Bulls n Bears Daily Market Commentary : 13 September 2022

Wed Sep 14 07:21:14 CAT 2022

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Bulls n Bears Daily Market Commentary : 13 September 2022

 <mailto:info at bulls.co.zw> 

ZSE commentary

Bearish sentiment prevails.

Bearish sentiment continued to prevail as the All-Share Index dropped 5.69%
to 11680.66pts while, the ZSE Top Ten closed on a 7.96% drop to 6549.94pts.
The ZSE Agriculture Index suffered a 9.43% knock to close at 70.47pts as the
Mid-Cap Index declined 1.35% to 28198.91pts. Tobacco company BAT was the was
top faller of the day on a 15.00% plunge to $1,955.0000 while, National
Foods Holdings succumbed 14.87% to $1,145.0000. TSL decreased 13.17% to
$52.1000 as Hippo Valley Estates dropped 12.52% to $209.9513. Capping the
top five decliners was telecoms giant Econet which shed 10.08% to $74.7281
on selling pressure. Leading the risers' pack was property firm Mashonaland
Holdings which advanced 4.67% to $5.2333, post the release of its HY22
results in which PAT jumped 300% to $1.57bn. Following was brick company
Willdale which added 0.33% to $1.7056. Capping the day's gainers was the duo
in General Beltings and Star Africa that improved a similar 0.15% to finish
at $2.2033 and $1.7000 apiece.

The market recorded a negative breath of eighteen as twenty-two stocks lost
ground while, four advanced. Activity aggregates improved in Tuesday's
session as turnover ballooned 92.34% to $446.94 while, volume of shares
traded jumped 74.27% to 7.62m. Top volume drivers of the day were OKZIM,
Econet and Delta with respective  contributions of 69.18%, 10.18% and 8.85%.
Value leaders of the day were OKZIM, Delta, Econet and Simbisa with a shared
contribution of 91.59%. On the VFEX, Bindura traded 8,202 shares and closed
at USD$0.0308 while, Padenga traded 232 shares to end pegged USD$0.4000.
Four ETFs recorded losses in the session as Old Mutual ETF trimmed 4.42% to
$5.0199 while, Morgan & Co MCS fell 0.55% to $26.5000. MIZ ETF lost 0.47% to
$1.2441 while, the Datvest ETF eased 0.02% to $1.4907.-efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

South African rand falls after firm U.S. consumer prices

(Reuters) - South Africa's rand fell on Tuesday as the dollar was buoyed by
stronger-than-expected U.S. inflation data, suggesting that the Federal
Reserve may have to stay aggressive in raising interest rates.

U.S. consumer prices unexpectedly rose in August and underlying inflation
picked up amid rising costs for rents and healthcare, according to readings
reported by the U.S. Labor Department.

Fed officials will meet next week to deliver the interest rate decision,
with traders betting on a third straight rate hike of 75 basis points.

"With FOMC members, particularly Jerome Powell, communicating increasingly
in favour of a 75bp increase in U.S. interest rates, South Africa is now
seeing a significant probability of one too next week," Investec analyst
Annabel Bishop said in a research note.

Like most emerging market currencies, the rand is highly susceptible to
global drivers like the U.S. monetary policy.

At 1541 GMT, the rand ZAR=D3 traded at 17.3900 per dollar, 1.55% weaker than
its previous close.

The dollar index =USD, which measures the currency against six rivals, was
up 1.22% at 109.540. [nL1N30K18Y]

On the local economic data front, figures from Statistics South Africa
showed thatthe country's total mining output ZAMNG=ECIin July dropped 8.4%
year on year.

Shares on the Johannesburg Stock Exchange fell, mirroring the slump in
global equities following the U.S. inflation data.

Overall on the stock market, the Top-40 .JTOPI ended 2.23% lower while the
broader all-share .JALSH dipped 2.15%.

The government's benchmark 2030 bond ZAR2030= was little changed, with the
yield up 1 basis point at 10.195%.

Ghana

Cedi to find cushion on expected dollar inflows, but demand pressures
persist

Cedi has fallen by more than 30% so far in 2022

The cedi is expected to find a cushion on the back of expected foreign
exchange inflows from the $1.3 billion cocoa syndicated loan.

The dollar inflows is expected by October 2022.

According to the Weekly Currency Report by Databank Research, the European
Central Bank hike of deposit rate by 75 basis points and an impending US Fed
policy rate hike represent depreciatory pressure points for the local unit.

"In the coming weeks, we expect the cedi to find a cushion on the back of
expected FX [foreign exchange] inflows from the $1.3 billion cocoa
syndicated loan. We reckon, however, that the ECB hike of deposit rate by
75bps and an impending US Fed policy rate hike represent depreciatory
pressure points for the local unit".

Cedi slid slightly against dollar last week

The cedi slid against the dollar last week after a short-lived rally the
previous week.

Despite the improved dollar reserves, sustained demand for the dollar
weighed on the cedi, subduing its rally in the first week of September 2022.

Last week, the Bank of Ghana allotted $25 million across the 7-day to 75-day
tenors against total bids of $107.75 million.

The resulting bid-to-cover ratio of 4.31x vs 4.38x in the previous auction
shows a marginal relaxation of demand pressures, although the wide demand
supply disparity persists.

The cedi shed 0.28% week-on-week (w/w) against the greenback on the Bank of
Ghana reference rate market, lost 0.41% w/w vs euro, and slid 0.55% w/w
against pond.

However, on the forex bureau, the local currency lost 1.74% w/w against the
greenback, with a bid/offer quote of 9.93/10.20, deepening its year-to-date
loss to 35.52% against the US dollar.

 <mailto:info at bulls.co.zw> 

Global Markets

Sterling creeps higher despite downbeat data as dollar wavers

(Reuters) - Sterling tiptoed up on Tuesday despite data showing Britain's
jobs boom is fading, as the employment report was overshadowed by weakness
in the dollar ahead of an update on U.S. inflation

that could herald a softer stance from the Federal Reserve.

The dollar's hesitancy gave some respite to the pound, which has been
battered in recent months by a drumbeat of bad news about Britain's
faltering economy, persistent inflation and mounting energy crisis.

Official data on Tuesday showed Britain's jobless rate hit its lowest since
1974, a positive indicator at the face of it, but which in fact was down to
the workforce shrinking as the economy falters.

The Office For National Statistics said the share of the population neither
in work nor looking for was up because there were more people classified as
long-term sick, as well as fewer students than normal moving into
employment. read more

The report followed one on Monday that showed Britain's economy growing even
less than expected in July, as the sharp increase in energy prices curbed
demand. read more

New Prime Minister Liz Truss has sought to get a grip on the problem
immediately by announcing a cap on domestic energy tariffs, albeit at a cost
of adding 100 billion pounds ($117.21 billion) or more to Britain's already
stretched public finances.

The pound nonetheless rose 0.2% on Tuesday morning to reach $1.1709, above
its recent nadir of $1.14 hit last week, as the dollar faltered ahead of
U.S. inflation data due at 1230 GMT.

If as expected the report shows inflation peaking, the Federal Reserve could
begin to slow the pace of interest rate hikes, putting pressure on the
dollar's recent ascendancy over other major currencies.

Sterling meanwhile edged down to 86.8 pence per euro, holding above its
lowest level against the bloc's currency since 2021 of 87.215 pence which it
touched on Monday.

($1 = 0.8532 pounds)

The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slides 1.63% with dollar strength accounting for almost 100% of the
move

Today the government reported a fractional decline in headline inflation
through the release of the August CPI inflation report. The August 2022 CPI
report revealed that inflation was both stickier and larger than expected,
with the actual numbers exceeding the forecasts by major economists and
analysts. The report revealed that headline inflation increased by 0.1%
month over month and fell from 8.5% year-over-year in July to 8.3% in
August. Economists were expecting a deeper decline in inflation to between
7.9% and 8% YoY.

The fallout in the financial markets was profound running across almost
every asset class. Equities experienced one of the deepest daily selloffs
with the Dow Jones industrial average losing 1276.37 points or 3.94%. On
September 7 the Dow Jones industrial average began an extremely short-lived
rally. Moving higher for four consecutive trading days, from 31,147 to
32,376 points at the close of trading yesterday.

Today the Dow gapped below the entire trading range of Tuesday opening at
32,000, trading to a low of 31,104.97, and closing very near the low at
31,104.97. The S&P 500 had a steeper decline giving up 4.32% or 177.72
points, with the largest percentage decline occurring in the Nasdaq
composite which lost 5.16%.

Gold futures also had a sharp selloff with the most active December contract
as of 5:45 PM EDT down $28.40 or 1.63% and fixed at $1712.20. It is
noteworthy that the low today in gold futures occurred just above $1700 at
$1706.70 which indicates short-term technical support at that key
psychological level.

Both the dollar and yields on 30-year government bonds had substantial gains
with the vast majority of individual stocks as well as precious metals
moving dramatically lower. The dollar index gained 1.48% the largest
single-day move since March 2020. Yields on U.S. 30-year bonds moved to an
8-year high yielding 3.507%. Both bonds and the dollar had significant gains
based upon inflation remaining more sticky or persistent than analysts had
forecasted.

This will be the most important report when the Federal Reserve convenes
next week because their decisions according to Chairman Powell have always
been data-dependent and the data reveals that their recent sizable rate
hikes have had a minimal effect at best. It also solidifies that the Federal
Reserve's resolute demeanor will not accomplish its intended goal in any
short amount of time. Lastly, it almost locks in a hard landing as the
Federal Reserve will be forced to act even more aggressively than their
current exceedingly hawkish monetary policy.

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
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subscribe for any securities. The information contained in this report has
been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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