Bulls n Bears Daily Market Commentary : 03 November 2021

Thu Nov 4 06:06:32 CAT 2021

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Bulls n Bears Daily Market Commentary : 03 November 2021

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ZSE commentary

The ZSE rose again on Wednesday supported by trades from Econet and Cassava. However, turnover declined to ZW$159.9 million. Activity levels slid to 290 trades. Econet was the most active stock at 31 trades followed by Cassava and Star Africa at 30 and 28 trades respectively. Market bias was negative as 17 stocks declined against 15 risers while three of the active stocks remained unchanged. Edgars anchored volume aggregate trading 1 468 900 shares and Econet anchored value aggregate with a value of ZW$49.4 million contributing 31% to total turnover.

The All-Share Index closed 1.07% higher at 11 731.91 points. The Top 10 Index added 1.40%. The Top 15 Index also added 1.44%. The Medium Cap Index added 0.32% to 22 512.99 points whilst the Small Cap Index also shaded 0.98% to 352 840.68 points. Leading the risers pack of the day was National Tyre Services adding margin up 20.00% and Meikles up by 19.96%. First Mutual Holdings gained 13.04% and Unifreight gained 8.57% to 3800c. Zimpapers was up by 7.90%. Mitigating the gains were losses in General Beltings Holdings and Mashonaland Holdings which shaded 16.18% and 8.04% respectively. Bindura was down by 7.57% to 536.12c. Zimplow and CBZ Holdings pared 2.98% and 2.94% respectively. The Old Mutual Top Ten ETF closed at 446.62c down by 3.57% after 36 168 units were traded worth ZW$161 531.80 in 35 trades. Elsewhere, on the VFEX, Padenga gained 0.41% to US 20 cents while Seed Co Int slipped by 0.32% to US 28 cents. wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand firms; focus on local polls results, Fed meeting

(Reuters) - The South African rand rose in early trade on Wednesday, but hovered near an eight-month low hit in the previous session on some caution ahead of an update on municipal elections results and the outcome of a U.S. Federal Reserve policy meeting.

At 0615 GMT, the rand traded at 15.4100 against the dollar, 0.26% firmer than its previous close. The currency fell to 15.4925 on Tuesday, its weakest since early March.

Vote counting after Monday's local poll was still underway and the electoral commission was expected to provide updated results later in the day.

Partial results showed on Tuesday that voter support for the ruling African National Congress (ANC) was set to drop below 50% for the first time since it ended white minority rule in 1994. read more

Market focus was also on the result of the Fed meeting, as investors looked to assess how the U.S. central bank plans to combat rising inflation and ease worries about economic recovery.

The Fed on Wednesday is expected to approve plans to scale back its $120 billion monthly bond-buying program put in place to help the economy during the pandemic. Investors will also be focused on commentary about interest rates and how sustained the recent surge in inflation is. read more

Higher rates in developed countries often drain capital away from higher-yielding but riskier emerging markets such as South Africa, weighing on their currencies.

In fixed income, the yield on the benchmark 2030 government bond was up 1.5 basis points to 9.645% in early deals.

The Thomson Reuters Trust Principles.

Kenya

Kenya’s Shilling Reaches Record Low on Increased Dollar Demand

Kenya’s shilling depreciated to its weakest level against the dollar on record as increased demand for foreign exchange added pressure on the currency of East Africa’s largest economy.

Nigeria

Nigerian Naira Loses 9 kobo Against Dollar at Spot Market

The Nigerian Naira weakened against the US Dollar at the Investors and Exporters (I&E) segment of the foreign exchange (forex) market on Tuesday, November 2.

At the spot market, the value of the local currency depreciated by 9 kobo or 0.02 per cent against the greenback to N415.07/$1 from the preceding day’s N414.98/$1.

The Naira suffered this loss despite the market window recording a decline in the value of transactions as data showed that the FX turnover for the day went down by 61.0 per cent or $98.06 million.

According to FMDQ Securities Exchange, transactions worth $62.58 million were carried at the I&E segment yesterday in contrast to the $160.64 million executed at the previous session.

A look at the interbank window of the forex market indicated that the domestic also witnessed the same outcome as its value depreciated against the American currency by 4 kobo or 0.01 per cent as it traded at N411.21/$1 versus N411.17/$1 it was sold on Monday.

However, the Naira appreciated against the British Pound Sterling at the interbank window on Tuesday by N4.99 to trade at N561.63/£1 in contrast to the previous day’s N566.62/£1 and also appreciated against the Euro by N2.79 to trade at N475.89/€1 compared with N478.68/€1 it was traded on Monday.

Meanwhile, the cryptocurrency market was largely bullish on Tuesday as interest in the digital assets begin to grow with Bitcoin (BTC) rising by 1.5 per cent to trade at N35,348,941.20 and Ethereum (ETH) growing by 4.3 per cent to trade at N2,502,998.00.

In addition, Tron (TRX) jumped by 9.1 per cent to sell for N60.93, Ripple (XRP) rose by 4.9 per cent to trade at N639.94, Dash (DASH) gained 2.7 per cent to sell at N109,860.46, Cardano (ADA) improved by 0.8 per cent to sell at N1,170.96, Dogecoin (DOGE) went north by 0.6 per cent to N164.52, while Binance Coin (BNB) grew by 0.4 per cent to trade at N228,742.27.

But the value of Litecoin (LTC) went down yesterday by 0.8 per cent to sell at N110,712.87, while the US Dollar Tether (USDT) depreciated by 0.2 per cent to settle at N568.99.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar dips after Fed confirms beginning of taper

(Reuters) - The dollar eased on Wednesday after the U.S. Federal Reserve said it would begin unwinding its pandemic-era stimulus, but held to its belief that high inflation would prove "transitory" and likely not require a rapid rise in interest rates.

The Fed announced a $15 billion monthly cut to its $120 billion in monthly purchases of Treasuries and mortgage-backed securities, but did little to signal when it may begin the next phase of policy "normalization" by raising interest rates.

The dollar index softened after the Fed statement, hitting a session low before reversing some of the losses and was last down 0.045% at 94.068, still within reach of its 2021 peak of 94.563 hit last month.

The initial sell-off in the dollar after the Fed announcement was likely profit-taking, said Scott Petruska, chief currency strategist at Silicon Valley Bank.

Over the rest of the quarter, the dollar will be supported by relatively higher U.S. yields, the Fed showing an eagerness to stop inflation and admitting to some extent that inflation may not be as transitory as they initially thought, and as a safe haven, he said.

The Fed announcement follows meetings of the Reserve Bank of Australia on Tuesday and the European Central Bank last Wednesday, both of which pushed back against market pricing of tighter policy. The Bank of England meets on Thursday. read more

ECB President Christine Lagarde said an interest rate rise in 2022 was very unlikely because inflation was too low, sending government bond yields lower. But the euro barely budged. read more

Against the euro the greenback was nearly flat at $1.15825. That was not far from the $1.1522 low for the euro reached in October, which was the strongest level for the dollar since July 2020.

Dollar/yen traded at 114.125, near a four-year high .

The RBA on Tuesday abandoned its short-term yield target and dropped its expectation of holding rates at record lows until 2024, though the Aussie fell because the bank also pushed back on aggressive pricing for 2022 hikes. read more

The Aussie dropped 1.2% against the dollar on Tuesday and sat at $0.7425 on Wednesday, down 0.05% from the session open. The New Zealand dollar was also dragged 1% lower on Tuesday, but found support on Wednesday from strong labor data and was up 0.27% at $0.71285.

Money markets have dialled back expectations for a 15 basis point hike from the Bank of England on Thursday but still expect one before 2022.

The BoE is also focused on labor data and may decide to hold off on rate increases on Thursday, as "they will not want to hike rates too soon and risk crippling businesses’ recoveries," he said.

Sterling recovered from a two-week low to trade 0.3% higher at $1.36525.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips as investors brace for Fed announcement

(Reuters) - Gold prices eased on Wednesday, ahead of a crucial Federal Reserve decision, as investors await cues on the U.S. central bank’s plan to taper its pandemic-induced stimulus amid signs of rising inflation.

Spot gold fell 0.4% to $1,780.60 per ounce by 0937 GMT. U.S. gold futures for December delivery slipped 0.4% to $1,782.10 per ounce.

The Fed policy announcement is due at 1800 GMT. The central bank is likely to begin paring its monthly asset purchases by $15 billion each month, bringing them to an end by mid-2022.

Market participants are also eyeing a Bank of England policy meeting on Thursday after data suggested unemployment is unlikely to rise sharply, bolstering the case for a rate hike.

Prices of the metal have been wavering between slight losses and gains this week, and analysts have said the Fed decision could be the event that pushes gold out of its range-bound trade.

Elsewhere, spot silver edged up 0.1% to $23.54 per ounce. Platinum rose 0.6% to $1,044.27 per ounce and Palladium gained 0.5% to $2,021.71 per ounce. 

Copper bounces on scarce supplies and robust risk appetite

LONDON: Copper prices jumped on Wednesday on low inventories, healthy risk appetite and a brighter technical outlook.

Three-month copper on the London Metal Exchange gained 0.9% to $9,585 a tonne in official open-outcry trading, having lost about 8% since Oct. 18.

Global stock markets traded at fresh record-highs on Wednesday ahead of a likely U.S central bank announcement that it will start cutting pandemic-era monetary stimulus.

An arbitrage window has also opened up for copper between the LME and China, spurring Chinese buying, Hansen added.

China demand fears push copper to two-week low

The most-traded December copper contract on the Shanghai Futures Exchange closed up 2% at 71,350 yuan ($11,151.23) a tonne, following two straight weeks of declines.

On-warrant LME copper inventories rebounded by 19% to 37,525 tonnes, daily LME data showed on Wednesday, but they are still down 84% since late August.

The LME cash copper premium over the three-month contract was at $275 a tonne, indicating tight nearby supplies.

A rural community in Peru will likely lift its blockade of the country's largest copper mine Antamina on Wednesday after protests forced miners to suspend operations, the Peruvian Ministry of Energy and Mines said in a tweet.

LME cash nickel was last at a $110-a-tonne premium over the three-month contract, suggesting tightness in nearby supplies, as inventories fell to their lowest since December 2019 at 139,878 tonnes.

LME aluminium advanced 1.1% in official activity to $2,722 a tonne, nickel rose 0.5% to $19,690, lead added 1.1% to $2,388, tin climbed 1% to $37,000, but zinc slipped 0.5% to $3,325.

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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