Bulls n Bears Daily Market Commentary : 17 November 2022

Thu Nov 17 17:20:44 CAT 2022

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Bulls n Bears Daily Market Commentary : 17 November 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE All Share Index shed a further 79.28 points to close the trading
session at 13,728.25 points. Trading in the negative: AFDIS DISTILLERS
LIMITED  decreased by $21.0000 to $275.0000, PROPLASTICS LIMITED shed
$2.6000 to $25.0000 and ECONET WIRELESS ZIMBABWE LIMITED lost $2.4562 to
$69.5263. SIMBISA BRANDS LIMITED shed $1.8942 to $210.3608 and AXIA
CORPORATION LIMITED went down by $0.9231 to $63.0374. Trading in the
positive: DELTA CORPORATION LIMITED increased by $1.7901 to $197.9296,
INNSCOR AFRICA LIMITED added $0.3962 to $312.0574 and WILLDALE LIMITED
gained $0.0484 to $2.8486. OK ZIMBABWE LIMITED traded $0.0119 higher at
$29.9517 and MASIMBA HOLDINGS LIMITED was up $0.0001 at $75.0001. 

EXCHANGE TRADED FUNDS

MORGAN & CO MULTI SECTOR EXCHANGE TRADED FUND , CASS SADDLE AGRICULTURE
EXCHANGE TRADED FUND  and MORGAN & CO MADE IN ZIMBABWE EXCHANGE TRADED FUND
remained flat at $20.0000, 2.0000 and 1.2000 respectively DATVEST MODIFIED
CONSUMER STAPLES ETF moved up by $0.0016 to $1.6185 and OLD MUTUAL ZSE TOP
10  shed $0.7517 to close at $5.5577.zse

Global Currencies & Equity Markets

South Africa

Rand dips as dollar rebounds on US data

At 08:36, the rand traded at R17.28 against the dollar, 0.2% weaker than its
previous close.

The rand slipped in early trade on Thursday, as the dollar rebounded on data
conflicting with a narrative of retreating US inflation leading to slower
interest rate hikes.

At 08:36, the rand traded at R17.28 against the dollar, 0.2% weaker than its
previous close.

US October retail sales rose 1.3%, compared with economists' expectations
for 1.0%, a healthy signal but one that dented hopes that the Federal
Reserve would scale back rate hikes.

The South African currency has mainly taken its cue from global drivers
recently, rallying strongly last week after a lower-than-expected US
inflation reading.

The government's benchmark 2030 bond was little changed in early deals, with
the yield up 0.5 basis point at 10.350%.

On Friday, investor attention will shift to scheduled reviews of South
Africa's sovereign credit ratings by S&P Global and Moody's.

African currencies: what's expected in the next week

Zambia, Kenya, Nigeria currencies to weaken, Ghana's stable, Uganda's to
firm.

The Zambian, Kenyan, and Nigerian currencies are expected to weaken against
the dollar in the next week to Thursday, with Ghana's and Tanzania's seen
holding steady, while the Ugandan shilling is expected to firm, traders
said.

Zambia

The kwacha is expected to weaken further against the dollar going into next
week due to reduced central bank support and rising festive season demand
for hard currency.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 16.6000 per dollar, down from 16.5200 at the close of
business a week ago.

"The outlook suggests that the kwacha is likely to continue trading on the
back foot for the rest of the year," Zambia National Commercial Bank said in
a report.

Kenya

Kenya's shilling is expected to weaken due to dollar demand in the market
from the energy sector, which is expected to persist till the end of the
month.

The shilling was trading at 122.0/122.20 on Thursday, compared with
121.70/90 at the close of last Thursday's session.

The shilling has come under pressure due to dollar demand from manufacturing
and energy sectors this week, having hit several fresh lows. It is down
nearly 7.3% against the dollar this year.

"We expect the shilling to remain on the weaker foot going into next week,"
said one trader at a commercial bank.

Uganda

The Ugandan shilling is expected to trade with an appreciation bias in the
coming days with some inflows expected from large credit lines the
government is acquiring to bolster its finances.

At 0752 GMT, commercial banks quoted the shilling at 3,745/3,755, compared
to 3,765/3,775 at last Thursday's close.

Lawmakers have approved a request by the government to allow it to borrow
$464 million from Standard Chartered Bank while separately, the finance
ministry has invited financial institutions to bid to lend the government
500 million Euros.

"These will be huge amounts of inflows that will potentially keep the
shilling on a strengthening trajectory," said a trader at one commercial
bank in the capital Kampala.

Nigeria

Nigeria's naira is expected to fall on the parallel market in the coming
week weakened by renewed demand for foreign currency from importers.

The naira was quoted at 800 to the dollar on the parallel market on
Thursday, compared to 765 at last Thursday's close. It traded within a range
on the official market.

"The temporary and artificial appreciation of the naira in the forex market
has all but faded," analyst at Lagos-based consultancy Financial Derivatives
said in a note.

"If the naira slides further than 810/$, it might have major detrimental
effects on price stability in the run-up to a monumental election in
February."

Ghana

Ghana's cedi is expected to remain stable for the next week, with hard
currency demand and supply evenly matched, with central bank offering
support.

The currency was quoted at 14.00 at 1037 GMT on Thursday, compared to 14.25
at last Thursday's close.

"The cedi held firm against the dollar week on week on the back of matched
demand and supply, amid support from the central bank," said Chris Nettey,
head of trading at StanBic Ghana.

"We expect the narrative to remain the same through the coming sessions
ahead of the budget reading on the 24th November," Nettey said.

Tanzania

Tanzania's shilling is expected to hold steady next week with great support
for inflows from agricultural exports.

Commercial banks quoted the shilling at 2,327/2,337 on Thursday, unchanged
from last week's close.

"Agri-commodity sales including cashew nuts and NGO inflows have helped keep
the shilling stable in recent weeks, and with the country managing to keep
annual inflation relatively low at 4.9% in October, we expect the shilling
to continue holding firm against the dollar in the week ahead," Kristine Van
Helsdingen, a dealer at Nairobi-based FX trading firm AZA Finance, said.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar is red but supported by U.S. data, hawkish Fed speakers

(Reuters) - The dollar was supported by stronger-than-expected U.S. retail
sales data on Wednesday as investors also looked for clues from Federal
Reserve speakers on the path for interest rates.

But the euro gained against the greenback and the yen as geopolitical
concerns eased after Poland and NATO said on Wednesday that Tuesday's
explosion, which killed two in Poland, was probably from a stray missile
from Ukraine's air defenses and not an intentional Russian strike.

The euro was last up 0.33% at $1.0388 but still below the four-and-a-half
month peak of $1.0481 it touched Tuesday when U.S. producer price inflation
data was below expectations. While it was well off its session high of the
day, the euro more than erased Tuesday's losses against the yen . It was
last up 0.46% against the Japanese currency.

Tuesday's U.S. data had suggested last week's cooler-than-expected consumer
price inflation was not a one-off, fueling hopes that the U.S. Federal
Reserve can slow aggressive rate hikes that had sent the dollar soaring
against the pound, euro and yen this year.

Then on Wednesday the Commerce Department said that October retail sales
rose 1.3% compared with economist expectations for 1.0%, with estimates
ranging from a 0.1% drop to a 2.0% jump.

Meanwhile, two key policy doves argued on Wednesday that while the European
Central Bank must continue to raise interest rates, there is a growing case
for increased caution in policy tightening after a string of aggressive
moves.

"A lot of people are fixated on what we're going to see regarding what the
Fed and the ECB will do," said Edward Moya senior market analyst at Oanda in
New York.

Also, Fed Governor Christopher Waller, an early and outspoken "hawk," said
the Fed has a ways to go on rates and will still need increases into next
year although he added that data made him "more comfortable" with the idea
of slowing to a 50-basis point hike in December.

San Francisco Fed President Mary Daly told CNBC it's reasonable for the Fed
to raise its policy rate to a 4.75%-5.25% range by early next year, and that
pausing rate hikes is not part of the discussion.

"There's a lot of noise in the FX market. You could say Waller and Daley's
comments today were somewhat hawkish," said Moya. "The retail sales figures
showing there's more resilience in the economy could make the argument the
Fed could be justified in maintaining its aggressive stance against
inflation."

Elsewhere, data released on Wednesday showed inflation in Britain - in
contrast with the United States - continues to rise, hitting a 41-year high
in the 12 months to October.

After rising earlier, Sterling was last up 0.31% at $1.1906.

Britain is set to announce a new budget on Thursday with expectations for
tax hikes and spending cuts. The pound fell to a record low of $1.0327 in
September after finance minister Jeremy Hunt's predecessor Kwasi Kwarteng
announced a package of unfunded tax cuts.

The dollar was up 0.07% against the Japanese yen at 139.3950, compared with
Tuesday's two-and-a-half-month low of 137.67.

The dollar index , which tracks the greenback against six main peers, was
recently 0.06% lower at 106.342 after earlier hitting a low of 105.859.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price drops to fresh daily lows after U.S. housing data fails to drop
by as much as expected

(Kitco News) Gold fell following the release of the U.S. housing data from
October, with housing starts and building permits dropping less than
expected.

U.S. housing starts declined 4.2% to a seasonally adjusted annual rate of
1.425 million units in October, the Commerce Department said on Thursday.
Consensus forecasts were calling for starts to drop to 1.41 million.
September's data was revised up to 1.488 million units. For the year,
housing starts were down 8.8%.

At the same time, building permits, which are a precursor to future
projects, were down 2.4% at 1.526 million in October after September's
revised total of 1.564 million. For the year, building permits dropped 10.1%
from the October 2021 levels. 

Gold hit fresh daily lows following the data release. December Comex gold
futures were last at $1,761.20, down 0.82% on the day.

The housing data was slightly above consensus expectations but still
signifies a slowdown, said CIBC World Markets economist Katherine Judge.

"Single-family permit issuance declined by 3.6%, suggesting further weakness
in building ahead in that segment of the market, which is also in line with
plummeting homebuilder confidence and elevated mortgage rates," Judge said.

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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