Bulls n Bears Daily Market Commentary : 21 October 2021

Fri Oct 22 06:12:34 CAT 2021

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Bulls n Bears Daily Market Commentary : 21 October 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE rose strongly on Thursday with two indices passing key levels on
sustained brisk buying mostly in blue chip counters. Market bias was
positive as 28 stocks registered gains against 11 losers while two of the
active stocks remained unchanged. Activity levels improved to 610 trades
with a share volume of 4.19 million shares. OK Zimbabwe was the most active
stock at 56 trades followed by Medtech and Cassava at 44 and 43 trades
respectively. First Capital Bank anchored volume aggregate trading 1 057 300
shares and Innscor anchored value aggregate with a value of ZW$47.8 million
contributing 29.74% to total turnover.

The All-Share Index gained 6.88% to 12 312.57 points breaking yet another
plateau. The Top 10 Index added 9.28% in continued flight to quality. The
Top 15 Index gained 8.92%. The Medium Cap Index added 1.51% to 23 237.68
points whilst the Small Cap Index shaded 4.61% to 325 699.73 points. Leading
the risers pack of the day was BAT adding 20.00% and Seed Co adding 16.73%.
Hippo added 15.25% and Meikles added 14.17% to 18 669c. Delta added 12.28%.
Mitigating the gains were losses in Zimplow  and Axia Corporation which
shaded 14.48% and 6.31% respectively. Masimba Holdings lost 2.42% to 5
366.67c. African Sun and Star Africa pared 1.64% and 1.28% respectively. The
Old Mutual Top Ten ETF closed at 466c up by 1.46% after 188 873 units were
traded worth ZW$766 680.51. Elsewhere on the VFEX, Padenga traded 121 652
shares worth US$26 763.44 to close unchanged at US 22 cents..-wealthaccess

Global Currencies & Equity Markets

South Africa

South African rand, stocks fall as global risk appetite weakens

(Reuters) - South Africa's rand and local stocks retreated early on
Thursday, as risk appetite weakened across global markets.

At 0723 GMT, the rand ZAR=D3 traded at 14.4825 against the dollar, down
roughly 0.5% on its previous close. The Johannesburg Stock Exchange's Top-40
.JTOPI index was down almost 1%.

Asian stocks slipped on Thursday as the upbeat mood that carried the Dow
Jones .DJI to a record a day earlier ran out of steam, replaced by fresh
worries about the weakening Chinese property sector as a possible default by
China Evergrande looms within days.

The rand had gained on Wednesday, as data showing consumer price inflation
quickened slightly to 5.0% last month reinforced the view of some traders
that the central bank will raise interest rates next month.

The South African Reserve Bank has kept its main lending rate on hold at a
record low of 3.5% ZAREPO=ECI for its past seven monetary policy meetings,
lagging other emerging market central banks like those of Russia and Brazil
which have tightened policy substantially.

The government's 2030 bond ZAR2030= also dropped early on Thursday, with the
yield rising 4 basis points to 9.395%.

Zambia

Kwacha appreciation might not lead to immediate decline in commodity prices
- Mulenga

COMMERCE, Trade and Industry Minister Chipoka Mulenga says the appreciation
of the Kwacha against major convertible currencies might not lead to an
immediate decline in the prices of goods. 

And Mulenga says government will set up a fertiliser plant which will
produce 10 times more than Nitrogen Chemicals of Zambia. 

Speaking in Parliament, Tuesday, Mulenga said it may take a little while for
prices to decline on the domestic market even when the Kwacha had
appreciated. He said the country was expected to see price stability
domestically as import commodity...

Nigeria

Naira sustains gain at official window as dollar liquidity rises by 95%

The exchange rate between the naira and the US dollar closed at N414.07/$1,
at the official Investors and Exporters forex window.

Naira appreciated further against the US dollar on Wednesday to close at
N414.07/$1, representing a 0.16% gain compared to N414.73/$1 recorded on
Monday, 18th October 2021.

On the other hand, naira depreciated marginally by 0.17% to N573/$1 on
Wednesday, 20th October 2021 compared to N572/$1 recorded as of the close of
trade on Tuesday, 19th October 2021. This is according to information
obtained by Nairametrics from BDC operators in Lagos.

However, Nigeria's foreign reserve recorded a further boost of $566.45
million on Monday, 18th October 2021 to close at $40.39 billion compared to
$39.82 billion recorded as of the previous week. The reserve position has
now surpassed the $40 billion mark, largely driven by the fund raised by the
federal government to the Eurobond and recent positive rally at the global
crude oil market.

Trading at the official NAFEX window

The exchange rate appreciated against the US dollar on Wednesday, 20th
October 2021 to close the day at N414.07 to a dollar, representing a 0.16%
gain compared to N414.73/$1 recorded on Monday, 18th October 2021.

This represents consecutive gains for three trading days in the official
forex market.

The opening indicative rate closed at N414.18/$1 on Wednesday, representing
a 28 kobo appreciation compared to N414.46/$1 recorded in the previous
trading day. This also represents a positive movement in three consecutive
trading days

An exchange rate of N442 to a dollar was the highest rate recorded during
intra-day trading before it settled at N414.07/$1, while it sold for as low
as N405/$1 during intra-day trading.

Meanwhile, forex turnover at the official window gained by 94.8% on
Wednesday, 20th October 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover
increased from $172 million recorded on Monday to $334.97 million on
Wednesday 20th October 2021.

Cryptocurrency watch

The cryptocurrency market closed trading activities on Wednesday on a
positive note gaining 3.54% to close at $2.656 trillion, indicating a $90.35
billion gain for crypto investors. The positive movement was largely driven
by the continuous rally in the flagship crypto asset, bitcoin.

Bitcoin gained 2.43% on Wednesday to close at a new record high of
$65.799.09 while Ethereum also gained over 5.23% to close trade at $4,081.
XRP gained 4.67% to close at $1.14207 on Wednesday, 20th October 2021.

This surge comes as the first Bitcoin futures-based exchange-traded fund
(ETF) in the United States appeared to be on track to open firmer after a
strong launch on Tuesday. The Bitcoin Strategy ETF, a new exchange-traded
fund linked to bitcoin futures rather than directly to the currency, rose
nearly 5% on its first day of trading on Tuesday.

Crude oil price

The crude oil market closed on a positive note, rising to a record high on
Monday as Brent Crude closed at $85.88 per barrel indicating a 0.94%
decline.

However, West Texas Intermediate (WTI) gained 1.55% to close at $84.25 per
barrel, while the OPEC Basket dipped marginally by 0.07% to close at $83.48
per barrel. Bonny Light also gained 0.45% to close at $84.36 per barrel on
Wednesday.

The other Nigerian crudes, Brass River and Qua Iboe both traded negative
with 0.25% each to close at $4 per barrel on Wednesday.

External reserve

Nigeria's foreign reserve gained $566.45 million on Monday, 18th October
2021 to close at $40.39 billion compared to $39.82 billion recorded as of
the previous day. The latest increase represents a 1.42% increase in the
country's foreign reserve.

The nation's foreign reserve has gained $3.6 billion so far in October,
higher than the $2.76 billion gain recorded in the month of September 2021,
while the recent increase puts the year-to-date gain at $5.01 billion.

Nigeria's foreign reserve position has now crossed the $40 billion mark,
indicating more firepower to meet up with pent-up obligations as a result of
the covid lockdown in the previous year. It is worth noting that the
positive movement in the country's foreign reserve came on the back of the
$4 billion raised through Eurobond and the bullish trend in the global crude
oil market.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar higher on upbeat U.S. data but set for weekly losses

(Reuters) - The dollar was firmer early on Friday, helped higher by upbeat
economic data though was headed for its second week of declines while
commodities currencies slipped as traders rejigged their positions after
this week's brisk rally.

Better jobs and housing data and rising U.S. Treasury yields helped the
dollar rise towards the end of the U.S. session on Thursday, gains it held
in Asian hours.

The dollar index was last at 93.736, up from the three-and-a-half week low
of 93.494 it had touched a day earlier.

The late gains day on Thursday were broad-based with the euro, sterling and
Aussie dollar all losing ground on the greenback.

However, the dollar index is down 0.18% for the week and set to post a
second week of declines.

On Friday, benchmark 10-year U.S. Treasury yields were at 1.6967% slightly
off from Thursday's multi-month high of 1.7%.

The commodity currency rally took a breather late on Thursday and into Asian
hours on Friday, as traders took profits, analysts said.

The Canadian dollar slipped to C$1.2369 per U.S. dollar , off Thursday's
C$1.2287, a level last seen in June.

The Australian dollar also lost some ground, with the currency buying
$0.7455, off Thursday's three-month top.

Brent crude , which had risen above $86 dollars a barrel on Thursday,
tumbled late in the day, and was last at $84.66.

The British pound stood at $1.3784 , also off a month peak hit earlier in
the week.

The euro was at $1.1621 little changed, while the yen wobbled within sight
of its multi-year lows, with one dollar worth 114.07 yen, compared with
114.69 earlier in the week, a four-year low.

The Thomson Reuters Trust Principles..

 <mailto:info at bulls.co.zw> 

Commodities Markets

Copper price retreats, cash/3-month spread near to $300/t backwardation

The London Metal Exchange three-month copper price was trading below $10,000
per tonne during morning trading on Thursday October 21, while the
backwardation in the metal's cash/three-month spread had narrowed to below
$300 per tonne.

This comes after the exchange imposed a series of temporary measures
designed to cool the market.

The three-month copper price was at $9,990 per tonne at 10am, down by $220
per tonne from Wednesday's close. The cash/three-month spread was at $295.55
per tonne backwardation, narrowing from around $325 per tonne backwardation
on Wednesday afternoon.

On-warrant copper stocks in LME totaled 18,250 tonnes on Thursday, up from
17,875 tonnes a day earlier but still 84% lower than the level at the start
of the month.

Switzerland-based Trafigura has found itself in the spotlight recently amid
allegations of massive copper warrant cancellations in the market.

Trafigura issued a statement on Wednesday, saying the copper withdrawn was
for delivery to customers, mainly in Asia and Europe, amid extremely tight
market conditions.

LME prices for the other base metals were broadly down on Thursday morning.
The three-month zinc price was down by 1.3% at $2,420.5 per tonne, while
three-month aluminium fell by 1.2% to $3,059 per tonne.

Gold rises, set for weekly gain on softer dollar

(Reuters) - Gold inched higher and was poised for a second weekly gain on
Friday, as a softer dollar provided some respite against higher U.S. bond
yields and rising expectations that central banks could begin easing
economic support.

FUNDAMENTALS

* Spot gold rose 0.1% to $1,785.00 per ounce by 0216 GMT. U.S. gold futures
edged 0.2% higher to $1,786.00.

* Bullion prices were en route to a second week of gains, aided by a weaker
dollar which was set to decline this week.

* Bullion prices have traded in a broad $1,749-$1,800 range so far this
month, with a steep rally in U.S. benchmark 10-year Treasury yields limiting
its upside.

* The U.S. Federal Reserve should let its $8 trillion balance sheet reduce
over the next couple of years, Fed Governor Christopher Waller said on
Thursday.

* Atlanta Fed President Raphael Bostic also said he expects high inflation
to persist into 2022 and the U.S. central bank should raise interest rates
by the end of next year.

* The Bank of Japan is discussing phasing out a COVID-19 loan programme if
infections in the country continue to dwindle, sources told Reuters,
potentially setting the bank up to exit a key crisis-mode policy sooner than
investors expect.

* Gold is often considered an inflation hedge, though reduced stimulus and
interest rate hikes push government bond yields up, translating into a
higher opportunity cost for holding bullion which pays no interest.

* Spot silver rose 0.2% to $24.18 an ounce and was on track for a fifth
consecutive weekly gain.

* Platinum was up 0.5% at $1,053.80 per ounce and palladium gained 1% to
$2,037.56.

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
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