Bulls n Bears Daily Market Commentary : 09 January 2023

Tue Jan 10 09:35:22 CAT 2023

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Bulls n Bears Daily Market Commentary : 09 January 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

ZSE gains persist into the second week of 2023.

The ZSE continued with last week's positive momentum to see the four
benchmark indices that we review end in the black. The ZSE All Share Index
improved 1.37% to 21595.83pts while, the ZSE Top Ten Index rose 1.16% to
13777.40pts. The ZSE Agriculture Index put on 1.89% to end at 78.71pts
while, the Mid Cap Index added 2.18% to close at 39890.76pts. Leading the
market upswing was hotelier RTG that surged 13.68% to $10.8000 trailed by
brick makers Willdale that jumped 12.62% to $2.7056. Banking group NMB
advanced 9.35% to $43.7419 as Hippo grew 8.94% to $220.0498. Fintech group
Ecocash went up 8.53% to $59.8285 as it capped the top five winners of the
day. Partially offsetting today's gains were losses in FBC that dropped
15.00% to $51.0000 as Mashonaland tripped 6.82% to $7.4545. Star Africa shed
5.97% to $2.0762 while, Axia slipped 5.85% to settle at $103.5617 having
traded a low of $100.0000. Milk processor Dairibord retreated 4.17% to
complete the top five shakers of the day at $38.3333.

Activity aggregates declined in Monday's session as volumes dipped 78.97% to
2.95m while, value outturn eased 35.49% to $401.58m. Volume leaders of the
day were OKZIM,Proplastics, Econet and Innscor that accounted for a combined
74.87% of the aggregate. Value drivers of the day were Innscor, Delta,
Econet and OKZIM that claimed 44.85%, 18.68%, 12.80% and 10.25% of outturn
in that order. On the VFEX, Simbisa soared 18.20% to USD$0.5201 on 1,564
shares while, Seed Co International leapt 2.88% to USD$0.3390 on 583,412
shares. Padenga was stable at USD$0.2750 on 516 shares. The ETFs traded
sideways in week-opener as Old Mutual Top Ten and MIZ rose 11.33% and 2.19%
to settle at respective prices of $7.2693 and $1.3000. Morgan and Co MCS
trimmed 4.26% to $21.8824 while, Datvest MCS shrunk 2.29% to $1.5000. A
total of 115,211 units worth $269,288.25 exchanged hands. The Tigere REIT
was unchanged at $54.1100 as 458 units traded. -efesecurities

Global Currencies & Equity Markets

South Africa

JSE lifts and rand falls below R17/$ amid China boost, US data

The rand fell back below R17/$ on Monday afternoon, while the JSE had
climbed more than 2% to a new record, with global sentiment lifted by
reports China is easing its crackdown on its tech sector.

In late afternoon trade the local currency was 0.83% firmer at R16.96/$ -
having now gained more than 3.5% over the past month - while on the JSE,
tech stocks and miners were faring well, with Naspers, Prosus, Glencore and
Sibanye-Stillwater all gaining more than 3%.

A top Chinese central bank official was reported as saying the clampdown on
the internet sector was drawing to a close, offering the prospect of an end
to two years of uncertainty sparked by regulatory interventions, including
related to gaming restrictions for minors and online tuition.

Market sentiment has also been lifted so far in 2023 after China eased its
Covid-19 restrictions, resulting in optimism over the prospects for the
world's second-largest economy, while US nonfarm payrolls numbers on Friday
has also boosted riskier assets, with slowing wage growth helping to temper
expectations over the size of upcoming US Federal Reserve interest rate
hikes.

Although a robust jobs number, the trend in the US jobs market is that of a
slowdown, said Swissquote Bank senior analyst Ipek Ozkardeskaya in a note,
including the announcement of major job cuts in the banking and tech
sectors. The positive reaction to the data was due to hopes of a so-called
'soft landing' from ultra-supportive monetary policy, or where inflation is
brought under control without too much pain for the jobs market.

"But we should still not forget one thing: the US economy added around 4.5
million jobs last year," said Ozkardeskaya. "That was the second-best year
on record after 2021 - where 6.4 million Americans found jobs following the
pandemic-shattered economy. The unemployment data hit 3.5%, a multi-decade
low, and Atlanta Fed President Raphael Bostic said that the central bank
still needs to keep raising the rates despite the cooler-than-expected wages
data."

The JSE on Monday had risen to 78 550 points, and was extending records set
last week, having now gained more than 7.5% so far in 2023.

"Emerging markets and especially high-yield assets have been bought like
Tesla shares, pre-Covid since the start of the year," said Standard Bank
executive for rand and emerging market spot trading Warrick Butler said in a
note. "I am just hoping they don't suffer the same late 2022 demise in said
stock as predicted by many a commentator, Jim Rodgers and even Warren Buffet
among them."

Nigeria

Naira stable at official market

Naira recorded no significant movement against the United States dollar at
the authorised market on Monday.

According to data published on the FMDQ website where forex is officially
traded, the naira closed at N461.67 per dollar on Monday, the same rate it
traded last Friday

This implies a 0.04 per cent depreciation from N461.50 it closed on Friday
30 December the last day of business in 2022.

The local currency which opened at N459.33 touched an intraday high of
N426.00 and stooped to a low of N462.00 to a dollar at the spot market on
Monday before settling at N461.67.

Within this period, the market foreign exchange turnover is pegged at $47.13
million, the FMDQ data showed.

In the parallel market, currency dealers in Abuja said the dollar was
exchanged at N738.00 and above and sold for N742.00 and above, as against
the N735.00 per dollar it traded last week.

Last year, the Nigerian naira recorded a significant depreciation across
foreign exchange markets (Official and Black markets) due to a sudden surge
in demand for the greenback currency.

The naira closed the year exchanging hands with the greenback currency at
N461.50 per dollar at the official window at the close of business on Friday
last week, translating to a 6.1 per cent depreciation from the N435.00 per
dollar the currency was exchanged at the close of sales in December 2021.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar at 7-month low vs euro on slower Fed rate hike expectations

(Reuters) - The U.S. dollar on Monday slid to a seven-month low against the
euro as traders bet recent economic data would prompt the Federal Reserve to
slow the pace of interest rate hikes, while riskier currencies benefited
from China reopening its borders.

The euro was up 0.96% at $1.0747 at 2:50 p.m. EST (1950 GMT), its highest
level versus the greenback since June 9, adding to Friday's 1.17% increase.

Sterling surged 0.87% to $1.21975 against the dollar, building on Friday's
1.5% rally, while the Swiss franc jumped 0.82% to $0.92, its strongest since
early March.

The moves continued the trend lower for the dollar, which in the final three
months of 2022 posted its biggest quarterly loss in 12 years. That was
driven mainly by investors' belief that the Fed will not raise rates beyond
5%, from its current range of 4.25%-4.50%, as inflation and growth cool.

"There are a lot of people looking at the Fed funds futures and it seems we
might get one rate hike in February and then possibly a rate cut at the end
of the year and that's, I think, paving the way for a lot of people to bet
against the dollar," said Edward Moya, senior markets analyst at Oanda.

Fed fund futures show investors believe the most likely outcome for the
Fed's February meeting is for a 25 basis- point increase.

"The consensus call is that at the end of the year the dollar will be much
lower and a lot of people are trying to get ahead of that trade," said Moya.

The Fed raised interest rates by 50 basis points last month after delivering
four consecutive 75 basis-point hikes last year, but said it was likely to
keep interest rates higher for longer to tame inflation.

Advertisement . Scroll to continue

Two separate reports on Friday painted a picture of an economy that is
growing and adding jobs, but where overall activity is tilting into
recession territory, prompting traders to sell the dollar against a range of
currencies.

Friday's monthly employment report showed a bigger-than-expected increase in
the number of workers and a slowing in wage growth - welcome news for the
U.S. central bank.

A report from the Institute for Supply Management showed activity in the
service sector contracted for the first time in 2-1/2 years in December.

The dollar index was at a 7-month low, last down 0.81% at 103.033. The
index, which measures the greenback against six major currencies, tumbled
1.15% on Friday as investors shifted into riskier assets.

With U.S. inflation data due on Thursday, the outlook for price pressures
will be front-and-center for investors.

"The expectation with this week's Consumer Price Index is for further easing
of inflation pressures," said Greg McBride, chief financial analyst at
Bankrate. "Anything less than broad-based improvement will rattle investors'
nerves and keep the Fed active."

Elsewhere, China continued to dismantle much of its strict zero-COVID rules
around movement as it reopened its borders.

Optimism about a swift economic recovery sent China's offshore yuan to
five-month highs against the dollar on Monday.

The Australian dollar rose by 0.8% to $0.69305, hitting its highest level
against the U.S. currency since Aug. 30, while the kiwi was last up 0.45% at
$0.6378.

-The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold price hits 8-month high on Fed slowdown bets

Gold prices hit an eight-month high on Monday, helped by a drop in the US
dollar after economic data late last week raised hopes for slower rate hikes
from the Federal Reserve going forward.

Spot gold inched 0.3% higher to $1,870.43 per ounce by 12:20 p.m. ET, after
reaching an intraday high of $1,880.90 earlier in the session. US gold
futures were up by 0.4% to $1,877.50 per ounce.

Meanwhile, the US dollar slipped 0.8% to its lowest in seven months, making
gold cheaper for overseas buyers. Benchmark US 10-year Treasury yields were
also hovering near a three-week low.

"Interest rates are looking like they're going to continue higher. But they
do have a limit of what they can do and the market is pricing that in," said
Bob Haberkorn, senior market strategist at RJO Futures, in a Reuters note.

"We are also seeing some flight to safety. Technically, gold looks like it
has more room to go because it's been strong through all these resistance
points that we continue to see," he added.

Gold prices jumped nearly 2% on Friday after data showed a moderation in US
wage growth and a contraction in activity in services industries in
December.

Money market bets show 75% odds of a 25-basis point hike at the Fed's
February policy meeting, with the terminal rate expected just below 5% by
June.

Traders now await Fed Chair Jerome Powell's speech at a central bank
conference in Stockholm on Tuesday and the closely watched US consumer price
index data due later this week, which could offer more cues on the rate hike
path.

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
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been compiled from sources believed to be reliable, but no representation or
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opinions expressed and recommendations made are subject to change without
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