Bulls n Bears Daily Market Commentary : 05 October 2022

Thu Oct 6 05:12:40 CAT 2022

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Bulls n Bears Daily Market Commentary : 05 October 2022

ZSE commentary

Mashonaland Holdings highlights the session.

Mashonaland Holdings highlighted the midweek session as circa 88.35m shares
worth $662.03m exchanged hands. The trade represented 95.46% of the total
volumes traded and 58.21% of turnover. The other notable value driver of the
day was Delta that contributed 21.98% of the aggregate. Activity aggregates
surged in the session as volumes advanced 2477.67% to 92.55m shares while,
turnover enhanced 296.11% to $1.14bn. The market closed with a negative
breadth as twenty counters lost ground against twelve counters that went up.
Leading the laggards of the day was clothing retailer Truworths, that
dropped 14.97% to close at $2.2109. Retailer OKZIM succumbed 10.75% to
$30.6489, trailed by National Foods that lost 8.41% to close the day pegged
at $1,100.0000. Ariston Holdings trimmed 7.95% to $3.5337 while, telecoms
giant Econet capped the top five losers of the day on a 7.88% retreat to
$100.0504 on waning demand.

Cafca Limited headlined the winners of the day on a 14.29% surge to
$200.0000, followed by RioZim Limited that improved 10.58% to $115.0000.
Apparel retailer Edgars ticked up 10.29% to $7.5000 as cement producer
Lafarge went up 9.94% to close at $125.0000. Sugar refiners Hippo Valley
concluded the top five gainers' list on an 8.43% uplift to end pegged at
$230. 0000. The market slumped into further losses in the session as the
Primary All-Share Index tumbled 2.39% to 14079.81pts as the Blue-Chip Index
retreated 2.95% to 8561.42pts. The Mid-Cap Index dropped 1.14% to
28861.48pts while, the ZSE-Agriculture Index gave up 2.46% to 72.74pts. Cass
Saddle and Morgan and Co MCMS ETFs lost 12.80% and 0.71% to close at $1.8051
and $28.2972 respectively. The Old Mutual ETF marginally slipped 0.26% to
close the day pegged at $5.1867. Contrastingly, the Datvest ETF added 0.48%
to $1.7584. - efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand little changed against dollar

(Reuters) - South Africa's rand was little changed on Wednesday, as the
dollar steadied after a sharp rate hike in New Zealand dashed hopes for a
pause or slowdown in the U.S. Federal Reserve's aggressive policy
tightening.

At 0636 GMT, the rand ZAR=D3 traded at 17.6200 against the dollar, not far
from its previous close of 17.6300.

The dollar index =USD, which measures the currency against six major rivals,
steadied at 110.23, after suffering its heaviest setback in over two years
on Tuesday.

Local investors will be looking at the S&P Global South Africa PMI survey
for September due later in the day for clues on the health of the economy.

The government's benchmark 2030 bond ZAR2030= was up in early deals, with
the yield down 4.5 basis points to 10.595%.

Malawi

Malawi Kwacha needs further devaluing-EIU

The Economist Intelligence Unit (EIU) has maintained that the Malawi Kwacha
remains overvalued, as it was not sufficiently devalued in May.

The global economic think tank's analysis which has been quoted in NICO
Asset Managers monthly economic report, comes barely a month after World
Bank gave a similar assessment.

The Kwacha was devalued by 25% in May to trade at K1,026 to a dollar from
K830, but current black-market rate is approaching K1,300.

The Reserve Bank of Malawi (RBM) assured the public that it has no intention
to devalue the currency, as it has strategies that will resolve current
forex supply challenges.

However, EIU says the Kwacha is expected to be affected by widening
current-account deficit in 2022.

"The value of the Kwacha is expected to continuously be undermined by a
large current-account deficit in 2022, with high volatility expected in 2023
owing to the probable transition to a less interventionist exchange-rate
regime.

"The EIU expects the exchange rate to reach K1,224.4/US$1 at end-2022, with
the average exchange rate standing at K992/US$1 for 2022," reads part of the
report.

In a recent interview, Malawi University of Business and Applied Sciences
Economist Betchani Tchereni highlighted the need to realign the currency's
exchange rate.

While suggesting that the local monetary policy as ineffective, the EIU has
raised its forecast for full-year inflation in 2022, to 22 % - slightly
lower than government's 23.2 % projection.

A finance professor at MUBAS, James Kamwachale Khomba has stressed that the
prevailing global and domestic shocks are rendering Malawi's monetary policy
ineffective as inflationary pressure remains high.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains as investors see Fed stance likely unchanged; euro, sterling
fall

(Reuters) - The dollar rebounded from recent weakness on Wednesday as
investors viewed the U.S. Federal Reserve's aggressive stance on interest
rates as likely unchanged, with the euro and sterling down at least 1% each.

The euro was down 1% at $0.9892, and was set for its biggest daily
percentage slide since Sept. 23, after rising 1.7% on Tuesday.

Sterling was down 1.1% at $1.1344 after rising for six straight sessions.
Its fall extended slightly as UK Prime Minister Liz Truss pledged to bring
down debt as a share of national income, just over a week after the
government's plans to slash taxes and ramp up borrowing spooked markets.

Adding to the pressure on the pound, data showed Britain's private-sector
economy last month suffered the sharpest contraction in activity since a
COVID-19 lockdown early last year.

A dollar index measuring the greenback against a basket of currencies was
last up about 1%. On Tuesday, it had its biggest daily percentage decline
since March 2020.

Recent gains for most major currencies against the dollar have been
underpinned by hope among investors and traders that the Fed will raise
interest rates by less than previously expected.

"You had a general risk-on where the euro, sterling really traded well and
the stock market gained. I kind of think this is just (investors) exploring
a trading range," said Marc Chandler, chief market strategist at Bannockburn
Global Forex in New York.

"The bottom line is the bounce in risk assets is not taking place because of
a change in Fed views," he said.

On Wednesday, the ADP National Employment report showed private employment
rose by 208,000 in September, above the 200,000 consensus forecast of
economists polled by Reuters, while separately the Institute for Supply
Management's (ISM) non-manufacturing PMI reading came in slightly above
expectations.

Also, U.S. Fed Governor Philip Jefferson reiterated overnight that inflation
was the top target for policymakers and that growth would suffer in efforts
to bring it down.

San Francisco Fed President Mary Daly took a softer line and said the impact
of the dollar, which is up sharply this year, on other currencies and
economies was a concern.

>From here, investors are likely to focus on Friday's U.S. jobs report,
Bannockburn's Chandler said, which will be watched for clues on the possible
trajectory of the Fed's monetary policy.

In other currencies, the dollar was up 0.2% against the Japanese yen , while
the dollar was up 0.4% at 7.0676 against China's offshore yuan . Chinese
authorities have come out in recent weeks with maneuvers to slow the yuan's
slide.

A fifth consecutive 50-basis-point rate hike from the Reserve Bank of New
Zealand (RBNZ) on Wednesday reminded investors that inflation remains the
main focus of central banks.

The New Zealand dollar was last up 0.1% at $0.5744, having jumped as much as
1.3% earlier in the session. The Aussie dollar was near flat at $0.6502.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price slides ahead of US jobs data

Gold retreated on Wednesday after a two-day surge as traders weighed whether
the Federal Reserve may moderate its hawkish stance after the release of
weak US data.

Spot gold slid nearly 1.0% to $1,709.82 per ounce by 10:45 a.m. ET, erasing
most of its gains from the previous session. US gold futures also fell 1.0%
to $1,714.30 per ounce.

Meanwhile, both the US dollar and Treasury yields rebounded, lessening the
appeal of the precious metal, which has risen by 4% over the past two days.

"We're seeing a resurgence in the dollar and yields, as a result, we've seen
a pullback in gold after a pretty aggressive move higher over the course of
the last several sessions," David Meger, director of metals trading at High
Ridge Futures, told Reuters.

A worse-than-expected US manufacturing gauge and a decline in US job
openings had helped push bullion up through the key $1,700 price level,
marking a shift in market sentiment.

Recent data showed US private employers stepped up hiring in September,
suggesting demand for workers remains strong despite rising interest rates
and tighter financial conditions.

The focus now shifts to the US Labor Department's closely watched nonfarm
payrolls data on Friday, as well as reactions from Fed officials to the
data.

"The fact that the US dollar should ease during the course of next year
points to a higher gold price again," Commerzbank AG analysts including Thu
Lan Nguyen said in a Bloomberg note. "This is because the Fed is unlikely to
raise its interest rates any further after the first quarter of 2023."

(With files from Bloomberg and Reuters)

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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