Bulls n Bears Daily Market Commentary : 28 September 2022

Thu Sep 29 05:07:16 CAT 2022

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Bulls n Bears Daily Market Commentary : 28 September 2022

ZSE commentary

ZSE extends gains.

The ZSE extended gains in the mid-week session as the primary All Share
Index surged 8.67% to 15023.86pts while, the Top Ten Index advanced 11.52%
to 9303.36pts. The Mid Cap Index rose 2.37% to 29499.17pts as the
ZSE-Agriculture Index ticked up 1.19% to 73.46pts. Logistics company
Unifreight headlined the gainers' list on a 14.97% rise to $43.0000, trailed
by Innscor which went up 14.90% to $309.3762. Ecocash Holdings jumped 14.83%
to $60.1154 while, telecoms giant Econet advanced 14.67% to $118.4534.
Beverages group Delta capped the top five winners of the session after
adding 14.55% to $256.2002. Leading the losers of the day was bankers NMBZ
that slumped 10.00% to $18.0009. Milk processor Dairibord retreated 9.07% to
$22.1880 while, clothing retailers Edgars gave up 4.76% to trade at $7.0000.
Mashonaland Holdings lost 3.37% to end pegged at $6.6000, trailed by Meikles
Limited which capped the top five losers' list of the day on a 2.98% decline
to end the session at $114.9565.

The market closed with a positive breadth of twelve after nineteen counters
gained ground against seven losers. Activity aggregates advanced in the
session as value traded grew by 341.34% to $445.17m while, volumes edged up
96.10% to 7.16m shares. Proplastics, NMB and Econet dominated the volume
traded after contributing 41.91%, 15.75% and 12.95% accordingly. Delta,
Econet, Proplastics and Simbisa contributed a combined 75.13% to the total
outturn. The Datvest and Old Mutual ETF were the only ETF'S to register
price movements today as the duo gained 6.06% and 0.32% to close the day at
respective prices of $1.6047 and $5.2099. On the VFEX, Bindura slipped 0.65%
to end pegged at $0.0305. Elsewhere, VFEX will welcome its fifth listing
Simbisa, which will delist from the ZSE. efesecurities

 <mailto:info at bulls.co.zw> 

Global Currencies & Equity Markets

South Africa

Rand gains as dollar retreats from 20-year peakMining companies lead the
fall on the JSE.

South Africa's rand recovered some losses to strengthen on Wednesday, as the
dollar softened from a two-decade peak it hit earlier in the day.

At 17:55, the rand traded at 17.8875 against the dollar, 0.74% stronger than
its previous close. The rand had earlier in the morning hit a new 28-month
low of 18.2225.

The dollar index, which measures the currency against a basket of major
rivals, was last down about 0.84% to 113.180, softening from a 20-year high
of 114.78.

As the dollar scaled fresh two-decade highs nearly every day this week, it
kept most emerging market currencies on the back foot, including the rand,
which is highly susceptible to global drivers such as the U.S. monetary
policy.

Shares on the Johannesburg Stock Exchange fell, led by mining companies
African Rainbow Minerals and Exxaro Resources, which closed down over 12.1%
and 8% respectively.

Overall on the stock market, the Top-40 fell 0.34%, while the broader
all-share index ended 0.36% lower.

The government's benchmark 2030 bond was weaker, with the yield up 3 basis
points to 10.810%.

Nigeria

Naira extends free fall against dollar, hits new all-time low

Naira on Tuesday fell to a record low of N725 per dollar at the parallel
market following increased demand for the greenback amid a supply shortage.

After trading on Tuesday, the local currency lost N3 or 0.41 percent of its
value to close at N725/$ compared to N722 closed on Monday on the black
market, BusinessDay findings show.

However, the trend is expected to reverse following the tightening policy
measures of the Central Bank of Nigeria (CBN), according to traders who
spoke with BusinessDay.

Godwin Emefiele, governor of the CBN, after the Monetary Policy Committee
(MPC) meeting in Abuja on Tuesday, raised its benchmark interest rate, known
as Monetary Policy Rate (MPR) to 15.5 Percent, the third consecutive hike
this year.

The CBN also increased the Cash Reserve Ratio (CRR) by 500 basis points to
32.5 percent from 27.5 percent in January 2020, to reduce monetary-induced
inflation.

Emefiele had in July 2022 MPC meeting warned bank customers against
converting the naira to foreign exchange, for electioneering purposes.

Osita Nwanisobi, director, the corporate communications department, on July
20, 2022, clarified the CBN governor's warning on converting Naira to dollar
for the electioneering campaign.

According to Nwanisobi, the warning by the CBN Governor was to those who
sought to convert the Naira from their accounts into foreign exchange for
election campaigns and not those who seek to exchange the currency for
legitimate purposes such as payment for tuition and other personal expenses.

While maintaining that the Bank, in line with its mandate, had discretionary
power to prevent persons from conducting unauthorized transactions,
Nwanisobi said the CBN was within its statutory limits to mop up the excess
liquidity in the vaults of the institutions it regulates, so they do not get
involved in speculative activities.

With the new increase in CRR, the CBN may likely debt banks a whopping N15.8
trillion, being 32.5 percent of N48.64 trillion, their combined deposit
base.

"It remains to be seen if the policy rate hikes will attract forex liquidity
and therefore strengthen the Naira against other major currencies," said
Taiwo Oyedele, head of tax and corporate advisory services at PwC.

Reacting to the CBN's policy decision, Uche Uwaleke, professor of Capital
Market at the Nasarawa State University Keffi, said, "I think the decision
by the MPC to further tighten monetary policy is justified by the need to
tame inflationary and forex pressures and possibly stem capital outflows on
account of the hike in policy rates in developed economies, especially in
the US and UK. The primary mandate of the CBN is to maintain price
stability."

He said it has grave implications for cost of capital for firms, cost of
borrowing by the government, stock market performance and output growth in
general. It may also affect the asset quality of banks as they reprice their
loans in response to the hike in MPR.

On the CRR hike Uwaleke said, "It reinforces the hike in MPR aimed at
squeezing liquidity in the Banking system, reducing the ability of banks to
give loans and raising interest rates in the process. The MPC believes that
the expansion in broad money supply is a threat to inflation."

At the Investors and Exporters (I&E) forex window, Naira depreciated by 0.08
percent as the dollar was quoted at N436.33 on Tuesday compared to N436.00
quoted on Monday. Most currency dealers who participated at the foreign
exchange market auction on Tuesday maintained bids between N423.00 (low) and
N441.00 (high) per dollar.

 <mailto:info at bulls.co.zw> 

Global Markets

China's yuan sinks to record low against the dollar

China's yuan has tumbled to a record low against the US dollar in offshore
trading, joining a host of currencies experiencing sharp declines against
the greenback.

The offshore yuan, which is traded outside mainland China, fell to 7.2386
against the dollar on Wednesday, the Bloomberg news agency reported, the
lowest since Beijing eased rules on trading the currency in Hong Kong in
2010.

The onshore yuan, which is circulated in mainland China and more tightly
controlled than its offshore counterpart, fell to a low of 7.2302 per dollar
in early trade, the weakest since the global financial crisis in 2008.

The declines come despite China's central bank on Monday announcing moves to
stem the yuan's decline by making it more expensive to bet against the
currency.

International investors have rushed to buy up the dollar, a traditional safe
haven, as aggressive rate hikes by the US Federal Reserve stoke pessimism
about the global economic outlook, lifting the currency to multi-decade
highs against other key currencies.

On Monday, the British pound sank to a record low against the dollar as
investors dumped the currency in a vote of no confidence in London's
economic plans, which include huge tax cuts funded by steep increases in
government borrowing.

China's economy has been battered in recent months by COVID-19 lockdowns,
droughts, and a slump in the heavily indebted property market.

The world's second-largest economy narrowly avoided contraction in the
second quarter, with gross domestic product (GDP) expanding just 0.4 percent
on year during the April-June period.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold attempts relief rally as dollar decelerates

Gold rose about 2% on Wednesday as a retreat in the dollar rekindled some of
its safe-haven appeal, although prospects of sharp rate hikes kept the
non-yielding precious metal near a two-and-a-half-year trough.

Spot gold climbed 2% to $1,660.62 per ounce, to recoup some losses from a
slide to its lowest since April 2020 earlier in the day.

U.S. gold futures settled 2.1% higher at $1,670.00.

A pullback in the dollar and yields have "seen gold move off those lows,"
said David Meger, director of metals trading at High Ridge Futures.

"The factors in regards to Russia and the discussion of annexation... that
probably gave a bid to the (gold) market from a safe-haven perspective,"
Meger added.

The dollar retreated after scaling a new two-decade high, making bullion
less expensive for overseas buyers, while Treasury yields eased.

Moscow was poised on Wednesday to annex a swath of Ukraine, releasing what
it called vote tallies showing support in four partially occupied provinces
to join Russia, after what Kyiv and the West denounced as illegal sham
referendums held at gunpoint.

Moreover, "gold is seeing some relief as the UK's plan to buy long-end Gilts
sees yields weaken," TD Securities said in a note.

Gold, however, has failed to benefit from the recent rout in equities and
faces headwinds from looming rate hikes that would raise the opportunity
cost of holding non-yielding bullion.

"This oscillation between dollar headwinds and growth concerns should keep
gold in a rangebound market torn between growth fears and higher rates,"
Goldman Sachs said in a note.

Meanwhile, silver gained 2.7% to $18.92 per ounce, after hitting a
three-week low of $17.94 earlier in the session.

Platinum advanced 1.5% to $861.32 and palladium jumped 3.2% to $2,153.51.

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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