Bulls n Bears Daily Market Commentary : 22 October 2021

Sat Oct 23 07:23:34 CAT 2021

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Bulls n Bears Daily Market Commentary : 22 October 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE bull run halted today as profit taking started to creep in to the
market. Investor sentiment as measured by market breadth was negative as 25
stocks declined against 11 advancers while four of the active stocks
remained unchanged. Activity levels retreated to 595 trades with a share
volume of 2.5 million shares. Star Africa was the most active stock at 47
trades followed by OK Zimbabwe at 46 trades and Cassava and Delta at 40
trades each. Medtech anchored volume aggregate trading 575 200 shares and
CBZ anchored value aggregate with a value of ZW$43.99 million.

All the indices in our review closed in the red. The All-Share Index lost
1.75% to 12 097.36 points. The Top 10 Index shaded 1.89%. The Top 15 Index
pare 1.88%. The Medium Cap Index shaded 1.60% to 22 864.87 points whilst the
Small Cap Index also shaded 0.43% to 324 284.55 points. Leading the shakers
pack of the day was NMB Holdings shading 12.62% and Meikles lost 8.94%.
Proplastics pared 7.14% and Masimba Holdings lost 6.83% to 5000c. Innscor
Africa was down by 6.30%. Mitigating the losses were gains in Zimpapers and
CBZ Holdings which added 11.36% and 10.93% respectively. Turnall Holdings
was up by 8.33% to 650c. African Sun and Cassava added 7.83% and 3.19%
respectively. The Old Mutual Top Ten ETF closed at 440.58c up by 8.54% after
27 973 units were traded worth ZW$123 243 in 48 trades.wealthaccess

Global Currencies & Equity Markets

South Africa

S.Africa's rand firms in early trade as risk appetite returns

(Reuters) - South Africa's rand strengthened in early trade on Friday as
firm commodity prices and a surprise interest payment by China Evergrande
Group 3333.HK late on Thursday brought confidence back to emerging markets.

But a strong dollar driven by healthy earnings in the U.S. kept the local
currency in check.

At 0640 GMT, the rand ZAR=D3 was trading at 14.63 against the dollar, 0.27%
firmer than its previous close and on path to end the week almost flat after
flirting with highs of 14.39 mid week.

The currency usually benefits when investors are willing to take on more
risk in developing countries.

With stronger commodity prices, a commodity-driven economy such as South
Africa offers strong prospects and hence investors bet on the local
currency.

However, a lingering fear the Federal Reserve will raise interest rates in
November, which could lead to a fall in commodities prices, is keeping a lid
on the rand from strengthening further.

China Evergrande paid a dollar bond interest payment due Sept. 23 days
before a deadline that would have plunged the embattled developer into
formal default, bringing faith back to emerging markets, albeit temporarily.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar set for second week of declines but outlook bullish

(Reuters) - The U.S. dollar slipped against its rivals on Friday and is set
for a second consecutive week of decline as news that heavily-indebted
property firm China Evergrande Group had averted a default buoyed appetite
for risky assets.

Concerns over the embattled property developer whose liabilities are equal
to 2% of China's gross domestic product had sent investors flocking to the
perceived safe-haven currencies like the U.S. dollar and government debt.

Worries of economic contagion have seen swathes of other heavily-indebted
developers hit with credit rating downgrades.

But days before a deadline that would have plunged the embattled developer
into formal default and sent shockwaves through global markets, the company
had supplied funds to pay interest on a U.S. dollar bond.

The dollar index edged 0.1% lower to 93.61, putting it on track for a second
straight week of falls.

But the broader market narrative remained supportive of more U.S. dollar
gains as rising bond yields on the back of firmer inflation expectations are
expected to lend support to the greenback.

Yields on 10-year U.S. Treasury notes held near their highest levels this
year at 1.7% while yield differentials between comparable U.S. and German
debt held at a chunky 177 bps.

Moreover, rising expectations that the U.S. Federal Reserve will be among
the leaders to tighten monetary policy before other major central banks is
also prompting investors like UBS Wealth Management to keep the dollar as
its most preferred currency in its portfolio.

Elsewhere, the Australian dollar was at $0.7498, off Thursday's three-month
top, as the boost to the China-exposed currency from Evergrande's news was
outweighed by action from the Reserve Bank of Australia to stem a bond
sell-off, as well as the pause in energy price rises.

The RBA said on Friday it had stepped in to defend its yield target for the
first time in eight months, spending A$1 billion ($750 million) to dampen an
aggressive bonds sell-off as traders have bet on inflation pulling forward
rate hikes.

Elsewhere, the euro was little changed at $1.1627, while the yen wobbled
within sight of its multi-year lows, with one dollar worth 114.01 yen,
compared with 114.69 earlier in the week, a four-year low.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold set for second weekly gain as dollar weakens

(Reuters) - Gold prices gained for a fourth consecutive session on Friday,
and were on track for a second straight weekly gain as a weaker U.S. dollar
and growing inflationary pressure boosted demand for the safe-haven metal.

Spot gold rose 0.6% to $1,793.59 per ounce by 1130 GMT, and was up 1.4% for
the week.

U.S. gold futures gained 0.7% to $1,795.00.

The dollar index headed for a second week of declines, lending support to
gold by making it more attractive for buyers holding other currencies.

Further, Hansen said, while growth concerns could reduce the ability for
central banks to be aggressive on hiking rates and in turn help gold, the
sharp recovery in stock markets remains a hindrance.

Gold is often considered an inflation hedge, though reduced stimulus and
interest rate hikes push government bond yields up, denting the bullion's
appeal.

Meanwhile, euro zone inflation expectations hit their highest levels in
years on Friday, putting additional pressure on the European Central Bank
and its insistence on maintaining crisis-era stimulus.

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

However, Citigroup, in a note, said, "spot bullion trading remains
lacklustre despite robust U.S. inflation data and increased investor
concerns about stagflation risk... price action appears to struggle near or
above $1,800/oz."

Spot silver gained 0.9% to $24.34 per ounce and was on track for a fifth
consecutive weekly gain.

Platinum rose 1% to $1,059.21, while palladium fell 0.4% to $2,009.10.

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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for guideline purposes only and sourced from third parties.

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