Bulls n Bears Daily Market Commentary : 15 December 2023

Sat Dec 16 09:42:17 CAT 2023

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Bulls n Bears Daily Market Commentary : 15 December 2023

ZSE commentary

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

Heavies drag down the ZSE ...

Profit taking in heavies continued to weigh down the ZSE market in the week
ending session to see the Top Ten index succumbing 3 .18% to close at
80,050.BOpts . The All-Sha re Index dropped 1.77% to 192,837.21pts while,the
Agriculture Index added 0.83% to 603 .62pts. The Mid Cap ga ined 0.94% to
889,925 .15pts . Beverages giant Delta led the laggards of the day on a
7.17% slid to $3,176.1447, followed by retailer OkZim that slipped 2.51% to
close at $190.2117. Nampak eased 1.69% to $290.0000 while, FBC declined
1.27% to settle at

$925 .8824 . Telecoms giant Econet capped the fallers of the day on a 1.18%
retreat to end the week pegged at $700.4063 . On the contrary, banking group
NMB headlined the w inners of the day on a 14.99% jump to $663.8500
while,Turnall climbed 9.09% to settle at $38.0000. Seed producer SeedCo
surged 7.84% to 864.2910 while, Zimre Holdings Limited advanced 2.50% to end
the day pegged at $184.5000 . Fintech group Ecocash Holdings completed the
gainers list on a 2.45% to settle at $123 .2330. The market closed with a
positive breadth of three as ten counters registered gains against seven
fallers.

Activity aggregates were depressed as seen in all measures which closed in
the red. Volumes exchanged declined 65 .41% to  l.75m shares  while, value
outturn  was  37.06%  lower  at

$2.32bn. The top volume leaders of the day were Econet (33.23%), Delta
(31.96%), and Ecocash Holdings (13.68%). Delta and Econet dominated the
value traded on respective contributions of 74.68% and 17.12%. The other top
value drivers were Proplastics (2.20%) and NMB (1.49%) . A total of 171,131
units exchanged hands in the ETF section. OMTI ETF ticked up 2.22% to
38.1786 while, Datvest ETF slipped 0.01% to end pegged at $8.9989 . The
Tigere REIT exchanged 48,700 units at a stable price of $300.0000.-efe

Global Currencies & Equity Markets

South Africa

South Africa Eyes Half of $27 Billion Contingency Funds to Cut Debt

South Africa's National Treasury is considering withdrawing as much as half
of the 497 billion rand ($27.3 billion) of contingency reserves held by the
central bank to help reduce the government's debt load or fund public-sector
wages.

The Treasury and central bank are close to agreeing on terms of the
draw-down from the Gold & Foreign Exchange Contingency Reserve Account,
according to people familiar with the discussions who asked not to be
identified as they're not authorized to discuss the matter publicly.

Nigeria

Naira gains 23%, closes week at N889/$ on official market

The naira gained 23.51 per cent against the dollar in one week to close at
N889.86/$ on the official Investors and Exporter window on Friday.

This is a N209.19 gain from the all-time official low of N1,099.05/$ it fell
to last week Friday according to data from the FMDQ Securities Exchange.
Last week Friday, the naira fell to an all-time low to cap what has been a
turbulent couple of months for the national currency.

The N1,099.05/$ is the lowest rate the naira has officially closed since the
Central Bank of Nigeria adopted the I&E window as the official trading
channel for the naira. On Friday, the naira opened trading at N901.12/$
before closing at N889.86/$.

Despite its recovery, the national currency is not out of the woods yet with
dollar shortages persisting in the country.  The World Bank recently
disclosed that since May, the naira has depreciated by 41 per cent in the
official market and by 30 per cent in the parallel market, leading to higher
cost of importation and partly contributing to elevated levels of inflation
which rose to 28.20 per cent as of the end of November.

In its December Edition of the Nigeria Development Update, the Bretton Woods
institution, however, expressed confidence that the naira will recover when
it said, "Similarly, while the depreciation of the naira contributes to
short-run inflation, over time a more transparent, market-reflective, and
flexible exchange rate, underpinned by monetary policy tightening, is also
likely to be more stable, thereby easing the pressures on inflation."

A lot of pressure the naira is facing in the market has been tied to
backlogs of FX contracts, and the apex bank has recently begun to clear
these contracts.

Commenting on the issue of volatility recently, the CBN governor, Olayemi
Cardoso, disclosed that the CBN is working to minimise the volatility of the
naira against the dollar. He noted that the bank is taking a comprehensive
look at all its different FX policies in the past in a bid to rethink its FX
approach.

 <mailto:info at bulls.co.zw> 

Global Markets

US dollar rallies after comments from NY Fed President Williams

The US dollar rose around 30 pips across the board as NY Fed President John
Williams spoke on CNBC. US equity futures also gave up gains.

Here is exactly what he said:

"We aren't really talking about rate cuts right now. We're very focused on
the question in front of us, which is-- as Chair Powell said -- the question
is: Have we gotten monetary policy to a sufficiently restrictive stance to
ensure that inflation comes back down to 2%. That's the question in front of
us and that's the question we've been thinking about for the past five
months and that's the question we will be thinking about for some time.
That's the topic of discussion for the committee....the discussion really at
the FOMC right now is about 'do we have monetary policy at the right place'
not speculating about what will happen in the next year'."

He later added that "it's premature to be even thinking about March cuts".
The market is pricing in a 76% chance of a March cut, down from 80%
yesterday.

I take this as the usual meeting-by-meeting mantra from the Fed and trying
to preserve optionality but the market is taking it as a pushback on Powell.
I'm not sure I agree but the market certainly did get out on its skis a bit.

He also said "if we get the progress I'm hoping to see on monetary policy it
will be kind-of natural to lower rates".

Compare this to what Powell said on Wednesday:

"So the way we're looking at it is really this. When we started out, right,
we said the first question is how fast to move, and we moved very fast. The
second question is, you know, really, how high to raise the policy rate, and
that's really the question that we're still on here. We're very focused on
that. As I mentioned, people generally think that we're at or near that and
think it's not likely that we will hike, although they don't take that
possibility off the table. So that's -- when you get to that question, and
that's your answer, there's a natural -- naturally it begins to be the next
question, which is when it will become appropriate to begin dialing back the
amount of policy restraint that's in place. So that's really the next
question, and that's what people are thinking about and talking about. And I
would just say this, we are seeing, you know, strong growth that appears to
be moderating, We're seeing a labor market that is coming back into balance
by so many measures, and we're seeing inflation making real progress. These
are the things we've been wanting to see. We can't know -- we still have a
ways to go. No one is declaring victory. That would be premature, and we
can't be guaranteed of this progress. So, we're moving carefully in making
that assessment of whether we need to do more or not. And that's really the
question that we're on, but of course, the other question, the question of
when will it become appropriate to begin dialing back the amount of policy
restraint in place, that begins to come into view, and is clearly a topic of
discussion out in the world and also a discussion for us at our meeting
today."

Q: Can you gives us some color on that discussion:

"Sure. So it comes up in this way today. Everybody wrote down an SEP
forecast. So many people mentioned what their rate forecast was, and there
was no back and forth, no attempt to sort of reach agreement, like this is
what I wrote down, this is what I think, that kind of thing. And a
preliminary kind of discussion like that, not everybody did that, but many
people did. And then, and I would say there's a general expectation that
this will be a topic for us looking ahead. That's really what happened in
today's meeting. I can't do the head count for you in real time, but that's
generally what happened today."

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold heads for weekly gain as Fed strikes dovish stance

Gold prices fell on Friday, but eked out a weekly rise as the Federal
Reserve shifted to a dovish stance and projected lower interest rates next
year.

Spot gold  fell 0.8% to $2,018.56 per ounce but gained 0.8% for the week.
U.S. gold futures settled 0.4% lower at $2,035.70.

"The gold market will continue to mirror what the expectations from the Fed
are," said Everett Millman, chief market analyst at Gainesville Coins.

"If the U.S. economy does not improve early in 2024 then that's a very
strong sign that gold will continue to push near an all-time high."

Earlier in the week, Fed Chair Jerome Powell said the prolonged tightening
of monetary policy is likely over as a discussion of lower borrowing costs
comes "into view", an outlook affirmed by 17 of 19 policymakers.

Markets are seeing a 70% chance of a rate cut in March, CME FedWatch tool
showed.

Lower interest rates increase the appeal of non-yielding bullion.

But, New York Fed President John Williams pushed back on surging market
expectations of interest rate cuts.

"If more Fed officials walk back Powell's FOMC comments before Christmas,
then we could see a deeper correction in gold prices, but this will make the
market tread a little more carefully," said Tai Wong, a New York-based
independent metals trader.

The dollar firmed but headed for a weekly drop, making gold cheaper for
overseas buyers, while 10-year Treasury yields eyed their worst week since
March.

Silver

fell 1.3% to $23.83 per ounce, and platinum fell 1.95% to $939.25. Both were
set for weekly gains.

Palladium rose 6.3% to $1,1171.32 and was headed for its best week since
March 2022. Prices had touched a five-year low earlier this month.

"The bounce (in palladium) is being accelerated by short covering from funds
who have played palladium with a short bias all year," said Ole Hansen, Saxo
Bank's head of commodity strategy.

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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