Bulls n Bears Daily Market Commentary : 01 November 2022

Wed Nov 2 07:29:15 CAT 2022

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Bulls n Bears Daily Market Commentary : 01 November 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

Heavy and mid-cap counters lift the market.

Heavy and mid-cap counters lifted the market on the first session of
November. The primary All-share Index went up 0.78% to 15189.23pts while,
the ZSE Top Ten Index rose 0.76% to 8945.41pts. The Mid Cap Index edged up
0.84% to end pegged at 33537.05pts as the ZSE Agriculture Index inched up
0.03% to 76.46pts. The top five winners of the day were led by mining house
Riozim which jumped 11.54% to $145.0000 as microfinance group Getbucks
climbed 7.98% to $18.9500. Property company Mashonaland Holdings rose 6.22%
to $8.0000 while, conglomerate Innscor increased 4.52% to $340.2306. 

Telecoms giant Econet completed the top five risers' set on a 2.13% surge to
$88.8778. The worst performer of the day was Zimre Holdings that dropped
1.95% to $5.0004 while, Ecocash Holdings lost 1.72% to settle at $43.2218.
Retailer OK Zimbabwe trimmed 1.10% to close at $31.9936 as bankers ZB
Financial slipped 0.44% to $$114.5000. Fast food entity Simbisa capped the
top five shakers of the day on 0.38% fall to $240.0205. Gainers outnumbered
losers by a count of five as the market registered a positive breadth.
Activity aggregates enhanced as turnover soared 102.50% to $263.42m while,
volumes ballooned 195.57% to 1.85m shares. 

The troika of heavies in Econet, Delta and Simbisa dominated the volume and
value categories with combined contributions of 88.15% to the former and
90.79% to the latter. A total of 41,305 units worth $142,129.62 exchanged
hands in the five ETFs. Morgan & Co MIZ and Datvest ticked up 3.35% and
0.17% to close at $1.1400 and $1.7483 apiece. Morgan and Co MCS declined
4.16% to $21.0000 while, Old Mutual succumbed 3.62% to $5.2173. Padenga was
the only counter to trade on the VFEX shedding 0.44% to USD$0.2475 on 50,584
shares.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand strengthens as markets await Fed rate decision

(Reuters) - The South African rand strengthened on Tuesday, as the dollar
retreated ahead of the Federal Reserve's meeting, with investors focusing on
the idea the U.S. central bank could shift to a less-aggressive policy
narrative.

At 1557 GMT, the rand traded at 18.2600 against the dollar, 0.61% stronger
than its previous close.

Investors widely expect the Fed this week to raise its benchmark overnight
interest rate by 75 basis points (bps), but for December, the fed funds
futures market has priced in a 57% probability of a 50-bps increase amid
suggestions from Fed officials of potentially slowing down the tightening
pace.

Improved risk sentiment in the market ahead of Fed decision has helped
emerging market currencies such as the rand.

Earlier on Tuesday a South African purchasing managers' index showed that
manufacturing activity improved in October, but rolling power cuts and a
crippling strike at freight rail and ports company Transnet prevented a
stronger recovery.

On the Johannesburg Stock Exchange, the Top-40 index closed 1.28% higher,
while the broader all-share index ended up 1.11%.

Naspers and Prosus were the top gainers, rallying more than 8%, after
technology investment firms rejected as "untrue" a press report on a
potential sale of its 28% stake in Chinese software and gaming giant Tencent
.

The South African government's benchmark 2030 bond was stronger in afternoon
deals, with the yield down 5 basis points to 10.810%.

Nigeria

Naira crosses N800 against dollar at parallel market

Naira fell significantly against the U.S dollar at the unauthorised parallel
market on Monday, extending the local unit devaluation to N800 at the close
of business.

This implies a 2.83 per cent decline from N778.00 per $1 it exchanged last
week Friday.

The continuous devaluation of the naira against the dollar at the parallel
market increased within the past three business days after the Central Bank
of Nigeria announced plans to replace naira notes.

The apex bank said the decision was embarked upon to reduce excess cash in
circulation and check counterfeiting.

Analysts have blamed the CBN move as the reason behind the further
devaluation of the Naira in the black market, as holders of illicit funds
are jostling to convert cash stacked outside of banks to dollars, further
driving up the exchange rate.

Currency dealers in Abuja and Uyo said the dollar was exchanged at N800.00
and sold for N803.00 and N805.00 respectively on Monday.

However, the naira gained slightly against the U.S dollar at the official
market within this period.

According to data published on FMDQ websites, where forex is officially
traded, the naira closed at N443.00 per dollar on Monday.

This represents a 0.39 per cent appreciation from the N444.75 rate it traded
on Friday last week, with $40.05 million posted as forex turnover for the
day.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar sags as Fed decision looms; yen surges

The U.S. dollar slipped from near a one-week peak versus major peers on
Wednesday, with traders on tenterhooks before a looming Federal Reserve rate
decision that should also give clues on the future policy path.

The dollar index - which gauges the greenback against a basket of six
counterparts that includes the yen, euro and sterling - eased 0.14% to
111.33, but still not far below Tuesday's high of 111.78, which was the
strongest level since Oct. 25.

The U.S. dollar slipped from near a one-week peak versus major peers on
Wednesday, with traders on tenterhooks before a looming Federal Reserve rate
decision that should also give clues on the future policy path.

The yen outperformed, seeing a sudden burst of strength mid-morning Japan
time, with traders on alert for possible intervention around the Fed
meeting.

The dollar index

- which gauges the greenback against a basket of six counterparts that
includes the yen, euro and sterling - eased 0.14% to 111.33, but still not
far below Tuesday's high of 111.78, which was the strongest level since Oct.
25.

The index rode a yo-yo overnight, dropping fast in the European open only to
recover those losses after U.S. data pointed to continued price pressures,
dampening speculation of a Fed pivot this year. U.S. job openings
unexpectedly rose, suggesting wage growth remains elevated, while
construction spending staged a surprise rebound.

Investors widely expect the Fed to raise its benchmark interest rate by 75
basis points (bps) on Wednesday, the fourth such increase in a row. But for
the December meeting, the futures market is split on the odds of a 75- or
50-bps increase amid recent suggestions from Fed officials of a potential
slowdown in the tightening pace.

"In the Fed's view, putting the U.S. into a recession is still a lesser evil
than not tackling entrenched price pressures," Chris Weston, head of
research at Pepperstone, wrote in a client note.

"It seems highly unlikely that the Fed will want to promote a positive
reaction in risky assets, and the risks to markets in my mind are skewed to
a hawkish reaction - equity up, bond yields and the USD lower."

The dollar index has surged more than 15% this year as the Fed has hiked
rates hard, crushing other currencies and heaping pressure on the global
economy.

The yen

has been particularly vulnerable to dollar strength, spurring the Ministry
of Finance and Bank of Japan to intervene to support the currency in
September for the first time since 1998. Japanese authorities are widely
considered to have waded in several times again in October to pull the yen
back from 32-year lows just shy of 152 per dollar, although they declined to
confirm any action.

On Wednesday, the Japanese currency jumped suddenly by about half a yen to
147.4 per dollar. It then extended those gains, with the dollar last down
0.55% at 147.40 yen.

"This doesn't look like intervention to me," said Ray Attrill, head of FX
strategy at National Australia Bank.

"On the three occasions that we know about, the BOJ intervened in enormous
size and repeatedly, and if we were seeing intervention now - unless the
pattern has changed - I would expect we would see much more significant
movements that would be continuing now."

The euro

edged up 0.15% to $0.9888, but still close to the previous session's
one-week low at $0.98535.

Sterling

rose 0.17% to $1.1505, but remained not far from Tuesday's one-week low of
$1.14365.

The Bank of England announces its policy decision on Thursday, and markets
expect a 75-bps increase there as well, followed by a slowdown to a 50-bps
pace in December.

The Australian dollar

was little changed at $0.63945, consolidating near a one-week low. The
Reserve Bank of Australia opted to keep its pace of rate hikes at 25bps on
Tuesday, despite consumer inflation running at a 32-year high.

The kiwi

dollar rose 0.16% to $0.58485, garnering support after an upbeat jobs report
reinforced the case for a super-sized increase in interest rates this month
from the Reserve Bank of New Zealand.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold edges higher ahead of key Fed rate verdict

Gold prices ticked higher on Wednesday, supported by a pullback in the
dollar, although investors were focused on the U.S. Federal Reserve outlook
on future pace of interest rate hikes as the central bank's policy meeting
concludes later in the day.

Fundamentals

Spot gold was up 0.2% at $1,650.13 per ounce, as of 0100 GMT, while U.S.
gold futures

also gained 0.2% to $1,652.10.

The dollar index

edged 0.1% lower, making the greenback-priced gold less expensive for
holders of other currency.

U.S. job openings unexpectedly rose in September, suggesting demand for
labor remained strong, providing evidence that rapid interest rate hikes
have yet to bite hard in the real economy.

Investors widely expect the Fed will raise its benchmark overnight interest
rate by 75 basis points, the fourth such increase in a row.

Gold is highly sensitive to rising U.S. interest rates, as that increase the
opportunity cost of holding the non-yielding metal and boosts the dollar.

Global factory output weakened in October as widespread recession fears,
high inflation and China's zero-Covid policy hurt demand, business surveys
showed on Tuesday, adding to persistent supply disruptions and darkening
recovery prospects.

Holdings of SPDR Gold Trust

, the world's largest gold-backed exchange-traded fund, said its holdings
fell 0.16% to 919.12 tons on Tuesday from 920.57 tons on Monday.

Spot silver

fell 0.1% to $19.63 per ounce, having hit a three-week peak on Tuesday.
Platinum

rose 0.4% to $946.18 and palladium

was 0.5% higher at $1,889.47.

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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DISCLAIMER: This report has been prepared by Bulls 'n Bears, a division of
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