Bulls n Bears Daily Market Commentary : 31 January 2023

[Bulls n Bears]

 <http://www.bullszimbabwe.com> Bullszimbabwe.com         <mailto:bulls at bulls.co.zw> Views & Comments        <http://www.bullszimbabwe.com> Bullish Thoughts        <http://www.twitter.com/BullsBears2010> Twitter         <https://www.facebook.com/BullsBearsZimbabwe> Facebook           <http://www.linkedin.com/pub/bulls-n-bears-zimbabwe/57/577/72> LinkedIn          <mailto:%20bulls at bullszimbabwe.com?subject=Unsubscribe> Unsubscribe

 

 	

 

 

 	

Bulls n Bears Daily Market Commentary : 31 January 2023

 

 	

 <mailto:info at bulls.co.zw> 

 

 	


ZSE commentary

 

Mid-Caps drives the market…

The Mid-cap counters carried the market in month-ending session as reflected in their index that added 2.83% to close at 48200.90pts. The ZSE Agriculture Index gained 3.86% to 100.93pts while, the primary All Shares Index put on 0.82% to end at 22813.24pts. The Top Ten Index slipped a marginal 0.03% to settle at 13824.24pts. Leading the top five winners’ pack was the trio of Cafca, Seed Co Limited and Dairibord that gained a similar 14.99% to close at $264.6000, $218.2000 and $59.8500 in that order. Masimba Holdings Limited added 14.95% to $114.6000 as plastic manufacturer Proplastics surged 14.91% to $58.9500 to fasten the top five risers of the day. Property concern Mashonaland Holdings led the fallers of the day on a 7.86% decline to $8.0073 followed by ART Holdings that retreated 5.03% to $18.0000. Sugar processor Star Africa gave up 3.92% to $1.8835 as Ariston Holdings slid 3.62% to $4.5792. Packaging group Nampak trimmed 3.59% to $12.1050 post the release of its financials in which its revenue increased by 43.16% to $52.52bn as profit for the year was at $2.61bn.

 

Activity aggregates improved in the session as volumes traded soared 164.37% to 6.49m shares while, turnover grew 229.85% to $597.35m. Delta and Innscor were the value leaders of the day as they claimed a combined 77.19% of the outturn. Volume leaders were Ariston Holdings, OK Zimbabwe and Delta which accounted for a shared 79.94% of the total shares that traded. On the VFEX, Padenga Holdings tumbled 2.31% to USD$0.2875 while, Simbisa went down 0.09% to USD$0.4300. Bindura Nickel was flat at USD$0.0240 on 100 shares. The Datvest ETF ticked up 0.64% to $1.5000 while, the MIZ ETF rose 0.04% to $1.2966. Losses were recorded in the Old Mutual and Morgan and CO MCS ETFs which trimmed 4.19% and 0.18%. Cumulatively 33,161 units worth $108,918.96 traded in the ETFs. The Tigere REIT remained unchanged at $50.6200 on 5,063 shares.-efesecurities

 

 

Global Currencies & Equity Markets

 

 

 

Nigeria

 

Pressured naira records marginal gain

 

Naira on Tuesday gained marginally against the dollar as demand eased slowly at the parallel market, also known as black market.

 

During the morning trading session on Tuesday, one dollar was trading at the rate of N754 per dollar, gaining 0.13 percent (N1/$1) compared to N755 traded on Monday at the unofficial market.

 

 

At the Investors and Exporters (I&E) forex window, Nigeria’s official foreign exchange market, naira gained slightly by 0.05 percent (N0.25/$1) as the dollar was quoted at N461.50 on Monday, as against N461.75/$1 quoted on Friday, data from the FMDQ indicated.

 

The marginal gain was supported by increased activity on the I&E window as the daily foreign exchange market turnover rose by 54.05 percent to $150.49 million on Monday from $97.69 million recorded on Friday last week.

 

Over the years, Naira has remained under pressure. Last year, it depreciated to a peak of N890/$ at the parallel market, in 2022. The local currency weakness followed increased demand amid short supply of the greenback.

 

Aggregate inflows of foreign exchange into the country from all sources still fall short of the country’s demand hence the sustained pressure on the external reserve and consequently the relative value of the Naira, a Lagos based analyst said.

 

 

Nigeria’s external reserves have declined by 8.54 percent year-on-year to $37.04 billion as of January 27, 2023 from $40.50 billion at the beginning of last year.

 

Godwin Emefiele, the governor of the CBN, said last year that the Nigerian foreign exchange market was in the middle of a serious crunch which was straining the country’s reserves and stifling the value of the naira. Market demand for both goods and invisible transactions has continued to increase under various uses in the face of dwindling supply of foreign exchange.

 

The official foreign exchange receipt from crude oil sales into Nigeria’s official reserves has dried up steadily from above $3.0 billion monthly in 2014 to absolute zero dollars last year.

 

To boost foreign exchange earnings in the country, the CBN and the Bankers’ Committee initiated the RT200 programme in February 2022.

 

The programme was fundamentally devised to innovatively tackle the fundamental problem associated with the repatriation of non-oil export proceeds.

 

“So far, we have recorded and continue to record resounding success with the RT200 programme,” he said. According to him, inflows through this programme in 2022 rose to about $1.6 billion and could surpass $2.5 billion by year-end.

 

“Under the rebate scheme of the programme, the central bank has reimbursed a total of N78.4 billion, which I consider a fair price to incur to stabilise our foreign exchange market,” Emefiele said.

 

 

South Africa

 

Rand knocked out by energy crisis

South Africa’s rand is trading weaker as investor confidence in the country’s economy is eroded by load shedding.

 

Investec’s chief economist Annabel Bishop said that January typically sees seasonal strength in the rand, but this year market players penalised the rand as the state failed to ally investors’ concerns over the electricity crisis.

 

Rolling blackouts enforced by the failing national power utility Eskom to try to curb a total grid collapse have increased across the country and continue to plague businesses and stifle economic growth.

 

Bishop said that the situation has worsened with no near-term state solution to end the damaging effect on the economy.

 

“Additionally, Transnet’s deteriorating ability to meet the demand for its rail and port transport services has further dented investor and business confidence, threatening export-led growth and afflicting the rand,” said Bishop.

 

South Africa’s growing electricity crisis implies a substantially weaker 2023 outcome for the economy and a growth rate well below the previously predicted 1.1% year-on-year rate – it is likely to settle closer to 0.6% this year, said the chief economist.

 

Already industrial production contracted in the first two months of the final quarter last year – down by 1.4% versus the same period in the third quarter, said Bishop. Due to the country’s deepening supply-side energy shortages, she added.

 

Bishop said that Eskom also faces high and rising costs from its use of diesel to fuel open-cycle gas turbines, desperately needing cash injections (and a wholesaler’s license) to purchase diesel.

 

“The looming threat of stage 8 load shedding, and outages, including stage 6 so far, have eroded confidence in the domestic economic outlook, with no government solution in sight in the near term, pushing the rand weaker.”

 

“This year, little improvement in state infrastructure is expected, particularly on the rail, port, electricity and water supply front, which will impede economic growth and job creation, keeping the rand weak,” added the economist.

 

Future predictions

 

Despite global and domestic economic shakeups, the rand is expected to strengthen in 2023, says Sebastian Steyn, a forex expert at Sable International.

 

He said that the South African currency is predicted to grow further in 2023 as the global market looks for new opportunities in emerging economies outside the developed world.

 

As a result of the dollar soaring in 2022, the rand ended up being undervalued – this is expected to change, said Steyn.

 

The Economist’s latest Big Mac Index for 2023 shows, however, that despite being undervalued, the rand is trading closer to its ‘real value’ this year.

 

The Big Mac Index is based on the theory of purchasing power parity (PPP) – the idea that, over a long period of time, exchange rates should move towards the rate that would equalise the prices of identical baskets of goods and services (for example, a Big Mac burger) in any two countries.

 

According to the index, a Big Mac costs R49.90 in South Africa and US$5.36 in the United States. The implied exchange rate is R9.31/$

 

The difference implies a 45.9% range undervaluation.

 

The rand is currently trading at:

 

R17.44/$

R18.90/€

R21.50/£

 

 

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

Global Markets

 

Dollar pauses ahead of Fed rate decision

The dollar was broadly flat against major currencies on Wednesday after easing in the previous session following U.S. data that showed moderating wage pressure, with investors keenly awaiting the conclusion of a Federal Reserve policy meeting.

 

The U.S. central bank is expected to raise interest rates by 25 basis points later on Wednesday, but Fed Chair Jerome Powell’s press conference is likely to take the spotlight as traders attempt to gage how long the Fed is likely to stay hawkish.

 

, which measures the U.S. currency against six major peers, fell 0.029% to 102.060. It slipped 0.16% in the previous session, in part because of a report showing U.S. labor costs had increased in the fourth quarter at their slowest pace in a year.

 

The index has fallen for four straight months. As investors price in the Fed reaching the end of its rate-hike cycle, the index is far from the 20-year high of 114.78 it touched on Sept. 28.

 

Investor attention this week will also be on the monetary path taken by European Central Bank and Bank of England, each of which is expected to raise interest rates by 50 basis points on Thursday.

 

The euro

was down 0.03% to $1.0859, while sterling

was last trading at $1.231, down 0.08% on the day.

 

The Japanese yen

strengthened 0.10% versus the greenback at 129.98 per dollar.

 

Prices of Fed funds futures imply the Fed’s benchmark rate will peak at 4.91% in June, up from 4.33%, then fall to 4.48% by December.

 

“Recent progress on inflation has encouraged market participants to expect the Fed to quickly pivot from interest rate hikes to interest rate cuts,” said Carol Kong, currency strategist at Commonwealth Bank of Australia.

 

Since signs of labor market loosening were limited, the Fed would likely pair a smaller rate hike this week with hawkish communication, she said. “The U.S. dollar can in turn enjoy a brief rally if markets reassess their expectations for a quick FOMC pivot.”

 

The Fed increased interest rates by 50 basis points in December after four successive 75 bps rate hikes. It said then that interest rates might need to be higher for longer to tame inflation.

 

“The expectations of a soft landing have picked up since the start of the year, relative to the rising recession bets seen in second half of last year,” Saxo Markets strategists said.

 

“There is some reason to believe that Powell and team may be aiming to lengthen the hiking cycle in order to buy more time to assess both the incoming data and the impact of their previous aggressive rate hikes.”

 

 

 

 <mailto:info at bulls.co.zw> 

 

 

 

 

Commodities Markets



 

Gold, silver up after traders buy the early price dips

(Kitco News) - Gold and silver prices are firmer in midday U.S. trading Tuesday, as traders stepped in to do some perceived bargain hunting on early-session price pullbacks. Trading action is more subdued just ahead of this week’s monetary policy decisions by major central banks. February gold was last up $7.10 at $1,930.00 and March silver was up $0.057 at $23.795.

 

The U.S. data point of the week is the Federal Reserve Open Market Committee (FOMC) meeting that began Tuesday morning and ends Wednesday afternoon with a statement. Most believe the Fed will raise the key U.S. interest rate by 0.25%, following the recent 0.5% rate hikes. Trading in stock and financial markets may be more muted just ahead of the FOMC statement and press conference by Fed Chairman Jerome Powell Wednesday afternoon. The European Central Bank and Bank of England hold their monetary policy meetings Thursday.

 

Global stock markets were mostly lower overnight. U.S. stock indexes are higher at midday. Another tamer U.S. inflation report this morning mildly boosted trader and investor sentiment. The U.S. fourth-quarter employment cost index rose just 0.1% and was up 5.1%, year-on-year. The U.S. stock indexes are still in price uptrends on the daily bar charts and the stock index bulls have the overall near-term technical advantage.

 

 

 

Gold is vulnerable to a pullback as Powell prepares to signal 'seriousness', but will hit an all-time high in 2023 - Adrian Day

The key outside markets today see the U.S. dollar index a bit weaker. Nymex crude oil futures prices are up and trading around $78.75 a barrel. Oil traders are awaiting an OPEC-plus cartel meeting Wednesday. Meantime, the yield on the benchmark U.S. 10-year Treasury note is presently fetching 3.523%.  

 

Live 24 hours gold chart [Kitco Inc.]

 

Technically, February gold futures bulls have the solid overall near-term technical advantage. A three-month-old uptrend is in place on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $1,885.00. First resistance is seen at this week’s high of $1,933.60 and then at the January high of $1,949.80. First support is seen at last week’s low of $1,912.50 and then at $1,900.00. Wyckoff's Market Rating: 8.0

 

Live 24 hours silver chart [ Kitco Inc. ]

 

March silver futures bulls have the overall near-term technical advantage. However, trading has been choppy and sideways for weeks. Silver bulls' next upside price objective is closing prices above solid technical resistance at the January high of $24.775. The next downside price objective for the bears is closing prices below solid support at $22.00. First resistance is seen at $24.000 and then at last week’s high of $24.415. Next support is seen at last Friday’s low of $23.39 and then at today’s low of $23.05. Wyckoff's Market Rating: 6.5.

 

March N.Y. copper closed up 110 points at 421.25 cents today. Prices closed nearer the session high today. The copper bulls have the solid overall near-term technical advantage. A four-month-old uptrend is in place on the daily bar chart. Copper bulls' next upside price objective is pushing and closing prices above solid technical resistance at 440.00 cents. The next downside price objective for the bears is closing prices below solid technical support at 400.00 cents. First resistance is seen at this week’s high of 424.90 cents and then at last week’s high of 430.25 cents. First support is seen at today’s low of 411.85 cents and then at 405.00 cents. Wyckoff's Market Rating: 7.5.

 

 

 

 


 

INVESTORS DIARY 2023

 


Company

Event

Venue

Date & Time

 

 	

 

 

 

 

 

 	

Axia 

EGM to approve the delisting of Axia from the ZSE and listing on VFEX

virtual

February 2 –  (9am)

 

 	

 

Robert Mugabe National Youth Day

 

February 21

 

 	

Cafca 

AGM

virtual 

February 23  - (12pm)

 

 	

Ariston 

AGM

Centenary Room, Royal Harare Golf Club

February 24 - 3:30pm

 

 	

 

Good Friday

 

April 7

 

 	

 

Easter Saturday

 

April 8

 

 	

 

Easter Sunday

 

April 9

 

 	

 

Easter Monday

 

April 10

 

 	

 

Independence Day

 

April 18

 

 	

 

Workers’ Day

 

May 1

 

 	

 

Africa Day

 

May 25

 

 	

 

 

 

 

 

 	

Counters trading under cautionary

 

 

 

 	

CBZH

TSL

Fidelity

 

 	

Willdale

FMHL

ZBFH

 

 	

GetBucks

Zimre

Seed Co

 

 	

 

 

 

 

 	

 

 

 

 

 	

Invest Wisely!

Bulls n Bears 

 

Cellphone:      <tel:%2B263%2077%20344%201674> +263 77 344 1674

Alt. Email:       <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com  

Website:         <http://www.bullszimbabwe.com> www.bullszimbabwe.com  

Blog:            <http://www.google.com/url?q=http%3A%2F%2Fwww.bulls.co.zw%2Fblog&sa=D&sntz=1&usg=AFQjCNFoIy6F9IXAiYnSoPSgWDYsr8Sqtw> www.bullszimbabwe.com/blog

Twitter:         @bullsbears2010

LinkedIn:       Bulls n Bears Zimbabwe

Facebook:      <http://www.google.com/url?q=http%3A%2F%2Fwww.facebook.com%2FBullsBearsZimbabwe&sa=D&sntz=1&usg=AFQjCNGhb_A5rp4biV1dGHbgiAhUxQqBXA> www.facebook.com/BullsBearsZimbabwe

Skype:         Bulls.Bears 



 

 

 	

 

 

 	

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 constitute an offer to sell or the solicitation of an offer to buy or subscribe for any securities. The information contained in this report has been compiled from sources believed to be reliable, but no representation or warranty is made or guarantee given as to its accuracy or completeness. All opinions expressed and recommendations made are subject to change without notice. Securities or financial instruments mentioned herein may not be suitable for all investors. Securities of emerging and mid-size growth companies typically involve a higher degree of risk and more volatility than the securities of more established companies. Neither Faith Capital nor any other member of Bulls ‘n Bears nor any other person, accepts any liability whatsoever for any loss howsoever arising from any use of this report or its contents or otherwise arising in connection therewith. Recipients of this report shall be solely responsible for making their own independent investigation into the business, financial condition and future prospects of any companies referred to in this report. Other  Indices quoted herein are for guideline purposes only and sourced from third parties.

 

 	

 

 

 	

(c) 2023 Web: <http://www.bullszimbabwe.com>  www.bullszimbabwe.com Email:  <mailto:info at bulls.co.zw> bulls at bullszimbabwe.com Tel: +263 4 2927658 Cell: +263 77 344 1674

 

 	

 

 

 	
							

 

 

 

 

 

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0001.html>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 34378 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image002.jpg
Type: image/jpeg
Size: 29279 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0003.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.jpg
Type: image/jpeg
Size: 29358 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0004.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.jpg
Type: image/jpeg
Size: 37760 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0005.jpg>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: oledata.mso
Type: application/octet-stream
Size: 130911 bytes
Desc: not available
URL: <http://listmail.bulls.co.zw/pipermail/bulls/attachments/20230201/a91280c1/attachment-0001.obj>