Bulls n Bears Daily Market Commentary : 18 November 2021

Thu Nov 18 20:19:39 CAT 2021

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Bulls n Bears Daily Market Commentary : 18 November 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE closed in the red dragged down by losses in blue chip counters amid
weak exchange rate policy cues. Activity levels were at 340 trades. OK
Zimbabwe was the most active stock at 35 trades followed by Delta and
Medtech at 34 and 27 trades respectively. Investor sentiment was negative
after the session yielded 23 decliners against 12 risers while four of the
active stocks remained unchanged. Nampak anchored both volume and value
aggregate trading 10 000 300 shares which represents 1.32% of its issued
shares with a value of ZW$105 million.

The benchmark All-Share Index shaded 1.24% to close at 11 818.24 points. The
Top 10 Index lost 1.67%. The Top 15 Index also shaded 1.65%. The Medium Cap
Index was down by a marginal 0.16% to 21 427.23 points whilst the Small Cap
Index added 0.64% to 401 785.06 points. Leading the shakers pack of the day
was Meikles Limited  shading 9.09% and Econet down by 6.02%. OK Zimbabwe
pared 5.70% and Innscor Africa Limited lost 5.20% to 17 734.58c. Zimpapers
was down by 3.52%. Mitigating the losses were gains in Medtech Holdings and
Mashonaland Holdings which added 15.36% and 12.45% respectively. Cassava was
up by 9.41% to 5 539.18c. RTG and First Capital Bank both added 4.40%. The
Old Mutual Top Ten ETF closed at 510.40c.-wealthaccess

Global Currencies & Equity Markets

South Africa

Rand slumps to new low this year after central bank's dovish hike

An interest-rate increase by South Africa's central bank provided little
support for the rand, which fell to its weakest levels this year.

While the South African Reserve Bank delivered on market expectations, its
policy makers' comments were taken to be dovish, as they said further
tightening would be gradual.

A risk-off mood in markets also added to the rand's gloom, with more other
developing-nation currencies such as the ruble and the Chilean peso dropping
against the greenback.

The currency weakened as much as 1.7% to R15.7657 per dollar, the lowest
since November 5 last year on a closing basis, and was last at 15.7095 in
late afternoon trading.

Yields on benchmark 10-year government bonds were flat at 9.95%

Markets are bracing for policy tightening from the Federal Reserve sooner
than anticipated after better-than-expected economic data. Russia, Brazil
and Hungary have all raised interest rates and were joined this month by
Poland.

A break above R15.794 for the pair would set up a test of the September 2020
high near R17.266, he said.

Bloomberg calculations based on options pricing assign a 62% probability of
the rand weakening to R16 per dollar by the end of the year. The currency
last touched that level a year ago.

Nigeria

Naira maintains stability at official market as forex turnover surged by
over 300%

The exchange rate between the naira and the US dollar closed at N415.1/$1,
at the Investors and Exporters window, where forex is traded officially.
Naira maintained N415.1/$1 for the fourth day in a row at the Investors and
Exporters window.

At the parallel market, naira also closed flat at N545/$1 on Wednesday, the
same as recorded on Tuesday, 16th November 2021. The exchange rate had
gained massively in the previous week to N535 to a dollar from N570/$1. This
is according to information obtained from BDC operators interviewed by
Nairametrics.

On the other hand, Nigeria's foreign reserve declined by 0.06% on Tuesday,
16th November 2021 to close at $41.43 billion, representing a $23.92 million
drop compared to $41.46 billion recorded as of the previous day.

The exchange rate at the Investors and Exporters window remained flat
against the US dollar on Wednesday, 17th November 2021 to close at
N415.1/$1, the same as recorded in the past three days.

The opening indicative rate closed at N413.74/$1 on Wednesday, indicating an
81 kobo appreciation compared to N414.55/$1 recorded in the previous trading
session.

An exchange rate of N444 to a dollar was the highest rate recorded during
intra-day trading before it settled at N415.1/$1, while it sold for as low
as N386/$1 during intra-day trading.

Forex turnover at the official window jumped significantly by 378% to
$298.88 million on Wednesday.

According to data tracked by Nairametrics from FMDQ, forex turnover at the
I&E window increased from $62.53 million recorded on Tuesday 16th November
2021 to $298.88 million on Wednesday 17th November 2021.

Bitcoin price falls below $60k

Bitcoin price dipped significantly on Wednesday to huge selloffs as the
flagship crypto asset lost 0.29% to close at $59,970.52 as of 10:45pm. The
decline triggered a 1.8% decrease in the industry's market capitalisation to
close at $2.564 trillion, indicating a $27.84 billion loss.

The downturn in the market came after it lost over $150 billion in the
previous trading session. Meanwhile, Ethereum gained 0.62% on Wednesday to
close at $4,236.06.

The bearish trade has caused a liquidation event in which $971.5 million
worth of leveraged longs have been liquidated from their positions in the
past two days. Data from Coinglass which formerly went by the name Bybt,
revealed that a total of $971.5 million leveraged longs got liquidated in
the past 48 hours.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar dips from 16-month peak as traders assess rally

The dollar edged back from a 16-month high on Thursday as traders assessed
whether the U.S. currency's recent surge, fueled by diverging central bank
tightening expectations amid surging inflation around the globe, had gone
too far.

The dollar index, which measures the currency against a basket of six
rivals, reached its highest since mid-July 2020 on Wednesday at 96.226, but
was last down 0.146% at 95.647.

Recent U.S. data showed inflation running in October at its hottest since
1990, while retail sales numbers topped forecasts, leading the market to
price in earlier rate hikes by the Federal Reserve than had been
anticipated, driving strength in the greenback.

The euro, rose 0.32% to $1.13545, bouncing off of a 16-month low hit on
Wednesday below $1.13.

Sterling, which jumped 0.5% against the greenback on Wednesday after data
showing rising inflation in Britain last month piled pressure on the Bank of
England to hike rates at its meeting next month, gave back some gains and
was last down 0.08% at $1.3477.

The New Zealand dollar rose 0.31% to $0.7020 after a central bank survey
showed near-term inflation is expected to rise in the fourth quarter.

Elsewhere, Turkey's lira shed another 3.3% to above 11 per dollar after the
central bank cut rates by 100 basis points to 15%, even in the face of
inflation near 20% and the Turkish currency hurtling southwards.

The lira has lost around 11.5% of its value this month amid President Tayyip
Erdogan's renewed criticism of interest rates and calls for stimulus despite
the risks. It was last at 10.955, having earlier hit a record low of 11.30
per dollar.

Commodity-linked currencies were hurt by oil prices, which slumped to near
six-week lows.

The Canadian dollar was at a six-week low. Markets are expecting the Bank of
Canada to start raising interest rates early next year. The Norwegian Crown
also fell.

The Australian dollar touched a six-week low of $0.7251 and was last down
0.1% at $0.72575.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips as U.S. jobless claims data cements rate-hike bets

Gold prices slipped on Thursday as encouraging weekly U.S. jobless claims
data strengthened bets for an earlier-than-expected rate hike by the Federal
Reserve following recent strong inflation data out of the United States.

Spot gold eased 0.3% to $1,860.62 per ounce by 10:30 am ET (1530 GMT), while
U.S. gold futures fell 0.4% to $1,862.50. Despite the drop in prices,
bullion was still holding near its highest level in five months, hit on
Tuesday.

The number of Americans filing new claims for unemployment benefits fell
close to pre-pandemic levels last week, data showed on Thursday. Any signs
of a recovering economy reduces the demand for the safe-haven metal.

U.S. Treasury yields held near recent three-week highs , while the U.S.
dollar paused for breath, slipping back from a 16-month peak. A weaker
dollar makes gold more attractive for buyers holding other currencies.

Bullion, considered a hedge against inflation, has gained on surging
consumer prices in the U.S. and Europe. But that has also bolstered bets for
early interest rate hikes, which would increase the opportunity cost of
holding non-yielding gold.

Elsewhere, platinum slipped 1.4% to $1,042.88 per ounce, while palladium was
1.4% lower at $2,157.17

Silver fell 1.1% to $24.78 per ounce.

Crude oil price falls below $80 per barrel

Crude oil prices have fallen below $80 per barrel at the global crude oil
market, following recurrent bearish trades. Brent Crude dipped 2.79% on
Wednesday to close at $80.13 per barrel, while a 0.42% early Thursday dip
has seen the price of the crude product fall below $80 per barrel.

West Texas Intermediate in the same manner declined by 2.47% on Wednesday to
close at $77.85 per barrel and currently trades on the red at $77.72 as of
7am on Thursday.

Similarly, Natural gas lost 5.47% to close at $4.894, while Nigeria's crude,
Bonny Light gained 1.26% to trade at $81.69 per barrel, Brass River and Qua
Iboe both declined by 1.2% to close at $81.43 per barrel.

External reserve

Nigeria's foreign reserve declined yet again by 0.06% to close at $41.43
billion as of Tuesday, 16th November 2021 compared to $41.46 billion
recorded as of the previous day.

The nation's foreign reserve had gained $5.04 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.

The gains recorded in the previous month is higher than the $2.76 billion
gain recorded in the month of September 2021. Meanwhile, Nigeria's reserve
has declined by $388.93 million so far in the month of November. On a
year-to-date basis, the reserves have gained $6.06 billion.

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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