Bulls n Bears Daily Market Commentary : 19 January 2022

Thu Jan 20 06:32:14 CAT 2022

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Bulls n Bears Daily Market Commentary : 19 January 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The All-Share Index plunged 4.45% closing Wednesday's session at 11,687.43
points. INNSCOR AFRICA tumbled $28.9404 to $185.0596, MEIKLES LIMITED sank
by $15.2694 to $127.2694 while TSL LIMITED declined by $14.7518 to $75.2482.
DELTA CORPORATION lost $10.1844 to $184.8172 along with AXIA which pulled
$9.2554 back to $41.1133.

Gains were noted in MEDTECH HOLDINGS which surged $3.8235 to $25.0000,
MASIMBA HOLDINGS LIMITED rose by $2.0500 to close at $52.0500 together with
CASSAVA SMARTECH  which jumped $1.6847 to $54.9044. UNIFREIGHT added $1.0870
to $26.0870 along with ZIMBABWE NEWSPAPERS which was $0.4001 up at $2.9001.

EXCHANGE TRADED FUNDS (ETF)

MORGAN & CO MULTI-SECTOR ETF TRUST eased $0.16838 to $13.2785 and OLD MUTUAL
ZSE TOP 10 went up by $0.1545 to $6.8114.-zse

Global Currencies & Equity Markets

South Africa

South African rand gains as December inflation bolsters rate hike case

JOHANNESBURG- The South African rand gained on Wednesday, as December
inflation came in quicker than expected, bolstering the case for the central
bank to raise interest rates next week.

Statistics South Africa data showed annual consumer inflation accelerated to
5.9% last month ZACPIY=ECI from 5.5% in November, approaching the top of the
South African Reserve Bank's (SARB's) 3%-6% target range. 

Another release by the statistics service showed November retail sales grew
3.3% year on year, also more than forecast. 

Those readings helped the rand trade 1.1% stronger on the day by 1130 GMT at
15.3500 to the dollar.

Also supporting the rand, the dollar slipped about 0.2% against a basket of
currencies.

A Reuters poll predicted the SARB would raise its repo rate by another 25
basis points to 4.00% at its first monetary policy meeting of 2022. The
decision from that meeting is due on Jan. 27. 

The government's benchmark 2030 bond was slightly stronger, with the yield
falling 1.5 basis points to 9.445%. The Top 40 index .JTOPI on the
Johannesburg Stock Exchange was up 1.1%.

Nigeria

Naira depreciates as banks shift BTA/PTA rates to N419 per dollar

The value of the Nigerian naira depreciated by 1.5 percent as banks shifted
personal travel allowance (PTA) and business travel allowance (BTA) rates
from N413 to N419 per dollar.

PTA and BTA are currency exchange schemes specifically set up for Nigerians
travelling abroad for personal or business reasons. Each traveller can get
up to $4000 every quarter to lessen FX disparity at parallel and official
markets.

The rate, which exchanged for N413 per dollar in the last few months, has
added about N6, bank sources told TheCable on Wednesday.

At the parallel market, naira traded flat at N570 against the US dollar.

Bureaux De Change operators (BDCs), popularly known as 'abokis', who spoke
to TheCable, quoted the naira at N567/N570 to a dollar.

A parallel market (street market) is characterised by noncompliant behaviour
with an institutional set of rules.

Since the suspension of trading information by abokiFX - citizens have
resorted to street traders for current parallel market rates of the local
currency.

The Central Bank of Nigeria (CBN) has consistently maintained that the
parallel market represented less than one percent of foreign exchange (FX)
transactions and should never be used to determine Nigeria's naira/dollar
exchange rate.

On the apex bank's website, the local currency closed at N415.17 to a dollar
at the official market on Tuesday.

This means the rate has dropped N2 so far in January at the official market.

Nwanisobi Osita, spokesperson of the CBN, had told TheCable that the market
determines the exchange rate.

The apex bank has devalued the exchange rate multiple times since March 2020
as it strives to bridge the disparity between the official and parallel
market rates.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar weakens, but keeps positive outlook; sterling rises after UK
data

(Reuters) - The dollar slid on Wednesday, with U.S. Treasury yields
retreating as well after hitting roughly two-year peaks on 2-year and
10-year notes, but the greenback remains well-supported as investors
prepared for a widely expected interest rate increase in March.

U.S. 10-year Treasury yields touched a new two-year high of 1.902% on
Wednesday, but was last down 4 basis points at 1.8271%.

Bond yields in other major economies rose as well, with the euro, sterling,
the Canadian, Australian, and New Zealand dollars, among others, gaining
versus the U.S. currency.

Sterling, meanwhile, rose after data showed British inflation rose 5.4% in
December, its highest level in 30 years, raising rate hike expectations.
Talks of a leadership challenge to Prime Minister Boris Johnson, however,
have kept the pound in check. read more

The Fed will meet next week and will likely provide clarity and details on
the end of quantitative easing, possibly in March. The U.S. central bank
could also signal it will raise interest rates in March as well, right after
ending QE.

Fed funds futures have fully priced in a rate hike in March and four in all
for 2022.

In afternoon trading, the dollar index was down 0.2% at 95.528.

The greenback trimmed losses after data showed U.S. homebuilding
unexpectedly increased in December amid unseasonably mild weather. Housing
starts rose 1.4% to a seasonally adjusted annual rate of 1.702 million units
last month. read more

The euro, the largest component in the dollar index, was up 0.2% at $1.1348
, after the previous day's sharpest daily drop in a month.

The single European currency was underpinned overall after Germany's 10-year
bond yield rose above 0% for the first time since 2019 on Wednesday, marking
a potential turning point for euro area debt characterised for years by
negative yields.

The German 10-year yield, considered a benchmark for the whole euro zone,
rose as high as 0.025%, and was last little changed on the day at -0.007% .

The euro, meanwhile, dropped to a 23-month low versus sterling after the
red-hot UK inflation data. It was last flat at 83.29 pence . Against the
dollar, the pound rose 0.2% to $1.3624 .

The pound was also supported by the surge in UK yields, with the two-year
gilt yield rising to 0.958%, its highest level since March 2018.

The Australian dollar rose 0.5% to US$0.7224.

The U.S. dollar edged 0.2% lower versus the Canadian currency to C$1.2492
after Canada's annual inflation rate climbed to a 30-year high of 4.8% in
December. 

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold jumps 1% on subdued dollar, palladium bounces 7%

(Reuters) - Gold rose more than 1% on Wednesday as a retreat in the dollar
and geopolitical tensions surrounding Ukraine burnished safe-haven bullion's
appeal, sparking a rally in precious metals.

Palladium led the gains with a rise of as much as 7%, with Citi Research
saying in a note a gradual recovery in global automotive output could
underpin demand for the auto-catalyst metal this year. It was last up 5.7%
at $2,006.20 per ounce.

Spot gold climbed 1.5% to $1,840.91 per ounce by 13:43 ET (1843 GMT), while
U.S. gold futures settled up 1.7% at $1,843.20.

A slide in the dollar (.DXY) made bullion cheaper for buyers holding other
currencies, while a retreat in the benchmark 10-year Treasury yields from a
two-year peak also boosted demand for the metal.

The drop in yields has driven a technical breakout in gold, but it may still
trade within the overall $1,800 to $1,840 range until the U.S. Federal
Reserve meeting next week, said Ed Moya, a senior market analyst at
brokerage OANDA.

Expectations that the Fed would tighten monetary policy as soon as March
have weighed on bullion this year because higher interest rates increase the
opportunity cost of holding gold.

Gold may also be finding support from geopolitical tensions around Ukraine
and the Middle East, Moya said.

U.S. Secretary of State Antony Blinken said earlier in the day Russia could
launch a new attack on Ukraine at very short notice but Washington would
pursue diplomacy as long as it could. read more

The yellow metal also benefited from its appeal as a hedge against inflation
as oil prices rose to their highest since 2014, sparking concerns that price
pressures could intensify.

Among other precious metals, platinum jumped 4.4% to $1,024.50 per ounce and
spot silver rose 2.7% to $24.08.

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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