Bulls n Bears Daily Market Commentary : 06 December 2023

Wed Dec 6 07:16:05 CAT 2023

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Bulls n Bears Daily Market Commentary : 06 December 2023

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

ZSE swings back into the red.

The ZSE market reversed prior session's gains to see the primary All Share
Index dropping 0.34% to 191,185.20pts while, the Blue-Chip Index shed 0.97%
to 81,293.96pts. The Agriculture Index fell 0.21% to 603.53pts while, the
Mid Cap Index was the only gainer after putting on 0.91% to 842,538.58pts.
Apparel retailer Edgars led the laggards of the day on a 11.79% retreat to
close at $90.2485, followed by CBZ that dropped 7.83% to $1,990.9091. Tea
producer Tanganda fell 3.16% to $957.7500 while, hotelier Meikles slipped
2.91% to $1,306.8947. Retailer OKZIM capped the top five fallers' pack on a
1.33% slide to end the day pegged at $197.3305. Partially mitigating today's
losses was First Mutual Properties that firmed up 14.26% to $240.0000,
trailed by Turnall Holdings that jumped 8.70% to close at $25.0000.
Zimpapers climbed 7.18% to $26.7955 while, Ariston ticked up 6.38% to end
the day pegged at $40.0000. General Beltings completed the top five winners
list on a 3.64% uplift to $22.8000. The market closed with a positive
breadth of one as eleven counters recorded gains against ten laggards.

Activity aggregates were mixed in the session as volume of shares traded
rose 1.53% to 1.79m while, value traded succumbed 78.80% to $733.97m. The
duo of Edgars and Econet dominated the volume traded, claiming 57.23% and
20.27% apiece. Delta, Econet and Edgars contributed a combined 88.06% to
turnover. Foreign participation was net buyers in the session as purchases
stood at $88.45m while, sales amounted to $10.22m. In the ETF section, a
total of 54,198 units exchanged hands as the MIZ ETF surged 9.32% to settle
at $9.5000 while, the OMTT ETF tumbled 3.78% to close at $31.7530. The
Tigere REIT charged 7.50% to $300.0000 on 39,457 units.-efe

Global Currencies & Equity Markets

South Africa

South African rand falls as third-quarter GDP contracts

(Reuters) - The South African rand fell on Tuesday as third-quarter gross
domestic product (GDP) contracted slightly more than expected and the U.S.
dollar rose on global markets.

At 1615 GMT, the rand traded at 18.9950 against the dollar , around 1%
weaker than its previous close.

The dollar last traded around 0.2% stronger against a basket of global
currencies.

Q3 GDP contracted 0.2% quarter-on-quarter in seasonally adjusted terms
(ZAGDPN=ECI) and 0.7% year-on-year (ZAGDPY=ECI), versus expectations for a
quarter-on-quarter decline of 0.1% and 0.2% annually.

The latest figures mean Africa's most industrialised economy grew just 0.3%
in the first nine months of the year, further evidence that its economic
recovery from the COVID-19 pandemic has been among the worst in emerging
markets.

A PMI survey on Tuesday also showed South African private sector business
activity flatlined in November, with a cooling of price pressures
counteracted by supply chain disruptions due to a port crisis.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index (.JTOPI)
ended down 1.1%. South Africa's benchmark 2030 government bond weakened,
with the yield up 5 basis points to 10.01%.

Nigeria

Naira strengthens as dollar demand moderates

Nigeria's  Naira strengthened by 9.64 percent despite a decline in dollar
liquidity at the official market on Monday.

At the close of trading on Monday, the dollar was quoted at N837.77,
stronger than N927.19 quoted on Friday at the Autonomous Foreign Exchange
Market (NAFEM), data from the FMDQ indicated.

The naira appreciation followed a moderation in dollar demand at the
official foreign exchange (FX) market.

Willing buyers and willing sellers quoted dollars at a bid rate of N1,021,
stronger than N1,160/$1 offered on Friday as the higher bid rate on the spot
trading. The lower bid rate remained steady at N701 per dollar on the spot.

Dollar supply decreased on Monday as the daily foreign exchange market
turnover dropped by 32.87 percent to $73.93 million from $110.14 million
recorded on Friday.

In its equity research note, FSDH research acknowledged the recent pickup in
activities at the NAFEM following increasingly attractive interest rates in
the money market, which could entice trade investors to bring investments
into Nigeria.

For context, post-FX reforms, the average NAFEM turnover is $114.8mn, up 5.2
percent from the pre-FX reform average. In addition, the report stated that
the average NAFEM turnover for November was $140.9mn, showing some form of
resurgence.

However, it remains below pre-Covid peak levels of about $250mn, which is
the level that indicates renewed foreign investor interest in Nigeria's
capital market instruments.

"As a result, while the November resurgence was impressive, we deem it
inadequate to sustain prolonged foreign investor interest in Nigerian
equities. Ultimately, stable oil prices around $60 - $70/bbl. And prolonged
crude oil production at >1.7mbpd will be needed to generate adequate FX
inflows and strengthen external reserves, which would then attract
much-needed Foreign Portfolio Investment inflows," analysts at FSDH research
said.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar steady as traders weigh labour data, rate outlook

The dollar was near a two-week high against a basket of currencies on
Wednesday as investors assessed U.S. economic data that showed a cooling
labor market, while wagering the Federal Reserve will cut rates next year.

The dollar index

, which measures the U.S. currency against six rivals, was 0.019% higher at
103.99, having climbed 0.3% overnight. The index is up 0.5% this month,
after sliding 3% in November, its steepest monthly decline in a year.

Data on Tuesday showed U.S. job openings fell to more than a 2-1/2-year low
in October, the strongest sign yet that higher interest rates were dampening
demand for workers. Data also showed there were 1.34 vacancies for every
unemployed person in October, the lowest since August 2021.

The focus will now shift to the Friday release of the November jobs report
to provide clues on the strength of the economy ahead of the Fed's policy
meeting next week.

"This week the highlight is payrolls (report)," OCBC currency strategist
Christopher Wong said, adding that a downside surprise could see dollar
rebound stall.

Fed officials are now in a blackout period ahead of the U.S. central bank's
Dec. 12 to 13 meeting, where a key focus will be the updated projections of
where they see rates at in 2024.

Traders have priced in 99.7% chance of the Fed standing pat next week but a
56% chance of the central bank cutting rates in March, according to CME's
FedWatch tool.

ANZ analysts forecast conditions for the Fed to start cutting interest rates
will emerge around the middle of 2024 but cautioned Chair Jerome Powell will
need to maintain hawkish guidance during the transition to lower growth and
inflation.

The widely expected rate cuts in 2024 will result in the dollar loosening
its grip on other G10 currencies next year, dimming the outlook for the
greenback, according to Reuters poll of foreign exchange strategists.

Meanwhile, the euro

was at $1.0795, having dropped to three-week low of $1.07785 on Tuesday.

Investors believe the European Central Bank could deliver its first rate cut
by March. Inflation across the euro zone has fallen more quickly than most
anticipated, as evidenced by last Thursday's consumer price data.

Sterling

was last at $1.2601, up 0.06% on the day. The Japanese yen

strengthened 0.03% to 147.12 per dollar.

The offshore Chinese yuan eased 0.09% versus the greenback to $7.1657 per
dollar. Ratings agency Moody's on Tuesday cut China's credit outlook to
"negative" on Tuesday.

In cryptocurrencies, bitcoin

surged above $44,000 - its highest since April 2022 - and was last at
43,995.

The world's largest cryptocurrency has gained 150% this year, fueled in part
by optimism that a U.S. regulator will soon approve exchange-traded spot
bitcoin funds.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold ticks up as dollar slips, investors await US jobs data

(Reuters) - Gold prices edged higher on Wednesday as the dollar eased and
weaker-than-expected U.S. jobs data cemented expectations that the Federal
Reserve's policy tightening cycle has come to an end.

Spot gold rose 0.2% at $2,023.39 per ounce by 0415 GMT. U.S. gold futures
for February delivery also rose 0.2% to $2,041.00.

Reuters Graphics

"Volatility in gold prices is likely to remain capped heading into Friday's
U.S. non-farm payrolls data," said City Index Senior Analyst Matt Simpson.

-

"It might take a particularly weak set of numbers for gold to post strong
gains from here - as many bullish fingers were likely burned with gold's
false break to a record high."

Bullion climbed to a record high of $2,135.40 on Monday on elevated bets for
a Fed rate cut, before dropping more than $100 in the same session, on
uncertainty over the timing of the monetary policy easing.

Data on Tuesday showed U.S. job openings fell to a more than two-and-a-half
year low in October, signalling that higher rates were dampening demand for
workers.

-

The dollar index (.DXY) fell 0.1% against a basket of currencies after
rising to a two-week high on Tuesday, making gold less expensive for other
currency holders.

Focus now shifts to the Friday release of the November non-farm payrolls
data that could provide more clues on U.S. interest rate outlook ahead of
Fed's policy meeting next week.

Traders are pricing in about a 60% chance of a rate cut by March next year,
CME's FedWatch Tool shows. Lower interest rates tend to support
non-interest-bearing bullion.

-

Spot gold may bounce into a range of $2,033-$2,039 per ounce, as it has
stabilized around a support of $2,009, according to Reuters technical
analyst Wang Tao.

Silver rose 0.5% to $24.24 per ounce, while platinum gained 0.1% to $900.31.
Palladium rose 0.6% to $940.14 per ounce, hovering near a more than five
year low.

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
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