Bulls n Bears Daily Market Commentary : 08 October 2021

Fri Oct 8 16:45:38 CAT 2021

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Bulls n Bears Daily Market Commentary : 08 October 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE continued on its bull run on gains supported by blue-chip counters
and mid-tier stocks as the government frantically tries to solve the
currency crisis. Activity levels were near flat at 367 trades with a share
volume of 7.5 million shares. Consumer staples contributed the most to
volume at 44.6% followed by Financials and Consumer discretionary at 17.37%
and 16.42% respectively. Star Africa was the most active stock at 36 trades
followed by Delta and OK Zimbabwe at 27 trades each. Innscor anchored volume
aggregate trading 1 351 900 shares and Hippo anchored value aggregate with a
value of ZW$207 million.

The All-Share Index gained 2.92% to 9 570.05 points. The Top 10 Index added
4.03%. The Top 15 Index gained 3.57%. The Medium Cap Index traded higher to
20 682.54 points appreciating by 0.82% whilst the Small Cap Index pared
0.30%. Leading the risers pack of the day was BAT and General Beltings which
added 20.00% and 14.44% respectively. Econet added 8.68% to 6244.76c. while
Simbisa Brands added 8.60% and National Foods was up by 8.59%. Mitigating
the gains were losses in Zimpapers and Star Africa which shaded 12.78% and
2.99% respectively. First Mutual Holdings shaded 2.44% to 2439.12c and
Wildale and Edgars pared 1.22% and 0.85% respectively. The Old Mutual Top
Ten ETF closed at 400c up by 0.33% after 533 221 units were traded worth
ZW$2 132 884 in 41 trades. Elsewhere, on VFEX, Padenga shaded 12.66% to
close at US 24.50 cents after 40 928 shares worth US$10 027.36 exchanged
hands.wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand falls as investors eye U.S. jobs data

(Reuters) - The South African rand weakened early on Friday in cautious
trade, ahead of a U.S. non-farm payrolls report considered key to the U.S.
Federal Reserve's stimulus taper schedule.

At 0634 GMT, the rand ZAR= traded at 14.9770 against the dollar, 0.26%
weaker than its previous close.

U.S. non-farm payrolls data is expected to show continued improvement in the
labour market, with a forecast for 500,000 jobs added in September, a
Reuters poll showed.

In the so-called "taper tantrum" of 2013, a Fed announcement that it would
begin cutting back on bond purchases led to a sharp sell-off in emerging
market currencies such as the rand.

In fixed income, the yield on the benchmark government bond due in 2030
ZAR2030= was up 0.5 basis points to 9.435%.

KENYA

Kenyan shilling seen hurt by strong dollar appetite

(Reuters) - The Kenyan shilling is seen weaker on sharper dollar appetite in
the coming week, while the Zambian Kwacha may also lose ground on rising
hard currency demand.

Kenya's shilling KES= is expected to be under pressure from dollar demand
from importers next week, traders said.

Commercial banks quoted the shilling at 110.60/80 to the dollar, compared
with last Thursday's close of 110.40/60 per dollar.

NIGERIA

Nigeria's naira NGNP= is seen firmer on the black market next week as
dealers hoard the local unit while they weigh the impact of the planned
launch of the country's digital currency, traders said.

The naira firmed to 573 against the dollar on the unofficial market, from a
low of 577 naira a week ago, while the unit was quoted at 410.50 naira on
the official market NGN=, broadly in a range held since June.

The central bank is yet to set a date for the launch of its digital currency
"e-naira" after it postponed the plans last week.

Retail currency operators have faced low dollar supply after a July central
bank clamp-down on bureau de change operators in an attempt to channel
demand away from unofficial sources, to support the naira.

TANZANIA

Tanzania's shilling TZS= is expected to hold steady next week, drawing
support from hard currency inflows from exporters in sectors like mining and
agriculture.

Commercial banks quoted the shilling at 2,300/2,310 on Thursday, against
2,305/2,315 recorded a week earlier.

UGANDA

The Ugandan shilling UGX= is seen trading with a weakening bias in the
coming days on the back of a rebound in appetite for hard currency from
importers and players in the interbank market.

At 0932 GMT commercial banks quoted the shilling at 3,560/3,570, compared to
last Thursday's close of 3,535/3,545.

ZAMBIA

The kwacha ZMW= will likely post further losses against the dollar in the
coming week as demand for hard currency continues to outweigh supply.

On Thursday, commercial banks quoted the currency of Africa's second largest
copper producer at 17.0266 per dollar, versus 16.7250 at the close of
business a week ago.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar creeps higher ahead of U.S. jobs report

(Reuters) - The dollar edged higher versus major peers on Friday but within
a narrow range as traders awaited clues from the U.S. non-farm payrolls
report on the pace of Federal Reserve policy normalization.

The U.S. Dollar Currency Index , which measures the greenback against a
basket of six peers, rose 0.1% to 94.294, keeping within sight of last
week's one-year peak of 94.504.

The dollar gained 0.3% to 111.96 yen , and touched 111.975, the highest
level this month, helped by higher Treasury yields, with the benchmark
10-year note hitting 1.6010% for the first time since June 4.

The euro consolidated around $1.1550, after weakening on Wednesday to a
14-month low of $1.1529.

The Federal Reserve has said it is likely to begin reducing its monthly bond
purchases as soon as November and follow up with interest rate increases
potentially next year, as the U.S. central bank's turn from pandemic crisis
policies gains momentum. read more

The non-farm payrolls data, due out later on Friday, is expected to show
continued improvement in the labour market, with a consensus forecast for
500,000 jobs added in September, although estimates ranged from 250,000 to
700,000, a Reuters poll showed.

Following the September Federal Open Market Committee meeting, Fed Chair
Jerome Powell said the upcoming payrolls report need not be "a knock-out,
great, super-strong" report to keep policy makers on track toward tapering,
but it would need to be "reasonably good".

Powell's comment "should make markets more tolerant of a downside surprise
in particular, and the balance of risks favours a positive USD reaction" to
the jobs data, Adam Cole, the chief currency strategist at RBC Capital
Markets, wrote in a research note.

Meanwhile, the Australian dollar slipped back 0.26% to $0.7293, following a
0.55% surge on Thursday. It earlier touched $0.7324 for a second day
running, the strongest level since Sept. 16.

The Aussie has made "a decent go at breaking higher," but the test will be
whether it can stay at about $0.7315 following several failed attempts this
year, Rodrigo Catril, senior FX strategist at National Australia Bank in
Sydney, wrote in a client note.

Sterling slipped 0.16% to $1.3595, holding on to most of a 0.26% gain from
Thursday, when new Bank of England Chief Economist Huw Pill said inflation
pressures were proving stickier than initially thought, reinforcing
expectations for a rate hike by February. read more

The Canadian dollar was little changed at C$1.2548 per greenback after
earlier strengthening to a one-month peak of C$1.2534 on the back of rising
oil prices.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper steady as low inventories offset growth fears

(Reuters) - Copper prices were steady on Friday as concerns over the impact
of higher prices on global growth were offset by low inventories in exchange
warehouse, pointing to solid demand.

Benchmark copper on the London Metal Exchange (LME) CMCU3 shed 0.2% to
$9,248 a tonne by 1053 GMT but the metal widely viewed as a gauge of global
economic health remained on track for a weekly gain.

Market focus turns to non-farm payrolls later in the day after a week of
fretting over the economic impact of soaring energy prices and the prospects
of faster than expected interest rate rises to combat inflation. MKTS/GLOB

Exchange warehouse stocks climbed but remained at low levels. Weekly copper
inventories data for warehouses monitored by the Shanghai Futures Exchange
showed a rise for the first time in eight weeks, increasing by 15% to 50,062
tonnes but still hovering around 2009 lows. CU-STX-SGH

In LME-registered warehouses, on-warrant stocks rose 3.7% to 85,875 tonnes,
near their lowest since May. MCUSTX-TOTAL

EVERGRANDE: Another concern for the copper market is potential contagion
from the financial woes of Chinese property developer Evergrande 3333.HK.
China's property sector is a major consumer of copper.

However, global exchange copper inventories are down 23% since late August
and the copper price was flat over that period, the analysts said.

OTHER METALS: LME aluminium CMAL3 fell 1% to $2,918 a tonne, zinc CMZN3
added 1.3% to $3,090, lead CMPB3 rose 0.8% to $2,191, tin CMSN3 was up 1.1%
at $35,700 and nickel CMNI3 was down 2.9% at $18,795.

Gold price pushing higher following another disappointing employment report,
194K jobs created in September

(Kitco News) - Gold prices are pushing higher as the U.S. labor market
showed further weakness as fewer American's found jobs in September,
potentially putting a crimp in the Federal Reserve's plan to shift its
monetary policy before the end of the year.

Friday, the Bureau of Labor Statistics said 194,000 jobs were created last
month. Economists were expecting to see job gains of around 490,000. This is
the second consecutive month employment has missed expectations.

The gold market was in positive territory ahead of the data and has added to
its gains. December gold futures last traded at $1,700.00 an ounce, up 0.61%
on the day.

Although the headline number was significantly weaker than expected, the
report noted some positive trends. The unemployment rate fell to 4.8% in
September, down from August's reading at 5.2%. Economists were expecting the
unemployment rate to fall to 5.1%.

August's disappointing employment numbers were also revised higher. The
report said that August's employment numbers were revised to 366,000, an
increase of 131,000 jobs from the initial estimate. July's data was also
revised higher to 1.091 million, up from the previous estimate of 1.053
million.

Positive for the gold market, wage inflation continues to pick up. The
report said that wages in September increased by 19 cents or 0.6%, up from
August's 0.6% increase.

Economists will now be asking whether or not the latest employment data
changes the Federal Reserve's plans to reduce its monthly bond purchases
before the end of the year.

The U.S. central bank has said that a healthy labor market is a critical
target to determine the path of monetary policy.

Katherine Judge, senior economist at CIBC, said that the Fed could still be
on a course to taper its monthly bond purchases.

Andrew Hunter, Senior U.S. economist at Capital Economics, said that
September's employment report is probably "decent" enough for the Fed to
start tapering its bond purchases before the end of the year.

However, he noted that it the data is not strong enough to warrant a rate
hike anytime soon. He also warned that inflation pressure will be a lot
stickier than the central bank currently expects.

While tapering is still on the table, commodity analysts at TD Securities
said that gold could see some short-covering as investors start to price the
Fed's inevitable shift in monetary policy further down the road.

Looking at U.S. monetary policy, the analysts said that there are plenty of
reasons to hold gold.

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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