Bulls n Bears Daily Market Commentary : 01 December 2022

Fri Dec 2 05:34:47 CAT 2022

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Bulls n Bears Daily Market Commentary : 01 December 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The market started the last month of the year on a high with the ZSE All
Share Index moving 233.35 points up to close at 14,810.81 points. Trading in
the positive: BRITISH AMERICAN TOBACCO ZIMBABWE LIMITED increased by
$50.3330 to $3,100.0000, AFRICAN DISTILLERS LIMITED added $7.5000 to
$265.0000 and DELTA CORPORATION LIMITED  traded $6.2899 higher at $241.5500.
AFRICAN SUN LIMITED gained $3.1000 to $24.5000 whilst CBZ HOLDINGS LIMITED
went up by $3.0000 to $125.0000. Only two counters were in the negative
which are FIRST MUTUAL PROPERTIES LIMITED which shed $0.0364 to $10.0000 and
ZIMPLOW HOLDINGS LIMITED which was $0.0286 down at $16.8000. 

EXCHANGE TRADED FUNDS (ETF) 

MORGAN & CO MULTI SECTOR EXCHANGE TRADED FUND recovered $0.1600 to close the
session at $21.0000 and OLD MUTUAL ZSE TOP 10 added $0.1548 to $5.6000.
MORGAN & CO MADE IN ZIMBABWE EXCHANGE TRADED FUND and CASS SADDLE
AGRICULTURE EXCHANGE TRADED FUND remained flat at $1.3800 and $2.0000
respectively. DATVEST MODIFIED CONSUMER STAPLES ETF lost $0.0083 to
$1.6900.-ZSE

Global Currencies & Equity Markets

South Africa

South African rand falls on panel findings against president

(Reuters) - The South African rand weakened in Thursday afternoon trade as
market analysts digested the news that President Cyril Ramaphosa may be
impeached following a panel of experts' findings against him.

The rand ZAR= was down 3.16% to 17.7139 to $1 at 1300 GMT, its worst day
since early May.

South Africa's presidency will make an announcement imminently, President
Cyril Ramaphosa's spokesman said on Thursday, a day after a panel report
found preliminary evidence that he may have violated his oath of office and
committed misconduct.

The president has denied any wrongdoing. Ramaphosa has not been charged with
any crimes.

"The uncertainty around Ramaphosa's presidency has caused a selloff of the
local currency as investors now wait for clarity on the ramifications of the
report, and what that could mean for the President," said Bianca Botes,
director at Citadel Global.

The growing uncertainty around his political future will weigh negatively on
sentiment, said Barclays in a note, adding that it could slow the "positive
momentum" that South African credit spreads have enjoyed.

The yield on South Africa's benchmark 10-year local bond was up 62.5 basis
points to 10.91% ZAR2030=, the biggest move since the March 2020 COVID-19
induced market rout.

South Africa's sovereign dollar-denominated bonds dropped around 2 cents.
Longer-dated maturities suffered the biggest losses with the 2052 down 2.4
cents to trade at 85.917 cents in the dollar, Tradeweb data showed.
US836205BE37=TE

The Johannesburg Stock Exchange pared gains, with the all-share index .JALSH
up 0.26% to 75,021.61 points, having risen as high as 76,338 points earlier
on Thursday.

Nigeria

'CBN Spent $65bn To Stabilise Naira In 5yrs'

After spending about $65 billion to stabilise the naira within five years,
the Central Bank of Nigeria (CBN) must stop depleting Nigeria's foreign
reserves on the naira stability, said an economist and consultant, Mr.
Ademola Henry Adigun.

Adigun who spoke at the National Advertising Conference 2022 driven by the
Advertising Regulatory Council of Nigeria (ARCON), also said Nigeria must
borrow to spend its way out of the current economic hardships.

"We have spent in the last five years close to $65 billion on stabilising a
currency that is not stabilised. You can't stabilise it. So, it's either we
jump and sustain injuries before we are pushed off if we are not careful,"
he warned.

He noted that Nigeria may be headed the way of Ghana if we don't make
rational economic decisions quickly.

"We are in a very difficult time. There is an exchange rate crisis, there is
inflation, and all. If you follow Ghana's economy lately, it is in a mess.
It is where we could be too. It took Ghana some bad decisions to get there.
It took some bad decisions to get us where we are right now. It will take us
some bad decisions to be where Ghana is."

The Director General of ARCON, Dr Olalekan Fadolapo, said the business and
practice of advertising are on the decline. To arrest the decline in
performance standards, the business framework and standards must be
improved. 

Naira constant, exchanges at 445.30 to dollar

The naira remained unchanged on Wednesday, exchanging at 445.30 to the
dollar at the Investors and Exporters Window.

The local currency did not change from its value on Tuesday while the open
indicative rate closed at N444.25 to the dollar on Wednesday.

Local CBN's RT200 initiative improves as non-oil exports hit $4.98 billion

An exchange rate of N447 to the dollar was the highest rate recorded within
the day's trading before it settled at N445.30.

The naira sold for as low as 440 to the dollar within the day's trading.

A total of 177.44 million dollars was traded in foreign exchange at the
official Investors and Exporters window on Wednesday.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar index lowest since August as inflation moderates

(Reuters) - The U.S. dollar dipped to 16-week lows against a basket of major
currencies on Thursday after data showed that U.S. consumer spending
increased solidly in October, while inflation moderated, adding to
expectations that the Federal Reserve is closer to reaching a peak in
interest rates.

Fed Chairman Jerome Powell said on Wednesday that it was time to slow rate
hikes, noting that "slowing down at this point is a good way to balance the
risks."

Investors took comfort from the comments, even as Powell also said that
rates would still go higher and that controlling inflation "will require
holding policy at a restrictive level for some time."

"We're seeing the consumer is still keeping up with their spending, and in
addition to that continuing claims are rising. So, we're going to probably
start to see that unemployment rate tick higher and I think this is going to
support the idea that we're going to see the Fed is close to done with their
tightening cycle," said Edward Moya, senior analyst at OANDA in New York.

"The markets are going to be a little bit more expecting that yields are
going to continue to come down and also that's going to be a weaker dollar,"
Moya added.

Thursday's data showed that consumer spending, which accounts for more than
two-thirds of U.S. economic activity, jumped 0.8% after an unrevised 0.6%
increase in September.

The personal consumption expenditures (PCE) price index rose 0.3 after
advancing by the same margin in September. In the 12 months through October,
the PCE price index increased 6.0% after advancing 6.3% in September.

Other data on Thursday showed that U.S. manufacturing activity contracted
for the first time in 2-1/2 years in November and U.S. construction spending
fell in October.

Jobs data for November due on Friday is the next major U.S. economic focus.

The dollar index fell as low as 104.66 against a basket of currencies, the
lowest since Aug. 11. It has now dropped below its 200-day moving average,
which could signal further losses to come.

The euro reached $1.05340, the highest since June 29. The greenback fell as
low as 135.24 yen , the weakest since Aug. 18. Sterling also reached
$1.23115, the highest since June 27.

Fed funds futures traders are now pricing for the Fed's benchmark rate to
peak at 4.87% in May, up from 3.83% now. Traders had priced for a top of
over 5% before Powell's comments on Wednesday. ,

Fed Governor Michelle Bowman said on Thursday that the Fed should slow the
pace of its rate increases in order to assess the impact of its hiking
cycle.

But New York Fed President John Williams reiterated that more interest rate
rises will be needed to bring down overly high levels of price pressures.

Antipodean currencies were also boosted by expectations that China will ease
its strict COVID restrictions.

China is set to announce an easing of its quarantine protocols in the coming
days and a reduction in mass testing, sources told Reuters, a marked shift
in policy after anger over the world's toughest curbs fueled widespread
protests.

The Aussie reached $0.68470, the highest since Sept. 13 and the kiwi hit
$0.64000, the highest since Aug. 15.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold soars 2% as Fed rate hike slowdown prospects hit dollar

(Reuters) - Gold prices rose 2% on Thursday to climb above the key $1,800
per ounce pivot, as the dollar weakened on the prospect of slower rate hikes
from the Federal Reserve and signs of cooling U.S. inflation.

Spot gold climbed 1.8% to $1,800.69 per ounce by 1:55 p.m. ET (1855 GMT),
reaching $1,803.94 earlier in the session to its highest since August 10.

U.S. gold futures settled up 3.1% at $1,815.2.

"We've established a price uptrend on the daily chart which invited
technical-based buying... we're seeing the dovish lean by (Fed Chair Jerome
Powell) supporting the commodity markets and seen the U.S. dollar index back
off," said Jim Wyckoff, senior analyst at Kitco Metals.

Powell on Wednesday said it was time to slow the pace of interest rate
hikes, but added that controlling inflation "will require holding policy at
a restrictive level for some time".

The dollar fell more than 1% to a near four-month low against rival
currencies, making gold less expensive for overseas buyers.

Traders are pricing in a 91% probability that the Fed increases rates by 50
basis points on Dec. 14.

Further supporting bets around slower rate hikes, data showed moderation in
the inflation trend last month, boosting interest in gold, analysts said.

Gold is highly sensitive to rising U.S. interest rates, as these increase
the opportunity cost of holding non-yielding bullion.

On the technical front, gold is trading above its 50-day, 100-day and
200-day moving averages, which is considered a bullish signal by traders.

"With the Fed on pause, decreasing U.S. real yields drive our bullish
baseline outlook for gold and silver prices over the back half of next
year," analysts at JP Morgan said in a note.

Focus now turns to the U.S. Labor Department's non-farm payrolls (NFP) data
due on Friday.

Elsewhere, spot silver rose 2.3% to $22.70 per ounce, and hit its highest
since early May. Platinum was up 0.5% to $1,038.24 while palladium gained
3.2% to $1,941.65.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Counters trading under cautionary

CBZH

Meikles

Fidelity

TSL

FMHL

Turnall

GBH

ZBFH

GetBucks

Zeco

Lafarge

Zimre

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
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opinions expressed and recommendations made are subject to change without
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for guideline purposes only and sourced from third parties.

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