Bulls n Bears Daily Market Commentary : 21 November 2022

Tue Nov 22 07:05:48 CAT 2022

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Bulls n Bears Daily Market Commentary : 21 November 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

The ZSE All Share Index was down by 1.22 points to close the trading session
at 13,769.87 points. Trading in the negative: TSL LIMITED decreased by
$1.8374 to $40.1626, FIRST MUTUAL HOLDINGS LIMITED shed $1.7500 to $23.0000
and AXIA CORPORATION LIMITED lost $1.1299 to $61.8201. SIMBISA BRANDS
LIMITED shed $0.4403 to $210.1349 and FIRST CAPITAL BANK LIMITED went down
by $0.1948 to $10.0802. 

Trading in the positive: OK ZIMBABWE LIMITED increased by $1.3098 to
$30.8088, MEIKLES LIMITED added $1.0000 to $101.0000 and CBZ HOLDINGS
LIMITED gained $0.4466 to $120.0000. DELTA CORPORATION LIMITED traded
$0.2780 higher at $200.6356 and TRUWORTHS LIMITED was up $0.2475 at $2.4500.

EXCHANGE TRADED FUNDS MORGAN & CO MADE IN ZIMBABWE EXCHANGE TRADED FUND was
down $0.0316 at $1.1684 whilst CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND
and remained flat at $2.0000. MORGAN & CO MULTI SECTOR EXCHANGE TRADED FUND
added $1.3623 to $21.5702, DATVEST MODIFIED CONSUMER STAPLES ETF  moved up
by $0.0500 to $1.7000 and OLD MUTUAL ZSE TOP 10 recovered $0.1926 to close
at $6.2783..zse

Global Currencies & Equity Markets

South Africa

S. African rand slides as China COVID worries dent sentiment

South Africa's rand weakened in early trade on Monday, as the market
sentiment was dented by worries about a rise in COVID cases in China and
tightening restrictions in some cities of the world's second-biggest
economy.

At 0642 GMT, the rand traded at 17.3725 against the dollar, 0.68% weaker
than its previous close.

China's capital Beijing reported two deaths for Nov. 20, with the city's
most populous district urging residents to stay at home on Monday, extending
a request from the weekend as the country fights numerous COVID-19
flare-ups.

ETM Analytics said in a research note that persistent power cuts in South
Africa and a public sector strike expected on Tuesday were also doing little
to boost market sentiment.

This week, investors will focus on an interest rate decision by the South
African Reserve Bank (SARB) on Thursday, a day after the release of October
inflation figures .

The government's benchmark 2030 bond was unchanged in early deals, with the
yield at 10.395%. 

Nigeria

Naira gains against dollar at I&E window

The figure represents an appreciation of 0.07 per cent compared with the
N445.67 for which the dollar exchanged at the close of business on Friday.

The open indicative rate closed at N444.08 to the dollar on Monday.

An exchange rate of N447 to the dollar was the highest rate recorded within
the day's trading before it settled at N445.38.

The naira sold for as low as 440 to the dollar within Monday's trading.

A total of 83.57 million dollars was traded at the official Investors and
Exporters window on Monday. 

NAN

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar rises as China COVID worries spook markets

(Reuters) - The U.S. dollar rose against most major currencies on Monday,
recouping recent losses, as fresh COVID-19 curbs in China fuelled worries
over the global economic outlook and made traders shun riskier currencies.

China's capital warned on Monday that it was facing its most severe test of
the COVID-19 pandemic, shutting businesses and schools in hard-hit districts
and tightening rules for entering the city as infections ticked higher in
Beijing and nationally.

The new cases have cast doubt on hopes that the government could soon ease
its tough restrictions. That has boosted the dollar, which is seen as a safe
haven in times of stress.

The dollar rose 1.2 % against the Japanese yen to 142.085 yen, on pace for
its largest one-day gain since Sept. 6. The euro fell 0.86 % against the
greenback to $ 1.0235 .

"All eyes are on China today and their COVID Zero policy. Traders are
worried that China could expand their restrictions which could slowdown
growth and threaten higher inflation," said John Doyle, vice president of
dealing and trading at Monex USA.

"The worry is seen across asset classes," Doyle said.

China's onshore yuan opened at 7.1451 per dollar and weakened to a low of
7.1708, the softest level since Nov. 11.

With investors taking a dim view of riskier currencies, the Australian
dollar, viewed as a liquid proxy for risk appetite, sank 1.1% to a more than
1-week low of $0.66.

The dollar found additional support after Federal Reserve Bank of San
Francisco President Mary Daly said Monday that the U.S. central bank could
lift its overnight target rate above 5% if inflation does not cool off, even
thought that's not her expected outcome for monetary policy.

Analysts also pegged some of the dollar's strength to a rebound following
the sharp selloff over the last few weeks that saw the Dollar Index slip as
much as 4.7% in November.

"I look at the dollar's rally this morning as a reflection of recent
weakness, rather than as a sign that anything is changing," said Kit Juckes,
chief FX strategist at Societe Generale.

Cooler-than-expected U.S. inflation data had spurred investors' hopes that
the Federal Reserve's dollar-boosting interest rate hikes may be set to be
moderated. That had prompted traders to take profits on existing long dollar
positions.

Speculators' bets on the U.S. dollar swung to a net short for the first time
in more than a year, according to calculations by Reuters and Commodity
Futures Trading Commission data released on Friday. read more

The dollar index remains up about 12% for the year.

Investors will be parsing minutes from the Fed's November meeting, due to be
released on Wednesday, for any hints about the outlook for interest rates.

On Monday, the stronger dollar weighed on Sterling with the British currency
slipping 0.5% to $1.18225 against a strengthening U.S. dollar and as
investors braced for further weakness for the pound ahead of public finances
data due on Tuesday and flash PMI numbers on Wednesday.

Elsewhere, cryptocurrencies remained under pressure, with bitcoin down about
3% to $15,740, after touching a 2-year low of $ 15,588 earlier in the
session.

The crypto industry continues to reel from the high profile collapse of
crypto exchange FTX, which owes its 50 biggest creditors nearly $3.1
billion, according to bankruptcy filings.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold Price Forecast: XAU/USD Extends Drawback Ahead of FOMC

Gold is tracking lower this morning on the back of a stronger USD stemming
from the build up of relatively hawkish comments from Fed speakers. Although
some reiterated the moderation of interest rate hikes going forward, the
expectation remains aggressive with peak rates priced in at just over 5% in
June next year (see table below).

After recent optimism around an easing of China's COVID restrictions, we
have seen a recent uptick in COVID cases in certain regions which has
quickly reignited the possibility of renewed limitations. From the demand
side, China is the worlds largest buyer of gold and question marks about
COVID policies will likely dent demand forecasts leaving spot gold
vulnerable to additional downside.

With no real market moving events today, the focus will shift to Wednesdays
stream of high impact events shown in the economic calendar below. The FOMC
minutes will take center stage with a build up of Fed speakers tomorrow who
may add to the recent hawkish rhetoric which could keep gold prices
depressed.

Price action on the daily spot gold chart shows prices dipping in line with
the recently overbought Relative Strength Index (RSI). Today's daily candle
close will be important for short-term directional guidance in terms of
closing above or below the psychological 1750.00 level. Considering
fundamentals look skewed to further dollar strength, it is more likely that
subsequent support zones will be tested first.

IGCS shows retail traders are currently distinctly LONG on gold, with 64% of
traders currently holding long positions (as of this writing). At DailyFX we
typically take a contrarian view to crowd sentiment but due to recent
changes in long and short positioning, we arrive at a short-term upside
bias.

DailyFX provides forex news and technical analysis on the trends that
influence the global currency markets.

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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