Bulls n Bears Daily Market Commentary : 07 December 2023

Fri Dec 8 07:27:58 CAT 2023

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Bulls n Bears Daily Market Commentary : 07 December 2023

ZSE commentary

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

ZSE extends gains.

The market extended previous session's gains as the primary All Share Index
rose 0.91% to 193,303.47pts while, the Blue-Chip Index edged up 1.24% to
82,202.57pts. The Agriculture Index added 0.46% to 605.51pts while, the Mid
Cap Index gained 0.26% to 851,766.93pts. Banking group CBZ Holdings led the
winners of the day on a 14.48% jump to close at $2,400.0000, followed by
hotelier Meikles Limited that firmed up 3.06% to $1,346.0000. Sugar
processors Hippo Valley climbed 2.42% to $1,900.0000 while, Zimre Holdings
shot up 0.97% to settle at $181.7391. Tea producer Tanganda capped the top
five best performers of the day on a 0.84% uplift to end the day pegged at
$958.0000. On the contrary, fintech group Ecocash Holdings lost 3.19% to
settle at $116.2339 while, seed producer Seed Co Limited slipped 0.58% to
$860.0000 despite recording a revenue jump of 101.11% to $59.71m. Telecoms
giant trimmed 0.56% to settle at $719.0361 while, beverages giant Delta
dropped 0.48% to end the day pegged at $3,492.1422. Banking group FBC
completed the laggards of the day on a 0.18% slid to close at $955.0000. Six
counters recorded gains against nine that faltered to leave the market with
a negative breadth of three.

Activity aggregates enhanced in the session as volume traded ballooned
60.90% to 2.26m shares while, value traded grew 88.41% to $2.34bn.
Proplastics and Delta dominated the volume and value aggregates as they
claimed a shared 83.41% of the former and 92.25% of the latter. A total of
52,182 units exchanged hands in a session which saw Cass Saddle ETF, Datvest
ETF and MIZ ETF trade flat at $7.5000, $9.0000 and $9.5000 apiece. OMTT ETF
declined 0.19% to end the day pegged at $34.4313. The Tigere REIT went up
0.01% to $299.4366 as 6,157 units exchanged hands.-efe

Global Currencies & Equity Markets

South Africa

South African rand unchanged ahead of Q3 current account data

JOHANNESBURG: The South African rand was unchanged in early trade on
Thursday ahead of third quarter current account data and as risk aversion
was heightened ahead of US payrolls data on Friday, analysts said.

At 0646 GMT, the rand traded at its previous close of 18.9600 against the
dollar, while the dollar was last around 0.1% weaker against a basket of
global currencies.

The rand has been under pressure this week and is once again "flirting" with
19.00 to the dollar, said Andre Cilliers, currency strategist at
TreasuryONE.

At 0900 GMT, the South African Reserve Bank will publish the country's third
quarter current account data.

Analysts polled by Reuters predict a deficit of 111 billion rand.

"Risk aversion is firming ahead of the payroll data, US CPI, and monetary
meetings by the FOMC, ECB, and BoE in the coming week," Cilliers added.
Payrolls data out of the US could give hints on the future interest rate
path of the world's biggest economy.

South African rand slips before third-quarter GDP data

The rand often take cues from global factors like US monetary policy in
addition to local drivers. Locally, South Africa's net foreign reserves rose
to $56.319 billion at the end of November from $55.510 billion in October,
central bank data showed on Thursday.

On the Johannesburg Stock Exchange, the blue-chip Top-40 index was down
about 0.3% lower in early trade.

South Africa's benchmark 2030 government bond was slightly weaker in early
deals, with the yield up 2 basis points to 10%.

AFRICA-FX-Kenya's currency could find support, Zambia's under pressure

(Reuters) - Kenya's shilling could find support in the next week to
Thursday, but Zambia's kwacha is seen staying under pressure while the
Ugandan shilling and Ghanaian cedi could gain, traders said.

KENYA

Kenya's shilling could halt its long-running slide against the dollar,
drawing support from foreign-currency inflows from tourism and reduced
dollar demand from the fuel and manufacturing sectors.

Commercial banks quoted the shilling at 153.20/40 per U.S. dollar, compared
with last Thursday's closing rate of 153.15/35.

This week Kenya's central bank unveiled a big interest rate hike aimed at
stabilising the shilling, which has lost about 19.5% against the dollar this
year.

The bank said the shilling's depreciation had spurred price pressures,
curbed foreign investment and hampered debt-servicing.

UGANDA

Uganda's shilling is seen showing a strengthening bias on remittance flows
and a central bank decision to maintain a tight policy stance.

Commercial banks quoted the shilling at 3,775/3,785 to the dollar, compared
to last Thursday's close of 3,815/3,825.

"There are remittances flowing in but also the central bank decision is
driving a positive sentiment for the unit," a trader said, referring to the
Bank of Uganda's Wednesday decision to maintain its policy rate at 9.5%.

The local unit would likely trade in a range of 3,750-3,780 to the dollar in
the days ahead, he said.

ZAMBIA

Zambia's kwacha is likely to remain under modest pressure due to sustained
hard-currency demand and minimal supply.

On Thursday the kwacha, which has been setting record lows, was trading at
24.25 per dollar from 23.70 at the close of business a week ago, according
to LSEG data.

"The local unit is anticipated to trade bearish in the short term," Access
Bank said in a note.

GHANA

Ghana's cedi is expected to strengthen next week due to muted corporate
dollar demand and improved supply on the interbank market.

LSEG data showed the cedi trading at 11.95 to the dollar on Thursday, the
same as last Thursday's close.

"The cedi has posted gains in recent sessions as FX liquidity has improved
and corporate demand has reduced. We've also seen some banks sell hard
currency in a bid to unlock cedi liquidity following the new tighter
monetary policy measures implemented last week," said Sedem Dornoo, a senior
trader at Absa Bank Ghana.

"There is still room for the local unit to strengthen in the coming week as
corporate demand is expected to remain lacklustre," he said.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar Slides as the Yen Soars on Possible BOJ Policy Shift

The dollar index (DXY00) on Thursday fell by -0.58%.  Thursday's main
bearish factor for the dollar was a sharp rally in the yen to a 4-month high
on speculation that the BOJ might soon exit its ultra-easy monetary policy.
Thursday's rally in stocks also curbed the liquidity demand for the dollar.

Thursday's U.S. economic news was mixed for Fed policy and the dollar.  On
the bearish side, Oct wholesale trade sales unexpectedly fell -1.3 % m/m,
weaker than expectations of +1.0% m/m and the biggest decline in 7 months.
Also, Oct consumer credit rose +$5.134 billion, weaker than expectations of
+$8.5 billion.  Conversely, weekly continuing unemployment claims fell
-64,000 to 1.861 million, showing a stronger labor market than expectations
of 1.910 million.

The markets are discounting a 1% chance for a +25 bp rate hike at the next
FOMC meeting on Dec 12-13 FOMC and a 0% chance for that +25 bp rate hike at
the following FOMC meeting on Jan 30-31, 2024.  The markets are then
discounting a 71% chance for a -25 bp rate cut at the March 19-20, 2024,
FOMC meeting and are more than fully discounting (146%) that -25 bp rate cut
at the Apr 30-May 1, 2024, FOMC meeting. 

EUR/USD (^EURUSD) on Thursday rose by +0.34%.  The euro on Thursday
recovered from a 3-month low and rose moderately as dollar weakness sparked
short covering in EUR/USD.  The euro Thursday initially fell to a 3-week low
after an unexpected decline in German Oct industrial production knocked the
10-year German bund yield down to an 8-month low of 2.166%.

Eurozone Q3 employment was revised lower to +0.2% q/q and +1.3% y/y from the
previously reported +0.3% q/q and +1.4% y/y.

German Oct industrial production unexpectedly fell -0.4% m/m, weaker than
expectations of +0.2% m/m.

Swaps tied to ECB meeting dates have now priced in a 74% chance that the ECB
will reduce its benchmark rate by -25 bp at the March 7 meeting.

USD/JPY (^USDJPY) on Thursday fell by -2.60%.  On Thursday, the yen rallied
sharply and posted a 4-month high against the dollar.  Massive short
covering emerged in the yen Thursday, and the 10-year JGB bond yield soared
to a 1-week high of 0.769% after comments from BOJ Governor Ueda to the
Japanese parliament bolstered speculation the BOJ would soon exit its
ultra-easy monetary policy.  Also, a sharp -1.76% decline in the Nikkei
Stock Index Thursday boosted safe-haven demand for the yen.

On Thursday, BOJ Governor Ueda told the Japanese parliament that handling
monetary policy "will become even more challenging from the year-end and
through next year," stoking speculation that the BOJ would soon end its
negative interest rate monetary policy.

The Japan Oct leading index CI fell -0.2 to 108.7, a smaller decline than
expectations of 108.2.

February gold (GCG4) Thursday closed down -1.50 (-0.07%), and Mar silver
(SIH24) closed down -0.169 (-0.70%).  Gold and silver prices Thursday closed
lower, with silver falling to a 2-week low.  Higher global bond yields on
Thursday were bearish for precious metals.  Also, comments from BOJ Governor
Ueda bolstered speculation that the BOJ will soon exit its negative interest
rate policy and was bearish for gold.  Silver prices were under pressure on
industrial metals demand concerns after German Oct industrial production
unexpectedly declined.  Finally, Thursday's rally in stocks dampened
safe-haven demand for precious metals.  A weak dollar on Thursday limited
losses in metals.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold firms as dollar dips ahead of US payrolls report

(Reuters) - Gold firmed on Thursday on a weaker dollar in the run-up to U.S.
non-farm payrolls data, as traders hoped for signs of a weaker labour market
to boost chances of a rate cut by the Federal Reserve as early as March.

Spot gold edged up 0.3% to $2,029.92 per ounce by 2:25 p.m. ET (1925 GMT).
U.S. gold futures settled 0.1% lower at $2,046.40.

"The markets have gotten in front of themselves on the interest rate
expectations," said Chris Gaffney, president of world markets at EverBank,
adding that the only risk to metals prices next year was if "the Fed has to
keep rates higher for longer."

On Monday, bullion scaled an all-time peak of $2,135.40 on elevated bets for
a Fed cut, before dropping more than $100 on uncertainty over the cut's
timing.

Reuters Graphics

Traders were pricing a 62% chance of a rate cut by March next year, CME's
FedWatch Tool showed, but a Reuters poll saw rates unchanged until at least
July. Lower interest rates tend to support non-interest-bearing bullion.
Benchmark 10-year Treasury yields were near three-month lows, while the U.S.
dollar (.DXY) dipped 0.6%, making gold cheaper for other currency holders.

While "drivers for a further gold rally are set in place," gold should
consolidate and spend some time testing these new price levels, said Everett
Millman, chief market analyst at Gainesville Coins. After an uptick in
weekly U.S. jobless claims, traders positioned for the non-farm payrolls
data on Friday in search of more signs of a weaker labor market. The market
consensus is for a soft landing in the U.S., which historically makes gold
less attractive. Still, geopolitical tensions in a critical election year
alongside central bank buying could support gold in 2024, the World Gold
Council said. Spot silver fell 0.4% to $23.79 per ounce, platinum rose 2.1%
to $908.74, and palladium climbed 2.8% to $969.94.

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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