Bulls n Bears Daily Market Commentary : 05 November 2021

Sat Nov 6 06:29:46 CAT 2021

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Bulls n Bears Daily Market Commentary : 05 November 2021

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ZSE commentary

The ZSE closed with significant gains across the board except for a marginal
decline from mid-tier stocks which failed to drag down the bourse. Activity
levels were at 370 trades. Star Africa was the most active stock at 47
trades followed by Delta at 34 and Econet and OK Zimbabwe 24 trades each.
Market bias was negative as 20 stocks declined against 13 risers while four
of the active stocks remained unchanged. Medtech anchored volume aggregate
trading 2 116 700 shares and Cassava anchored value aggregate with a value
of ZW$55.6 million.

The All-Share Index closed 1.48% higher at 11 846.33 points. The Top 10
Index added 1.97%. The Top 15 Index also added 1.76%. The Medium Cap Index
lost a paltry 0.09% to 22 207.30 points whilst the Small Cap Index added a
massive 5.48% to 369 643.95 points. Leading the risers pack of the day was
CFI Holdings adding 19.95% and Mashonaland Holdings up by 17.69%. Edgars
gained 15.11% and Meikles gained 14.44% to 24 112.50c. General Beltings was
up by 12.50%. Mitigating the gains were losses in National Tyre Services and
Zimpapers which shaded 14.29% and 8.57% respectively. Truworths was down by
7.48% to 240.54c. Bindura and CBZ Holdings pared 6.03% and 3.12%
respectively. The Old Mutual Top Ten ETF closed at 447.91c up by 1.53% after
12 602 units were traded worth ZW$56 445.40 in 19 trades.wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand firms after strong U.S. jobs data

(Reuters) - The South African rand firmed on Friday along with other
emerging market currencies after a volatile week with price swings driven by
domestic politics and U.S. monetary policy.

At 1513 GMT, the rand traded at 15.13 against the U.S. dollar, 0.49%
stronger than its previous close.

The rand was supported by strong U.S. jobs data, which boosted optimism
about the global economic recovery.

Non-farm payrolls increased by 531,000 jobs last month as the surge in
COVID-19 infections over the summer subsided, offering more evidence that
U.S economic activity was regaining momentum early in the fourth quarter.

The rand's gains were capped, however, by a poor showing by the governing
African National Congress (ANC) in municipal elections. The final count
released late on Thursday showed the ANC took 46% of the vote, its worst
result since taking power at the end of white minority rule in 1994.

ANC's support dropping below 50% raised the possibility - albeit still
remote - that South Africa could be governed by a different party in the not
too distant future.

Technology stocks, meanwhile, weighed on the Johannesburg Stock Exchange's
Top-40 Index. It fell 0.48% and the broader All-Share Index closed down
0.49%.

The tech index fell 3.24%, led by market heavyweights Naspers and its
subsidiary Prosus which both fell more than 3%.

Bucking the downward trend was MTN, which jumped 13.15% after Africa's
biggest mobile operator by subscribers got in-principle approval to operate
its mobile money service MoMo in Nigeria.

In fixed income, the yield on the benchmark 2030 government bond was down 6
basis points to 9.450%. 

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar soars to more than 1-year high after jobs data, then pulls back

(Reuters) - The dollar jumped on Friday to hit its highest level in more
than a year, after data showed stronger U.S. job growth than expected in
October, but retreated a bit in late trading as risk appetite improved and
stocks rallied.

Nonfarm payrolls increased by 531,000 jobs last month, above the 450,000
forecast, as the latest surge in COVID-19 infections subsided. read more
August and September data were revised upward to show an additional 235,000
jobs created over those months.

The dollar index , which measures the greenback against a basket of six
rivals, rose as high as 94.634 after the jobs report, its firmest since
Sept. 25, 2020.

The safe-haven currency pulled back a bit as risk appetite improved and
stocks staged a broad rally. The dollar was last down 0.096% at 94.234, but
was still up around 0.1% for the week, which was marked by a bevy of central
bank meetings that forced investors to reset rate hike expectations. read
more

On Wednesday, Fed Chair Jerome Powell said he was in no rush to hike
borrowing costs, as there was "still ground to cover to reach maximum
employment." The central bank did announce a $15 billion monthly tapering of
its $120 billion in monthly asset purchases. read more

The conditions are in place for a broad grind higher in the dollar, which
also meshes with the seasonal trend for November, they said.

One soft spot in the U.S. employment report was a flat participation rate,
which could end up spurring the Fed into action faster than expected, said
Sal Guatieri, senior economist at BMO Capital Markets

The Bank of England's decision on Thursday not to lift rock-bottom benchmark
rates proved the biggest shock for markets and pushed sterling to its
biggest one-day fall in more than 18 months by as much as 1.6% on the day.

Sterling fell as much as 0.5% on Friday, hitting a fresh one-month low of
$1.34250. It was last down 0.07%.

Earlier in the week, the Reserve Bank of Australia also stuck to its dovish
stance despite inflationary pressure and held rates. The Aussie reversed
declines from the overnight session and was up 0.01% at $0.73995, but was
still on track for around a 1.6% weekly fall. read more

European Central Bank President Christine Lagarde pushed back on Wednesday
against market bets for a rate hike as soon as next October and said it was
very unlikely such a move would occur in 2022. read more

The euro was up 0.08% at $1.15635.

Among cryptocurrencies, bitcoin was down 0.89% at $60,908.40, having largely
traded sideways since it hit its all-time high above $67,000 last month.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Base metals prices looking weak, vulnerable - stronger dollar a headwind

Base metals prices on the London Metal Exchange were mixed on the morning of
Friday November 5, but for the most part they were on a back foot and
looking vulnerable.

At the same time, base metals prices on the Shanghai Futures Exchange were
mainly weaker while they tracked the weakness on the LME on Thursday, and
because weaker coal prices in China are less likely to cause metal producers
to cut production.

Friday's US employment report likely to set the scene into the weekend.

Central banks have not surprised the markets because they have remained
dovish.

Base metals

Three-month base metals prices on the LME were mixed this morning, but only
aluminium was showing any real weakness with its three-month price down by
0.8% at $2,532.50 per tonne. Zinc ($3,234 per tonne) was down by 0.1%, but
the rest were up by an average of 0.4%, led by a 0.8% rise in lead ($2,366
per tonne). Lead has been the one metal that has held up the best in recent
weeks. Copper was up by 0.6% at $9,468 per tonne.

The most-active base metals contracts on the SHFE were mainly weaker, the
exception was the December tin contract that was up by 0.1%, while the rest
of the December contracts were down by an average of 2%, although that was
skewed by a 5.9% fall in aluminium and a 2.6% fall in zinc. Copper was off
by 0.8% at 69,680 yuan ($10,890) per tonne. Aluminium was down because of
the rapid fall in coal prices, which should help prevent smelters having to
close due to either high energy prices, or due to energy shortages.

Precious metals

The precious metals were stronger across the board this morning with prices
up by an average of 0.5%, it would seem that the dovish central bank stance
has supported prices. Spot gold was up by 0.3% at $1,792.46 per oz, having
put in a 0.8% rise on Thursday.

Wider markets

Bonds rallied after the Bank of England avoided being the first major
central bank to raise interest rates. While bonds strengthened, the yield on
US 10-year treasuries eased and was recently at 1.54%, compared with 1.59%
at a similar time on Thursday.

Despite generally strong US equity indices, Asia-Pacific equities were
mainly weaker on Friday morning: the Nikkei (-0.61%), the Hang Seng
(-1.21%), CSI 300 (-0.22%) and the Kospi (-0.47%), with the ASX 200 (+0.39%)
bucking the trend.

While central banks might have refrained from being more hawkish, it is
clear that monetary policy will start to return to a more normal situation
in the quarters ahead and that might become an issue for those emerging
markets with high US dollar-denominated debt.

Currencies

The US Dollar Index put in a strong performance on Thursday and has held
onto those gains on Friday morning. The index was recently at 94.32,
compared with 94.09 at a similar time on Thursday and seems to be closing on
this year's high at 94.56, set on October 12.

Most of the other major currencies were weaker: the euro (1.1555), the
Australian dollar (0.7386), and especially sterling (1.3493), while the
Japanese yen (113.66) was stronger.

Key data

Economic data already out showed German industrial production fell by 1.1%
month on month in September, after a 3.5% decline in August.

Later there is key data on French industrial production, French private
payrolls, Italian retail sales and US data on employment, consumer credit
and a Treasury currency report.

In addition, UK Monetary Policy Committee members David Ramsden and Silvana
Tenreyro are scheduled to speak.

Gold tops $1,800, posts highest finish since early September

Gold prices climbed back above $1,800 an ounce on Friday to post the highest
finish since early September.

Data released Friday revealed that the U.S. created more jobs than expected,
but a disappointing number of people chose to join the workforce last month
and rising inflation dulled prospects for stronger economic growth.

U.S. companies added 531,000 jobs in October, with that increase almost
double the number of job gains in September and well above the 450,000 new
jobs expected by economists polled by The Wall Street Journal.

The NFP data was "excellent and far exceeded expectations," but gold likely
is "benefitting from labor participation rate still holding steady below
62%; an overheated labor market would be about 1% higher," Jeff Wright,
chief investment officer at Wolfpack Capital, told MarketWatch. Data on
Friday showed the labor participation rate at 61.6%.

The Federal Reserve is "always cautious when labor participation is not
robust and pays less attention to the headline unemployment rate of 4.6% vs
4.8% - plenty of folks who could return to work [are] not doing so," said
Wright. 

Traders have also focused on inflation, with the consumer price index and
producer price index numbers due out next week and "expected to be very
high," said Chintan Karnani, director of research at Insignia Consultants.
Gold is often seen a hedge against inflation. "It is all about inflation and
its potential impact on Fed's monetary policy for bullion," said Karnani.  

Gold for December delivery GC00, +1.48% GCZ21, +1.48% rose $23.30, or 1.3%,
to settle at $1,816.80 an ounce on Comex, the highest most-active contract
finish since Sept. 3, FactSet data show. For the week, prices for the
front-month contract ended about 1.8% higher.

December silver SI00, +1.40% SIZ21, +1.40% rose 25 cents, or 1%, at $24.157
an ounce, for a weekly climb of 0.9%.

Following the strong jobs data, Treasury yields fell on Friday, lowering the
opportunity cost of holding nonyielding assets such as gold, with yield on
the 10-year Treasury note TMUBMUSD10Y, 1.453% down to 1.458%, compared with
1.524% on Thursday.

Gold futures had climbed 1.7% on Thursday as Treasury yields also retreated
after the Federal Reserve on Wednesday announced widely expected plans to
begin tapering its bond purchases and signaled it would remain patient on
raising interest rates.

Read: Why gold has climbed in the wake of the Fed's decision, but still
trades lower for the year

Gold has been trapped in a $30 range from $1,770 to $1,800 an ounce, said
Peter Cardillo, chief market economist at Spartan Capital Securities, in a
note.

Wolfpack Capital's Wright said he believes gold is "about neutral" at this
point, and prices could go either way. The $1,800 level is "an important
barrier," which gold has not been able to sustain in the past, but if prices
decidedly push through that mark, gold "could accelerate quickly," he said.

In other Comex metals trading, December copper HGZ21, +0.52% rose 0.5% to
$4.343 a pound, with most-active contract prices still down 0.6%.

January platinum PLF22, +0.55% added 0.6% to $1,035.80 an ounce, but ended
around 1.5% higher for the week. December palladium PAZ21, +1.63% rose 1.6%
to $2,027.60 an ounce, contributing to a 2.4% weekly rise.

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
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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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