Bulls n Bears Daily Market Commentary : 24 October 2022

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Bulls n Bears Daily Market Commentary : 24 October 2022

 

 	

 

 

 	


ZSE commentary

 

Delta and Innscor highlight the session.

Beverages group Delta and conglomerate Innscor highlighted the session as
they claimed a shared 54.60% of the volume aggregate and 82.30% of the value
outturn. A total of 1.41m shares worth $243.07m exchanged hands proving
buying and selling was skewed to the highly priced stocks in the session.
The market closed with a positive breadth of twelve as seventeen counters
rose against five that lost ground. Dairibord was the top gainer of the day
after extending 13.83% to close at $47.8095. Following was brick
manufacturer Willdale that added 12.50% to $2.7000 as National Foods ticked
up 8.32% to $1,105.0000. Zimplow edged up 6.90% to settle at $15.5000 while,
Simbisa capped the top five day's winners on a 6.55% improvement to
$225.0585 as the fast foods group announced its intent to invest USD$23m in
new stores. The worst performer of the day was financial services group ZB
that dipped 4.16% to $115.0110 trailed by banking group CBZ that dropped
3.62% to trade at $130.1079. Apparel retailer Edgars trimmed 0.48% to
$7.4700 while, spirits and wines manufacturer AFDIS retreated 0.33% to
$298.0000. OKZIM completed the fallers' set on a 0.09% loss to $32.9705.

 

Gains in selected heavies lifted the market further as the ZSE Top Ten Index
inched up 2.24% to 8604.58pts aiding the mainstream All Share Index that
increased 1.73% to 14553.96pts. The ZSE Agriculture Index soared 2.98% to
75.13pts as the Mid-Cap Index gained a marginal 0.55% to 31846.11pts. The
Morgan and Co MIZ and the Old Mutual ETFs dropped 8.25% and 1.17% to close
at respective prices of $1.1000 and $5.4359. Datvest MCS and Morgan and Co
MCS ETFs traded at stable prices of $1.7000 and $22.0000. Cumulatively,
145,200 units worth $774,457.00 exchanged hands in four ETFs. There were no
trades on the VFEX market. 

. -efesecurities

 

 

 

Global Currencies & Equity Markets

 

 

South Africa

 

Rand weakens in early trade

The rand weakened in early trade on Monday, pulled down by a firmer US
dollar.

 

At 09:00, the rand traded at R18.20 against the dollar.

 

The US dollar made gains against other major currencies, with the dollar
index up about 0.3% at 112.14.

 

This week, attention turns to the South African government's mid-term
budget. A Reuters poll published on Friday predicted the National Treasury
would be able to trim this year's projected budget deficit thanks to buoyant
mining receipts.

 

Economists at ETM Analytics wrote in a note that traders would also have to
navigate "market landmines" such as the UK's leadership race, further
escalation of the Russia-Ukraine war and economic data out of China.

 

The government's benchmark 2030 bond was stronger in early deals, with the
yield down 2.5 basis points to 11.000%.

 

 

 

Nigeria

 

Weak naira, inflation and the Nigerian consumers

Nigerian consumers face multiple challenges from weak naira to inflation.
The combination of both factors has impaired the purchasing power of
Nigerian consumers. Nigeria's national currency, the naira, has depreciated
in the last decade against other major international currencies such as the
US dollar, British Pound Sterling, Euro, Yuan, even including the South
African Rand.

 

According to data on exchange rates from the Central Bank of Nigeria (CBN),
the naira has depreciated against all the international currencies between
October 2015 and October 2022. The naira, which traded on the average at
N196.5 to one US dollar in October 2015, depreciated by 122 percent to
N436.78 to one US dollar by October 2022.

 

A British Pound Sterling that was exchanged to the naira at N301.73 in
October 2015 traded to the naira at N491.68 in October 2022 (both at
official rate), indicating that the naira depreciated by 63 percent. The
naira also depreciated by 98 percent to the Euro as instead of the N216.6 it
was exchanged to the Euro in 2015, it traded at N428.66 to the Euro in
October 2022.

 

The naira depreciated by 119 percent to the Swiss Franc within the reference
period from N198.69 to Swiss Franc in October 2015 to N435.65 to Swiss Franc
in October 2022. The depreciation against the Japanese Yen was 79 percent
from N1.63 in October 2015 to N2.92 in October 2022.

 

Nigerian workers deserve a housing unit that dignifies them. They should be
made the centre of Nigeria's economic development as it is only when they
are well taken care of that the nation's economic potential could be
unleashed

 

Nigeria's currency also depreciated against CFA by 102 percent from N0.32 in
October 2015 to N0.64 in October 2022. With another depreciation of 104
percent against WAUA, the value of the naira against this currency dropped
from N273.06 in October 2015 to N556.39 in October 2022.

 

One of Nigeria's largest trading partners, China, has its currency
appreciated against the naira during the reference period. The Yuan/Renminbi
appreciated against the naira from N31.10 in October 2015 to N60.44 in
October 2022. In addition to being Nigeria's trading partner, China is also
among Nigeria's largest creditors.

 

Saudi Arabia's Riyal gained against the naira by as much as 122 percent from
N52.37 in October 2015 to N116.19 in October 2022. In addition to being a
power broker within the Organisation of Petroleum Exporting Countries
(OPEC), Nigerians troop to the country on religious ground through the
periodic Umrah (lesser hajj) and the annual hajj pilgrimage.

 

Danish Krone gained against the naira by 98 percent as the naira depreciated
from N29.04 in October 2015 to N57.61 in October 2022. In the light of the
foregoing, the naira depreciated across board from the perspective of any
currencies it is compared with.

 

Read also: Inflation: IMF advises Nigeria, others on monetary tightening

 

As the depreciation intensified, inflation became intense in the country. As
of September 2022, Nigeria's headline inflation hit 20.77 percent, the
highest in a decade. Food inflation was even higher at 23.34 percent. That
food inflation is on the rise displays the enormous amount of the problems
Nigeria, an agricultural economy, faces.

 

The combination of the depreciating naira against international currencies
in some way contributed to the rising inflation. Since the start of the
Ukrainian conflict, the prices of staple foods such as bread, pasta and
cereals generally have skyrocketed in the country.

 

The consumer goods firms bear the brunt of the surge in the prices of raw
materials, especially wheat, which is imported from either Russia or
Ukraine. For instance, the price of sliced 500g bread rose by 33.12 percent
year-on-year as of August 2022, based on NBS data. The unsliced bread of the
same quantity rose by 32.5 percent year on year during the same period.

 

Evaporated tinned milk carnation 170g rose by 28 percent year-on-year as of
August. That od evaporated tinned milk (Peak) 170 g was higher on a year on
year basis by 33 percent as of August 2022. The impact of the Ukrainian
crisis could be seen on the energy sector. The price of Bonny Light,
Nigeria's crude, hovers around $90 a barrel. With all Nigeria's refineries
not yet working, the impact of the depreciating value of naira is felt on
the landing prices of PMS, AGO, DPK, ATK, among others.

 

Amid this, CBN raised the benchmark interest rate, the Monetary Policy Rate,
from 13.5 percent to 15.5 percent, to rein in inflation. In all of these,
the Nigerian consumers are at the receiving end.

 

Average national salary has not increased in the last five years. This is as
the costs of feeding, housing, and school fees have increased steadily. With
unemployment as high as 33.3 percent in the country, it means an average
Nigerian worker has enough dependents to take care off among siblings and
parents.

 

It is time for the Nigerian government to address the multifaceted problems
facing the Nigerian workers. They deserve to live a life that is worthwhile
from childhood to adulthood. Nigerian workers deserve a housing unit that
dignifies them. They should be made the centre of Nigeria's economic
development as it is only when they are well taken care of that the nation's
economic potential could be unleashed.

 

 

 

 

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Markets

 

Dollar eases amid bets on less hawkish Fed; sterling firm

(Reuters) - The safe-haven U.S. dollar eased against peers on Tuesday amid
signs Federal Reserve rate hikes are already putting the brakes on the
world's biggest economy, while risk sentiment improved with Rishi Sunak
about to become Britain's prime minister.

 

Sterling edged toward this month's highs, while the euro threatened to hit
$0.99 for the first time since Oct. 6 ahead of Thursday's European Central
Bank (ECB) policy meeting.

 

The yen held firm on the stronger side of 149 per dollar following two
consecutive days of suspected Bank of Japan (BOJ) intervention straddling
the weekend.

 

A retreat this week in long-term Treasury yields also helped support the
Japanese currency, but the policy background for yen weakness is likely to
be put in stark relief in coming days: the BOJ is expected to stick to
monetary stimulus on Friday, while the Fed is likely to raise rates by
another 75 basis points on Wednesday of next week.

 

The dollar index , which measures the currency against six major peers,
eased to 111.78, taking it close to Friday's low of 111.68, the weakest
level since Oct. 6.

 

The greenback softened after S&P flash PMI data overnight showed U.S.
business activity contracting for a fourth straight month in October, the
latest evidence of an economy slowing in the face of high inflation and
rising interest rates.

 

Economists polled by Reuters expect the pace of rate increases to slow to 50
basis points in December, matching bets in money markets.

 

"Structurally there's still a lot to like about the U.S. dollar, but we're
in a mean-reversion, sideways, choppy market at the moment," said Chris
Weston, head of research at Pepperstone in Melbourne. Weston expects the
dollar index could dip as low as 110 before resuming its uptrend to
potentially test 115.

 

"I still think the dollar is the most beautiful currency to own in G-10."

 

Yields on U.S. 10-year Treasury notes retreated to 4.217% in Tokyo, after
reaching multi-year peaks at 4.338% at the end of last week.

 

At 149.00 yen, the dollar was down from the 32-year high of 151.94 on Friday
that appeared to trigger successive bouts of BOJ intervention. The dollar
dropped as low as 144.55 on Friday and 145.28 on Monday.

 

Unlike intervention in September, the first yen-buying foray since 1998 by
Japanese authorities, the Ministry of Finance declined comment on whether it
had ordered intervention.

 

"As a general rule, policymakers have their greatest impact on the market
when they are transparent about their actions and objectives, so it is odd
they refuse to confirm their intervention," Joseph Capurso, a currency
strategist at Commonwealth Bank of Australia, wrote in a client note.

 

"The refusal to confirm the intervention may reflect a desire to keep
traders guessing and bear down on USD/JPY. Whatever the tactics, we still
expect USD/JPY to recover within a few weeks after BOJ intervention ends."

 

Sterling added 0.24% to $1.13105, heading toward the high this month of
$1.1493 from Oct. 5.

 

The euro was 0.16% stronger at $0.98875.

 

The ECB looks set to hike rates by 75 basis points on Thursday to try and
rein in red-hot inflation. read more

 

Elsewhere, the offshore Chinese yuan dipped to an unprecedented 7.3650 per
dollar amid weakness after Chinese leader Xi Jinping's choice of leadership
team at the twice-a-decade Communist Party Congress raised fears growth will
be sacrificed for ideology-driven policies.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold price weaker amid bearish outside markets

(Kitco News) - Gold prices are modestly lower in early U.S. trading Monday.
Silver prices are slightly up. The precious metals are once again being
constrained by a higher U.S. dollar index. Lower crude oil prices to start
the trading week are also negative for the metals. December gold was last
down $3.00 at $1,653.40 and December silver was up $0.099 at $19.17.

 

Global stock markets were mixed overnight, with European shares mostly up
and Asian shares mostly down. U.S. stock indexes are pointed to firmer
openings when the New York day session begins, following solid gains Friday
that came after a Wall Street Journal report suggested the Federal Reserve
will slow down the pace of its monetary policy tightening after its November
meeting, at which the Fed is expected to raise the Fed funds rate another
0.75%. Stock and financial market bulls are hoping that's the "Fed pivot"
they have been awaiting. There has been scattered talk in the marketplace
that certain sectors of financial markets have become strained and much less
liquid due to central banks aggressively tightening their monetary policies.
It will be another busy week for corporate earnings reports this week.

 

Asian stock markets sold off as China's President Xi Jinping tightened his
grip on the world's second-largest economy, following China's major
communist party meeting. It's likely Xi will continue China's "zero Covid"
policy, which has constrained China's economy.

 

The Euro zone got more weak purchasing managers' data for October. The
composite purchasing managers' index (PMI) for October came in at 47.1 from
48.1 in September. A reading below 50.0 represents contraction in the
sector.

 

 

 

Bitcoin crash is not over; $10K is next before Fed pause in December bottoms
markets - Ben Armstrong

The key outside markets today see the U.S. dollar index higher. Nymex crude
oil prices are lower and trading around $83.25 a barrel. The 10-year U.S.
Treasury note is presently yielding 4.177%.

 

U.S. economic data due for release Monday includes the Chicago Fed national
activity index and the U.S. flash and services purchasing managers' indexes.

 

Technically, the December gold futures bears have the solid overall
near-term technical advantage. Bulls' next upside price objective is to
produce a close above solid resistance at $1,700.00. Bears' next near-term
downside price objective is pushing futures prices below solid technical
support at $1,600.00. First resistance is seen at the overnight high of
$1,675.50 and then at $1,685.00. First support is seen at the overnight low
of $1,648.40 and then at $1,630.00. Wyckoff's Market Rating: 1.5

 

 

September silver futures bears have the firm overall near-term technical
advantage and have momentum. Silver bulls' next upside price objective is
closing prices above solid technical resistance at $20.00. The next downside
price objective for the bears is closing prices below solid support at the
September low of $17.40. First resistance is seen at today's high of $19.675
and then at $20.00. Next support is seen at $19.00 and then at $18.65.
Wyckoff's Market Rating: 2.5.

 

 

 


 

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!

Bulls n Bears 

 

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