Bulls n Bears Daily Market Commentary : 19 December 2023

Wed Dec 20 04:04:30 CAT 2023

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Bulls n Bears Daily Market Commentary : 19 December 2023

ZSE commentary

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

ZSE rebounds on improved activity ...

The market rebounded from prior session losses as the primary All Share
Index gained 2.39% to 191,984.72pts while, the Blue Chip Index added 3.38%
to 79,734.20pts. The Agriculture Index rose 1.75% to 604.22pts as the Midcap
Index firmed up 0.62% to 885,200.66pts . Cable manufacturer Cafca headlined
the  winners   the   day   on  a   14.97%  jump   to $3,345.0000 followed by
banking group CBZ Holdings that surged 14.67% to close at $3,164.7824. Milk
processor Dairibord stepped up 14.40% to $606.8015 while, f intech group
Ecocash   Holdings  advanced   10.69%  to  settle  at $140.0252. Zimpapers
capped the gainers' list of the day on a 5.43% uplift to end the day pegged
at $34.0000. On the contrary, Turnall led the laggards of the day on a
10.20% slump to $34.2206 trailed by brick manufacturer Willdale which shed
0.41% to $40.8556. Telecoms giant Econet declined 0.37% to close at
$697.4823 while, Zimre lost 0.17% to end the day pegged at $184.4093. The
market closed on a positive breadth of eight after thirteen counters
recorded gains against five that faltered.

Activity aggregates enhanced in the session as volume traded shot up 44.07%
to 2.02m shares while, total value traded grew by 38.02% to $2.95bn. Delta
was the dominant counter in today's activity, as it claimed 38.21% of the
volumes exchanged and 77.67% of the value totals. Other notable volume
drivers of the day were Ecocash, OKZIM and Star Africa with contributions of
16.41%,10.51% and 9.82% respectively. Other value contributions to take note
of were CBZ (13.20%), Econet {3.42%) and Ecocash {l.56%). Only two ETFs were
active in today's session which saw a total of 12,800 units exchange hands.
MIZ ETF declined 5.23% to close at $9.0000 on 100 shares while, OMIT edged
up 4.08% to end the day pegged at $40.7958. Tigere REIT eased 0.12% to
$304.3357 after 23,637 units exchanged hands.

-efe

Global Currencies & Equity Markets

South Africa

Exclusive news, data and analytics for financial market professionals

(Reuters) - The South African rand strengthened on Tuesday against a weaker
U.S. dollar, as global market sentiment was buoyed by expectations of
interest rate cuts in 2024 and a local leading business cycle indicator came
in line with expectations.

At 1605 GMT, the rand traded at 18.3200 against the dollar , 1.4% firmer
than its previous close.

The dollar was last trading down 0.4% against a basket of global currencies,
as traders sold the U.S. currency on expectations the Federal Reserve could
start cutting rates as early as March.

South Africa's composite leading business cycle indicator (ZALEAD=ECI) came
in at 112.0 in October, showing a slight improvement from the previous month
although it was still down over 3% year-on-year.

The indicator collects data on vehicle sales, business confidence, money
supply and other factors to gauge the outlook for Africa's most
industrialised economy.

Analysts at ETM Analytics had said the indicator would likely stabilise
month-on-month but still reflect a year-on-year contraction, confirming
South Africa remains in an economic downturn.

The benchmark 2030 government bond was weaker, with the yield up 8 basis
points at 9.730%.

Shares on the Johannesburg Stock Exchange rose, as the blue-chip Top-40
index (.JTOPI) closed up 0.7%.

Nigeria

Nigerian naira falls to record low on official market

(Reuters) - Nigeria's naira dropped to a record low against the dollar on
the official market on Tuesday in thin trading, swinging widely to levels
seen on the unofficial parallel market, where the currency trades freely.

The naira fell as low as 1,248 to the dollar, during mid-day trading, LSEG
data showed after it opened at 927 naira on Tuesday. It later recovered to
845 naira.

Central Bank of Nigeria Governor Olayemi Cardoso has said he would allow
market forces to determine exchange rates while setting clear, transparent
and harmonised rules governing market operations.

Advertisement . Scroll to continue

The comments and chronic dollar shortages on the official market have
prompted the naira's official exchange rate to drift towards the parallel
market level.

The currency sold at around 1,225 naira on the parallel market on Tuesday,
while it was quoted at 1,002.50 naira on the one month non-deliverable
forwards market .

 <mailto:info at bulls.co.zw> 

Global Market

U.S. Dollar Inflation Is Ruining The Stock Market's New High Party

The Federal Reserve declares victory. Goldman Sachs raises its growth
forecast. Wall Street endorses lower interest rates. And the stock market
hits new highs. Yippee! But, wait...

That's "unreal" thinking, based on funny money - that is, the dollar, which
continues to lose value.

But, inflation is only 3%

Why do 3% price increases rate the "only" descriptor? The past three years
saw total inflation of 18%. Compound that 3% forecast atop it, and the
four-year rate becomes an even more serious 21.5%.

Think about it this way: In the past three years, overall consumer costs
have risen from $100 to $118. That is an unusually fast deterioration of the
U.S. dollar's value from $1.00 to $0.85. Any positive inflation rate makes
that bad picture worse.

Is your income up 18% since 2020? Great! Except that means your real income
growth is 0%. So, you're only back to where you started. Anything less means
your earnings have fallen. And, it isn't just income that needs to be
adjusted to show reality. Everything that is priced in dollars needs
conversion - including the stock market.

Note: In 1972, I wrote a paper for a business school class about the need
for pension funds to adjust their investment returns for inflation. It was a
new idea at the time. Nevertheless, here we are, back again. Adjusting
dollar valuations for inflation is not a radical or questionable activity.
It's done for the economy's growth rate, so it should be done elsewhere,
too. Not inflation-adjusting is a sign of ignorance, incompetence or
propaganda. Tough descriptions, but the experts and media know or should
know how to measure reality.

This first graph is what Wall Street wants you to believe...

Can such inflation drama happen again?

Yes. Inflation has not been cured, and history shows that premature Fed
easings set the stage for human nature to strengthen, not lessen,
inflation's hold.

The Fed had its chance, although it waited too long to do something. Now,
they're declaring premature victory. Therefore, expect an enthusiastic
return of high deficit spending and excess borrowing - meaning more fiat
money creation. And the fallout? Seemingly uncontrollable high inflation.

What's a person to do? Try to stay up with inflation's deteriorating dollar
values. It's a tough task in a normal economy. Add in a recession, which
will happen eventually, and the task becomes nearly impossible. The result
is a period when cutting back becomes the norm.

(I'm sorry for this downer holiday message, but it's important not to get
carried away by today's rah-rah happy talk. Stay "real.")

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold gains as dollar, yields ease and traders eye U.S. economic data

Gold prices firmed on Tuesday as the U.S. dollar and Treasury yields slipped
while investors strapped in for a bunch of U.S. economic data due this week
that could provide more clarity on the Federal Reserve's interest rate path.

Spot gold was up 0.6% at $2,038.59 per ounce. U.S. gold futures settled 0.6%
higher at $2,052.1.

The gains were helped by a 0.4% decline in the dollar index , while
benchmark U.S. 10-year Treasury yields were hovering near their lowest
levels since July.

Investors are buying gold as there are fewer incentives for people to get
rid of it, with the market betting the Federal Reserve will cut interest
rates before they achieve their 2% inflation target, said Bart Melek, head
of commodity strategies at TD Securities.

Lower bond yields and interest rates reduce the opportunity cost of holding
non-interest-bearing gold.

Fed Chair Jerome Powell said last week that the Fed's monetary policy is
likely done with a tight monetary policy, with discussion on cuts to
borrowing costs moving "into view." However, some Fed officials have pushed
back against the surging market expectations of rate cuts.

Markets are pricing in about a 75% chance of a rate cut in March, according
to the CME FedWatch tool.

Traders are looking towards a slew of U.S. economic data this week,
including the November core personal consumption expenditure index report
due on Friday, considered to be the Fed's preferred measure of underlying
inflation. It's a question of when the Fed will lower its interest rates, so
we see no reason for any significant downward correction of the gold price
in the foreseeable future, Commerzbank said in a note.

Swiss gold exports fell in November partly due to a drop in shipments to
India, Swiss customs data showed on Tuesday.

Spot silver gained 1.1% to $24.03 per ounce, while platinum was up 1.3% at
$957.08. Palladium climbed 3.2% to $1,222.14, rising for the seventh
consecutive session.

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
Faith Capital (Pvt) Ltd for general information purposes only and does not
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