Bulls n Bears Daily Market Commentary : 10 October 2022

Tue Oct 11 07:50:30 CAT 2022

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Bulls n Bears Daily Market Commentary : 10 October 2022

ZSE commentary

Delta buoys the market…

Top capitalised stock Delta buoyed the market in the new week as three of the indices under our review closed pointing northwards. The primary All Share Index put on 1.30% to end at 13239.34pts while, the ZSE Top Ten Index added 1.85% to 7827.60pts. The Mid-cap Index went up 0.15% to close at 28921.22pts as the ZSE Agriculture Index slipped a negligible 0.01% to 69.79pts. Delta surged 9.57% to $198.3815 having traded an intraday high of $200.0000. Zimre Holdings trailed on a 7.43% jump to $4.9630 while, Mashonaland Holdings  improved 6.99% to $7.4893. Packaging group Nampak grew 5.56% to $9.5000 as logistics concern Unifreight rose 5.26% to close pegged at $50.0000. on the downside was Bridgefort Capital that dropped 5.53% to $7.0000, trailed by African Sun which trimmed 2.81% to $18.1188 having traded a low of $18.0000 in the session. Star Africa shed 2.80% to $1.5501 as Turnall retreated 2.79% to $3.4025. Telecoms giant Econet was 2.49% lower at $82.5837.

Volumes advanced 57.85% to see 18.27m shares worth $1.20bn exchange hands in the session. The duo in Econet and its spinoff Cassava highlighted the aggregates as they claimed a combined 91.96% of total volumes traded and 85.82% of the value outturn. Delta was the other notable value contributor claiming 10.57% of turnover. Cass Saddle was the top gainer among the ETFs as it extended 5.07% to $1.8967 followed by Old Mutual that rose 1.88% to $5.2975. Morgan and Co MIZ climbed 0.41% to $1.2852. Datvest MCS was the only decliner for the day having lost 1.54% to land at $1.7143. Cumulatively, 65,772 units worth $191,165.27 exchanged hands in the 5 ETFs. There were no trades on the VFEX. In company news, Edgars published their half year results in which PAT jumped 540.01% to $1.22bn as trading in foreign currency has improved their stock selection and hence customer traffic.efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

Nigeria

Naira falls to N439.17/$1 at official market

The Naira was under pressure against the US dollar in the foreign exchange (forex) market’s Investors and Exporters (I&E) and Peer-to-Peer (P2P) windows at the weekend.

According to FMDQ Securities Exchange data, the Nigerian Naira fell to a new low of N439.17/$1 after losing 0.58 per cent or N2.54 from the previous day’s rate of N436.63/$1.

The value of transactions in the spot market slightly went down by 1.0 per cent or $1.04 million to $99.70 million from the $100.74 million achieved a day earlier.

But in the P2P forex window, the value of the Nigerian currency against the Dollar appreciated by N2 to close at N741/$1 in contrast to N743/$1 and in the parallel market, the domestic currency closed flat at N731/$1.

In the interbank segment, the Naira gained N1.57 against the Pound Sterling to close at N487.34/£1 versus Thursday’s N488.91/£1, and against the Euro, it gained N2.22 to end the day at N425.87/€1 compared with the preceding session’s N428.09/€1.

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South Africa

Rand flat in early trade

The rand was flat in early trade on Monday, as it mirrored the US dollar’s moves versus major currencies.

At 09:15 the rand was at R18.14 against the dollar.

The US dollar index was up 0.018% at 112.83, off lows around 110 last week and creeping back toward last month’s 20-year high of 114.78.

“The pair thus looks set to test its September highs around R18.22 in the coming days, a break of which would open the door for a continued uptrend towards R18.50 and potentially beyond,” economists at ETM Analytics said.

The government’s benchmark 2030 bond was slightly weaker in early deals, with the yield up 1.5 basis points to 10.650%.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar gains, yen flirts with intervention levels

The dollar loomed large over fragile financial markets on Tuesday, with worries about rising interest rates, global growth and geopolitical tensions unsettling investors, while the yen was testing levels that have prompted official intervention.

The yen hit 145.80 per dollar overnight, just 10 pips short of the 24-year trough it made before the Japanese government stepped in to prop it up three weeks ago.

U.S. dollar index was up 0.053% at 113.12, not far off the 20-year high of 114.78 it touched late last month.

The dollar loomed large over fragile financial markets on Tuesday, with worries about rising interest rates, global growth and geopolitical tensions unsettling investors, while the yen was testing levels that have prompted official intervention.

The yen

hit 145.80 per dollar overnight, just 10 pips short of the 24-year trough it made before the Japanese government stepped in to prop it up three weeks ago. Japan returned from a holiday on Tuesday and the yen sat at 145.65.

Strong U.S. labor data and an expectation of inflation figures due on Thursday to remain stubbornly high have all but dashed bets on anything but high interest rates through 2023 and are driving the dollar back toward multi-decade highs.

Russia rained missiles upon Ukraine’s cities on Monday in retaliation for blast that damaged the only bridge linking Russia to the annexed Crimean peninsula, with the escalation putting markets in a risk-averse mood.

The risk-sensitive Australian

dollar made a 2½-year low of $0.6275 on Monday and hovered at $0.6296 early on Tuesday. Analysts at the National Australia Bank said the Aussie was the market’s “whipping boy” in a sell off and that further lows were possible in the near term as sentiment is fragile.

The New Zealand dollar

also made a 2½-year low at $0.5545 on Monday and is close to breaking its pandemic trough, with weak data from China further souring the mood.

“Our expectation for the world economy to enter recession next year is consistent with further gains in the dollar,” said Commonwealth Bank of Australia strategist Carol Kong.

U.S. dollar index

was up 0.053% at 113.12, not far off the 20-year high of 114.78 it touched late last month.

Britain’s markets remain on edge and not exactly soothed by the Bank of England stepping up bond buying and finance minister Kwasi Kwarteng promising to bring forward some budget announcements.

Gilts sold sharply overnight and sterling was wobbly, sliding to a 10-day low of $1.1027 on Monday. The pound

was up 0.28% at $1.1090 on Tuesday.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price sharply down on bearish outside market forces

(Kitco News) Gold and silver prices are solidly lower in early U.S. trading Monday, pressured by a higher U.S. dollar index, rising U.S. Treasury yields and weaker crude oil prices. The specter of an aggressively tight monetary policy from the U.S. Federal Reserve continues to hang over the precious metals markets. December gold was last down $25.20 at $1,684.10 and December silver was down $0.40 at $19.86.

Global stock markets were mostly lower overnight. U.S. stock indexes are pointed to slightly lower openings when the New York day session begins. U.S. government offices and many banks are closed Monday for the Columbus Day national holiday. Stock market traders will focus on a barrage of corporate earnings reports out this week.

Risk aversion is still elevated to start the trading week. The Russia-Ukraine war has escalated as Russia launched missiles into several Ukrainian cities after a strategic bridge for Russia in the Crimea region suffered major damage from explosions, with Ukraine’s military likely the culprit. Meantime, North Korea has test-fired ballistic missiles to provoke the West in an already-tense global geopolitical environment.

The key outside markets today see the U.S. dollar index higher. Nymex crude oil prices are higher and trading around $92.00 a barrel. The U.S. Treasury cash market is closed Monday for the holiday.

U.S. economic data due for release Monday is light and includes the employment trends index. Traders are looking ahead to a key U.S. inflation report on Thursday morning, the consumer price index report for September, which is expected to come in at up 8.1%, year-on-year, following a rise of 8.3% in August.

Technically, the December gold futures bears have the firm overall near-term technical advantage and have regained power. Bulls’ next upside price objective is to produce a close above solid resistance at the October high of $1,738.70. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the September low of $1,622.20. First resistance is seen at $1,700.00 and then at the overnight high of $1,707.40. First support is seen at $1,675.00 and then at the October low of $1,666.50. Wyckoff's Market Rating: 2.5

September silver futures bulls have lost their slight overall near-term technical advantage. 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 $18.00. First resistance is seen at $20.00 and then at today’s high of $20.21. Next support is seen at today’s low of $19.62 and then at $19.25. Wyckoff's Market Rating: 4.5.

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!

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DISCLAIMER: This report has been prepared by Bulls ‘n Bears, a division of Faith Capital (Pvt) Ltd for general information purposes only and does not constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

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