Bulls n Bears Daily Market Commentary : 14 December 2023

Fri Dec 15 09:37:36 CAT 2023

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Bulls n Bears Daily Market Commentary : 14 December 2023

ZSE commentary

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

ZSE swings back into the red...

The market swung back into the red to see the primary All Share Index
declining 1.11% to 196,315.80pts while, the Blue- Chip Index fell 2.05% to
82,679.36pts. The Agriculture Index fell 0.12% to 598.63 while, the Mid Cap
Index gained 0.76% to 881,678.62pts. Fintech group Ecocash Holdings led the
laggards of the day on a 13.81% slid to $120.2874 on waning demand, followed
by beverages giant Delta that succumbed 2.08% to settle at $3,421.3905 on
selling pressure. Proplastics declined 1.87% to close at $594.5473 while,
telecoms giant Econet slipped 1.47% to $708.7512. Seed producer Seed-Co
Limited capped the fallers of the day on a 1.42% retreat to end the day
pegged at $801.4797. Partially mitigatingtoday's losses was Turnall that
surged 33.98% to $34.8345 as brick manufacturer Willdale Limited followed
after firmed up 15.00% to close at $46.0000. Sugar processors Hippo advanced
0.12% to end the day pegged at $1,857.1698.

Activity aggregates enhanced in the session as volume traded ballooned
338.21% to 5.05m shares while, turnover soared 131.10% to $3.69bn.
Proplastics dominated the volume aggregate, contributing 39.88% of the
total. Other notable volume drivers of the day were Ecocash (27.56%), FBC
(14.91%) and Delta (7.095). The trio of Delta, Proplastics and FBC dominated
the  total values exchanged after claiming 33.02%, 32.38% and 19.04%
respectively. The other value drivers of the day were CBZ Holdings Limited
(6.11%) and Ecocash Holdings (4.51%). A total of 31,100 units exchanged
hands in the ETF section. Cass Saddle ETF and Datvest ETF traded flat at
$6.4000 and $9.0000 apiece. The Tigere REIT rose a negligible 0.01% to end
the day pegged at $300.0000.-efe

Global Currencies & Equity Markets

AFRICA-FX-Kenyan and Zambian currencies seen falling, Ghana's steady

(Reuters) - Kenya's shilling and Zambia's kwacha are expected to fall in the
next week to Thursday, while the Ugandan shilling could strengthen, Ghana's
cedi will probably be steady and Nigeria's naira may be mixed, traders said.

KENYA

Kenya's shilling is seen slipping on increased foreign-currency demand from
the manufacturing sector and as Kenyans living abroad ask for higher
exchange rates to part with their dollars.

Commercial banks quoted the shilling at 153.30/50 to the U.S. currency,
compared with last Thursday's close of 153.20/40.

On Thursday the shilling hit a new all-time low of 153.50/70 before
recouping some losses, LSEG data showed.

"Those looking to sell, especially diaspora (remittance) inflows, are
looking to sell at higher (exchange) rates. I see heavy (dollar) demand from
manufacturing," one trader said.

NIGERIA

Nigeria's naira could trade around its current level on the official market,
but it could strengthen on the parallel market thanks to muted dollar demand
and seasonal remittance inflows.

The naira was quoted at 878 to the dollar in official trading on Thursday,
compared with about 900 at the close of trading a week earlier. It was
quoted at 1,225 to the dollar on the parallel market , versus 1,175 per
dollar last Thursday.

"A combination of diaspora inflows and decreased demand for dollars going
into the festive holiday period will see pressure on the naira ease up,
especially on the black market where it will probably strengthen," one
trader said.

GHANA

Ghana's cedi is expected to remain relatively stable next week, as market
activity slows in the lead-up to Christmas.

LSEG data showed the cedi trading at 11.99 to the dollar on Thursday,
compared to 11.98 at last Thursday's close.

"The cedi has seen some stability against the dollar this week despite
delays in approval and disbursement of the $600 million IMF support. We
expect the relative stability to remain as market players wind down ahead of
the yuletide," said Chris Nettey, head of trading at Stanbic Bank Ghana.

Ghana is working towards a debt restructuring deal with its official
creditors, which will pave the way for the next disbursement of an
International Monetary Fund (IMF) support package.

UGANDA

Uganda's shilling is expected to strengthen, as dollar appetite tails off
with the approaching holidays.

Commercial banks quoted the shilling at 3,775/3,785 to the dollar, compared
with last Thursday's closing rate of 3,768/3,778.

"In the run-up to Christmas we normally see (dollar) demand come down
significantly as some businesses start to wind down activity," one trader
said, adding the shilling was likely to trade in a range of 3,750-3,770 to
the dollar in the coming week.

ZAMBIA

Zambia's kwacha is likely to remain under pressure as hard-currency demand
from importers like energy firms continues to outpace supply.

On Thursday the currency was trading at 24.55 per dollar from 24.25 at the
close of business a week ago.

"The local unit is expected to continue facing headwinds," Zambia National
Commercial Bank said in a note.

 <mailto:info at bulls.co.zw> 

Global Markets

U.S. dollar tanks as post-Fed momentum continues

(Xinhua) -- The U.S. dollar continued to suffer substantial losses on
Thursday, after investors rotated out of momentum growth stocks following
the U.S. Federal Reserve's dovish pivot.

The dollar index, which measures the greenback against six major peers, was
down 0.88 percent to 101.9642 in late trading, hitting its weakest position
since August.

Investors and traders continued to digest the Federal Reserve's
interest-rate projections and policy update, released on Wednesday, as the
U.S. Treasury yields slid to fresh multi-month lows Thursday, with the
10-year rate falling to as low as 3.91 percent.

U.S. retail sales unexpectedly rose 0.3 percent in November as the holiday
shopping season got off to a brisk start, further alleviating fears of a
recession, the U.S. Commerce Department reported on Thursday.

"The rebound in retail sales in November provides further illustration that
the continued rapid decline in inflation is not coming at the cost of
significantly weaker economic growth," said Andrew Hunter, deputy chief U.S.
economist at Capital Economics.

The CME FedWatch Tool projections suggest that markets foresee rate cuts as
early as March 2024.

Both the European Central Bank and Bank of England decided to keep their
main interest rates unchanged on Thursday, though each also gave signals
that cuts are not imminent. In late New York trading, the euro increased to
1.0991 dollars from 1.0886 dollars in the previous session, and the British
pound was up to 1.2755 dollars from 1.2621 dollars in the previous session.

The U.S. dollar bought 141.9480 Japanese yen, lower than 143.1550 Japanese
yen of the previous session. The U.S. dollar was down to 0.8662 Swiss francs
from 0.8694 Swiss francs, and it fell to 1.3409 Canadian dollars from 1.3499
Canadian dollars. The U.S. dollar decreased to 10.2349 Swedish kronor from
10.2928 Swedish kronor. │

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold tests investor appeal as Fed prepares to pivot

Gold is facing a major test of investor appetite as the Federal Reserve
commences a long-awaited pivot to rate cuts.

The precious metal extended gains following Wednesday's surge after Fed
policymakers said they expected to lower rates by 75 basis points next year.
Cooling inflation had already pushed investors to position for easing,
spurring bullion to briefly spike to a record last week.

With monetary loosening now definitively on the agenda, gold traders will be
watching for the return of big-money investors who could set the stage for a
more sustainable rally after two years on the sidelines. They long shunned
non-interest bearing bullion, as inflation-adjusted Treasury yields surged
to the highest since the financial crisis.

That caused persistent outflows from gold-backed exchange-traded funds
that's been a major headwind to the precious metal. But with bond yields
dropping as the Fed signals easing in 2024, that could be about to change.

"The return of an environment that's conducive to financial inflows for gold
is clearly happening," said Marcus Garvey, head of commodities strategy at
Macquarie Group Ltd. "Into next year, I'm still very bullish."

With prices just under $100 shy of the record set last week in a chaotic
trading session, investors may be wary of getting into the market. Gold is
also still trading at a significant premium to real Treasury yields - one of
its biggest drivers - on a historical basis.

That premium has persisted for well over a year, thanks to record buying by
central banks that helped mop up sales from investors. It appeared to be on
the verge of closing in September as gold tumbled, before Hamas's attack on
Israel caused prices to spike amid a wave of short covering.

Even as concerns about the conflict spilling over have faded, gold has
continued to trade at elevated levels, setting a high base for prices to
rally from. Even a small-scale resumption in ETF purchases would have a
major impact on sentiment.

"With central banks hoovering more than 1,000 tons out of the market for a
second year, the selling from ETF investors has been easily absorbed," said
Ole Hansen, head of commodity strategy at Saxo Bank A/S. "What happens when
they both potentially turn buyers next year?"

The extent of any new buying will likely be dictated by the pace of the
Fed's rate cuts in the new year. Currently swaps traders are pricing in
nearly twice as much easing as the central bank signaled on Wednesday,
potentially leaving gold vulnerable to pullbacks if it takes a cautious
approach.

"There is no need for a rapid reversal in US monetary policy," said Carsten
Menke, an analyst at Julius Baer Group Ltd. "We therefore see gold and
silver prices on a soft footing."

Attention will remain firmly on US economic data next year, with stronger
than expected inflation or robust jobs numbers likely to disappoint those
betting on multiple rate cuts.

"The market will inevitably face disappointment in terms of the path from
here to rate cuts at some point," said Macquarie's Garvey. "I imagine we
keep having two steps forward, one step back."

Spot gold climbed 0.9% to $ 2,046.58 as of 10:14 a.m. in New York. Other
precious metals also advanced, with spot palladium gaining as much as 7.9%
in its biggest intraday jump since March.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

Counters trading under cautionary

CBZH

GetBucks

EcoCash

Padenga

Econet

RTG

Fidelity

TSL

FMHL

ZBFH

Invest Wisely!

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