Bulls n Bears Daily Market Commentary : 10 February 2022

Fri Feb 11 06:36:22 CAT 2022

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Bulls n Bears Daily Market Commentary : 10 February 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares continued to gain steadily against the backdrop of increasing
wage and exchange rate pressures. Activity levels were lower at 476 trades.
OK Zimbabwe was the most active stock at 43 trades followed by Star Africa
and Delta at 42 and 22 trades respectively. Investor sentiment was positive
after the session yielded 29 risers against 7 decliners while three of the
active stocks remained unchanged. Nampak anchored both volume and value
aggregate trading 8 122 300 shares with a value of ZW$101.53 million. The
All-Share Index added 3.56% to close at 13 542.80 points. The Top 10 Index
added 4.07%. The Top 15 Index also added 3.94%. The Medium Cap Index was up
by 2.36% to 22 373.85 points whilst the Small Cap Index added 0.03% to 400
285.28 points. Leading the risers pack of the day was Dairibord closed at
3497.50c and Cassava was up by 10.71%. Star Africa added 8.51% and Axia
added 8.44% to 7049.28c. Hippo was up by 7.65%. Mitigating the gains were
losses in Truworths  and Ariston which shaded 6.28% and 4.46%. Tanganda was
down by 1.32%. African Sun and First Capital Bank shaded 1.24% and 0.29%
respectively.

The ETFs traded 22 229 units worth ZW$246 736.20 in 48 trades. The Old
Mutual Top 10 ETF added 4.60% to close at 783.83c while the Morgan and Co
Multi Sector ETF shaded 0.02% to close at 1370.39c. On the VFEX, Bindura
shaded 10% to US 4.50cents, Seed Co Int and Padenga remained unchanged at US
21c and US 28.50c respectively..-wealthaccesssecurities

Global Currencies & Equity Markets

Kenyan shilling to firm, Zambian kwacha to weaken

Kenya's shilling is expected to strengthen against the dollar in the next
week to Thursday, while Uganda's and Zambia's kwacha will weaken, traders
said.

NAIROBI -(Reuters) - Kenya's shilling is expected to strengthen against the
dollar in the next week to Thursday, while Uganda's and Zambia's kwacha will
weaken, traders said.

KENYA

The Kenyan shilling KES= is expected to strengthen against the dollar next
week as it benefits from the sale of a government infrastructure bond which
is popular with offshore investors.

The shilling was trading at 113.50/70 against the dollar, unchanged from a
week earlier. It has been stuck in that level as the market waits to see the
amount of dollar inflows into the bond auction next week.

The shilling's gains could, however, be curbed by pent-up demand for dollars
from large importers who have postponed their purchases in anticipation of
the strengthening, warned a senior trader at a leading commercial bank.

UGANDA

The Ugandan shilling UGX= is forecast to weaken on dollar demand from
importers preparing to buy goods to meet a surge in demand after a reopening
of the economy.

Commercial banks quoted the shilling at 3,525/3,535, compared to last
Thursday's close of 3,495/3,505.

A trader at one of the commercial banks said there was increased demand from
merchandise importers and that they anticipated the trend to continue for a
few weeks.

Uganda fully reopened its economy last month for the first time in nearly
two years.

TANZANIA

Tanzania's shilling TZS= is expected to hold steady with support from
investment activity inflows.

Commercial banks quoted the shilling at 2,308/2,318 on Thursday, little
changed from a week earlier.

NIGERIA

The Nigerian naira is seen easing on the black market in the coming week
after the currency weakened on the parallel market due to rising dollar
demand, traders said.

The currency eased to 574 naira to the dollar on the parallel market NGNP=
on Thursday, lower than last week's 571 naira. On the official market NGN=,
it traded between 411 and 417 naira.

Nigeria has been battling dollar shortages, forcing the central bank to
introduce policies to ration hard currency supply, thereby channelling
demand to the unofficial market.

ZAMBIA

The kwacha ZMW= is likely to ease despite next week's treasury bond auction
on Friday as corporate demand continues to grow on the back of improving
economic activity amid tight hard currency supply.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 18.6670 per dollar, down from 18.3000 a week ago.

South Africa

Rand gains ahead of Ramaphosa's address

The rand posted strong gains on Thursday before President Cyril Ramaphosa's
annual state of the nation address where he typically announces reforms in
key policy areas.

At 17:45 local time the rand traded at R15.01 against the dollar, up 1.3%
from its Wednesday close.

Ramaphosa's address to parliament is due to start at around 19:00.

Watch the livestream here.

In previous years he has announced steps to turn around struggling state
power utility Eskom and shore up public finances, attempting to boost
investor confidence in Africa's most industrialised nation.

Domestic data releases on Thursday were mixed, with December manufacturing
output falling 0.1% year on year, less than expected, and December mining
production falling by 1.1% when growth was expected.

Johannesburg-listed stocks fell, led by declines in rand hedge shares which
derive a large percentage of their profits from foreign markets and tend to
weaken when the currency strengthens.

Tech investor Prosus, Cartier owner Richemont, mining firm Glencore and
British American Tobacco fell between 3.56% and 0.29%.

Megacap growth stock Naspers, a tech investor that owns a majority stake in
Prosus, also fell, declining 2.59%.

The Top 40 Index closed down 0.23% at 69 944 points and the broader All
Share Index slipped 0.14% to 76 585 points. The mining index declined by
0.47% following the weak December data.

The government's benchmark 2030 bond gained, with the yield falling 6.5
basis points to 9.17%.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar inches up on strongest CPI growth since 1982

(Xinhua) -- The U.S. dollar increased in late trading on Thursday due to
higher-than-expected inflation.

The dollar index, which measures the greenback against six major peers,
increased 0.06 percent at 95.5530 in late trading.

U.S. consumer price index (CPI) for January 2022 posted 7.5 percent of
year-on-year growth, higher than the 7.3 percent of market expectation
consensus.

The highest CPI growth since 1982 further spurred market expectation of more
aggressive monetary tightening by the Federal Reserve.

St. Louis Federal Reserve President James Bullard on Thursday said he wants
the Fed to hike interest rate by 100 basis points by July 1, which means the
Fed should announce a 50-basis point hike in one of the three upcoming
monetary policy meetings.

In late New York trading, the euro was up to 1.1452 dollars from 1.1436
dollars in the previous session, and the British pound increased to 1.3574
dollars from 1.3537 U.S. dollars in the previous session.

The U.S. dollar bought 115.9210 Japanese yen, higher than 115.4760 Japanese
yen of the previous session. The U.S. dollar rose to 0.9257 Swiss franc from
0.9238 Swiss franc, and it increased to 1.2717 Canadian dollars from 1.2673
Canadian dollars. The U.S. dollar increased to 9.2953 Swedish Krona from
9.1050 Swedish Krona. │

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold hits 2-week high on mounting inflation worries, softer dollar

(Reuters) - Gold prices touched their highest level in two-weeks on
Thursday, supported by a weaker dollar and as data showing a spike in U.S.
consumer prices boosted the metal's appeal as a hedge against inflation.

Spot gold prices fell as much as 0.6% after hotter-than-expected U.S.
inflation data supported the case for aggressive rate hikes, but recouped
losses to trade 0.2% higher at $1,835.71 per ounce by 13:43 ET (1843 GMT).

U.S. gold futures settled mostly unchanged at $1,837.40.

The dollar (.DXY) slipped to a near one-week low, making bullion less
expensive for holders of other currencies.

While gold is considered a hedge against soaring inflation, a resultant hike
in interest rates would increase the opportunity cost of holding
non-yielding bullion.

The U.S. consumer price index jumped 7.5% in the 12 months through January,
the biggest year-on-year increase since 1982, topping expectations of a 7.3%
rise. 

Federal funds rate futures increased the chances of a half percentage-point
tightening by the U.S. Federal Reserve at next month's policy meeting
following the data. 

Meanwhile, benchmark 10-year U.S. Treasury yields topped 2% for the first
time in 2-1/2 years.

Wall Street's main indexes dropped on Thursday, with Big Tech leading
declines.

Elsewhere, spot silver gained 0.7% at $23.46 per ounce, platinum rose 0.2%
to $1,035.55, while palladium fell 0.3% to $2,272.81.

The Thomson Reuters Trust Principles.

Copper price highest since October on supply squeeze

The copper price surged again on Thursday as stocks continued to fall in a
slow-motion re-run of events leading up to last year's super squeeze.

Copper stocks are once again approaching historically low levels, with only
200,402 tonnes of available inventory officially held by the LME, Comex and
SHFE, with New York responsible for more than half the total. 

Shanghai copper climbed 4% to 73,030 yuan a tonne, after earlier hitting
73,040 yuan, also its highest since October 21.

Copper for delivery in March rose on the Comex market in New York, touching
$4.7065 per pound ($10,354 per tonne), up 2.1% compared to Wednesday
closing, the highest since October.

Meanwhile, Fitch Solutions said in its outlook for 2022 that the tightness
in copper inventories will ease a bit this year, with Chinese smelters
increasing production again after the cuts during the power crisis in
October.

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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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
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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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