Bulls n Bears Daily Market Commentary : 14 September 2022

Thu Sep 15 06:44:37 CAT 2022

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Bulls n Bears Daily Market Commentary : 14 September 2022

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ZSE commentary

ZSE in tremendous fall…

The market had a tremendous fall in the mid-week session as the primary All-share Index succumbed 6.53% to 10917.96pts while, the Mid-Cap Index gave up 4.08% to 27048.05pts. The ZSE Agriculture Index trimmed 3.22% to 68.20pts with the ZSE Top Ten Index dipping 7.97% to 6,027.66pts. Tea producers Tanganda, headlined the fallers’ pack of the day on a 14.97% slump to $104.5000, trailed by Axia which slipped 14.92% to $33.9500. Telecoms giant Econet Wireless went down 14.87% to end at $63.6128, OKZim declined 14.55% to $30.6222. Delta Corporation capped the top five losers’ list on a 14.54% slide to close the day at $134.2760. Banking group First capital was the top riser of the day on a 7.22% uplift to $8.1458 followed by CFI Holdings which advanced 2.50% to $410.0000 on scrappy 300 shares. Zimre Holdings Limited ticked up 1.17% to $4.4807 as Hoteliers RTG added 0.95% to $7.4000. Completing the risers’ set was clothing retailer Edgars which improved 0.89% to end pegged at $5.6500.

Activity aggregates were depressed in Wednesday’s session as volumes traded succumbed 76.45% to 1.79m shares while, value traded plunged 68.83% to $139.31m. The market recorded a negative breadth of eight as eighteen counters lost ground against ten gainers. Econet and Delta were the top volume and value drivers of the day as the duo claimed a combined 78.40% of the former and 83.63% of the latter. Bindura was the only counter that registered trades on the VFEX as it slipped 0.32% to close at USD$0.0307. The Datvest ETF improved 0.17% to $1.4932 while, the Made In  Zimbabwe and the Old Mutual ETFs shed 0.01% and 0.55% to $1.2300 and $4.4692 apiece-efesecurities

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Global Currencies & Equity Markets

South Africa

South African rand flat ahead of local retail sales data

South Africa's rand was flat in early trade on Wednesday, ahead of local retail sales figures due to be released later in the day.

At 0647 GMT, the rand traded at 17.4600 against the dollar, 0.03% weaker than its previous close.

July retail sales numbers will be published around 1100 GMT, with analysts polled by Reuters expecting an 8.4% increase compared to a 2.5% fall in June.

"A weakening retail sector performance would be unfavourable for headline growth numbers in the country as consumption expenditure accounts for 60% of GDP," said analysts at ETM.

The government's benchmark 2030 bond was weaker in early deals, with the yield up 7 basis points to 10.265%.

Nigeria

Naira stable on declining $629.95m FX turnover in 5months

Naira maintained stability against the dollar in five months this year, despite the declining foreign exchange (FX) market turnover at $629.95 million over the same period, data from the Central Bank of Nigeria (CBN) indicated.

Naira/dollar exchanged at N415 and N416/$ between January 2022 and May 2022 at the Investors and Exporters (I&E) forex window, the nation’s official foreign exchange (FX) window.

The monthly FX turnover, which showed the level of activity at the official market declined by 0.65 percent to $124.32 million in May 2022 compared to $125.14 million in January 2022.

Read also: Naira closes at 271.96 premium between official, black market

Nigeria’s foreign exchange market has continued to witness dollar shortages amid increased demand as Nigeria continues to struggle with diversifying and improving foreign exchange inflows, analysts said.

A breakdown of the exchange rate and the FX turnover during the period under review showed that naira exchanged with the dollar at N415.95 per dollar, while the turnover stood at $124.32 million in May 2022, in April 2022, the cost of dollar was N415.53/$ and the FX turnover was $143.55 million.

The data showed that in March 2022 naira was N416.03 per dollar while the FX turnover stood at $125.94 million, in February 2022, the FX turnover was $0.111 billion while naira exchanged with the dollar at N416.95/$, and in January 2022, naira/dollar exchange rate was N416.03 as the FX turnover dropped to $125.14 million from the level it was in December 2021 ($205.64m).

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Global Markets

Dollar stands tall as focus swings back to Fed

(Reuters) - The dollar stood near recent peaks on Thursday as markets increased bets the Fed has more work to do in its aggressive tightening streak to curb red-hot inflation, while wariness of intervention kept the yen steady.

The Japanese currency hovered at 143.02 in Asia after jumping on Wednesday when the country's central bank checked on exchange rates with banks - a possible preparation for yen buying. read more

A record Japanese trade deficit for August, however, underscored both the bear case for the yen and some of the effect that its nearly 20% slide this year is having on the economy. read more

"The yen direction of travel continues to be for further weakness ... If they really want to stop the weakness, then a change in BOJ policy is the recipe," said Rodrigo Catril, a currency strategist at National Australia Bank.

"Our sense is that the intervention, sure, it will scare the speculators on the day, but it's unlikely to prove longer lasting."

The kiwi jumped 0.2% to $0.6012, as official data showed gross domestic product (GDP) rose 1.7% in the June quarter, beating forecasts of a 1.0% gain. read more

Sterling was down 0.05% to $1.1536, while the euro slipped 0.06% to $0.9972 - both nursing losses after an inflation surprise sent the greenback surging on Tuesday.

The euro had some help from European Central Bank policymaker Francois Villeroy de Galhau who said on Wednesday that the bank's neutral rate, estimated as below or close to 2% in nominal terms, could be reached by the end of the year. read more

However, the dollar is in the driving seat ahead of next week's Fed meeting. read more

Fed funds futures are pricing in a 37% chance that the Fed will hike rates by 100 basis points.

"The market is kind of in consolidation mode," said NAB's Catril. "Clearly evident in the front end of the U.S. Treasury curve, the market is becoming a bit more emboldened to the reality that the Fed will remain aggressive."

U.S. producer prices fell for a second straight month in August as the cost of gasoline declined further, data showed on Wednesday, though that seemed cold comfort after Tuesday's data already dashed hopes of cooling consumer prices. read more

The Aussie was marginally lower at $0.6747 ahead of labour data due at 0130 GMT.

The U.S. dollar index , which measures the greenback against a basket of currencies, was up 0.09% to 109.7, not far off its two-decade peak of 110.79.

The Thomson Reuters Trust Principles.

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Commodities Markets

Gold prices drop further today, near lowest in over a month

Gold prices today slipped after a sharp selloff in the previous session. On MCX, gold futures were down 0.1% to ₹50,087 per 10 gram while silver fell 0.2% to ₹56719 per kg. Gold and silver prices fell sharply on Tuesday on the back of a strong US inflation data that also sent the dollar index and bond yields higher. In global markets, gold was flat today and traded near $1,704.03 per ounce.

“COMEX gold traded flat weighed down by recovery in the US dollar and higher bond yields in reaction to US inflation data. A slightly bigger than expected rise in consumer prices rekindled worries that the Fed may continue with aggressive rate hikes. The Fed is largely expected to raise interest rate by 0.75% in the coming week and market players now expect Fed to continue with aggressive hikes going ahead. Gold witnessed a sharp rebound which ran out of steam close to $1750/oz level and prices may remain under pressure as focus shifts to upcoming Fed meeting," said Ravindra Rao, VP- Head Commodity Research at Kotak Securities.

The stronger-than-anticipated US inflation numbers have cemented the likelihood for a jumbo-sized rate hike at the (Fed meeting, scheduled next week. Gold is seen as a hedge against inflation, but higher interest rates increase the opportunity cost of holding it. The dollar index eased a bit today, making gold less expensive for overseas buyers.

Gold rates had prices in the previous session saw their biggest one-day percentage fall since July 14, as the dollar logged its best day since March 2020 after an unexpected rise in U.S. August consumer prices. In India, gold had dropped ₹500 per 10 gram on Tuesday. 

Gold Technical Outlook

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said: “Gold has support at $1696-1682, while resistance is at $1718-1726. Silver has support at $18.78-18.55, while resistance is at $19.28-19.45. In rupee terms gold has support at ₹49,940-49810, while resistance is at Rs50,380–50,540. Silver has support at Rs56,050-55,640, while resistance is at Rs57,180–57,610."

Meanwhile, in global equity markets, a semblance of calm returned after Tuesday's rout sparked by hotter-than-expected American inflation. Shares had their biggest drop in more than two years Tuesday, with the S&P 500 falling more than 4% and the Nasdaq 100 sliding more than 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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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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