Bulls n Bears Daily Market Commentary : 31 October 2022

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Bulls n Bears Daily Market Commentary : 31 October 2022

 

 	

 <mailto:info at bulls.co.zw> 

 

 	


ZSE commentary

 

Thin trades in month-ending session.

The market was plunged into thin trades in the month-ending session as the
mainstream All Share Index put on 0.93% to 15072.14pts as it breezed past
the 15000pts mark. The ZSE Top Ten Index added 0.77% to 8878.08pts while,
the Mid Cap Index went up 1.27% to 33256.19pts. The Agriculture Index was
the only faller amongst the indices after retreating a marginal 0.01% to
76.44pts. Hotelier African Sun headlined the winners' pack on a 13.04% surge
to close at $26.0000. Life assurer Fidelity followed on a 9.09% uplift to
$24.0000 as banking institution FBC rose 8.00% to end pegged at $54.0000.
Star Africa improved 2.73% to $1.8500 while, beverages group Delta completed
the top five gainers of the day on a 2.46% advance to $240.0001 having
traded an intraday high of $250.0000.

 

Holding back today's gains were losses in Mashonaland Holdings that dipped
5.86% to $7.5313 trailed by Meikles which shed 2.30% to $100.3094 having
traded a low of $100.0000 in the session. Apparel retailer Edgars retreated
1.32% to $7.5000 while, First Capital slipped 0.29% to $9.3186. Fintech
group Ecocash trimmed 0.27% to settle at $43.9800 as it capped the top five
decliners of the day. Volume of shares traded tumbled 46.22% to 626,413
shares as the market spend dropped 39.06% to $130.08m. Delta and Innscor
were the top traded counters by volume and value as they claimed a shared
63% of the former and 80.45% of the latter. National Foods was the other
notable value driver with a 13.31% contribution as the conglomerate released
a cautionary statement announcing of its intention to delist from the ZSE
and subsequent listing on the VFEX. On the ETFs, three ETFs recorded gains
against two that faltered. Cass Saddle, Morgan, and Co MCS and Datvest ETFs
added 3.11%, 6.68% and 0.14% apiece. MIZ and Old Mutual slid 8.08% and 1.38%
respectively. Padenga declined 0.28% to USD$0.2485 on 360,000 shares while,
Bindura edged up 1.67% to USD$0.0305 on 305 shares. -efesecurities

 

 

 

Global Currencies & Equity Markets

 

 

South Africa

 

Rand weakens as Fed meeting looms

The dollar advanced on Monday as bets cooled that the US Federal Reserve
could signal a slowdown in its aggressive rate-hiking cycle, ahead of its
key policy meeting this week and as domestic data points to underlying
inflation pressure.

 

The greenback moved broadly higher in Asia trade, particularly against the
Japanese yen, rising more than 0.5% and pushing above the 148 yen level.

 

The yen last traded 147.82 per dollar, further pressured by the Bank of
Japan's (BOJ) decision to keep ultra-low interest rates on Friday, and BOJ
Governor Haruhiko Kuroda's still-dovish comments in the face of rising
interest rates elsewhere.

 

The pound and the euro each declined more than 0.2% against the dollar,
which has recouped some of last week's losses, after having slid on hopes of
a potential Fed change of tack.

 

The rand weakened to R18.20, after trading below R18 towards at the end of
last week. 

 

"Markets have been kind of expecting a Fed pivot on monetary policy. I think
that is too premature, given how resilient the economy has been and
particularly how high inflation has been," said Carol Kong, a currency
strategist at Commonwealth Bank of Australia (CBA).

 

Data on Friday showed that U.S. consumer spending rose more than expected in
September, while underlying inflation pressures continued to bubble.

 

The Fed is expected to deliver another 75 basis point (bp) rate hike after
the conclusion of the FOMC meeting on Wednesday.

 

Sterling was last 0.26% lower at $1.1584, though was on track for a nearly
4% monthly gain, staging a strong recovery after former British prime
minister Liz Truss's economic programme unleashed market turmoil last month.

 

Investors have since taken succour from the appointment of new prime
minister Rishi Sunak, who has pledged to lead the country out of a profound
economic crisis.

 

"Sterling has indeed recovered quite a bit over the past few weeks, and I
think a lot of that really reflects an unwind of the previous market turmoil
and the easing of UK policy uncertainties," said CBA's Kong.

 

The euro fell 0.25% to $0.9943, but was likewise headed for a monthly gain
of over 1%, its first since May.

 

Ahead of another central bank decision this week, the Australian dollar rose
0.1% to $0.6418.

 

The Reserve Bank of Australia (RBA) is expected to raise interest rates by a
more modest 25 bp at its Tuesday meeting, even as inflation raced to a
32-year high last quarter.

 

"We expect the RBA Board to stick with a 25 bp rate hike on Tuesday, as we
think it's too soon for the Board to reverse the judgment it made at its
October meeting about scaling back the size of rate increases," said ANZ
analysts.

 

"But we now look for a follow-up 25 bp in December. Along with a further 75
bp of rate hikes in the first half of 2023, we now have the RBA cash rate
peaking at 3.85%."

 

The kiwi edged 0.11% higher to $0.5822, and was on track for a monthly gain
of nearly 4%, reversing two straight months of losses.

 

Elsewhere, the Chinese yuan slumped after data released on Monday showed
that the country's factory activity unexpectedly fell in October, weighed by
softening global demand and strict domestic COVID-19 curbs.

 

"We expect that the CNY will weaken further in the short term given the
apparent weakness of the economy. Together with more COVID cases and
expected lockdowns, it becomes even more difficult to be upbeat about the
yuan," said Iris Pang, chief economist for Greater China at ING.

 

The offshore yuan was last down 0.4% at 7.2990 per dollar.

 

Against a basket of currencies, the U.S. dollar index rose 0.1% to 110.92,
pushing some distance away from a one-month trough of 109.53 hit last
week.-fin24

 

 

 

Nigeria

 

Naira continues free fall, hits N815/$ at parallel market

The naira has continued its free fall in the parallel market, depreciating
to N815 per dollar in Abuja on Monday.

 

Bureaux De Change (BDC) operators in the Wuse area of Abuja, who spoke to
TheCable, said the naira was falling rapidly against the greenback amid
increased demand by Nigerians.

 

This development comes a few days after the Central Bank of Nigeria (CBN)
announced that it has redesigned some naira notes and will start circulating
them by December 2022.

 

The apex bank had explained that it took the decision to reduce excess cash
in circulation and check counterfeiting.

Meanwhile, currency traders in the Victoria Island area of Lagos quoted the
naira at N805 to the dollar at the street market.

 

The figure represents a depreciation of N63 or 8.5 percent compared to the
N742 it traded two weeks ago.

 

The street traders put the buying price of the dollar on Monday at N785 and
the selling price at N805, leaving a N20 profit margin.

 

"There is always high demand and no supply. The dollar is just going up
everyday. Importers are not getting dollars from banks. So, they are coming
to us," a BDC operator told TheCable.

 

At the official market, the naira depreciated by 0.06 percent against the
dollar to close at N444.75 on Friday, according to details on FMDQ OTC
Securities Exchange - a platform that oversees official FX trading in
Nigeria.

 

An exchange rate of N447 to the dollar was the highest rate recorded within
the day's trading before it settled at N444.75.

 

It sold for as low as N438 to the dollar within the day's trading. A total
of $61.89 million was traded in foreign exchange at the official investors
and exporters window (I & E) window.

 

 

 

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Markets

 

U.S. dollar rises as Fed likely doing another big hike; sterling sinks

(Reuters) - The dollar gained across the board on Monday, regaining some of
the luster it lost earlier in the month, bolstered by expectations of
another supersized rate increase at this week's Federal Reserve monetary
policy meeting.

 

That said, the dollar's gains could be limited if the Fed signals on
Wednesday that the pace of rate hikes will slow as it assesses the impact so
far of its policy tightening.

 

Sterling, on the other hand, was on the defensive against the dollar and the
euro, despite market forecasts of another 75 basis-point rate hike by the
Bank of England later this week as well.

 

The Fed is widely expected to raise its benchmark overnight interest rate by
75 basis points (bps) to a range of 3.75% to 4.00%, its fourth such increase
in a row. But for the December meeting, fed funds futures have priced in on
Monday a 55% chance of a 50-bps rate increase, down from about 67% last
Friday.

 

In afternoon trading, the dollar rose 0.8% against the struggling yen to
148.62 yen . For the month of October, the dollar was up 2.7%, on track to
post its third monthly gain versus the Japanese currency.

 

"I think the dollar in general is consolidating. A lot of the news has
already been priced into the dollar," said Amo Sahota, executive director at
FX consulting firm Klarity FX in San Francisco.

 

"If the dollar is to make new gains, I think it would be relatively
marginal. Generally, the dollar is somewhere in the bend - trying to
establish a high, but has not generally done so. Think there is an
exhaustion in that trade."

 

On Monday, Japan's finance ministry said it spent a record $42.8 billion on
currency intervention this month to prop up the yen. A steep drop in the yen
to a 32-year low of 151.94 to the dollar on Oct. 21 likely triggered the
intervention, followed by another one on Oct. 24.

 

The dollar likewise climbed against the Swiss franc, rising 0.6% to 1.0014
francs .

 

The greenback, however, was on pace for a monthly decline of 0.5% in
October, based on the dollar index. That would be its first fall since May
and only its second this year.

 

Sterling fell 1.2% against the dollar to $1.1476 . The BoE is likely to
deliver a 75-basis point hike at Thursday's meeting, although analysts said
longer-term rate expectations are coming under sustained pressure.

 

The pound also fell versus the euro, which rose 0.5% to 86.16 pence .

 

BoE Deputy Governor Ben Broadbent recently suggested that the borrowing
costs priced by investors would hammer the UK economy, noting that he's
doubtful Britain could engineer a "soft-landing" - a U.S. term for bringing
inflation back to target without significantly damaging the real economy.

 

The euro dropped 0.8% against the dollar to $0.9887 . The euro barely
reacted after data released on Monday that showed eurozone inflation came in
hotter than expected at 10.7%, a fresh record high.

 

Elsewhere, the Chinese yuan slumped after data released on Monday showed
China's factory activity unexpectedly fell in October, weighed down by
softening global demand and strict domestic COVID-19 curbs.

 

The dollar was last 0.9% higher against the yuan traded offshore at 7.336.

 

The Reserve Bank of Australia (RBA), meanwhile, is tending towards the
dovish end of the spectrum and is expected to raise interest rates by a more
modest 25 bp at its Tuesday meeting, even as inflation raced to a 32-year
high last quarter.

 

The Aussie dollar was last down 0.3% at US$0.6392.

 

In the emerging market world, the U.S. dollar dropped more than 2% against
the Brazilian real after former president Luiz Inacio Lula da Silva narrowly
defeated President Jair Bolsonaro in a run-off election.

 

The Thomson Reuters Trust Principles.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold price slightly down as USDX, bond yields up; FOMC awaited

(Kitco News) - Gold and silver prices are slightly lower in early U.S.
trading Monday. A higher U.S. dollar index and rising U.S. Treasury yields
to start the trading week are putting mild pressure on the precious metals
markets. December gold was last down $2.10 at $1,642.70 and December silver
was down $0.012 at $19.135.

 

Trading action in gold and silver may be more subdued until mid-week, as
traders are looking ahead to the Federal Reserve's Open Market Committee
(FOMC) meeting that begins Tuesday morning and ends Wednesday afternoon with
a statement and a press conference from Fed Chairman Jerome Powell. Most
expect the FOMC to raise the Fed funds rate by another 0.75%. Traders and
investors also want to see what comments the FOMC and Powell make regarding
the future path of U.S. monetary policy-specifically, when the Fed will back
off the accelerator on aggressively raising interest rates.

 

Global stock markets were flat to mixed overnight. U.S. stock indexes are
headed for lower openings when the New York day session begins. Stock
traders are exiting the historically rocky months of September and October
with near-term price uptrends in place on the daily charts, including
technically bullish weekly high closes last Friday.

 

The key outside markets today see the U.S. dollar index higher. Nymex crude
oil prices are weaker and trading around $86.50 a barrel. The 10-year U.S.
Treasury note is yielding 4.062%.

 

 

 

Is the Fed ready to slow down? Gold price is watching what Powell has to say

In overnight news, Euro zone inflation continues to run hot. The October
consumer price index came in at up 10.7%, year-on-year, after a rise of 9.9%
in September. The CPI was forecast at up 10% for October.

 

Russia over the weekend said it will suspend its agreement with Ukraine and
the United Nations to allow Ukrainian grain to be exported from the war-torn
country. Grain futures rallied on the news.

 

U.S. economic data due for release Monday includes the ISM Chicago business
survey and the Texas manufacturing outlook survey.

 

 

 

Technically, the gold futures bears have the solid overall near-term
technical advantage. Bulls' next upside price objective is to produce a
close above solid resistance at $1,700.00. Bears' next near-term downside
price objective is pushing futures prices below solid technical support at
$1,600.00. First resistance is seen at $1,650.00 and then at Friday's high
of $1,670.90. First support is seen at the overnight low of $1,638.40 and
then at the October low of $1,621.10. Wyckoff's Market Rating: 2.0.

 

The silver bears have the overall near-term technical advantage. However,
recent price action suggests a market bottom is in place. Silver bulls' next
upside price objective is closing prices above solid technical resistance at
the October high of $21.31. The next downside price objective for the bears
is closing prices below solid support at the September low of $17.40. First
resistance is seen at $19.50 and then at last week's high of $19.765. Next
support is seen at today's low of $18.935 and then at $18.74. Wyckoff's
Market Rating: 3.0.

 

 

 

 

 


 

INVESTORS DIARY 2022

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

National Unity Day

 

December 22

 

 	

 

Christmas Day

 

December 25

 

 	

 

Boxing Day

 

December 26

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

Counters trading under cautionary

 

 

 

 	

 

 

 

 

 	

CBZH

Meikles

Fidelity

 

 	

TSL

FMHL

Turnall

 

 	

GBH

ZBFH

GetBucks

 

 	

Zeco

Lafarge

Zimre

 

 	

Invest Wisely!

Bulls n Bears 

 

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