Bulls n Bears Daily Market Commentary : 27 October 2022

Thu Oct 27 07:21:20 CAT 2022

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Bulls n Bears Daily Market Commentary : 27 October 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

All share Index rises further .

The bourse saw modest gains in the mid-week session as the primary All share
Index edged up 0.53% to 14722.93pts while, the Blue-Chip Index advanced
1.04% to 8722.19pts. Contrastingly, the ZSE-Agriculture Index slipped 0.24%
to 75.39pts while, the Mid-cap Index fell 0.65% to 32060.44pts. Zimplow
Holdings led the gainers' pack on a 11.25% jump to end pegged at $17.8000
while, Axia ticked up 6.58% to $68.8886. Star Africa surged 6.55% to $1.8100
trailed by Willdale Limited that rose by 6.52% to $2.9000. Capping the top
five winners' list was Simbisa on a 6.18% uplift to settle at $241.2625. Art
Holdings headlined the laggards of the day on a 14.49% decline to $15.0500
followed by hotelier African Sun that trimmed 7.49% to $22.0000.

Ariston Holdings slid 4.76% to $4.0000 while, retailers Ok Zimbabwe lost
3.88% to end pegged at $31.5749. Tea producers, Tanganda completed the
losers' set on a 3.57% slump to end the day at $81.0000. Five counters lost
ground against seventeen that gained, resulting in a positive market breadth
of twelve. Activity aggregates were mixed in the session as turnover slipped
20.15% to $203.41m while, volume traded grew 17.32% to $4.79m. 

First Capital, Proplastics and Ariston contributed a shared 65.71% of the
total volumes traded. Innscor, Simbisa, Proplastics and Econet were the top
value drivers of the day after claiming 16.02%, 14.45%, 13.92% and 12.61%
accordingly. Padenga was the sole trader on the VFEX as it dipped 15.53% to
USD$0.2703 on 92518 shares. Datvest ETF recorded a 1.17% lift to $1.7300
while, Cass Saddle ETF added 0.37% to $1.874. MIZ ETF, MORGAN ETF and the
Old Mutual ETF declined 0.23%, 0.47% and 0.02% to close at $1.0600, $21.2500
and $5.4999 apiece.-efesecurities

Global Currencies & Equity Markets

South Africa

South African rand strengthens after mid-term budget

(Reuters) - The South African rand strengthened on Wednesday, buoyed by the
mid-term budget, which showed an improvement in the country's fiscal
outlook.

At 1620 GMT, the rand ZAR=D3 traded at 17.9375 against the dollar, 1.44%
firmer than its previous close.

The National Treasury said South Africa's deficits are seen shrinking more
quickly than before in the next three years, with debt stabilising at a
lower level, putting it in a stronger position for any future economic
shocks.

The Treasury also confirmed it would take on some of the 400 billion rand
($22.32 billion) debt of struggling state utility Eskom, but did not commit
to a specific amount or timeframe.

The utility has found it hard to keep lights on for longer periods of time,
with electricity outages reaching record levels this year. This has had a
knock-on effect on the rand.

The dollar index=USD, which measures the currency against six rivals, was
last trading down more than 1% at 109.73.

Shares on the Johannesburg Stock Exchange rose, mirroring similar gains in
world stocks, which have jumped on the hopes that the Federal Reserve will
slow its aggressive pace of interest rate increases.

The Top-40 .JTOPI index closed 2.19% higher, while the broader all-share
.JALSH index ended up 1.9%.

The government's benchmark 2030 bond ZAR2030= was stronger in early deals,
with the yield down 14 basis points to 10.730%.

($1 = 17.9220 rand)

Nigeria

Naira Down to N758 At Parallel Market

Naira weakened across both the authorised and unauthorised markets on
Tuesday.

Naira fell against the U.S. dollar at both the official and unofficial
markets on Tuesday, slipping to a record low at the unauthorised market
amidst continuing scarcity and high demand of the greenback.

Naira which commenced trading at N440.58 per $1 at the spot market declined
to N441.67 per dollar at the close of sales, data published on FMDQ
websites, where forex is officially traded, showed.

This implies a 0.07 per cent devaluation from N441.38 it exchanged in the
previous session on Monday.

Foreign exchange supply rose to $79.41 million on Tuesday, representing
101.2 per cent increase from $39.47 million on Monday.

Similarly, the local unit crashed significantly at the street market on
Tuesday, parallel market exchange rates reviewed across states showed.

Currency dealers at the Abuja Zone 4 market said the dollar was exchanged at
N758.00 on Tuesday as against N755.00 it traded on Monday. It sold at
N761.00 and above on Tuesday evening, the traders said.

"It was trading at N760.00 per $1 in the morning, but it dropped to N758.00
for $1 this evening. I don't know if it will continue to increase or
decrease by tomorrow," a currency dealer at the market told PREMIUM TIMES.

-Premium Times.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar sells off on speculation of less hawkish Fed, euro regains parity

(Reuters) - The U.S. dollar sank more than 1% against a basket of peers on
Wednesday as weakening economic data firmed views that the Federal Reserve
will slow the pace of its rate hiking cycle, sending the euro back above
parity with the greenback for the first time in a month.

At 3:15 p.m. EDT (1915 GMT), the dollar was down 1.118% at 109.7 against a
basket of six currencies, its weakest since Sept. 20.

The dollar's decline came as the benchmark 10-year U.S. Treasury yield
continued its descent from last week's multi-year high of 4.338%, and was
last down four basis points at 4.0317%.

"Broad dollar weakness and further but milder declines in U.S. Treasury
yields than yesterday appear to reflect wishful thinking toward a Fed pivot
next week," said Derek Holt, head of capital markets at Scotia Economics.

The aggressive pace of Fed tightening this year, aimed at taming stubbornly
high inflation, has turbo-charged the dollar.

Traders and economists predict a fourth-straight 75 basis-point interest
rate increase next Wednesday, but there is growing speculation that the
central bank will slow to half a point in December.

The view that the Fed could begin to pivot in December was reinforced by
data on Tuesday that showed U.S. home prices sank in August as surging
mortgage rates sapped demand.

Data on Wednesday showed that sales of new U.S. single-family homes dropped
in September and data for the prior month was revised lower, supporting the
view that Fed rate increases are already working to tap the breaks on the
world's biggest economy.

The European common currency was up 1.11% at $1.0079, its highest since
Sept. 13.

Sterling also hit its highest since Sept. 13, surging 1.33% to $1.1625,
extending the previous day's 1.6% gain when markets took succour from Rishi
Sunak becoming Britain's prime minister.

"Optimism that Rishi Sunak and his team will restore stability and
credibility in the UK is overshadowing the very difficult economic situation
that he has inherited," said Fiona Cincotta, senior financial markets
analyst at City Index.

Elsewhere, the Bank of Canada hiked interest rates by a
smaller-than-expected 50 basis points and said future increases would be
influenced by its assessment of how tighter policy was working to slow
demand and ease inflation.

The Canadian dollar initially fell against the U.S. dollar after the Bank of
Canada decision, which was the second consecutive reduction in the size of
rate rises after a 100 basis-point move in July and 75 basis points last
month, but then firmed up again. The loonie hit a three-week high of 1.35105
earlier in the day.

The dollar slumped 1.55% against China's offshore yuan , while the onshore
yuan finished the domestic trading session at 7.1825 per dollar, the
strongest close since Oct. 12.

Market participants became cautious after major state-owned banks were
spotted selling the dollar in the previous session to stabilise the market,
traders said, wondering if the yuan has reached its peak weakness for the
time being.

The dollar also fell against the Japanese yen , sliding 1.11% to 146.290.

Cryptocurrencies extended their sharp rallies from the day before. Bitcoin
was 4.45% higher at $20,981.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold Price Running Back Into Resistance as the US Dollar Slides

The precious metal is running higher on the back of a weaker US dollar and
is testing a former area of support turned resistance. Gold will need to
make a confirmed break of $1,730/oz. though if the backdrop for the precious
metal is to turn bullish.

The US dollar is sitting on a zone of support that has held for the last
month and is making a double-bottom pattern in the process. This technical
pattern normally suggests a price reversal, from bearish to bullish, but a
break of the neckline - currently around 113.85 - is needed to confirm this
set-up. A break and open below this area however leaves the US dollar likely
to re-test a prior swing high and a cluster of prior lows around the 109.30
level.

Gold remains stuck in a downtrend with a series of lower highs and lower
lows intact. The rebound off the double-low around $1,616/oz. has given the
precious metal a slightly more positive outlook but sterner tests lie ahead.
Around $10 above the current spot price lies a zone of resistance made off a
prior swing low and a cluster of, mainly, failed attempts to break higher.
The early October break higher was quickly reversed and this area has held
gold at bay over the last 2-3 weeks. If gold can break this area, for the
chart to turn positive the last swing low at $1,731/oz. would need to be
broken. This may be difficult in the current climate.

Retail trader data show that 83.91% of traders are net-long with the ratio
of traders long to short at 5.22 to 1.The number of traders net-long is
0.87% lower than yesterday and 4.05% higher from last week, while the number
of traders net-short is 7.08% higher than yesterday and 6.70% lower from
last week.

We typically take a contrarian view to crowd sentiment, and the fact traders
are net-long suggests Gold prices may continue to fall. Positioning is less
net-long than yesterday but more net-long from last week. The combination of
current sentiment and recent changes gives us a further mixed Gold trading
bias.

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
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
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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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