Bulls n Bears Daily Market Commentary : 19 January 2023

Fri Jan 20 08:35:12 CAT 2023

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Bulls n Bears Daily Market Commentary : 19 January 2023

 <mailto:info at bulls.co.zw> 

ZSE commentary

ZSE rebounds in the penultimate session.

The ZSE rebounded in the penultimate session of the week as mid and small
cap counters lifted the market. The All-Share Index recovered 0.87% to close
at 21624.47pts while, BlueChip Index advanced 0.40% to 13349.26pts. The
Agriculture Index continued to buttress prior sessions gains as it rose
3.35% to 89.07pts while, the Mid-Cap Index went up 2.11% to 43623.29pts. The
duo of SeedCo Limited and Hippo Valley led the gainers of the day, as they
surged a similar 15.00% to see the former close at $118.4490 and the latter
at $322.05000.

Construction group Masimba traded 14.99% up to close pegged at $96.6500
while, Art holdings improved 12.50% to $18.0000. Property concern
Mashonaland Holdings fastened

the top-five risers of the day on a 3.56% increment to $8.8023. African Sun
wasthe top laggard of the day as it dropped 5.95% to $30.1519 trailed by,
telecommunication company Econet that eased 1.58% to close at $136.0471.
Retailer OK Zimbabwe shed 1.10% to end the day at $39.1772 while, Tanganda
was 0.74% weaker at $126.0004. Axia that is trading under a cautionary
capped the top five losers' pack of the day as it slipped 0.49% to trade at
$98.0135. Activity aggregates faltered in the session as volume of shares
traded declined 84.27% to see 1.35m shares exchange hands, while turnover
plunged 85.39% to $259.17m. Trio of Econet, Tanganda and Innscor claimed a
combined 58.42% of the volume aggregate. Innscor, Econet, Delta and Tanganda
drove the value aggregate in the session with respective contributions of
36.89%, 21.16%, 17.44% and 11.55%. On the ETF category, Morgan & Co Made in
Zimbabwe and the Morgan & Co MCS traded mixed in the session, as the former
lost 1.48% and the latter rose 1.54%. Elsewhere, the VFEX AllShare Index
fell 0.59% to 115.9141pts as SeedCo International and Simbisa dropped 6.67%
and 1.28% respectively. In other news Delta released a Q3 trading update in
which a revenue growth of 44% compared to the same quarter last year was
reported.efesecurities

Global Currencies & Equity Markets

South Africa

South African rand weakens; c.bank seen raising rates next week

(Reuters) - The South African rand weakened on Thursday, as a Reuters poll
predicted the central bank would deliver another interest rate hike next
week.

At 1532 GMT, the rand traded at 17.3400 against the U.S. dollar, 1.14%
weaker than its previous close.

Eleven of the 20 economists polled by Reuters predicted the South African
Reserve Bank would raise rates by 50 basis points to 7.50% at its upcoming
rate-setting announcement on Jan. 26.

Most economists saw no further rate hikes after next week, forecasting the
end of a tightening cycle that began in November 2021.

Recent economic data in Africa's most industrialised nation have been mixed,
with weak November mining numbers (ZAMNG=ECI) released this week, followed
by in-line December inflation figures (ZACPIY=ECI) and better-than-expected
November retail sales (ZARET=ECI).

On the stock market, the Top-40 (.JTOPI) index ended 0.58% lower and the
broader all-share (.JALSH) index dropped 0.45%.

However, Woolworths (WHLJ.J) was up almost 5% after South African food and
fashion retailer raised its profit growth forecast, saying it now expected
half-year earnings to jump as much as 80% on strong Black Friday sales and
festive demand.

The government's benchmark 2030 bond was weaker in afternoon deals, with the
yield up 8.5 basis points to 9.740%.

-The Thomson Reuters Trust Principles.

Kenyan shilling, Nigerian naira, Zambian kwacha seen under pressure

NAIROBI: Kenya's shilling, Nigeria's naira and Zambia's kwacha are expected
to remain under pressure against the dollar in the week to next Thursday,
but Ghana's cedi, and the Ugandan and Tanzanian shillings are seen holding
steady.

Kenya

Kenya's shilling is forecast to weaken due to increased demand for dollars
from the energy and manufacturing sectors.

Commercial banks quoted the shilling at 124.05/25 per dollar, compared with
last Thursday's close of 123.70/90. It struck a new all-time low on
Thursday, Refinitiv data showed.

"It is (dollar demand from) the energy sector and a little bit of
manufacturing continuing to outmatch dollar supply which has remained very
subdued. We see it (the shilling) remaining under pressure," a trader at one
commercial bank said.

Nigeria

Nigeria's naira is seen weakening on the parallel market, as dollar demand
builds and authorities adjust rates on the official market to manage
pressure on the currency, traders said.

The naira was quoted at 751 to the dollar on the parallel market on
Thursday, compared with 745 at last Thursday's close. It traded within a
range of 460 to 462 on the official market.

"As demand continues to build going into the year, we expect a further but
gradual depreciation of the naira," foreign exchange trading firm AZA
Finance said in a note.

Kenyan shilling weakens, oil companies exert pressure

Ghana

Ghana's cedi is expected to remain relatively stable in the coming week, but
it could depreciate if the government does not secure higher participation
in its domestic debt exchange, analysts said.

Refinitiv data showed the cedi trading at 11.5 to the dollar on Thursday,
the same as last Thursday's close.

The government has extended the deadline for registration for its debt
exchange until Jan. 31 and added incentives for bondholders to participate,
but it still needs greater buy-in.

"The currency stands the risk of depreciating further in the coming week if
the negotiations on the debt exchange do not yield the needed results," said
Chris Nettey, a trader at Stanbic Bank.

Zambia

Zambia's kwacha is likely to remain under pressure against the dollar next
week due to increased hard-currency demand while dollar supply remains
limited.

On Thursday, commercial banks quoted the currency of Africa's second-largest
copper producer at 18.6800 per dollar, compared with 18.5500 at the close of
business a week ago.

"The local unit is predicted to follow a downward trajectory in the near
term," Access Bank said in a note.

Uganda

Uganda's shilling is expected to be broadly stable in the week ahead, with
dollar sales by charities providing some support.

Commercial banks quoted the shilling at 3,675/3,685 to the dollar, compared
with last Thursday's close of 3,685/3,695.

A trader at one commercial bank said he anticipated some dollar inflows from
non-governmental organisations to meet local currency-denominated salary
payments.

"Some support will come from there (charities)," he said, adding the
shilling would likely trade in 3,660-3,690 to the dollar range in the coming
days.

Tanzania

Tanzania's shilling is seen holding steady, with dollar inflows from
commodities exports matching foreign-currency demand.

Commercial banks quoted the shilling at 2,333/2,343 to the dollar compared
with last Thursday's close of 2,330/2,340.

A trader said coal exports had boosted Tanzania's reserves at a time that
Europe was seeking alternative energy sources amid Russia's war in Ukraine.
"We expect the shilling to withstand any significant losses against the
dollar in the near term," the trader said.

 <mailto:info at bulls.co.zw> 

Global Markets

Dollar subdued as growth concerns mount, yen retreats

(Reuters) - The U.S. dollar struggled for direction on Friday as fears of an
economic slowdown dented risk sentiment, while the yen slipped as
speculation continue to swirl that the Bank of Japan will eventually move
away from its ultra-easy policy.

The dollar index , which measures the U.S. currency against six peers, rose
0.069% to 102.090, not far off the seven-month low of 101.51 it touched on
Wednesday.

The index is down 1.3% so far this year after sinking 7.7% in the last three
months of 2022 as investors bet that the Federal Reserve will slow the pace
of its interest rate hikes.

The Japanese yen weakened 0.32% versus the dollar to stand at 128.86.

Data on Friday showed Japan's core consumer prices in December rose 4.0%
from a year earlier, double the central bank's 2% target, with the latest
figure likely to fuel market expectations that the Bank of Japan (BOJ) will
soon end its yield control policy and allow interest rates to rise more.

"We now expect the BOJ to exit from yield curve control and negative
interest rate policy by the end of June, conditional on a solid pick-up in
Japan's wage growth," said Carol Kong, currency strategist at Commonwealth
Bank of Australia.

The Asian currency has had a volatile week after the BOJ's decision on
Wednesday to stand pat on its ultra-loose monetary policy.

With little economic data scheduled on Friday, Kong said currency market
moves will hinge on overall risk sentiment, with major currencies likely to
trade in narrow ranges.

A flurry of U.S. data on Thursday indicated the world's biggest economy was
slowing down after multiple hefty interest rate hikes from the Federal
Reserve as traders hope for a pause in tightening this year.

However, the number of Americans filing new claims for unemployment benefits
unexpectedly fell last week, pointing to another month of solid job growth
and continued labour market tightness.

Investor focus will switch to the upcoming Fed meeting at the start of next
month. The central bank raised interest rates by 50 basis points in December
after four straight 75 basis point hikes and the market is eagerly
anticipating another stepdown.

ING economists said the intense scrutiny of the U.S. growth story means that
the dollar remains vulnerable to data releases as markets keep scaling back
Fed rate expectations.

"The fact that the ongoing dovish repricing is not only a consequence of
slowing inflation but also of a worsening economic outlook in the United
States has exacerbated the negative implications for the dollar," according
to ING economists.

Meanwhile, the euro was up 0.11% to $1.0839, while sterling was last trading
at $1.239, up 0.01% on the day. The Australian dollar rose 0.14% versus the
U.S. currency to $0.692. The kiwi rose 0.19% to $0.640.

-The Thomson Reuters Trust Principles.

 <mailto:info at bulls.co.zw> 

Commodities Markets

Gold set for fifth straight weekly rise on Fed slowdown bets

(Reuters) - Gold prices held steady on Friday but were on track for a fifth
consecutive weekly gain, as a weaker dollar and hopes of slower U.S.
interest rate hikes boosted the safe-haven bullion's appeal.

Spot gold was little changed at $1,930.04 per ounce, as of 0308 GMT and was
up 0.5% for the week. On Thursday, prices hit $1,935.20, the highest since
April 2022.

U.S. gold futures rose 0.4% to $1,931.50.

The U.S. Federal Reserve will end its tightening cycle after a
25-basis-point hike at each of its next two policy meetings and then likely
hold interest rates steady for at least the rest of the year, according to a
Reuters poll.

"It is possible for gold to hit $2,000 this year, but for that we need to
see a down shift in hawkish tone from the Fed to confirm current market rate
hike expectations," said IG Market strategist Yeap Jun Rong.

Boston Fed President Susan Collins said on Thursday that the Fed would
probably need to raise rates to "just above" 5%, while Fed Vice Chair Lael
Brainard said there was evidence in favour of a "soft landing" for the U.S.
economy.

With lower rates translating into lesser returns on interest-bearing assets
like government bonds, investors may prefer zero-yield gold.

"There are signals that show that the U.S. is probably heading to a
recession, this will favour gold as it is historically supportive for gold,"
said Brian Lan, managing director at Singapore-based dealer GoldSilver
Central.

Data on Wednesday showed U.S. retail sales dropped by the most in a year,
putting the overall economy on a weaker growth path heading into 2023.

The dollar index was headed for a second consecutive weekly drop, making
bullion cheaper for overseas buyers.

Spot silver gained 0.5% to $23.94.

Platinum fell 0.1% to $1,032.25, palladium lost 0.3% to $1,748.28. Both
metals headed for a second straight week of declines.

-The Thomson Reuters Trust Principles.

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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