Bulls n Bears Daily Market Commentary : 25 October 2021

Mon Oct 25 14:40:38 CAT 2021

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Bulls n Bears Daily Market Commentary : 25 October 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE closed in the negative for the second day with low activity and
liquidity levels. Market bias was strongly negative as 28 stocks declined
against 9 advancers while one of the active stocks remained unchanged.
Activity levels further retreated to 429 trades with a share volume of 1.489
million shares. OK Zimbabwe was the most active stock at 35 trades followed
by Star Africa at 24 trades and Delta at 21 trades. First Mutual Properties
anchored volume aggregate trading 275 400 shares and Innscor anchored value
aggregate with a value of ZW$19.01 million.

All the indices in our review closed in the red. The All-Share Index lost
2.02% to 11 852.40 points. The Top 10 Index shaded 2.04%. The Top 15 Index
pared 2.11%. The Medium Cap Index shaded 2.16% to 22 370.08 points whilst
the Small Cap Index also shaded 1.48% to 319 475.37 points. Leading the
shakers pack of the day was Lafarge Cement Zimbabwe shading 14.48% and ZIMRE
Holdings lost 8.16%. Proplastics pared 7.69% and Seed Co lost 6.84% to 12
493.33c. Econet was down by 8 149.48%. Mitigating the losses were gains in
CBZ Holdings and Truworths which added 17.29% and 11.06% respectively. NMB
Holdings was up by 4.40% to 1 272.67c. Ariston and Masimba Holdings  added
2.99% and 1.56% respectively. The Old Mutual Top Ten ETF closed at 450.55c
up by 2.26% after 57 249 units were traded worth ZW$257 933 in 27 trades. On
the VFEX Padenga traded 280 shares worth US$61.60 at 22 US cents to close
unchanged at US 22 cents..wealthaccess

Global Currencies & Equity Markets

South Africa

Rand opens slightly stronger on Monday against the US dollar

The rand opened slightly stronger on Monday, supported by higher precious
metal prices and erasing some of Friday's losses.

At 6.24am GMT, the rand traded at 14.7950 against the dollar, around 0.2
percent firmer than its previous close.

Major South African exports gold and platinum were up 0.3 percent, lifted by
a weaker dollar as investors assessed how the US Federal Reserve could
respond to inflationary pressures.

Higher precious metals prices have helped cushion the economic shock from
the Covid-19 pandemic by providing Africa's most industrialised nation with
bumper tax receipts.

Domestic data releases this week include the central bank's leading
indicator on Tuesday, the producer price index on Thursday, as well as
budget and trade numbers on Friday.

Rand weakens against the dollar as risk aversion returns to markets on weak
Chinese growth

Next week, attention will shift to a municipal election on Monday that will
be a barometer of support for the governing African National Congress and
the National Treasury's medium-term budget policy statement on Thursday.

The yield on the government's 2030 bond was at 9.585 percent, unchanged from
its closing level on Friday.

REUTERS

Nigeria

Naira remains flat at official market as forex liquidity rises significantly
by 134%

The exchange rate between the naira and the US dollar closed at N415.07/$1
at the Investors and Exporters window, where forex is traded officially.
Naira remained stable on Friday against the US dollar to close at
N415.07/$1. This was the same rate that was recorded on Thursday, 21st
October 2021.

Also, naira appreciated against the US dollar on Friday to close at N574/$1,
representing a 0.17% gain when compared to the N575/$1 that was recorded as
of the close of trading activities on Thursday, 21st October 2021. This is
according to information obtained by Nairametrics from BDC operators in
Lagos.

The local currency remained flat at the official market as dollar supply
rose significantly by 134%. Meanwhile, the International Monetary Fund (IMF)
has attributed the decline in diaspora remittances into Nigeria to the
uncertainty in the country's foreign exchange market. Nigeria's foreign
reserve closed at $40.76 billion on Wednesday, 20th October 2021,
representing a $377.04 million boost in the reserve position. The nation's
foreign reserve increased by 0.93% on Wednesday from $40.39 billion recorded
as of the previous day.

The exchange rate remained stable against the US dollar on Friday, 22nd
October 2021 to close the day at N415.07 to a dollar, representing the same
rate when compared to N415.07/$1 recorded on Thursday, 21st October 2021.

The opening indicative rate closed at N414.10/$1 on Friday, representing a
16 kobo drop when compared to N413.94/$1 recorded in the previous trading
day.

An exchange rate of N429 to a dollar was the highest rate recorded during
intra-day trading before it settled at N415.07/$1, while it sold for as low
as N404/$1 during intra-day trading.

Meanwhile, forex turnover at the official window rose by 133.6% on Friday,
22nd October 2021.

According to data tracked by Nairametrics from FMDQ, forex turnover at the
I&E window increased from $103.16 million recorded on Thursday to $240.97
million on Friday 22nd October 2021.

Cryptocurrency watch

The world's largest and most popular cryptocurrency, Bitcoin, closed trading
activities on a bullish note on Sunday evening as it went up by 0.80% to
trade at $61,582 amidst price fluctuation.

In the week that just ended, the total crypto market capitalization fell to
a Monday low of $2.386 trillion before rising to a Thursday high $2.741
trillion. The total market capitalization on Sunday stood at $2.578
trillion.

Bitcoin's dominance rose to a Wednesday high of 47.72% before falling to a
Saturday low of 44.75%. At the time of writing, Bitcoin's dominance stood at
44.80%.

Meanwhile, as China continues its crackdown on cryptocurrency, other
countries are taking note of the development.

The second-largest cryptocurrency by market capitalization, Ethereum, was
also up by 0.14% to trade at $4,136.31 on Sunday evening. XRP was up by
0.43% to trade at $1.10 on Sunday.

Crude oil price

The crude oil market was bullish on Sunday as most headline crude recorded
increases with Brent crude going up by 0.14% later in the evening to trade
at $85.65 per barrel after gaining earlier in the day.

The American headline crude, the WTI sustained its increase for the ninth
consecutive week, extending its winning streak as market attention turned to
the U.S. storage hub for crude, which is at a three-year low.

Saudi Arabia had earlier warned that oil producers should not take the
recent rise in crude oil prices for granted because the coronavirus pandemic
could still hit demand.

Meanwhile, Nigeria has thrown its weight behind Saudi Arabia's effort for
OPEC to resist pressure from other stakeholders and some countries to
increase its production output.

The West Texas Intermediate (WTI) Crude was up by 0.42% to trade at $84.11
per barrel while natural gas was up by 5.44% to trade at $5.567. Similarly,
the OPEC Basket was up by 0.07% to trade at $83.36 per barrel.

Also, Nigeria's headline crude, Bonny Light was up by 1.60% to trade at
$84.37 per barrel.

External reserve

Nigeria's foreign reserve gained $195 million on Thursday, 21st October 2021
to close at $40.958 billion compared to $40.763 billion recorded as of the
previous day. The latest increase represents a 0.48% increase in the
country's foreign reserve position.

The nation's foreign reserve has gained $4.18 billion so far in October, on
the back of the $4 billion raised by the federal government from the
issuance of Eurobond in the international debt market. The gains recorded so
far in the month is 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
approximately $5.59 billion.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar rebounds as traders assess rate hike prospects elsewhere

(Reuters) - The dollar rebounded off a one-month low on Monday as traders
looked ahead to tighter U.S. monetary policy even as they bet on the
prospect of interest rate hikes happening earlier outside of the United
States.

Currency markets were broadly quiet at the start of the week with traders
awaiting U.S. growth data and central bank meetings in the euro zone, Japan
and Canada.

The dollar index initially dropped to a one-month low during trading in
Asia, extending softness after Federal Reserve Chair Jerome Powell said on
Friday it was not yet time to begin raising interest rates.

The index had recovered by 1100 GMT and was last up 0.1% at 93.726, helped
by U.S. Treasury yields holding close to their recent highs.

While Powell said it was not right to start hiking rates, he also warned
about inflationary pressures and said it was time to cut back on its asset
purchases.

Analysts said the dollar's rebound was also aided by the euro slipping 0.2%
to $1.1625 ahead of the European Central Bank meeting on Thursday.

The dollar also chalked up gains versus the Japanese yen, rising 0.2% to
113.68 yen . The Bank of Japan meets later this week but like the ECB, it is
not expected to shift from its dovish policy stance.

But the U.S. currency did not rebound against all its rivals, with gains for
commodity-linked currencies such as the Australian , Canadian and New
Zealand dollars, which are also benefiting from the rally in commodity
prices.

Australian inflation data, due on Wednesday, is likely to set the tone for
the next stage in a tussle between traders and a resolutely dovish central
bank.

Soaring housing costs and rising food and fuel prices have tapering in the
frame when Canada's central bank meets on Wednesday.

Thursday's U.S. gross domestic product figures -- if they show an expected
slowdown -- could take some pressure from the Fed even while inflation runs
relatively hot.

Elsewhere, China's yuan hit a five-month peak at 6.3782 per dollar while the
Turkish lira fell to a new record low in the wake of a surprise rate cut
last week.  

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold firms near key $1,800 level as dollar weakens

(Reuters) - Gold prices hovered close to the key $1,800 level on Monday,
supported by a weaker dollar as investors assessed the Federal Reserve's
likely response to inflationary pressure after its chair said inflation
could last longer than expected.

Spot gold was up 0.3% at $1,797.81 per ounce, as of 0712 GMT. U.S. gold
futures gained 0.1% to $1,797.20.

On Friday, the metal rallied to its highest level since early-September
before paring gains after Fed Chairman Jerome Powell said the U.S. central
bank should start reducing its asset purchases.

In the long term, however, Rodda said gold's trajectory hinged mainly on how
aggressive central banks would act to contain inflation.

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 non-yielding bullion.

Market participants now eye the Bank of Japan (BoJ) and the European Central
Bank (ECB) meetings due on Thursday.

Adding to gold's support, the dollar eased 0.1%, making bullion more
appealing to buyers holding other currencies.

On the technical front, gold may retest a resistance at $1,814 per ounce, a
break above could lead to a gain to $1,826, according to Reuters technical
analyst Wang Tao. Spot silver rose 0.5% to $24.43 per ounce. Platinum was up
0.2% at $1,042.23 and palladium rose 0.6% to $2,033.21. 

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
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