Bulls n Bears Daily Market Commentary : 07 February 2023

Wed Feb 8 05:00:12 CAT 2023

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Bulls n Bears Daily Market Commentary : 07 February 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

OKZIM anchors activity aggregates.

Retailer OKZIM anchored activity aggregates in Tuesday's session after
13.77m shares worth $662.22m exchanged hands. The trade accounted for 78.53%
of volumes and 48.60% of turnover. Innscor was the other notable value
driver of the day on a 28.38% contribution. Volumes traded ballooned 852.35%
to 17.64m shares while, turnover surged 225.31% to $1.37bn. The market
recorded a positive market breadth of twenty-two as twenty-four counters
advanced against only two that faltered while, nine sailed stable. The trio
of CFI Holdings, Bridgefort Capital Limited and Delta led the top five
gainers of the day with a similar gain of 15.00% to close at respective
prices of $494.5000, $9.2000, and $565.2000. Bankers First Capital soared
12.53% to $17.0684 as clothing retailer Truworths capped the top five
gainers of the day on a 12.00% jump to $2.8000. On the downside, was
property firm Mashonaland Holdings that dropped 7.94% to $8.0000 and brick
manufacturer Willdale that slipped 0.20% to $2.9943.

Foreign purchases declined 23.13% to $72.41mn while foreign sales surged
8.65% to $134.27mn. The ZSE's bullish momentum persisted in the Tuesday
session to see the AllShare Index jump 5.60% to 26658.62pts while, the Top
10 Index emerged 7.31% stronger at 16671.77pts. The ZSE Agriculture Index
grew 1.74% to 108.78pts as the Mid-cap Index ticked up 1.33% to 52103.25pts.
On the ETF section, a total of 1,466,031 units worth $3.86m traded in the
four ETFs. The Old Mutual ETF added 3.39% to $7.9721 while, Datvest rallied
3.15% to $1.5733. Morgan & Co shot up 1.35% to $25.0000 as MIZ ETF stepped
up 0.11% to $1.3014. The Tigere REIT was flat at $50.6200 on 105,154 units.
On the VFEX, only two stocks registered trades in a session as 39,289 shares
worth $10,993.45 exchanged hands . Simbisa gained 6.03% to USD$0.4241 while,
Seed Co International traded was stable at USD$0.2695.efesecurities

Global Currencies & Equity Markets

South Africa

South African rand inches up ahead of Fed chair Powell's speech

(Reuters) - South Africa's rand inched higher against the dollar on Tuesday
ahead of a speech by Federal Reserve Chair Jerome Powell that could provide
further clues on the U.S. interest rate hike path.

At 1545 GMT, the rand traded at 17.6400 against the dollar, about 0.11%
stronger than its previous close.

The dollar rose to a one-month peak against a basket of six major currencies
and was last up 0.21% at 103.82 , after traders raised their forecasts for
how high the Fed might raise interest rates.

Powell is set to deliver a speech at the Economic Club of Washington later
on Tuesday, where investors will be keen to hear his take on the labour
market.

The domestic focus this week is on Cyril Ramaphosa's annual State of the
Nation Address on Thursday amid local media reports of a possible cabinet
reshuffle by the South African President.

However, analysts have cautioned against expecting any major announcements
and reforms, even as South Africa grapples with daily power outages.

"Markets anticipate little game changing reforms, with many past priorities
unfulfilled and the economic environment instead deteriorating on weakening
infrastructure," Investec analyst Annabel Bishop said in a research note.

Separately, South Africa's net foreign reserves rose to $54.844 billion in
January from $53.827 billion in December, Reserve Bank figures showed.

Shares on the Johannesburg Stock Exchange were little changed, with both the
broader all-share index (.JALSH) and the top-40 index (.JTOPI) closing not
far from their previous close.

South Africa's biggest cement maker PPC Ltd (PPCJ.J) ended 20.23% higher
after Bloomberg reported that it was considering selling its Zimbabwe
business for about $200 million.

The government's benchmark 2030 bond was weaker, with the yield up 6 basis
point at 9.760%.

- The Thomson Reuters Trust Principles.

Ghana

Inflation in Ghana and Cedi depreciation: causes and impact on money
transfers

African Media Agency (AMA)/- Inflation rates in Ghana are at a record high,
but what is causing the increase, and how does it affect you? Ghana's
inflation rate currently stands at over 40%. Predictions suggest that
inflation in Ghana will peak in the first quarter of 2023, following another
slump in the Ghana Cedi in November 2022. 

Here, we are looking at the causes of inflation in Ghana from August 2022 to
today. Read on to see how that inflation impacts the exchange rate for
Ghanaian currency, why the Ghana Cedi is depreciating, and what that means
for your money transfers to Ghana.

What is causing inflation in Ghana?

Currently, the inflation rate in Ghana continues to rise though analysts
predict that it will decelerate in 2023. The inflation rate in Ghana is
affected by many elements, and there are different factors involved in how
inflation is calculated. 

Firstly, the heightened political division in Ghana between the ruling New
Patriotic Party and their opposers has resulted in an opposition request for
the removal of the current Finance Minister, Ken Ofori-Atta, due to his
handling of the current financial situation. Political instabilities,
situations, and risks can have a vast impact on inflation rates, as they
will affect how much a government will be able to borrow in times of need.
Over the course of the last year, Ghana has borrowed money in attempts to
stabilise inflation, so there is also the possible risk of further debt,
which will influence political conversations.

Further, prices for commodities are a leading indication of inflation risks,
and are often used in predicting inflation or deflation, though high global
commodity prices can also add to high inflation levels. 

Prices of crude oil surged globally after Russia's invasion of Ukraine in
early 2022, but oil is one of Ghana's highest sources of export revenue, and
oil prices in Ghana are driving inflation, causing rising energy costs.
Ghana's current inflation rates are partly a result of global oil price
increases causing domestic increases at gas stations, as well as generally
in transportation costs, with a knock on to other factors such as food
supply chains.

Though food is generally excluded from 'core' inflation measures, the rising
prices for food was the initial cause of the inflation rate in Ghana,
created by panic-buying as the country entered lockdowns due to Covid-19 in
2020. Despite making some recovery, inflation in Ghana soared again in
mid-2021, after the food supply chain ran into issues of oil pricing, a bird
flu outbreak in one of Ghana's food-producing regions, and climate change
causing delayed rainfall. The increase in food costs affected Ghana's
inflation rates as specific ingredients became harder to source, and
therefore more costly. 

Today, Ghana's currency, the Cedi, is depreciating against the US dollar,
and is now one of the worst performing global currencies. This is one of the
main factors of the inflation rate in Ghana. A weakened currency means that
hikes in import costs must be passed on to individuals within the country,
adding pressure to already-higher costs of food and transportation. 

How this affects Ghana Cedi's inflation rate

Inflation and currency exchange rates are very closely related, and changes
in one have an impact on the other. In the last year, the Ghana Cedi has
lost more than half of its value against the US dollar. As imported
commodities are priced in US dollars, when inflation rises, the same amount
of Ghana Cedi buys less than it did before, causing currency depreciation in
Ghana of the Cedi against USD. Exchange rates are often determined by a
perceived desirability of a particular currency, so a decrease in that
currency's purchasing power leads to a decrease in desirability, further
lowering the exchange rate.

Sending money to Ghana with WorldRemit

WorldRemit wants to make sure you get the most for your money, even through
tough times. Though the depreciation of the Ghana Cedi has impacted money
transfers to Ghana, WorldRemit always tries to offer the closest exchange
rates to the market. Compared to other money transfer companies, WorldRemit
places itself as the most competitive in terms of exchange rates and Google
Exchange Rates. To check real time exchange rates for money transfers with
WorldRemit, use our calculator.

With WorldRemit, it is easy to send Cedi to friends and family in Ghana as
mobile money, bank transfer, airtime top up, or for cash pickup. Once you're
registered with WorldRemit, and we've verified your information, you can
send money to family and friends via our website, or on our iOs or Android
app. You will pay no fees on your first three transfers with our 3FREE
offer, and 90% of money transfers to Ghana are ready within minutes.  

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar extends rebound as U.S. data supports; yen slips

(Reuters) - The dollar jumped to a four-week high against the euro on
Monday, as last week's blockbuster U.S. jobs report raised the likelihood of
the U.S. Federal Reserve keeping on with its inflation-fighting interest
rate hikes for longer.

The euro slipped 0.6% against the dollar to $1.0724, its lowest since Jan.
9, following a 1% drop on Friday. The euro remains not far from the 10-month
high of $1.1034 hit last week.

"Friday's NFP (nonfarm payroll) number solidified the likelihood of another
25 basis points hike and reduced the chances of an eventual rate cut at the
end of the year, sending equities lower and the greenback soaring," said
John Doyle, vice president of operations and trading at Monex USA.

"Overall, the dollar's decline since late November has been impressive.
However, it now looks like it was a bit overdone," Doyle said.

On Friday, data showed U.S. job growth accelerated sharply in January while
the unemployment rate hit more than a 53-1/2-year low of 3.4%, pointing to a
stubbornly tight labor market, and a potential headache for Federal Reserve
officials as they fight inflation.

The data came after the Fed on Wednesday raised rates by 25 basis points and
said it had turned a corner in the fight against inflation, leading
investors to price in a slowdown in the pace of rate hikes going forward.

On Monday, U.S. Treasury Secretary Janet Yellen said she saw a path for
avoiding a U.S. recession, with inflation coming down significantly and the
economy remaining strong, given the strength of the U.S. labor market.

The Turkish lira, under pressure from geopolitical risks and surprise
inflation readings out of the country, briefly slipped to a record low of
18.85 , in early trade, as a major earthquake hit the region.

Sterling slipped 0.2% on the day at $1.20245, a fresh one-month low, as
traders look to British growth data and remarks from Bank of England
policymakers about the pace of interest rate hikes for clues to the outlook
for the British currency.

The yen fell more than 1% against the U.S. dollar after the Nikkei newspaper
reported, citing anonymous government and ruling party sources, that Bank of
Japan Deputy Governor Masayoshi Amamiya was being sounded out to be the next
governor.

In a news conference on Monday, Deputy Chief Cabinet Secretary Yoshihiko
Isozaki said there was no truth to the Nikkei report.

Amamiya is considered the "most dovish among the contenders, which is
thrashing hopes that BOJ policy normalisation could progress under the new
chief," Saxo strategists said.

Meanwhile, bitcoin was little changed on the day at $23,015 remaining close
to the more than five-month high of $24,258 touched last week.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold prices higher as dollar cedes ground after Fed chief Powell's comments

Gold prices were up on Tuesday, tracking a slight pullback in the dollar and
as investors digested comments from U.S. Federal Reserve Chair Jerome Powell
on the outlook for rate-hike policy.

U.S. gold futures settled up 0.03% at $1,885.4. Spot gold edged lower 0.06%
to $1,872.65 per ounce on Tuesday.

Powell said on Tuesday the latest U.S. employment report showed the process
for getting inflation back near the central bank's 2% target will take
"quite a bit of time", noting further interest rate increases were needed.

In the wake of Powell's speech, the dollar slipped from one-month highs,
sparking a jump in gold prices to as much as 0.8% earlier in the session.
The greenback was last down 0.27% at 103.34.

"We may go a little bit higher but ultimately I think that we are due for
more of a correction and this (rise) is just a pause," said Daniel
Pavilonis, senior market strategist at RJO Futures.

Minneapolis Fed President Neel Kashkari on Tuesday said the U.S. central
bank would perhaps have to raise interest rates to at least 5.4% to tame
high inflation.

With Fed officials John Williams, Michael Barr and Christopher Waller due to
speak during the week, "(they) are going to talk about having to continue to
fight inflation, which would strengthen yields," added Pavilonis.

Gold is sensitive to high interest rates, which lift the opportunity cost of
holding the non-yielding asset.

Analysts at Commerzbank forecast gold prices at $1,850 by mid-year and
$1,950 by end-2023.

Spot silver gained 0.06% to $22.2 per ounce and platinum gained 0.14% to
$974.96, while palladium added 0.15% to $1,648.19.

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

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 

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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
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
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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.

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