Bulls n Bears Daily Market Commentary : 31 January 2022

Tue Feb 1 05:42:23 CAT 2022

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Bulls n Bears Daily Market Commentary : 31 January 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares closed today's session registering marginal losses from blue
chips and mid-tier counters. Activity levels were at 401 trades. Star Africa
was the most active stock at 45 trades followed by Econet and Delta at 30
and 23 trades respectively. Investor sentiment was negative after the
session yielded 13 advancers against 19 fallers while four of the active
stocks remained unchanged. Cassava anchored volume aggregate trading 581 400
shares and Hippo anchored value aggregate with a value of ZW$40.56 million.

The All-Share Index shaded 0.33% to close at 12 079.74 points. The Top 10
Index pared 0.59%. The Top 15 Index also shaded 0.47%. The Medium Cap Index
was up by 0.37% to 21 233.64 points whilst the Small Cap Index added 1.80%
to 381 675.40 points. Leading the risers pack of the day was Mashonaland
Holdings adding 20.00%. Wildale was up by 14.97%. National Tyre Services
added 9.59% and Edgars added 8.89% to 560c. Fidelity was up by 5.26%.
Mitigating the gains were losses Dairibord Holdings and Cassava which shaded
6.71% and 6.45%. Star Africa was down by 2.97%. Get Bucks and Rio Zimbabwe
shaded 2.56% and 2.22% respectively. The ETFs traded 272 315 units worth
ZW$3 517 172.96 in 98 trades. The Old Mutual Top 10 ETF shaded 0.87% to
close at 757.69c while the Morgan and Co Multi Sector ETF shaded 3.56% to
close at 1394.82c. On the VFEX, Bindura traded 21 951 shares to close down
16.67% at US$ 0.05c.- wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South Africa's rand recovers, central banks in focus

(Reuters) - South Africa's rand firmed in early trade on Monday, regaining
some ground after weakening last week after the country's central bank
signalled a gradual pace of policy tightening and expectations grew for
aggressive U.S. rate hikes.

At 0635 GMT, the rand ZAR=D3 traded at 15.5550 against the dollar, 0.29%
firmer than its previous close.

Last week, the South African Reserve Bank (SARB) raised its main lending
rate by 25 basis points in a "measured" move, but its forward guidance was
less hawkish than the market had positioned for.

In contrast, bets for U.S. rate hikes increased on Federal Reserve hawkish
shift.

Focus in the week remained on central banks, with key Australian, UK and
European central bank meetings taking place in the days ahead.

Locally, December trade balance numbers were due at 1200 GMT.

In fixed income, the yield on the benchmark 2030 government bond ZAR2030=
was down a single basis point to 9.415%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar slides as recent rally takes a pause, may have seen short-term peak

The U.S. dollar fell on Monday, posting its largest daily fall since last
November as investors consolidated gains after hitting a 1-1/2-year high on
Friday on expectations of a faster pace of rate hikes by the Federal
Reserve.

With the Fed clearly signalling last week that it intends to raise interest
rates as early as the March 15-16 policy meeting, Wall Street banks are now
expecting are now expecting about five to seven rate hikes this year.

Fed funds futures late Monday have priced in just under five hikes for 2022,
or about 121 basis points of tightening. They also showed a 17% chance of a
50 basis-point increase in March, down from as high as 32% on Friday.

Atlanta Fed President Raphael Bostic, a non-voter on the Federal Open Market
Committee told the Financial Times in an interview over the weekend the Fed
could super-size a rate increase to half a percentage point if inflation
remains stubbornly high.

The dollar index slid 0.7% on the day, its highest daily percentage rise in
two months. For January, the greenback was up nearly 1%.

The dollar could start to see "some underperformance against advanced
economies that grow more aggressive in tightening," he added.

Investors are also looking to Friday's U.S. nonfarm payrolls for an
indication of how aggressive the Fed can be on its tightening path. U.S.
payrolls are forecast to show a gain of 153,000 jobs for January, down from
199,000 in December, with the unemployment rate holding steady at 3.9%,
according to a Reuters poll. [EM]

A quicker pace of rate hikes is also seen as dampening future growth
expectations, a scenario playing out in bond markets where spreads between
2-year and 10-year U.S. Treasury yields fell below 59 basis points for the
first time since early November, a phenomenon known as "bear-flattening."
[US/]

In other currencies, the Australian dollar led gains, rising 1% to US$0.7068
before a Reserve Bank of Australia policy meeting on Tuesday.

Against the yen, the dollar fell 0.2% to 115.045 yen.

The Bank of England also holds its policy meeting on Thursday, with a
Reuters poll predicting a second rate hike in less than two months after UK
inflation jumped to its highest in nearly 30 years.

Sterling was last up 0.4% at $1.354

The European Central Bank also meets on Thursday. While no policy change is
expected, analysts said the Fed's looming rate hikes will narrow the ECB's
window for action.

The euro last traded up 0.8% at $1.1240, its best daily percentage gain in
two months.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold faces January fall, palladium set for best month in 14 years

(Reuters) - Gold prices edged up on Monday even as expectations for interest
rate hikes by the U.S. Federal Reserve put non-yielding bullion on track for
its worst monthly performance since September, while palladium braced for
its best month in 14 years.

Spot gold was up 0.4% at $1,797.79 per ounce by 14:01 EST (1901 GMT) and was
headed for a loss of 1.7% for the month. U.S. gold futures settled 0.6%
higher at $1,796.40.

The dollar has risen against other currencies based on expectations of Fed
rate hikes, while other central banks haven't really started to move yet,
which has created a problem for gold, said Bob Haberkorn, senior market
strategist at RJO Futures.

The dollar index was set for a monthly gain, making greenback-priced bullion
more expensive for holders of other currencies.

The reality of five Fed rate hikes possibly this year has spooked the gold
market a little bit, and gold is competing with bonds since it doesn't earn
interest, Haberkorn added.

The Fed plans to raise rates in March on the assumption the economy will
largely steer clear of fallout from the Omicron coronavirus variant and keep
growing at a healthy clip. read more

Elsewhere, spot palladium fell 0.8% to $2,357.69 per ounce, but the
auto-catalyst metal is poised for a monthly gain of about 24.6%, its best
performance since February 2008.

Silver gained 0.1% to $22.43 an ounce and was set for about a 3.6% decline
in January.

Platinum gained 1.2% to $1,019.94, set for its best month since October.

The Thomson Reuters Trust Principles.

Copper prices tick up in trade thinned by China holiday

(Reuters) - Copper prices ticked higher on Monday as the dollar lost ground,
but trading volumes were thin as markets in top metals consumer China were
closed for the week-long Lunar New Year holiday.

Benchmark copper on the London Metal Exchange (LME) were up 0.3% to $9,536
per tonne by 1705 GMT, overcoming early weakness.

A weaker dollar supports demand for commodities it is priced in, while
firmer stock markets point to a higher risk appetite from investors.

The industrial metal, considered an economic bellwether, was set for its
biggest monthly loss since September as markets braced for higher U.S.
interest rates.

THIN TRADE: The Shanghai Futures Exchange will reopen on Feb. 7.

ALUMINIUM: Benchmark prices for the lightweight metal fell 1.8% to $3,027
per tonne.

But it was on track for a monthly gain of more than 9%, the biggest rise
since November 2020, on lower output, solid demand and concerns that an
escalation of the Ukraine conflict could disrupt exports from major producer
Russia.

CHINA: Growth in top metals consumer China's factory activity slowed in
January as a resurgence of COVID-19 cases and tough lockdowns hit production
and demand, but the slight expansion offered some signs of resilience as the
world's second-largest economy enters a likely bumpy new year. read more

COPPER POLL: Copper prices are set to languish this year, a Reuters poll of
analysts showed, weighed down by weaker demand as rising interest rates curb
economic growth, while mines churn out more supply. read more

TENSIONS: Europe needs to diversify its energy supplies, the head of NATO
said on Sunday, as Britain warned it was "highly likely" that Russia, the
continent's biggest natural gas supplier, was looking to invade Ukraine.
read more

Base metals producers in Europe, especially of aluminium and zinc, are heavy
users of power.

OTHER PRICES: Zinc lost 0.6% to $3,589 per tonne, lead fell 0.9% to $2,242,
tin was up 3% to $42,900 and nickel was steady at $22,350.

The Thomson Reuters Trust Principles.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Counters trading under cautionary

ART

Seed co Int.

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

Bulls n Bears 

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