Bulls n Bears Daily Market Commentary : 29 December 2022

Fri Dec 30 08:57:34 CAT 2022

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Bulls n Bears Daily Market Commentary : 29 December 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

Market gains maintained

The market maintained gains in the penultimate session of the year as four
of the indices we review closed the day pointing northwards. The All-share
Index gained 0.47% to close at 18409.23pts while, the Blue-Chips Index
advanced 0.48pts to 11,528.21pts. The Agriculture Index rose 0.12% to
71.51pts as the Mid-Cap Index increased by a mere 0.02% to 35,485.89pts.
Bankers First Capital led the best performers of the day on a 14.87% surge
to close at $13.7368 trailed by sugar processor Star Africa that jumped
14.09% to $1.9616. The duo of Nampak and Proplastics gained 12.63% and
12.06% to see the former close at $9.0100 and the latter at $30.2574.
Conglomerate Innscor fastened the top five winners of the day as it edged up
11.27% to $625.0630. Property concern Mashonaland Holdings led the laggards
of the day as it declined 12.46% to end pegged $9.5880 followed by African
Sun that plunged 7.14% to $23.2157..-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand firms against dollar, stocks slide

(Reuters) - South Africa's rand firmed against the dollar on Thursday, as
U.S. weekly jobless claims data pointed to a cooling off in the labour
market, easing worries about harsher Federal Reserve rate hikes next year.

At 1559 GMT, the risk-sensitive rand traded at 16.8875 against the dollar,
1.2% stronger than its previous close.

The dollar index , which measures the greenback against six rivals, was down
0.364% at 103.97.

On the stock market, the Top-40 (.JTOPI) and the broader all-share (.JALSH)
indexes ended almost 1% lower.

South African government's benchmark 2030 bond prices weakened in afternoon
deals, with the yield up 1.5 basis points to 10.255%.

AFRICA-FX-Nigerian, Kenyan, Zambian and Ugandan currencies seen weakening

(Reuters) - The Nigerian, Kenyan, Zambian and Ugandan currencies are seen
weakening in the week to Thursday, due to unmatched dollar demand early in
the new year.

NIGERIA

Nigeria's naira NGN= is seen weakening on the official market after the
currency dropped to a record low due to a backlog demand for foreign
exchange, traders said.

The currency eased to a new band of between 460 naira and 462 naira to the
dollar on Thursday, weaker than last week's range of between 455 naira and
457 naira on the official market.

"The rate is weakening and I think it will weaken further by the end of the
year," a currency trader at a local bank said.

"It should hit about 465 levels."

KENYA

Kenya's shilling KES= is expected to weaken on increased demand for dollars
from importers, especially oil companies.

Commercial banks quoted the 123.20/40 per dollar, compared with last
Thursday's close of 123.15/35. In early Thursday trade, the shilling hit a
new all-time low of 123.35/55 before recovering some of its losses,
according to Refinitiv data.

"It still remains the same direction ... weakening," a trader at one
commercial bank said. "The oils (oil companies) will be back, they are the
main buyers."

The trader said they would also be on the lookout for central bank selling
dollars, which could give the shilling some reprieve. The bank says it only
intervenes in the market to smooth out any volatility in either direction,
and has no preferred level for the shilling.

ZAMBIA

The kwacha ZMW= is expected to remain on the back foot against the dollar
next week due to a sustained rise in demand for the greenback, while supply
remains minimal.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 18.1900 per dollar from 18.0200 at the close of business
a week ago.

"The kwacha is expected to continue following a downward trajectory in the
short-term despite the anticipation of local investors for a shift in
trends," Access Bank ACCESS.GH said in a note.

UGANDA

The Ugandan shilling UGX= is seen weakening in the coming days, undermined
by strong demand from commercial banks looking to beef up their hard
currency positions as the new year gets underway.

At 1020 GMT commercial banks quoted the shilling at 3,750/3,760, compared to
last Thursday's close of 3,640/3,650.

"I anticipate a spike in (dollar) demand which we normally see around this
time," said a trader at one commercial bank.

"Some banks that are short are covering up their positions ahead of the new
year."

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slides as traders weigh China outlook, U.S. jobless claims

(Reuters) - The dollar slipped on Thursday with investors on edge at the end
of the year as initial optimism over China's reopening fizzled out and as
markets processed a readout of U.S. jobless claims.

Markets are weighing the impact of China's rapid loosening of its strict
COVID-19 rules with a surge in new infections.

"China is one of the keys I think to 2023 and what happens to the global
economy," said Chris Gaffney, president of world markets at TIAA Bank.

Following China's removal of its quarantine rule for inbound travelers from
Jan. 8, the United States, Japan, India and other countries said they would
require COVID tests for travelers from China.

"If they can bounce back from the dramatic slowdowns that we've seen, that
helps the overall growth on the global scale, but on the other hand, it
could also lead to higher energy demand and more demand means higher
prices," said Gaffney.

After hitting a one-week high against the yen on Wednesday, which saw the
dollar touch 134.40, the greenback hit a session low against the yen on
Thursday. The dollar last fell 1.1% against the yen to 133.005.

The dollar also fell against the Swiss franc to as low as 0.9208, the lowest
level since March 31. It was last down 0.71% against the Swiss franc at
0.922.

Against a basket of currencies, the U.S. dollar index fell 0.479% to
103.840, having climbed 0.18% in the previous session.

That drop may have been a reaction to fresh U.S. jobless claims numbers on
Thursday, said Steve Englander, head of G10 FX research at Standard
Chartered.

The Labor Department found that the number of people receiving benefits
after an initial week of aid rose to 1.710 million in the week ending Dec.
17. Those so-called continuing claims, a proxy for hiring, have drifted
higher since early October.

"Historically, when you have that pace of increasing continuing claims, it's
been an early signal of a downturn," said Steve Englander, head of G10 FX
research at Standard Chartered.

But analysts warned against reading too much into price moves amid low
trading volumes as markets head into the new year.

"It's the end of the year and there are liquidity issues and so on, so the
market may be reacting more to incoming data than it would under normal
liquidity circumstances," said Englander.

Investors are likely eager for the fresh information that 2023 will bring,
said Craig Erlam, markets analyst at currency platform Oanda.

"We very much appear to be in drifting mode, awaiting the turn of the year
when traders return and we can get the latest thoughts from policymakers and
the most up-to-date data," he said.

Sterling rose 0.42% against the dollar to 1.207 after slipping 0.11% the
previous day.

The aussie rose 0.70% versus the greenback at $0.678, while the kiwi rose
0.68% against the dollar at $0.635.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices to push above $1,900 as the Fed remains behind the inflation
curve in 2023 - BCA

(Kitco News) - The gold market has seen a solid end to 2022 and according to
one research firm, its momentum in the fourth quarter should continue into
2023.

In its 2023 outlook, analysts at BCA said that they see gold prices pushing
above $1,900 an ounce next year. The positive outlook comes as the firm
started building a bullish position in November.

The research firm is bullish on gold as they expect a peak in the Federal
Reserve's monetary policy, persistently high inflation and global economic
uncertainty to support prices through the new year.

"The evolution of gold prices next year will hinge on Fed monetary policy
and its impact on the USD's trajectory," the analysts said in the report.
"Given a backdrop of elevated uncertainty next year and a dovish Fed, which
will weaken the USD, safe-haven demand for gold will rise."

Currently, markets are expecting the U.S. central bank to raise interest
rates to a peak between 5.00% and 5.25% in the first half of the year. BCA
said that as recession fears grow, it expects the central bank to start
cutting rates by the end of the year or early 2024.

Although inflation has fallen from its highs in the summer, BCA warned
investors that the threat remains and the analysts see a risk of it becoming
unanchored in 2023.

"We expect the Fed will remain behind the inflation curve, as it targets
core inflation when conducting monetary policy, not headline inflation," the
analysts said. "This will unmoor currently well-anchored inflation
expectations since, we believe, it is headline inflation - chiefly energy
and food prices - that drives households' and firms' wage and price
decisions."

Along with rising investment demand for gold, BCA sees increased physical
demand driven by central bank purchases.

"In the longer run, E.M. central banks will be keen to replace U.S. dollars
with gold in their reserves, so as to insulate themselves from the risk of
Western financial sanctions the likes of which Russia is dealing with now,"
the analysts said.

The biggest risk to BCA's bullish outlook is the persistent inflation
threat, which they said would force the U.S. central bank to maintain its
aggressive monetary policies.

"Higher interest rates will increase the opportunity cost of holding
non-yielding bullion and will support the U.S. dollar, which is
anti-correlated to gold,'' the analysts said.

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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