Bulls n Bears Daily Market Commentary : 23 September 2021

Thu Sep 23 16:51:52 CAT 2021

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Bulls n Bears Daily Market Commentary : 23 September 2021

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE posted a record close on Thursday buoyed by heavyweights with
activity and liquidity levels improving significantly. Activity levels
climbed to 507 trades and market bias firmed in the positive as 28 stocks
rose while 5 lagged and 8 of the active stocks remained unchanged. Bindura
was the most active stock at 55 trades followed by Star Africa and OK
Zimbabwe at 42 and 41 trades respectively. First Capital Bank anchored
volume aggregate trading 2 034 800 shares and Cassava anchored value
aggregate with a value of ZW$21.97 million.

The benchmark All Share Index jumped by 3.11% to a fresh all time high of 7
374.18 points. The Top 10 Index added 3.70%. The Top 15 Index gained 3.66%.
The Medium Cap Index traded higher to 17 949.71 points appreciating by 2.33%
whilst the Small Cap Index also added 0.49% to close at 224 303.10 points.
Leading the risers pack of the day was NMB Holdings which continued on its
upward trend up by 15.05% to 1495.59c. Simbisa Brands added 9.17% to
5251.08c. OK Zimbabwe added 8.03% and Meikles  was up by 7.34%. Seed Co
added 6.75%. Leading in the shakers' pack were Nampak and National Tyre
Services which slipped 4.10% and 2.04% respectively. General Beltings
Holdings and Medtech Holdings were down 1.15% and 0.66% respectively. The
Old Mutual Top Ten ETF closed at 249.97c after trading 138 894 units with a
value of ZW$347 195 in 22 trades exchanged hands..-wealthaccess

Global Currencies & Equity Markets

South Africa

South Africa's rand firmer ahead of interest rate decision

Reuters) - South Africa's rand firmed early on Thursday, as traders awaited
the outcome of a central bank monetary policy meeting later in the day,
where the regulator is expected to leave its benchmark lending rate
unchanged.

At 0643 GMT, the rand traded at 14.7300 against the dollar, 0.4% firmer than
its previous close.

Data on Wednesday showing consumer price inflation in August rose to 4.9%
did little to change market expectations that the South African Reserve Bank
monetary policy committee (MPC) will keep the benchmark rate at 3.5%. read
more

The consumer price inflation remained within the central bank's target rate
of 3-6%.

In fixed income, the yield on the government bond due in 2030 was up 1.5
basis points to 9.1% in early deals.

The Thomson Reuters Trust Principles.

Nigeria

Naira records slight gains after Nigeria raises $4 billion in Eurobond

Following yesterday's report of the $4 billion Eurobond Nigeria raised,
which was dubbed one of the biggest financial trades to come out of Africa
in 2021, Naira appreciated marginally at both the black market and the
official window.

On Wednesday, the naira gained 0.02% versus the dollar, closing at
N413.18/$1, up from N413.28/$1 on Tuesday, September 21, 2021. Between
Monday and Wednesday, the currency rate has averaged N413.38/$1.

The daily foreign exchange market turnover increased by 14.49% to $229.72
million on Wednesday, up from $200.65 million on Tuesday.

As a result, the dollar was quoted at N413.18 after trade on Wednesday, up
from N413.28 on Tuesday, marking a 0.02 per cent increase, according to FMDQ
statistics.

Similarly, the parallel market exchange rate appreciated to N572/$1 on
Wednesday, up from N575/$1 the day before, according to data gathered by
Nairametrics from licensed BDC operators in Lagos.

This progress comes after Nigeria had raised the sum of $4 billion through
Eurobonds which were issued in three tranches.

According to the DMO, the Order Book peaked at $12.2 billion which enabled
the FGN to raise $1 billion more than the $3 billion it initially announced.

The long tenors of the Eurobonds and the spread across different maturities
are well aligned with Nigeria's Debt Management Strategy, 2020 - 2023.

The mobilization of $4 billion through Eurobonds, which was part of the New
External Borrowing in the 2021 Appropriation Act, provides a considerable
amount of capital to finance projects in the Act, thereby helping the
implementation of the Act, according to the DMO.

Although, some analysts believe that the marginal gains of the Naira were
caused by the FG's success in the bond market. Others hold that the gains
are too small to strengthen the Naira in the long run.

What the expert is saying

Dumebi Udegbunam, Fixed Income trader at United Bank for Africa (UBA)
postulated that "the appreciation we are currently witnessing is based on
sentiments."

He also affirmed that there is a growing appetite for Nigerian debt saying,
"The Euro bond auction showed an exceptional performance with it being
oversubscribed by 400% allowing the DMO raise an extra $1 billion. This
simply shows that market participants especially foreign investors are
optimistic of the growth outlook and investment fundamentals of Nigeria."

He pointed out the need for the government to tread carefully when
accumulating debt saying, "Despite the impressive performance, the
government needs to be very cautious of its debts servicing and also debt
sustainability. To avoid creating a debt trap scenario despite having
positive fundamentals."

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar eases as traders see wiggle room in Fed's hike path

(Reuters) - The dollar eased slightly from a one-month high on Thursday,
after the Federal Reserve set the stage for rate hikes next year but left
enough breathing room to slow things down if necessary, while sterling
traded firmly ahead of a Bank of England meeting.

In an Asia session thinned by a holiday in Japan, the euro bounced a bit to
$1.1705, scraping off a one-month low. Sterling was up 0.1% to $1.3643 as
investors weighed the risk of a hawkish surprise from the central bank.

Other moves were pretty modest, with the greenback staying near multi-week
highs against the Australian and New Zealand dollars and holding onto gains
made against the yen in the wake of the Fed meeting. It bought 109.80 yen .

The Fed left policy settings unchanged on Wednesday and, as expected, did
not announce the beginning of asset purchase tapering. But chair Jerome
Powell flagged that it was not far off, perhaps as near as November, and
said board members thought tapering could conclude around mid-2022 - opening
the way for rate hikes after that. read more

As well as helping the dollar, the U.S. yield curve flattened and Fed funds
futures markets moved to price a 50% chance of a hike in October and to
fully price a 25 basis point rate hike in December after his comments.

As the dollar retreated slightly in Asia, its index slipped from a one-month
high of 93.526 to 93.369 as traders took profit and figured there were a few
caveats in Powell's remarks.

Powell said tapering would not carry a "direct signal" on the rates outlook,
even though median projections from Fed members showed liftoff in 2022.

The Bank of England's monetary policy committee meets later on Thursday,
with traders expecting it to keep rates steady but wary of more members
joining Michael Saunders, an external member of the panel, by pressing for
tapering due to inflationary pressures. read more

China Evergrande's struggles to avoid defaulting also kept investors on
edge. China's second largest property developer settled with bondholders
over a domestic coupon payment, but still has to settle $83.5 million in
interest on an offshore bond due on Thursday. read more

The risk-sensitive Aussie was flat at $0.7243 by afternoon, and the kiwi was
steady at $0.7006.

Norges Bank also meets on Thursday and is widely expected to deliver the
first hike among G10 central banks. The Norwegian Crown was a touch firmer
at 8.6486 per dollar.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices ease as Fed signals quicker-than-expected rate hikes

(Reuters) - Gold prices dipped on Thursday after the U.S. Federal Reserve
signalled easing its monthly bond purchases by next year and a
sooner-than-expected interest rate hike, which could increase the
opportunity cost of holding the non-yielding bullion.

FUNDAMENTALS

* Spot gold was down 0.3% at $1,762.33 per ounce, as of 0122 GMT, while U.S.
gold futures slipped 0.9% to $1,762.10.

* In its policy statement on Wednesday, the U.S. central bank said it could
start paring bond purchases as soon as November and that half of the Fed
officials were ready to raise interest rates next year in response to
inflation.

* Gold is often considered a hedge against higher inflation, but a Fed rate
hike would dull bullion's appeal.

* The dollar index hit a one-month high, diminishing gold's appeal for those
holding other currencies.

* Fears of imminent contagion from China Evergrande's debt crisis were
temporarily soothed on Wednesday after the property developer agreed to
settle interest payments on a domestic bond, while the Chinese central bank
injected cash into the banking system.

* Russia produced 173.99 tonnes of gold between January and July, down from
the 176.30 tonnes it produced in the same period in 2020, the finance
ministry said on Wednesday.

* Silver fell 0.5% to $22.55 per ounce.

* Palladium eased 0.1% to $2,020.96, but prices rose 6.2% on Wednesday,
their biggest one-day gain since March 2020.

* Platinum dropped 0.4% to $993.13.

Copper slips as Fed hints at tapering plan

London copper prices eased on Thursday, after the U.S. Federal Reserve
hinted at plans to taper its stimulus program that raised worries of slowing
recovery in the world's biggest economy.

Three-month copper on the London Metal Exchange fell 0.3% to $9,257 a tonne
by 0553 GMT, while the most-traded October contract on the Shanghai Futures
Exchange advanced 0.3% to 68,820 yuan ($10,646.00) a tonne, tracking
overnight gains in London.

The Fed said on Wednesday it would likely begin reducing its monthly bond
purchases as soon as November and signaled interest rate increases may
follow more quickly than expected.

FUNDAMENTALS

* LME lead rose 1.4% to $2,142 a tonne while ShFE aluminum advanced 2.8% to
23,545 yuan a tonne and ShFE tin hit a record 277,800 yuan a tonne on supply
worry.

* Yangshan copper premium rose to $108 a tonne, its highest since Aug. 23,
indicating rising demand to import the metal into top consumer China, as
Chinese bonded warehouse stocks fell to their one-year low of 250,500
tonnes.

* The cash premium of LME lead over its three-month contract was last at
$11.30 a tonne, flipping from a discount zone in the previous sessions,
indicating rising tightness in nearby supplies.

* LME cash tin was traded at a premium of $1,334 a tonne against its
three-month contract , its highest since Aug. 3, as nearby supply tightened.

* COLUMN-Malaysia deals fresh blow to global copper scrap trade: Andy Home.

* For the top stories in metals and other news, click or

($1 = 6.4644 yuan)

INVESTORS DIARY 2021

Company

Event

Venue

Date & Time

Star Africa

AGM

virtual

September 23 -11am

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
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subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
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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
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