Bulls n Bears Daily Market Commentary : 26 January 2022

Thu Jan 27 06:25:32 CAT 2022

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Bulls n Bears Daily Market Commentary : 26 January 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE shares closed today’s session in the positive headlined by heavyweight counters. Liquidity and activity levels however declined. Activity levels were lower at 380 trades. Star Africa was the most active stock at 35 trades followed by Seed Co and Delta at 29 and 28 trades respectively. Investor sentiment was positive after the session yielded 16 advancers against 12 fallers while six of the active stocks remained unchanged. Cassava anchored both volume and value aggregate trading 570 800 shares with a value of ZW$34.18 million.

The All-Share Index added 2.79% to close at 11 792.65 points. The Top 10 Index gained 3.76%. The Top 15 Index also added 3.13%. The Medium Cap Index was up by 0.33% to 21 171.28 points whilst the Small Cap Index shaded 3.88% to 368 018.12 points. Leading the risers pack of the day was First Mutual Holdings adding 20.00%. Cassava was up by 15.14%. Ariston added 9.55% and African Sun added 5.22% to 742.42c. Unifreight was up by 4.98%. Mitigating the gains were losses Fidelity and TSL  which shaded 19.27% and 6.11% to 1135c and 7511.11c respectively. Wildale was down by 5.11% to 322.73c. Zimpapers and Star Africa shaded 5.06% and 3.42% respectively.

The ETFs traded 137 230 units worth ZW$1 243 163.62 in 79 trades. The Old Mutual Top 10 ETF added 0.36% to close at 699.17c while the Morgan and Co Multi Sector ETF added 1.47% to close at 1298.82c. On the VFEX, Bindura traded 63 900 shares to close unchanged at US$ 0.06c.-wealthaccesssecurities

Global Currencies & Equity Markets

South Africa

South African rand, stocks stronger before Fed outcome

JOHANNESBURG — The South African rand strengthened on Wednesday as global risk appetite improved before the outcome of a closely watched U.S. Federal Reserve meeting.

The Fed is due to update its policy plan at 1900 GMT after a two-day meeting. Markets currently see a first rate increase in March and three more quarter-point increases by year-end.

At 1430 GMT, the rand traded at 15.1800 against the dollar, around 0.4% stronger than its previous close.

Also supporting the rand, the South African Reserve Bank (SARB) is widely expected to raise rates on Thursday at its first policy meeting of 2022. Economists polled by Reuters predict a 25-basis-point increase in the repo rate to 4.00% in what would be the second successive increase after one in November to fight rising inflation.

Shares on the local bourse firmed after four consecutive days of declines as investors awaited the Fed update.

The benchmark all-share index was up 2.05% to 73,797 points, while the blue-chip index of top 40 companies ended up 2.27% at 67,364 points.

The broad-based rally, which was in sync with most global markets, was led by commodity and mining companies, with the mining index ending up 3.25%.

Petrochemicals major Sasol Ltd was one of the top performers with the company’s shares rising by over 7%, helped by an increase in crude oil price.

The government’s benchmark 2030 bond edged higher, with the yield falling 1 basis point to 9.35%.  

Nigeria

Low Forex Trades Strengthen Naira by 0.01% at I&E 

The Naira regained strength against the Dollar at the Investors and Exporters (I&E) segment of the foreign exchange market on Tuesday, appreciating by 5 kobo or 0.01 per cent to close at N416.33/$1 compared with N416.38/$1 of the preceding session.

Low forex trades contributed to the gains posted by the local currency at the market window yesterday as the turnover for the day stood at $95.52 million, 30.2 per cent or $41.38 million lower than the $136.9 million achieved on Monday.

However, the domestic currency continued its depreciation against the American currency at the interbank segment of the market, losing 18 kobo yesterday to trade at N415.62/$1 in contrast to the previous day’s value of N415.64/$1.

But the Nigerian currency appreciated against the Pound Sterling at the same market segment on Tuesday by N1.83 to trade at N558.86/£1 compared with Monday’s N560.69/£1 and against the Euro, the Naira gained N1.29 to sell for N468.71/€1 compared to N470/€1 of the preceding session.

A look at the digital currency market on Tuesday indicated confidence is gradually returning into the space as investors continue to react to plans by the US Federal Reserve to start rein in the accommodative policy settings that fuelled a boom in risk assets.

The pullback has hit all corners of the crypto ecosystem, from stablecoins to memecoins and publicly listed crypto exchanges and at the close of business yesterday, eight of the 10 coins tracked by Business Post closed with the green colour.

Bitcoin (BTC) posted a 2.2 per cent gain to sell for N21,808,296.31, Dogecoin (DOGE) grew by 6.5 per cent to sell at N85.35, Binance Coin (BNB) recorded a 4.1 per cent appreciation to trade at N157,485.69, while Tron (TRX) added 2.5 per cent to its value to trade at N32.95.

In addition, Ethereum (ETH) improved by 1.7 per cent to sell at N1,443,970.10, Ripple (XRP) gained 1.6 per cent to trade at N357.38, Dash (DASH) recorded a 0.2 per cent appreciation to quote at N52,968.96, while Cardano (ADA) made a 0.1 per cent rise to sell at N623.00.

Conversely, Litecoin (LTC) lost 1.3 per cent to trade at N63,443.60, while the United States Dollar Tether moved downwards by 0.5 per cent to trade at N584.14.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar finds buyers as Fed flags hikes

SINGAPORE (Reuters) – The dollar was perched near a five-week high on Thursday, bolstered after Federal Reserve chair Jerome Powell primed investors for U.S. interest rate hikes beginning in March.

Overnight the Fed left policy unchanged but Powell foreshadowed a sustained battle to tame inflation.

He told reporters there was “quite a bit of room to raise interest rates without threatening the labour market” and said the Fed was of a mind to begin lifting rates in March.

The dollar leapt 0.7% against the yen in the wake of the Fed’s decision and Powell’s remarks, its steepest daily jump in more than two months as the prospect of imminent hikes spooked stock markets and drove bond yields higher.

The yen inched a fraction lower to 114.74 per dollar early in the Asia session.

The euro was also sold and fell about 0.5% overnight to a five-week low of $1.1235, holding at that level in Asia.

Sterling and the Australian dollars also dropped with the mood and the New Zealand dollar fell to its lowest since Nov. 2020.

The Australian dollar fell close to its 2022 low in the overnight session before recovering a little to $0.7119. The kiwi posted a fifth consecutive daily loss to touch $0.6639. Both Antipodeans steadied in early trade. [AUD/]

Sterling is hovering at $1.3469 as investors await a Bank of England meeting next week and have an eye on the political turmoil enveloping Prime Minister Boris Johnson, who is under pressure after attending parties during lockdowns.

On Thursday, data showed New Zealand inflation a little hotter than forecast and running at a three-decade high.

Chinese industrial profits data is due later in the day, as well as U.S. economic growth and jobless claims figures.

After a battering last week, cryptocurrencies held their ground in the wake of the Fed’s meeting and bitcoin last bought $35,869.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price holds 2-month high ahead of Fed announcement

Gold prices retreated but still held near a two-month high on Wednesday, as investors await the outcome of a US Federal Reserve meeting that may offer more clues on the outlook for monetary policy tightening.

Spot gold declined 0.8% to $1,833.15/oz by noon EDT, its highest since mid-November. US gold futures fell 1.0%, trading at $1,832.70/oz in New York.

Later in the day, Fed chair Jerome Powell and his fellow policymakers are expected to signal their first interest-rate hike since 2018, setting the stage for a March move to cool inflation.

The Federal Open Market Committee is all but certain to hold its benchmark rate near zero after the two-day meeting ending Wednesday, while sticking to a plan to end its bond-buying program in March.

Bullion has risen more than 4% since the end of November amid headwinds in equity markets as investors hone in on the possibility of an error by the Fed. The risk of a Russian invasion of Ukraine and a cut in the International Monetary Fund’s world economic growth forecast for this year are also aiding the safe haven asset.

Gold is acting like a “flight to safety trade” in a wait-and-watch scenario until after the Fed announcement, Bob Haberkorn, senior market strategist at RJO Futures, said in a Reuters report earlier.

Investors now await cues on how aggressive the Fed would be for the rest of the year and if it would signal more hikes to tackle inflation, Haberkorn added.

Recently, there has been an increase in gold demand from investors. Exchange-traded funds have added more than 5 tonnes of bullion so far this week, building on the 33 tonnes taken in the week before, Bloomberg data suggests.

(With files from Bloomberg and Reuters)

Copper claws higher on hopes for a moderate Fed

(Reuters) - Copper prices clambered higher on Wednesday as investors bet the U.S. central bank would not raise rates too quickly, allowing economic growth and metals demand to keep increasing.

Three-month copper on the London Metal Exchange had gained 1.6% to $9,955 a tonne by 1715 GMT, building on its 0.8% rise in the previous session.

The U.S. Federal Reserve is expected on Wednesday to signal plans to raise interest rates in March as it focuses on fighting inflation. read more

The upbeat mood lifted equity markets, while oil touched $90 a barrel for the first time in seven years on tension between Russia and Ukraine.

In China, the most-traded copper contract on the Shanghai Futures Exchange finished up 1.3% at 70,730 yuan ($11,192) a tonne.

* Signs of near-term physical demand in China, however, were not as rosy. The Yangshan copper premium was last at $62 a tonne, the lowest since August last year and down from $88 a month ago.

* LME aluminium rose 0.2% to $3,099 a tonne after climbing by 2.1% on Tuesday on worries that Russia-Ukraine tension would hit supply.

Al Munro at broker Marex said in a note the market was expecting sanctions to be imposed on Russia, but there was not as much scope for gains as in 2018 when prices surged to seven-year highs. "In contrast to the 2018 impact ... the market is already at elevated levels."

* LME zinc advanced 1.2% to $3,615 a tonne, nickel climbed 2% to $22,785, tin gained 2.7% to $42,500 while lead was little changed at $2,335.

($1 = 6.3196 yuan)

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!

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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 constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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