Bulls n Bears Daily Market Commentary : 11 December 2023

Tue Dec 12 05:42:13 CAT 2023

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Bulls n Bears Daily Market Commentary : 11 December 2023

ZSE commentary

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

ZSE extends gains.

ZSE record marginal gains in week-opener.

The market recorded marginal gains in the opening session of the week as the
primary All Share Index rose 0.02% to 197,692.69pts while, the Mid Cap Index
firmed up 0.14% to 872,064.68pts. The Blue-Chip Index fell 0.04% to
84,028.18pts while, the Agriculture Index eased 0.02% to 605.33pts. Clothing
retailer Edgars headlined the winners of the day on a 0.71% jump to
$92.6520, followed by Proplastics that leapt 0.17% to settle at $606.0000.
Banking group CBZ Holdings advanced 0.12% to settle at $2,760.3822 while,
fintech group Ecocash Holdings added 0.06% to $121.7156. Zimre Holdings
completed the top five best performers of the day on a 0.01% lift to close
at $182.1500. On the contrary, OK Zimbabwe Limited led the laggards of the
day on a 2.35% drop to $195.0000 while, telecoms giant Econet declined 0.26%
to $719.7093. Tea producer Tanganda retreated 0.15% to settle at $956.5253
while, beverage giant Delta tumbled 0.06% to $3,497.5724. Star Africa
completed the fallers of the day on 0.02% slide to end the day pegged at
$4.7976. The market closed on a positive breadth of one after six counters
recorded gains against five counters that faltered. 

Activity aggregates were depressed in the opening session of the week as
volume traded succumbed 65.26% to 596,345 shares while, value outturn fell
50.43% to $889.15m. Delta contributed 34.07% to the total volume traded and
79.63% to turnover. The other notable volume drivers of the day were OKZim
(27.83%), Star Africa (11.74%) and Tanganda (11.11%). A total of 32,392
units exchanged hands on the ETF section as Cass Saddle ETF and Datvest ETF
trade flat at $7.5000 and $9.0000 respectively.  Morgan and Co MCS climbed
14.29% to $560.0000 while, the Old Mutual ETF shot up 0.15% to $34.5000. The
Tigere REIT grew 6.15% to end the day pegged at $296.8000.-efe

Global Currencies & Equity Markets

South Africa

South African rand weaker ahead of data-filled week

JOHANNESBURG: The South African rand was weaker in early trade on Monday
ahead of a week jam-packed with both local and global economic data
releases.

At 0645 GMT, the rand traded at 19.0150 against the dollar, about 0.2%
weaker than its previous close.

The dollar last traded around 0.07% stronger against a basket of global
currencies.

This week global investors await several developed market central bank
meetings and data on US inflation that could hint at the possibility of
interest rate cuts next year.

Locally, investors will on Wednesday turn their attention to consumer
inflation for the month of November.

South African rand unchanged ahead of Q3 current account data

The October inflation reading neared the upper limit of the central bank's
target range of 3% to 6% and influenced its decision to keep its main
interest rate unchanged at its November meeting.

South Africa's benchmark 2030 government bond was slightly weaker in early
deals, with the yield up 1.5 basis points to 10.070%.

Nigeria

Naira trades 864/$ at official market as dollar supply rises

The naira appreciated by 27.16 per cent to close at N864.29/$ on the
official Investors and Exporter window on Monday.

This is as the daily turnover of the dollar surged by 86.83 per cent to
$132.46m at the closing of trading from $70.90m last Friday. The naira's
rise signifies a N234.76 gain from the all-time low of N1099.05/$ it closed
trading last Friday according to data from the FMDQ Securities Exchange.

On Monday, trading opened at N867/$, before hitting a high of N1185.10/$,
then a low of N720/$. It eventually settled at N864.29/$ as the daily
turnover of the dollar hit $132.46m.

Monday's rate signifies a marginal recovery for the national currency whose
movement has been volatile since the Central Bank of Nigeria removed the
rate cap on it.

Since the apex bank's move to unify rates, the country's foreign exchange
reserves have fallen by about $1.6bn to $32.97bn. This decline in FX
reserves has been blamed for the free fall of the naira.

Recently the Economist Intelligence Unit said Nigeria did not have enough in
its FX arsenal to defend its exchange rate unification policy.

In its Africa Outlook report, it said, "In Nigeria, an unsupportive monetary
policy implies that the naira will remain under pressure, while the central
bank lacks the firepower to adequately supply the market or clear a backlog
of foreign exchange orders, which will keep foreign investors unnerved. High
inflation and a continued spread with the parallel market will leave the
exchange rate regime unstable and result in periodic devaluations."

Recently, the CBN Governor, Olayemi Cardoso, discussed Nigeria's attempt to
stablise its exchange rates. He said the bank was set to release new FX
guidelines in the hope to save the market.

He said, "In order to ensure the proper functioning of domestic and foreign
currency markets, clear, transparent, and harmonized rules governing market
operations are essential. New foreign exchange guidelines and legislation
will be developed, and extensive consultations will be conducted with banks
and FX market operators before implementing any new requirements."

 <mailto:info at bulls.co.zw> 

Global Markets

Global Markets

US Dollar firms up at the start of the last normal trading week of 2023

The US Dollar (USD) is steady in the green on Monday at the last week of
normal trading for 2023. Some volatility picks up in the commodity complex
as headlines are being issued that a COP28 agreement is on the table after
host Saudi Arabia objected to "phase out" fossil fuels, and rather wanted to
see a "reduction of consumption". Meanwhile traders are brushing off the
recent US Jobs Reports with Central Bank Futures now pointing to the
European Central Bank (ECB) to be the first to cut in the first quarter of
2024, before the US Federal Reserve (Fed) will in the second quarter of
2024. 

On the economic front, besides CPI on Tuesday, traders will mainly look
forward to Wednesday when the Fed will kick off ahead of Super Thursday,
when no less than three major central banks will issue their last monetary
policy for 2023 (four with Fed included). 

Daily digest: Last calls from central banks

Several new agencies are reporting that an agreement has been drafted for
all countries to agree upon after Saudi Arabia, which was the host this
year, asked to redact the wording "phase out" rather to "reduce consumption"
of fossil fuels. 

Still very far away, though for the US Presidential elections: former US
President Donald Trump is leading the Republican Primary elections. 

A possible main driver for the sudden backtracking on changing its monetary
policy at the BoJ, could have come with the drop of 13.6% year-on-year in
Machine Tool Orders for Japan. 

Meanwhile Chinese markets are trembling as deflation fears are soaring. With
a big focus on central banks this week, the European Central Bank could be
facing a similar issue as inflation is sinking very rapidly in the region
and the ECB already guided markets that it will not cut quick. 

The US Treasury is the main driver this Monday in the economic calendar with
no less than four debt issuances. 

Near 16:30 GMT both a 3-month and a 6-month bill will be auctioned.

At 18:00 GMT a 10-year and a 3-year note will be allocated. 

Equites are flying in Asia after the statement from the BoJ. Japan has
closed its Nikkei up 1.50% and the Topix at 1.47%. The already closed Hang
Seng was able to erase an early 1.6% loss to close this Monday up 0.5%.
European equities are not sure what to make off all these messages out of
Asia and are flat for this Monday, together with US futures. 

The CME Group's FedWatch Tool shows that markets are pricing in a 97.7%
chance that the Federal Reserve will keep interest rates unchanged at its
meeting next week.  

The benchmark 10-year US Treasury Note trades near 4.25%, a substantial leg
higher than last week. The recent US Jobs Report from last Friday revealed a
persistent uptick in wages and another drop in unemployment, which opens the
risk for persistent inflation. 

US Dollar Index technical analysis: DXY steady above 104

The US Dollar is gearing up for a comeback in this last trading week of the
year under normal trading regime. This means that the last volatile moves in
the Greenback and its US Dollar Index (DXY) will be unfolding this week.
>From a pure technical point of view, the DXY looks set to end this year near
105. 

The DXY is recouping losses against the Japanese Yen, one of its main
constituents, and is up by 1% in the USD/JPY pair. The DXY trades above 104
and would attract more volume if it was able to break above the high of
Friday at 104.26. Once from there, the 100-day Simple Moving Average (SMA)
near 104.55 looks very appealing to head toward prior to ahead of
Wednesday's Fed meeting. 

To the downside, the 200-day SMA has done a tremendous job in supporting the
DXY with buyers coming in below 103.56 and pushing it back towards that same
level near the US closing bell. If it fails this week, the lows of November
near 102.46 is a level to watch. More downside pressure could bring into
view the 100 marker, in a case where US yields sink below 4%.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold slips, focus shifts to US inflation data

Gold prices fell Monday as the dollar and U.S. Treasury yields firmed, while
investors awaited several crucial central bank meetings and U.S. inflation
data that could influence the Federal Reserve's policy path.

Spot gold

was down 1.1% at $1,981.29 per ounce, after hitting the lowest since Nov.
21. U.S. gold futures

eased 0.9% to $1,997.10.

The dollar rose 0.2%, making gold more expensive for other currency holders.
U.S. 10-year Treasury yields also edged higher.

"Gold and silver traders are waiting for some new fundamental information
that they're going to get this week," said Jim Wyckoff, senior analyst at
Kitco Metals.

"Near-term chart posture for gold has deteriorated. If the CPI numbers are
surprisingly high, that could produce some selling pressure on the gold
market."

Focus will be on the November U.S. consumer price report due on Tuesday,
before the Fed's statement and Chair Jerome Powell's comments on Wednesday.

Traders are pricing in a 71% chance of an interest rate cut in May,
according to the CME FedWatch tool. Lower interest rates tend to support
non-interest-bearing bullion.

Data on Friday showed U.S. job growth accelerated in November.

"The resilience of the American labour market means that an earlier rate cut
is unlikely ... the prospect of higher-for-longer rates is back in a
development that supports Treasury yields and the dollar, and is bad news
for the non-yielding gold," Ricardo Evangelista, senior analyst at
ActivTrades said.

The European Central Bank, Bank of England, Norges Bank and the Swiss
National Bank will also conduct policy meetings on Thursday.

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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