Bulls n Bears Daily Market Commentary : 26 November 2021

Sat Nov 27 07:06:04 CAT 2021

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Bulls n Bears Daily Market Commentary : 26 November 2021

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ZSE commentary

The ZSE was near flat in today’s session supported by gains in blue-chip counters although with low activity and liquidity levels. Activity levels were at 376 trades. Econet was the most active stock at 54 trades followed by OK Zimbabwe and Star Africa 37 and 36 trades respectively. Investor sentiment was flat after the session yielded 16 decliners against 16 risers while two of the active stocks remained unchanged. Star Africa anchored volume aggregate trading 497 200 shares and Delta anchored value aggregate with a value of ZW$58.8 million.

The benchmark All-Share Index added 1.03% to close at 10 712.88 points. The Top 10 Index gained 1.70%. The Top 15 Index also added 1.44%. The Medium Cap Index was down by 0.57% to 20 833.19 points whilst the Small Cap Index shaded 0.54% to 389 045.08 points. Leading the shakers pack of the day was Art Corporation shading 8.70% and Star Africa down by 5.33%. RTG pared 5.03% and Ariston lost 4.88% to 360.01c. Zimplow was down by 3.75%. Mitigating the losses were gains in Medtech and Bindura  which added 14.62% and 11.48% to 5800c and 519.96c respectively. British America Tobacco was up by 5.84% to 289999.96c. African Distillers and Delta  added 4.76% and 4.73% respectively. The Old Mutual Top Ten ETF closed at 466.37c down by 11.50% after 79 012 units were traded worth ZW$368 484.40 in 37 trades. wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand takes a hit on fears of new Covid variant with many mutations

The South African rand on Friday fell sharply against the dollar after a new variant with many mutations was detected in the country.

The currency fell as low as 16.2255 against the greenback during Asia trading hours on Friday and was last trading at 16.2106 per dollar.

Those losses came as investors scurried toward safe-haven currencies such as the Japanese yen, which strengthened about 0.6% against the greenback to 114.69 per dollar.

The South African rand on Friday fell sharply against the dollar after a new variant with many mutations was detected in the country.

The currency fell to as low as 16.2391 against the greenback during Asia trading hours on Friday and was last trading about 1.6% weaker at 16.2215 per dollar.

The losses came as investors scurried toward safe-haven currencies such as the Japanese yen, which strengthened about 0.6% against the greenback to 114.69 per dollar. The U.S. dollar index, which tracks the greenback against its peers, was at 96.712 — as compared with levels below 96.5 seen earlier this week.

One currency analyst told CNBC's "Street Signs Asia" on Friday that the big move in the rand may be partially due to fewer trades being made during Asia hours.

World Health Organization officials said Thursday they are monitoring a new variant with numerous mutations to the spike protein — the part of the virus that binds to cells in the body. The health agency is scheduling a special meeting Friday to discuss what it may mean for vaccines and treatments.

The variant, called B.1.1.529, has been detected in South Africa in small numbers, according to the WHO.

Hours following the announcement, the United Kingdom announced it would temporarily suspend flights from six African countries.

Nigeria

Naira Flat at Investors’ FX Market as Demand Tanks 59%

The value of the Naira compared with the US Dollar at the Investors and Exporters (I&E) window of the foreign exchange (FX) market on Thursday, November 25, remained unchanged at N415.07/$1 at the close of business.

This came on the back of a 59.7 per cent or $145.27 million decrease in the turnover for the trading session at the investors’ FX market as transactions worth $98.07 million were carried out in contrast to the $243.34 million executed at the previous trading day.

However, at the interbank segment of the market, the Naira recorded a marginal loss of one kobo against the US Dollar yesterday to trade at N411.64/$1 in contrast to N411.63/$1 it traded at the last trading session.

But it was a different outcome against the British Pound Sterling at the same market window, where the domestic currency appreciated by N1.14 to trade at N548.55/£1 compared to the previous N549.69/£1 and depreciated by 63 kobo against the Euro to quote at N462.07/€1 in contrast to the previous day’s exchange rate of N461.44/€1.

Meanwhile, at the cryptocurrency market on Thursday, most of the digital coins monitored by Business Post closed bullish, with Binance Coin (BNB) appreciating by 8.4 per cent to trade at N267,277.06.

Furthermore, Ethereum (ETH) went up by 3.9 per cent to sell at N2,514,184.33, Dash (DASH) added 3.6 per cent to its previous value to trade at N119,099.99, Tron (TRX) improved during the session by 3.3 per cent to sell at N57.40, Ripple (XRP) appreciated by 2.2 per cent to quote at N594.99, Bitcoin (BTC) made a 1.8 per cent gain to sell at N33,242,755.01, while Litecoin (LTC) marginally went up by 0.1 per cent to trade at N124,997.93.

On the reverse side, the United States Dollar Tether (USDT) recorded a 1.1 per cent fall to sell at N566.70, Cardano (ADA) declined by 0.8 per cent to sell at N952.14, while Dogecoin (DOGE) lost 0.6 per cent to finish at N126.60.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar hits highest level since July 2020 — Oppenheimer on which stocks to watch

The greenback is breaking out.

The U.S. dollar this week climbed to highs not seen since July 2020 after Federal Reserve Chair Jerome Powell was renominated to the position. That decision gave a somewhat clearer outlook for monetary policy in the year ahead, including the likelihood of coming rate hikes.

Common wisdom is that multinational stocks tend to underperform when the U.S. dollar is strong — company profits made overseas are diminished when brought back to the U.S.

That's not always the case, according to Ari Wald, head of technical analysis at Oppenheimer. He highlights technology stocks as one group that manages to buck currency headwinds.

The U.S. dollar index has risen 7% over the past six months, for example, just as the XLK technology ETF has climbed 23%. That ETF, which holds Apple and Microsoft as its top components, generates more than half its revenue from outside the U.S.

So if technology outperforms regardless of a strong U.S. dollar, Wald sees a different group that should do well if the currency begins to ease.

The XME metals and mining ETF has risen 34% this year, better than the 25% gain for the S&P 500.

The dollar and stock market's lockstep rise is an "anomaly" that should continue, according to Michael Bapis, managing director of Vios Advisors at Rockefeller Capital. He says the best tactic is to stay the course.

He adds that a strong U.S. dollar could stick around.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold jumps as new virus variant fears grip investors

Gold gained on Friday as concerns about a hit to the global economic recovery, due to the spread of a new coronavirus variant identified in South Africa, drove investors to the safety of bullion.

Spot gold jumped 0.9% to $1 805.26 per ounce by 09:51 GMT. US gold futures advanced 1.2% to $1 805.20.

The variant spreading in South Africa possibly evades immune responses and has prompted Britain and the European Union to halt travel from the African nation.

European stocks tumbled and were set for their worst session in more than a year.

Aiding gold's climb, the dollar index eased 0.4% from a 16-month peak scaled earlier this week, reducing bullion's cost to buyers holding other currencies. US benchmark 10-year Treasury yields also weakened.

On a weekly basis though, the metal was heading for its worst week since Aug. 6 on increased expectations that the Fed could taper its asset purchases and raise interest rates at a faster pace.

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

Michael Langford, director at corporate advisory AirGuide, expects gold to decline further on higher chances of Fed sticking to its tapering timeline.

Elsewhere, platinum fell 2.3% to $972.67, while palladium dropped 2.6% to $1 812.28.

QCR's Fertig attributed palladium and platinum's declines to fears the new variant could hurt auto consumption as well as demand for the precious metals used in automobile exhaust systems.

Spot silver was down 0.5% at $23.45 per ounce. 

Copper falls on new coronavirus variant jitters

London copper prices fell on Friday, as a newly identified Covid-19 variant in South Africa fuelled concerns over its impact on economic growth and dented risk appetite.

Three-month copper on the London Metal Exchange fell 2.1% to $9 596 a tonne by 08:05 GMT. The most-traded January copper contract on the Shanghai Futures Exchange dropped 1.9% to 70 560 yuan ($11 040.01) a tonne.

The new coronavirus variant, detected by South African scientists, might make vaccines less effective. Britain introduced travel restrictions on South Africa and five neighbouring countries.

This led to Asian stocks suffering their sharpest drop in three months, as investors rushed towards safe-haven assets.

There is enough upside for copper prices with the physical availability of the metal being pretty scarce, the trader said adding, for 2022 the demand picture looks questionable with buyers becoming cautious with the prices rising "too quickly."

On-warrant LME copper inventories though edged up to 62 950 t, is still down nearly 74% from 238 725 t in August. Prices have risen 25% this year.

Copper stocks in ShFE-registered warehouses were at 34 918 t, the lowest since June 2009.

Copper is often used as a gauge of global economic health due to its widespread application in many sectors.

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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