Top 10
Index pared 0.28%. The Top 15 Index also lost 0.52%. The Medium Cap Index
was down by 0.73% to 19 251.85 points whilst the Small Cap Index added 3.68%
to 388 136.97 points.

Leading the shakers pack of the day was RTG shading 14.29%. FBC Holdings was
down by 6.77%. CBZ Holdings shaded 5.13% and Nampak shaded 5.02% to 949.77c.
First Mutual Holdings was down by 5.00%. Mitigating the losses were gains in
First Capital Bank and Zimplow Holdings which added 17.01% and 12.15% to
351.54c and 2400c respectively. Star Africa Corporation was up by 6.98% to
120.07c. Ariston Holdings and Simbisa Brands added 6.29% and 6.05%
respectively. The Old Mutual Top Ten ETF closed at 531.41c up by 6.93% after
2 846 units worth ZW$15 123.80 exchanged hands in 14 trades.-wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand falls as emerging market currencies weaken on Omicron
worries

(Reuters) - The South African rand weakened on Monday amid a broader fall in
emerging market currencies as investors shunned riskier assets on concerns
over the rapidly spreading Omicron coronavirus variant.

At 0615 GMT, the rand traded at 15.9550 against the dollar, 0.35% weaker
than its previous close, with thin year-end liquidity contributing to choppy
trading.

Emerging market currencies weakened as rising cases of the new Omicron
variant of the coronavirus in Europe and the United States clouded the
global economic recovery. read more

The World Health Organization said on Saturday that Omicron cases were
doubling in 1-1/2 to three days in areas of the world with community
transmission, but noted that much remains unknown about the variant,
including the severity of the illness it causes. read more

The Thomson Reuters Trust Principles.

Nigeria

Naira falls marginally at official window as FX supply drops by 54%

Naira depreciated marginally against the US dollar on Friday to close at
N415.07/$1 compared to N415.05/$1 recorded in the previous trading sessions.
Forex turnover at the official market also dropped by 54.4% to $151.03
million from $331.11 million recorded in the previous day.

Similarly, naira depreciated against the US dollar on Friday, falling by
0.09% to close at N573/$1 from N572.5/$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 0.04% on Thursday, 16th December to
close at $40.69 billion compared to $40.71 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 fell marginally to
close at N415.07/$1 on Friday, compared to N415.05/$1 recorded on Thursday,
16th December 2021.

The opening indicative rate closed at N413.83/$1 on Friday, which represents
a 30 kobo appreciation compared to N414.13/$1 recorded in the previous
trading session.

An exchange rate of N444/$1 was the highest rate recorded during intra-day
trading before it settled at N415.07/$1, while it sold for as low as N405/$1
during intra-day trading.

Forex turnover at the official window decreased by 54.4% to $151.03 million
on Friday.

According to data tracked by Nairametrics from FMDQ, forex turnover at the
I&E window dropped from $331.11 million recorded on Thursday 16th December
2021 to $151.03 million on Friday 17th December 2021.

Cryptocurrency watch

The cryptocurrency market currently trades bearish as the market
capitalisation had already lost $21.6 billion to stand at $2.164 trillion as
of press time. Crypto flagship asset, bitcoin recorded a 0.27% decline in
price to trade at $46,565 while Ethereum declined by 1.67% to trade at
$3,856.67.

Solana also dipped 2.24% to trade at $175.8325 while Luna with a 1.57% drop
trades at $77.02089. The crypto market is suffering from bullish sentiments
as huge selloffs going into the festive period has kept the prices on the
red.

The bearish trend in the market came on the back of the Central Bank of
Russia reaffirmation of its opposition against cryptocurrency investment
citing the high volatility of the digital assets.

Crude oil price

Crude oil prices resumed the week on a bearish note, as Brent crude is
currently trading around $70 per barrels, while West Texas Intermediate
already fell below the $70 per barrel mark. As at press time on Monday,
Brent Crude fell by 3.58% to trade at $70.89 per barrel.

Similarly, West Texas Intermediate dipped 3.71% to trade at $68.23 per
barrel while Bonny Light dropped by 2.24% to trade at $73.25 per barrel.
However, the OPEC Basket gained 2.11% to trade at $74.66 per barrel as if
the time of writing this article.

Nigerian crude oil, Brass RIver and Qua Iboe also started the week bullish
with 0.147% gain to trade at $75.1 per barrel.

External reserve

Nigeria's external reserve dipped by 0.04% on Thursday, 16th December 2021
to close at $40.69 billion, which represents a decline of $16.33 million
compared to $40.71 billion recorded as of the previous day.

The decline in the country's reserve level can be attributed to the
continuous intervention of the apex bank in ensuring the stability of the
exchange rate. The exchange rate at the official window as remained stable
in the past four trading sessions.

It is worth noting that the nation's foreign reserve had gained $5.99
billion in the month of October, as a result of the $4 billion raised by the
federal government from the issuance of Eurobond in the international debt
market.

In the month of November, Nigeria's external reserve lost $633.47 million in
value as against a gain of $5.99 million recorded in the previous month and
$2.76 million gain in September 2021. So far in the month of December, the
reserve level has lost $496.1 million, while on a year-to-date basis, the
reserve gain has reduced to $5.32 billion.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar shines, euro sags as Omicron spreads while Fed hawks circle

(Reuters) - The U.S. dollar hovered near its highest point in 17 months
against major peers on Monday after Federal Reserve officials signalled a
first pandemic-era interest rate increase could come as early as March.

The euro sank with the British pound after the Netherlands went into
lockdown on Sunday and Britain's health minister declined to rule out
further restrictions before Christmas amid the rapid spread of the Omicron
coronavirus variant. read more

Although COVID-19 restrictions cloud the outlook for economic growth, they
also risk keeping inflation elevated and turning central banks more hawkish.

Fed Governor Chris Waller, a known hawk, said on Friday that he thought a
rate increase in March would be "very likely" and that the central bank
could start to run down it balance sheet in mid-2022. Meanwhile, erstwhile
dove Mary Daly, president of the San Francisco Fed, refused to rule out a
March increase and voiced support for as many as three increases next year.
read more

The Fed's rapid hawkish tilt combined with Omicron's troubling spread
intensified a risk-off mood, which led investors to squirrel away their
capital in safe havens, including Treasuries and the dollar, with moves
exacerbated by year-end profit taking, said Ken Cheug, chief Asian
foreign-exchange strategist at Mizuho Bank.

The dollar index , which measures the currency against six major peers,
stood at 96.629, not far from last month's peak of 96.938, the highest since
July 2020.

The greenback touched its highest levels since Dec. 15 against the euro,
sterling and the risk-sensitive Australian dollar, although it slipped
against fellow haven currency the yen, but remained near the middle of the
trading range of the past three weeks.

Ten-year U.S. Treasury yields , to which the dollar-yen pair are often
closely correlated, languished near a two-week low reached Friday.

Money markets price about 50-50 odds of a quarter-point hike by March.

Chris Weston, head of research at brokerage Pepperstone in Melbourne, warned
that despite the tailwind from an increasingly hawkish Fed, the dollar may
be vulnerable to a retracement..

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold holds near 3-week high on omicron jitters

Gold prices edged higher on Monday, hovering near a three-week high hit in
the previous session, as fears over the rapidly spreading omicron
coronavirus variant boosted the metal's safe-haven appeal.

Fundamentals

Spot gold was up 0.2% at $1,800.42 per ounce by 0113 GMT. U.S. gold futures
were down 0.2% at $1,801.50.

Asian share markets fell and oil prices slid as surging omicron cases
triggered tighter restrictions in Europe and threatened to drag on the
global economy into the new year.

The possibility of more Covid-19 restrictions being imposed ahead of the
Christmas and New Year holidays loomed over several European countries as
the omicron variant spreads rapidly.

U.S. health officials urged Americans on Sunday to get booster shots, wear
masks and be careful if they travel over the winter holidays, as the omicron
variant raged across the world and was set to take over as the dominant
strain in the United States.

U.S. Federal Reserve officials openly spoke of hiking rates as soon as March
and of starting to run down the central bank's balance sheet in mid-2022.

The U.S. dollar index hovered close to a three-week high hit in the previous
week.

Physical gold demand in India showed a modest improvement this week as some
buyers rushed to stores anticipating a further rise in domestic prices,
while customers in other Asian hubs started bullion shopping for Christmas.

Spot silver was up 0.1% at $22.37 an ounce, platinum shed 0.2% to $928.23
and palladium dipped 1.8% to $1,749.51. 

Oil prices slide as rapid Omicron spread dims fuel demand outlook

(Reuters) - Oil prices slumped more than 3% on Monday as surging cases of
the Omicron coronavirus variant in Europe and the United States stoked
investor worries that new mobility restrictions to combat its spread could
hit fuel demand.

Brent crude futures fell $2.42, or 3.2%, to $71.10 a barrel by 1005 GMT
while U.S. West Texas Intermediate (WTI) crude futures were down $2.79, or
3.9%, at $68.07.

The Netherlands went into lockdown on Sunday and the possibility of more
COVID-19 restrictions being imposed ahead of the Christmas and New Year
holidays loomed over several European countries. read more

U.S. health officials urged Americans on Sunday to get booster shots, wear
masks and be careful if they travel over the winter holidays, as the Omicron
variant raged across the world and was set to take over as the dominant
strain in the United States. read more

Meanwhile, U.S. energy firms this week added oil and natural gas rigs for a
second week in a row.

The oil and gas rig count, an early indicator of future output, rose by
three to 579 in the week to Dec. 17, its highest since April 2020, energy
services firm Baker Hughes Co said in its closely followed report on Friday.
read more

Still, lower exports are expected from Russia with exports and transit of
oil from the country planned at 56.05 million tonnes in the first quarter of
2022 versus 58.3 million tonnes in the fourth quarter of 2021, a quarterly
export schedule seen by Reuters showed on Friday. read more

Meanwhile OPEC+ compliance with oil production cuts stood at 117% in
November, up a percent from the previous month, two sources from the group
told Reuters, as output continues to lag agreed targets. read more

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
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
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for guideline purposes only and sourced from third parties.

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