Bulls n Bears Daily Market Commentary : 07 February 2022

Mon Feb 7 18:10:48 CAT 2022

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Bulls n Bears Daily Market Commentary : 07 February 2022

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ZSE commentary

The ZSE shares closed the week with gains in major indices as liquidity and
activity levels ticked up as the monetary policy was released today.
Activity levels were at 478 trades. Star Africa was the most active stock at
51 trades followed by Delta and OK Zimbabwe at 32 and 28 trades
respectively. Investor sentiment was positive after the session yielded 20
risers against 12 decliners while five of the active stocks remained
unchanged. Star Africa anchored volume aggregate trading1 306 900 shares and
Innscor anchored value aggregate with a value of ZW103.99 million.

The All-Share Index added 1.27% to close at 12688.57 points. The Top 10
Index added 1.40%. The Top 15 Index also added 1.56%. The Medium Cap Index
was up by 0.72% to 21590.57 points whilst the Small Cap Index shaded 1.56%
to 382 823.22 points. Leading the risers pack of the day was Axia closed at
5526.28c and Tanganda  was up by 6.33%. Cassava added 3.94% and General
Beltings added 5.92% to 190.65c. Simbisa was up by 4.53%. Mitigating the
gains were losses in Zimpapers and RTG  which shaded 13.90% and 4.94%. First
Mutual Holdings was down by 3.94%. Proplastics and Edgars shaded 3.70% and
2.31% respectively. The ETFs traded 257 369 units worth ZW$1 760 102.71 in
82 trades. The Old Mutual Top 10 ETF shaded 1.79% to close at 630.56c while
the Morgan and Co Multi Sector ETF added 0.53% to close at 1357.46c..-
wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South Africa's rand falls as power cuts resume

(Reuters) - The South African rand weakened against a stronger dollar in
afternoon trade on Monday, as domestic headwinds also weighed with power
utility Eskom announcing the resumption of schuduled power cuts barely hours
after suspending the outages.

At 1500 GMT, the rand traded at 15.5050 against the dollar, 0.39% weaker
than its previous close.

Eskom said scheduled power cuts would resume from 9 p.m. (1900 GMT) after
more breakdowns at its ailing coal-fired power stations. It had only
suspended outages on Sunday evening, when it said its generation capacity
had recovered.

The outages are a major drag on Africa's most industrialised economy.

Investors awaited economic cues from local data releases including December
mining and manufacturing figures, as well as a State of the Nation address
by President Cyril Ramaphosa due this week.

Ramaphosa typically uses the annual address to parliament to announce
reforms in key policy areas. Previous addresses have laid out plans to
overhaul Eskom and address the country's power crisis.

January business confidence (ZABCI=ECI) data is due on Wednesday, and
December mining (ZAMNG=ECI) and manufacturing (ZAMAN=ECI) numbers are
expected on Thursday.

The government's benchmark 2030 bond weakened, with the yield rising 4.5
basis point to 9.37%.

Stocks closed higher, with the Johannesburg Stock Exchange's Top-40 Index
(.JTOPI) rising 0.76% to 69,198 points and the broader All-Share Index
(.JALSH) climbing 0.63% to 75,680 points.

Exporters such as mining firms BHP Group , Anglo American and Glencore ,
whose exports become more competitive when the rand falls, were among the
biggest winners of the day.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Global Markets

Euro drops after U.S. jobs data fuels dollar rebound

(Reuters) - The euro dipped on Monday after a surge last week that followed
a hawkish shift by the European Central Bank, as traders turned to the
dollar betting the jump in U.S. jobs created in January could lead to faster
Federal Reserve rate hikes.

The European common currency dropped 0.2% to as low as $1.1415, having hit
its highest since mid-January on Friday.

Those gains had been driven by a hawkish turn from the ECB, which led
markets to bring forward the likely timing of euro zone rate rises and sent
bond yields sharply higher.

ECB policymaker Martins Kazaks, in an interview with Reuters, pushed back
against market expectations for a rate hike as soon as July. He said the ECB
could end its stimulus programme earlier than planned but it was unlikely to
raise its main interest rate in July. read more

Not everyone is convinced by the market's reading of the ECB's hawkish tilt.

He said he expected the euro to fall to $1.10 by year-end and the dollar
gaining versus the Swiss franc to finish the year at 0.98 francs per dollar,
from 0.92 currently .

The dollar found some support on Monday, helped by U.S. Treasury yields that
rose after far better-than-expected jobs data on Friday.

Markets have now priced in a one-in-three chance the Fed might hike by a
full 50 basis points in March, and a reasonable chance rates will reach 1.5%
by year end. FEDWATCH

These expectations could be bolstered by the U.S. consumer price index due
Thursday.

The dollar index climbed 0.1% to 95.483, off the 95.136 touched last week
before the labour market numbers.

U.S. two-year yields held firm after briefly touching a new a two-year high
of 1.33%.

The U.S. currency dropped 0.2% to 114.94 Japanese yen . Sterling slipped
0.1% to $1.3511 but both currencies remained in the middle of their recent
ranges.

Markets will be watching scheduled speeches by policymakers at the Fed and
the UK, European, Australian and Canadian central banks this week, to see
whether they drop any further hints on rate policy.

Bitcoin rose 0.7% to $42,715 after jumping 11% late on Friday.

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold gains as inflation risks boost safe-haven appeal

(Reuters) - Gold prices climbed to a more than one-week high on Monday,
supported by inflation worries and lingering geopolitical risks, as markets
awaited key U.S. inflation data for cues on the Federal Reserve's interest
rate hike trajectory.

Spot gold was up 0.4% at $1,813.93 per ounce by 09:44 a.m. EST (1444 GMT),
after hitting its highest level since Jan. 27 at $1,816.86 earlier in the
session.

U.S. gold futures gained 0.4% to $1,814.70.

Benchmark 10-year U.S. Treasury yields hovered near their highest levels
since December 2019 after an upbeat U.S. employment report on Friday.

U.S. inflation figures for January are due on Thursday, with markets now
pricing in a one-in-three chance the Fed might hike by a full 50 basis
points in March. read more

Although gold is considered a hedge against higher inflation and a safe
store of value in times of uncertainty, higher rates raise the opportunity
cost of holding non-yielding bullion.

Russia-Ukraine tensions are also on the back of everyone's minds, Haberkorn
said.

U.S. President Joe Biden and German Chancellor Olaf Scholz will underscore
their unity in opposing any Russian aggression against Ukraine when they
meet at the White House on Monday, amid U.S. warnings that a Russian
invasion could happen in days or weeks. read more

Gold and silver prices were also boosted by a weaker U.S. dollar.

Meanwhile, speculators cut their net long COMEX gold position in the week to
Feb. 1, data showed on Friday.

Among other precious metals, silver jumped 1.6% to $22.84 per ounce,
platinum declined 1.1% to $1,012.71, and palladium dropped 2.8% to
$2,222.06.

The Thomson Reuters Trust Principles.

Oil falls on positive signals from U.S.-Iran talks

(Reuters) - Oil prices fell on Monday as concerns over tight supply were
offset by signs of progress in nuclear talks between the United States and
Iran, which could lead to the removal of U.S. sanctions on Iranian oil
sales.

Brent crude was down 61 cents, or 0.7%, at $92.66 by 1445 GMT, having
earlier touched its highest since October 2014 at $94.

U.S. West Texas Intermediate crude fell $1.11, or 1.2%, to $91.20 after
touching $92.73.

U.S. President Joe Biden's administration on Friday restored sanctions
waivers to Iran to allow international nuclear cooperation projects as talks
on the 2015 international nuclear deal enter the final stretch. read more

Although the sanctions relief will have limited impact on Iran's struggling
economy, the move was perceived by markets as a signal that both sides are
determined to reach a deal.

Iran could quickly export millions of barrels of crude and help to drive
down red-hot oil prices if U.S. sanctions are lifted. It seems that Iran has
been moving oil into place to prepare for the eventual resumption of its
exports.

Kazuhiko Saito, chief analyst at Fujitomi Securities, said that "investors
expect more twists and turns" in the talks, with no agreement likely any
time soon.

Crude prices, which have rallied about 20% this year, are likely to surpass
$100 a barrel because of strong global demand, analysts have said. read more

The Organization of the Petroleum Exporting Countries (OPEC) and allies led
by Russia, together known as OPEC+, are struggling to meet output targets
despite pressure from top consumers to raise production more quickly. read
more

Fuelling supply concerns, tensions remain high in Eastern Europe, with White
House national security adviser Jake Sullivan saying on Sunday that Russia
could invade Ukraine within days or weeks but might still opt for a
diplomatic path. read more

The Thomson Reuters Trust Principles.

INVESTORS DIARY 2022

Company

Event

Venue

Date & Time

Cafca

AGM

Feb 24, 12PM  

Ariston

AGM

Royal Harare Golf Club

Feb 24, 3PM

Counters trading under cautionary

ART

Seed co Int.

Starafrica

Medtech

Turnall

Seed co

Invest Wisely!

Bulls n Bears 

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