Bulls n Bears Daily Market Commentary : 03 January 2023

Tue Jan 3 18:10:10 CAT 2023

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Bulls n Bears Daily Market Commentary : 03 January 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

The All Share Index gained 241.32 points (1.24%) to close at 19,735.17
points. Trading in the positive: CFI HOLDINGS LIMITED added $21.3078 to
$433.0078, ECOCASH HOLDINGS LIMITED increased by $5.9190 to $46.0000 and
ALMAGAMATED REGIONAL TRADING LIMITED added $2.0000 to $16.0000. FIRST
CAPITAL BANK LIMITED gained $1.6632 to $17.4132 whilst DELTA CORPORATION
LIMITED was up $1.0944 at $360.8671.

Trading in the negative: INNSCOR AFRICA LIMITED declined by $5.7639 to
$707.9033, FIRST MUTUAL HOLDINGS LIMITED lost $1.6000 to $24.0000 and AXIA
CORPORATION LIMITED  went down $1.2161 to $110.0000.OK ZIMBABWE LIMITED shed
$0.2098 to close at $32.1096 whilst MASHONALAND HOLDINGS LIMITED decreased
by $0.0377 to $9.2100

EXCHANGE TRADED FUNDS (ETF)

MORGAN & CO MADE IN ZIMBABWE EXCHANGE TRADED FUND added $0.0025 to $1.1400.
CASS SADDLE AGRICULTURE EXCHANGE TRADED FUND and MORGAN & CO MULTI SECTOR
EXCHANGE TRADED FUND remained flat at $1.800 and $23.0000 respectively.
DATVEST MODIFIED CONSUMER STAPLES EXCHANGE TRADED FUND lost $0.0341 to
$1.5259 whilst OLD MUTUAL ZSE TOP 10 was $0.0526 down at $6.3875

REAL ESTATE INVESTMENT TRUST (REIT)

TIGERE REAL ESTATE INVESTMENT TRUST gained $6.1300 to close at $47.1100. ZSE

Global Currencies & Equity Markets

South Africa

South African rand steady with investor focus on Fed minutes

(Reuters) - South Africa's rand was steady in early trade on Tuesday, as
investors look ahead to minutes from the Federal Reserve's December policy
meeting for clues on its interest rate path for 2023.

At 0722 GMT, the rand traded at 16.9800 against the dollar, little changed
from its previous close of 16.9775.

The minutes of the Fed's December policymaking meeting are due to be
released on Wednesday.

The risk-sensitive rand had a volatile 2022 as domestic factors such as
power cuts, port strikes and political turmoil weighed on the currency, in
addition to economic and geopolitical events elsewhere.

The rand is highly susceptible to global drivers such as U.S. monetary
policy.

On the stock market, the Top-40 (.JTOPI) index was up 0.4%, while the
broader all-share (.JALSH) index was up nearly 0.3% in early trade.

The government's benchmark 2030 bond was weaker in early deals, with the
yield up 2.5 basis points to 10.210%.

The Thomson Reuters Trust Principles.

Nigeria

New naira: Nigeria to become cashless by 2025 - CBN

As Nigerians expect to see more new naira notes next week when the banks
resume operations for the New Year, the Central Bank of Nigeria (CBN) has
said the use of cash will naturally slow by 2025.

In its Payments Vision 2025 document, the CBN said by 2025, Nigeria aspires
to have a cashless and efficient electronic payment system infrastructure
that facilitates financial services in all the sectors of the economy and
provides secured, reliable, and user centric financial solutions in
compliance with international standards.

According to the CBN, the Nigerian payment landscape has many options that
have displaced cash in recent times, including electronic bill payment,
mobile phone top up, mobile and instant payments.

"The use of cash will naturally slow with the 'mobile first generation', who
will be economically active by 2025, hence one of the focuses of the PSV
2025 is enhancing the cashless policy of the CBN", the document stated.

The CBN on October 26, 2022 announced that higher denominations of the
naira- N200, N500 and N1,000 notes would be redesigned and introduced into
the economy from December 15, 2022 while commercial banks were directed to
return existing denominations to the CBN.

The new naira became a legal tender on December 15, 2022, after it was
unveiled by President Muhammadu Buhari on November 23, 2022.

A visit to some bank branches in Lagos revealed that the banks which
rationed the new naira when it was rolled out, no longer have any to give to
customers who requested to withdraw some.

Read also: CBN focuses on big data, contactless solutions in payment system
vision 2025

"There is no new naira again; come by January, that is when they will bring
it," said a bank cashier in the Mazamaza area of Lagos.

Since the roll out of the new naira, Nigerians have expressed mixed feelings
about the redesigned currency as they have observed that new banknotes,
which they described as 'painted', are being counterfeited.

"It is not a design issue. But quality," said an entertainer, in his twitter
handle. Another comment from the twitter handle of an IT company said,
"perhaps, it was intentionally designed to fade, so that if the crook stash
the money somewhere, in two months, they will come back to see that it has
turned to white paper."

Sharing his experience about the new naira, Jeffrey Asemota, a Lagos based
self-employed, said, "early this morning (Friday) I got paid with the new
note. And out of excitement I decided to buy a few things with the money. I
went to a shop in town to buy something but it was rejected. The store
keeper refused to accept the money for payment. She claimed that nobody
accepted the notes from her when she used it to make purchases.

My experience this morning was not funny at all. What if that was the only
money left with me?"

However, to save Nigerians from fallen victims of fake naira notes, the CBN
on December 20, 2022 released the security features of the new naira.

The security features of the new notes show 23 features on the N1,000 note,
15 features on the N500 note and 10 features on the N200 note.

The release of the security features has brought some relief to Nigerians
who have expressed fears about counterfeiting of the new notes.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar jumps before Fed minutes, euro dips as inflation moderates

(Reuters) - The greenback jumped on Tuesday before the Federal Reserve on
Wednesday is to release minutes from its December meeting, while the euro
was dented by moderating inflation data.

The U.S. central bank slowed its pace of interest rate hikes to 50 basis
points last month after delivering four consecutive 75-basis point hikes,
but stressed the need to hold rates in restrictive territory to bring down
inflation.

Investors will be watching for signs of how concerned the Fed is about
persistent inflation and its thoughts on the labor market, though the
meeting minutes may not be as market-moving as upcoming jobs and inflation
data, said Bipan Rai, North American head of FX strategy at CIBC Capital
Markets in Toronto.

A still robust employment picture is viewed as giving the Fed more room to
keep raising rates as it battles to bring down stubbornly high inflation.
The highly anticipated December jobs report is due on Friday, and consumer
price data for last month will be released on January 12.

Fed funds futures traders are pricing for rate cuts this year even as the
Fed maintains a hawkish tone, with the fed funds rate expected to peak at
4.9% in June, before falling back to 4.52% by year-end.

The dollar was last up 0.53% against a basket of currencies at 104.20 ,
though Rai cautioned about reading too much into the move with liquidity
relatively thin as investors returned from holidays.

The greenback may have gotten a boost from safety buying after data earlier
showed that China's factory activity shrank at a sharper pace in December as
surging COVID-19 infections disrupted production and weighed on demand.

The Australian and New Zealand dollars, which are sensitive to Chinese
growth, were both last down around 0.50%.

The euro also fell 0.74% to $1.0586 after German state inflation data showed
that price pressures eased in December, indicating national inflation may
also have slowed for a second month due in part to the government's one-off
payment of household energy bills.

Scotiabank noted that January is typically a strong month for the dollar.

"The strong start to the new calendar year for the USD is very much in
keeping with long (and shorter) term seasonal trends which typically see the
USD rally in January-its strongest month of the year over the past 25 years
or so," Shaun Osborne, chief FX strategist at Scotiabank, said in a report.

He added that recent weakness in the greenback was also likely overdone for
the short-term.

Meanwhile the yen was up slightly on the day at 130.21 after earlier hitting
a six month high of 129.51 against the U.S. currency.

The rally followed a Nikkei report on Saturday that the Bank of Japan was
considering raising its inflation forecasts in January to show price growth
close to its 2% target in fiscal 2023 and 2024.

Speculation that the BOJ was set to start shifting from its ultra-loose
policy flared in December when the central bank widened the yield cap range
on 10-year Japanese government bonds. The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold surges to 6-month high, and analysts expect records in 2023

LONDON - The price of gold  notched a six-month high early Tuesday, and
analysts believe the rally has further to go in 2023.

Spot gold peaked just below $1,850 per troy ounce in the early hours, before
easing off to trade around $1,847.92 per ounce. U.S. gold futures were up
1.5% at $1,854.30.

Gold prices have been on a general incline since the beginning of November
as market turbulence, rising recession expectations and more gold purchases
from central banks underpinned demand.

"In general, we are looking for a price friendly 2023 supported by recession
and stock market valuation risks - an eventual peak in central bank rates
combined with the prospect of a weaker dollar and inflation not returning to
the expected sub-3% level by year-end - all adding support," said Ole
Hansen, head of commodity strategy at Saxo Bank.

"In addition, the de-dollarization seen by several central banks last year
when a record amount of gold was bought look set to continue, thereby
providing a soft floor under the market."

Looking ahead, Hansen suggested the key events for gold prices would be
Wednesday's minutes from the latest U.S. Federal Reserve meeting and
Friday's U.S. jobs report.

"Above $1842, the 50% [mark] of the 2022 correction, gold will be looking
for resistance at $1850 and $1878 next," Hansen added.

New all-time high in 2023?

Much of the 2023 outlook for global markets hinges on the trajectory of
monetary policy as central banks ease off the aggressive interest rate hikes
of the past year amid slowing economic growth and possible recessions.

Economists are divided as to whether this will culminate in rate cuts by the
end of the year, however, as inflation is expected to remain well above the
target range in most major economies.

A full dovish pivot by central banks this year would likely have major
implications for gold prices, according to strategists.

Eric Strand, manager of the AuAg ESG Gold Mining ETF, said last month that
2023 would yield a new all-time high for gold and the start of a "new
secular bull market," with the price exceeding $2,100 per ounce.

"Central banks as a group have continued, since the great financial crisis,
to add more and more gold to their reserves, with a new record set for [the
third quarter of] 2022," Strand said.

"It is our opinion that central banks will pivot on their rate hikes and
become dovish during 2023, which will ignite an explosive move for gold for
years to come. We therefore believe gold will end 2023 at least 20% higher,
and we also see miners outperforming gold with a factor of two."

The bullion bullishness was echoed toward the end of last year by Juerg
Kiener, managing director and chief investment officer at Swiss Asia
Capital, who told CNBC last month that the current market conditions mirror
those of 2001 and 2008.

"In 2001, the market didn't just move 20 or 30%, it moved a lot, the same in
2008 when we had actually a smaller sell-off in the market and the stimulus
coming back in, and gold went from $600 to $1,800 in no time, so I think we
have a very good chance that we see a major move," Kiener told CNBC's
"Street Signs Asia" in late December.

"It is not going to be just 10 or 20%, I think I'm looking at a move which
will really make new highs."

INVESTORS DIARY 2023

Company

Event

Venue

Date & Time

National Unity Day

December 22

Christmas Day

December 25

Boxing Day

December 26

Counters trading under cautionary

CBZH

Meikles

Fidelity

TSL

FMHL

Turnall

GBH

ZBFH

GetBucks

Zeco

Lafarge

Zimre

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
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for guideline purposes only and sourced from third parties.

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