Bulls n Bears Daily Market Commentary : 08 February 2022

Tue Feb 8 16:21:48 CAT 2022

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Bulls n Bears Daily Market Commentary : 08 February 2022

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ZSE commentary

The ZSE shares closed the week with mild gains across all indices. Activity
levels were at 472 trades. Star Africa was the most active stock at 57
trades followed by Econet and OK Zimbabwe at 38 and 35 trades respectively.
Investor sentiment was positive after the session yielded 22 risers against
11 decliners while five of the active stocks remained unchanged. Star Africa
anchored volume aggregate trading 2 176 600 shares and Econet anchored value
aggregate with a value of ZW118.17 million. The All-Share Index added 1.18%
to close at 12 838.15 points. The Top 10 Index added 1.34%. The Top 15 Index
also added 1.28%. The Medium Cap Index was up by 0.30% to 21 655.52 points
whilst the Small Cap Index added 1.45% to 388 386.19 points.

Leading the risers pack of the day was African Sun closed at 800c and
Tanganda was up by 9.56%. Mashonaland Holdings added 9.38% and Zimpapers
added 7.88% to 190.65c. Ariston was up by 6.48%. Mitigating the gains were
losses in Dairibord and NMB Holdings which shaded 14.29% and 6.96%. Nampak
was down by 6.72%. ZIMRE Holdings  and Star Africa shaded 3.40% and 3.25%
respectively. The ETFs traded 147 951 units worth ZW$1 152 377.20 in 56
trades. The Old Mutual Top 10 ETF added 11.59% to close at 703.61c while the
Morgan and Co Multi Sector ETF added 0.92% to close at 1369.91c. on the
VFEX, Padenga traded 36 501 shares to close unchanged at US$
21c.-wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South African rand weaker as U.S. rate-hike bets boost dollar

(Reuters) - The South African rand opened weaker on Tuesday, as the dollar
gained in global markets, with traders wary that U.S. inflation data due
later in the week could unleash bets on faster interest rate hikes.

Stunningly strong U.S. labour data last week has put extra focus on
inflation, forecast to hit a four-decade high of 7.3% in January in
Thursday's data release, in the lead up to March's Federal Reserve meeting.
read more

At 0622 GMT, the rand traded at 15.5550 against the dollar, around 0.5%
weaker than Monday's close.

The dollar (.DXY) was 0.2% stronger against a basket of currencies.

Sentiment was also impacted by South Africa's state-owned utility Eskom
resuming scheduled power cuts on Monday, as it suffered more breakdowns at
its ailing coal fleet. Eskom's woes are a major constraint on economic
growth and investor sentiment in Africa's most industrialised nation.

The focus will soon shift to President Cyril Ramaphosa's annual State of the
Nation Address in parliament on Thursday, a speech he typically uses to
announce reforms in key policy areas.

The statistics agency will also release December mining (ZAMNG=ECI) and
manufacturing (ZAMAN=ECI) numbers on Thursday.

Elsewhere, the government's benchmark 2030 bond was weaker in early deals,
with the yield edging up 2.5 basis points to 9.385%.

The Thomson Reuters Trust Principles.

Nigeria

Naira Crashes Further At Black Market, See Today's Exchange Rate

Naira has crashed further at the black market with new exchange rate
emering.

Newsone reports that the Nigerian official currency, Naira has fallen
against dollar for the second time in February 2022 the second month of the
new year, after maintaining N570/per $1 at the black market since January
20, 2022.

This online news platform understands that the naira has fallen against the
United States dollar at the black market for the second time since the start
of the second month of the year 2022, exchanging at N572/per $1, days after
it maintained position of N570 per dollar to naira.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar up, euro down as pair face off in rate hike tussle

(Reuters) - The dollar and the euro both eased on Monday after European
Central Bank President Christine Lagarde calmed market expectations of a
quick hike in interest rates that pushed regional bond yields in Europe up
to multi-year highs.

There is no need for big monetary policy tightening in the euro zone as
inflation is set to decline and could stabilize around the ECB's target of
2%, Lagarde told a European Parliament hearing. read more

Last week the ECB opened the door to a rate hike later in 2022 as inflation
risks rose, while data showing an unexpected jump in U.S. jobs created in
January also raised speculation of a faster timetable for the Federal
Reserve to hike rates.

The new rate expectations for both the Fed and ECB pit the dollar and euro
against each other as to which will gain an upper hand. U.S. consumer price
data to be released on Thursday is poised to be a key data point
determinant.

A Reuters poll of economists showed they expect year-over-year CPI to have
climbed to 7.3% in January.

The major currencies traded in a tight range near break-even. The dollar
index fell 0.045%, with the euro down 0.03% to $1.1443.

The ECB last week got the ball moving in a positive direction for the euro,
said Joe Manimbo, senior market analyst at Western Union Business Solutions.

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

The European common currency hit its highest since mid-January on Friday,
driven by the hawkish turn from the ECB.

Not everyone is convinced of a hawkish ECB tilt.

Haefele said he expects 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 two-year U.S. Treasury yield, which typically moves in step with
interest rate expectations, was down 2.4 basis points at 1.298%. The yield
on two-year German bonds fell by 3.5 bps to -0.29%, after hitting its
highest since September 2015 at -0.21%.

The Japanese yen strengthened 0.13% versus the greenback at 115.06 per
dollar, while sterling was last trading at $1.3536, up 0.05% on the day.

Bitcoin rose to a four-week high, driven in part by liquidation of some
short positions that have accumulated in the virtual currency's recent
three-month downtrend. 

The cryptocurrency climbed 8.94% to $44,279.81, after jumping 11% late on
Friday.

 <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 rose 0.7% to $1,820.23 per ounce by 13:53 ET (1853 GMT), after
hitting its highest level since Jan. 27 at $1,820.96 earlier in the session.

U.S. gold futures settled 0.8% higher at $1,821.80.

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.

White House national security adviser Jake Sullivan said on Sunday that
Russia could invade Ukraine within days or weeks but might still opt for a
diplomatic path. read more

Gold and silver prices were boosted in part by a U.S. dollar index that has
dropped sharply from its late-January high, Jim Wyckoff, senior analyst at
Kitco Metals, wrote in a note.

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 2.4% to $23.02 per ounce,
platinum declined 0.4% to $1,020.02, and palladium fell 1% to $2,261.51.

The Thomson Reuters Trust Principles.

Oil slips from seven-year high ahead of more U.S.-Iran talks

(Reuters) - Oil slipped to around $91 a barrel on Tuesday ahead of the
resumption of indirect talks between the United States and Iran, which could
revive an international nuclear agreement and allow more oil exports from
the OPEC producer.

A deal could return more than 1 million barrels per day (bpd) of Iranian
oil, equating to more than 1% of global supply, to the market. The nuclear
talks are due to resume in Vienna on Tuesday. read more

Eight rounds of indirect talks between Tehran and Washington since April
have yet to result in an agreement on a resumption of the 2015 nuclear pact,
with differences remaining over the speed and scope of the lifting of
sanctions.  

Brent crude was down $1.76, or 1.9%, at $90.93 a barrel by 1315 GMT after
hitting a seven-year high of $94 on Monday. U.S. West Texas Intermediate
crude fell $1.67, or 1.8%, to $89.65.

Both benchmarks have found support this year from rising global demand,
Russia-Ukraine tensions, supply disruptions in producers such as Libya and a
slow easing of 2020's record output cuts by OPEC and its allies.

Prices were also dented on Tuesday by comments from French President
Emmanuel Macron, who said his meeting with Russian counterpart Vladimir
Putin had helped to prevent a worsening of the Ukraine crisis.

Oil also came under pressure from the prospect of an increase in U.S. crude
inventories. Analysts estimate that inventories rose by 700,000 barrels in
the week to Feb. 4.

The first of this week's two supply reports, from the American Petroleum
Institute, is due at 2130 GMT.

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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