Bulls n Bears Daily Market Commentary : 04 December 2023

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Bulls n Bears Daily Market Commentary : 04 December 2023

 

 	

 

 

 	


 <https://www.dulys.co.zw/> ZSE commentary

 

ZSE takes a breather in week-opener…

 

The ZSE took a breather in the week opening session on the back of profit taking seen in selected counters across the board. As a result, the primary All Share Index slipped 0.20% to 191,844.90pts while, the ZSE Top Ten Index slid 0.30% to 82,088.5pts. ZSE Agriculture Index retreated 1.45% to end at 604.79pts while, the Mid Cap Index gained a negligible 0.01% to close at 834,904.81pts. SeedCo Limited led the laggards of the day on a 10.51% decline to $867.8491, trailed by Turnall that succumbed 7.63% to $23.0000. Ariston reversed prior session’s gains on a 3.20% loss to $37.6000 as tea company Tanganda tumbled 1.10% to $989.0000. Star Africa held the fifth position of the fallers’ table after dropping 0.53% to trade at $4.8025. Partially mitigating today’s losses were gains in retailer OKZIM that put on 2.53% to $200.0000. Following was Edgars that charged 2.31% to $102.3070 as NMB improved 1.32% to $502.0000. African Distillers added 0.37% to settle at $2,308.4615 while, telecoms giant Econet rose 0.08% to $729.8365.

 

 

Volume of shares traded enhanced 17.17% to 1.77m, yielding a turnover of $3.46bn which was a 46.64% uplift from prior session. Delta and NMB highlighted the volume and value aggregates of the day claiming a combined 81.45% of the former and 93.84% of the latter. The MIZ ETF gained 14.95% to $8.6900 while, the Morgan and Co MCS grew 13.95% to $490.0000. The Old Mutual ETF went up 3.09% to close at $33.0000. Datvest MCS was the sole faller amongst its kind as it trimmed 0.37% to $9.0000. A total of 21,965 units worth $575,165 exchanged hands in the five ETFS. The Tigere REIT traded 0.10% lower at $279.0625 on 1,600 units.-efe

 

 

Global Currencies & Equity Markets

 

 

 

 

South Africa

 

South African rand falls; GDP and current account due this week

(Reuters) - South Africa's rand fell on Monday as the dollar rose strongly on global markets at the start of a busy week for local economic data with gross domestic product (GDP) and current account figures due.

 

At 1530 GMT, the rand traded at 18.8075 against the dollar , about 1% weaker than its previous close.

 

The dollar last traded around 0.6% stronger against a basket of global currencies.

 

"The rand has very much been a passenger to broader dollar moves today," said Danny Greeff at ETM Analytics.

 

  

Statistics South Africa will publish third-quarter GDP numbers (ZAGDPY=ECI), (ZAGDPN=ECI) on Tuesday, with analysts polled by Reuters predicting a small contraction in both year-on-year and quarter-on-quarter terms.

 

The central bank will publish Q3 current account data on Thursday (ZACAGP=ECI), with a deficit of 1.9% of GDP forecast compared to 2.3% in the previous quarter.

 

Other releases this week include a whole-economy PMI survey on Tuesday (ZAPMIM=ECI).

 

  

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI) closed up about 0.2%. The yield on the benchmark 2030 government bond was down 2 basis points at 9.96%.

 

 

 

Nigeria

 

 

Naira regains ground, rises by 10.67% to N837.77/$1 at the official market    

The Nigerian naira appreciated against the dollar on Monday, 4th December 2023, closing at N837.77/$1 at the official market.   

 

The positive trajectory aligns with expectations among experts, who anticipated that the Central Bank of Nigeria’s (CBN) recent initiative to clear a portion of its FX backlog would boost confidence in the currency.  

 

The domestic currency appreciated 10.67% to close at N837.77 to a dollar at the close of business on Monday, data from the NAFEM where forex is officially traded, showed.   

 

This represents an N89.42 gain or a 10.67% increase in the local currency compared to the 927.19 it closed on Friday.   

The intraday high recorded was N1021/$1, while the intraday low was N701/$1, representing a wide spread of N320/$1.   

According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $73.94 million, representing a 32.87% growth compared to the previous day.   

However, the naira closed flat at the parallel forex market where forex is sold unofficially, the exchange rate quoted at N1165/$1 same as what was closed on Friday, while peer-to-peer traders quoted around N1161.55/$1.   

 

The Central Bank of Nigeria (CBN) has said it has made tranche payments to 31 banks to clear the backlog of foreign exchange forward obligations.   

 

The apex bank also disclosed that it has set up foreign exchange frameworks to address the FX issues.   

 

Yemi Cardoso, governor of the CBN disclosed this on Friday at the bankers’ dinner in Lagos.   

 

What Cardoso said   

The CBN governor said:   

 

“We have already witnessed improvements in FX market liquidity in recent weeks, as the market responded positively to tranche payments which have been made to 31 banks to clear the backlog of FX forward obligations.   

“We have been subjecting these payments to detailed verification to ensure only valid transactions are honoured. In a properly functioning market, it is reasonable to expect significant FX liquidity, with daily trade potentially exceeding $1.0 billion.   

“We envision that, with discipline and focused commitment, foreign exchange reserves can be rebuilt to comparable levels with similar economies.”   

The value of the Nigerian currency has been steadily declining as the country struggles with foreign exchange illiquidity and the inability to pay down its forex backlog.

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

Global Markets

 

Dollar stems decline after heavy November selloff

The dollar regained some ground on Tuesday and hovered near a one-week high against major peers, while bitcoin extended its momentum on optimism that U.S. regulators could soon approve exchange-traded spot bitcoin funds.

 

The greenback rose marginally against the yen

in early Asia trade to 147.23, helped by a slowdown in core consumer inflation in Tokyo that put downward pressure on the Japanese currency.

 

The euro

, meanwhile, languished near a three-week low hit on Monday and last traded $1.0840, while the dollar

index stood near a more than one-week high and was last at 103.59.

 

Analysts say the greenback’s move higher was in part due to a reversal of its heavy selloff in recent weeks, which saw the dollar index falling some 3% in November, its steepest monthly decline in a year.

 

“I think it’s maybe just a little bit of a reassessment as to the U.S. dollar having fallen too far, and too fast,” said Sean Callow, a senior currency strategist at Westpac.

 

A slew of U.S. economic indicators due this week, including November’s non-manufacturing ISM figures out later on Tuesday and the closely-watched nonfarm payrolls report at the end of the week, will provide further clarity on the future path of interest rates. Traders have all but priced in a rate cut from the Federal Reserve by the first half of next year.

 

“The Fed will be reactive to the hard data and not anticipatory of it. So as long as the activity data deteriorates and inflation retreats, convergence toward lower yields will resume,” said Thierry Wizman, Macquarie’s global FX and interest rates strategist.

 

Elsewhere, sterling

rose 0.08% to $1.2642, but was some distance away from its recent three-month high, while the New Zealand dollar

similarly edged away from a four-month high and last traded $0.6173.

 

The Australian dollar

steadied at $0.6620 ahead of a rate decision from the Reserve Bank of Australia later on Tuesday, amid expectations the central bank will keep rates on hold.

 

In cryptocurrencies, bitcoin

last stood at $41,873, not far from the previous session’s peak of $42,404, its highest level since April 2022.

 

The world’s largest cryptocurrency has charged roughly 153% higher this year on U.S. rate cut expectations and bets that American regulators will soon approve exchange-traded spot bitcoin funds, or ETF, opening the bitcoin market to millions more investors.

 

″$40,000 has acted like a magnet since Bitcoin finally broke through $30,000 in late October. It was only a matter of time before the next round number succumbed as enthusiasm about a spot ETF reaches fever pitch,” said crypto-services firm Nexo co-founder Antoni Trenchev.

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



Gold has never been this expensive

 

Gold prices hit an all-time high Monday, buoyed by growing expectations of interest rate cuts among investors, a weaker dollar and geopolitical tensions.

 

Prices for the yellow metal jumped as much as 3% in Monday trade to reach $2,135 per ounce, rising above the previous record of $2,072 notched in August 2020. Prices later fell on the day to trade at $2,023 by 11.57 a.m. ET.

 

In recent weeks, investors have grown increasingly confident that the US Federal Reserve has successfully reined in inflation through aggressive interest rate hikes, and may start to cut borrowing costs as early as March next year.

 

 

Traders work on the floor of the New York Stock exchange during morning trading on November 10, 2023 in New York City.

The 2023 stock rally is back on track

Higher interest rates push up the yields on assets such as US Treasuries, drawing in investors.

 

But, when interest rates are low, falling or — as in this case — expected to fall, demand for Treasuries ebbs, and gold, which doesn’t pay out any interest, becomes relatively more attractive.

 

The yield on the benchmark 10-year US Treasury bill has fallen from a 16-year high of 5% reached in mid-October to stand at 4.3% Monday.

 

 

“The expectations of the end of the tightening cycle have been priced in, pushing longer-term yields lower,” Daria Efanova, head of research at trading platform Sucden Financial, wrote in a note Monday. “This has created a more favorable environment for gold as a non-yielding asset.”

 

John Reade, a market strategist at the World Gold Council, an association of gold producers, told CNN that, with investors predicting several rate cuts over the next year, gold prices could “quite possibly” shoot above Monday’s record high.

 

Those rate predictions have also weighed on the US dollar, again making gold more appealing. Higher interest rates tend to boost the value of a currency by attracting more capital from abroad into the country, and the reverse is true when rates fall.

 

The dollar slumped 3% last month against a basket of six major currencies. Since gold is priced in US dollars, the fall in the greenback’s value has made it less expensive for investors outside the United States to buy the metal, which should have boosted demand and, in turn, lifted gold prices.

 

Geopolitical risk

Over a longer timeframe, gold has benefited from another factor: A deep sense of global unease. JPMorgan CEO Jamie Dimon has said this may be the most dangerous time the world has seen in decades.

 

Investors typically see the metal as a safe haven since it is a tangible, scarce asset that, in theory, holds its value. Gold prices have risen 10% so far this year.

 

“The geopolitical risk environment appears to have changed,” Reade said. “Not just (because of) Russia invading Ukraine, not just the terrible things going on in Israel and Gaza, but trade tensions between the US and China, concerns about what will happen in the South China Sea, concerns about what China will do in Taiwan.”

 

A more fractured, febrile world has encouraged central banks in emerging markets to stock up on the precious metal, Reade noted. In addition, policymakers in those countries, spooked by the freezing of the Russian central bank’s foreign exchange reserves in the West, have piled into gold as an alternative store of value that they perceive to be safer, he added.

 

According to the World Gold Council, central banks in emerging markets bought 473 metric tons (521 tons) of gold a year on average between 2010 and 2021. But last year, they bought 1,100 metric tons of the metal and, in the first three quarters of this year, 800. That breakneck pace of purchases “could continue for years, if not decades,” Reade said.

 

Close to a quarter of all central banks said in a survey published in May that they planned to increase their gold reserves in the next 12 months.

 

“Concerns about the shaky global economic backdrop and the Israel-Hamas conflict have fueled investor demand for safe-haven assets like gold,” Victoria Scholar, head of investment at Interactive Investor, said in a note. “Plus, expectations for Fed rate cuts next year have put downward pressure on the US dollar… adding to gold’s attractiveness.”

 

 

 

 


 

INVESTORS DIARY 2023

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

 

 

 

 

 

 	

Counters trading under cautionary

 

 

 

 	

 

 

 

 

 	

CBZH

GetBucks

EcoCash

 

 	

Padenga

Econet

RTG

 

 	

Fidelity

TSL

FMHL

 

 	

ZBFH

 

 

 

 	

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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